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EXHIBIT 2.3
CONTRACT OF SALE
BY AND BETWEEN
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XXXXX BROADCASTING COMPANY,
AS SELLER
AND
STC BROADCASTING, INC.,
AS BUYER
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APRIL 27, 1998
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TABLE OF CONTENTS
Page
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ARTICLE 1 PURCHASE AND SALE OF ASSETS............................................................... 4
1.01 Assets...................................................................................... 4
1.02 Excluded Assets............................................................................. 6
ARTICLE 2 PURCHASE PRICE AND PAYMENTS............................................................... 8
2.01 Purchase Price.............................................................................. 8
2.02 Deposit; Method of Payment of the Purchase Price............................................ 8
2.03 Adjustments and Assumptions................................................................. 9
ARTICLE 3 APPLICATION FOR GOVERNMENT APPROVAL....................................................... 10
3.01 Filing and Prosecution of Application....................................................... 10
3.02 Expenses.................................................................................... 10
3.03 Control of Stations......................................................................... 10
3.04 Xxxx-Xxxxx-Xxxxxx Notification.............................................................. 10
3.05 Other Governmental Approvals................................................................ 11
3.06 Recording Fees, Survey Costs and Title Insurance Commitments................................ 11
ARTICLE 4 ASSUMPTION OF LIABILITIES................................................................. 11
4.01 Assumed Liabilities......................................................................... 11
ARTICLE 5 CLOSING DATE AND CLOSING TRANSACTIONS..................................................... 12
5.01 The Closing................................................................................. 12
5.02 Deliveries by Seller........................................................................ 12
ARTICLE 6 REPRESENTATIONS, WARRANTIES AND AGREEMENTS................................................ 14
6.01 Representations and Warranties of Seller.................................................... 14
6.02 Representations and Warranties of Buyer..................................................... 24
6.03 Brokers..................................................................................... 25
ARTICLE 7 CONDITIONS TO OBLIGATIONS................................................................. 25
7.01 Conditions to the Obligations of Buyer...................................................... 25
7.02 Conditions to the Obligations of Seller..................................................... 28
ARTICLE 8 TERMINATION; REMEDIES..................................................................... 28
8.01 Termination................................................................................. 28
8.02 Effect of Termination....................................................................... 29
8.03 Default by Buyer............................................................................ 29
8.04 Default by Seller........................................................................... 30
8.05 Specific Performance........................................................................ 30
8.06 Liquidated Damages.......................................................................... 30
8.07 Return of Letter of Credit.................................................................. 31
ARTICLE 9 CONDUCT OF BUSINESS PENDING CLOSING....................................................... 31
9.01 Covenants and Agreements of Seller.......................................................... 31
ARTICLE 10 INDEMNITY................................................................................ 36
10.01 Indemnification by Seller................................................................... 36
10.02 Indemnification by Buyer.................................................................... 37
10.03 Remedies.................................................................................... 37
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10.04 Claims Procedures........................................................................... 38
10.05 Indemnity Deposit........................................................................... 38
ARTICLE 11 RISK OF LOSS............................................................................. 39
11.01 Risk of Loss................................................................................ 39
ARTICLE 12 MISCELLANEOUS............................................................................ 39
12.01 Best Efforts................................................................................ 39
12.02 Access...................................................................................... 39
12.03 No Solicitation............................................................................. 40
12.04 Expenses.................................................................................... 40
12.05 Collection of Accounts Receivable........................................................... 40
12.06 Survival.................................................................................... 40
12.07 Notices..................................................................................... 41
12.08 Entire Agreement; Amendments; Waiver........................................................ 42
12.09 Remedies Cumulative......................................................................... 42
12.10 Assignment.................................................................................. 42
12.11 Headings.................................................................................... 42
12.12 Governing Law............................................................................... 43
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CONTRACT OF SALE
AGREEMENT made this 27th day of April, 1998, by STC
BROADCASTING, INC., a Delaware corporation ("Buyer"), and XXXXX BROADCASTING
COMPANY, a North Dakota corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is the licensee, owner and operator of
television stations KVLY-TV in Fargo, North Dakota and KFYR-TV in Bismarck,
North Dakota plus three satellite stations, KMOT-TV licensed to Minot, North
Dakota, KQCD-TV licensed to Dickinson, North Dakota, and KUMV-TV licensed to
Williston, North Dakota (the "Stations");
WHEREAS, Seller desires to sell the assets of the Stations to
Buyer under the terms and conditions set forth herein;
WHEREAS, Buyer desires to buy the assets of such Stations from
Seller under the terms and conditions set forth herein; and
WHEREAS, capitalized terms used herein without definition
shall have the respective meanings assigned thereto in Annex I attached hereto
and incorporated herein for all purposes of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants,
conditions and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties have agreed and by these presents do agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.01 ASSETS.
Subject to the terms and conditions hereof and in reliance upon
the representations, warranties, covenants and agreements contained herein, upon
the Closing, Seller shall sell, assign, transfer, convey and deliver to Buyer,
and Buyer shall purchase, acquire, pay for and accept from Seller, the Stations
and all real, personal and mixed assets, rights, benefits and privileges, both
tangible and intangible, wheresoever situated or located, owned, leased, used or
otherwise held by Seller in connection with the business and operations of any
of the Stations (collectively, the "Assets"); but excluding the Excluded Assets
described in Section 1.02. Subject
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to the provisions of Section 1.02, the Assets shall include all such assets
existing on the date hereof and all such assets acquired between the date hereof
and the Closing Date. The Assets shall include, without limitation, all of
Seller's right, title and interest in, to and under the following:
(a) All tangible personal property, including, without
limitation, plants, automobiles, trucks, and other on or off-road vehicles and
motorized equipment, tools, test, electronic, and other equipment, radios,
television sets, monitors, fax machines, tape players, tapes, cassettes,
cassette players, video recorders, printers, antennas, processors, receivers,
lines, cable, furniture, underground pipes and conduits, wire, amplifiers,
transformers, translators, earth stations, and other auxiliary facilities,
towers, receptacles and outlets, office furniture, equipment and supplies,
computer hardware, facilities used or useful in connection with the transmission
of television or microwave signals, all inventories (including, but not limited
to, inventories of materials and supplies of whatever nature and including
office supplies) including replacements or improvements thereof acquired or
constructed prior to the Closing Date, including, without limitation, those set
forth and described on Exhibit 1.01(a) attached hereto;
(b) All licenses, permits and other evidence of authority
issued by the FCC (the "FCC Licenses") or any other Governmental Authority,
including any pending applications for licenses or permits and any amendments,
renewals, extensions or modifications thereof and additions thereto, including,
without limitation, those set forth and described in Exhibit 1.01(b) attached
hereto;
(c) The film and program licenses (syndicated or otherwise)
and Contracts under which Seller is authorized to broadcast film product or
programs on any of the Stations and listed in Exhibit 1.01(c), including without
limitation, (i) all cash and non-cash (barter) program Contracts, and (ii) any
other such program Contracts that are entered into between the date of this
Agreement and the Closing Date in accordance with the terms of this Agreement
(collectively the "Program Contracts");
(d) All Contracts (excluding Program Contracts) pursuant to
which Seller has sold, traded or bartered commercial air time on the Stations in
consideration for any property or services in lieu of or in addition to cash,
including, without limitation, Contracts under which commercial air time
availability within a particular program are exchanged for the provision of such
program which are set forth and described in Exhibit 1.01(d) (collectively, the
"Trade-out Agreements");
(e) The Contracts listed in Exhibit 1.01(e) (including,
without limitation, all broadcast time sales agreements, network affiliation
agreements, retransmission agreements and national and local advertising
representation agreements for the Stations), together with all Contracts that
will be entered into in the Ordinary Course of Business between the date of this
Agreement and the Closing Date as permitted by this Agreement (collectively, the
"Operating
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Contracts", and together with the Program Contracts and the Trade-out
Agreements, the "Station Contracts");
(f) All interests in Real Property (including mixed real and
personal property), including, without limitation, land, structures, buildings,
studios, towers, microwave towers, easements and agreements or arrangements of
lease with respect to real property or interests therein, building improvements,
fixtures, and rights-of-way, all of which are described on Exhibit 1.01(f)
attached hereto;
(g) All of the intangible personal property, books and
records, logs, public files, historical billing information, correspondence
files, drawings, blueprints, plans and specifications, advertising lists, vendor
lists, music, sound effect and video libraries, station call letters, station
telephone and post office box numbers, promotional materials, customer files,
maintenance records or any other business records relating to or used in
connection with the operation and financial condition of the Stations, good
will, copyrights, trade marks, trade names, service marks, franchises, software,
jingles, slogans, logotypes, engineering records, FCC applications and filings
and all records maintained by Seller pursuant to the rules and regulations of
the FCC, including, without limitation, those set forth and described in Exhibit
1.01(g) attached hereto;
(h) All rights and claims of Seller, if any, whether mature,
contingent or otherwise, against third parties relating to the Assets, other
than Excluded Assets identified in Section 1.02, whether in tort, contract, or
otherwise, including, without limitation, causes of action, unliquidated rights
and claims under or pursuant to all warranties, representations and guarantees
made by manufacturers, suppliers or vendors;
(i) The business of each of the Stations as a "going
concern", customer relationships and reputation of Seller;
(j) The IBM AS400 with related Seller developed traffic and
management software, terminals, monitors, and associated miscellaneous
equipment; and
(k) All other assets, whether tangible or intangible, not
hereinbefore mentioned which are used in connection with the operation of the
Stations, not excluded pursuant to Section 1.02 hereof.
1.02 EXCLUDED ASSETS.
There shall be excepted and excluded from the Assets to be
transferred from Seller to Buyer the following (collectively, the "Excluded
Assets"):
(a) All books, records and documents, relating to the
corporate or business operations of Seller other than the Assets of the
Stations, including, without limitation, minute
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books, and similar items relating to Seller and not to the Assets or the
business or operations of the Stations, all of which items are described in
Exhibit 1.02(a) attached hereto. Any of Seller's books of account reasonably
required to confirm, review or assist in the preparation of financial statements
shall be made available to Buyer, at Buyer's expense, for examination and
duplication at Seller's offices, or at such other offices of Seller or their
successors-in-interest as may be designated by them for a period of one (1) year
after the date hereof, but only during regular business hours, and on reasonable
notice;
(b) All (i) personal items of Xxxxxx Xxxxxx Xxxxxxx,
including her office furniture, computer and personal items and (ii) office
furnishings, employees personal computers at Seller's corporate headquarters,
but only to the extent that the items described in clauses (i) and (ii) are
specifically identified and described in Exhibit 1.02(b);
(c) Cash, cash equivalents, accounts receivable, and
inter-company receivables and payables, if any, of Seller;
(d) The call letters "KFYR" shall be subject to use by
KFYR-AM licensed to Bismarck, North Dakota;
(e) All interests in the separate parcels of real property
of Seller adjacent to but not including the KMOT-TV studios, more specifically
described as the un-platted portion of the North Three Hundred Feet (300') of
the South One Half (S1/2) of the Southeast Quarter (SE1/4) of Section 27, Range
000 Xxxxx Xxxxxxxx 000 Xxxx, Xxxx Xxxxxx, Xxxxx Xxxxxx (the "Excluded Parcel"),
upon which rental/storage units are located and which is not used in the
operations of station KMOT-TV;
(f) All Plans, Benefit Arrangements, Qualified Plans and
Welfare Plans and the assets thereof, including, without limitation, those set
forth in Exhibit 6.01(g);
(g) Any financing or loan agreements (including, without
limitation, equipment financing agreements), and other obligations for borrowed
money; and any Contract entered into after the date hereof except as permitted
by this Agreement;
(h) Any and all claims of Seller with respect to any tax
refunds;
(i) All of Seller's deposits and prepaid expenses; provided,
however, any deposit and prepaid expense shall be included in the Assets
conveyed pursuant hereto to the extent that Seller receives adjustment therefor
pursuant to Section 2.03; and
(j) All labor union contracts, collective bargaining
agreements and employment contracts.
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ARTICLE 2
PURCHASE PRICE AND PAYMENTS
2.01 PURCHASE PRICE.
Buyer agrees to pay to Seller, and Seller agrees to accept from
Buyer, in consideration of the Assets the aggregate sum of Sixty-Three Million
Seven Hundred Fifty Thousand Dollars ($63,750,000) (the "Purchase Price").
