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EXHIBIT 2.5
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of
this 3rd day of March, 1999, by and among STC BROADCASTING, INC., a Delaware
corporation ("STC"), STC LICENSE COMPANY, a Delaware corporation and a
wholly-owned subsidiary of STC ("STC LICENSEE") (each of the foregoing entities
referred to herein individually as "SELLER" and collectively as "SELLERS"), and
NEXSTAR BROADCASTING OF ROCHESTER, LLC, a Delaware limited liability company
("BUYER").
WHEREAS, STC Licensee is the licensee of television broadcast station
WROC-TV, Channel 8, Rochester, New York (the "STATION") pursuant to certain
authorizations issued by the FCC, and STC operates the Station and owns and
leases certain assets used in connection with the operation of the Station; and
WHEREAS, Sellers desire to sell, assign and transfer the assets and
business of the Station as described below, and Buyer desires to acquire the
assets and business of the Station as described below, and to assume certain
liabilities of Sellers and the Station as described below, all on the terms
described in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE 1.
DEFINITIONS AND REFERENCES
Capitalized terms used herein without definition shall have the
respective meanings assigned thereto in Annex I attached hereto and
incorporated herein for all purposes of this Agreement (such definitions to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise specified, all references herein to "Articles" or "Sections"
are to Articles or Sections of this Agreement.
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ARTICLE 2.
SALE AND PURCHASE OF ASSETS; ESCROW DEPOSIT;
PURCHASE PRICE; PRORATION AMOUNTS; ASSUMPTION OF LIABILITIES
2.1. ASSET SALE AND PURCHASE OF ASSETS.
Subject to the terms and conditions hereof and in reliance upon
the representations, warranties and agreements contained herein, Sellers shall
sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase,
acquire, pay for and accept from Sellers, all right, title and interest of
Sellers in, to and under all real, personal and mixed assets, rights, benefits
and privileges, both tangible and intangible, wheresoever located, owned,
leased, used or held for use by Sellers in connection with the business and
operations of the Station (collectively, the "ASSETS"); but excluding the
Excluded Assets described in Section 2.2.
The Assets shall include, without limitation, all right, title and
interest of Sellers in, to and under the following:
2.1.1. FCC LICENSES.
All licenses, permits and other authorizations issued by
the FCC to either Seller for the operation of the Station (the "FCC LICENSES"),
including without limitation those listed in Schedule 2.1.1, and all
applications therefor, together with any renewals, extensions or modifications
thereof and additions thereto.
2.1.2. REAL AND LEASED PROPERTY INTERESTS.
(a) All the real property owned by Sellers including,
without limitation, all land, fee interests, easements and other interests of
every kind and description in real property, buildings, structures, fixtures,
appurtenances, towers and antennae, and other improvements thereon owned by
Sellers ("REAL PROPERTY"), including, without limitation, all of those items
listed or described in Schedule 2.1.2.
(b) All the real property leasehold interests of Sellers
including, without limitation, leases and subleases of any land, easements and
other real property leasehold interests of every kind and description in real
property, buildings, structures, fixtures, appurtenances, towers and antennae,
and other improvements thereon leased by Sellers in connection with the
business and operations of the Station ("LEASED PROPERTY"), including, without
limitation, all of those items listed or described in Schedule 2.1.2.
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2.1.3. TANGIBLE PERSONAL PROPERTY.
All of the furniture, fixtures, furnishings, machinery,
computers, equipment, inventory, spare parts, supplies, office materials and
other tangible property of every kind and description maintained, owned,
leased, used or held for use by Sellers in connection with the business and
operations of the Station, including, without limitation, those items which are
set forth and identified in Schedule 2.1.3 (which is intended to identify those
having a book value in excess of Ten Thousand Dollars ($10,000)), together with
any replacements thereof and additions thereto made before the Closing Date,
and less any retirements or dispositions thereof made before the Closing Date
in the Ordinary Course of Business.
2.1.4. INTELLECTUAL PROPERTY.
All of the service marks, copyrights, franchises,
trademarks, trade names, domain names, jingles, slogans, logotypes, trade
secrets, confidential information, technical and computer data, documentation
and software, business and marketing plans and all other intangible assets
maintained, owned, used or held for use by Sellers in connection with the
business and operations of the Station (including any and all applications,
registrations, extensions and renewals relating thereto) (collectively, the
"INTELLECTUAL PROPERTY"), and all of the rights, benefits and privileges
associated therewith, including, without limitation, those set forth and
identified in Schedule 2.1.4 and the right to use the "WROC" call letters for
the Station.
2.1.5. PROGRAM CONTRACTS.
Except for the Excluded Contracts, the program licenses
and contracts under which Sellers are authorized to broadcast programs on the
Station (collectively the "PROGRAM CONTRACTS"), including without limitation,
(a) all program (cash and non-cash) licenses and contracts listed on Schedule
2.1.5, and (b) any other such program contracts that are entered into between
the date of this Agreement and the Closing Date in accordance with the terms of
this Agreement.
2.1.6. TRADE-OUT AGREEMENTS.
Except for the Excluded Contracts, all contracts and
agreements (excluding Program Contracts) pursuant to which Sellers have sold,
traded or bartered commercial air time on the Station in consideration for any
property or services in lieu of or in addition to cash (collectively, the
"TRADE-OUT AGREEMENTS"), including, without limitation, those set forth and
identified in Schedule 2.1.6.
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2.1.7. BROADCAST TIME SALES AGREEMENT.
Except for the Excluded Contracts, all contracts and
agreements pursuant to which Sellers have sold commercial air time on the
Station for cash (collectively the "TIME SALES AGREEMENTS").
2.1.8. OPERATING CONTRACTS.
The other contracts and agreements entered into by Sellers
in connection with the business and operations of the Station, including,
without limitation, those listed on Schedule 2.1.8 (including, without
limitation, employment agreements and talent contracts, collective bargaining
agreements, network affiliation agreements and national and local advertising
representation agreements for the Station), together with all contracts and
agreements that will be entered into between the date of this Agreement and the
Closing Date in accordance with the terms of this Agreement (collectively, the
"OPERATING CONTRACTS" and together with the Program Contracts, and the
Trade-out Agreements and the Time Sales Agreements, the "STATION CONTRACTS");
provided, that, in each case, unless Buyer otherwise accepts such contract or
agreement in writing, neither the Program Contracts, the Trade-Out Agreements,
the Time Sales Agreements or the Operating Contracts will include (a) any
contract or agreement that is required by Section 3.14.1 to be, but which is
not, described on any of Schedules 2.1.5, 2.1.6 or 2.1.8, or (b) any contract
or agreement that is entered into in breach of any of Sections 6.1.3, 6.1.4,
6.1.5 or 6.1.6 (collectively, such contracts and agreements described in
clauses (a) and (b), the "EXCLUDED CONTRACTS").
2.1.9. VEHICLES.
Except for the vehicle described on Schedule 2.2.13, all
automotive equipment and motor vehicles maintained, owned, leased, used or held
for use by Sellers in connection with the business and operations of the
Station, including, without limitation, those set forth and described in
Schedule 2.1.9.
2.1.10. FILES AND RECORDS.
All engineering, business and other books, papers, logs,
files, and accounting, financial and other records pertaining to the business
and operations of the Station, but not the documents, books and records
described in Section 2.2.8.
2.1.11. AUXILIARY FACILITIES.
All translators, earth stations, and other auxiliary
facilities, and all applications therefor, owned, leased, used or held for use
by Sellers in connection with the business and operations of the Station.
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2.1.12. PERMITS AND LICENSES.
All permits, approvals, orders, authorizations, consents,
licenses, certificates, franchises, exemptions of, or filings or registrations
with, any court or Governmental Authority (other than the FCC) in any
jurisdiction, which have been issued or granted to or are owned, used or held
for use by Sellers in connection with the business and operations of the
Station and all pending applications therefor.
2.1.13. GOODWILL.
The business of the Stations as a "going concern,"
customer relationships and goodwill.
2.2. EXCLUDED ASSETS.
Notwithstanding anything to the contrary in this Agreement, there
shall be excluded from the Assets and retained by Sellers, the following assets
(collectively, the "EXCLUDED ASSETS"):
2.2.1. CASH.
All cash and cash equivalents held by Sellers, all
interest payable in connection with any such cash, cash equivalents or short
term investments, bank balances and rights in and to bank accounts, marketable
and other securities of Sellers.
2.2.2. ACCOUNT RECEIVABLE.
All Accounts Receivable.
2.2.3. DEPOSITS AND PREPAID EXPENSES.
All deposits (other than deposits under Program Contracts,
to the extent apportioned to Buyer pursuant to Section 2.6.1), and prepaid
expenses of the Station and Sellers; provided, however, that such deposits and
prepaid expenses shall be included in the Assets conveyed pursuant hereto to
the extent that Sellers receive a credit therefor in the calculation of the
Proration Amount pursuant to Section 2.6.
2.2.4. PERSONAL PROPERTY DISPOSED OF.
All tangible personal property disposed of or consumed in
the Ordinary Course of Business as permitted by this Agreement.
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2.2.5. INSURANCE.
Except for the Health Insurance Contracts, all contracts
of insurance and all insurance plans and the assets thereof; provided, however,
in the event of any loss or damage by fire or other casualty or other cause
occurring prior to the Non-License Transfer or the Closing, as the case may be,
insurance proceeds received by Sellers with respect to such loss or damage
shall belong to and be paid over to Buyer at the Non-License Transfer or the
Closing, as the case may be, or upon receipt by Sellers, if later, to the
extent that such proceeds have not been used to restore, replace or repair such
damaged Assets; provided, further, that upon the receipt by Buyer of such
insurance proceeds, Sellers shall have no further liability to Buyer to the
extent of the insurance proceeds received by Buyer for any such loss or damage
(pursuant to the indemnification provisions of this Agreement or otherwise).
2.2.6. EMPLOYEE PLANS AND ASSETS.
Except for the Health Insurance Contracts, all Plans,
Benefit Arrangements, Qualified Plans and Welfare Plans and the assets thereof.
2.2.7. RIGHT TO TAX REFUNDS.
Any and all claims of Sellers with respect to any Tax
refunds.
2.2.8. CERTAIN BOOKS AND RECORDS.
All of (a) Sellers' organizational documents and other
corporate records, and originals of account books of original entry, (b)
duplicated copies of any books, records, accounts, checks, payment records, Tax
records (including payroll, unemployment, real estate and other Tax records)
and other similar books, records and information of Sellers relating to the
operation of the business of the Station prior to the Closing Date, (c) all
records prepared by or on behalf of Sellers in connection with the sale of the
Station, and (d) all records and documents to the extent relating to any
Excluded Assets.
2.2.9. THIRD-PARTY CLAIMS.
All rights and claims of Sellers whether mature,
contingent or otherwise, against third parties relating to the business and
operations of the Station during the period prior to the Closing Date, whether
in tort, contract, or otherwise.
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2.2.10. RIGHTS UNDER THIS AGREEMENT.
All of the rights of Sellers under or pursuant to this
Agreement or any other rights in favor of Sellers pursuant to the other
agreements contemplated hereby or thereby.
2.2.11. NAME.
All rights to the name "STC" and "STC Broadcasting" and
any logo or variation thereof and the goodwill associated therewith.
2.2.12. SECURITIES.
All capital stock or other securities of any direct or
indirect subsidiary of Sellers.
2.2.13. EXCLUDED CONTRACTS AND UNRELATED ASSETS.
The contracts, agreements and any other assets listed on
Schedule 2.2.13, and the rights of Sellers under the Excluded Contracts.
2.3. ESCROW DEPOSIT.
For and in partial consideration of the execution and delivery of
this Agreement, simultaneously with the execution and delivery of this
Agreement, Buyer is depositing in escrow with the Deposit Escrow Agent an
amount equal to Four Million Six Hundred Thousand Dollars ($4,600,000) in cash,
said amount to be held as an xxxxxxx money deposit (the "DEPOSIT"), in
accordance with the terms and conditions of this Agreement and the Deposit
Escrow Agreement.
2.4. PURCHASE PRICE.
For and in consideration of the conveyances and assignments
described herein and in addition to the assumption of Liabilities as set forth
in Section 2.8, Buyer agrees to pay to Sellers, and Sellers agree to accept
from Buyer, an amount equal to Forty-Six Million Dollars ($46,000,000) (the
"BASE PURCHASE PRICE"), plus or minus (as the case may be) the Proration Amount
(the Base Purchase Price, as adjusted by the Proration Amount, the "PURCHASE
PRICE"). The Purchase Price shall be payable as described in Section 2.5. The
Purchase Price shall be allocated among the Assets in accordance with Section
2.7.
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2.5. PAYMENT OF PURCHASE PRICE.
2.5.1. At the Non-License Transfer pursuant to Section 11.1, (a)
Buyer shall pay to Sellers by wire transfer of immediately available funds to
an account or accounts which will be identified by Sellers not less than two
(2) days prior to the Non-License Transfer Date, an amount equal to Forty-Three
Million Dollars ($43,000,000) of the Base Purchase Price (plus or minus, as the
case may be, the Proration Amount), and (b) Buyer and Sellers shall cause the
Deposit to be returned to Buyer in accordance with the joint written
instructions of Buyer and Sellers.
2.5.2. The Purchase Price (less any amounts paid to Sellers at a
Non-License Transfer) shall be paid by Buyer to Sellers at the Closing by wire
transfer of immediately available funds to an account or accounts which will be
identified by Sellers not less than two (2) days prior to the Closing Date.
2.6. PRORATION AMOUNT.
2.6.1. At least five (5) days prior to the Transfer Date, Sellers
shall make a good faith estimate of the adjustments to the Base Purchase Price
customary in television broadcast station transactions for Proration Items (the
"PRORATION AMOUNT") to reflect that all Proration Items of the Station shall be
apportioned between Buyer and Sellers in accordance with the principle that
Sellers shall receive the benefit of all refunds, deposits (other than deposits
under Program Contracts, to the extent of the amount of such deposits set forth
on Schedule 2.1.5, which deposits shall be prorated based on the percentage of
the term that the film or program was permitted or required to be aired on the
Station before the Transfer Date and the percentage of the term that the film
or program is permitted or required to be aired on and after the Transfer Date)
and prepaid expenses, and shall be responsible for all expenses, costs and
liabilities allocable to the conduct of the business or operations of the
Station for the period prior to the Transfer Date, and Buyer shall receive the
benefit of all refunds, deposits and prepaid expenses, and shall be responsible
for all expenses, costs and liabilities allocable to the conduct of the
business or operations of the Station from and after the Transfer Date.
Notwithstanding the foregoing, there shall be no adjustment or proration (a)
for the Accounts Receivable; (b) for the Assumed Accrued Employee Liabilities;
provided, however, that in consideration of Buyer's assumption of such
Liabilities, Buyer shall receive a credit in the amount of Seventy-Five
Thousand Dollars ($75,000) in connection with the calculation of the Proration
Amount; (c) for any prepayments (other than deposits as provided for above)
under any Program Contract; or (d) for any negative or positive net trade
balance of the Station except to the extent that the net negative trade balance
(i.e., the amount by which the aggregate value of goods or services to be
received under all Trade-out Agreements is less than the aggregate value of any
advertising time remaining to be run under
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all Trade-out Agreements) or the net positive trade balance (i.e., the amount
by which the aggregate value of any advertising time remaining to be run under
all Trade-out Agreements is greater than the aggregate value of goods or
services to be received under all Trade-out Agreements) for the Station exceeds
Twenty-Five Thousand Dollars ($25,000) as of immediately prior to the Transfer
Date. With respect to amounts due under the Program Contracts as of the
Transfer Date, only those amounts first becoming due and payable during the
month in which the Transfer Date occurs shall be prorated (it being understood
and agreed that obligations for payments with respect to Program Contracts
first becoming due and payable prior to the month during which the Transfer
Date occurs will be allocated solely to Sellers), and such amounts shall be
prorated based on time elapsed and not actual use of the runs. If there shall
be a Non-License Transfer, then prorations and adjustments for Proration Items
related to the License Assets shall be made pursuant to this Section 2.6 as of
the Closing Date. Determinations pursuant to this Section 2.6 shall be made in
accordance with GAAP.
2.6.2 Within one hundred twenty (120) days after the Transfer
Date, Buyer shall deliver to Sellers in writing and in reasonable detail a good
faith final determination of the Proration Amount determined as of the Transfer
Date under Section 2.6.1 ("FINAL PRORATION AMOUNT"). Sellers shall assist Buyer
in making such determination, and Buyer shall provide Sellers with reasonable
access to the properties, books and records relating to the Station for the
purpose of determining the Final Proration Amount. Sellers shall have the right
to review the computations and workpapers used in connection with Buyer's
preparation of the Final Proration Amount. If Sellers disagree with the amount
of the Final Proration Amount determined by Buyer, Sellers shall so notify
Buyer in writing within thirty (30) days after the date of receipt of Buyer's
Final Proration Amount, specifying in detail any point of disagreement. If
Sellers fail to notify Buyer of any disagreement with Buyer's determination of
the Final Proration Amount within such thirty (30) day period, then Buyer's
determination of the Final Proration Amount shall be final as between the
parties. After the receipt of any notice of disagreement, Buyer and Sellers
shall negotiate in good faith to resolve any disagreements regarding the Final
Proration Amount. If any such disagreement cannot be resolved by Sellers and
Buyer within thirty (30) days after Buyer has received notice from Sellers of
the existence of such disagreement, Buyer and Sellers shall jointly select a
nationally recognized independent public accounting firm (the "ACCOUNTING
FIRM"), to review Buyer's determination of the Final Proration Amount and to
resolve as soon as possible all points of disagreement raised by Sellers. All
determinations made by the Accounting Firm with respect to the Final Proration
Amount shall be final, conclusive and binding on Buyer and Sellers. The fees
and expenses of the Accounting Firm incurred in connection with any such
determination shall be shared one-half by Buyer and one-half by Sellers.
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If the Final Proration Amount is such that Buyer's payment
of the Proration Amount was an underpayment to Sellers, then Buyer shall pay
such underpayment amount to Sellers in cash, within five (5) business days
following the final determination of the Final Proration Amount, plus interest
on such underpayment amount at an annual rate of eight percent (8%) from the
Transfer Date to the date of such payment to Sellers. If the Final Proration
Amount is such that Buyer's payment of the Proration Amount was an overpayment
to Sellers, then Sellers shall pay such overpayment amount to Buyer in cash
within two (2) business days following the final determination of the Final
Proration Amount, plus interest on such overpayment amount at an annual rate of
eight percent (8%) from the Transfer Date to the date of such payment to Buyer.
