PURCHASE AND SALE AGREEMENT
FOR
XXX ENTERPRISES, INCORPORATED,
NEW MEXICO BROADCASTING CO.,
AND
EMMIS COMMUNICATIONS CORPORATION
May 7, 2000
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as
of May 7, 2000 by and among Xxx Enterprises, Incorporated, a Delaware
corporation ("Xxx"), and New Mexico Broadcasting Co., a New Mexico corporation
("NMBC", and Xxx and NMBC sometimes referred to in this Agreement, individually
and collectively, as "Xxx-NMBC"), and Emmis Communications Corporation, an
Indiana corporation (the "Purchaser").
WITNESSETH:
WHEREAS, Xxx owns and operates television stations WSAZ-TV ("Station WSAZ") in
Charleston-Huntington, West Virginia; KGMB-TV ("Station KGMB") in Honolulu,
Hawaii, and television station satellites KGMD ("Station KGMD") in Hilo, Hawaii,
and KGMV ("Station KGMV") in Wailuku, Hawaii; KGUN-TV ("Station KGUN") in
Tucson, Arizona and KMTV-TV ("Station KMTV") in Omaha, Nebraska.
WHEREAS, Xxx owns all of the outstanding capital stock of KOIN-TV, Inc., a
Delaware corporation ("KOIN"), and KOIN owns and operates television station
KOIN-TV and an operating division, MIRA MOBILE TELEVISION (KOIN-TV and MIRA
MOBILE are collectively, "Station KOIN") in Portland, Oregon.
WHEREAS, Xxx owns all of the outstanding capital stock of NMBC and NMBC owns and
operates television station KRQE-TV ("Station KRQE") in Albuquerque, New Mexico
and television station satellites KBIM ("Station KBIM") in Roswell, New Mexico,
and KREZ-TV in Durango, Colorado-Farmington, New Mexico ("Station KREZ" and
together with Station WSAZ, Xxxxxxx XXXX, Xxxxxxx XXXX, Xxxxxxx XXXX, Xxxxxxx
KGUN, Station KMTV, Station KRQE and Station KBIM, the "Xxx-NMBC Stations," and
individually a "Xxx-NMBC Station").
WHEREAS, Xxx owns all of the outstanding capital stock of SJL of Kansas Corp., a
Kansas corporation ("SJL-Kansas"), and SJL-Kansas owns and operates television
station KSNW-TV ("Station KSNW") in Wichita, Kansas, and television station
satellites KSNG-TV ("Station KSNG") in Garden City, Kansas, KSNC-TV ("Station
KSNC") in Great Bend, Kansas, and KSNK-TV ("Station KSNK") in Oberlin,
Kansas-McCook, Nebraska; SJL-Kansas owns all of the outstanding shares of
capital stock of Wichita License Subsidiary Corp., a Delaware corporation
("Wichita License Sub"), and all of the outstanding capital stock of Topeka
Television Corporation, a Missouri corporation ("Topeka"); Topeka owns all of
the outstanding shares of capital stock of Topeka License Subsidiary Corp., a
Delaware corporation ("Topeka License Sub" and together with KOIN, SJL-Kansas,
Wichita License Sub and Topeka, the "Acquired Companies," and individually an
"Acquired Company"), and Topeka owns and operates television station KSNT-TV in
Topeka, Kansas ("Station KSNT" and together with Station KOIN, Station KSNW,
Station KSNG, Station KSNC, Station KSNK, the "Acquired Companies' Stations,"
and individually an "Acquired Company Station").
WHEREAS, the Purchaser desires to purchase from Xxx-NMBC, and Xxx-NMBC desires
to sell to the Purchaser, substantially all of the assets of Xxx-NMBC owned,
used or held for use by Xxx-NMBC primarily to conduct the operations of the
Xxx-NMBC Stations, and in connection therewith, the Purchaser has agreed to
assume certain Liabilities of Xxx-NMBC relating to the Xxx-NMBC Stations, all
upon the terms and subject to the conditions set forth herein (the "Asset
Purchase").
WHEREAS, the Purchaser desires to purchase from Xxx, and Xxx desires to sell to
the Purchaser, all of the issued and outstanding capital stock of the Acquired
Companies, all upon the terms and are subject to the conditions set forth herein
(the "Stock Purchase").
WHEREAS, Xxx-NMBC and Xxx, on behalf of each Acquired Company, and the Purchaser
desire to make certain representations, warranties, covenants and agreements in
connection with the Asset Purchase and Stock Purchase, all as more fully set
forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises, the mutual covenants,
promises and agreements hereinafter set forth, the mutual benefits to be gained
by the performance of such covenants, promises and agreements, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and accepted, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Certain Definitions. For all purposes of and under this Agreement, the
following terms shall have the respective meanings set forth below:
(a) "Action" means any claim, demand, action, suit or proceeding,
arbitral action, governmental inquiry or criminal prosecution.
(b) "Affiliate" means any "affiliate" as defined in Rule 144(a)(1)
promulgated under the Securities Act.
(c) "Business Day" means any weekday (Monday through Friday) on which
commercial banks in Chicago, Illinois are open for business.
(d) "Code" means the Internal Revenue Code of 1986, as amended, any
successor statute thereto, and the rules and regulations promulgated thereunder.
(e) "Communications Act" means the Communications Act of 1934, as
amended, any successor statute thereto, and the rules, regulations and written
policies of the FCC promulgated thereunder.
(f) "Confidentiality Agreement" means the letter agreement between Xxx
and the Purchaser, dated as of March 6, 2000.
(g) "Contract" means any contract, agreement, indenture, note, bond,
instrument, lease, conditional sales contract, mortgage, license, franchise
agreement, concession agreement, insurance policy, security interest, guaranty,
binding commitment or other agreement or arrangement, whether written or oral.
(h) "Encumbrance" means any security interest, pledge, mortgage, lien,
charge, adverse claim of ownership or use, restriction on transfer (such as a
right of first refusal or other similar right), defect of title, or other
encumbrance of any kind or character.
(i) "Environmental Law" means any Law pertaining to land use, air, soil,
surface water, groundwater (including the protection, cleanup, removal,
remediation or damage thereof), public or employee health or safety or any other
environmental matter, including the following laws as in effect on the Closing
Date: (i) Clean Air Act (42 U.S.C.ss.7401, et seq.); (ii) Clean Water Act (33
U.S.C.ss.1251, et seq.); (iii) Resource Conservation and Recovery Act (42
U.S.C.ss.6901, et seq.); (iv) Comprehensive Environmental Resource Compensation
and Liability Act (42 U.S.C.ss.9601, et seq.); (v) Safe Drinking Water Act (42
U.S.C.ss.300f, et seq.); (vi) Toxic Substances Control Act (15 U.S.C.ss.2601, et
seq.); (vii) Rivers and Harbors Act (33 U.S.C.ss.401, et seq.); (viii)
Endangered Species Act (16 U.S.C.ss.1531, et seq.); (ix) Occupational Safety and
Health Act (29 U.S.C.ss.651, et seq.); and (x) any other Laws relating to
Hazardous Materials or Hazardous Materials Activities.
(j) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
(l) "FCC" means the United States Federal Communications Commission, and
any successor agency thereto.
(m) "FCC Licenses" means all licenses, authorizations, permits and other
authorizations issued by the FCC for the operation of the Xxx-NMBC Stations and
the Acquired Companies' Stations, as the case may be, all of which are set forth
in Schedule 4.8(b) hereto.
(n) "FCC Transfer Application" means the written application to be filed
with the FCC requiring its written consent to the assignment or the transfer of
control of each of the FCC Licenses to Purchaser or any of its Subsidiaries, as
the case may be, or each of their permitted assignees or designees.
(o) "Final Determination" means the final resolution of liability for
any Tax for a Taxable Period, including any related interest or penalties, that
is final and nonappealable, including by reason of the expiration of the
applicable statute of limitations.
(p) "Final Order" means an order or action by the FCC, that by reason of
expiration of time or exhaustion of remedies, is no longer subject to
administrative or judicial reconsideration, or review or rehearing.
(q) "Funded Debt" means all indebtedness for borrowed money, all
obligations under leases which in accordance with GAAP constitute capital
leases, all notes payable and drafts accepted representing extensions of credit
and any guarantee obligation with respect to any of the foregoing, as applied to
the Xxx-NMBC Stations or any Acquired Company.
(r) "GAAP" means generally accepted accounting principles in the United
States on the date of this Agreement.
(s) "Governmental Authority" means any government, any governmental
entity, department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial body, in each case whether federal, state, county,
provincial, local or foreign.
(t) "Governmental Order" means any statute, rule, regulation, order,
judgment, injunction, decree, stipulation or determination issued, promulgated
or entered by or with any Governmental Authority of competent jurisdiction.
(u) "Hazardous Material" means any material or substance that is
prohibited or regulated by any Environmental Law or that has been designated by
any Governmental Authority to be radioactive, toxic, hazardous or otherwise a
danger to health, reproduction or the environment, including asbestos,
petroleum, radon gas and radioactive matter.
(v) "Hazardous Materials Activity" means the handling, transportation,
transfer, recycling, storage, use, treatment, manufacture, investigation,
removal, remediation, release, exposure of others to, sale or other distribution
of any Hazardous Material or any product containing a Hazardous Material.