2.02 DEPOSIT; METHOD OF PAYMENT OF THE PURCHASE PRICE.
The Deposit shall be made and the Purchase Price shall be paid
as follows:
(a) Deposit. For and in partial consideration of the execution
and delivery of this Agreement, simultaneously with the execution and delivery
of this Agreement, Buyer is depositing in escrow with the Deposit Escrow Agent
an original, irrevocable letter of credit (the "Letter of Credit") issued for
the benefit of Seller by The Chase Manhattan Bank for an amount equal to Three
Million One Hundred Eighty-Seven Thousand Five Hundred Dollars ($3,187,500) (the
"Deposit"), such Letter of Credit to be held as an xxxxxxx money deposit in
accordance with the terms and conditions of the Deposit Escrow Agreement, a form
of which is attached hereto as Exhibit A. Buyer and Seller shall cause the
Letter of Credit to be returned to Buyer on the Closing Date.
(b) Cash Payment at Closing. Buyer shall pay to Seller the
Purchase Price at Closing by wire transfer of immediately available federal
funds to an account to be identified by Seller not less than two (2) business
days before the Closing Date.
(c) Allocation of the Purchase Price. Seller and Buyer agree
to allocate the Purchase Price among the Stations for all purposes (including
financial, accounting and Tax purposes) as follows:
KVLY: $15,950,000
KMOT: $10,450,000
KQCD: $4,989,000
KUMV: $5,735,000
KFYR: $26,625,000
(i) Within thirty (30) days after the execution of this
Agreement, Seller and Buyer agree to retain Bond & Xxxxxx (the "Appraisal Firm")
to appraise the classes of Assets of each Station in accordance with the above
allocation of Station values. The Appraisal Firm shall be instructed to perform
an appraisal of the classes of Assets of each Station and deliver a preliminary
draft report to Seller and Buyer as soon as reasonably practicable. Seller and
Buyer will be given an opportunity to review and comment on the preliminary
draft report before the
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Appraisal Firm issues the final report (such final report, the "Appraisal
Report"). Seller and Buyer shall each pay one-half of the fees, costs and
expenses of the Appraisal Firm whether or not the transactions contemplated
hereby are consummated; provided, that the total cost of Seller's portion of the
appraisal shall not exceed Ten Thousand Dollars ($10,000).
(ii) Seller and Buyer each represent, warrant,
covenant, and agree with each other that the Purchase Price shall be allocated
among the classes of Assets for each Station, as set forth in the Appraisal
Report. Seller and Buyer agree, pursuant to Section 1060 of the Code that the
Purchase Price shall be allocated in accordance with this Section 2.02(c), and
that all Tax returns and reports shall be filed consistent with such allocation.
Notwithstanding any other provision of this Agreement, the provisions of this
Section 2.02(c) shall survive the Closing Date without limitation.
2.03 ADJUSTMENTS AND ASSUMPTIONS.
(a) The Station's expenses and accounts payable attributable to
the operation of the Stations up to 12:01 a.m. on the day of the Closing shall,
except as hereinafter provided in this Agreement, be for the account of, and be
the sole responsibility of, Seller. Expenses such as power and utility
charges, lease rents, property taxes, frequency discounts, prepaid time sales
agreements, outstanding trade balances under Trade-out Agreements (as defined in
Section 1.01(d)), annual license fees (if any) and similar prepaid and deferred
items shall be prorated between Seller and Buyer. All prorations shall be made
and paid insofar as feasible at Closing, with a final settlement within ninety
(90) days after the Closing.
(b) With specific reference to Liabilities with respect to
Seller's employees, including, without limitation, Liabilities for vacation pay
or vacation time, wages, commissions, severance, payroll taxes, fringe benefits
and other Liabilities of Seller with respect to its employees, it is understood
that Seller will be solely responsible for all such Liabilities and that Buyer
will not assume any such Liabilities. With specific reference to payment of
commissions to employees, Buyer shall pay commissions to its employees on sales
made by or on behalf of Buyer on or after the Closing Date pursuant to Buyer's
employee commission plan, and Seller shall pay to its employees on sales made by
or on behalf of Seller prior to the Closing Date pursuant to Seller's employee
commission plan. Employees' employment with Seller shall be terminated by
Seller as of the Closing Date, and Buyer may employ employees of its choice from
and after said date upon terms acceptable to Buyer and such employees. During
the four (4) week period prior to the Closing Date, Seller shall provide Buyer
with reasonable opportunities to interview any of the employees of the Stations
concerning employment of such individuals by Buyer after Closing, and will
permit Buyer reasonable access to data regarding such individuals; provided,
however, that the foregoing shall not be deemed to impose any obligation on
Buyer to hire or offer employment to any such employees or to provide any level
of benefits to such employees.
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ARTICLE 3
APPLICATION FOR GOVERNMENT APPROVAL
3.01 FILING AND PROSECUTION OF APPLICATION.
Buyer and Seller shall, as soon as practicable after the date of
this Agreement and in any event not later than five days thereafter, join in an
application to be filed with the FCC requesting its written consent to the
assignment of the FCC Licenses of the Stations from Seller to Buyer. Buyer and
Seller shall take all steps necessary to the expeditious prosecution of such
application to a favorable conclusion, using their reasonable best efforts
throughout; provided, however, that none of the parties hereto shall have any
obligation to take any unreasonable steps to satisfy complainants, if any, or to
participate in any evidentiary hearing. Neither Buyer or Seller shall take
action that such party knows or should know would adversely affect obtaining an
FCC Order, or adversely affect any FCC Order becoming a Final Order.
3.02 EXPENSES.
Except as otherwise expressly provided for herein, each party
shall bear its own legal, accounting and other expenses in connection with the
consummation of the contemplated transaction. The parties shall cooperate with
the preparation of the FCC application and FCC filing fees shall be shared
equally by the parties; however, additional expenses incurred in connection with
the prosecution and/or defense of such FCC application shall be paid by the
party causing such expenses to be incurred. Any costs incurred jointly shall be
shared equally by the parties.
3.03 CONTROL OF STATIONS.
Until Closing, Buyer shall not directly or indirectly, control,
supervise, direct or attempt to control, supervise or direct the operation of
the Stations. Such operation shall be the sole responsibility of Seller.
3.04 XXXX-XXXXX-XXXXXX NOTIFICATION.
Buyer and Seller agree that as soon as practicable, but in no
event later than ten (10) days after the execution of this Agreement, each will
complete and file any filing that may be required pursuant to Xxxx-Xxxxx-Xxxxxx
(each an "HSR Filing"), or shall mutually agree that no such filing is required
and will promptly complete and file responses to all requests for additional
data and information which may be made under such Act. Buyer and Sell shall
share equally in all filing fees incurred in connection with the HSR Filing
under this Section 3.04.
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3.05 OTHER GOVERNMENTAL APPROVALS.
Promptly following the execution of this Agreement, Buyer and
Seller shall proceed to prepare and file with the appropriate Governmental
Authorities any other requests for approvals or waivers, if any, that are
required from other Governmental Authorities in connection with the Closing,
and shall diligently and expeditiously prosecute, and shall cooperate fully
with each other in the prosecution of, such requests for approvals or waivers
and all proceedings necessary to secure such approvals and waivers. Buyer and
Seller shall share equally in all filing fees incurred in connection with the
approvals and waivers under this Section 3.05.
3.06 RECORDING FEES, SURVEY COSTS AND TITLE INSURANCE COMMITMENTS.
Buyer and Seller shall each pay one-half of all recording, license
and other similar taxes and fees, if any, applicable to, imposed upon or arising
out of the sale by Seller and the purchase by Buyer of the Assets and regardless
of which party such fee and/or tax is imposed upon. The costs and expenses of
the Surveys obtained by Buyer for the Title Insurance Commitments shall be paid
by Buyer. Buyer and Seller shall each pay one-half of costs of obtaining the
Title Insurance Commitments.
ARTICLE 4
ASSUMPTION OF LIABILITIES
4.01 ASSUMED LIABILITIES.
Except as expressly set forth below in this Section 4.01, Buyer
does not assume any liabilities or obligations of Seller or the Stations and
Seller shall defend, indemnify and hold Buyer harmless from and against any and
all obligations or liabilities of Seller and the Stations other than those
expressly assumed. From and after the Closing Date, Buyer shall assume and pay,
perform and discharge, and indemnify and hold Seller harmless from and against,
the following future liabilities, obligations and commitments of Seller to be
observed and performed by Buyer from and after the Closing Date, except
obligations, liabilities or commitments accrued prior to the Closing Date:
(a) All of Seller's obligations and commitments from and under
the leases, agreements, permits, consents, licenses, contracts and documents
listed in Exhibits 1.01(b), (c), (d) and (e) as the same may be modified with
the written consent of Buyer on or prior to the Closing Date.
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ARTICLE 5
CLOSING DATE AND CLOSING TRANSACTIONS
5.01 THE CLOSING.
The Closing of this Agreement shall be held on the last business
day of the month during which all of the FCC Orders have become Final Orders.
Closing shall take place at Seller's offices in Bismarck, North Dakota, or such
location as Buyer and Seller shall mutually agree.
5.02 DELIVERIES BY SELLER.
Seller agrees that on the Closing Date it will deliver to Buyer
such titles, bills of sale, endorsements, assignments and consents to
transfer and other good and sufficient instruments of conveyance, transfer and
consent, including, without limitation, a Xxxx of Sale and Assignment and
Assignment of FCC Licenses, each in the form attached hereto in Exhibit B, as
shall be effective to transfer to Buyer the Assets free and clear of all
Encumbrances. Without limiting the generality of the foregoing, Seller shall
deliver to Buyer:
(a) Appropriate instruments, in form satisfactory to Buyer's
counsel, assigning and transferring to Buyer as of the Closing Date, all of
Seller's right, title and interest in, to and under all of the Assets free and
clear of all Encumbrances.
(b) Copies of all consents and approvals, relating to the
transfer of all licenses or permits held by Seller and the assignment of any
agreement, lease or other Contract which may require consent for assignment
either by its terms or because it is personal to Seller.
(c) Certificates of title with respect to the motor vehicles
listed in Exhibit 1.01(a) or if any such motor vehicles are leased by Seller,
an assignment of such lease.
(d) All such other general instruments of transfer, assignment
and conveyance, general warranty deeds, certificates of title, assignments,
estoppel certificates and recordable assignments for leased Real Property,
evidences of consent or waiver, and other instruments or documents as shall be
necessary to evidence or perfect the sale, assignment, transfer and conveyance
of the Assets to Buyer and effectively vest in Buyer all right, title and
interest in the Assets free and clear of any and all Encumbrances and other
restrictions in accordance with the terms of this Agreement, together with
possession (or constructive possession, in the case of intangibles) thereof.
(e) Evidence reasonably satisfactory to Buyer that any and all
Liabilities which are Seller's responsibility hereunder due or payable by the
Stations or Seller pursuant to or under any Program Contract have been
satisfied to the extent required under this Agreement.
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(f) A report dated not more than ten (10) days prior to the
Closing Date of the North Dakota Secretary of State evidencing no judgments,
financing statements, tax liens, mechanics, material men or other statutory
liens on file with respect to the Assets, and, if such report evidences that
judgments, financing statements, tax liens, mechanic's, material men's or other
statutory liens are on file with respect to any of the Assets, a termination
statement or other appropriate document signed by the secured party or
lienholder evidencing the release or termination of such financing statement or
such lien and, if applicable, a pay-off letter from such secured party or
lienholder.
(g) A copy of (i) the resolutions of directors and shareholders
of Seller, certified as being correct and complete and then in full force and
effect, authorizing the execution, delivery and performance of this Agreement,
and of the other agreements, documents and instruments contemplated herein, and
the consummation of the transactions contemplated hereby and thereby, and (ii)
a certificate of incorporation of Seller and the bylaws of Seller, all
certified by the Secretary of Seller as being true, correct and complete as of
the Closing Date.
(h) A certificate, dated as of the Closing Date and duly
executed by Seller's Broker certifying that Seller's Broker has been paid in
full for services rendered in connection with the transactions contemplated
herein and has no claim with respect thereto.
(i) Internal Revenue Service Form 8594 completed by Seller in
connection with the acquisition of the Assets by Buyer.
(j) The Indemnity Letter of Credit described in Section 10.05.
(k) The Indemnity Escrow Agreement described in Section 10.05
duly executed by Seller.
ARTICLE 6
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
6.01 REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer as follows,
which representations and warranties, together with all other representations
and warranties of Seller in this Agreement, shall, subject to the provisions of
Section 12.06 hereof, survive the date hereof and the Closing:
(a) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the state of North Dakota. Neither the
nature of the business of the Stations conducted by Seller, nor the character
of the properties owned, leased or otherwise held in the operation of the
Stations by Seller makes any such qualification necessary in any other state,
country, territory or jurisdiction. Seller has all requisite power and
authority to own and operate
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the Stations, to carry on the business of the Stations as now being conducted
and to enter into this Agreement and the other Seller Documents and perform its
obligations hereunder and thereunder.