Any amounts paid pursuant to this Section 2.6.2 shall be by wire transfer of
immediately available funds for credit to the recipient at a bank account
identified by such recipient in writing.
Buyer and Sellers agree that prior to the date of the
final determination of the Final Proration Amount pursuant to this Section
2.6.2 (by the Accounting Firm or otherwise), neither party will destroy any
records pertaining to, or necessary for, the final determination of the Final
Proration Amount.
2.7. ALLOCATION OF PURCHASE PRICE.
As promptly as reasonably practicable following execution of this
Agreement, Sellers and Buyer agree to retain Bond & Xxxxxx (the "APPRAISAL
FIRM") to appraise the classes of Assets of the Station based on the Base
Purchase Price for the Station. The Appraisal Firm shall be instructed to
perform such appraisal and deliver a written report thereof to Sellers and
Buyer as soon as reasonably practicable (the "APPRAISAL REPORT"). Sellers, on
the one hand, and Buyer, on the other hand, shall each pay one-half (1/2) of
the fees, costs and expenses of the Appraisal Firm whether or not the
transactions contemplated hereby are consummated; provided, however, that the
amount of the fees, costs and expenses of the Appraisal Firm payable by Buyer
shall not exceed Ten Thousand Dollars ($10,000). Sellers and Buyer each
represent, warrant, covenant and agree with each other that the Base Purchase
Price shall be allocated among the classes of Assets for the Station as set
forth in the Appraisal Report. Sellers and Buyer agree, pursuant to Section
1060 of the Code, that the Base Purchase Price shall be allocated in accordance
with this Section 2.7, and that all Tax returns and reports shall be filed
consistent with such allocation. The parties acknowledge and agree that the
payment of the Purchase Price as contemplated herein does not reflect the
allocation among classes of Assets for the Station as determined pursuant to
this Section 2.7. Notwithstanding any other provision of this Agreement, the
provisions of this Section 2.7 shall survive the Non-License Transfer Date and
the Closing Date without limitation.
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2.8. ASSUMPTION OF LIABILITIES.
2.8.1. At the Non-License Transfer, Buyer shall assume, and shall
agree to pay, perform and discharge as and when the same become due and payable
or are required to be performed, (a) all Liabilities arising on or after, and
relating to the period from and after, the Non-License Transfer Date under the
Station Contracts, (b) all Liabilities arising out of events occurring on or
after the Non-License Transfer Date related to the business or operations of
the Station or Buyer's ownership of the Non-License Assets, (c) all Liabilities
for which Buyer receives a credit in connection with the calculation of the
Proration Amount, and (d) the Assumed Accrued Employee Liabilities; provided,
however, that the Assumed Liabilities shall not include any Liability under any
Excluded Contract.
2.8.2. To the extent not assumed by Buyer at the Non-License
Transfer, at the Closing, Buyer shall assume, and shall agree to pay, perform
and discharge as and when the same become due and payable or are required to be
performed, (a) all Liabilities arising on or after, and relating to the period
from and after, the Closing Date under the Station Contracts and the FCC
Licenses, (b) all Liabilities arising out of events occurring on or after the
Closing Date related to the business or operations of the Station or Buyer's
ownership of the Assets, (c) all Liabilities for which Buyer receives a credit
in connection with the calculation of the Proration Amount, and (d) the Assumed
Accrued Employee Liabilities; provided, however, that the Assumed Liabilities
shall not include any Liability under any Excluded Contract.
2.8.3. Except for the Assumed Liabilities, Buyer assumes no other
Liabilities of any kind or description.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY SELLERS
Sellers jointly and severally represent and warrant to Buyer as follows:
3.1. ORGANIZATION AND STANDING.
Each Seller is duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly qualified to do
business and is in good standing in any jurisdiction where such qualification
is necessary, except for those jurisdictions where the failure to be so
qualified would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Sellers have the corporate power and
authority to own, lease and otherwise to hold and operate the Assets, to carry
on the business of the Station as now conducted,
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and to enter into and perform the terms of this Agreement, the other Seller
Documents and the transactions contemplated hereby and thereby.
3.2. AUTHORIZATION.
The execution, delivery and performance of this Agreement and of
the other Seller Documents, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate actions of Sellers (none of which actions has been modified
or rescinded and all of which actions are in full force and effect). This
Agreement and the Deposit Escrow Agreement constitute, and upon execution and
delivery each other Seller Document will constitute, valid and binding
agreements and obligations of Sellers, enforceable against Sellers in
accordance with their respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights generally and
by the application of general principles of equity.
3.3. COMPLIANCE WITH LAWS.
Sellers are in compliance in all material respects with all Laws
applicable to Sellers, to the Assets, to the Station and to the business and
operations of Sellers. Sellers have obtained and hold all 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 Station as presently conducted, except for such
permits, licenses and approvals for which the failure to obtain would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
3.4. CONSENTS AND APPROVALS; NO CONFLICTS.
3.4.1. The execution and delivery of this Agreement, and the
performance of the transactions contemplated herein by Sellers, will not
require any consent, approval, authorization or other action by, or filing with
or notification to, any Person in connection with any Station Contract, except
that certain of the Station Contracts may be assigned only with the consent of
third parties, as specified in Schedule 3.4.1, and except for any consent,
approval, authorization, action, filing or notification, the failure of which
to obtain or make would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
3.4.2. The execution and delivery of this Agreement, and the
performance of the transactions contemplated herein by Sellers, will not
require
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any consent, approval, authorization or other action by, or filing with
or notification to, any Governmental Authority where the failure to make such
filing or obtain such consent would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, except as follows:
(a) filings required under Xxxx-Xxxxx-Xxxxxx, (b) consents to the assignment of
the FCC Licenses to Buyer by the FCC, and (c) filings, if any, with respect to
real estate transfer taxes.
3.4.3. Assuming all consents, approvals, authorizations and other
actions described in Section 3.4.1 and Section 3.4.2 have been obtained and all
filings and notifications described in Section 3.4.1 and Section 3.4.2 have
been made, the execution, delivery and performance of this Agreement and the
other Seller Documents by Sellers do not and will not (a) conflict with or
violate any Law applicable to Sellers, the Assets or the Station or by which
any of the Assets or the Station is subject or affected, (b) conflict with or
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under any contract or
agreement to which either Seller is a party or by which either Seller is bound
or to which any of the Assets or the Station is subject or affected, (c) result
in the creation of any Encumbrance upon the Assets, or (d) conflict with or
violate the organizational documents of Sellers; except where any such
conflict, violation or breach would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
3.5. FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES.
3.5.1. Sellers have provided to Buyer the unaudited balance sheet
of the Station as of December 31, 1997, and December 31, 1998, and the
unaudited statements of operations of the Station for the years ended December
31, 1997, and December 31, 1998. The financial statements referred to in this
Section 3.5.1 (a) present fairly in all material respects the financial
condition of the Station as of the respective dates and the results of
operations for the respective periods indicated, and (b) have been prepared in
accordance with GAAP (except that the financial statements referred to in this
Section 3.5.1 do not contain all footnotes required under GAAP and do not
include statements of cashflows).
3.5.2. There exist no Liabilities of the Station relating to, or
arising out of, the business or operations of the Station, contingent or
absolute, matured or unmatured, known or unknown, except (a) as reflected on
the unaudited balance sheet as of December 31, 1998 (the "CURRENT BALANCE SHEET
DATE") referred to in Section 3.5.1, (b) for Liabilities that were incurred
after the Current Balance Sheet Date in the Ordinary Course of Business and (c)
for Liabilities that would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
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3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS.
There has been no Material Adverse Effect since the Current
Balance Sheet Date through the date of this Agreement. Since the Current
Balance Sheet Date, Sellers have conducted the business of the Station in the
Ordinary Course of Business, and Sellers have not (a) incurred loss of, or
injury to, any of the Assets as the result of any fire, explosion, flood,
windstorm, earthquake, labor trouble, riot, accident, act of God or public
enemy or armed forces, or other casualty, except for such losses or injuries
which have been cured in accordance with Section 8.2; (b) incurred, or become
subject to, any Liability, except current Liabilities incurred in the Ordinary
Course of Business; (c) mortgaged, pledged or subjected to any Encumbrance any
of its Assets other than Encumbrances in connection with Liabilities arising
under any credit or loan agreement between Sellers and their lenders; (d) sold,
exchanged, transferred or otherwise disposed of any Assets, or canceled any
debts or claims; (e) entered into any transactions other than in the Ordinary
Course of Business; (f) made any material change in any method of accounting or
accounting practice; or (g) made any agreement to do any of the foregoing.
3.7. ABSENCE OF LITIGATION.
Except as set forth on Schedule 3.7, as of the date hereof there
is no action, suit, investigation, claim, arbitration or litigation pending or,
to the knowledge of Sellers, threatened against Sellers, the Assets or the
Station by or before any Governmental Authority that would reasonably be
expected to, individually or in the aggregate, (a) have a Material Adverse
Effect, or (b) challenge or seek to prevent, enjoin, alter or materially delay
the transaction contemplated hereby.
3.8. ASSETS.
Except for the Excluded Assets, the Assets include all of the
assets or property used in the business of the Station as presently operated.
Sellers are the owners of, and have good title to, or have a good and valid
leasehold or license interest in and to, the Assets free and clear of any
Encumbrances, except for and subject only to (a) the Permitted Encumbrances,
(b) those Encumbrances listed in Schedule 3.8, which shall be discharged and
removed on or prior to the Transfer Date, and (c) as to the Real Property,
those Encumbrances listed in Schedule 3.10 which, to the extent so indicated in
Schedule 3.10, shall be discharged and removed on or prior to the Transfer
Date. At the Non-License Transfer and the Closing, Buyer shall acquire good
title to, and all right, title and interest in and to the Assets, free and
clear of all Encumbrances, except for the Permitted Encumbrances.
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3.9. FCC MATTERS.
STC Licensee holds the FCC Licenses listed as held by STC Licensee
on Schedule 2.1.1. The FCC Licenses constitute all of the licenses, permits and
authorizations from the FCC that are required for the business and operations
of the Station. The FCC Licenses are valid and in full force and effect through
the dates set forth on Schedule 2.1.1, unimpaired by any condition which would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The Station has been operated by Sellers in all material
respects in accordance with the terms of the FCC Licenses. Except as set forth
on Schedule 3.9, no application, action or proceeding is pending for the
renewal or modification of any of the FCC Licenses, and, except for actions or
proceedings affecting television broadcast stations generally, no application,
complaint, action or proceeding is pending or, to Sellers' knowledge,
threatened that may result in the (a) the revocation, modification, non-renewal
or suspension of any of the FCC Licenses, (b) the issuance of a
cease-and-desist order, or (c) the imposition of any administrative or judicial
sanction with respect to the Station. Sellers have no knowledge of any facts,
conditions or events relating to Sellers or the Station including, without
limitation, compliance by Sellers with the Children's Television Act, that
would reasonably be expected to cause the FCC to deny the assignment of the FCC
Licenses as provided for in this Agreement. Sellers have filed with the FCC all
reports, forms and statements required by the FCC to be filed by Sellers
relating to the Station, including, without limitation, applications for
renewal of authority required by applicable Laws.
3.10. REAL PROPERTY.
3.10.1. STC has good and marketable title to the Real Property
listed in Schedule 2.1.2, free and clear of all Encumbrances, except for (a)
those items listed in Schedule 3.10 (which, to the extent so indicated on
Schedule 3.10, shall be discharged and removed on or prior to the Transfer
Date), and (b) Permitted Encumbrances. Schedule 2.1.2 sets forth the address
and the legal description of each parcel of real property owned by Sellers and
used or held for use in the operation of the Station.
3.10.2. STC has a valid leasehold interest in all Leased Property
listed as leased by STC in Schedule 2.1.2. Schedule 2.1.2 lists all leases,
subleases and other occupancy agreements (the "LEASES") pursuant to which any
of the Leased Property is leased by Sellers. STC is the owner and holder of all
the Leased Property purported to be granted by the Leases. Each Lease is in
full force and effect and constitutes a legal, valid and binding obligation of,
and is legally enforceable against STC and, to the knowledge of Sellers, each
other party thereto, and grants the leasehold interest it purports to grant.
STC has complied with all of the material provisions of the Leases and is not
in default thereunder in any
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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 by Sellers or, to the knowledge of
Sellers, any other parties to the Leases.
3.10.3. The Real Property and the Leased Property listed in
Schedule 2.1.2 constitute all of the real property owned, leased, used or held
for use by Sellers in the business and operations of the Station. Except as set
forth in Schedule 3.10 and except for any Permitted Encumbrances, other than
Sellers, no Person occupies or has the current or future right to occupy, the
Real Property (or the Leased Property in a manner that would infringe Sellers'
right with respect thereto).
3.10.4. All buildings, structures, fixtures and other improvements
on the Real Property are in sufficient operating condition and adequate repair
(ordinary wear and tear excepted) for the purposes to which they are currently
devoted.
3.10.5. To the knowledge of Sellers, 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.
3.10.6. Sellers have delivered to Buyer copies of title policies
and surveys prepared in connection with the acquisition of the Real Property by
Sellers.
3.11. CONDITION OF TANGIBLE ASSETS.
Except as set forth on Schedule 3.11, all tangible Assets
presently in use are in operating condition and adequate repair (ordinary wear
and tear excepted) for the purposes to which they are currently devoted.
3.12. INTELLECTUAL PROPERTY.
Schedule 2.1.4 contains a true, correct and complete listing of
all registered or applied-for Intellectual Property owned or licensed by or
registered in the name of Sellers which is used in the business and operations
of the Station. Except as set forth in Schedule 3.4.1, all Intellectual
Property owned or licensed by Sellers and used or held for use in the business
and operations of the Station is transferable to Buyer by the sole act and deed
of Sellers. Except as set forth in Schedule 3.4.1, no consent on the part of,
notice to or filing with any other person is necessary in connection with the
transfer to Buyer of such Intellectual Property. No royalty is payable to any
Person as a result of or with respect to the use of any Intellectual Property.
Sellers own or possess pursuant to a valid and enforceable
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license, all rights to use all such Intellectual Property material to the
conduct of the business of the Station. Sellers do not have any knowledge and
Sellers have not received any notice to the effect that the conduct of the
business of the Station may infringe, misappropriate or conflict with any
Intellectual Property right or other legally protectable right of another.
Sellers have the right to the use of the call letters "WROC-TV" pursuant to the
rules and regulations of the FCC. Sellers have no knowledge of any claim by
another Person contesting the validity, enforceability, use or ownership of any
Intellectual Property or any grounds for the same.
3.13. REPORTS AND RECORDS.
All material returns, reports and statements relating to the
Station required to be filed by Sellers with the FCC or any other Governmental
Authority have been filed and when filed were 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 will be correct and
complete in all material respects when filed. All documents required by the
FCC's rules to be placed in the Station's public files by Sellers have been
placed and are being held in such files. All logs and business records of every
type and nature relating to the business and operations of the Station have
been maintained in all material respects in accordance with the rules and
regulations of the FCC.
3.14. STATION CONTRACTS.
3.14.1. The Station Contracts set forth in Schedules 2.1.5, 2.1.6
and 2.1.8 are all of the contracts and agreements relating to the Assets, to
the Station or to the business and operations thereof, other than (a) Time
Sales Agreements entered into in the Ordinary Course of Business; and (b)
contracts and agreements which are not Subject Agreements and which do not
require payments of more than Ten Thousand Dollars ($10,000) per contract per
year or One Hundred Fifty Thousand Dollars ($150,000) per year in the
aggregate. Complete and correct copies of all Station Contracts have been made
available to Buyer.
3.14.2. Sellers represent and warrant to Buyer that (a) each
Station Contract is in full force and effect; (b) Sellers are not in breach or
default of the terms of any Station Contract in any material respect; (c) none
of the material rights of Sellers under any Station Contract will be subject to
termination or modification, nor will a default occur, as a result of the
consummation of the transactions contemplated hereby, except to the extent that
failure to obtain the prior consent to assignment thereof (to the extent set
forth on Schedule 3.4.1) of any party thereto shall or could be interpreted to
constitute a termination or modification of or a default under any such Station
Contract; and (d) to the knowledge of Sellers, no other party to any Station
Contract is in material breach or default of the terms thereunder.
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3.15. TAXES.
3.15.1. Sellers have (or, in the case of returns becoming due
after the date hereof and on or before the Transfer Date, will have prior to
the Transfer Date) duly filed all Seller Tax Returns required to be filed by
Sellers on or before the Transfer Date with respect to all applicable Taxes. In
the case of any Seller Tax Returns which receive an extension for their date of
filing, such Seller Tax Returns will be considered due on, and not considered
required to be filed before, the extended due date. To the knowledge of
Sellers, all of the Seller Tax Returns are (or, in the case of returns becoming
due after the date hereof and on or before the Transfer Date, will be) true and
complete in all material respects. Sellers: (a) have paid all Taxes due to any
Governmental Authority in connection with any of the Seller Tax Returns; or (b)
has established (or, in the case of amounts becoming due after the date hereof,
prior to the Transfer Date will have established) adequate reserves (in
conformity with GAAP consistently applied) for the payment of such Taxes.
3.15.2. There is no action, suit, proceeding, audit, investigation
or claim pending or, to the knowledge of Sellers, threatened in respect of any
Taxes associated with, or which would become a lien against, the Assets or
operations of the Station for which Sellers may become liable, nor has any
deficiency or claim for any such Taxes been proposed, asserted or, to the
knowledge of Sellers, threatened. There is no Station Contract, waiver or
consent providing for an extension of time with respect to the assessment or
collection of any Taxes associated with, or which would become a lien against,
the Assets or operations of the Station against Sellers, and no power of
attorney granted by Sellers with respect to any related tax matters is
currently in force.
3.16. EMPLOYEE BENEFIT PLANS.
3.16.1. Schedule 3.16 lists all Plans and Benefit Arrangements
maintained by or contributed to by Sellers, or with respect to which Sellers
have any liability, for the benefit of the employees of the Station
(collectively, the "BENEFIT PLANS"). Each Benefit Plan has been maintained in
substantial compliance with its terms and with the requirements prescribed by
applicable Law, including, without limitation, ERISA and the Code.