(w) "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
(x) "Income Tax" means any federal, state, county, provincial, local or
foreign income, franchise, business profits or other similar Tax, any estimated
Tax related thereto, any interest and penalties (civil or criminal) thereon or
additions thereto.
(y) "Intellectual Property" means any (i) United States and foreign
patents, patent applications, patent disclosures and improvements thereto, (ii)
United States, state or foreign trademarks, service marks, trade dress, logos,
trade names and corporate names, the goodwill associated therewith, and the
registrations and applications for registration thereof, (iii) United States and
foreign copyrights, and the registrations and applications for registration
thereof, and (iv) websites and domain names.
(z) "IRS" means the United States Internal Revenue Service, and any
successor agency thereto.
(aa) "Knowledge of" "known to" and phrases of similar import mean the
actual knowledge of each executive officer of Xxx-NMBC and each Acquired Company
or Purchaser, as the case may be, together with each General Manager and Chief
Engineer of the Xxx-NMBC Stations and Acquired Companies' Stations, without
obligation of inquiry.
(bb) "Law" means any federal, state, county, provincial, local or
foreign statute, law, ordinance, regulation, rule, code or rule of common law.
(cc) "Xxx Documents" means, collectively, the (i) the Grant Deeds, (ii)
the Xxxx of Sale, (iii) the Assignment and Assumption, (iv) the Assignment of
Proprietary Rights, (v) the Stock Certificates, and (vi) any other document
executed and delivered at the Closing under or in connection with this Agreement
by or on behalf of Xxx-NMBC or any of the Acquired Companies.
(dd) "Liability" means any direct or indirect debt, obligation or
liability of any kind or nature, whether accrued or fixed, absolute or
contingent, determined or determinable, matured or unmatured, and whether due or
to become due, asserted or unasserted, or known or unknown, and regardless of
whether required by GAAP to be reflected in a balance sheet or disclosed in the
related notes.
(ee) "License" means any franchise, approval, permit, order,
authorization, consent, license, registration or filing, certificate, variance
and any other similar right obtained from or filed with any Governmental
Authority.
(ff) "Lien" means any adverse claim, restriction on voting or transfer
or pledge, lien, charge, Encumbrance or security interest of any kind.
(gg) "Loss or Losses" means any claims, demands, Liabilities, losses,
damages, deficiencies, assessments, judgments, remediations and costs or
expenses (including reasonable attorneys', consultants' and experts' fees and
expenses but excluding punitive damages for breach of this Agreement or any Xxx
Document).
(hh) "Material Adverse Effect" means any change or effect that is
materially adverse to the assets, properties, operations, business, financial
condition or results of operations of the Xxx-NMBC Stations and the Acquired
Companies' Stations, taken as a whole, except for any such change or effect
resulting directly or indirectly from (i) the transactions contemplated by this
Agreement, (ii) the announcement or other disclosure of the transactions
contemplated by this Agreement, (iii) regulatory changes, (iv) changes in
conditions generally applicable to the television broadcasting industry, or in
general economic conditions in the geographic regions in which such stations are
operated; or (v) circumstances that are not likely to recur and have been
substantially restored or will be substantially restored in the near future.
(ii) "Permitted Encumbrances" means (i) Encumbrances for inchoate
mechanics' and materialmen's liens for construction in progress and workmen's,
repairmen's, warehousemen's and carriers' liens arising in the ordinary course
of business securing amounts not in default; (ii) Encumbrances for Taxes and
other Liabilities not yet due and payable, and for Taxes and other Liabilities
being contested in good faith, (iii) Encumbrances securing liabilities shown on
the Financial Statements, (iv) Encumbrances and imperfections of title
(including but not limited to those contained in a standard pre-printed ALTA
exception) the existence of which do not, and would not reasonably be expected
as of the date hereof to, materially detract from the value of, interfere with,
or otherwise affect the use and enjoyment of the property subject thereto or
affected thereby, consistent with past practice, and (v) solely with respect to
Owned Real Property, provided that the following are not violated by existing
improvements in any material respect and do not prohibit or materially restrict
the continued use and operation of such Owned Real Property for the same uses
and operations as currently conducted, or grant any third party any option or
right to acquire or lease a material portion thereof, (A) easements, rights of
way and other similar restrictions which would be shown by a current title
report, (B) conditions that may be shown by a current survey, title report or
visual site inspection, and (C) zoning, building and other similar restrictions
imposed by applicable Law.
(jj) "Person" means any individual, general or limited partnership,
firm, corporation, limited liability company, association, trust, unincorporated
organization or other entity.
(kk) "Proprietary Rights" means (i) Intellectual Property, (ii) trade
secrets and confidential business information (including ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), knowhow, research and development information, software,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information), (iii) other proprietary rights, (iv) copies and tangible
embodiments thereof (in whatever form or medium), and (v) licenses granting any
rights with respect to any of the foregoing.
(ll) "Securities Act" means the Securities Act of 1933, as amended, any
successor statute thereto, and the rules and regulations promulgated thereunder.
(mm) "Subsidiary" means, unless otherwise indicated with respect to a
Person, any other Person in which such Person has a direct or indirect equity
interest or other ownership interest in excess of fifty percent (50%).
(nn) "Tax" means any federal, state, county, provincial, local or
foreign income, gross receipts, sales, use, ad valorem, employment, severance,
transfer, gains, profits, excise, franchise, property, capital stock, premium,
minimum and alternative minimum or other taxes, fees, levies, duties,
assessments or charges of any kind or nature whatsoever imposed by any
Governmental Authority (whether payable directly or by withholding), together
with any interest, penalties (civil or criminal), additions to, or additional
amounts imposed by, any Governmental Authority with respect thereto, and any
expenses incurred in connection with the determination, settlement or litigation
of any Liability therefor.
(oo) "Tax Benefit" means, with respect to any Taxable Period, the amount
of the actual reduction in an indemnified party's liability for Taxes payable
for the Taxable Period as a result of the payment or accrual of any Loss
indemnifiable under this Agreement. The amount, if any, of a Tax Benefit with
respect to a Taxable Period arising from the payment or accrual of any Loss
indemnifiable under this Agreement shall be determined after first reducing
Taxes for the Taxable Period by taking into account all other applicable credits
and items of loss, deduction and similar items.
(pp) "Tax Cost" means, with respect to any Taxable Period, the amount of
the actual increase in an indemnified party's liability for Taxes payable for
the Taxable Period (including as a result of any decrease in a Tax refund or
credit) as a result of the accrual or receipt of payment for any Loss for which
the indemnified party is entitled to indemnification under this Agreement.
(qq) "Tax Return" means a report, return or other information required
to be supplied to a Governmental Authority with respect to any Tax.
(rr) "Taxable Period" means any taxable year or any other period that is
treated as a taxable year with respect to which any Tax may be imposed under any
applicable statute, rule or regulation.
1.2 Certain Additional Definitions. For all purposes of and under this
Agreement, the following terms shall have the respective meanings ascribed
thereto in the respective sections of this Agreement set forth opposite each
such term below:
Term Section
--------------------------------------------------------------------------------
Acquired Companies Recitals
Acquired Companies' Closing Liabilities 2.7(b)(i)
Acquired Companies' Common Stock 2.6
Acquired Companies' Stations Recitals
Acquired Company Recitals
Acquired Company Station Recitals
Agreement Preamble
Asset Purchase Recitals
Asset Purchase Cash Payment 2.3(a)
Asset Purchase Notice of Disagreement 2.3(b)(v)
Asset Purchase Price 2.3(a)
Assignment and Assumption 3.2(a)(iii)
Assignment of Proprietary Rights 3.2(a)(iv)
Assumed Liabilities of the Xxx-NMBC Stations 2.2(b)
Benefit Plan(s) 4.10(a)
Xxxx of Sale 3.2(a)(ii)
Cash Payment 2.9
Claimant 8.3(a)
Closing 3.1
Closing Date 3.1
Closing Adjusted Net Worth of the Acquired
Companies 2.7(b)(ii)
COBRA 4.10(a)
Contract of the Xxx-NMBC Stations 2.1(b)(ii)
Contracts of the Xxx-NMBC Stations 2.1(b)(ii)
CST 3.1
Employee 4.9
Employees 4.9
Excluded Assets of the Xxx-NMBC Stations 2.1(c)
Excluded Liabilities of the Xxx-NMBC Stations 2.2(c)
Financial Statements 4.12
Grant Deeds 3.2(a)(i)
Indemnitor 8.3(a)
Independent Accountant 2.3(b)(v)
Insurance Policies 4.17(a)
Interest Rate 2.3(b)(iv)
KOIN Recitals
KOIN Common Stock 4.3(a)
Leased Assets 4.5(a)
Leased Real Property 4.5(a)
Xxx Preamble & 9.1(a)
Xxx-NMBC Preamble
Xxx-NMBC Hawaii Stations 6.4(c)
Xxx-NMBC Station Recitals
Xxx-NMBC Stations Recitals
License of the Xxx-NMBC Stations 2.1(b)(iii)
Licenses of the Xxx-NMBC Stations 2.1(b)(iii)
Material Contract 4.7(a)
Material Contracts 4.7(a)
Material License 4.8(a)
Material Licenses 4.8(a)
NMBC Preamble
Owned Real Property 4.5(a)
Preliminary Statement of Closing Adjusted
Net Worth of the Acquired 2.7(c)(i)
Preliminary Statement of Working Capital of
the Xxx-NMBC Stations 2.3(b)(ii)
Purchased Assets of the Xxx-NMBC Stations 2.1(b)
Purchaser Preamble
Purchaser's Hawaii Stations 6.4(c)
Purchaser's Plans 6.9(a)
Schedules 6.11
Short Term Agreement 4.7(a)
SJL-Kansas Recitals
SJL-Kansas Common Stock 4.3(b)
Spin-Off Applications 6.4(c)
Term Section
--------------------------------------------------------------------------------
Statement of Closing Adjusted Net Worth of the
Acquired Companies 2.7(c)(ii)
Statement of Working Capital of the Xxx-NMBC
Stations 2.3(b)(iii)
Station KBIM 2.3(b)
Station KGMB Recitals
Station KGUN Recitals
Station KMTV Recitals
Station KOIN Recitals
Station KREZ Recitals
Station KRQE Recitals
Station KSNC Recitals
Station KSNG Recitals
Station KSNK Recitals
Station KSNT Recitals
Station KSNW Recitals
Station WSAZ Recitals
Stock Certificates 3.2(a)(vii)
Stock Purchase Recitals
Stock Purchase Cash Payment 2.7(a)
Stock Purchase Notice of Disagreemen 2.7(c)(iv)
Stock Purchase Price 2.7(a)
Termination Date 9.1(b)
Topeka Recitals
Topeka License Sub Recitals
Transferred Employees 6.9(a)
Transferred Non-Union Employees 6.9(a)
Transferred Union Employees 6.9(a)
Violation 8.5(e)
Wichita License Sub Recitals
Working Capital of the Xxx-NMBC Stations 2.3(b)(i)
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale of Purchased Assets of the Xxx-NMBC Stations.