(b) The execution, delivery and performance of this Agreement
and the other Seller Documents by Seller have been duly and validly authorized
and approved by all necessary action by Seller, and this Agreement is valid and
binding agreement, enforceable against Seller in accordance with its terms.
(c) Except as set forth in Exhibit 6.01(c), the execution and
carrying out of this Agreement and the other Seller Documents and compliance
with the provisions hereof and thereof by Seller will not violate any provision
of Law, and will not (i) with or without the giving of notice and/or the
passage of time, conflict with or result in any breach of any of the terms or
conditions of, or constitute a default under any indenture, mortgage, agreement
or other instrument or Contract to which Seller is a party or by which it or
the Assets is bound, (ii) result in the creation of any Encumbrance upon the
Assets, (iii) conflict with or violate the articles of incorporation, bylaws or
other organizational documents of Seller, or (iv) require any consent,
approval, authorization or permit of or filing with, or notification to any
Person or Governmental Authority.
(d) Seller has, or will secure, all requisite consents and
assignments and is entitled to sell and convey to Buyer good and marketable
title in and to all tangible property owned by Seller and all other rights,
assets and property described in Section 1.01 hereof, free and clear of all
Encumbrances.
(e) There are no actions, suits, arbitrations, administrative or
other proceedings, or investigations pending, or, to the knowledge of Seller,
threatened, against Seller which may materially adversely affect the Assets,
business operations, financial condition or customer relations of the Stations
or the right of Seller to dispose of the Assets being sold hereunder, or to
enter into or carry out this Agreement, nor does Seller know of any basis for
any such litigation, proceeding or investigation in the future, except for
actions, suits, proceedings or investigations affecting the television industry
generally.
(f) No representation or warranty made herein by Seller, or any
written statement, schedule or certificate furnished to Buyer pursuant hereto
or in connection with the transactions contemplated hereby by Seller contains
or will contain any untrue statement of material fact or omits or will omit a
material fact necessary to make the statement contained therein not misleading.
(g) Employee Benefit Plans.
(i) Except as set forth and described in Exhibit
6.01(g), Seller does not maintain any Plan or other Benefit Arrangement, and
has no other obligations under any other Plan or Benefit Arrangement. Any
Pension Plan terminated by Seller was terminated in
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accordance with applicable Law and Seller has no remaining Liabilities with
respect thereto. No Plan is a Multiemployer Plan, and Seller has never been a
party to or participant in a Multiemployer Plan.
(ii) To the best of Seller's knowledge, Seller has
made all contributions and other payments required by and due under the terms
of any Plan and Benefit Arrangement.
(iii) Exhibit 6.01(g) sets forth the current Qualified
Plan. The Qualified Plan and any related trust agreements or annuity
agreements (or any other funding document) complies and have complied with
ERISA, the Code (including, without limitation, the requirements for Tax
qualification described in Section 401 thereof), and all other Laws. The
trusts established under such Plans are exempt from federal income taxes under
Section 501(a) of the Code, and Seller has provided to Buyer true and complete
copies of all IRS determination letters with respect to such exemptions.
(iv) To the best of Seller's knowledge, Seller has
complied with applicable provisions of Laws pertaining to all Plans and Benefit
Arrangements, and all premiums and assessments relating to all Plans and
Benefit Arrangements. Seller has no Liability for any delinquent contributions
within the meaning of Section 515 of ERISA (including, without limitation,
related attorneys' fees, costs, liquidated damages and interest) or for any
arrearages of wages.
(v) Exhibit 6.01(g) lists all funded Welfare Plans
that provide benefits to current employees of Seller or their beneficiaries.
The funding under each Welfare Plan does not exceed and has not exceeded the
limitations under Sections 419A(b) and 419A(c) of the Code.
(vi) To the best of Seller's knowledge, Seller has no
post-retirement medical, life insurance or other benefits promised, provided or
otherwise due now or in the future to current, former or retired employees of
Seller.
(vii) To the best of Seller's knowledge, Seller has
(A) filed or caused to be filed all returns and reports on the Plans that they
are required to file and (B) paid or made adequate provision for all fees,
interest, penalties, assessments or deficiencies that have become due pursuant
to those returns or reports or pursuant to any assessment or adjustment that
has been made relating to those returns or reports. To the best of Seller's
knowledge, all other fees, interest, penalties and assessments that are payable
by or for Seller have been timely reported, fully paid and discharged. To the
best of Seller's knowledge, there are no unpaid fees, penalties, interest or
assessments due from Seller or from any other person that are or could become
an Encumbrance on any Asset or could otherwise adversely affect the businesses
or Assets. To the best of Seller's knowledge, Seller has collected or withheld
all amounts that are required to be collected or withheld by them to discharge
their obligations, and all of those amounts have been paid to the appropriate
Governmental Authority or set aside in appropriate accounts for future
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payment when due. To the best of Seller's knowledge, Seller has furnished to
Buyer true and complete copies of all documents setting forth the terms and
funding of each Plan.
(viii) All Welfare Plans and the related trusts that
are subject to Section 4980B(f) of the Code and Sections 601 through 607 of
ERISA comply with and have been administered in compliance with the health care
continuation-coverage requirements for tax-favored status under Section
4980B(f) of the Code (formerly Section 162(k) of the Code), Sections 601
through 607 of ERISA, and all proposed or final Treasury regulations under
Section 162 of the Code explaining those requirements.
(h) Taxes.
(i) To the best of Seller's knowledge, Seller has duly
and timely filed all required federal, North Dakota and local tax returns,
reports and estimates for all years and periods (and portions thereof) for
which any such returns, reports and estimates were due, and any and all amounts
shown on such returns and reports to be due and payable have been paid in full.
To the best of Seller's knowledge, all of such returns, reports and estimates
are true and complete in all respects. To the best of Seller's knowledge,
Seller has withheld all tax required to be withheld under applicable federal
and state of North Dakota laws and regulations, and such withholdings have
either been paid to the proper Governmental Authority or set aside in accounts
for such purpose, or accrued, reserved against and entered upon the books of
Seller, as the case may be.
(ii) To the best of Seller's knowledge, there are, and
after the date of this Agreement will be, no tax deficiencies (including
penalties and interest) of any kind assessed against or relating to Seller or
the Assets with respect to any taxable periods ending on or before, or
including, the Closing Date of a character or nature that would result in any
Encumbrance or claims on any of the Assets or on Buyer's title or use of the
Assets or that would result in any claim against Buyer.
(iii) There is no action, suit, proceeding, audit,
investigation or claim pending or, to the knowledge of Seller, threatened in
respect of any Taxes for which Seller may become liable, nor has any deficiency
or claim for any such Taxes been proposed, asserted or, to the knowledge of
Seller, threatened. There is no Contract, waiver or consent providing for an
extension of time with respect to the assessment or collection of any Taxes
against Seller.
(i) FCC Matters. Seller holds the FCC Licenses listed and
described by Seller in Exhibit 1.01(b). Such FCC Licenses constitute all of
the licenses, permits and authorizations from the FCC that are required for the
business and operations of its Stations as they are currently operated. Such
FCC Licenses are valid and in full force and effect through the dates set forth
in Exhibit 1.01(b), unimpaired by any condition which would have a material
adverse effect on the business or operations of the Stations. No application,
action or proceeding is pending for the renewal or modification of any of
Seller's FCC Licenses, and, except for actions or proceedings
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affecting television broadcast stations generally, no application, complaint,
action or proceeding is pending or, to Seller's knowledge, threatened that may
result in the (a) revocation, modification, non-renewal or suspension of any of
such FCC Licenses, (b) issuance of a cease-and-desist order, (c) denial of an
application for renewal or (d) imposition of any administrative or judicial
sanction with respect to any of the Stations. There is not now issued or
outstanding or, to Seller's knowledge, threatened, any investigation,
proceeding, notice of violation or material complaint against Seller at the
FCC. Seller has no knowledge of any facts, conditions or events relating to
Seller or its Stations that would reasonably be expected to cause the FCC to
deny the assignment of the FCC Licenses as provided for in this Agreement.
(j) The Contracts and other intangible assets to be
transferred or assigned to Buyer under this Agreement are and will, on the
Closing Date, be in full force and effect and on the Closing Date there will be
no leases or agreements relating to the Stations (not including this Agreement)
which will be binding on Buyer other than those specifically identified herein
as assumed by Buyer. True and correct copies of all the written leases and
other Contracts have been delivered to Buyer prior to the execution of this
Agreement together with Summary Statements with respect to any oral
commitments, if any. Seller represents and warrants that Seller has complied
in all material respects with the provisions of all such Contracts and
commitments and is not, and at the time of Closing will not be in material
default under any of them, that said leases and other Contracts will be in full
force and effect at the time of Closing unless by their terms they expire prior
thereto, that other than the Station Contracts set forth and described in
Exhibits 1.01(c), (d) and (e), Seller has no other presently existing Contracts
or commitments, oral or written, relating to the Stations, or Assets including,
but not by way of limitation, any collective bargaining or employment
contracts. Seller has not entered into any Contract or any amendment or
modification which waives any of its rights under any Station Contract. The
unperformed obligations ascertainable from the terms on the face of the Station
Contracts (and such amendments or modifications thereto), are the only existing
unperformed obligations thereunder. Seller has no reason to believe that the
network affiliation agreements described in Exhibit 1.01(e) will not be renewed
by the applicable network. Each Station is in compliance in all material
respects with the terms of the applicable network affiliation agreement and
broadcasts, in full, all programming, advertising and other material required
to be broadcast pursuant to the terms of any such network affiliation
agreement.
(k) Until Closing, Seller shall keep the Assets insured to
full insurable value against loss or damage by fire or from other causes
customarily insured against by other Stations similarly situated.
(l) To the best of Seller's knowledge, Seller is in compliance
in all material respects with Laws applicable to Seller, to the Assets, to the
Stations and to its businesses and operations. Seller has obtained and holds
all material permits, licenses and approvals (none of which has been modified
or rescinded and all of which are in full force and effect) from all
Governmental Authorities necessary in order to conduct the operations of the
Stations as presently conducted and to own, use and maintain the Assets.
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(m) Attached hereto as Exhibit 6.01(m) are (i) unaudited
operating statements of each Station as of the end of the fiscal year ending
December 31 in each of 1995, 1996 and 1997, (ii) unaudited operating statements
of each Station for the three (3) month period ending Xxxxx 00, 0000, (xxx)
compiled balance sheets (final audited numbers less non-TV assets and
liabilities) and operating statements of each Station as of the end of the
fiscal year ending December 31 in each of 1995, 1996 and 1997 and as of and for
the two (2) month period ending February 28, 1998. All of the financial
statements referred to in this Section or furnished to Buyer after the date
hereof pursuant to this Agreement: (A) are in accordance with the books and
records of each Station, (B) present fairly and accurately the fixed and
tangible asset base of the Stations as of the respective dates and the results
of operations of the Stations for the respective periods indicated, and (C)
have been prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior accounting periods (except that none
of the statements contain all footnotes required under generally accepted
accounting principles). Exhibit 6.01(m) sets forth all material changes in
accounting methods (for financial accounting purposes) during the time periods
covered by the financial statements attached as Exhibit 6.01(m) hereto. To the
best of Seller's knowledge, there exists no Liabilities of any Station relating
to, or arising out of, the business or operations of the Stations, except for
the Liabilities set forth on the balance sheets of the Stations as of February
28, 1998, and Liabilities incurred since February 28, 1998 in the Ordinary
Course of Business.
(n) Since December 31, 1997, there has been no material
adverse change in the business, operations, prospects, condition (financial or
otherwise), Assets or Liabilities of the Stations and Seller has conducted its
Stations diligently and substantially in the manner heretofore conducted and
only in the Ordinary Course of Business, and Seller has not (i) incurred loss
of, or significant injury to, any of the Assets as the result of any fire,
explosion, flood, windstorm, earthquake, labor trouble, riot, accident, act of
God or public enemy or armed forces, or other casualty; (ii) incurred, or
become subject to, any Liability, except current Liabilities incurred in the
Ordinary Course of Business; (iii) discharged or satisfied any Encumbrance or
paid any Liability other than current Liabilities in the Ordinary Course of
Business; (iv) mortgaged, pledged or subjected to any Encumbrance any of its
Assets; (v) sold, exchanged, transferred or otherwise disposed of any of its
Assets, or canceled any debts or claims; (vi) written down the value of any
Assets or written off as uncollectible any accounts receivable, except
write-downs and write-offs in the Ordinary Course of Business, none of which,
individually or in the aggregate, are material; (vii) entered into any
transactions other than in the Ordinary Course of Business; (viii) made any
material change in any method of accounting or accounting practice; or (ix)
made any agreement to do any of the foregoing.