3.16.2. Schedule 3.16 sets forth a list of all Qualified Plans.
All Qualified Plans and any related trust agreements or annuity agreements (or
any other funding document) have been maintained in compliance with ERISA and
the Code (including, without limitation, the requirements for Tax qualification
described in Section 401 thereof). The trusts established under such Plans are
exempt from federal income taxes under Section 501(a) of the Code.
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3.16.3. Schedule 3.16 lists all funded Welfare Plans that provide
benefits to current employees of Sellers 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. Sellers are not subject to
taxation on the income of any Welfare Plan's welfare benefit fund (as such term
is defined in Section 419(e) of the Code) under Section 419A(g) of the Code.
3.16.4. Except as required by applicable Law, Sellers have no
post-retirement medical, life insurance or other benefits promised, provided or
otherwise due now or in the future to current, former or retired employees of
the Station.
3.16.5. Except as set forth in Schedule 3.16, Sellers have (a)
filed or caused to be filed all returns and reports on the Plans that it is
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. All other fees, interest,
penalties and assessments that are payable by or for Sellers have been timely
reported, fully paid and discharged. There are no unpaid fees, penalties,
interest or assessments due from Sellers or from any other person that are or
could become an Encumbrance on any Asset or could otherwise adversely affect
the business of the Station or Assets. Sellers have collected or withheld all
amounts that are required to be collected or withheld by Sellers to discharge
its obligations, and all of those amounts have been paid to the appropriate
Governmental Authority or set aside in appropriate accounts for future payment
when due. Sellers have furnished to Buyer true and complete copies of all
documents setting forth the terms and funding of each Plan (including, without
limitation, copies of each severance benefit arrangement and vacation pay
plan).
3.16.6. Sellers have not incurred any liability to the Pension
Benefit Guaranty Corporation (other than premium payments) or otherwise under
Title IV of ERISA, including any withdrawal liability, or under the Code, with
respect to any employee pension plan covering employees of the Station that
either Sellers (or any other Person that, together with Sellers, is treated as
a single employer under Section 414 of the Code) maintain or have maintained or
to which either Seller contributes, has contributed or is required to
contribute, and which, individually or in the aggregate, would be reasonably
executed to have a Material Adverse Effect.
3.16.7. As of the close of business on December 31, 1998, (a) no
employee of the Station had any accrued vacation time that was eligible to be
used by such employee after December 31, 1998, except for employees covered by
the AFTRA collective bargaining agreement; (b) the Liability of Sellers for
accrued and unused vacation time for employees covered by the AFTRA collective
bargaining agreement did not exceed Fifty Thousand Dollars ($50,000) in the
aggregate; and (c) no employee of the Station had more than eighty (80) hours
of accrued unused sick leave that was eligible to be used by such employee
after December 31, 1998.
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3.17. LABOR RELATIONS.
3.17.1. Except as set forth in Schedule 3.17.1, there are no
strikes, work stoppages, grievance proceedings, union organization efforts, or
other controversies pending or threatened between Sellers and any union or
collective bargaining unit representing such employees. Sellers are in
compliance in all material respects with all 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 Schedule 3.17.1
hereto, there are no collective bargaining agreements relating to the Station
or the business and operations thereof and Sellers have not agreed to recognize
any union or other collective bargaining unit, nor has any union or collective
bargaining unit been certified as representing any employees of Sellers.
3.17.2. Sellers have provided to Buyer a true and complete list
dated as of February 1, 1999 of all employees of Sellers who perform
significant services at the Station.
3.18. ENVIRONMENTAL MATTERS.
3.18.1. Schedule 3.18 sets forth all environmental reports and
assessments prepared for and/or delivered to Sellers in connection with the
acquisition and operation of the Real Property by Sellers, true and complete
copies of which have been provided to Buyer.
3.18.2. To the knowledge of Sellers, the information set forth in
Schedule 3.18 is true, correct and complete in all material respects. Since
January 3, 1996, the Station, the Real Property or Leased Property and all
improvements thereon have been operated in material compliance with all
Environmental Laws; provided, that with respect to the Leased Property, the
representation and warranty set forth in this sentence is made only with
respect to the operations of Sellers thereon and thereat.
3.18.3. Except as set forth in Schedule 3.18, there are no pending
or, to the knowledge of Sellers, threatened actions, suits, claims, or other
legal proceedings based on (and Sellers have not received any notice of any
complaint, order, directive, citation, notice of responsibility, notice of
potential responsibility, or information request from any Governmental
Authority arising out of or
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attributable to): (a) the current or past presence at any part of the Real
Property of Hazardous Materials; (b) the current or past release or threatened
release into the environment from the Real Property (including, without
limitation, into any storm drain, sewer, septic system or publicly owned
treatment works) of any Hazardous Materials; (c) the off-site disposal of
Hazardous Materials originating on or from the Real Property or the business or
Assets of Sellers; (d) any facility operations or procedures of Sellers which
do not conform to requirements of the Environmental Laws; or (e) any violation
of Environmental Laws at any part of the Real Property arising from activities
of Sellers involving Hazardous Materials. To the knowledge of Sellers, Sellers
have been duly issued all permits, licenses, certificates and approvals
required under any Environmental Law, except for such permits the failure to
obtain, would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
3.18.4. Based on the information set forth in Schedule 3.18, the
Real Property contains no underground storage tanks, or underground piping
associated with such tanks, used currently or in the past for Hazardous
Materials.
3.19. TRANSACTIONS WITH AFFILIATES.
Except as set forth in Schedule 3.19 attached hereto, Sellers are
not now, and for the past twelve (12) months, have not been, a party, directly
or indirectly, to any contract, lease, arrangement or transaction which is
material to the business or operations of the Station, whether for the
purchase, lease or sale of property, for the rendition of services or
otherwise, with any affiliate of Sellers, or any officer, director, employee,
proprietor, partner or shareholder of either Seller. The terms and conditions
of the transactions involving Sellers and any affiliate of Sellers which are
identified on Schedule 3.19 are described briefly therein.
3.20. INSURANCE.
Schedule 3.20 contains a list and brief summary of all policies of
title, property, fire, casualty, liability, life, workmen's compensation, libel
and slander, and other forms of insurance of any kind relating to the Assets or
the business and operations of the Station and held by Sellers. All such
policies: (a) are in full force and effect; (b) are sufficient for compliance
in all material respects by Sellers with all requirements of Law and of all
material agreements to which Sellers are party; and (c) are valid, outstanding,
and enforceable policies.
3.21. INTERPRETATION OF CERTAIN PROVISIONS.
Sellers have not relied and are not relying on the specification
of any dollar amount in any representation or warranty made in this Agreement
or any
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Schedule hereto to indicate that such amounts, or higher or lower amounts, are
or are not material, and agree not to assert in any dispute or controversy
between the parties hereto that specification of such amounts indicates or is
evidence as to whether or not any obligation, item or matter is or is not
material for purposes of this Agreement and the transactions contemplated
hereby.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer represents, warrants and covenants to Sellers as follows:
4.1. ORGANIZATION AND STANDING.
Buyer is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified to do business as a foreign corporation where such qualification
is necessary, unless the failure to be so qualified would not materially and
adversely affect Buyer's ability to consummate the transactions contemplated by
this Agreement. Buyer has the full power and authority to enter into and
perform the terms of this Agreement and the other Buyer Documents and to carry
out the transactions contemplated hereby and thereby.
4.2. AUTHORIZATION.
The execution, delivery and performance of this Agreement and of
the other Buyer Documents, and the consummation of the transactions
contemplated hereby and thereby, have been duly and validly authorized by all
necessary actions of Buyer (none of which actions has been modified or
rescinded and all of which actions are in full force and effect). This
Agreement and the Deposit Escrow Agreement constitute, and upon execution and
delivery each such other Buyer Document will constitute, a valid and binding
agreement and obligation of Buyer, enforceable against Buyer in accordance with
its respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights generally and by the
application of general principles of equity.
4.3. COMPLIANCE WITH LAWS.
Buyer has obtained and holds all material permits, licenses and
approvals (none of which will have been modified or rescinded and all of which
shall be in full force and effect) from all Governmental Authorities necessary
in order to
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conduct the operations of the Station as presently conducted and to own, use
and maintain the Assets.
4.4. CONSENTS AND APPROVALS; NO CONFLICTS.
4.4.1. The execution and delivery of this Agreement, and the
performance of the transactions contemplated herein by Buyer, will not require
any consent, approval, authorization or other action by, or filing with or
notification to, any Person or Governmental Authority where the failure to make
such filing or obtain such consent would reasonably be expected to have a
material adverse effect on Buyer's ability to consummate the transactions
contemplated by this Agreement, except as follows: (a) filings required under
Xxxx-Xxxxx-Xxxxxx, (b) approvals of the assignment of the FCC Licenses to Buyer
by the FCC, and (c) based upon Sellers' representations set forth in Section
3.4.1, certain of the Station Contracts may be assigned only with the consent
of third parties, as specified in Schedule 3.4.1.
4.4.2. Assuming all consents, approvals, authorizations and other
actions described in Section 4.4.1 have been obtained and all filings and
notifications described in Section 4.4.1 have been made, the execution,
delivery and performance of this Agreement and the other Buyer Documents by
Buyer do not and will not (a) conflict with or violate any Law applicable to
Buyer, (b) conflict with or result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default) of
any contract or agreement to which Buyer is a party or by which Buyer is bound,
or (c) conflict with or violate the organizational documents of Buyer.
4.5. AVAILABILITY OF FUNDS.
Buyer will have available on the Non-License Transfer Date and the
Closing Date sufficient funds either under Buyer's existing credit facility
with NationsBank and the other lenders thereunder, or pursuant to financing
from Buyer's current investors, to enable Buyer to consummate the transactions
contemplated hereby.
4.6. QUALIFICATION OF BUYER.
Buyer is, and pending the Non-License Transfer and the Closing,
will be legally, technically, financially and otherwise qualified under the
Communications Act and all rules, regulations and policies of the FCC to
acquire and operate the Station. There are no facts or proceedings which would
reasonably be expected to disqualify Buyer under the Communications Act or
otherwise from acquiring or operating the Station or would cause the FCC not to
approve the assignment of the FCC Licenses to Buyer. Buyer has no knowledge of
any fact or
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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. 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.
4.7. NO OUTSIDE RELIANCE.
Buyer has not relied and is not relying on any statement,
representation or warranty not made in this Agreement, any Schedule hereto or
any certificate to be delivered to Buyer at the Non-License Transfer or the
Closing, as applicable, pursuant to this Agreement. Buyer is not relying on any
projections or other predictions contained or referred to in the Schedules or
other materials that have been or may hereafter be provided to Buyer or any of
its affiliates, agents or representatives, and Sellers make no representations
or warranties with respect to any such projections or other predictions.
4.8. INTERPRETATION OF CERTAIN PROVISIONS.
Buyer has not relied and is not relying on the specification of
any dollar amount in any representation or warranty made in this Agreement or
any Schedule hereto to indicate that such amounts, or higher or lower amounts,
are or are not material, and agrees not to assert in any dispute or controversy
between the parties hereto that specification of such amounts indicates or is
evidence as to whether or not any obligation, item or matter is or is not
material for purposes of this Agreement and the transactions contemplated
hereby.
ARTICLE 5.
PRE-CLOSING FILINGS
5.1. APPLICATIONS FOR FCC CONSENT.
As promptly as practicable and no later than five (5) business
days following the execution of this Agreement, Sellers and Buyer shall jointly
file an application for the Station with the FCC requesting the consent of the
FCC to the assignment of the FCC Licenses for the Station to Buyer. Sellers and
Buyer will diligently take, or fully cooperate in the taking of, all necessary
and proper steps, and provide any additional information reasonably requested
in order to obtain promptly the requested consents and approvals of the
applications by the FCC; provided, however, that none of the parties hereto
shall have any obligation to participate in any evidentiary hearing.
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5.2. XXXX-XXXXX-XXXXXX.
As promptly as practicable and no later than five (5) business
days following the execution of this Agreement, Sellers and Buyer shall
complete any filing that may be required pursuant to Xxxx-Xxxxx-Xxxxxx (each an
"HSR FILING"). Sellers and Buyer shall diligently take, or fully cooperate in
the taking of, all necessary and proper steps, and provide any additional
information reasonably requested in order to comply with, the requirements of
Xxxx-Xxxxx-Xxxxxx.
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLERS
Sellers covenant and agree with Buyer as follows:
6.1. NEGATIVE COVENANTS.
Pending and prior to the Closing Date, Sellers will not, without
the prior consent of Buyer (which consent shall not be unreasonably withheld,
delayed or conditioned), do or agree to do any of the following with respect to
the Station or the Assets:
6.1.1. DISPOSITIONS; MERGERS.
Sell, assign, lease, license or otherwise transfer or
dispose of any of the Assets other than the disposition in the Ordinary Course
of Business of items that are replaced prior to the Transfer Date with items of
comparable or superior value and utility in the operation of the Station; or
merge or consolidate with or into any other entity or enter into any contracts
or agreements relating thereto.
6.1.2. ACCOUNTING PRINCIPLES AND PRACTICES.
Change or modify any of the accounting principles or
practices or any method of applying such principles or practices currently
employed with respect to the Station, except as required by GAAP.
6.1.3. TRADE-OUT AGREEMENTS.
Enter into any Trade-out Agreement, except in the Ordinary
Course of Business not to exceed Twenty-Five Thousand Dollars ($25,000) in the
aggregate.
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6.1.4. BROADCAST TIME SALES AGREEMENTS.
Enter into any Time Sales Agreement except in the Ordinary
Course of Business.
6.1.5. NETWORK AFFILIATION AGREEMENTS AND LOCAL MARKETING
ARRANGEMENTS.
Except for the Time Brokerage Agreement with Buyer,
acquire or enter into any network affiliation agreements, local marketing
arrangements, joint operating agreements, time brokerage agreements or other
similar contracts.
6.1.6. ADDITIONAL AGREEMENTS.
Except as set forth on Schedule 6.1.6, acquire or enter
into any new Station Contracts not referred to in Sections 6.1.3, 6.1.4 or
6.1.5 above, or renew, extend, amend, alter, modify or otherwise change any
existing Station Contract, except, in any such case, for Station Contracts
which are not Subject Agreements and which (after any such renewal, extension,
amendment, alteration, modification or other change) require payments of less
than Twenty-Five Thousand Dollars ($25,000) per contract per year and no
greater than One Hundred Fifty Thousand Dollars ($150,000) per year in the
aggregate (collectively, "ADDITIONAL AGREEMENTS"), copies of which Additional
Agreements shall be provided to Buyer at or prior to the Transfer Date.
6.1.7. BREACHES.
Do or omit to do any act which will cause a material
breach of any Station Contract.
6.1.8. EMPLOYEE MATTERS.
Except as set forth on Schedule 6.1.8, enter into or
become subject to any employment, labor, union, or professional service
contract not terminable at will, without cost or obligation other than to pay
accrued salary or wages at the normally applicable rate through the time of
termination, or any bonus, pension, insurance, profit sharing, incentive,
deferred compensation, severance pay, retirement, hospitalization, employee
benefit, or other similar plan; or increase the compensation payable or to
become payable to any employee, or pay or arrange to pay any bonus payment to
any employee, except in the Ordinary Course of Business.
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6.1.9. ACTIONS AFFECTING FCC LICENSES.
Take any action which may jeopardize the validity or
enforceability of or rights under the FCC Licenses.
6.1.10. PROGRAMMING.
Program or broadcast any Program Contract or syndicated
program, except in the Ordinary Course of Business.
6.1.11. AFFILIATED TRANSACTIONS.
Except for the transactions described in Schedule 3.19,
enter any transaction with any affiliate of Sellers, including, without
limitation, any renewal, extension, modification or other change in, any
existing contract or agreement to which an affiliate of Sellers is a party or
any other transaction involving an affiliate of Sellers which will have
continued effectiveness after the Non-License Transfer Date or the Closing
Date.
6.2. AFFIRMATIVE COVENANTS.
Pending and prior to the Closing Date, Sellers will with respect
to the Station and the Assets:
6.2.1. PRESERVE EXISTENCE.
Preserve their respective corporate existences and
business organizations intact, maintain their existing franchises and licenses,
use commercially reasonable efforts to preserve for Buyer the relationships of
the Station with suppliers, customers, employees and others with whom the
Station has business relationships, and keep all Assets substantially in their
present condition, ordinary wear and tear excepted.
6.2.2. NORMAL OPERATIONS.
Subject to the terms and conditions of this Agreement
(including, without limitation, Section 6.1) and the Time Brokerage Agreement,
(a) carry on the business and activities of the Station, including without
limitation, the sale of advertising time, entering into other contracts and
agreements, or purchasing and scheduling of programming, in the Ordinary Course
of Business; (b) pay or otherwise satisfy all obligations (cash and barter) of
the Station in the Ordinary Course of Business; (c) maintain books of account,
records, and files with respect to the Station in substantially the same manner
as heretofore; and (d) maintain the Assets in customary repair, maintenance and
condition, except to the extent of normal wear and tear, and repair or replace,
consistently with the
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Ordinary Course of Business, any Asset that may be damaged or destroyed;
notwithstanding the foregoing, Buyer acknowledges that Sellers shall not be
obligated to spend any funds on capital expenditures after the date hereof,
except for the repair or replacement of Assets that may be damaged or
destroyed.
6.2.3. MAINTAIN FCC LICENSES.
Maintain the validity of the FCC Licenses, and comply in
all material respects with all requirements of the FCC Licenses and the rules,
policies and regulations of the FCC and all other applicable Laws.
6.2.4. NETWORK AFFILIATION.
Use reasonable efforts to maintain in full force and
effect the present network affiliation agreement for the Station (and any and
all modifications and renewals thereof).
6.2.5. STATION CONTRACTS.
Pay and perform its obligations in the Ordinary Course of
Business under the Station Contracts and under any Additional Agreements that
shall be entered into between the date hereof and the Transfer Date pursuant to
Section 6.1.6, in accordance with the respective terms and conditions of such
Station Contracts.
6.2.6. TAXES.
Pay or discharge all Taxes when due and payable in the
Ordinary Course of Business.