(a) Purchase and Sale of Purchased Assets of Xxx-NMBC Stations. Upon the
terms and subject to the conditions set forth herein, at the Closing, the
Purchaser shall purchase from Xxx-NMBC, and Xxx-NMBC shall irrevocably sell,
convey, transfer, assign and deliver to the Purchaser, free and clear of all
Liens other than Permitted Encumbrances, all right, title and interest in and to
the Purchased Assets of the Xxx-NMBC Stations (as defined below).
(b) Definition of Purchased Assets of the Xxx-NMBC Stations. For all
purposes of and under this Agreement, the term "Purchased Assets of the Xxx-NMBC
Stations" shall mean, refer to and include all of Xxx'x and NMBC's right, title
and interest in and to all tangible and intangible assets, properties and rights
which are owned, used or held for use by Xxx-NMBC primarily to conduct the
operations of the Xxx-NMBC Stations, including, except for the Excluded Assets
of the Xxx-NMBC Stations, all right, title and interest of Xxx and NMBC in and
to all real property (including the Owned Real Property of the Xxx-NMBC Stations
set forth in Schedule 4.5(a) hereto), and any leaseholds and sub-leaseholds
therein (including leases for the Leased Real Property of the Xxx-NMBC Stations
set forth in Schedule 4.5(a) hereto), buildings, structures, improvements,
fixtures, furnishings and other fittings thereon, and easements, rights-of-way,
and other appurtenances thereto, all tangible personal property (whether or not
located on any of the premises of the Xxx-NMBC Stations and including the
tangible personal property set forth in Schedule 4.5(a) hereto) including all
machinery, equipment and tools, furniture and furnishings, computers and
computer supplies, office materials and supplies, automobiles, trucks and other
vehicles, inventories of any kind or nature, materials and supplies, purchased
goods, all accounts, notes and other receivables, all prepaid assets and
expenses, and all books, records (other than records relating to Income Taxes),
ledgers, files, documents, correspondence, customer, supplier, advertiser, and
other lists, invoices and sales data, creative, advertising and other
promotional materials, studies, reports, and other printed or written materials
or data, and specifically including the following:
(i) Proprietary Rights (including the Intellectual Property of
the Xxx-NMBC Stations set forth in Schedule 4.6(a) hereto), goodwill associated
therewith, licenses and sublicenses granted and obtained with respect thereto,
rights thereunder, remedies against infringements thereof, and rights to
protection of interests therein under the applicable Laws of all jurisdictions;
(ii) Contracts to which Xxx-NMBC is a party or by which its
assets or properties are bound which primarily relate to the operations of the
Xxx-NMBC Stations (each, a "Contract of the Xxx-NMBC Stations" and,
collectively, "Contracts of the Xxx-NMBC Stations") (including the Material
Contracts of the Xxx-NMBC Stations set forth in Schedule 4.7(a) hereto), and all
rights thereunder;
(iii) Licenses owned or possessed by Xxx-NMBC (each, a "License
of the Xxx-NMBC Stations" and, collectively, "Licenses of the Xxx-NMBC
Stations") (including the FCC Licenses of the Xxx-NMBC Stations and the Material
Licenses of the Xxx-NMBC Stations), and all rights thereunder;
(iv) rights in or to all Assumed Plans of the Xxx-NMBC Stations,
and any and all assets associated with or allocated to the Employees of the
Xxx-NMBC Stations thereunder;
(v) any and all refunds of Taxes relating primarily to the
Xxx-NMBC Stations other than refunds of Income Taxes;
(vi) Actions, deposits, prepayments, refunds, causes of action,
chooses in action, rights of recovery, rights of set off, and rights of
recoupment of any kind or nature (including any such item relating to Taxes
other than Income Taxes) relating to the Purchased Assets of the Xxx-NMBC
Stations or the Assumed Liabilities; and .
(vii) Upon reimbursement at the closing for all amounts paid by
or due from iBlast, Inc. to Xxx, either as a capital contribution or loan or
other form of indebtedness (such reimbursement not to exceed, however, $750,000
in the aggregate), all capital stock of or other equity interests in iBlast,
Inc.
(c) Definition of Excluded Assets of the Xxx-NMBC Stations.
Notwithstanding anything to the contrary set forth in this Section 2.1 or
elsewhere in this Agreement, the term "Purchased Assets of the Xxx-NMBC
Stations" shall not mean, refer to or include the following (collectively, the
"Excluded Assets of the Xxx-NMBC Stations"):
(i) the corporate charter and bylaws, qualifications to transact
business as a foreign corporation, arrangements with registered agents relating
to foreign qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of Xxx and
NMBC as a corporation;
(ii) all assets, whether real or personal, tangible or
intangible, which are owned, used or held for use by Xxx-NMBC which do not
primarily relate to the Xxx-NMBC Stations, including such assets set forth in
Schedule 2.1(c) hereto;
(iii) Contracts of the Xxx-NMBC Stations described in Section
2.5 that, in accordance with Section 2.5, are not assigned to the Purchaser;
(iv) Nontransferable Licenses, other than FCC Licenses, of the
Xxx-NMBC Stations described in Section 2.5 that, in accordance with Section 2.5,
are not assigned to the Purchaser;
(v) rights in or to all Benefit Plans (other than Assumed Plans
of the Xxx-NMBC Stations and employment agreements included in the Contracts of
the Xxx-NMBC Stations), and all assets associated with or allocated to the
Employees of the Xxx-NMBC Stations thereunder;
(vi) cash and cash equivalents;
(vii) any and all refunds of Income Taxes;
(viii) Actions, deposits, prepayments, refunds, causes of
action, chooses in action, rights of recovery, rights of set off, and rights of
recoupment of any kind or nature (including any such item relating to Income
Taxes) relating to the Excluded Assets of the Xxx-NMBC Stations or the Excluded
Liabilities of the Xxx-NMBC Stations;
(ix) refunds paid or payable in connection with the cancellation
or discontinuance of any insurance policies applicable to the Xxx-NMBC Stations
(including the Insurance Policies of the Xxx-NMBC Stations set forth in Schedule
4.17 hereto) following the Closing;
(x) all rights of Xxx-NMBC under this Agreement, any agreement,
certificate, instrument or other document executed and delivered by Xxx-NMBC in
connection with the transactions contemplated hereby, or any side agreement
between Xxx-NMBC and the Purchaser entered into on or after the date of this
Agreement related primarily to the Xxx-NMBC Stations; and
2.2 Assumption of Liabilities.
(a) Assumption. Upon the terms and subject to the conditions set forth
herein, at the Closing the Purchaser shall assume from Xxx-NMBC (and therefore
pay, perform and discharge), and Xxx-NMBC shall irrevocably convey, transfer and
assign to the Purchaser, all of the Assumed Liabilities of the Xxx-NMBC Stations
(as defined below).
(b) Definition of Assumed Liabilities of the Xxx-NMBC Stations. For all
purposes of and under this Agreement, the term "Assumed Liabilities of the
Xxx-NMBC Stations" shall mean (i) the liabilities of the Xxx-NMBC Stations
included in the determination of the Working Capital of the Xxx-NMBC Stations
pursuant to Section 2.3(b), (ii) the obligations of Xxx-NMBC arising during and
attributable to any period after the Closing under the Contracts, Licenses and
Assumed Plans of the Xxx-NMBC Stations that are assigned to Purchaser at Closing
in accordance with this Agreement (excluding (A) any obligations or liabilities
of Xxx-NMBC under any such Contract, License or Assumed Plan resulting from the
failure to obtain any consent required in connection with the transactions
contemplated by this Agreement, (B) any default under any such Contract, License
or Assumed Plan prior to or as a result of the Closing, and (C) any bonus or
other payment or benefit conditioned upon or payable in connection with or as a
result of the Closing under any employment agreement, or calculated with
reference to the financial terms, of the transactions contemplated by this
Agreement), and (iii) the obligations of Xxx-NMBC arising during and
attributable to any period after the Closing under any other Contracts of the
Xxx-NMBC Stations not assigned to Purchaser in accordance with this Agreement
but only as and to the extent provided in Section 2.5 hereof.