(o) Except for the Excluded Assets, the Assets include all of
the assets and rights required for the continued operation of each of the
Stations as presently operated. Except for the Excluded Assets, the Assets
constitute all of the properties and assets used or held for use in the
operation and business of each of the Stations. Except for leased or licensed
Assets, Seller is the sole and exclusive legal and equitable owner of, and has
good title to, the Assets free and
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clear of any Encumbrances, except for and subject only to (i) liens for taxes
not yet due and payable, and (ii) those Encumbrances listed in Exhibit 6.01(o)
which shall be discharged and removed prior to the Closing Date. At the
Closing, Buyer shall acquire good title to, and all right, title and interest
in and to the Assets, free and clear of all Encumbrances.
(p) Real Property.
(i) Exhibit 6.01(p) sets forth a list and description
of all Real Property owned, leased, occupied or used by the Stations, which
list specifies (A) the use made of such Real Property by the Stations in the
business and operations of the Stations, and (B) the owner of each parcel
thereof. All such Real Property is suitable and adequate for the uses for
which it is currently devoted.
(ii) Seller is the sole owner of good, valid, fee
simple, marketable title to the Real Property owned by it, including, without
limitation, all buildings, structures, fixtures and improvements thereon in
each case free and clear of all Encumbrances.
(iii) Exhibit 6.01(p) lists all leases and subleases
pursuant to which any of the Real Property is occupied or used in the operation
of the Stations by Seller. Seller is the owner and holder of all the leasehold
interests purported to be granted by such leases and subleases, in each case
free and clear of all Encumbrances. Exhibit 6.01(p) also sets forth a list and
description of all real property leases and subleases pursuant to which Seller
or the owner of the KFYR Studio Site is a lessor or sublessor (the "KFYR
Leases"), which list specifies the use made of such real property by the lesses
and sublesses thereunder. Each lease and sublease listed on Exhibit 6.01(p) is
in full force and effect and constitutes a legal, valid and binding obligation
of, and is legally enforceable against, the respective parties thereto and
grants the leasehold interest it purports to grant free and clear of all
Encumbrances. The parties thereto have complied with all of the material
provisions of such leases and subleases and are not in default thereunder in
any material respect, and there has not occurred any event which (whether with
or without notice, lapse of time or the happening or occurrence of any other
event) would constitute such a default.
(iv) To the best of Seller's knowledge, all buildings,
structures, fixtures and other improvements on the Real Property are in good
repair, free of defects, and fit for the uses to which they are currently
devoted. To the best of Seller's knowledge, all Real Property and such
buildings, structures, fixtures and improvements on the Real Property conform,
including usage by Seller, with all applicable contractual requirements and
building, zoning, subdivision, environmental, land-use, fire and other Laws
pertaining to or affecting such Real Property. All notices or orders to Seller
to correct violations of Laws issued by any Governmental Authority having
jurisdiction against or affecting any of the Real Property have been complied
with.
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(v) To the best of Seller's knowledge, none of the
Real Property or any leasehold interest in the Real Property is subject to any
Contract or other restriction of any nature whatsoever (recorded or unrecorded)
preventing or limiting Seller's right to convey or to use it.
(vi) No portion of the Real Property or any building,
structure, fixture or improvement thereon is the subject of, or affected by,
any condemnation, eminent domain or inverse condemnation proceeding currently
instituted or pending, and Seller has no knowledge that any of the foregoing
are, or will be, the subject of, or affected by, any such proceeding.
(vii) The Real Property has direct and unobstructed
access to a public right-of-way and to adequate electric, gas, water, sewer and
telephone lines, all of which are adequate for the uses to which the Real
Property is currently devoted and intended to be devoted.
(viii) The buildings, structures, fixtures and
improvements on each parcel of the Real Property lie entirely within the
boundaries of such parcel of the Real Property as specified in the legal
description set forth in Exhibit 6.01(p), and, to the best of Seller's
knowledge, there are no encroachments on the Real Property.
(ix) On the Closing Date, no tangible assets, except
for the Excluded Assets and mobile equipment, used or useful in the business
and operations of the Stations by Seller will be located on any real property
not included in the Real Property.
(q) To the best of Seller's knowledge, all tangible Assets are
in good operating condition and repair, free of defects, and are suitable,
adequate and fit for the uses for which they are intended or are being used;
and such Assets and the present use thereof do not violate in any material
respect any applicable licenses, statutes, engineering standards or building,
fire, zoning, health and safety Laws.
(r) Exhibit 6.01(r) contains a true, correct and complete
listing of all Intellectual Property owned or licensed by or registered in the
name of Seller or used or held for use in the business and operations of the
Stations, all of which are transferable to Buyer and all required consents on
the part of any other person necessary to validate the transfer to Buyer of
such Intellectual Property have been obtained. Seller pays no royalty to
anyone with respect to the Intellectual Property and has the right to bring
action for the infringement thereof. Seller owns or possesses all rights to
use all such Intellectual Property necessary to the conduct of the business of
the Stations. Seller does not have any knowledge and Seller has not received
any notice to the effect that any service rendered by Seller relating to the
business of the Stations may infringe on any Intellectual Property right or
other legally protectable right of another. Seller has the right to the use of
the call letters of the Stations pursuant to the rules and regulations of the
FCC, except that the call letters "KFYR" are also be subject to use by KFYR-AM
licensed to Bismarck, North Dakota.
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(s) All returns, reports and statements relating to the
Stations currently required to be filed by Seller with the FCC or any other
Governmental Authority have been filed and complied with and to the best of
Seller's knowledge are true, correct and complete in all material respects.
All such reports, returns and statements shall continue to be filed on a
current basis until the Closing Date, and to the best of Seller's knowledge
will be true, correct, and complete in all material respects. All documents
required by the FCC's rules to be placed in the Stations' public files have
been placed and are being held in such files. All logs and business records
relating to the business and operations of the Stations, including without
limitation, political and public files, program, operating and maintenance
logs, equipment performance measurements, policies or evidence of insurance,
licenses, payroll, social security and withholding tax returns and other
records pertaining to the business and operations of the Stations have been
maintained in all material respects in accordance with good business practices
and the rules and regulations of the FCC and are in the possession of Seller at
the Stations.
(t) For each Station, Exhibit 6.01(t) sets forth a true and
complete list of all Program Contracts, copies of which have been provided to
Buyer. The Program Contracts have been scheduled and broadcast in the Ordinary
Course of Business. Seller has the right to broadcast on KMOT-TV, KQCD-TV and
KUMV-TV, all of the programming described in the Programming Contracts listed
in Exhibit 6.01(t) for KFYR-TV.
(u) Except as set forth in Exhibit 6.01(u), there are no
strikes, work stoppages, grievance proceedings, union organization efforts, or
other controversies pending or, to the best of Seller's knowledge, threatened
between Seller and (i) any of their respective current or former station
employees or agents, or (ii) any union or collective bargaining unit
representing such station employees. To the best of Seller's knowledge, Seller
has complied and is in compliance in all respects with Laws relating to the
employment or the workplace, including, without limitation, provisions relating
to wages, hours, collective bargaining, safety and health, work authorization,
equal employment opportunity, immigration and the withholding of income taxes,
unemployment compensation, worker's compensation, employee privacy and right to
know and social security contributions. Except as set forth in Exhibit 6.01(u)
hereto, there are no collective bargaining agreements, employment agreements
between Seller and any of its employees or professional service Contracts not
terminable at will relating to the Stations or the business and operations
thereof. The consummation of the transactions contemplated hereby will not
cause Buyer to incur or suffer any Liability relating to, or obligation to pay,
severance, termination, or other payments to any person or entity. Except as
set forth in Exhibit 6.01(u) hereto, no employee of Seller has any contractual
right to continued employment by Seller following consummation of the
transactions contemplated by this Agreement. Exhibit 6.01(u) sets forth a true
and complete list dated as of March 31, 1998, of all employees of Seller by
Stations and for each employee his or her respective position, title, salary,
date of hire, date of last review and accrued vacation and sick days, and all
information with respect to all benefit plans or policies, bonus plans,
commissions, severance plans or policies, compensation arrangements or other
benefits provided to such employees.
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(v) Environmental Matters.
(i) To the best of Seller's knowledge, Seller has
complied and is in compliance with, and the Real Property and all improvements
thereon are in compliance with, all Environmental Laws.
(ii) There are no pending or, to the knowledge of
Seller, threatened actions, suits, claims, legal proceedings or other
proceedings based on any of the actions or events described in clauses (A)
through (E) below, and neither Seller nor any officer thereof has directly or
indirectly received any notice of any complaint, order, directive, citation,
notice of responsibility, notice of potential responsibility, or information
request from any Governmental Authority or any other person or entity or knows
or suspects any fact(s) which might form the basis for any such actions or
notices arising out of or attributable to: (A) the current or past presence at
any part of the Real Property of Hazardous Materials or any substances that
pose a hazard to human health or an impediment to working conditions; (B) the
current or past release or threatened release into the environment from the
Real Property (including, without limitation, into any storm drain, sewer,
septic system or publicly owned treatment works) of any Hazardous Materials or
any substances that pose a hazard to human health or an impediment to working
conditions; (C) the off-site disposal of Hazardous Materials originating on or
from the Real Property or the businesses or Assets of Seller; (D) any facility
operations or procedures of Seller which do not conform to requirements of the
Environmental Laws; or (E) any violation of Environmental Laws at any part of
the Real Property or otherwise arising from Seller's activities involving
Hazardous Materials.
(iii) Seller has been duly issued, and currently has
and will maintain through the Closing Date, all permits, licenses, certificates
and approvals required under any Environmental Law, if any. A true and
complete list of such permits, licenses, certificates and approvals, all of
which are valid and in full force and effect, is set out in Exhibit 6.01(v).
Except in accordance with such permits, licenses, certificates and approvals,
there has been no discharge of any Hazardous Materials or any other material
regulated by such permits, licenses, certificates or approvals.
(iv) The Real Property contains no underground storage
tanks, or underground piping associated with such tanks, that are used by
Seller currently or, to the best of Seller's knowledge, by any prior owner in
the past, for Hazardous Materials except as disclosed in Exhibit 6.01(v)(iv),
and no portion of the Real Property is or has been used as a dump or landfill
or consists of or contains filled in land or wetlands. Neither PCBs nor
asbestos containing materials are present on or in the Real Property except as
disclosed in Exhibit 6.01(v)(iv).
(v) Seller has furnished to Buyer accurate and
complete information pertaining to the environmental history of the Real
Property and the operations of Seller, including without limitation, all
environmental assessments.
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(vi) To the best of Seller's knowledge, the operation
of the Stations does not cause or result in exposure of workers or the general
public to levels of radio frequency radiation in excess of the "Radio Frequency
Protection Guides" recommended in "American National Standard Safety Levels
with Respect to Human Exposure to Radio Frequency Electromagnetic Fields 300
kHz to 100 gHz" (ANSI C95.1-1982), issued by the American National Standards
Institute, and renewal of the FCC Licenses would not constitute a "major
action" within the meaning of Section 1.1301, et seq., of the FCC's rules.
(w) Exhibit 6.01(w) contains a list and brief summary of all
policies of title, property, fire, casualty, liability, life, worker's
compensation, libel and slander, and other forms of insurance of any kind
relating to the Assets or the business and operations of the Stations and owned
or held by Seller. All such policies: (i) are in full force and effect; (ii)
are sufficient for compliance in all material respects by Seller with all
requirements of Law and of all agreements to which Seller is a party; (iii) are
valid, outstanding, and enforceable policies; and (iv) insure against risks of
the kind customarily insured against and in amounts customarily carried by
corporations similarly situated and provide adequate insurance coverage for the
Assets and the Stations (including the business and operations thereof).
(x) Except as set forth in Exhibit 6.01(x) attached hereto,
Seller is not now, and during the past two (2) years has not been, a party,
directly or indirectly, to any material contract, lease, arrangement or
transaction, whether for the purchase, lease or sale of property, for the
rendition of services or otherwise, with any officer, director, employee or
shareholder of Seller. None of the transactions involving Seller which are
identified in Exhibit 6.01(x) contains terms and conditions which are in the
aggregate significantly less favorable to Seller than as would be obtained in a
comparable arm's length transaction or is a transaction which would not have
occurred but for the relationship between the parties. There are no, and at no
time prior to the Closing Date will there be any, Affiliates of Seller.
6.02 REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller as follows:
(a) Buyer is a corporation duly organized, validly existing
and in good standing under the applicable laws of the State of Delaware, and
has all requisite power and authority to own, operate and lease its properties,
to carry on its business as now being conducted and to enter into this
Agreement and perform its obligations hereunder.