6.2.7. CORPORATE ACTION.
Take all corporate action (including, without limitation,
all shareholder action) under the Laws of any state having jurisdiction over
Sellers necessary to effectuate the transactions contemplated by this Agreement
and by the other Seller Documents.
6.2.8. ACCESS.
Cause to be afforded to representatives of Buyer
reasonable access during normal business hours to offices, properties, assets,
books and records, contracts and reports of the Station, as Buyer shall from
time to time reasonably request; provided, however, that such investigation
shall only be upon reasonable notice and shall not unreasonably disrupt the
personnel or operations of Sellers or the Station. All requests for access to
the offices, properties, assets, books and records, contracts and reports of
the Station shall be made to Xxxxx X. Xxxx (at
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the address set forth in Section 15.4) and Xxxx Xxxxxxx (at the Station), or
such other representative as Sellers shall designate in writing, who shall be
solely responsible for coordinating all such requests and all access permitted
hereunder. Buyer acknowledges and agrees that prior to the Transfer Date,
neither Buyer nor its representatives shall contact any of the employees,
customers, suppliers, partners, or other associates or affiliates of Sellers or
the Station, in connection with the transactions contemplated hereby, whether
in person or by telephone, mail or other means of communication, without
reasonable prior written notice to Sellers; provided, however, that (a) Sellers
shall have the right to be present at any meetings or on any telephone calls
with any such Persons; (b) Sellers shall be given the opportunity to review in
advance any correspondence with any such Persons; and (c) any access to the
Station shall be during normal business hours and shall not cause any
disruption to the business and operations of the Station.
6.2.9. INSURANCE.
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; provided,
however, that if the Non-License Transfer occurs, the amount of insurance
coverage required to be carried by Sellers may be reduced to an amount
reasonable to cover casualty and liability related to the License Assets and
the business of Sellers conducted pursuant to the Time Brokerage Agreement.
6.2.10. FINANCIAL STATEMENTS.
Provide Buyer with (a) unaudited monthly statements of
assets and liabilities of Sellers relating to the business and operations of
the Station, and statements of revenues and expenses reflecting the results of
business and operations of the Station, for January, 1999 and for each month
thereafter, within thirty (30) days after the end of each such month; and (b)
weekly pacing reports for each week after the date hereof within five (5) days
after the end of each such week.
6.3. CONFIDENTIALITY.
Sellers shall, at all times, maintain strict confidentiality with
respect to all documents and information furnished to Sellers by or on behalf
of Buyer, and documents and information related to the business and operations
of the Station during the period prior to the Closing Date to the extent
included in the Assets. Nothing shall be deemed to be confidential information
that: (a) is known to Sellers at the time of its disclosure to Sellers; (b)
becomes publicly known or available other than through disclosure by Sellers;
(c) is received by Sellers from a third party not actually known by Sellers to
be bound by a confidentiality agreement with or
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obligation to Buyer; or (d) is independently developed by Sellers.
Notwithstanding the foregoing provisions of this Section 6.3, Sellers may
disclose such confidential information (i) to the extent required or deemed
advisable to comply with applicable Laws; and (ii) to its officers, directors,
employees, representatives, financial advisors, attorneys, accountants, and
agents with respect to the transactions contemplated hereby; provided, however,
Sellers shall be liable for any disclosure by any such Person that such Person
would not have been permitted to make if such Person were a Seller hereunder.
In the event this Agreement is terminated, Sellers will return to Buyer all
documents and other material prepared or furnished by Buyer relating to the
transactions contemplated hereunder, whether obtained before or after the
execution of this Agreement. In the event that any Seller is required by Law
(including without limitation by oral question, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar legal
process) to disclose any confidential information, such Seller will promptly
notify Buyer of such requirement so that Buyer may, as it may elect, either
seek an appropriate protective order or waive such Seller's compliance with the
provisions of this Section 6.3. In the event that such protection or other
remedy is not obtained or that Buyer waives compliance, such Seller agrees to
furnish only that portion of the confidential information which such Seller is
advised by counsel is legally required and to exercise such Seller's reasonable
efforts to obtain assurance that confidential treatment will be accorded such
confidential information.
6.4. NO SHOPPING.
From and after the date hereof until the earlier to occur of the
Closing Date or the termination of this Agreement, Sellers shall not, and shall
cause its officers, directors and affiliates not to, (a) initiate contact with,
solicit, encourage or respond to any inquiries or proposals by, or (b) enter
into any discussions or negotiations with, or disclose, directly or indirectly,
any information concerning, the Assets or the Station, or afford any access to
Sellers' properties, books and records to any Person in connection with any
possible proposal for the acquisition (directly or indirectly, whether by
purchase, merger, consolidation or otherwise) of all or any material portion of
the Assets or the Station.
6.5. NO SOLICITATION OF EMPLOYEES.
From and after the date hereof to the first anniversary of the
Transfer Date, neither Sellers nor any Seller Affiliate shall solicit or offer
employment to or hire or employ or otherwise compensate any employee or former
employee (who is an employee of a Station as of the date hereof or as of the
Transfer Date) of the Stations at any other location; provided, however, that
the foregoing shall not apply
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to the Excluded Employee, or to any employee of the Station who is terminated
by Buyer after the Transfer Date.
ARTICLE 7.
COVENANTS AND AGREEMENTS OF BUYER
Buyer covenants and agrees with Sellers as follows:
7.1. CONFIDENTIALITY.
Buyer shall, at all times prior to the Non-License Transfer,
maintain strict confidentiality with respect to all documents and information
furnished to Buyer by or on behalf of Sellers. Nothing shall be deemed to be
confidential information that: (a) is known to Buyer at the time of its
disclosure to Buyer; (b) becomes publicly known or available other than through
disclosure by Buyer; (c) is received by Buyer from a third party not actually
known by Buyer to be bound by a confidentiality agreement with or obligation to
Sellers; or (d) is independently developed by Buyer. Notwithstanding the
foregoing provisions of this Section 7.1, Buyer may disclose such confidential
information (i) to the extent required or deemed advisable to comply with
applicable Laws; and (ii) to its officers, directors, partners, employees,
representatives, financial advisors, attorneys, accountants, agents,
underwriters, lenders, investors and any other potential sources of financing
with respect to the transactions contemplated hereby; provided, however, Buyer
shall be liable for any disclosure by any such Person that such Person would
not have been permitted to make if such Person were Buyer hereunder. In the
event this Agreement is terminated, Buyer will return to Sellers all documents
and other material prepared or furnished by Sellers relating to the
transactions contemplated by this Agreement, whether obtained before or after
the execution of this Agreement. In the event that Buyer is required by Law
(including without limitation by oral question, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar legal
process) to disclose any confidential information, Buyer will promptly notify
Sellers of such requirement so that Sellers may, as they may elect, either seek
an appropriate protective order or waive Buyer's compliance with the provisions
of this Section 7.1. In the event that such protection or other remedy is not
obtained or that the Sellers waive compliance, Buyer agrees to furnish only
that portion of the confidential information which Buyer is advised by counsel
is legally required and to exercise Buyer's reasonable efforts to obtain
assurance that confidential treatment will be accorded such confidential
information.
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7.2. CORPORATE ACTION.
Prior to the Non-License Transfer and the Closing, Buyer shall
take all corporate action (including, without limitation, all shareholder
action) under the Laws of any state having jurisdiction over Buyer necessary to
effectuate the transactions contemplated by this Agreement and the other Buyer
Documents.
7.3. ACCESS.
For a period of seven (7) years from and after the Transfer Date,
Buyer shall cause to be afforded to representatives of Sellers reasonable
access during normal business hours to the offices, books and records,
contracts and reports of the Station which relate to the operations of the
Station during the period during which the Station was owned by Sellers and
that are included in the Assets (the "PRE-TRANSFER DATE RECORDS"), as Sellers
shall from time to time reasonably request for Sellers' reasonable business
purposes, and shall provide to Sellers copies of any Pre-Transfer Date Records
reasonably requested by Sellers; provided, however, that such investigation
shall only be upon reasonable notice and shall not disrupt the personnel or
operations of Buyer or the Station. Any costs incurred by Buyer in connection
with any such copying during the first nine (9) months after the Transfer Date
shall be paid by Buyer, and any such costs incurred by Buyer after such nine
(9) month period shall be paid by Sellers. All requests for access to the
Pre-Transfer Date Records shall be made to such representatives as Buyer shall
designate in writing, who shall be solely responsible for coordinating all such
requests and all access permitted hereunder. For a period of seven (7) years
from and after the Transfer Date, Buyer shall not dispose of any Pre-Transfer
Date Records; provided, however, Buyer may destroy any Pre-Transfer Date
Records upon providing thirty (30) days written notice to Sellers of an intent
to destroy such Pre-Transfer Date Records; provided, further, that Buyer, at
Buyer's expense, shall transfer to Sellers such Pre-Transfer Date Records,
rather than destroy them if, before the expiration of such thirty (30) day
notice period, Sellers direct Buyer to transfer such Pre-Transfer Date Records
to Sellers.
7.4. COLLECTION OF RECEIVABLES.
At the earlier of the Non-License Transfer or the Closing, Sellers
shall assign the Accounts Receivable to Buyer for collection purposes only,
and, within ten (10) business days after the Transfer Date, Sellers shall
furnish to Buyer a list of the Accounts Receivable by accounts and the amounts
then owing. Buyer agrees, for a period of one hundred fifty (150) days
following the Transfer Date (the "COLLECTION PERIOD"), without any requirement
to litigate or engage any third party to collect the Accounts Receivable, to
use its reasonable efforts (with at least the care and diligence Buyer uses to
collect its own accounts receivable) to collect for Sellers the Accounts
Receivable and to remit to Sellers (or their designees)
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on the tenth (10th) business day following the last day of each month occurring
during the Collection Period, collections received by Buyer with respect to the
Accounts Receivable. Buyer shall not make any referral or compromise of any
Accounts Receivable to a collection agency or attorney for collection and shall
not compromise for less than full value any Account Receivable without the
prior written consent of Sellers. At all times during the Collection Period,
Buyer shall promptly notify Sellers of any claim made by an Account Receivable
debtor that such debtor is not obligated to make payment. In any such case,
Buyer shall, at the written request of Sellers, reassign, without recourse to
Buyer, the associated Account Receivable, and Sellers shall thereafter have the
exclusive right to enforce the collection of such Account Receivable. Any
Account Receivable not collected by Buyer during the Collection Period shall
revert to Sellers (or their designees). Buyer shall reassign, without recourse
to Buyer, each Account Receivable and deliver to Sellers, all records relating
thereto at the end of the Collection Period. All payments in respect of the
Accounts Receivable received by Buyer (whether during the Collection Period or
otherwise), shall be first applied to the oldest balance then due on the
Accounts Receivable unless the account debtor, without any consultation or
discussions with Buyer or Buyer's representatives to such effect, indicates in
writing that payment is to be applied otherwise. Buyer agrees, upon the
reasonable request of Sellers, to furnish to Sellers periodic reports on the
status of its Accounts Receivable. Buyer shall have no right to set-off any
amounts collected for Accounts Receivable for any amounts owed to Buyer by
Sellers. During the Collection Period, Sellers will not make efforts to collect
Accounts Receivable, except those with respect to which Seller has requested
reassignment as described above.
ARTICLE 8.
MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLER AND BUYER
8.1. POSSESSION AND CONTROL.
Between the date hereof and the Closing Date, Buyer shall not
directly or indirectly control, supervise or direct, or attempt to control,
supervise or direct, the business and operations of the Station, and such
operation, including complete control and supervision of all programming, shall
be the sole responsibility of the owners of the Station, except as contemplated
by the Time Brokerage Agreement after the Non-License Transfer. On and after
the Closing Date, Sellers shall have no control over, or right to intervene,
supervise, direct or participate in, the business and operations of the
Stations.
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8.2. RISK OF LOSS.
The risk of loss or damage by fire or other casualty or cause to
the Assets until the Transfer Date (and, with respect to the License Assets,
until the Closing Date), shall be upon Sellers. In the event of any such loss
or damage prior to the Transfer Date (or, with respect to the License Assets,
the Closing Date) which causes a Material Adverse Effect (a "MATERIAL CASUALTY
LOSS"), Sellers shall restore, replace or repair the damaged Assets to their
previous condition; provided, however, that Sellers obligation to so restore,
replace or repair the damaged Assets shall be limited to the extent of
insurance proceeds actually received by Sellers as a result of such Material
Casualty Loss. In the event that as of the Non-License Transfer Date or the
Closing Date, as the case may be, any such Material Casualty Loss shall not
have been restored, replaced, or repaired, Sellers shall have the right to
defer the Non-License Transfer Date or the Closing Date, as applicable, by
written notice to Buyer, for a period of up to sixty (60) days after the date
on which such Material Casualty Loss occurred. In the event that any such
Material Casualty Loss shall not be restored, replaced, or repaired by the end
of such sixty (60) day period, Buyer shall, at its option, either:
(a) proceed with the Non-License Transfer or the Closing, as
applicable, and receive at the Non-License Transfer or the Closing, as
applicable, the insurance proceeds or an assignment of the right to receive
such insurance proceeds, as applicable, to which Sellers otherwise would be
entitled, whereupon Sellers shall have no further liability to Buyer for such
Material Casualty Loss (pursuant to the indemnification provisions of this
Agreement or otherwise); or
(b) terminate this Agreement by written notice to Sellers and
receive the immediate return of the Deposit, whereupon no party to this
Agreement shall have any liability to any other party to this Agreement, and
this Agreement in its entirety shall be deemed null, void and of no further
force and effect, except for the provisions set forth in Section 13.2 (which
shall survive such termination).
Buyer and Sellers acknowledge and agree that nothing in this
Section 8.2 shall be deemed to waive any requirement that the representations
and warranties be true and correct in all material respects at the Non-License
Transfer and the Closing, as applicable, as provided for in Section 9.1 of this
Agreement.
8.3. PUBLIC ANNOUNCEMENTS.
Between the date hereof and the Closing Date, Sellers and Buyer
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or the transactions
contemplated herein and shall not issue any such press release or make any such
public statement without the prior written consent of the other party, which
shall
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not be unreasonably withheld; provided, however, that a party may, without the
prior written consent of the other party, 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 either Seller or Buyer is a party if it
has used all reasonable efforts to consult with the other party and to obtain
such party's consent but has been unable to do so in a timely manner.
8.4. EMPLOYEE MATTERS.
8.4.1. TRANSFERRED EMPLOYEES.
(a) Upon the earlier of the Non-License Transfer or the
Closing, except for the employee listed on Schedule 8.4.1(a) hereto (the
"EXCLUDED EMPLOYEE"), Buyer shall offer employment to each of the employees of
the Station (including each Person who has taken a leave of absence or is on
disability leave from the Station), as of the Transfer Date, at the same salary
or wage rate (as applicable), position and place of employment as held by each
such employee immediately prior to the Transfer Date, and with benefits no less
favorable in the aggregate than those provided by Buyer and Buyer's affiliates
to their similarly situated employees (subject, in all cases, to the provisions
of any collective bargaining agreements and employment agreements that are
Station Contracts); provided, however, that the two (2) employees designated in
the Time Brokerage Agreement shall continue as employees of Sellers and, except
for the Excluded Employee, shall become Transferred Employees hereunder as of
the Closing Date. Buyer shall also offer employment to each employee of the
Station who is temporarily absent from active employment on the Transfer Date
upon termination of such temporary absence provided such employee is able to
perform the essential functions of the position such employee held prior to
such absence and any such employee who accepts such employment shall be treated
as a "Transferred Employee" (as defined herein) from and after the Transfer
Date.
(b) To the extent such employees accept employment with
Buyer (collectively, "TRANSFERRED EMPLOYEES"), such Transferred Employees will
be included in Buyer's employee benefit plans and will be subject to Buyer's
employment policies, as generally applicable to Buyer's employees who are
similarly situated. Buyer agrees that Transferred Employees shall be credited
under all of Buyer's applicable employee benefit plans covering such employees
with their service at the Station for purposes of determining any period of
eligibility to participate or to vest in benefits to the same extent such
service was counted under the Benefit Plans of Sellers. Buyer agrees that from
and after the Non-License Transfer until the Closing Date, Buyer shall not,
except for the employees listed on Schedule 8.4.1(b), (i) terminate any
Transferred Employee, except for termination for good cause, or (ii) reduce the
salary or wages of any Transferred Employee, or change the terms of any
Transferred Employee's employment or benefits to be
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materially adversely different than those provided by Buyer and Buyer's
affiliates to their similarly situated employees; provided, however, that after
the Closing Date, subject to applicable laws, Buyer shall have the right, at
any time thereafter, to dismiss any or all Transferred Employees at any time
thereafter, with or without cause, and to change the terms and conditions of
their employment (including compensation and employee benefit plans, policies
or arrangements, provided to them).
8.4.2. VACATION AND SICK LEAVE.
In furtherance of and not in limitation of the obligations
and liabilities of Buyer set forth in Section 8.4.1, Buyer shall assume,
without duplication of benefits, the Liabilities of Sellers to Transferred
Employees as of the Transfer Date for unused and unpaid vacation and sick
leave, but only to the extent reflected in the employee personnel records of
Sellers. Except as otherwise required by applicable law, Buyer shall provide,
without duplication of benefits, all Transferred Employees with vacation time
or sick leave, as the case may be, rather than cash in lieu thereof, for such
unused and unpaid vacation and sick leave in accordance with Buyer's policies.
Buyer shall be liable for, and shall indemnify, defend and hold harmless
Sellers from and against, all Liabilities of Sellers to Transferred Employees
with respect to unused sick leave and unused vacation leave.
8.4.3. SEVERANCE BENEFITS.
In furtherance of and not in limitation of the obligations
and liabilities of Buyer set forth in Section 8.4.1 and Buyer's obligations
under the collective bargaining and employment agreements that are Station
Contracts, with respect to each Transferred Employee, Buyer shall provide
severance benefits no less favorable than those provided by Buyer and Buyer's
affiliates to their similarly situated employees. Transferred Employees shall
be credited under Buyer's severance benefit plan with their service at the
Station for purposes of determining the amount of severance benefits to which
they may be entitled under such plan; provided, however, that any service at
the Station for which severance had previously been paid shall be disregarded.