(c) Definition of Excluded Liabilities of the Xxx-NMBC Stations. The
term "Excluded Liabilities of the Xxx-NMBC Stations" shall mean all Liabilities
of Xxx-NMBC other than the Assumed Liabilities of the Xxx-NMBC Stations.
Purchaser shall not assume any of the Excluded Liabilities of the Xxx-NMBC
Stations.
2.3 Consideration for Purchased Assets of the Xxx-NMBC Stations.
(a) Consideration. Subject to Section 2.3(b) hereof, the purchase price
(the "Asset Purchase Price") for the Purchased Assets of the Xxx-NMBC Stations
shall be (i) the portion of the Cash Payment (as defined in Section 2.9)
allocated to the Purchased Assets of the Xxx-NMBC Stations pursuant to Section
2.9, which shall be paid in cash at the Closing (the "Asset Purchase Cash
Payment"), and (ii) the assumption by the Purchaser of the Assumed Liabilities
of the Xxx-NMBC Stations pursuant to Section 2.2 hereof.
(b) Working Capital Adjustment of the Xxx-NMBC Stations.
(i) For all purposes of and under this Agreement, the term
"Working Capital of the Xxx-NMBC Stations" shall mean the current assets of the
Xxx-NMBC Stations included within the Purchased Assets of the Xxx-NMBC Stations,
minus the current liabilities of the Xxx-NMBC Stations as of the close of
business on the date immediately preceding the Closing Date (the "Adjustment
Date"), each determined in accordance with GAAP applied in a manner consistent
with the preparation of the Financial Statements, and adjusted to exclude (1)
from current assets the current portion of program rights and (2) from current
liabilities the current portion of program liabilities and any reserve or
accrual for loss contingencies required by GAAP related to the matters disclosed
in Schedule 4.14 hereto; provided, however, that current liabilities shall
include the amount or value of both cash and noncash consideration that has not
been paid or provided prior to the Closing Date for programming run by any of
the Xxx-NMBC Stations prior to the Closing Date.
(ii) Three Business Days prior to the Closing Date, Xxx shall
provide Purchaser with a reasonably detailed statement (the "Preliminary
Statement of Working Capital of the Xxx-NMBC Stations") setting forth Xxx'x
reasonable and good faith estimate of the Working Capital of the Xxx-NMBC
Stations. The Asset Purchase Cash Payment payable on the Closing Date shall be
decreased by the amount of any negative Working Capital of the Xxx-NMBC Stations
shown on the Preliminary Statement of Working Capital of the Xxx-NMBC Stations
or increased by the amount of any positive Working Capital of the Xxx-NMBC
Stations shown on the Preliminary Statement of Working Capital of the Xxx-NMBC
Stations.
(iii) As promptly as practicable, but in any event within sixty
(60) calendar days following the Closing, Xxx shall cause to be prepared and
delivered to the Purchaser a further determination and statement (the "Statement
of Working Capital of the Xxx-NMBC Stations") setting forth the Working Capital
of the Xxx-NMBC Stations.
(iv) Within thirty (30) calendar days following delivery of the
Statement of Working Capital of the Xxx-NMBC Stations pursuant to Section
2.3(b)(iii) hereof or, if applicable, such later date determined in accordance
with Section 2.3(b)(v) hereof, Xxx shall pay the Purchaser the amount, if any,
by which the Working Capital of the Xxx-NMBC Stations shown on the Statement of
Working Capital of the Xxx-NMBC Stations is less than the amount thereof shown
on the Preliminary Statement of Working Capital of the Xxx-NMBC Stations or (B)
the Purchaser shall pay to Xxx the amount, if any, by which the Working Capital
of the Xxx-NMBC Stations shown on the Statement of Working Capital of the
Xxx-NMBC Stations is more than the amount thereof shown on the Preliminary
Statement of Working Capital of the Xxx-NMBC Stations. Any and all payments made
pursuant to this Section 2.3(b)(iv) shall bear interest at the three (3) month
London Inter-Bank Offered Rate published in the Wall Street Journal on the
Closing Date (the "Interest Rate") for the period commencing on the Closing Date
and to but not including the date of payment, and shall be made by wire transfer
of immediately available funds to an account designated in writing by the party
to receive such payment. Any payment made pursuant to this Section 2.3(b)(iv)
shall be deemed to be an adjustment to the Asset Purchase Price.
(v) If the Purchaser disagrees in good faith with the Statement
of Working Capital of the Xxx-NMBC Stations, then the Purchaser shall notify Xxx
in writing (the "Asset Purchase Notice of Disagreement") of such disagreement
within thirty (30) calendar days following delivery of the Statement of Working
Capital of the Xxx-NMBC Stations. The Asset Purchase Notice of Disagreement
shall set forth in reasonable detail the basis for the disagreement described
therein. Thereafter, Xxx and the Purchaser shall attempt in good faith to
resolve and finally determine the amount of the Closing Working Capital of the
Xxx-NMBC Stations. If Xxx and the Purchaser are unable to resolve the
disagreement within thirty (30) calendar days following delivery of the Asset
Purchase Notice of Disagreement, then Xxx and the Purchaser shall retain the
services of KPMG Peat Marwick LLP (the "Independent Accountant"), to resolve the
disagreement and make a determination with respect thereto. The determination by
the Independent Accountant will be made, and written notice thereof given to Xxx
and the Purchaser, within thirty (30) calendar days after the Independent
Accountant's retention. The determination by the Independent Accountant shall be
final, binding and conclusive upon Xxx-NMBC and the Purchaser. The scope of the
Independent Accountant's engagement (which will not be an audit) shall be
limited to the resolution of the disputed items described in the Asset Purchase
Notice of Disagreement, and the recalculation, if any, of the Statement of
Working Capital of the Xxx-NMBC Stations in light of such resolution. If an
Independent Accountant is engaged pursuant to this Section 2.3(b)(v), the fees
and expenses of the Independent Accountant shall be borne equally by Xxx and the
Purchaser. Any payment required by Section 2.3(b)(iv) hereof shall bear interest
at the Interest Rate for the period commencing on the Closing Date and to but
not including the date of payment, and shall be made based on such determination
within ten (10) calendar days after delivery of a notice of determination by the
Independent Accountant as described above,
(c) A11ocation of Asset Purchase Price. The Asset Purchase Price shall
be allocated among the Purchased Assets of the Xxx-NMBC Stations for all
purposes (including Tax and financial accounting purposes) on the basis of a
customary appraisal report prepared by an independent appraisal firm which shall
be selected and whose report shall be approved by the Purchaser, or as agreed by
the parties. The Purchaser shall pay all fees, costs and expenses of the
appraisal firm. The appraisal report and allocation will be consistent with
Section 1060 of the Internal Revenue Code. The Purchaser and Xxx-NMBC shall (i)
execute and file all Tax Returns and prepare all financial statements, returns
and other instruments in a manner consistent with the allocation determined
pursuant to this Section 2.3(c), (ii) not take any position before any
Governmental Authority or in any judicial proceeding that is inconsistent with
such allocation, and (iii) cooperate with each other in a timely filing,
consistent with such allocation, of Form 8594 with the IRS.
2.4 Further Assurances. At and after the Closing, and without further
consideration therefor, (i) Xxx-NMBC shall execute and deliver to the Purchaser
such further instruments and certificates of conveyance and transfer as the
Purchaser may reasonably request in order to more effectively convey and
transfer the Purchased Assets of the Xxx-NMBC Stations to the Purchaser and to
put the Purchaser in operational control of the Xxx-NMBC Stations, or for
aiding, assisting, collecting and reducing to possession any of the Purchased
Assets of the Xxx-NMBC Stations and exercising rights with respect thereto, and
(ii) the Purchaser shall execute and deliver to Xxx such further instruments and
certificates of assumption, novation and release as Xxx may reasonably request
in order to effectively make the Purchaser responsible for all Assumed
Liabilities of the Xxx-NMBC Stations and release Xxx-NMBC therefrom to the
fullest extent permitted under applicable Law.
2.5 Nontransferable Contracts and Licenses. To the extent that transfer or
assignment hereunder by Xxx-NMBC to the Purchaser of any Contracts of the
Xxx-NMBC Stations or Licenses (other than the FCC Licenses) of the Xxx-NMBC
Stations is not permitted or is not permitted without the consent of another
Person, this Agreement shall not be deemed to constitute an undertaking to
assign the same if such consent is not given or if such an undertaking otherwise
would constitute a breach thereof or cause a loss of benefits thereunder.