(b) The execution and delivery of this Agreement by Buyer has
been duly and validly authorized and approved by all necessary action, and this
Agreement is valid and binding upon Buyer in accordance with its terms.
(c) The execution and carrying out of this Agreement and the
compliance with the provisions hereof by Buyer will not violate any provision
of law, will not, with or without the
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giving of notice and/or the passage of time, conflict with or result in any
breach of any of the terms or conditions of, or constitute a default under any
indenture, mortgage agreement or other instrument to which Buyer is a party or
by which it is bound, and will not result in the creation of any lien, charge
or encumbrance upon Buyer's assets.
(d) No representation or warranty of Buyer, or any statement
or certificate furnished by Buyer to Seller hereunder or in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary to
make the statement contained therein not misleading (except to the extent that
such statements are made in reliance on Seller's representations and
warranties).
(e)(i) To Buyer's knowledge, Buyer is, and pending Closing
will use commercially reasonable efforts to remain legally, technically,
financially and otherwise qualified under the Communications Act and all rules,
regulations and policies of the FCC to acquire and operate the Stations. To
Buyer's knowledge, there are no facts or proceedings which would reasonably be
expected to disqualify Buyer under the Communications Act or otherwise from
acquiring or operating any of the Stations or would cause the FCC not to
approve the assignment of the FCC Licenses to Buyer. Buyer has no knowledge of
any fact or circumstance relating to Buyer or any of Buyer's affiliates that
would reasonably be expected to (a) cause the filing of any objection to the
assignment of the FCC Licenses to Buyer, or (b) lead to a delay in the
processing by the FCC of the applications for such assignment. To Buyer's
knowledge, except for a waiver to continue to operate certain of the Stations
as satellites of KFYR-TV, no waiver of any FCC rule or policy is necessary to
be obtained for the grant of the applications for the assignment of the FCC
Licenses to Buyer, nor, to Buyer's knowledge, will processing pursuant to any
exception or rule of general applicability be requested or required in
connection with the consummation of the transactions herein.
(ii) To Buyer's knowledge, the acquisition, ownership
and operation of the Stations by Buyer will be in compliance with all Antitrust
Laws and all rules, regulations, policies and guidelines of the Federal Trade
Commission ("FTC") and the Department of Justice ("DOJ"). Buyer is not aware
of any facts or proceedings which would reasonably be expected to (a) result in
a violation of any Antitrust Laws by Buyer in connection with the consummation
of the transactions contemplated herein, (b) prevent or restrict Buyer from
acquiring, owning or operating any of the Stations, or (c) cause of the FTC
and/or the DOJ to file a civil antitrust complaint or otherwise challenge or
seek to enjoin the acquisition of the Stations by Buyer. Buyer has no
knowledge of any fact, condition, event, or other circumstance relating to
Buyer or Buyer's affiliates that would reasonably be expected to (a) cause the
filing of any complaint based on the Antitrust Laws seeking to enjoin the
acquisition of the Stations by Buyer, or (b) lead to an extension of the thirty
(30) day waiting period under the HSR Act.
(f) Buyer will have available on the Closing Date sufficient
funds to enable it to consummate the transactions contemplated hereby.
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6.03 BROKERS.
Any commissions payable for brokerage fees to Seller's Broker
in connection with this Agreement shall be the obligation of Seller. Seller
represents to Buyer that, except for the brokerage fees payable to Seller's
Broker (which fees are solely the responsibility of Seller), Seller has not
engaged, or incurred any unpaid liability (for any brokerage fees, finders'
fees, commissions or otherwise) to, any broker, finder or agent in connection
with the transactions contemplated by this Agreement; Buyer represents to
Seller that Buyer has not engaged, or incurred any unpaid liability (for any
brokerage fees, finders' fees, commissions or otherwise) to, any broker, finder
or agent in connection with the transactions contemplated by this Agreement;
and Seller agrees to indemnify Buyer, and Buyer agrees to indemnify Sellers,
against any claims asserted against the other parties for any such fees or
commissions by any person purporting to act or to have acted for or on behalf
of the indemnifying party. Notwithstanding any other provision of this
Agreement, this representation and warranty shall survive the Closing without
limitation and shall not be subject to any limitation contained in Section
10.04.
ARTICLE 7
CONDITIONS TO OBLIGATIONS
7.01 CONDITIONS TO THE OBLIGATIONS OF BUYER.
The obligation of Buyer to perform or fulfill or carry out its
agreements, undertakings and obligations herein made or expressed to be
performed, fulfilled or carried out on or after the date hereof and on or
before Closing Date is and shall be subject to fulfillment of or compliance
with, on the date hereof and on or before Closing Date, the following
conditions precedent, any of which may be waived by Buyer:
(a) Seller's representations and warranties contained in this
Agreement shall be true in all material respects as though such representations
and warranties were made on and as of the Closing Date; Seller shall have
performed and complied in all material respects with all agreements required by
this Agreement to be performed or complied with by it prior to or on the Closing
Date, and Buyer shall have been furnished with a certificate from Seller dated
as of the Closing Date, certifying to the fulfillment of the foregoing
conditions.
(b) There shall not have been instituted by any third party any
suit or proceeding to restrain or invalidate this transaction or seeking damages
from or to impose obligations upon Buyer as a result of this transaction which,
in Buyer's good faith judgment, based upon the advice of counsel, a copy of
which shall be delivered to Seller, would involve expense or lapse of time that
would be materially adverse to Buyer's interests. There shall not have been
suffered any casualty or loss, whether or not covered by insurance, which
materially and adversely affects the Stations and/or the Assets.
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(c) Buyer shall have been furnished with an opinion of
Seller's counsel dated as of the Closing Date to the effect that:
(1) Seller is duly organized and existing under the
laws of the state of its formation;
(2) Seller has the requisite power and authority to
execute, deliver and perform this Agreement and to convey, assign, transfer and
deliver the assets being purchased pursuant to this Agreement;
(3) Any proceedings required to be taken by Seller to
authorize Seller to execute, deliver and perform this Agreement and to convey,
assign, transfer and deliver to Buyer the assets being purchased hereunder have
been duly and properly taken;
(4) This Agreement is the legal, valid and binding
obligation of Seller enforceable as to Seller in accordance with its terms,
subject to bankruptcy, insolvency and other laws affecting the enforcement of
creditors' rights;
(5) The instruments executed and delivered by Seller
to Buyer at the closing pursuant to this Agreement have been duly and validly
executed by Seller.
(d) There shall have been no material adverse change in the
financial condition, results of operations, assets or property or business of
the Stations between the date hereof and the Closing Date, and the business of
Seller and the Stations shall have been conducted between the date hereof and
the Closing Date in the ordinary course of business consistent in all material
respects with past practices.
(e) Seller shall have obtained all consents, authorizations,
and approvals from all Persons, Governmental Authorities, and other entities as
are necessary for the consummation of the purchase and sale of the Assets,
including, without limitation, the consent of the FCC.
(f) Seller shall have delivered to Buyer all Contracts,
agreements, instruments and documents required to be delivered by Seller to
Buyer pursuant to Section 5.02.
(g) The FCC Order shall have become a Final Order with respect
to each of the Stations.
(h) Buyer shall have received the Title Insurance Commitment
with respect to the Real Property described in Exhibit 1.01(f).
(i) All applicable waiting periods under Xxxx-Xxxxx-Xxxxxx
shall have expired or terminated.
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(j) Seller and Xxxxxx Xxxxxx Xxxxxxx shall have executed and
delivered to Buyer a noncompetition agreement in form and substance reasonably
satisfactory to Buyer providing that neither will engage in the ownership or
operation of a television station within North Dakota for a period ending two
(2) years after the Closing Date. The parties acknowledge and agree that One
Thousand Dollars ($1,000) of the Purchase Price shall be allocated to the
non-compete.
(k) Seller shall have acquired good and marketable title to
the KFYR Studio Site and KFYR Leases, free and clear of all Encumbrances, or,
in the alternative, the owner of the KFYR Studio Site and KFYR Leases shall be
conveying all of its right title and interest in and to the KFYR Studio Site
and KFYR Leases to Buyer on the Closing Date pursuant to a real estate purchase
agreement and conveyance documents in forms and substance reasonably
satisfactory to Buyer.
(l) The owner of the KFYR Studio Site shall have entered into
a written lease with the KFYR-AM and KYYY-FM radio stations on terms and
conditions reasonably satisfactory to Buyer, which lease shall be freely
assignable by such owner to Buyer.
(m) If required by applicable Laws, Seller shall have
effectuated a legal subdivision of the Excluded Parcel from the Real Property
being conveyed to Buyer. Seller shall bear all costs, if any, and shall obtain
all necessary approvals required for, such subdivision.
7.02 CONDITIONS TO THE OBLIGATIONS OF SELLER.
The obligation of Seller to perform or fulfill or carry out their
agreements, undertakings and obligations herein made or expressed or to be
performed, fulfilled or carried out on or after the date hereof is and
shall be subject to fulfillment of or compliance with, on the Closing Date, the
following conditions precedent, any of which may be waived by Seller:
(a) Buyer's representations and warranties contained in this
Agreement shall be true in all material respects; Buyer shall have performed
and complied in all material respects with all agreements, covenants and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date, and Seller shall have been furnished with a
certificate from Buyer dated as of the Closing Date, certifying to the
fulfillment of the foregoing conditions.
(b) There shall not have been instituted by any third party
any suit or proceeding to restrain or invalidate this transaction or seeking
damages from or to impose obligations upon Seller as a result of this
transaction which in Seller's good faith judgment, based upon the written
advice of counsel, a copy of which shall be delivered to Buyer, would involve
expense or lapse of time that would be materially adverse to Seller's
interests.
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(c) Buyer shall have obtained from all persons, firms,
governmental agencies, or other entities all such material consents, approvals,
licenses, or other authorizations as may be necessary for Buyer to consummate
the transactions contemplated herein.
ARTICLE 8
TERMINATION; REMEDIES
8.01 TERMINATION.
This Agreement may be terminated at any time prior to the
Closing by:
(a) the mutual consent of Seller and Buyer;
(b) Either Buyer or Seller, by written notice of termination
delivered to the other, if (i) the FCC Order for each Station has not become a
Final Order and/or the Closing has not occurred within twelve (12) months after
the date of this Agreement; provided, however, that the failure of the FCC
Orders to become Final Orders or the failure of the Closing to have occurred
within twelve (12) months of the date of this Agreement shall not be
attributable to the breach of this Agreement by the party seeking termination
under this Section 8.01(b), or (ii) the FCC designates the applications
contemplated by Section 3.01 for an evidentiary hearing;
(c) Buyer, by written notice of termination delivered to
Seller, if the FCC fails to continue the existing satellite waivers or issues
any order in connection with the applications contemplated by Section 3.01 with
conditions which are materially adverse to Buyer (except any such conditions
expressly accepted by Buyer in writing);
(d) Seller, pursuant to Section 8.03 and by Buyer pursuant to
Section 8.04; and
(e) Buyer, by written notice of termination delivered to
Seller, if (i) Seller shall not have delivered a complete set of the Seller
Exhibits (and supporting materials) by May 4, 1998 or (ii) at any time prior to
the end of the Exhibit Review Period pursuant to Section 9.01(p).
8.02 EFFECT OF TERMINATION.
In the event this Agreement is terminated as provided in
Section 8.01, Buyer shall receive the immediate return of the Letter of Credit
or any funds drawn therefrom and this Agreement shall be deemed null, void and
of no further force or effect, and the parties hereto shall be released from
all future obligations hereunder; provided, however, that the obligations of
Buyer and Seller set forth in Sections 3.02, 3.04 and 3.05 (with respect to the
payment of costs, fees and expenses) and Section 12.02 (with respect to
confidentiality), shall survive such
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termination and the parties hereto shall have any and all remedies to enforce
such obligations provided at law or in equity or otherwise (including, without
limitation, specific performance).
8.03 DEFAULT BY BUYER.
If Buyer shall default in the performance of its obligations
under this Agreement or if, as a result of Buyer's action or failure to act,
the conditions precedent to Seller's obligation to close specified in Section
7.02 are not satisfied, and such default, action or failure to act is not cured
within a reasonable amount of time not to exceed thirty (30) days after notice
thereof from Seller, and provided that Seller shall not then be in default in
the performance of Seller's obligations hereunder, Seller shall be entitled, by
written notice to Buyer, to terminate this Agreement, and as Seller's sole
remedy under this Agreement, to the Deposit by drawing on the Letter of Credit
in accordance with the terms of the Deposit Escrow Agreement as liquidated
damages, and upon such payment Buyer shall be discharged from all further
liability under this Agreement; provided, however, that if such default, action
or failure to act is not capable of being cured within thirty (30) days in the
reasonable determination of Seller, then the foregoing thirty (30) day cure
period shall not apply and Seller shall be entitled to exercise its rights
under this Section 8.03 following such determination.