Buyer shall be liable for, and shall indemnify, defend and hold harmless
Sellers from and against any and all claims by Transferred Employees on or
after the Transfer Date for severance Liabilities, and any other Losses
asserted against, resulting to, imposed upon or incurred by Sellers in
connection with the termination of any Transferred Employee by Buyer (or any
affiliates, successors or assigns of Buyer) on or after the Transfer Date.
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8.4.4. REPRESENTED EMPLOYEES.
(a) In furtherance of and not in limitation of the
obligations and liabilities of Buyer set forth in Section 8.4.1, upon the
earlier of the Non-License Transfer or the Closing, Buyer shall: (i) recognize
the unions and labor organizations which are parties to the collective
bargaining agreements set forth in Schedule 3.17.1; (ii) employ all active
employees of the Stations represented by any such union or labor organization
(collectively, "REPRESENTED EMPLOYEES"); (iii) adopt employee benefit plans,
policies and arrangements covering such Represented Employees substantially
similar to the Benefit Plans of Sellers in effect as of the date hereof to the
extent required by such collective bargaining agreements; and (iv) negotiate in
good faith with the collective bargaining representatives of the employees of
Seller regarding the substitution of Buyer's employee benefit plans, policies
and arrangements for the Benefit Plans of Sellers.
(b) Upon the earlier of the Non-License Transfer or the
Closing, Sellers shall assign to Buyer, and Buyer shall assume the collective
bargaining agreements listed in Schedule 3.17.1, including, without limitation,
all obligations, if any, to provide severance benefits in connection with the
termination after the Transfer Date of any Represented Employee. Such
assignment and assumption shall not obligate Buyer to assume any Benefit Plans
of Sellers. Except for any Liabilities of Sellers with respect to unused sick
leave or unused vacation (which Buyer expressly assumes), Buyer shall not be
responsible for any Liabilities of Sellers under any collective bargaining
agreement listed in Schedule 3.17.1, which arose on or prior to the Transfer
Date, including, without limitation, any Liabilities for wages and any Benefit
Plans of Seller.
(c) Sellers agree to cooperate with Buyer in arranging for
such meetings as Buyer may reasonably request with the collective bargaining
representatives of the employees of Sellers to discuss the implementation of
employee benefits plans, policies and arrangements of Buyer; provided, however,
that any such meeting (i) shall be subject to the prior written approval of
Sellers upon reasonable notice to Sellers, and (ii) shall not unreasonably
disrupt the personnel or operations of Sellers or the Station.
8.4.5. COBRA OBLIGATIONS.
Sellers shall satisfy and discharge any obligations to
provide health care continuation coverage as required by the Consolidated
Omnibus Budget Reconciliation Act of 1985 and as described in Section 4980B of
the Code and Sections 601 through 608 of ERISA and as required by any
applicable state continuation of health coverage provisions (collectively,
"COBRA OBLIGATIONS") to (a) any employee of the Station whose employment is
terminated prior to the Transfer Date to whom Sellers have on-going COBRA
Obligations (and such employee's covered dependents), and (b) the Excluded
Employee. Buyer shall satisfy and discharge all other COBRA Obligations with
respect to Transferred Employees (and such
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employees' covered dependents). Sellers and Buyer shall reasonably cooperate in
good faith to comply with their respective COBRA Obligations hereunder.
8.4.6. SELLER BENEFITS PLANS.
As between Buyer and Sellers, Sellers agree to be
responsible and liable for any medical, disability or other benefits owed under
Sellers' benefit plans, except to the extent such benefits arise under the
Health Insurance Contracts during the period from and after the Transfer Date,
which benefits shall be the responsibility of Buyer. Except as otherwise
specified in Section 8.4.5, Sellers will be responsible for providing, at its
cost, all medical, life and other insurance coverage and benefits, and
disability benefits to which any employee of Sellers who was terminated from
service with Sellers prior to the Transfer Date or who was disabled prior to
the Transfer Date is entitled under Sellers' benefit plans or otherwise.
8.4.7. 401(k) PLANS.
Buyer agrees to permit those Transferred Employees, at
each such Transferred Employee's option, to transfer as a rollover to Buyer's
401(k) Plan their respective pre-tax account balances under Sellers' 401(k)
Plan, provided that such plan is a tax qualified plan under Section 401(a) and
401(k) of the Code and that the transfer as a rollover of any such pre-tax
account balance will not affect the tax qualified status of Buyer's 401(k)
Plan. Sellers agree that if any such Transferred Employee elects to transfer as
a rollover its pre-tax account balance to Buyer's 401(k) Plan, Sellers will
cause the trustees of Sellers' 401(k) Plan to transfer each such electing
Transferred Employee's account to the trustee of Buyer's 401(k) Plan. Effective
as of the Transfer Date, Sellers shall fully vest Transferred Employees in
their account balances under Sellers' 401(k) Plan.
8.4.8. EMPLOYMENT AND COLLECTIVE BARGAINING CONTRACTS.
Buyer acknowledges and agrees that Buyer's obligations
pursuant to this Section 8.4 are in addition to, and not in limitation of,
Buyer's obligation to assume the employment contracts and the collective
bargaining agreements that are Station Contracts.
8.5. DISCLOSURE SCHEDULES.
Sellers and Buyer acknowledge and agree that Sellers shall have
the right from time to time after the date hereof to update or correct the
Schedules
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attached hereto to reflect changes expressly permitted in accordance with the
terms of Article 6. The inclusion of any fact or item on a Schedule referenced
by a particular section in this Agreement shall, should the existence of the
fact or item or its contents, be relevant to any other section, be deemed to be
disclosed with respect to such other section whether or not an explicit
cross-reference appears in the Schedules if it is reasonably apparent on the
face of the Schedule in which such item is referenced that such item is
relevant to such other section.
8.6. BULK SALES LAWS.
Buyer hereby waives compliance by Sellers, in connection with the
transactions contemplated hereby, with the provisions of any applicable bulk
transfer laws; provided, however, that Sellers shall indemnify and hold
harmless Buyer from and against any Losses attributable to Sellers'
non-compliance with any applicable bulk transfer laws, without regard to the
provisions of Article 12.
8.7. CONSENTS.
Prior to, on and after the Non-License Transfer and the Closing,
Sellers and Buyer shall take all reasonable action required to obtain all
consents, approvals and agreements of any third parties (the initial requests
for which shall be provided by Sellers) necessary to authorize, approve or
permit the consummation of the transactions contemplated by this Agreement,
provided that neither Sellers nor Buyer shall be required to make any financial
accommodations to any third party in order to obtain such consents and
approvals (other than payment of any amount otherwise due such third party);
provided, further, that although Sellers may request release from any contract
as part of a request for any such consent, approval or agreement, Sellers shall
not require that Sellers be released from such contract as a condition to
obtaining any such consent, approval or agreement.
ARTICLE 9.
CONDITIONS PRECEDENT TO
BUYER'S OBLIGATION TO CLOSE
The obligations of Buyer to purchase the Assets and to proceed
with the Non-License Transfer or proceed with the Closing, as applicable, are
subject to the satisfaction (or waiver in writing by Buyer) at or prior to the
Non-License Transfer or Closing, as applicable, of each of the following
conditions:
9.1. REPRESENTATIONS AND COVENANTS.
The representations and warranties of Sellers made in this
Agreement (without giving effect to materiality qualifiers therein) shall be
true and
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correct on and as of the Non-License Transfer Date or the Closing Date, as
applicable, with the same effect as though such representations and warranties
had been made on and as of the Non-License Transfer Date or the Closing Date,
as applicable, except as modified by the Schedules updated after the date
hereof in accordance with Section 8.5, except for representations and
warranties that speak as of a specific date or time other than the Non-License
Transfer Date or the Closing Date, as applicable (which need only be true and
correct in all material respects as of such date or time), and except to the
extent that the failure of such representations and warranties to be true and
correct is due to facts and circumstances that have not had, and that are not
reasonably expected to have, in the aggregate, a Material Adverse Effect; and
the covenants and agreements of Sellers required to be performed on or before
the Non-License Transfer Date or the Closing Date, as applicable, in accordance
with the terms of this Agreement shall have been performed in all material
respects.
9.2. REQUIRED CONSENT.
Sellers shall have obtained prior to the Transfer Date the consent
required under the Network Affiliation Agreement to effect a valid assignment
thereof to Buyer.
9.3. DELIVERY OF DOCUMENTS.
Sellers shall have delivered to Buyer all contracts, agreements,
instruments and documents required to be delivered by Sellers to Buyer pursuant
to Section 11.4.
9.4. FCC ORDER.
As a condition precedent to the obligation of Buyer to consummate
the Closing but not the Non-License Transfer, the FCC Order shall have become a
Final Order.
9.5. XXXX-XXXXX-XXXXXX.
All applicable waiting periods under Xxxx-Xxxxx-Xxxxxx shall have
expired or terminated.
9.6. LEGAL PROCEEDINGS.
No injunction, restraining order or decree of any nature of any
court or Governmental Authority of competent jurisdiction shall be in effect
that restrains or prohibits the transactions contemplated by this Agreement;
and no action or
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proceeding by or before any Governmental Authority (other than an action or
proceeding instituted or threatened by Buyer) shall have been instituted or
threatened (and not subsequently dismissed, settled or otherwise terminated)
which, if determined adversely, would be reasonably likely to (a) restrain,
prohibit or invalidate the transactions contemplated by this Agreement or any
other Seller Document or Buyer Document, (b) have a Material Adverse Effect, or
(c) have a material adverse effect, in the aggregate, on the business,
operations, assets or financial condition of Buyer and the Buyer Affiliates
(taken as a whole).
9.7. NO MATERIAL ADVERSE EFFECT.
Since the date hereof through the Transfer Date, there shall not
have occurred a Material Adverse Effect.
ARTICLE 10.
CONDITIONS PRECEDENT TO
SELLERS' OBLIGATION TO CLOSE
The obligations of Sellers to sell, transfer, convey and deliver the
Assets and to proceed with the Non-License Transfer or proceed with the
Closing, as applicable, are subject to the satisfaction (or waiver in writing
by Sellers) at or prior to the Non-License Transfer or the Closing, as
applicable, of each of the following conditions:
10.1. REPRESENTATIONS AND COVENANTS.
The representations and warranties of Buyer made in this Agreement
(without giving effect to materiality qualifiers therein) shall be true and
correct on and as of the Non-License Transfer Date or the Closing Date, as
applicable, with the same effect as though such representations and warranties
had been made on and as of the Non-License Transfer Date or the Closing Date,
as applicable, except for representations and warranties that speak as of a
specific date or time other than the Non-License Transfer Date or the Closing
Date, as applicable (which need only be true and correct in all material
respects as of such date or time), and except to the extent that the failure of
such representations and warranties to be true and correct is due to facts and
circumstances that have not had, and that are not reasonably expected to have,
in the aggregate, a material adverse effect on Buyer or its ability to perform
its obligations hereunder and the other Buyer Documents; and the covenants and
agreements of Buyer required to be performed on or before the Non-License
Transfer Date or the Closing Date, as applicable, in accordance with the terms
of this Agreement shall have been performed in all material respects.
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10.2. DELIVERY BY BUYER.
Buyer shall have delivered to Sellers the Purchase Price in
accordance with Section 2.5, and all contracts, agreements, instruments and
documents required to be delivered by Buyer to Sellers pursuant to Section
11.5.
10.3. FCC ORDER.
As a condition precedent to the obligation of Sellers to
consummate the Closing but not the Non-License Transfer, the FCC Order shall
have been granted.
10.4. XXXX-XXXXX-XXXXXX.
All applicable waiting periods under Xxxx-Xxxxx-Xxxxxx shall have
expired or terminated.
10.5. LEGAL PROCEEDINGS.
No injunction, restraining order or decree of any nature of any
court or Governmental Authority of competent jurisdiction shall be in effect
that restrains or prohibits the transactions contemplated by this Agreement;
and no action or proceeding by or before any Governmental Authority (other than
an action or proceeding instituted or threatened by Sellers) shall have been
instituted or threatened (and not subsequently dismissed, settled or otherwise
terminated) which would be reasonably likely to restrain, prohibit or
invalidate the transactions contemplated by this Agreement or any other Seller
Document or Buyer Document.
ARTICLE 11.
NON-LICENSE TRANSFER; CLOSING
11.1. NON-LICENSE TRANSFER.
11.1.1. Notwithstanding anything to the contrary herein, provided
that the conditions set forth in Article 9 (except for Section 9.4) and Article
10 (except for Section 10.3) shall have been satisfied and the Closing shall
not have occurred, there shall be a closing (the "NON-LICENSE TRANSFER") for
the purchase and sale of all of the Non-License Assets, on the last business
day of the calendar month during which all applicable waiting periods under
Xxxx-Xxxxx-Xxxxxx shall have expired or terminated (the date on which the
Non-License Transfer shall occur pursuant to this Section 11.1.1 is referred to
herein as the "NON-LICENSE TRANSFER DATE"); provided, however, that if there
shall occur an early termination of the waiting period under Xxxx-Xxxxx-Xxxxxx
within five (5) business days prior to the
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last business day of the month (such date the "EARLY TERMINATION DATE"), then
the Non-License Transfer shall occur on the fifth (5th) business day after the
Early Termination Date; provided, further, that in such case, the parties shall
in good faith take reasonable actions to effect the economics of the
Non-License Transfer as of the end of the last business day of the preceding
calendar month.
11.1.2. At the Non-License Transfer, Sellers shall sell, assign,
transfer, convey and deliver to Buyer free and clear of any Encumbrances other
than Permitted Encumbrances, and Buyer shall purchase, acquire, pay for and
accept from Sellers, all right, title and interest of Sellers in, to and under
the Non-License Assets.
11.2. CLOSING.
11.2.1. To the extent not previously transferred pursuant to the
Non-License Transfer, and provided that the conditions set forth in Article 9
and Article 10 shall have been satisfied, the closing for all of the Assets
hereunder (the "CLOSING") shall be held on a date specified by Buyer in writing
that is not later than the tenth (10th) day after the date on which the FCC
Order shall have become a Final Order; provided, that such written notice shall
be provided to Sellers at least five (5) business days prior to the Closing
Date (the date on which the Closing shall occur pursuant to this Section 11.2.1
is referred to herein as the "CLOSING DATE").
11.2.2. If there shall occur a Non-License Transfer but the
Closing shall not have occurred on or prior to such date which is twelve (12)
months after the date hereof (the "OUTSIDE CLOSING DATE") solely due to the
failure to receive an FCC Order for reasons relating to Buyer's qualifications
and all conditions to the Closing (other than those set forth in Sections 9.4
and 10.3) shall have been satisfied or waived, then Buyer shall pay to Sellers
on the Outside Closing Date all amounts that would have been payable to Sellers
had the Closing occurred on the Outside Closing Date. Buyer acknowledges and
agrees that, notwithstanding anything to the contrary contained in this
Agreement or otherwise, Buyer's obligation to pay such amounts pursuant to this
Section 11.2.2 and the rights of Sellers to receive such payment shall be
absolute and unconditional (subject to the conditions of the preceding
sentence) and not subject to any right of set off, deduction or counterclaim.
Payment of the amounts at the Non-License Transfer or pursuant to this Section
11.2.2 shall be final and non-refundable and Buyer shall not seek to recover
all or any part of such payment from any Seller for any reason whatsoever
(other than pursuant to Article 12). Notwithstanding such payment to Sellers,
the Time Brokerage Agreement shall remain in effect from and after the Outside
Closing Date in accordance with the terms and conditions of the Time Brokerage
Agreement. All payments pursuant to this Section 11.2.2 shall be made
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by wire transfer of immediately available funds to an account or accounts
identified in writing by Sellers.
11.3. TIME AND PLACE OF NON-LICENSE TRANSFER AND CLOSING.
The Closing and the Non-License Transfer shall be held at 10:00
A.M. local time on the Closing Date and the Non-License Transfer Date,
respectively, at the offices of Xxxxx & Xxxxxxx L.L.P., 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 0000, XxXxxx, Xxxxxxxx, or at such other time and place as the parties
may agree in writing.
11.4. DELIVERY BY SELLER.
At the Non-License Transfer and the Closing, as applicable,
Sellers shall deliver to Buyer the following:
11.4.1. AGREEMENTS AND INSTRUMENTS
The following bills of sale, assignments and other
instruments of transfer duly executed by Sellers:
(a) the Xxxx of Sale;
(b) the Assignment of FCC Licenses; provided that the
Assignment of FCC Licenses shall not be delivered at
the Non-License Transfer;
(c) the Assignment of Contracts and Leases;
(d) the Assumption Agreement;
(e) certificates of title with respect to the motor
vehicles listed on Schedule 2.1.10 or if any such
motor vehicles are leased by Sellers, an assignment
of such lease;
(f) special or limited warranty deeds for all Real
Property owned by Sellers substantially in the form
attached hereto as Exhibit E;
(g) real and personal property transfer tax forms,
including, without limitation, those set forth in
Exhibit F attached hereto; and
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(h) the Time Brokerage Agreement; provided that the Time
Brokerage Agreement shall not be delivered at the
Closing.
11.4.2. CONSENTS.
Copies of all consents Sellers have been able to obtain to
effect the assignment to Buyer of the Station Contracts listed on Schedule
3.4.1.
11.4.3. CERTIFIED RESOLUTIONS.
A copy of the approval of the board of directors and
stockholders of each Seller, certified as being correct and complete and then
in full force and effect, authorizing the execution, delivery and performance
of this Agreement, and of the other Sellers Documents, and the consummation of
the transactions contemplated hereby and thereby.
11.4.4. OFFICERS' CERTIFICATES.
(a) A certificate of each Seller certifying the matters
set forth in Section 9.1; and
(b) A certificate of each Seller as to the incumbency of
the representatives of such Seller executing this Agreement or any of the other
Seller Documents on behalf of such Seller.
11.4.5. ORGANIZATIONAL DOCUMENTS.
Copies of the organizational documents of each Seller
certified by an executive officer of such Seller as being correct and complete.
11.4.6. DEPOSIT
Instructions to the Deposit Escrow Agent in writing to
return the Deposit to Buyer on the Transfer Date.
11.4.7. RELEASES.
Duly executed releases, termination statements and
mortgage satisfactions to the extent necessary to release any Encumbrances on
the Assets required to be removed by Sellers pursuant to the terms of this
Agreement.
11.4.8. FIRPTA CERTIFICATE.
A certificate of nonforeign status under Section 1445 of
the Code.