Xxx-NMBC shall use all commercially reasonable efforts to obtain any and all
such third party consents under all Material Contracts of the Xxx-NMBC Stations
and Material Licenses of the Xxx-NMBC Stations; provided, however, that Xxx-NMBC
shall not be required to pay or incur any cost or expense to obtain any third
party consent that Xxx-NMBC is not otherwise required to pay or incur in
accordance with the terms of the applicable Material Contract of the Xxx-NMBC
Stations or Material License of the Xxx-NMBC Stations. Purchaser shall cooperate
with Xxx-NMBC in obtaining such third party consents, provided, however, that
Purchaser shall not be required to agree to any change in the terms of any such
Contract or to pay any fee or other consideration to a third party in order to
obtain any such third party consent. Purchaser's cooperation shall include,
without limitation, signing and delivering consent forms which may be provided
by third parties to such Contracts pursuant to which Purchaser shall agree to
assume and perform the obligations of Xxx-NMBC under such Contracts arising
during and relating to the period on and after the Closing Date. If any such
third party consent is not obtained before the Closing, Xxx-NMBC shall cooperate
with the Purchaser in any reasonable arrangement designed to provide to the
Purchaser on and after the Closing with the benefits under the applicable
Contract of the Xxx-NMBC Stations or License of the Xxx-NMBC Stations, and
Purchaser shall perform on and after the Closing Date the applicable Contract
and License and the financial obligations thereunder, as the case may be, to the
extent commensurate with the benefits actually received by Purchaser thereunder.
After the Closing Date, Xxx-NMBC and Purchaser shall continue to cooperate with
one another and use commercially reasonable efforts to obtain any such third
party consents, and any such Contracts and Licenses shall be deemed transferred
or assigned upon Purchaser's receipt of any necessary third party consent
thereto. Notwithstanding anything contained above in this Section 2.5 to the
contrary, this Section 2.5 shall not apply to any FCC License.
2.6 The Stock Purchase. Upon the terms and subject to the conditions set forth
herein, at the Closing Xxx shall transfer, assign and deliver to Purchaser, and
Purchaser shall purchase from Xxx, the KOIN Common Stock and the SJL-Kansas
Common Stock (as defined in Section 4.3) (together, the "Acquired Companies'
Common Stock"), representing all issued and outstanding shares of the Acquired
Companies' Common Stock, solely in exchange for the Stock Purchase Price (as
defined below).
2.7 Consideration for Acquired Companies' Stock.
(a) Consideration. Subject to Section 2.7(c) hereof, the purchase price
(the "Stock Purchase Price") for the Acquired Companies' Common Stock shall be
the portion of the Cash Payment allocated to the Acquired Companies' Common
Stock pursuant to Section 2.9, which shall be paid in cash at the Closing (the
"Stock Purchase Cash Payment").
(b) Additional Definitions. For all purposes of and under this
Agreement, the following terms shall have the meanings indicated below:
(i) "Acquired Companies Closing Liabilities" means all
Liabilities that would be included on a consolidated balance sheet of the
Acquired Companies as of the Adjustment Date prepared in accordance with GAAP
applied in a manner consistent with the preparation of the Financial Statements,
including but not limited to, all indebtedness for borrowed money and all
bonuses, severance payments or other benefits for employees of the Acquired
Companies conditioned upon or payable in connection with or as a result of the
Closing, or calculated with reference to the financial terms, of the
transactions contemplated by this Agreement which any of the Acquired Companies
is obligated to make or provide as a result of the transactions contemplated by
this Agreement.
(ii) "Closing Adjusted Net Worth of the Acquired Companies"
means the current assets of the Acquired Companies as of the Adjustment Date
(excluding any such current assets (or portion thereof) to the extent not
relating to and usable in the operation of the Acquired Companies' Stations
after the Closing Date), minus the Acquired Companies Closing Liabilities, as
determined on a consolidated basis in accordance with GAAP applied in a manner
consistent with the preparation of the Financial Statements, adjusted to exclude
(A) from current assets the current portion of program rights and (B) from
Acquired Companies Closing Liabilities (1) the current and long-term portion of
program liabilities, (2) any amount related to unearned income under the Station
KOIN Sylvan lease agreement, and (3) any reserve or accrual for loss
contingencies required by GAAP related to the matters disclosed in Schedule 4.14
hereto; provided, however, that Acquired Companies Closing Liabilities shall
include the amount or value of both cash and noncash consideration that has not
been paid or provided prior to the Closing Date for programming run by any of
the Acquired Companies' Stations prior to the Closing Date.
(iii) "Acquired Companies Assumed Liabilities" means (A) the
Acquired Companies Closing Liabilities, and (B) the obligations of the Acquired
Companies arising during and attributable to any period after the Closing under
the Contracts and Licenses of the Acquired Companies, excluding, however, (1)
any obligations or liabilities arising under (aa) any such Contracts or Licenses
that do not relate primarily to the operation of the Acquired Companies'
Stations, (bb) any Contracts or Licenses required by this Agreement to be
terminated at or prior to Closing, (cc) any Benefit Plans of the Acquired
Companies other than (I) liabilities thereunder included as Acquired Company
Closing Liabilities and (II) employment contracts of the Acquired Companies and
(dd) any bonus or other payment or benefit conditioned upon or payable in
connection with or as a result of the Closing under any employment agreement, or
calculated with reference to the financial terms, of the transactions
contemplated by this Agreement, and (2) any obligations or liabilities of the
Acquired Companies resulting from the failure to obtain any consent required in
connection with the transactions contemplated by this Agreement or resulting
from any default under any Contract or License prior to or as a result of the
Closing.
(iv) "Acquired Companies Excluded Liabilities" means all
Liabilities of the Acquired Companies as of the Closing Date, other than the
Acquired Companies Assumed Liabilities.
(c) Adjusted Net Worth Adjustment of the Acquired Companies.
(i) Three (3) Business Days prior to the Closing Date, Xxx shall
provide Purchaser with a reasonably detailed statement (the "Preliminary
Statement of Closing Adjusted Net Worth of the Acquired Companies") setting
forth Xxx'x reasonable and good faith estimate of the Closing Adjusted Net Worth
of the Acquired Companies. The Stock Purchase Cash Payment payable on the
Closing Date shall be decreased by the amount of any negative Closing Adjusted
Net Worth of the Acquired Companies shown on the Preliminary Statement of
Closing Adjusted Net Worth of the Acquired Companies or increased by the amount
of any positive Closing Adjusted Net Worth of the Acquired Companies shown on
the Preliminary Statement of Closing Adjusted Net Worth of the Acquired
Companies.
(ii) As promptly as practicable, but in any event within sixty
(60) calendar days following the Closing, Xxx shall cause to be prepared and
delivered to the Purchaser a further determination and statement (the "Statement
of Closing Adjusted Net Worth of the Acquired Companies") setting forth the
Closing Adjusted Net Worth of the Acquired Companies.
(iii) Within thirty (30) calendar days following delivery of the
Statement of Closing Adjusted Net Worth of the Acquired Companies pursuant to
Section 2.7(c)(ii) hereof or, if applicable, such later date determined in
accordance with Section 2.7(c)(iv), (1) Xxx shall pay to Purchaser the amount,
if any, by which the Closing Adjusted Net Worth of the Acquired Companies shown
on the Statement of Closing Adjusted Net Worth of the Acquired Companies is less
than the amount thereof shown on the Preliminary Statement of Closing Adjusted
Net Worth of the Acquired Companies, or (2) the Purchaser shall pay to Xxx the
amount, if any, by which the Closing Adjusted Net Worth of the Acquired
Companies shown on the Statement of Closing Adjusted Net Worth of the Acquired
Companies is more than the amount thereof shown on the Preliminary Statement of
Closing Adjusted Net Worth of the Acquired Companies. Any and all payments made
pursuant to this Section 2.7(c)(iii) shall bear interest at the Interest Rate
for the period commencing on the Closing Date and to but not including the date
of payment, and shall be made by wire transfer of immediately available funds to
an account designated in writing by the party to receive such payment. Any
payment made pursuant to this Section 2.7(c)(iii) shall be deemed to be an
adjustment to the Stock Purchase Price.
(iv) If the Purchaser disagrees in good faith with the Statement
of Closing Adjusted Net Worth of the Acquired Companies, then the Purchaser
shall notify Xxx in writing (the "Stock Purchase Notice of Disagreement") of
such disagreement within thirty (30) calendar days following delivery of the
Statement of Closing Adjusted Net Worth of the Acquired Companies. The Stock
Purchase Notice of Disagreement shall set forth in reasonable detail the basis
for the disagreement described therein. Thereafter, Xxx and the Purchaser shall
attempt in good faith to resolve and finally determine the amount of the Closing
Adjusted Net Worth of the Acquired Companies. If Xxx and the Purchaser are
unable to resolve the disagreement within thirty (30) calendar days following
delivery of the Stock Purchase Notice of Disagreement, then the Independent
Accountant shall resolve the disagreement and make a determination with respect
thereto. Such determination will be made, and written notice thereof given to
Xxx and the Purchaser, within thirty (30) calendar days after such selection.
The determination by the Independent Accountant shall be final, binding and
conclusive upon Xxx and the Purchaser. The scope of the Independent Accountant's
engagement (which will not be an audit) shall be limited to the resolution of
the disputed items described in the Stock Purchase Notice of Disagreement, and
the recalculation, if any, of the Statement of Closing Adjusted Net Worth of the
Acquired Companies in light of such resolution. If an Independent Accountant is
engaged pursuant to this Section 2.7(c)(iv), the fees and expenses of the
Independent Accountant shall be borne equally by Xxx and the Purchaser. Within
ten (10) calendar days after delivery of a notice of determination by the
Independent Accountant as described above, any payment required by Section
2.7(c)(iii) hereof shall be paid based upon such determination, together with
interest at the Interest Rate for the period commencing on the Closing Date and
to but not including the date of payment.