8.04 DEFAULT BY SELLER.
If Seller shall default in the performance of Seller's
obligations under this Agreement, or if, as a result of Seller's action or
failure to act, the conditions precedent to Buyer's obligation to close
specified in Section 7.01 are not satisfied and such default, action or failure
to act is not cured within a reasonable amount of time not to exceed thirty
(30) days after notice thereof from Buyer, and provided that Buyer shall not
then be in default in the performance of Buyer's obligations hereunder, Buyer
shall be entitled, at Buyer's sole option:
(a) to require Seller to consummate and specifically perform
the sale in accordance with the terms of this Agreement, if necessary through
injunction or other court order or process; or
(b) by written notice to Seller, to terminate this Agreement
to receive the immediate return of the Letter of Credit, and to pursue any
other remedies Buyer has at law or in equity or otherwise; provided, however,
that if such default, action or failure to act is not capable of being cured
within thirty (30) days in the reasonable determination of Buyer, then the
foregoing thirty (30) day cure period shall not apply and Buyer shall be
entitled to exercise its rights under this Section 8.04 following such
determination.
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8.05 SPECIFIC PERFORMANCE.
Seller and Buyer acknowledge that the Assets to be sold and
delivered to Buyer pursuant to this Agreement are unique and that Buyer has no
adequate remedy at law if Seller shall fail to perform any of its obligations
hereunder, and Seller therefore confirms and agrees that Buyer's right to
specific performance is essential to protect the rights and interests of Buyer.
Accordingly, in addition to any other remedies which Buyer may have hereunder
or at law or in equity or otherwise and provided that Buyer is not in default
in any material respect of any of its obligations hereunder, Seller hereby
agrees that Buyer shall have the right to have all obligations, undertakings,
agreements and other provisions of this Agreement specifically performed by
Seller and that Buyer shall have the right to obtain an order or decree of such
specific performance in the United States District Court for the District of
North Dakota or any North Dakota state district court.
8.06 LIQUIDATED DAMAGES.
Seller and Buyer have provided for the amount of the Deposit to
be liquidated damages as the sole and exclusive remedy for Seller after having
considered carefully the anticipated and actual xxxxx and losses that would be
incurred if Buyer defaults and thus fails to perform its obligations to
consummate the transactions contemplated hereunder, the difficulty of
ascertaining at this time the actual amount of damages, special and general,
that Seller will suffer in such event, and the inconvenience or nonfeasibility
of otherwise obtaining an adequate remedy in such event.
8.07 RETURN OF LETTER OF CREDIT.
In the event this Agreement shall not be consummated for any
reason other than as specified in Section 8.03, Buyer shall be entitled to
receive and Buyer and Seller shall cause the immediate return of the Letter of
Credit.
ARTICLE 9
CONDUCT OF BUSINESS PENDING CLOSING
9.01 COVENANTS AND AGREEMENTS OF SELLER.
Seller warrants and agrees that, pending Closing:
(a) Seller's assets, business, and operations being sold
hereunder will be conducted only in the Ordinary Course of Business, including
supplying all products and services required by them but not disposing of any
Assets except in the Ordinary Course of Business and
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property or equipment of like kind and equivalent value is substituted
therefore. No change will be made in the aforementioned policies or practices.
(b) Except as set forth in Exhibit 9.01(b), there will be no
pay increase or any bonus payment or arrangement with any employee or agent of
Stations other than normal and customary increases or bonuses pursuant to
annual reviews. In addition, Seller shall not enter into or become subject to
any employment, labor, union or professional service Contract related to the
operations of any Station which is not terminable at will, or any bonus,
pension, insurance, profit sharing, incentive, deferred compensation, severance
pay, retirement, hospitalization employee benefit or other similar plan
covering any employees of the Stations.
(c) Seller will use its best efforts to preserve Seller's
Stations intact and to preserve for Buyer the good will of its suppliers,
employees, subscribers and others having business relations with it.
(d) There shall be no material changes in any Contracts or
commitments, nor shall any new Contracts or commitments be entered into
extending beyond the Closing Date without the written consent of Buyer, except
for those Contracts and commitments which do not relate to the programming of
any Station and which are in amounts less than Fifteen Thousand Dollars
($15,000) individually, and, in the aggregate with all such Contracts and
commitments, in an amount less than One Hundred Thousand Dollars ($100,000.00).
(e) Buyer, its agents and employees, shall have full access,
during normal business hours throughout the period prior to Closing, to all of
Seller's properties, books, Contracts, commitments and records relating to the
Stations (including, without limitation, employee personnel files). In
addition, Seller shall deliver to Buyer a copy of the following documents and
information relating to the owned Real Property described in Exhibit 1.01(f):
(i) any and all engineering studies, environmental reports, soil boring test
results, boundary or topographic surveys; (ii) existing title policies or title
reports, along with copies of exceptions referenced therein; and (iii) any and
all existing proposed, and proffered conditions and agreements accepted and
agreed to by Seller or any predecessor in title to Seller as a condition to
development of the owned real property, in Seller's possession or otherwise
available to Seller.
(f) At Closing, Seller shall provide Buyer with a list of all
accounts receivable of the Stations. Buyer shall endeavor to collect (without
any requirement to litigate or take other enforcement action) all such accounts
receivable and remit to Seller sums collected on the accounts receivable every
thirty (30) days and shall furnish to Seller a final accounting within one
hundred eighty (180) days following Closing. In addition, Buyer shall provide
Seller with a listing of all accounts receivable that have not been collected.
The uncollected accounts receivable are the property of Seller.
(g) Seller shall use its best efforts to cause advertisers to
use, prior to the Closing Date, the time available under trade-out agreements.
Notwithstanding any other
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provision of this Agreement, Seller will not enter into any new trade-out
agreements which exceed Five Thousand Dollars ($5,000) individually or Fifty
Thousand Dollars ($50,000) in the aggregate without the prior consent of Buyer.
All outstanding positive and negative trade balances of the Stations as of the
Closing Date shall be prorated pursuant to Section 2.03(a) hereof.
(h) Within twenty (20) days after the end of each calendar
month prior to Closing, Seller will provide monthly reports to Buyer reflecting
the results of operations of the Stations during such month. Such statements
shall be prepared in a manner consistent with past practices. Buyer is
involved in the television industry and has had the opportunity to view the
Stations and ask questions concerning the operation of the Stations and the
content of the financial information mentioned herein.
(i) Pending and prior to the Closing, Seller will not, without
the prior written approval of Buyer, do or agree to do any of the following:
(A) Change or modify any of Seller's accounting
principles or practices or any method of applying such principles or practices;
(B) Do or omit to do any act (or permit such action or
omission) which will cause a material breach of any Station Contract or any
other Contract to which Seller is a party or by which Seller is bound;
(C) Take any action which may jeopardize the validity
or enforceability of or rights under the FCC Licenses, or under any Station
Contract, or which may diminish the value thereof, or which may prevent the
satisfaction or fulfillment of a condition precedent hereunder;
(D) Program or broadcast any Program Contract,
picture, feature film or syndicated program (and the film usage schedules and
amortization schedules associated therewith), except in the Ordinary Course of
Business; provided, however, in no event shall any of the Stations not
broadcast, in full, all programming, advertising and other material required to
be broadcast pursuant to the terms of any affiliation agreement with such
network;
(E) Take any action or fail to take any action which
would cause any of the representations, warranties or covenants contained
herein to be untrue, incorrect or incapable of being performed or satisfied on
the Closing Date; or
(F) Enter any transactions with any officer, director,
employee or shareholder of Seller, including, without limitation, any renewal,
extension, modification or other change in, any existing Contract to which any
such Person is a party or any other transaction involving any such Person.
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(j) Pending and prior to the Closing Date, Seller will:
(A)(i) Pay or otherwise satisfy all obligations (cash
and barter) of the Stations as they come due and payable; (ii) maintain all
Assets in customary repair, order and condition; and (iii) maintain their books
of account, records, and files in substantially the same manner as heretofore;
(B) Maintain the validity of the FCC Licenses, and
comply in all material respects with all requirements of the FCC Licenses and
the rules and regulations of the FCC;
(C) Use best efforts to maintain in full force and
effect Seller's present network affiliation agreements for the Stations (and
any and all modifications and renewals thereof);
(D) Pay and perform its obligations under the Station
Contracts and under any additional agreements that shall be entered into
between the date hereof and the Closing pursuant to Section 9.01(d), in
accordance with the respective terms and conditions of such Contracts;
(E) Pay or discharge when due and payable all Taxes;
(F) Take all corporate action (including, without
limitation, all shareholder action) under the Laws of North Dakota necessary to
effectuate the transactions contemplated by this Agreement and by the other
Seller Documents;
(G) Maintain in full force and effect all of their
existing casualty, liability, and other insurance through the day following the
Closing Date in amounts not less than those in effect on the date hereof;
(H) Upon receiving notice or otherwise becoming aware
of any violation relating to the FCC Licenses, any violation by Seller or the
Stations of any rules and regulations of the FCC, or any material violations
under any other applicable Laws, promptly notify Buyer and, at Seller's
expense, cure all such violations prior to the Closing Date;
(I) Promptly notify Buyer in writing if any Station
ceases to broadcast at its authorized power for more than forty-eight (48)
consecutive hours. Such notice shall specify the reason or reasons for such
cessation and the corrective measures taken or to be taken by Seller; and
(J) Give prompt written notice to Buyer of (a) the
occurrence, or failure to occur, of any event that would be likely to cause any
of Seller's representations or warranties contained in this Agreement to be
untrue or inaccurate at any time from the date hereof
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to the Closing Date, and (b) any failure on Seller's part to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
by Seller under this Agreement; provided, however, that such notice shall not
operate to cure any breach of the representations, warranties, covenants,
conditions or agreements contained herein.
(k) Seller and Buyer shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to this Agreement or the transactions contemplated herein and shall not issue
any such press release or make any such public statement without the prior
written consent of the other party, which shall not be unreasonably withheld;
provided, however, that Buyer may, without the prior written consent of Seller,
issue such press release or make such public statement as may be required by Law
or any listing agreement with a national securities exchange to which Buyer is a
party if it has used all reasonable efforts to consult with Seller and to obtain
Seller's consent but has been unable to do so in a timely manner.
(l) Environmental Audits.
(i) Within thirty (30) days after the date of this
Agreement, Buyer shall have the right to have Phase I environmental audits (the
"Phase I Audits") performed on the Real Property by Environmental Strategies
Corporation, and to deliver copies of any such Phase I Audits to Seller (the
date of receipt of the Phase I Audits by Seller being the "Audit Receipt
Date"). Seller shall permit Buyer and the environmental inspection firm to
have access to the Real Property for the purpose of conducting such
environmental inspections. Buyer and Seller shall each pay one-half (1/2) of
the fees and expenses of the environmental inspection firm incurred in
connection with preparation of the Phase I Audits; provided that Seller's share
shall not exceed Ten Thousand Dollars ($10,000).
(ii) In the event that the Phase I Audits indicate
that any conditions exist on the Real Property that violate, fail to comply
with, or require remediation under, any applicable Environmental Laws, or that
suggest that additional testing or investigation may be necessary or
appropriate (any such condition, an "Environmental Condition"), then Buyer,
during the thirty (30) day period after the Audit Receipt Date (the "Subsequent
Audit Period"), may, at its own cost and expense, have any additional
environmental investigations as it deems necessary performed on the Real
Property on which the Environmental Condition was identified. If any Phase I
Audit or any subsequent investigations performed by Buyer and delivered to
Seller during the Subsequent Audit Period reveal a Environmental Condition,
Seller shall take whatever reasonable remedial actions are necessary to cure
such Environmental Condition and to cause the Real Property to be in compliance
with applicable Environmental Laws. If Seller shall refuse to take any such
remedial action on the grounds that such action would be unreasonable, Buyer
shall have the right, at its election, to terminate this Agreement, receive
immediate return of the Letter of Credit, and to pursue any remedies Buyer has
at law or in equity or otherwise.
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(iii) In the event that any Environmental Condition
has not been remedied to Buyer's reasonable satisfaction prior to the Closing
Date, and provided that Seller is diligently taking steps to remedy such
Environmental Condition, then the Closing Date shall be delayed for a period of
up to thirty (30) days to provide Seller with additional time to remedy such
Environmental Condition. If such Environmental Condition is not remedied to
Buyer's reasonable satisfaction within such thirty (30) day period, or Buyer
determines in good faith that it is not reasonably likely that such
Environmental Condition will be remedied within such thirty (30) day period,
then Buyer may elect, by written notice to Seller, to terminate this Agreement,
in which event the Letter of Credit shall be returned to Buyer regardless of
whether Buyer is in default under, or breach of, any of the terms of this
Agreement.