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11.4.9. TITLE INSURANCE DOCUMENTS.
An owner's affidavit executed by Sellers and such other
customary documents and certificates executed by Sellers reasonably acceptable
to Sellers and as may be reasonably required by Buyer's title insurance company
with respect to Buyer's title insurance of the Real Property and Leased
Property.
11.5. DELIVERY BY BUYER.
At the Non-License Transfer and the Closing, as applicable, Buyer
shall deliver to Sellers the following:
11.5.1. PURCHASE PRICE PAYMENT.
The Purchase Price in the amount and manner set forth in
Section 2.5.
11.5.2. AGREEMENTS AND INSTRUMENTS.
The following agreements, documents and instruments duly
executed by Buyer:
(a) the Assumption Agreement;
(b) the Time Brokerage Agreement; provided that the Time
Brokerage Agreement shall not be delivered at the
Closing; and
(c) real and personal property transfer tax forms,
including, without limitation, those set forth in
Exhibit F attached hereto.
11.5.3. CERTIFIED RESOLUTIONS.
Copies of the resolutions of the directors of Buyer,
certified as being correct and complete and then in full force and effect,
authorizing the execution, delivery and performance of this Agreement and of
the other Buyer Documents, and the consummation of the transactions
contemplated hereby and thereby.
11.5.4. OFFICERS' CERTIFICATE.
(a) A certificate of Buyer signed by an officer of Buyer
certifying the matters set forth in Section 10.1; and
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(b) a certificate signed by the Secretary of Buyer as to
the incumbency of the officers of Buyer executing this Agreement or any of the
other Buyer Documents on behalf of Sellers.
ARTICLE 12.
SURVIVAL; INDEMNIFICATION
12.1. SURVIVAL OF REPRESENTATIONS.
Unless otherwise set forth herein, all representations and
warranties, covenants and agreements of Sellers and Buyer contained in or made
pursuant to this Agreement or in any certificate furnished pursuant hereto
shall survive the Non-License Transfer Date or the Closing Date, as applicable,
and shall remain in full force and effect to the following extent: (a)
representations, warranties, covenants and agreements of Sellers with respect
to the Non-License Assets shall remain for a period of twelve (12) months after
the Non-License Transfer Date; (b) representations, warranties, covenants and
agreements of Sellers with respect to the License Assets shall survive for a
period of twelve (12) months after the Closing Date; provided, however, that
any representation, warranty, covenant or agreement that is the subject of a
claim which is asserted by the party seeking indemnification hereunder in a
reasonably detailed writing delivered to the other party or parties, as the
case may be, prior to the expiration of either such twelve (12) month period
shall survive with respect to such claim or dispute until the final resolution
thereof; and (c) the following covenants and agreements shall continue in full
force and effect until fully discharged: Sections 6.3 and 7.1 (which relate to
confidentiality), Sections 6.2.8 and 7.3 (which relate to access), Section 8.4
(which relates to employee matters), Article 12 (which relates to
indemnification) and Article 15 (which relates to miscellaneous matters). No
claim for indemnification may be made pursuant to this Article 12 after the
survival period set forth in this Section 12.1.
12.2. INDEMNIFICATION BY SELLERS.
Subject to the conditions and provisions of Section 12.4 and
Section 12.5, from and after the Transfer Date, Sellers, jointly and severally,
agree to indemnify, defend and hold harmless Buyer, and Buyer's officers,
directors, employees, agents and shareholders ("BUYER INDEMNIFIED PARTIES")
from and against and in any respect of any and all Losses, asserted against,
resulting to, imposed upon or incurred by any Buyer Indemnified Parties,
directly or indirectly, by reason of or resulting from: (a) any failure by
Seller to pay, perform or discharge any Liabilities of Seller not expressly
assumed by Buyer pursuant hereto or pursuant to any Buyer Document; (b) the
business or operations of the Station during the period prior to the Transfer
Date (except to the extent such Loss is an
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Assumed Liability); (c) any misrepresentation or breach of the representations,
warranties and certifications of Sellers contained in or made pursuant to this
Agreement or any other Seller Document; or (d) any breach by Sellers of any
covenants of Sellers contained in or made pursuant to this Agreement or any
other Seller Document.
12.3. INDEMNIFICATION BY BUYER.
Subject to the conditions and provisions of Section 12.4 and
Section 12.5, from and after the Transfer Date, Buyer hereby agrees to
indemnify, defend and hold harmless Sellers, and their respective officers,
directors, employees, agents and partners ("SELLER INDEMNIFIED PARTIES") from,
against and with respect of any and all Losses, asserted against, resulting to,
imposed upon or incurred by any Seller Indemnified Parties, directly or
indirectly, by reason of or resulting from: (a) any failure by Buyer to pay,
perform or discharge any Assumed Liabilities; (b) the business or operations of
the Station during the period from and after the Transfer Date; (c) any
misrepresentation or breach of the representations, warranties and
certifications of Buyer contained in or made pursuant to this Agreement or any
other Buyer Document; or (d) any breach by Buyer of any covenants of Buyer
contained in or made pursuant to this Agreement or any other Buyer Document.
12.4. LIMITATIONS ON INDEMNIFICATION
12.4.1. Notwithstanding any other provision of this Agreement to
the contrary, in no event shall Losses include a party's indirect,
consequential, incidental, exemplary or punitive damages or other special
damages or lost profits, regardless of the theory of recovery. Each party
hereto agrees to use reasonable efforts to mitigate any Losses which form the
basis for any claim for indemnification hereunder.
12.4.2. Sellers (taken as a whole) shall not be liable to the
Buyer Indemnified Parties in respect of any indemnification under Section
12.2(c) or Section 12.2(d) (with respect to breaches of covenants set forth in
Sections 6.1 and 6.2) except to the extent that the aggregate Losses of the
Buyer Indemnified Parties under such Sections exceed One Hundred Thousand
Dollars ($100,000) (the "BASKET AMOUNT"), and then only to the extent of the
excess over the Basket Amount. Buyer shall not be liable to the Seller
Indemnified Parties in respect of any indemnification under Section 12.3(c) or
Section 12.3(d) (with respect to breaches of covenants set forth in Section
7.2) except to the extent that the aggregate Losses of the Seller Indemnified
Parties under such Sections exceed the Basket Amount, and then only to the
extent of the excess over the Basket Amount.
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12.4.3. Notwithstanding any other provision of this Agreement to
the contrary (other than Section 12.4.2), Buyer acknowledges and agrees that
the maximum aggregate liability of Sellers (taken as a whole) pursuant to
Section 12.2(c) and Section 12.2(d) (with respect to breaches of covenants set
forth in Sections 6.1 and 6.2) of this Agreement to the Buyer Indemnified
Parties and any third parties for any and all Losses shall not exceed Two
Million Dollars ($2,000,000), regardless of the form of action, whether in
contract or tort, including negligence, and regardless of whether or not the
Sellers are notified of the possibility of damages to the Buyer Indemnified
Parties or any other third party; provided, however, nothing in this Section
12.4.3 shall be construed to constitute a waiver or limitation of any claims by
Buyer based on fraud. Notwithstanding anything to the contrary in this
Agreement, from and after the Transfer Date, the indemnifications set forth in
this Article 12 shall be the sole and exclusive remedies available to the Buyer
Indemnified Parties and the Seller Indemnified Parties for any claims arising
out of or related to the transactions contemplated by this Agreement,
including, without limitation, any claims for breaches of representations,
warranties, covenants or agreements contained in this Agreement, or any
certificate delivered pursuant to this Agreement or otherwise in connection
with this Agreement; provided, however, that from after the Non-License
Transfer and prior to the Closing, Buyer shall also have the remedies set forth
in Section 14.4 with respect to the covenants and agreements of Sellers that
survive the Transfer Date.
12.4.4. Each party (a "RECIPIENT PARTY") shall notify the other
party (the "REPRESENTING PARTY") reasonably promptly of any perceived breach by
the representing party of which the recipient party has knowledge of any
representations and warranties, covenants, and agreements and of any Losses
(including a brief description of the same) of the recipient party caused
thereby. In the event of any breach that is cured prior to the Transfer Date in
accordance with the terms of this Agreement, the representing party shall have
no obligation under Section 12.2 or Section 12.3 or otherwise to indemnify the
recipient party with respect to such Losses.
12.5. CONDITIONS OF INDEMNIFICATION.
The obligations and liabilities of Sellers and of Buyer hereunder
with respect to their respective indemnities pursuant to this Article 12,
resulting from any Losses, shall be subject to the following terms and
conditions:
12.5.1. The party seeking indemnification (the "INDEMNIFIED
PARTY") must give the other party or parties, as the case may be (the
"INDEMNIFYING PARTY"), notice of any such Losses promptly after the Indemnified
Party receives notice thereof; provided that the failure to give such notice
shall not
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affect the rights of the Indemnified Party hereunder except to the extent that
the Indemnifying Party shall have suffered actual damage by reason of such
failure.
12.5.2. The Indemnifying Party shall have the right to undertake,
by counsel or other representatives of its own choosing (reasonably acceptable
to the Indemnified Party), the defense of such Losses at the Indemnifying
Party's risk and expense; provided, however, that as a condition to the
exercise of such right to undertake defense of such Losses, the Indemnifying
Party shall, as between the Indemnifying Party and the Indemnified Party,
assume the liability for such Losses, without regard to the limitations set
forth in Section 12.4.3.
12.5.3. In the event that the Indemnifying Party shall elect not
to undertake such defense, or, within a reasonable time after notice from the
Indemnified Party of any such Losses, shall fail to defend, the Indemnified
Party (upon further written notice to the Indemnifying Party) shall have the
right to undertake the defense, compromise or settlement of such Losses, by
counsel or other representatives of its own choosing, on behalf of and for the
account and risk of the Indemnifying Party (subject to the right of the
Indemnifying Party to assume defense of such Losses at any time prior to
settlement, compromise or final determination thereof (with counsel reasonably
acceptable to the Indemnified Party)). In such event, the Indemnifying Party
shall pay to the Indemnified Party, in addition to the other sums required to
be paid hereunder, the costs and expenses incurred by the Indemnified Party in
connection with such defense, compromise or settlement as and when such costs
and expenses are so incurred.
12.5.4. Anything in this Section 12.5 to the contrary
notwithstanding, (a) if any third party alleges the right to or seeks any
remedy other than money damages or other money payments, the Indemnified Party
shall have the right, at the cost and expense of the Indemnifying Party, to
participate in and direct the defense, compromise or settlement of the Losses,
(b) the Indemnifying Party shall not, without the Indemnified Party's written
consent, settle or compromise any Losses or consent to entry of any judgment
which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party of a release from all
liability in respect of such Losses in form and substance satisfactory to the
Indemnified Party, and (c) in the event that the Indemnifying Party undertakes
defense of any Losses, the Indemnified Party, by counsel or other
representative of its own choosing and at its sole cost and expense, shall have
the right to consult with the Indemnifying Party and its counsel or other
representatives concerning such Losses and the Indemnifying Party and the
Indemnified Party and their respective counsel or other representatives shall
cooperate with respect to such Losses (d) in the event that the Indemnifying
Party undertakes defense of any Losses, the Indemnifying Party shall have an
obligation to keep the Indemnified Party informed of the status of the defense
of such Losses and furnish the Indemnified Party with all documents,
instruments and
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information that the Indemnified party shall reasonably request in connection
therewith, and (e) in the event that both the Indemnified Party and the
Indemnifying Party are parties (directly or through interpleader) to any Losses
giving rise to indemnification hereunder and the Indemnified Party is advised
by counsel that there is or may be a conflict of interest in the representation
of both the Indemnified Party and the Indemnifying Party by one firm of
counsel, the Indemnified Party shall be entitled to assume, at the sole cost
and expense of the Indemnifying Party, the defense, compromise and settlement
(subject to clause (b) above) of such Loss with counsel (in addition to local
counsel) reasonably satisfactory to the Indemnifying Party.
12.5.5 In the event that an Indemnified Party has a good faith
basis for a claim for indemnification which does not involve a claim against it
by a third party (a "DIRECT CLAIM"), the Indemnified Party shall notify the
Indemnifying Party in writing of such Direct Claim with reasonable promptness,
specifying, to the extent known, the nature, circumstances and amount of such
Direct Claim (a "DIRECT CLAIM NOTICE"), including with particularity the
specific representation and warranty or covenant and agreement alleged to have
been breached; provided, that the failure to give such notice shall not affect
the rights of the Indemnified Party hereunder except to the extent that the
Indemnifying Party shall have suffered actual damage by reason of such failure.
If the Indemnifying Party notifies the Indemnified Party that it disputes an
Indemnified Party's right of indemnification with respect to a particular
Direct Claim, the parties shall use their reasonable efforts to negotiate a
resolution of such dispute promptly. Except to the extent of the limitations on
indemnification set forth in this Article 12, nothing in this Section 12.5.5
shall be deemed to prevent any Indemnified Party from initiating litigation
under this Agreement with respect to any Direct Claim disputed by the
Indemnifying Party for the purpose of establishing the Indemnified Party's
right to indemnification hereunder.
12.6. CURE OF BREACH
Notwithstanding any other provision of this Agreement to the
contrary, a breach by Sellers of any representations and warranties or a
failure to perform any covenant or agreement hereunder may be cured prior to
the Transfer Date by Sellers (a) by reducing the Purchase Price in an amount
equal to the Losses to Buyer caused by such breach, (b) by making payment to a
third party or taking other action to discharge the Losses, (c) by placing an
amount equal to the Losses in an escrow account under an escrow arrangement
reasonably satisfactory to Sellers and Buyer, or (d) a combination of the
foregoing. If the foregoing actions fully cure the breach, and the Non-License
Transfer or Closing, as the case may be, is consummated, Sellers shall have no
obligation under Section 12.2 or otherwise to indemnify Buyer with respect to
the Losses caused by such breach; if such actions
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partially cure the breach, Sellers shall continue to have an obligation under
Section 12.2 to indemnify Buyer with respect to the remaining portion of the
Losses caused by such breach. This Section 12.6 shall not operate to limit
Section 9.1.
ARTICLE 13.
TERMINATION
13.1. TERMINATION
This Agreement may be terminated at any time prior to the Closing
by:
13.1.1. the mutual consent of Sellers and Buyer;
13.1.2. either Buyer or Sellers, by written notice of termination
delivered to the other, if (a) the Transfer Date has not occurred within twelve
(12) months after the date of this Agreement; provided, however, that the
failure of the Non-License Transfer 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 pursuant to this Section 13.1.2(a);
and provided, further, that Buyer's right to terminate this Agreement pursuant
to this Section 13.1.2(a) shall be subject to Sellers' rights to extend the
Transfer Date pursuant to Section 8.2; or (b) the FCC designates the
applications contemplated by Section 5.1 for an evidentiary hearing; provided,
however, that Sellers shall not be permitted to terminate this Agreement
pursuant to this Section 13.1.2(b) after the Non-License Transfer Date;
13.1.3. either Buyer or Sellers in the event that any court or
Governmental Authority of competent jurisdiction shall issue a final,
non-appealable injunction prohibiting the transactions contemplated by this
Agreement; provided, however, that the issuance of such final, non-appealable
injunction shall not be attributable to the breach of this Agreement by the
party seeking termination pursuant to this Section 13.1.3; provided that
Sellers shall not be permitted to terminate this Agreement pursuant to this
Section 13.1.3 after the Non-License Transfer Date;
13.1.4. either Buyer or Sellers in accordance with the terms and
conditions of Article 14; or
13.1.5. Sellers if (a) the Closing shall not have occurred within
thirty (30) months after the date of this Agreement, and (b) Buyer shall not
have paid to Sellers on or prior to the end of such thirty (30) month period,
all amounts payable to Sellers by Buyer at the Closing; provided, however, that
the failure of the
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Closing to have occurred within such thirty (30) month period shall not be
caused by a breach of this Agreement by Sellers.
13.2. EFFECT OF TERMINATION
13.2.1. In the event this Agreement is terminated as provided in
Sections 13.1.1, 13.1.2, 13.1.3 or 13.1.5, Buyer shall receive the immediate
return of the Deposit (except in the event that the Non-License Transfer shall
have occurred) 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
Sellers set forth in Sections 6.3 and 7.1 (which relate to confidentiality),
and Section 15.3 (which relates to payment of certain expenses), shall survive
such termination and the parties hereto shall have any and all remedies to
enforce such obligations provided at law or in equity or otherwise (including,
without limitation, specific performance).
13.2.2. In the event this Agreement is terminated as provided in
Section 13.1.4, this Agreement shall be deemed null, void and of no further
force or effect, and the parties hereto shall be released from all future
obligations hereunder; provided, however, that the obligations of Buyer and
Sellers set forth in Sections 6.3 and 7.1 (which relate to confidentiality),
Article 14 (which relates to remedies and the Deposit) and Section 15.3 (which
relates to payment of certain expenses), shall survive such termination and the
parties hereto shall have any and all remedies to enforce such obligations
provided at law or in equity or otherwise (including, without limitation,
specific performance).
ARTICLE 14.
REMEDIES
14.1. DEFAULT BY BUYER.
If each condition set forth in Section 9 and Section 10 (other
than any condition that has not been satisfied solely as a result of an uncured
misrepresentation or breach of representation or warranty of Buyer set forth in
this Agreement or a default by Buyer in the performance of its obligations
under this Agreement) has been satisfied or waived, and Buyer has breached its
obligation to effect the transactions to be consummated on the Transfer Date by
the date required pursuant to Sections 11.1 or 11.2, as the case may be, then
Sellers shall be entitled, by written notice to Buyer, to terminate this
Agreement, and as Sellers' sole remedy under this Agreement, to receive the
Deposit as liquidated damages, and upon the receipt of such payment by Sellers,
Buyer shall be discharged from all further liability under this Agreement;
provided, however, Buyer shall have a period of ten (10) business days after
receipt of Sellers' written termination notice to
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cure any such misrepresentation, breach or default, and if Buyer cures such
misrepresentation, breach or default within such ten (10) business day period,
Sellers shall have no right to terminate this Agreement based on such
misrepresentation, breach or default; provided, further, however, that Buyer
shall have no right to such ten (10) business day cure period with respect to
any breach by Buyer of Buyer's obligations to consummate the Non-License
Transfer on the Non-License Transfer Date (including, without limitation,
Buyer's obligation to pay the amounts set forth in Section 2.5.1 on the
Non-License Transfer Date, and execute and deliver the agreements, certificates
and documents set forth in Section 11.5).