(d) Allocation of Modified Aggregate Deemed Sales Price ("MADSP") and
Adjusted Grossed-Up Basis ("AGUB") to KOIN Assets. If a Section 338(h)(10)
election is made with respect to KOIN, the "MADSP" and "AGUB" shall be
determined and allocated among the assets of KOIN in accordance with the
applicable Treasury Regulations under Section 338 for all purposes. The Stock
Purchase Price attributed to KOIN in Section 2.7(a) shall be allocated among the
assets of KOIN for all purposes (including Tax and financial accounting
purposes) on the basis of a customary appraisal report prepared by an
independent appraisal firm which shall be selected and whose report shall be
approved by the Purchaser, or as agreed by the parties. The Purchaser shall pay
all fees, costs and expenses of the appraisal firm. The appraisal report and
allocation will be consistent with Section 338 of the Internal Revenue Code. The
Purchaser and Xxx shall (i) execute and file all Tax Returns and prepare all
financial statements, returns and other instruments in a manner consistent with
the allocation determined pursuant to this Section 2.3(d), (ii) not take any
position before any Governmental Authority or in any judicial proceeding that is
inconsistent with such allocation, and (iii) cooperate with each other in a
timely filing, consistent with such allocation, of Form 8023 with the IRS.
2.8 Further Assurances. At and after the Closing, subject to the terms and
conditions herein provided, each of the Purchaser and Xxx covenants and agrees
to use reasonable efforts to take, or cause to be taken, all action, or do, or
cause to be done, all things, necessary, proper or advisable under applicable
Laws to consummate and make effective the transactions contemplated by the Stock
Purchase.
2.9 Allocation of Cash Payment. Subject to Sections 2.3(b) and 2.7(c), the total
purchase price payable in cash at the Closing for the Purchased Assets of the
Xxx-NMBC Stations and the Acquired Companies' Common Stock shall be Five Hundred
Sixty-Two Million Five Hundred Thousand Dollars ($562,500,000) (the "Cash
Payment"). Purchaser shall be entitled to specify (i) the allocation of the Cash
Payment between the Asset Purchase Cash Payment and the Stock Purchase Cash
Payment and (ii) the allocation of the Stock Purchase Cash Payment between the
KOIN Common Stock and the SJL-Kansas Common Stock, provided that (A) Purchaser
delivers such allocations to Xxx at least ten (10) days prior to Closing and (B)
Xxx approves such allocations, which approval shall not be unreasonably withheld
or delayed.
ARTICLE 3
THE CLOSING
3.1 The Closing. The consummation of the transactions contemplated hereby shall
take place at a closing (the "Closing") to be held at 10:00 a.m., Central
Standard Time ("CST"), on a date to be designated by Xxx and the Purchaser,
which date shall be no later than the second (2nd) Business Day after
satisfaction and fulfillment of the last to occur of the conditions set forth in
Sections 7.1(c) or (d) and Sections 7.2 (c) or (d), subject to the conditions
set forth in Section 7.1(e) and Section 7.2(e) (the "Closing Date"), at the
offices of Lane & Xxxxxxxx, 000 X. Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxx,
unless another time, date or place is mutually agreed upon in writing by Xxx and
the Purchaser.
3.2 Closing Deliveries of Xxx-NMBC and the Acquired Companies. At the Closing,
Xxx shall deliver, or cause to be delivered, to the Purchaser the following
instruments, certificates and other documents, dated as of the Closing Date and
executed on behalf of Xxx-NMBC or an Acquired Company by a duly authorized
officer thereof, in order to effect the transfer of the Purchased Assets of the
Xxx-NMBC Stations to the Purchaser pursuant to Section 2.1 hereof and effect the
transfer of the Acquired Companies' Common Stock to the Purchaser pursuant to
Section 2.6 hereof:
(a) Instruments of Transfer and Assignment.
(i) A grant deed or deeds, as the case may be, in a customary
and usual form acceptable to the parties (the "Grant Deeds"), conveying fee
simple title to all of the Owned Real Property of the Xxx-NMBC Stations;
(ii) a Xxxx of Sale with respect to the Purchased Assets of the
Xxx-NMBC Stations in a customary and usual form acceptable to the parties (the
"Xxxx of Sale");
(iii) an Instrument of Assignment and Assumption with respect to
the Purchased Assets of the Xxx-NMBC Stations and Assumed Liabilities of the
Xxx-NMBC Stations in a customary and usual form acceptable to the parties (the
"Assignment and Assumption");
(iv) an Assignment of Proprietary Rights with respect to the
Xxx-NMBC Stations substantially in a customary and usual form acceptable to the
parties (the "Assignment of Proprietary Rights");
(v) copies of all instruments, certificates, documents and other
filings (if applicable) necessary to release the Purchased Assets of the
Xxx-NMBC Stations from all Encumbrances other than Permitted Encumbrances and
those Encumbrances set forth in Schedule 4.5(b) hereto, all in a form reasonably
satisfactory to counsel for the Purchaser;
(vi) copies of all requisite Licenses, waivers, consents,
approvals, authorizations, qualifications and other orders of any Governmental
Authority with competent jurisdiction over the transactions contemplated hereby,
and all requisite consents, approvals or waivers from third parties, which are
necessary to effect the valid transfer and assignment of the Purchased Assets of
the Xxx-NMBC Stations to the Purchaser pursuant to this Agreement and to
otherwise consummate the Asset Purchase, Stock Purchase and as otherwise
contemplated by this Agreement;
(vii) stock certificates representing all of the outstanding
shares of KOIN and SJL-Kansas duly endorsed or accompanied by duly executed
stock powers in blank (the "Stock Certificates");
(viii) all other documents, instruments and certificates
required to be delivered by Xxx-NMBC or the Acquired Companies pursuant to this
Agreement or otherwise required or reasonably requested by Purchaser, including
of conveyance and transfer, as the Purchaser may reasonably request in order to
more effectively convey and transfer the Purchased Assets of the Xxx-NMBC
Stations to the Purchaser and to put the Purchaser in operational control of the
Xxx-NMBC Stations, or for aiding, assisting, collecting and reducing to
possession any of the Purchased Assets of the Xxx-NMBC Stations and exercising
rights with respect thereto and to otherwise consummate the Asset Purchase, the
Stock Purchase and as otherwise contemplated by this Agreement;
(ix) resignations of all directors and officers of the Acquired
Companies which have been previously requested in writing by Purchaser shall
have been delivered to Purchaser, effective upon the Closing; and
(x) the stock book, stock ledger, and minute book of each of the
Acquired Companies.
(b) Closing Certificates.
(i) an officer's certificate in a form reasonably acceptable to
the parties;
(ii) a secretary's certificate substantially in a form
reasonably acceptable to the parties; and
(iii) a certificate of Xxx-NMBC and each Acquired Company
certifying as to its non-foreign status which complies with the requirements of
Section 1445 of the Internal Revenue Code.
(c) Legal Opinions.
(i) A legal opinion of Lane & Xxxxxxxx, outside counsel for
Xxx-NMBC and the Acquired Companies, substantially in the form attached hereto
as Exhibit A; and
(ii) a legal opinion of Wiley, Rein & Fielding, FCC counsel of
Xxx-NMBC and the Acquired Companies, substantially in the form attached hereto
as Exhibit B.
3.3 Closing Deliveries of the Purchaser. At the Closing, the Purchaser shall
deliver, or cause to be delivered, to Xxx the following instruments,
certificates and other documents, dated as of the Closing Date and executed or
acknowledged (as applicable) on behalf of the Purchaser by a duly authorized
officer thereof, in order to pay for the Acquired Companies' Common Stock and
the Purchased Assets of the Xxx-NMBC Stations and effect the assumption of all
Assumed Liabilities of the Xxx-NMBC Stations pursuant to Section 2.2 hereof.
(a) Cash Payment. An amount in cash equal to the Cash Payment, payable
by wire transfer of immediately available funds to an account designated in
writing by Xxx at least two (2) Business Days prior to the Closing Date.
(b) Instruments of Assumption.
(i) the Xxxx of Sale;
(ii) the Assignment and Assumption;
(iii) the Assignment of Proprietary Rights; and
(iv) all other documents, instruments and certificates required
to be delivered by Purchaser pursuant to this Agreement or otherwise secured and
reasonably requested by Xxx including instruments and certificates of
assumption, novation and release as Xxx may reasonably request in order to
effectively make the Purchaser responsible for all Assumed Liabilities of the
Xxx-NMBC Stations and release Xxx-NMBC therefrom to the fullest extent permitted
under applicable Law but without any additional obligation incurred on the part
of Purchaser.
(c) Closing Certificates.
(i) an officer's certificate substantially in a form reasonably
acceptable to the parties; and
(ii) a secretary's certificate substantially in a form
reasonably acceptable to the parties.