(m) Buyer and its auditors shall be entitled at Buyer's
expense to conduct an audit of Seller's financial information as Buyer may
reasonably determine is necessary to satisfy Buyer's public company reporting
requirements pursuant to the Securities Act of 1933 or the Securities Exchange
Act of 1934. Seller agrees to cooperate with Buyer and its auditors as
reasonably requested by Buyer in connection with the preparation and filing of
such financial statements, including providing customary and required
confirmations of the financial data as prescribed by generally accepted
auditing standards.
(n) Seller shall use its reasonable best efforts to enter into
and consummate a real estate purchase agreement in form and substance
reasonably satisfactory to Buyer, pursuant to which Seller shall acquire good
and marketable title to the KFYR Studio Site and KFYR Leases prior to Closing.
(o) Within five (5) business days after Buyer's receipt of the
final engineering reports for the Stations prepared by Central Tank and Tower,
Inc. of Ebensburg, Pennsylvania (the "Engineering Reports"), Buyer shall
provide a copy thereof to Seller. As promptly as practicable after Seller's
receipt of the Engineering Reports and prior to Closing, Seller shall remedy
any conditions identified in the Engineering Reports that are necessary for the
Stations to comply with Laws applicable to the ownership and operation of the
towers and facilities covered by the Engineering Reports, including, without
limitation, the rules and regulations of the FCC and FAA.
(p) The parties acknowledge that as of the date of this
Agreement, the Exhibits referred to herein (other than Exhibits A, B and C)
have not been completed (such incomplete Exhibits, the "Seller Exhibits").
Buyer covenants that it shall provide comments to Seller's counsel on the
initial drafts of the Seller Exhibits previously provided to Buyer no later
than April 29, 1998. Seller covenants that Seller shall in good faith
incorporate Buyer's comments and deliver to Buyer and to Buyer's counsel a
revised and complete set of the Seller Exhibits (and copies of all materials
identified on the Seller Exhibits, as reasonably required to support the Seller
Exhibits or as otherwise requested by Buyer) no later than May 4, 1998. On the
date of receipt of the revised Seller Exhibits, an officer of Seller shall
certify in writing that the Seller Exhibits (and supporting materials)
delivered to Buyer and Buyer's counsel are complete and
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correct. Buyer shall have a period of five (5) business days following the
date of receipt by Buyer and Buyer's counsel of the complete and correct set of
the Seller Exhibits (and supporting materials) (the "Exhibit Review Period") to
review such Seller Exhibits and to determine in the good faith exercise of
Buyer's reasonable business judgment whether the items referenced therein are
acceptable to Buyer. If Buyer, after reasonable consultation with Seller,
determines that the items referred to in the Seller Exhibits are not
acceptable, Buyer shall be entitled to terminate this Agreement pursuant to the
terms set forth in Section 8.01(e).
ARTICLE 10
INDEMNITY
10.01 INDEMNIFICATION BY SELLER.
Seller agrees from and after the Closing Date to indemnify,
defend and to hold Buyer, and Buyer's officers, directors, employees, agents and
successors and assigns (each a "Buyer Indemnified Party"), harmless from and
against and in respect of any Losses incurred by any such Buyer Indemnified
Party from:
(a) Breach of any representation or warranty or non-fulfillment
of any agreement or covenant on the part of Seller under this Agreement or any
exhibit or other instrument furnished or to be furnished to Buyer hereunder.
(b) Any claims made by creditors of Seller relating to the
operation of the Stations to the extent not assumed by Buyer hereunder.
(c) All other Liabilities related to or arising out of the
Assets or the business and operations of the Stations for the period prior to
the Closing Date.
(d) Any employment related practices, policies, Contracts,
decisions, actions or omissions by Seller for the period ending on the Closing
Date with respect to any of Seller's employees or former employees.
(e) As an inducement to Buyer to waive compliance with the
provisions of any applicable bulk transfer laws, Seller covenants and agrees to
pay and discharge when due all debts, obligations and liabilities relating to
the Stations and/or the Assets except the liabilities assumed by Buyer in
accordance with Section 4.01. Seller further agrees to indemnify, defend and
hold harmless each Buyer Indemnified Party from and against and in respect of
any and all Losses, including without limitation any claims made by creditors,
with respect to non-compliance with any bulk transfer law.
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10.02 INDEMNIFICATION BY BUYER.
Buyer agrees from and after the Closing to indemnify, defend and
to hold Seller, and Seller's officers, directors, employees, agents and
successors and assigns (each a "Seller Indemnified Party"), harmless from and
against and in respect of any Losses incurred by any such Seller Indemnified
Party from:
(a) Buyer's failure to materially perform and discharge all of
the obligations and liabilities specifically assumed by it hereunder.
(b) Any damage or deficiency resulting from any material
misrepresentation, breach of warranty, or non-fulfillment of any agreement or
covenant on the part of Buyer under this Agreement, or from any material
misrepresentation in or material omission from any exhibit or other instrument
furnished or to be furnished to Seller hereunder.
10.03 REMEDIES.
The remedies provided by this indemnity shall be in addition to,
and not in lieu of, any other remedies to which the respective party is entitled
at law or in equity for any breach or noncompliance by the other with the
provisions of this Agreement.
10.04 CLAIMS PROCEDURES.
Seller and Buyer each agrees to give prompt written notice to
the other of any claim against the party giving notice which might give rise to
a claim by it against the other party hereto based upon the indemnity agreement
contained in Sections 10.01 and 10.02 hereof, stating the nature and basis of
the claim and the actual or estimated amount thereof. In the event any action,
suit or proceeding is brought against Seller or Buyer with respect to which the
other party hereto may have liability under the indemnity agreement contained in
Sections 10.01 or 10.02 hereof, the indemnifying party shall have the right, at
its sole cost and expense, to defend such action in the name and on behalf of
the indemnified party and in connection with any such action, suit or
proceeding, the parties hereto agree to render to each other such assistance as
may reasonably be required in order to insure the proper and adequate defense of
any such action, suit or proceeding. The party hereto seeking indemnification
hereunder shall not make any settlement of any claim which might give rise to
liability to the other party hereto under the indemnity contained in Sections
10.01 or 10.02 hereof without the written consent of such other party, which
consent such other party covenants shall not be unreasonably withheld. In any
event the indemnifying party shall not be obligated to make any payment pursuant
to this indemnity agreement until the aggregate amount of the indemnifying
party's liability hereunder for all claims exceeds Twenty-Five Thousand Dollars
($25,000) in the aggregate. In no event shall Seller have any right of
contribution against the Stations with respect to any Losses.
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10.05 INDEMNITY DEPOSIT.
At Closing Seller shall deposit in escrow with United Bank (f/k/a
The Xxxxxx Xxxxx Bank) (the "Indemnity Escrow Agent") an original, irrevocable
letter of credit (the "Indemnity Letter of Credit") issued for the benefit of
Buyer by a financial institution reasonably acceptable to Buyer for an amount
equal to Two Million Dollars ($2,000,000), such Indemnity Letter of Credit to be
held as security for Seller's indemnification obligations under this Agreement
in accordance with the terms and conditions of the Indemnity Escrow Agreement, a
form of which is attached hereto as Exhibit C. Buyer and Seller shall cause the
Escrowed Property (as defined in the Indemnity Escrow Agreement) to be returned
to the Seller one (1) year after the Closing Date, unless there shall be any
claims outstanding on such date, in which case the Escrowed Property shall
continue to be held by the Indemnity Escrow Agent until such claims are resolved
in accordance with the terms and conditions of the Indemnity Escrow Agreement.
ARTICLE 11
RISK OF LOSS
11.01 RISK OF LOSS.
The risk of any loss, damage or destruction to any of the Assets
to be transferred to Buyer hereunder from fire or other casualty or loss shall
be borne by Seller at all times prior to the Closing. Upon the occurrence of
any material loss or damage to any of the Assets to be transferred hereunder as
a result of fire, casualty, or other causes prior to the Closing, Seller shall
notify Buyer of same in writing immediately, stating with particularity the
reasonable estimates of the loss or damage incurred, the cause of damage, if
known, and the extent to which restoration, replacement and repair of the Assets
lost or destroyed is believed reimbursable under any insurance policy with
respect thereto. Provided Seller has not repaired, restored or replaced the
damaged Assets by the Closing, Buyer shall have the option (but not the
obligation) exercisable at the Closing to:
(a) terminate this Agreement;
(b) postpone the Closing until such time as the property has
been completely repaired, replaced or restored; or
(c) elect to consummate the Closing and accept the property in
its "then" condition, in which event Seller shall assign to Buyer all rights
under any insurance claim covering the loss and pay over to Buyer the proceeds
under any such insurance policy heretofore received by Seller with respect
thereto.
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ARTICLE 12
MISCELLANEOUS
12.01 BEST EFFORTS.
Each party hereto agrees to use its best efforts to cause the
consummation of the transactions contemplated hereby including, but not limited
to, using its best efforts to assure that the conditions to Closing are
satisfied.
12.02 ACCESS.
Following the date hereof, Seller shall afford to Buyer,
through its attorneys, accountants, and authorized representatives, free and
full access to the plants, properties, books and records of Seller relating to
operation of the Stations on reasonable notice during normal business hours in
order to permit Buyer to make such investigation of the business, properties,
and operations of Seller as Buyer may deem necessary or desirable. Any
information furnished to, or obtained by, any party hereto, its officers,
attorneys, accountants, or authorized representatives, as a result of its
investigations or otherwise in connection with the transactions herein
contemplated shall be treated as confidential information and in the event that
the transactions contemplated hereby are not consummated, each party agrees to
return to the other party all written information furnished by the other party
to it and that it will not use such confidential information, or permit any
such confidential information to be made publicly available.
12.03 NO SOLICITATION.
Seller agrees that, pending the consummation of the
transactions contemplated hereby or prior to the termination of the
transactions so contemplated, it will not enter into any arrangement with any
other party with respect to the sale or other disposition of the Assets and
will not negotiate or otherwise deal with any other person or entity for the
purpose of such sale or disposition.
12.04 EXPENSES.
Except as otherwise expressly provided for herein, Buyer and
Seller shall each pay its own expenses in connection with the preparation of
this Agreement and the consummation of the transactions contemplated hereby.
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12.05 COLLECTION OF ACCOUNTS RECEIVABLE.
From and after the Closing Date, Buyer shall have the right and
authority to collect all account receivables and to endorse with the name of
Seller any checks or drafts received on account of any such items.
12.06 SURVIVAL.
Each party hereto covenants and agrees that its representations
and warranties contained in this Agreement and in any instrument of sale,
assignment, conveyance, and transfer executed and delivered pursuant to this
Agreement shall survive the date hereof and the Closing, and such
representations contained therein and the duty to indemnify pursuant to Article
10 above shall be of no further force and effect after the end of the twelve
(12) months following the date hereof, except as to breaches theretofore
discovered.
12.07 NOTICES.
All notices, claims and other communications hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered,
or mailed first class, postage prepaid, delivered by overnight air courier or
transmitted by facsimile transmission addressed as follows:
(a) if to Seller:
Xxxxxx Xxxxxx Xxxxxxx
CEO
Xxxxx Broadcasting Company
Xxxx Xxxxxx Xxx 000
Xxxxxxxx, Xxxxx Xxxxxx 00000
Fax: (000) 000-0000
copy to:
Xxxxxxx X. Xxxxxx
Xxxxxx & Xxxxxx
Attorneys at Law
Xxxx Xxxxxx Xxx 000
Xxxxxxxx, Xxxxx Xxxxxx 00000
Fax: (000) 000-0000
(b) if to Buyer:
STC Broadcasting, Inc.
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3839 0xx Xxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxx
Fax: (000) 000-0000
with copies (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxxx, Xx., Esq.
Fax: (000) 000-0000
and to:
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Xx.
Fax: (000) 000-0000
or at such other address as any party may from time to time furnish to the
other party by notice given in accordance with the provisions of this Section.
All notices shall be deemed given when mailed or personally delivered in the
manner provided in this Section.
12.08 ENTIRE AGREEMENT; AMENDMENTS; WAIVER.
This Agreement, together with the Exhibits hereto, contains the
entire understanding between the parties hereto concerning the subject matter
hereof and may not be changed, modified or altered, except by an agreement in
writing executed by the parties hereto. Any waiver by either party of any of
its rights under this Agreement or of any breach of this Agreement shall not
constitute a waiver of any other rights or of any other or future breach.