14.2. DEFAULT BY SELLERS.
If there exists a material misrepresentation or breach of
representation or warranty of Sellers set forth in this Agreement, or if
Sellers shall default in any material respect in the performance of Sellers'
obligations under this Agreement, or if, as a result of Sellers' action or
failure to act, the conditions precedent to Buyer's or Sellers' obligation to
close specified in Section 9 or Section 10 are not satisfied, and for such
reason or reasons this Agreement is not consummated, and provided that Buyer
shall not then be in default in the performance of Buyer's obligations
hereunder, Buyer shall be entitled, by written notice to Sellers, to terminate
this Agreement to receive the immediate return of the Deposit, and to pursue
any other remedies Buyer has at law or in equity or otherwise; provided,
however, Sellers shall have a period of ten (10) business days after receipt of
Buyer's written termination notice to cure any such misrepresentation, breach
or default, and if Sellers cure such misrepresentation, breach or default
within such ten (10) business day period, Buyer shall have no right to
terminate this Agreement based on such misrepresentation, breach or default,
provided, further, however, that Sellers shall have no right to such ten (10)
business day cure period with respect to any breach by Sellers of Sellers'
obligation to consummate the Non-License Transfer on the Non-License Transfer
Date or the Closing on the Closing Date (including, without limitation,
Sellers' obligation to execute and deliver on the Non-License Transfer Date or
the Closing Date, as the case may be, the agreements, certificates and
documents set forth in Section 11.4).
14.3. LIQUIDATED DAMAGES.
Sellers and Buyer have provided for the amount of the Deposit to
be liquidated damages as a remedy for Sellers after having considered carefully
the anticipated and actual 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 Sellers will
suffer in such event, and
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the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy
in such event. In any situation hereunder pursuant to which the Deposit shall
be payable to Sellers, Buyer agrees to waive any defense that there is an
alternative adequate remedy available to Sellers and/or that payment of the
Deposit to Sellers would constitute a penalty.
14.4. SPECIFIC PERFORMANCE.
Sellers hereby acknowledge that the Assets are unique, and that
the harm to Buyer resulting from Sellers failure to perform their obligations
hereunder cannot be adequately compensated by damages. Accordingly, Sellers
agree that Buyer shall have the right to have all obligations, undertakings,
agreements, covenants and other provisions of this Agreement specifically
performed by Sellers. In any such specific performance action, Sellers agree to
waive the defense that there is an adequate remedy at law for damages and agree
that Buyer shall be entitled to obtain specific performance of Sellers'
obligations hereunder without having to post any bond or other security in any
such proceeding.
ARTICLE 15.
GENERAL PROVISIONS
15.1. ADDITIONAL ACTIONS, DOCUMENTS AND INFORMATION.
Buyer agrees that it will, at any time, prior to, at or after the
Transfer Date, take or cause to be taken such further actions, and execute,
deliver and file or cause to be executed, delivered and filed such further
documents and instruments and obtain such consents, as may be reasonably
requested by Sellers in connection with the consummation of the transactions
contemplated by this Agreement. Each Seller agrees that it will, at any time,
prior to, at or after the Transfer Date, take or cause to be taken such further
actions, and execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments and obtain such consents, as may
be reasonably requested by Buyer in connection with the consummation of the
transactions contemplated by this Agreement.
15.2. BROKERS.
Sellers represent to Buyer that, except for the brokerage fees
payable to Sellers' Broker (which fees are solely the responsibility of
Sellers), Sellers have 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 Sellers that Buyer has not engaged, or incurred any unpaid
liability (for any brokerage fees,
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finders' fees, commissions or otherwise) to, any broker, finder or agent in
connection with the transactions contemplated by this Agreement; and Sellers
agree 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 Transfer Date without limitation
and shall not be subject to the Basket Amount contained in Section 12.4.2 or
the limitations of Section 12.4.3.
15.3. EXPENSES AND TAXES.
Each party hereto shall pay its own expenses incurred in
connection with this Agreement and in the preparation for and consummation of
the transactions provided for herein. Notwithstanding the foregoing, (a) Buyer
and Sellers shall each pay one-half (1/2) of all sales (including, without
limitation, bulk sales), use, documentary, stamp, gross receipts, registration,
transfer, conveyance, excise, recording, license and other similar Taxes and
fees ("TRANSFER TAXES") applicable to, imposed upon or arising out of the
transactions contemplated hereby whether now in effect or hereinafter adopted
and regardless of which party such Transfer Tax is imposed upon, (b) Sellers
and Buyer shall each pay one-half (1/2) of any FCC filing fees incurred in
connection with the assignment of the FCC Licenses, and (c) Buyer shall pay any
filing fees payable in connection with any HSR Filings. Each party agrees to
cooperate with such other party in the timely completion, execution and filing
of any documentation required by any local or state governmental agency in
connection with the Transfer Taxes.
15.4. NOTICES.
All notices, demands, requests, or other communications which may
be or are required to be given or made by any party to any other party pursuant
to this Agreement shall be in writing and shall be hand delivered, mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, delivered by overnight air courier, or transmitted by telegram, telex,
or facsimile transmission addressed as follows:
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If to Buyer:
c/o Nexstar Broadcasting Group, Inc.
200 Abington Executive Park
Suite 201
Clarks Summit, Pennsylvania 18411
Attention: Xx. Xxxxx X. Xxxx
Telecopy No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
If to Sellers:
STC Broadcasting, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxx
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice) to:
Hicks, Muse, Xxxx & Xxxxx. Inc.
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxxx X. Xxxxxx, Xx.
Telecopy No.: (000) 000-0000
and to:
Xxxxx & Xxxxxxx L.L.P.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx., Esq.
Telecopy No.: (000) 000-0000
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or such other address as the addressee may indicate by written notice to the
other parties.
Each notice, demand, request, or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the return receipt, the delivery receipt, the affidavit of messenger or (with
respect to a telex) the answerback being deemed conclusive but not exclusive
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
15.5. WAIVER.
No delay or failure on the part of any party hereto in exercising
any right, power or privilege under this Agreement or under any other
instrument or document given in connection with or pursuant to this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
15.6. BENEFIT AND ASSIGNMENT.
(a) No party hereto shall assign this Agreement, in whole or in
part, whether by operation of law or otherwise, without the prior written
consent of the other party hereto; provided, however, upon written notice to
Sellers, Buyer may assign all or any portion of Buyer's rights and obligations
under this Agreement to one or more direct or indirect wholly-owned
subsidiaries of Buyer (each a "PERMITTED ASSIGNEE"); provided, further, that
(i) prior to or concurrently with such assignment, Buyer shall have
represented, warranted and certified to Sellers in writing that (A) Buyer has
no knowledge of any fact or proceeding which would reasonably be expected to
disqualify any such Permitted Assignee under the Communications Act or under
the rules and regulations of the FCC from acquiring or operating the Station or
would cause the FCC not to approve the assignment of the FCC Licenses to any
such Permitted Assignee, (B) Buyer has no knowledge of any fact or circumstance
relating to any such Permitted Assignee or any of any such Permitted Assignee's
affiliates that would reasonably be expected to (1) cause the filing of any
objection to the assignment of the FCC Licenses to any such Permitted Assignee,
or (2) lead to a material delay in the processing by the FCC of the
applications for such assignment, and (C) no waiver of an FCC rule or policy is
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necessary to be obtained for the grant of the applications for the assignment
of the FCC Licenses to any such Permitted Assignee, nor will processing
pursuant to any exception or rule of general applicability be requested or
required in connection with the consummation of the transactions herein; (ii)
prior to or concurrently with such assignment, each such Permitted Assignee
shall assume in writing all of Buyer's obligations to Sellers, and each such
Permitted Assignee shall deliver to Sellers a certificate representing and
warranting to Sellers as to the matters set forth in Article 4; (iii)
notwithstanding such assumption, Buyer shall not be released from any
liabilities or obligations hereunder; (iv) Buyer and any such Permitted
Assignee shall be jointly and severally liable for the liabilities or
obligations of Buyer and any such Permitted Assignee hereunder (including,
without limitation, any obligation pursuant to Article 12 hereof); and (v) such
assignment shall not cause a material delay in the receipt of the FCC Order or
the Final Order. Notwithstanding the foregoing, if the Non-License Transfer
shall have occurred, then Buyer shall have the right at any time after the
Non-License Transfer Date and upon at least five (5) business days notice to
Sellers, to pay to Sellers all, but not less than all, of the amounts that
would have been payable to Sellers had the Closing occurred on the date of such
payment, and, at any time after such payment is made, or at any time after
Buyer has paid the amount described in Section 11.2.2, Buyer shall be permitted
to assign this Agreement, in whole or in part, without regard to the
limitations and conditions set forth in Section 15.6(a)(i), (ii), (iv) or (v).
(b) Any purported assignment contrary to the terms hereof shall be
null, void and of no force and effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns as permitted hereunder. No Person, other than the
parties hereto, is or shall be entitled to bring any action to enforce any
provision of this Agreement against any of the parties hereto, and the
covenants and agreements set forth in this Agreement shall be solely for the
benefit of, and shall be enforceable only by, the parties hereto or their
respective successors and assigns as permitted hereunder. Without limiting the
foregoing, no employee of Sellers and no other Person shall be a third-party
beneficiary under this Agreement (including, without limitation, the provisions
of Section 8.4), or any Seller Document or Buyer Document.
15.7. ENTIRE AGREEMENT; AMENDMENT.
This Agreement, including the Schedules and Exhibits hereto and
the other instruments and documents referred to herein or delivered pursuant
hereto contains the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior oral or written agreements,
commitments or understandings with respect to such matters. No amendment,
modification or discharge of this Agreement shall be valid or binding unless
set forth in writing and
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duly executed by the party or parties against whom enforcement of the
amendment, modification or discharge is sought.
15.8. SEVERABILITY.
If any part of any provision of this Agreement or any other
contract, agreement, document or writing given pursuant to or in connection
with this Agreement shall be invalid or unenforceable under applicable law,
such part shall be ineffective to the extent of such invalidity or
unenforceability only, without in any way affecting the remaining parts of such
provisions or the remaining provisions of said contract, agreement, document or
writing.
15.9. HEADINGS.
The headings of the sections and subsections contained in this
Agreement are inserted for convenience only and do not form a part or affect
the meaning, construction or scope thereof.
15.10. GOVERNING LAW; JURISDICTION.
This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by and construed
under and in accordance with the laws of the state of New York, without giving
effect to the conflicts of law principles thereof (other than Section 5-1401 of
the New York General Obligations Law). The parties hereto hereby irrevocably
consent to the nonexclusive jurisdiction and venue of the courts of the State
of New York and of any Federal Court located in New York County, New York, in
connection with any action, suit or proceeding arising out of or relating to
this Agreement. The parties hereto hereby waive personal service of any process
in connection with any such action, suit or proceeding and agree that the
service thereof may be made by certified or registered mail addressed to or by
personal delivery to the other party, at such other party's address set forth
pursuant to Section 15.4 hereof. In the alternative, in its discretion, any of
the parties hereto may effect service upon any other party in any other form or
manner permitted by law.
15.11. SIGNATURE IN COUNTERPARTS.
This Agreement may be executed in separate counterparts, none of
which need contain the signatures of all parties, each of which shall be deemed
to be an original, and all of which taken together constitute one and the same
instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
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[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, each of the parties hereto has executed this Asset
Purchase Agreement, or has caused this Asset Purchase Agreement to be duly
executed and delivered in its name on its behalf, all as of the day and year
first above written.
SELLERS
STC BROADCASTING, INC.
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
STC LICENSE COMPANY
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
BUYER
NEXSTAR BROADCASTING OF ROCHESTER, LLC
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Secretary
63
ANNEX I
DEFINITIONS
"ACCOUNTING FIRM" shall have the meaning specified in Section 2.6.
"ACCOUNTS RECEIVABLE" means all accounts receivable with respect to the
Station as of the end of the broadcast day immediately preceding the Transfer
Date.
"ADDITIONAL AGREEMENTS" shall have the meaning set forth in Section
6.1.6.
"APPRAISAL FIRM" shall have the meaning set forth in Section 2.7.
"APPRAISAL REPORT" shall have the meaning set forth in Section 2.7.
"ASSETS" shall have the meaning set forth in Section 2.1.
"ASSUMED ACCRUED EMPLOYEE LIABILITIES" shall mean all Liabilities to be
assumed by Buyer pursuant to Sections 8.4.2 and 8.4.4(b) hereof for unused and
unpaid vacation and sick leave of the Transferred Employees, and all
Liabilities related to Buyer's obligations under Section 8.4 to provide length
of service credits to the Transferred Employees for purposes of determining the
eligibility of the Transferred Employees for benefits under Buyer's benefit
plans.
"ASSUMED LIABILITIES" means the Liabilities assumed by Buyer pursuant to
Section 2.8 of this Agreement.
"ASSIGNMENT OF CONTRACTS AND LEASES" means that certain Assignment of
Contracts and Leases executed by Sellers, substantially in the form attached
hereto as Exhibit C.
"ASSIGNMENT OF FCC LICENSES" means that certain Assignment of FCC
Licenses executed by STC Licensee, substantially in the form attached hereto as
Exhibit B.
"ASSUMPTION AGREEMENT" means that certain Assumption Agreement executed
by Buyer and Sellers, substantially in the form attached hereto as Exhibit D.
"BASE PURCHASE PRICE" shall have the meaning set forth in Section 2.4.
"BASKET AMOUNT" shall have the meaning set forth in Section 12.4.
64
"BENEFIT ARRANGEMENT" means a welfare or benefit program, practice or
policy 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.
"BENEFIT PLANS" shall have the meaning specified in Section 3.16.1.
"XXXX OF SALE" means that certain Xxxx of Sale and Assignment of Assets,
dated as of the Transfer Date and executed by Sellers, substantially in the
form attached hereto as Exhibit A.
"BUYER AFFILIATES" mean Nexstar Broadcasting Group, LLC, and all direct
or indirect subsidiaries of Nexstar Broadcasting Group, LLC.
"BUYER DOCUMENTS" means, collectively, this Agreement, the Deposit Escrow
Agreement, the Assumption Agreement and the Time Brokerage Agreement and the
closing certificates and other deliveries contemplated by Section 11.5.
"BUYER INDEMNIFIED PARTIES" shall have the meaning specified in Section
12.2.
"CLOSING" shall have the meaning set forth in Section 11.2.1.
"CLOSING DATE" shall have the meaning specified in Section 11.2.1.
"COBRA OBLIGATIONS" shall have the meaning specified in Section 8.4.5.
"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.
"CURRENT BALANCE SHEET DATE" shall have the meaning specified in Section
3.5.2.
"DEPOSIT" shall have the meaning specified in Section 2.3.
"DEPOSIT ESCROW AGENT" means United Bank, 0000 X Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000.
ANNEX I-2
65
"DEPOSIT ESCROW AGREEMENT" means that certain Deposit Escrow Agreement
dated as of the date hereof by and among Buyer, Sellers and the Deposit Escrow
Agent.
"EARLY TERMINATION DATE" shall have the meaning specified in Section
11.1.1.
"ENCUMBRANCES" means any mortgages, pledges, liens, security interests,
defects in title, easements, encumbrances, encroachments and any other matters
affecting the title, value, marketability or current use of the Real Property
or the Leased Property.
"ENVIRONMENTAL LAWS" means any federal, state, local, or foreign law
(including common law), statute, code, ordinance, rule, regulation, or other
requirement relating to the environment, natural resources, public, or employee
health and safety, and Hazardous Materials generation, production, use, storage,
treatment, transportation or disposal, and includes, but is not limited to 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. Section 9601 et seq.; the Toxic Substances Control Act
("TSCA"), 15 U.S.C. Section 2601 et seq.; the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1802 et seq.; the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. Section 9601 et seq.; the Clean Water Act ("CWA"), 33 U.S.C.
Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et
seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq.; the Toxic
Substances Control, 15 U.S.C. Section 2601 et seq., the Federal Insecticide,
Fungicide, and Rodenticide Act, 7 U.S.C. Section 2701 et seq., and the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., as such laws
have been amended or supplemented, and the regulations promulgated pursuant
thereto, and all analogous state or local statues.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all Laws promulgated pursuant thereto or in connection therewith.
"EXCLUDED ASSETS" shall have the meaning specified in Section 2.2.
"EXCLUDED CONTRACTS" shall have the meaning specified in Section 2.1.8.
"EXCLUDED EMPLOYEE" shall have the meaning specified in Section 8.4.1(a).
"FCC" means the Federal Communications Commission.
"FCC LICENSES" shall have the meaning specified in Section 2.1.1.
ANNEX I-3
66
"FCC ORDER" means an unconditional order or orders (except for standard
conditions imposed by the FCC on all assignments of licenses) of the FCC, or of
the Chief, Mass Media Bureau of the FCC, acting under delegated authority,
consenting to the assignment to Buyer of the FCC Licenses for the Station.
"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.
"GAAP" means generally accepted accounting principles consistently
applied for the periods involved.
"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.
"HSR FILING" shall have the meaning specified in Section 5.2.
"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", "hazardous materials", "extremely hazardous
waste", "toxic substances", "radioactive materials", or other similar
designations in, or otherwise subject to regulation under, any Environmental
Laws.
"HEALTH INSURANCE CONTRACTS" means the contracts and agreements of the
Station described in Schedule 2.1.8 with (i) Blue Cross & Blue Shield and (ii)
the Rochester Area Health Maintenance Organization (d/b/a Preferred Care), each
with respect to the health care plans for employees of the Station.
"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" shall have the respective
meanings set forth in Section 12.5.1.
"INTELLECTUAL PROPERTY" shall have the meaning set forth in Section
2.1.4.
ANNEX I-4
67
"LAWS" means any federal, state or local law, statute, code, ordinance,
regulation, order, writ, injunction, judgment or decree applicable to the
specified Person and to the businesses and assets thereof.
"LEASED PROPERTY" shall have the meaning set forth in Section 2.1.2.
"LIABILITIES" means, as to any Person, all debts, adverse claims,
liabilities and obligations, direct, indirect, absolute or contingent of such
Person, whether accrued, vested or otherwise, whether in contract, tort, strict
liability or otherwise and whether or not actually reflected, or required by
GAAP to be reflected, in such Person's balance sheets or other books and
records.