(d) Legal Opinion. A legal opinion of outside counsel for the Purchaser,
substantially in the form attached hereto as Exhibit C.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF XXX-NMBC
OR EACH ACQUIRED COMPANY
Xxx and NMBC jointly and severally represent and warrant to the Purchaser as
follows:
4.1 Organization. Xxx-NMBC and each Acquired Company is a corporation duly
organized, validly existing and in good standing under the Laws of the state of
such company's incorporation, and have all requisite corporate power and
authority to own, operate or lease the assets and properties now owned, operated
or leased by it, and to conduct the operation of the Xxx-NMBC Stations and each
Acquired Company as presently conducted by such company. Xxx-NMBC, with respect
to the Xxx-NMBC Stations, and the Acquired Companies are duly authorized,
qualified or licensed to do business as a foreign corporation, and are in good
standing, under the Laws of each state or other jurisdiction in which the
character of such company's properties owned, operated or leased, or the nature
of such company's activities, makes such qualification necessary, except in
those states and jurisdictions where the failure to be so qualified or in good
standing would not reasonably be expected, as of the date hereof, to have a
Material Adverse Effect. Corporate minutes of each Acquired Company for the past
five years, and the stock records of each Acquired Company have been made
available to Purchaser. For the past five years, all corporate action which has
previously been taken by the shareholders of the Acquired Companies, by the
board of directors of each Acquired Company, or by any committee of any board of
the type customarily recorded in the minutes or proceedings of shareholders,
board of directors and committees of the board is properly and accurately
recorded in the corporate minutes of each Acquired Company. Complete and
accurate records with respect to the issuance, transfer, redemption and
cancellation of shares of capital stock of each Acquired Company are contained
in each Acquired Company's stock records.
4.2 Authority and No Violation.
(a) Xxx-NMBC and each Acquired Company have all requisite corporate
power and authority to enter into this Agreement and the Xxx Documents, to
perform such company's obligations hereunder and thereunder, and to consummate
the transactions contemplated hereby and thereby. The execution and delivery by
Xxx-NMBC and each Acquired Company of this Agreement and Xxx Documents, the
performance by Xxx-NMBC and each Acquired Company of its obligations hereunder
and thereunder, and the consummation by Xxx-NMBC and each Acquired Company of
the transactions contemplated hereby and thereby, have been duly authorized by
all necessary corporate action on the part of Xxx-NMBC and each Acquired
Company. This Agreement has been duly executed and delivered by Xxx-NMBC and,
assuming the due authorization, execution and delivery of this Agreement by the
Purchaser, this Agreement constitutes a legally valid and binding obligation of
Xxx-NMBC, enforceable against Xxx-NMBC in accordance with its terms, except as
such enforceability may be limited by principles of public policy, and subject
to (i) the effect of any applicable Laws of general application relating to
bankruptcy, reorganization, insolvency, moratorium or similar Laws affecting
creditors' rights and relief of debtors generally, and (ii) the effect of rules
of Law and general principles of equity, including rules of Law and general
principles of equity governing specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law). Upon the execution and delivery of the Xxx
Documents by Xxx-NMBC and each Acquired Company, at the Closing and, assuming
the due authorization, execution and delivery of the Assignment and Assumption
by the Purchaser, each of the Xxx Documents will constitute a legally valid and
binding obligation of Xxx-NMBC and each Acquired Company, enforceable against
Xxx-NMBC and each Acquired Company, in accordance with its respective terms,
except as such enforceability may be limited by principles of public policy, and
subject to (i) the effect of any applicable Laws of general application relating
to bankruptcy, reorganization, insolvency, moratorium or similar Laws affecting
creditors' rights and relief of debtors generally, and (ii) the effect of rules
of Law and general principles of equity, including rules of Law and general
principles of equity governing specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(b) Assuming that all consents, waivers, approvals, orders and
authorizations set forth in Schedule 4.4 hereto have been obtained and all
registrations, qualifications, designations, declarations or filings with any
Governmental Authorities set forth in Schedule 4.4 hereto have been made, and
except as set forth in Schedule 4.2 hereto, the execution and delivery by
Xxx-NMBC and each Acquired Company of the Xxx Documents, the performance by
Xxx-NMBC and each Acquired Company of its obligations hereunder and thereunder,
and the consummation by such company of the transactions contemplated hereby and
thereby, will not conflict with or violate in any material respect, constitute a
material default (or event which with the giving of notice or lapse of time, or
both, would become a material default) under, give rise to any right of
termination, amendment, modification, acceleration or cancellation of any
material obligation or loss of any material benefit under, result in the
creation of any material Encumbrance pursuant to, or require such company to
obtain any consent, waiver, approval or Action of, make any filing with, or give
any notice to any Person as a result or under, the terms and provisions of (i)
the respective charter or the respective bylaws of such company, (ii) any
material Contract to which such company is a party or by which any of the
Purchased Assets of the Xxx-NMBC Stations is bound, or (iii) any material Law
applicable to such company, any of the Purchased Assets, assets of the Acquired
Companies or the Acquired Companies' Common Stock, or any Governmental Order
issued by a Governmental Authority by which Xxx-NMBC or any Acquired Company or
any of the Purchased Assets of the Xxx-NMBC Stations is in any way bound or
obligated.
4.3 Capitalization, Subsidiaries and Charter.
(a) The authorized capital stock of KOIN consists of thirty thousand
(30,000) shares of common stock, par value of $10.00 per share (the "KOIN Common
Stock"). There are thirty thousand (30,000) shares of KOIN Common Stock issued
and outstanding. No shares of KOIN Common Stock are held by KOIN in its
treasury. All of the issued and outstanding shares of KOIN Common Stock are
validly issued, fully paid and nonassessable. Xxx is the legal and beneficial
owner of record of the KOIN Common Stock, and the KOIN Common Stock is free and
clear of all liens, pledges and other Encumbrances. There are no securities of
KOIN presently outstanding, nor at the Closing will there be, which are
convertible into or exchangeable or exercisable for any shares of KOIN Common
Stock, and there are no outstanding or authorized subscriptions, options,
warrants, calls, rights, commitments or any other agreements of any character
obligating KOIN to issue, sell or transfer any additional shares of KOIN Common
Stock or any securities convertible into or evidencing the right to subscribe
for any shares of KOIN Common Stock.
(b) The authorized capital stock of SJL-Kansas consists of one million
nine hundred fifty thousand shares (1,950,000) shares of Class A common stock
with a par value of .01 per share; nine hundred fifty thousand (950,000) shares
of Class B common stock with a par value of .01 per share; one hundred thousand
(100,000) shares of Class C common stock with a par value of .01 per share and
fifty thousand (50,000) shares of Class D 6% preferred stock (the "SJL-Kansas
Common Stock"). There are one thousand (1,000) Class A shares of SJL-Kansas
Common Stock issued and outstanding. No shares of SJL-Kansas Common Stock are
held by SJL-Kansas in its treasury. All of the issued and outstanding shares of
SJL-Kansas Common Stock are validly issued, fully paid and nonassessable. Xxx is
the legal and beneficial owner of record of the SJL-Kansas Common Stock, free
and clear of all Liens. There are no securities of SJL-Kansas outstanding which
are convertible into or exchangeable or exercisable for any shares of SJL-Kansas
Common Stock, there are not now, nor at the Closing will there be, any
outstanding or authorized subscriptions, options, warrants, calls, rights,
commitments or any other agreements of any character obligating SJL-Kansas to
issue, sell or transfer any additional shares of SJL-Kansas Common Stock or any
securities convertible into or evidencing the right to subscribe for any shares
of SJL-Kansas Common Stock.
(c) Schedule 4.3 hereto sets forth the name, date and jurisdiction of
incorporation, and the outstanding shares of capital stock of Topeka, Wichita
License Sub, Topeka License Sub and any Subsidiary of an Acquired Company. Each
company listed on Schedule 4.3 hereto is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and lawful authority to own, lease and
operate its assets, properties and business and to carry on its business as now
being and as heretofore conducted. Each company listed on Schedule 4.3 hereto is
duly qualified or otherwise authorized as a foreign corporation to transact
business and is in good standing in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased by it
makes such licensing or qualification necessary, except where the failure to be
so licensed or qualified would not, in any individual case, reasonably be
expected as of the date hereof to have a Material Adverse Effect. No shares of
any company listed on Schedule 4.3 hereto are held by such company in its
treasury. All of the issued and outstanding shares of such company are validly
issued, fully paid and nonassessable. All shares of Topeka, Topeka License Sub
and Wichita License Sub are owned beneficially and of record by the corporation
specified as the owner in the Recitals to this Agreement, free and clear of all
Liens. There are no securities of any company listed in Schedule 4.3 hereto
presently outstanding, nor at the Closing will there be, which are convertible
into or exchangeable or exercisable for any shares of such company, and there
are no outstanding or authorized subscriptions, options, warrants, calls,
rights, commitments or any other agreements of any character obligating such
company to issue, sell or transfer any additional shares or any securities
convertible into or evidencing the right to subscribe for any shares of such
company except as set forth in Schedule 4.3 hereto with respect to IBS-Xxx
Partners LLC.
(d) Except as set forth in Schedule 4.3 hereto, neither Xxx-NMBC nor any
Acquired Company has any Subsidiaries, and does not own any direct or indirect
equity or debt interest in any other Person, including any interest in a
corporation, partnership or joint venture, and is not obligated or committed to
acquire any such interest, in any case in which the Subsidiary, interest or
other Person relates primarily to the Xxx-NMBC Stations or the Acquired
Companies.
(e) Each Acquired Company and each company listed on Schedule 4.3 hereto
has heretofore delivered to Purchaser true and complete copies of its respective
charter documents and by-laws or comparable instruments of such company as in
effect on the date hereof.