12.09 REMEDIES CUMULATIVE.
Each and all of the rights and remedies in this Agreement
provided, and each and all of the rights and remedies allowed at law in equity
in like case, shall be cumulative, and the exercise of one right or remedy
shall not be exclusive of the right to exercise or resort to any and all other
rights or remedies provided in this Agreement or at law or in equity.
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12.10 ASSIGNMENT.
This Agreement and all rights and obligations of Buyer may be
assigned, either before or after the Closing Date, without the consent of
Seller, to an affiliate or subsidiary of Buyer or a limited partnership, the
general partner of which is a wholly-owned subsidiary of Buyer, provided that
any such assignment shall not relieve Buyer of any of its obligations
hereunder.
12.11 HEADINGS.
Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provisions of this
Agreement.
12.12 GOVERNING LAW.
This Agreement has been executed in, and shall be construed in
accordance with and subject to the laws and decisions of the State of North
Dakota, applicable to contracts made and to be performed entirely therein.
This Agreement may be executed in several counterparts, each of which shall be
an original; but such counterparts shall together constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the day and year first above written.
SELLER:
XXXXX BROADCASTING COMPANY
By: /s/ Xxxxxx Xxxxxx Xxxxxxx
------------------------------------
Xxxxxx Xxxxxx Xxxxxxx
Its: President
BUYER:
STC BROADCASTING, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------------
Its: Chief Financial Officer
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ANNEX I
DEFINITIONS
"Affiliate" means, with respect to any specified Person,
another Person which directly or indirectly controls, is controlled by, or is
under common control with, the specified Person.
"Antitrust Laws" means the Xxxxxxx Act, as amended, the
Xxxxxxx Act, as amended, the Xxxx-Xxxxx-Xxxxxx Act, the Federal Trade
Commission Act, as amended, and all other federal and state statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines, and other
laws that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade.
"Benefit Arrangement" means a benefit program or practice
providing for bonuses, incentive compensation, vacation pay, severance pay,
insurance, restricted stock, stock options, employee discounts, company cars,
tuition reimbursement or any other perquisite or benefit (including, without
limitation, any fringe benefit under Section 132 of the Code) to employees,
officers or independent contractors that is not a Plan.
"Closing Date" means the time and date on which the Closing
takes place, as established by Section 5.01.
"Code" means the Internal Revenue Code of 1986, as amended,
and all Laws promulgated pursuant thereto or in connection therewith.
"Communications Act" means the Communications Act of 1934, as
amended.
"Contract" means any concurrence of understanding and
intention between two or more persons (or entities) with respect to their
relative rights and/or obligations or with respect to a thing done or to be
done, including without limitation, any contract, agreement, lease,
arrangement, commitment, or understanding, written or oral, expressed or
implied.
"Deposit Escrow Agent" means United Bank (f/k/a The Xxxxxx
Xxxxx Bank).
"Deposit Escrow Agreement" means that certain Escrow Agreement
dated as of the date hereof by and among Buyer, Sellers and the Deposit Escrow
Agent, in the form of Exhibit A attached hereto.
"Encumbrances" means any mortgages, pledges, liens, security
interests, restrictions and easements except general utility easements that do
not interfere with the use of the property.
45
"Environmental Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, ("CERCLA") as amended by the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), 42 U.S.C. degree
9601 et seq.; the Toxic Substances Control Act ("TSCA"), 15 U.S.C. degree 2601
et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. degree 1802 et
seq.; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. degree 6901
et seq.; the Clean Water Act ("CWA"), 33 U.S.C. degree 1251 et seq.; the Safe
Drinking Water Act, 42 U.S.C. degree 300f et seq.; the Clean Air Act ("CAA"), 42
U.S.C. degree 7401 et seq.; or any other applicable laws, relating to Hazardous
Materials generation, production, use, storage, treatment, transportation or
disposal, or the protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and all Laws promulgated pursuant thereto or in connection
therewith.
"FCC" means the Federal Communications Commission.
"FCC Order" means an order or orders of the FCC, or of the
Chief, Mass Media Bureau of the FCC, acting under delegated authority,
consenting to the assignment to Buyer of the FCC Licenses for each of the
Stations, as proposed in the applications therefor, without conditions which
are adverse to Buyer or which in any way diminish the operating rights with
respect to the Assets and the Stations, except any such conditions expressly
accepted by Buyer in writing.
"Final Order" means an FCC Order as to which the time for
filing a request for administrative or judicial review, or for instituting
administrative review sua sponte, shall have expired without any such filing
having been made or notice of such review having been issued; or, in the event
of such filing or review sua sponte, as to which such filing or review shall
have been disposed of favorably to the grant and the time for seeking further
relief with respect thereto shall have expired without any request for such
further relief having been filed.
"Governmental Authority" means any agency, board, bureau,
court, commission, department, instrumentality or administration of the United
States government, any state government or any local or other governmental body
in a state, territory or possession of the United States or the District of
Columbia.
"Xxxx-Xxxxx-Xxxxxx" means the Xxxx-Xxxxx-Xxxxxx antitrust
Improvements Act of 1976, as amended, and all Laws promulgated pursuant thereto
or in connection therewith.
"Hazardous Materials" means any wastes, substances, or
materials (whether solids, liquids or gases) that are deemed hazardous, toxic,
pollutants, or contaminants, including without limitation, substances defined
as "hazardous wastes", "hazardous substances", "toxic substances", "radioactive
materials" or other similar designations in, or otherwise subject to regulation
under, any Environmental Laws. "Hazardous Materials" includes polychlorinated
biphenyls (PCBs),
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asbestos, lead-based paints and petroleum and petroleum products (including,
without limitation, crude oil or any fraction thereof).
"IRS" means the Internal Revenue Service.
"KFYR Studio Site" means the KFYR-TV studio site located at
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxx 00000, and all buildings,
towers, improvements, structures and fixtures thereon.
"Laws" means all applicable common law and any statute, law,
code, ordinance, regulation, rule, resolution, order, determination, writ,
injunction, award (including, without limitation, any award of any arbitrator),
judgments and decrees applicable to the specified persons or entities and to
the businesses and assets thereof (including, without limitation, Laws relating
to securities registration and regulation; the sale, leasing, ownership or
management of real property; employment practices, terms and conditions, and
wages and hours; building standards, land use and zoning; safety, health and
fire prevention; and environmental protection, including Environmental Laws).
"Liabilities" shall mean, as to any Person, all debts, adverse
claims, liabilities and obligations, direct, indirect, absolute or contingent
of such person or entity, whether accrued, vested or otherwise, whether in
contract, tort, strict liability or otherwise and whether or not actually
reflected, or required by generally accepted accounting principles to be
reflected, in such person's or entity's balance sheets or other books and
records, including, without limitation, (a) obligations arising under any Law
of any Governmental Authority or imposed by any court or any arbitrator of any
kind, (b) obligations arising in connection with products sold by, or in
connection with services provided by, or under Contracts; (c) all indebtedness
or liability of such Person for borrowed money, or for the purchase price of
property or services (including trade obligations); (d) all obligations of such
Person as lessee under leases, capital or other; (e) liabilities of such Person
in respect of plans covered by Title IV of ERISA, or otherwise arising in
respect of plans for employees or former employees or their respective families
or beneficiaries; (f) all liabilities of other Persons directly or indirectly
guaranteed, endorsed (other than for collection or deposit in the ordinary
course of business) or discounted with recourse by such person or entity or
with respect to which the person or entity in question is otherwise directly or
indirectly liable; (g) all obligations secured by any Lien (as defined herein)
on property of such person or entity, whether or not the obligations have been
assumed; (h) all other items which have been or in accordance with generally
accepted accounting principles would be, included in determining total
liabilities on the liability side of the balance sheet; and (i) any and all
other obligations.
"Losses" means any and all demands, claims, complaints,
actions or causes of action, suits, proceedings, investigations, arbitrations,
assessments, losses, damages (including diminution in value), liabilities,
obligations (including those arising out of any action, such as any settlement
or compromise thereof or judgment or award therein) and any costs and expenses,
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including, without limitation to, interest, penalties and reasonable attorneys'
fees and disbursements.
"Multiemployer Plan" means a "multiemployer plan" as such term
is defined in Section 3(37) of ERISA.
"Ordinary Course of Business" means the ordinary course of
business consistent with past practices of Seller and prudent business
operations.
"Pension Plan" means an "employee pension benefit plan" as
such term is defined in Section 3(2) of ERISA.
"Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization,
other form of business or legal entity or Governmental Authority.
"Plan" means any plan, program or arrangement, whether or not
written, that is or was an "employee benefit plan" as such term is defined in
Section 3(3) of ERISA and (a) which was or is established or maintained by
Seller; (b) to which Seller contributed or was obligated to contribute or to
fund or provide benefits; or (c) which provides or promises benefits to any
person who performs or who has performed services for Seller and because of
those services is or has been (i) a participant therein or (ii) entitled to
benefits thereunder.
"Qualified Plan" means a Pension Plan that satisfies, or is
intended by Seller to satisfy, the requirements for tax qualification described
in Section 401 of the Code.
"Real Property" means all realty, towers, fixtures, easements,
rights-of-way, leasehold and other interests in real property, buildings and
improvements owned, leased, occupied or used in the business and operations of
the Stations, including, without limitation, the fee interest in the KFYR
Studio Site.
"Seller Documents" means this Agreement and other agreements,
documents and instruments executed and delivered by Seller in connection with
the transactions contemplated by this Agreement.
"Seller Tax Returns" means all federal, state, local, foreign
and other applicable Tax returns, declarations of estimated Tax reports
required to be filed by Seller (without regard to extensions of time permitted
by law or otherwise).
"Seller's Broker" means Media Venture Partners.
"Survey" means a survey for a parcel or parcels of real
property prepared by a registered land surveyor licensed in the state where
such real property is located (the "Surveyor"),
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certified by the Surveyor to Buyer and Buyer's lender, and showing (a) the
location of all lot and street lines; (b) the location of encroachments,
overhangs or projections by buildings or improvements erected on adjacent lands
or on such real property; (c) adequate means of ingress and egress to public
roads; (d) the location of all utility and other easements, rights of way,
set-back lines and other matters of record affecting such real property; (e) a
description and the location of all existing improvements (including parking
areas); and (f) such other reasonable facts and information as Buyer may
require.
"Taxes" means all federal, state, local and foreign taxes
(including, without limitation, income, profit, franchise, sales, use, real
property, personal property, ad valorem, excise, employment, social security
and wage withholding taxes) and installments of estimated taxes, assessments,
deficiencies, levies, imports, duties, license fees, registration fees,
withholdings, or other similar charges of every kind, character or description
imposed by any Governmental Authorities, and any interest, penalties or
additions to tax imposed thereon or in connection therewith.
"Title Insurance Commitment" means an irrevocable title
insurance commitment issued by a title insurance company acceptable to Buyer
with respect to the interests in Real Property described in Exhibit 1.01(f) for
(a) a prepaid owner's policy of title insurance (on ALTA 1992 Owner's Form),
showing title for the Real Property interest described in Exhibit 1.01(f) in
Buyer, and (b) a prepaid full-coverage mortgagee policy of title insurance (on
the ALTA 1992 Lender's Form), naming Buyer's lender as the insured party, with
no exception as to survey matters, insuring that the mortgage of Buyer's lender
constitutes a valid and recorded first lien on a good and marketable fee simple
interest in the Real Property described in Exhibit 1.01(f), and providing full
protection against filed and unfiled mechanics' and material men's liens. Each
such policy shall not include any (i) survey matters exceptions, (ii) standard
printed exceptions, (iii) creditor's rights exceptions, (iv) mechanics and
material men's liens exceptions and (v) any other exceptions that are not
Permitted Exceptions (as defined below). "Permitted Exceptions" shall mean (i)
the lien of real estate taxes not yet due and payable, (ii) all matters
revealed in the Title Insurance Commitment described above which are approved
by Buyer, (iii) all existing building, zoning and other city , state, county or
federal laws, codes and regulations affecting the Real Property covered by the
Title Insurance Commitment, and (iv) any existing general utility easements
serving the Real Property covered by the Title Insurance Commitment. The
dollar amount of each interest insured shall be equal to the amount of
consideration allocated to such interest pursuant to Section 2.02(c)(i). If
the interest insured was not separately appraised by the Appraisal Firm and the
parties cannot agree on the amount of consideration to be allocated to such
interest, then the parties shall direct the Appraisal Firm to appraise such
interest and such appraisal shall be binding on both parties for purposes of
this definition. Costs for the appraisal of any real estate interest pursuant
to this definition shall be borne equally by the parties. The foregoing
appraisal procedures shall not apply in the case of any mortgagee policy which
shall be in an amount required by Buyer's lenders(s).
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"Welfare Plan" means an "employee welfare benefit plan" as
such term is defined in Section 3(1) of ERISA.
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