"LICENSE ASSETS" means the FCC Licenses and other Assets described on
Schedule I hereto.
"LOSSES" means any and all demands, claims, complaints, actions or causes
of action, suits, proceedings, investigations, arbitrations, assessments,
losses, damages, liabilities, obligations (including those arising out of any
action, such as any settlement or compromise thereof or judgment or award
therein) and any costs and expenses, including, without limitation, reasonable
attorneys' fees and disbursements; provided that "Losses" shall not include any
indirect, consequential, incidental, exemplary or punitive damages or other
special damages or lost profits.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, operations, assets or financial condition of the Station, except for
any material adverse affect resulting from (a) general economic conditions
applicable to the television broadcast industry, or (b) general conditions in
the market in which the Station operates.
"NETWORK AFFILIATION AGREEMENT" means that certain Network Affiliation
Agreement dated January 12, 1995, between the Station and CBS Television
Network and the other agreements with the CBS Television Network listed under
Section 2 of Schedule 2.1.8 hereto.
"NON-LICENSE TRANSFER" shall have the meaning set forth in Section
11.1.1.
"NON-LICENSE ASSETS" means the Assets, other than the License Assets.
"NON-LICENSE TRANSFER DATE" shall have the meaning set forth in Section
11.1.1.
ANNEX I-5
68
"OPERATING CONTRACTS" shall have the meaning set forth in Section 2.1.8.
"ORDINARY COURSE OF BUSINESS" means, with respect to Sellers, the
ordinary course of business consistent with past practices of Sellers; any
actions taken pursuant to the requirements of law or contracts existing on the
date hereof and described on any of Schedules 2.1.5, 2.1.6, 2.1.8 or 3.14,
shall be deemed to be action in the Ordinary Course of Business.
"OUTSIDE CLOSING DATE" shall have the meaning set forth in Section
11.2.2.
"PENSION PLAN" means an "employee pension benefit plan" as such term is
defined in Section 3(2) of ERISA.
"PERMITTED ASSIGNEE" shall have the meaning set forth in Section 15.6(a).
"PERMITTED ENCUMBRANCES" means (a) Encumbrances arising in connection
with equipment or maintenance financing or leasing pursuant to any contract or
lease set forth on Schedule 2.1.8 hereto, (b) Encumbrances on Real Property
that do not interfere with the value, marketability or use of the Real Property
in the operations or business of the Station, (c) Encumbrances for Taxes not
yet due and payable or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on Seller's books in accordance with GAAP, (d) Encumbrances
identified on Schedule 3.10 that are not required to be discharged or removed
on or prior to the Transfer Date and (e) Encumbrances which do not secure
monetary liabilities of any Person and that, individually or in the aggregate,
do not and would not materially detract from the value or marketability of any
of the Assets or materially interfere with the use thereof as currently used.
"PERSON" or "PERSON" means 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.
ANNEX I-6
69
"PRE-TRANSFER DATE RECORDS" shall have the meaning set forth in Section
7.3.
"PROGRAM CONTRACTS" shall have the meaning set forth in Section 2.1.5.
"PRORATION AMOUNT" shall have the meaning set forth in Section 2.7.1.
"PRORATION ITEMS" means all items of revenue (other than Accounts
Receivable) and expense with respect to the Station and the Assets, including
power and utility charges, business and license fees (including retroactive
adjustments thereof), sales and service charges, commissions, special
assessments, and rental payments and personal and real estate Taxes and
assessments with respect to the Real Property, taxes (except for Taxes arising
from the transfer of the Assets hereunder), deposits, Trade-out Agreements, FCC
annual regulatory fees, and other similar prepaid and deferred items and any
other operating expenses incurred in the Ordinary Course of Business.
"PURCHASE PRICE" shall have the meaning set forth in Section 2.4.
"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" shall have the meaning set forth in Section 2.1.2.
"REPRESENTED EMPLOYEES" shall have the meaning set forth in Section
8.4.4.
"RESTRICTED CONTRACTS" shall have the meaning set forth in Section 6.3.
"SCHEDULES" means the disclosure schedules delivered by Sellers to Buyer
in connection herewith.
"SELLER AFFILIATE" means any direct or indirect wholly owned subsidiary
of STC Broadcasting, Inc.
"SELLER DOCUMENTS" means, collectively, this Agreement, the Deposit
Escrow Agreement, the Assignment of Contracts and Leases, the Xxxx of Sale, the
Assignment of FCC Licenses, and the Assumption Agreement and the Time Brokerage
Agreement and the closing certificates and other deliveries contemplated by
Section 11.4.
ANNEX I-7
70
"SELLER INDEMNIFIED PARTIES" shall have the meaning set forth in Section
12.3.
"SELLER TAX RETURNS" means all federal, state, local, foreign and other
applicable Tax returns, declarations of estimated Tax reports required to be
filed by Sellers (without regard to extensions of time permitted by law or
otherwise).
"SELLERS' BROKER" means Media Venture Partners.
"STATION" means WROC-TV, Channel 8, Rochester, New York.
"STATION CONTRACTS" shall have the meaning set forth in Section 2.1.8.
"STC" means STC Broadcasting, Inc., a Delaware corporation.
"STC LICENSEE" means STC License Company, a Delaware corporation and a
wholly-owned subsidiary of STC.
"SUBJECT AGREEMENTS" means the following types of Station Contracts: (i)
written employment agreements that will not be terminable by Buyer after the
Transfer Date at-will without cost or obligation (other than an obligation to
pay accrued salary or wages at the normally applicable rate through the time of
termination); (ii) agreements related to Real Property and Leased Property;
(iii) program licenses and contracts under which Sellers are authorized to
broadcast programs on the Station; (iv) all contracts and agreements pursuant
to which commercial air time on the Station is sold, traded or bartered in
consideration for any property or services in lieu of or in addition to cash;
(v) network affiliation agreements; (vi) rating service agreements; (vii)
advertising sales representation agreements; and (viii) agreements pursuant to
which an Encumbrance is placed on an Asset.
"TAXES" means all federal, state and local taxes (including, without
limitation, income, profit, franchise, sales, use, real property, personal
property, ad valorem, excise, employment, social security and wage withholding
taxes) and installments of estimated taxes, assessments, deficiencies, levies,
imports, duties, license fees, registration fees, withholdings, or other
similar charges of every kind, character or description imposed by any
Governmental Authorities.
"TIME BROKERAGE AGREEMENT" means the Time Brokerage Agreement executed by
Buyer and Sellers, in substantially the form attached hereto as Exhibit G.
ANNEX I-8
71
"TIME SALES AGREEMENTS" shall have the meaning set forth in Section
2.1.7.
"TRADE-OUT AGREEMENTS" shall have the meaning set forth in Section 2.1.6.
"TRANSFER DATE" means either the earlier of the Non-License Transfer Date
or the Closing Date.
"TRANSFER TAXES" shall have the meaning set forth in Section 15.3.
"TRANSFERRED EMPLOYEE" shall have the meaning set forth in Section 8.4.1.
"WELFARE PLAN" means an "employee welfare benefit plan" as such term is
defined in Section 3(1) of ERISA.
ANNEX I-9
72
ASSET PURCHASE AGREEMENT
BY AND AMONG
STC BROADCASTING, INC.
AND
STC LICENSE COMPANY
AS SELLERS
AND
NEXSTAR BROADCASTING OF ROCHESTER, LLC
AS BUYER
DATED AS OF MARCH 3, 1999
73
TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS AND REFERENCES...................................... 1
ARTICLE 2. SALE AND PURCHASE OF ASSETS; ESCROW DEPOSIT; PURCHASE PRICE;
PRORATION AMOUNTS; ASSUMPTION OF LIABILITIES.................... 2
2.1. Asset Sale and Purchase of Assets............................ 2
2.1.1. FCC Licenses....................................... 2
2.1.2. Real and Leased Property Interests................. 2
2.1.3. Tangible Personal Property......................... 3
2.1.4. Intellectual Property.............................. 3
2.1.5. Program Contracts.................................. 3
2.1.6. Trade-out Agreements............................... 3
2.1.7. Broadcast Time Sales Agreement..................... 4
2.1.8. Operating Contracts................................ 4
2.1.9. Vehicles........................................... 4
2.1.10. Files and Records.................................. 4
2.1.11. Auxiliary Facilities............................... 4
2.1.12. Permits and Licenses............................... 5
2.1.13. Goodwill........................................... 5
2.2. Excluded Assets.............................................. 5
2.2.1. Cash............................................... 5
2.2.2. Account Receivable................................. 5
2.2.3. Deposits and Prepaid Expenses...................... 5
2.2.4. Personal Property Disposed Of...................... 5
2.2.5. Insurance.......................................... 6
2.2.6. Employee Plans and Assets.......................... 6
2.2.7. Right to Tax Refunds............................... 6
2.2.8. Certain Books and Records.......................... 6
2.2.9. Third-Party Claims................................. 6
2.2.10. Rights Under this Agreement........................ 7
2.2.11. Name............................................... 7
2.2.12. Securities......................................... 7
2.2.13. Excluded Contracts and Unrelated Assets............ 7
2.3. Escrow Deposit............................................... 7
2.4. Purchase Price............................................... 7
2.5. Payment of Purchase Price.................................... 8
2.6. Proration Amount............................................. 8
2.7. Allocation of Purchase Price................................. 10
2.8. Assumption of Liabilities.................................... 11
ARTICLE 3. REPRESENTATIONS AND WARRANTIES BY SELLERS....................... 11
3.1. Organization and Standing.................................... 11
74
TABLE OF CONTENTS (continued)
Page
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3.2. Authorization................................................ 12
3.3. Compliance with Laws......................................... 12
3.4. Consents and Approvals; No Conflicts......................... 12
3.5. Financial Statements; Undisclosed Liabilities................ 13
3.6. Absence of Certain Changes or Events......................... 14
3.7. Absence of Litigation........................................ 14
3.8. Assets....................................................... 14
3.9. FCC Matters.................................................. 15
3.10. Real Property................................................ 15
3.11. Condition of Tangible Assets................................. 16
3.12. Intellectual Property........................................ 16
3.13. Reports and Records.......................................... 17
3.14. Station Contracts............................................ 17
3.15. Taxes........................................................ 18
3.16. Employee Benefit Plans....................................... 18
3.17. Labor Relations.............................................. 20
3.18. Environmental Matters........................................ 20
3.19. Transactions With Affiliates................................. 21
3.20. Insurance.................................................... 21
3.21. Interpretation of Certain Provisions......................... 21
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY BUYER......................... 22
4.1. Organization and Standing.................................... 22
4.2. Authorization................................................ 22
4.3. Compliance with Laws......................................... 22
4.4. Consents and Approvals; No Conflicts......................... 23
4.5. Availability of Funds........................................ 23
4.6. Qualification of Buyer....................................... 23
4.7. No Outside Reliance.......................................... 24
4.8. Interpretation of Certain Provisions......................... 24
ARTICLE 5. PRE-CLOSING FILINGS............................................. 24
5.1. Applications for FCC Consent................................. 24
5.2. Xxxx-Xxxxx-Xxxxxx............................................ 25
ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLERS............................. 25
6.1. Negative Covenants........................................... 25
6.1.1. Dispositions; Mergers.............................. 25
6.1.2. Accounting Principles and Practices................ 25
6.1.3. Trade-out Agreements............................... 25
6.1.4. Broadcast Time Sales Agreements.................... 26
6.1.5. Network Affiliation Agreements and Local
Marketing Arrangements............................. 26
6.1.6. Additional Agreements.............................. 26
6.1.7. Breaches........................................... 26
6.1.8. Employee Matters................................... 26
6.1.9. Actions Affecting FCC Licenses..................... 27
ii
75
TABLE OF CONTENTS (continued)
Page
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6.1.10. Programming........................................ 27
6.1.11. Affiliated Transactions............................ 27
6.2. Affirmative Covenants........................................ 27
6.2.1. Preserve Existence................................. 27
6.2.2. Normal Operations.................................. 27
6.2.3. Maintain FCC Licenses.............................. 28
6.2.4. Network Affiliation................................ 28
6.2.5. Station Contracts.................................. 28
6.2.6. Taxes.............................................. 28
6.2.7. Corporate Action................................... 28
6.2.8. Access............................................. 28
6.2.9. Insurance.......................................... 29
6.2.10. Financial Statements............................... 29
6.3. Confidentiality.............................................. 29
6.4. No Shopping.................................................. 30
6.5. No Solicitation of Employees................................. 30
ARTICLE 7. COVENANTS AND AGREEMENTS OF BUYER............................... 31
7.1. Confidentiality.............................................. 31
7.2. Corporate Action............................................. 32
7.3. Access....................................................... 32
7.4. Collection of Receivables.................................... 32
ARTICLE 8. MUTUAL COVENANTS AND UNDERSTANDINGS OF SELLER AND BUYER......... 33
8.1. Possession and Control....................................... 33
8.2. Risk of Loss................................................. 34
8.3. Public Announcements......................................... 34
8.4. Employee Matters............................................. 35
8.4.1. Transferred Employees.............................. 35
8.4.2. Vacation and Sick Leave............................ 36
8.4.3. Severance Benefits................................. 36
8.4.4. Represented Employees.............................. 37
8.4.5. COBRA Obligations.................................. 37
8.4.6. Seller Benefits Plans.............................. 38
8.4.7. 401(k) Plans....................................... 38
8.4.8. Employment and Collective Bargaining Contracts..... 38
8.5. Disclosure Schedules......................................... 38
8.6. Bulk Sales Laws.............................................. 39
8.7. Consents..................................................... 39
ARTICLE 9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE............. 39
9.1. Representations and Covenants................................ 39
9.2. Required Consent............................................. 40
9.3. Delivery of Documents........................................ 40
9.4. FCC Order.................................................... 40
iii
76
TABLE OF CONTENTS (continued)
Page
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9.5. Xxxx-Xxxxx-Xxxxxx............................................ 40
9.6. Legal Proceedings............................................ 40
9.7. No Material Adverse Effect................................... 41
ARTICLE 10. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE............ 41
10.1. Representations and Covenants................................ 41
10.2. Delivery by Buyer............................................ 42
10.3. FCC Order.................................................... 42
10.4. Xxxx-Xxxxx-Xxxxxx............................................ 42
10.5. Legal Proceedings............................................ 42
ARTICLE 11. NON-LICENSE TRANSFER; CLOSING................................... 42
11.1. Non-License Transfer......................................... 42
11.2. Closing...................................................... 43
11.3. Time and Place of Non-License Transfer and Closing........... 44
11.4. Delivery by Seller........................................... 44
11.4.1. Agreements and Instruments......................... 44
11.4.2. Consents........................................... 45
11.4.3. Certified Resolutions.............................. 45
11.4.4. Officers' Certificates............................. 45
11.4.5. Organizational Documents........................... 45
11.4.6. Deposit............................................ 45
11.4.7. Releases........................................... 45
11.4.8. FIRPTA Certificate................................. 45
11.4.9. Title Insurance Documents.......................... 46
11.5. Delivery by Buyer............................................ 46
11.5.1. Purchase Price Payment............................. 46
11.5.2. Agreements and Instruments......................... 46
11.5.3. Certified Resolutions.............................. 46
11.5.4. Officers' Certificate.............................. 46
ARTICLE 12. SURVIVAL; INDEMNIFICATION....................................... 47
12.1. Survival of Representations.................................. 47
12.2. Indemnification by Sellers................................... 47
12.3. Indemnification by Buyer..................................... 48
12.4. Limitations on Indemnification............................... 48
12.5. Conditions of Indemnification................................ 49
12.6. Cure of Breach............................................... 51
ARTICLE 13. TERMINATION..................................................... 52
13.1. Termination.................................................. 52
13.2. Effect of Termination........................................ 53
ARTICLE 14. REMEDIES........................................................ 53
14.1. Default by Buyer............................................. 53
14.2. Default by Sellers........................................... 54
14.3. Liquidated Damages........................................... 54
14.4. Specific Performance......................................... 55
iv
77
TABLE OF CONTENTS (continued)
Page
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ARTICLE 15. GENERAL PROVISIONS.............................................. 55
15.1. Additional Actions, Documents and Information................ 55
15.2. Brokers...................................................... 55
15.3. Expenses and Taxes........................................... 56
15.4. Notices...................................................... 56
15.5. Waiver....................................................... 58
15.6. Benefit and Assignment....................................... 58
15.7. Entire Agreement; Amendment.................................. 59
15.8. Severability................................................. 60
15.9. Headings..................................................... 60
15.10. Governing Law; Jurisdiction.................................. 60
15.11. Signature in Counterparts.................................... 60
v
78
SCHEDULES
Schedule 2.1.1 FCC Licenses
Schedule 2.1.2 Real Property Interests
Schedule 2.1.3 Tangible Personal Property
Schedule 2.1.4 Intellectual Property
Schedule 2.1.5 Program Contracts
Schedule 2.1.6 Trade-out Agreements
Schedule 2.1.8 Operating Contracts
Schedule 2.1.9 Vehicles
Schedule 2.2.13 Excluded Contracts and Unrelated Assets
Schedule 3.4.1 Consents
Schedule 3.7 Litigation
Schedule 3.8 Encumbrances on Assets
Schedule 3.9 FCC Matters
Schedule 3.10 Encumbrances on Real Property and Leasehold Interests
Schedule 3.11 Condition of Tangible Assets
Schedule 3.16 Employee Benefit Plans
Schedule 3.17.1 Collective Bargaining Agreements
Schedule 3.18 Environmental Matters
Schedule 3.19 Transactions with Affiliates
Schedule 3.20 Insurance
Schedule 6.1.8 Employee Matters
Schedule 8.4.1(a) Excluded Employee
Schedule 8.4.1(b) Certain Other Employees
Schedule I License Assets
vi
79
EXHIBITS
EXHIBIT A Form of Xxxx of Sale and Assignment of Assets
EXHIBIT B Form of Assignment of FCC Licenses
EXHIBIT C Form of Assignment of Contracts and Leases
EXHIBIT D Form of Assumption Agreement
EXHIBIT E Form of Warranty Deed
EXHIBIT F Transfer Tax Forms
EXHIBIT G Form of Time Brokerage Agreement
vii