4.4 Government Consents. No material consent, waiver, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority is required on the part of Xxx-NMBC in
connection with the execution and delivery by such company of this Agreement and
by Xxx-NMBC and each Acquired Company of the Xxx Documents, the performance by
Xxx-NMBC and any Acquired Company of its respective obligations hereunder and
thereunder, or the consummation by Xxx-NMBC and each Acquired Company of the
transactions contemplated hereby and thereby, including the sale and transfer of
the Acquired Companies' Common Stock and Purchased Assets of the Xxx-NMBC
Stations and transfer of the FCC Licenses of the Xxx-NMBC Stations to the
Purchaser or connection with the Acquired Companies' Common Stock, except as set
forth in Schedule 4.4 hereto.
4.5 Tangible Property.
(a) Except for the shared property or assets identified in Schedules
2.1(c) and 6.10, Schedule 4.5(a) hereto contains a true, correct and complete
list of the following to the extent owned, used or held for use by Xxx-NMBC or
any Acquired Company in the operation of the Xxx-NMBC Stations and the operation
of each Acquired Company, as the case may be: (i) each parcel of real property
owned, as of the date hereof, by such company ("Owned Real Property"), (ii) each
parcel of material real property leased from or to a third party, as of the date
hereof, by such company ("Leased Real Property"), the name of the third party
lessor(s) or lessee(s) thereof, as the case may be, the date of the lease
contract relating thereto and all amendments thereof, and (iii) a list of all
material fixed assets owned by such company as set forth in each company's
depreciation schedule attached thereto, (excluding therefrom such fixed assets
with an original cost of less than $5,000 or which have been fully depreciated)
and prepared in the ordinary course of business as of the date set forth
therein. Except as set forth in Schedule 4.5(a) hereto, the Xxx-NMBC Stations
and each Acquired Company does not own, or have a contractual obligation to
purchase or otherwise acquire any material interest in, any parcel of real
property which would be used or held for use primarily in the operation of the
Xxx-NMBC Stations or by the Acquired Company. All of the tangible assets and
properties used by Xxx-NMBC Stations or the Acquired Companies pursuant to a
lease or license included among the Purchased Assets of the Xxx-NMBC Stations or
to which an Acquired Company is a party shall be referred to herein,
collectively, as "Leased Assets."
(b) Xxx-NMBC and each Acquired Company have fee simple title to all of
the Owned Real Property of the Xxx-NMBC Stations and the Owned Real Property of
the Acquired Companies, free and clear of Liens except Permitted Encumbrances.
(c) Within twenty-one (21) days after the date of this Agreement,
Xxx-NMBC and each Acquired Company shall, with respect to each tract of Owned
Real Property owned by such company, procure at its expense (except as provided
below) and deliver to Purchaser (i) commitments for either (x) endorsements to
existing owner's policies of title insurance committing to date the existing
policies down to the Closing, subject to all matters listed on said policies and
such other matters of record since the date of the policies or (y) ALTA owner's
policies of title insurance in the amounts ascribed to the applicable tract of
Owned Real Property, issued by Chicago Title Insurance Company or an affiliate
or agent thereof, subject to all matters of record as of the date of the
commitments, the pre-printed jacket exclusions and the standard pre-printed
exceptions, (ii) copies of all matters listed as exceptions on the policies and
commitments, as the case may be, and (iii) if requested by Purchaser and at
Purchaser's expense, surveys accompanied by certifications by surveyors
registered and licensed in the jurisdiction where each tract is located stating
that the surveys have been prepared as of a recent date in accordance with the
current ALTA minimum standard detail requirements, or accompanied by a
recertification updating to a current date a prior certification regarding
preparation in accordance with such requirements.
4.6 Intellectual Property and Proprietary Rights.
(a) Schedule 4.6(a) hereto contains a true, correct and complete list of
all material Intellectual Property owned by Xxx-NMBC and each Acquired Company,
as the case may be, as of the date hereof, to the extent such Intellectual
Property is related primarily to the Xxx-NMBC Stations and the operation of each
Acquired Company. A true and complete copy of all material documentation
relating to each item of Intellectual Property set forth in Schedule 4.6(a)
hereto has been made available to the Purchaser and its agents and
representatives.
(b) Xxx-NMBC and each Acquired Company, as the case may be, own or have
a valid right to use all Proprietary Rights used by such company to conduct the
Xxx-NMBC Stations and the Acquired Companies' operations as currently conducted
by such company, without, to their Knowledge, materially infringing upon the
material rights of any other Person. To the Knowledge of Xxx-NMBC and each
Acquired Company, as the case may be, no other Person is materially infringing
upon the material rights of such company in or to any of the Intellectual
Property set forth in Schedule 4.6(a) hereto.
4.7 Xxx-NMBC Stations and the Acquired Companies' Contracts.
(a) Schedule 4.7(a) hereto contains a list of each of the Xxx-NMBC
Stations or the Acquired Companies' Contracts (including all amendments thereto)
to which Xxx-NMBC and each Acquired Company, as the case may be, is a party or
by which Xxx-NMBC and each Acquired Company, as the case may be, or any of the
Purchased Assets of the Xxx-NMBC Stations or any of the assets of the Acquired
Companies is bound as of the date hereof, which involves an executory obligation
of more than $25,000 or is otherwise material to the Xxx-NMBC Stations or the
Acquired Companies, the Purchased Assets of the Xxx-NMBC Stations or the Assumed
Liabilities of the Xxx-NMBC Stations (each, a "Material Contract" and,
collectively, the "Material Contracts"), except (i) contracts for the sale of
advertising time entered into in the ordinary course of business; and (ii)
contracts which are Short Term Agreements. The Material Contracts include,
except as noted above, the following: (i) leases relating to all Leased Real
Property of the Xxx-NMBC Stations or the Acquired Companies; (ii) capital or
operating leases or conditional sales agreements relating to any Purchased
Assets of the Xxx-NMBC Stations or to which an Acquired Company is a party
(other than Short Term Agreements), in each case involving monthly payments in
excess of $10,000, (iii) noncompetition or other agreements restricting the
ability of Xxx-NMBC or any Acquired Company, as the case may be, to engage in
the television broadcasting business in any location; (iv) employment,
consulting, separation, collective bargaining or other labor agreements; (v)
agreements under which Xxx-NMBC or any Acquired Company, as the case may be, is
obligated to indemnify, or entitled to indemnification from, any other Person
primarily related to the Xxx-NMBC Stations and the Acquired Companies, other
than any agreement that requires indemnification solely in connection with or as
a result of a breach of such agreement; and (vi) the network affiliation
agreements of Xxx-NMBC and each Acquired Company. For all purposes of and under
this Agreement, the term "Short Term Agreement" shall mean an agreement entered
into in the ordinary course of business that is terminable by Xxx-NMBC or any
Acquired Company upon ninety (90) days or less notice without penalty or
cancellation fee or charge. Accurate and complete copies of all Material
Contracts have been made available for inspection by Purchaser.
(b) Xxx-NMBC and each Acquired Company, as the case may be, has made
available to the Purchaser and its agents and representatives a copy or summary
of each written Material Contract and a written summary of each oral Material
Contract. Except as set forth in Schedule 4.7(b) hereto, (i) each Material
Contract is in full force and effect and represents a valid, binding and
enforceable obligation of such company in accordance with the respective terms
thereof and, to the knowledge of Xxx-NMBC and each Acquired Company, as the case
may be, represents a valid, binding and enforceable obligation of each of the
other parties thereto; and (ii) there exists no material breach or material
default (or event that with notice or the lapse of time, or both, would
constitute a material breach or material default) on the part of Xxx-NMBC or any
Acquired Company, as the case may be, or, to the knowledge of Xxx-NMBC and each
Acquired Company, as the case may be, on the part of any other party under any
Material Contract, in any individual case which has had or could reasonably be
expected, as of the date hereof, to have a Material Adverse Effect.
4.8 Licenses and FCC Licenses.
(a) Xxx-NMBC and each Acquired Company, as the case may be, owns or
possesses all right, title and interest in and to all the FCC Licenses and all
other material Licenses under its respective name which are necessary to conduct
the business of the Xxx-NMBC Stations and each Acquired Company as conducted by
each of Xxx-NMBC or any Acquired Company, as the case may be, as of the date
hereof (each, a "Material License" and, collectively, the "Material Licenses").
No loss or expiration of any Material License is pending or, to the knowledge of
Xxx-NMBC and each Acquired Company, as the case may be, threatened, other than
the expiration of any Material License in accordance with the terms thereof. Any
action of the FCC with respect to each FCC License is a Final Action with the
exception of the FCC's grant of its consent to the FCC Transfer Application.
Each of the Xxx-NMBC Stations and Acquired Companies' Stations is being operated
in all material respects in accordance with the Communications Act.
(b) Xxx-NMBC and each Acquired Company, as the case may be, is the
holder of all rights in and to the FCC Licenses listed under its respective name
on Schedule 4.8(b) hereto. The FCC Licenses listed in Schedule 4.8(b) hereto
constitute all of the FCC Licenses used or necessary to lawfully operate the
Xxx-NMBC Stations and the Acquired Companies' Stations in the manner now
operated. The FCC Licenses, including extensions or renewals thereof, are in
full force and effect and are unimpaired by any acts or omissions of Xxx-NMBC,
any Acquired Company or their respective shareholders, employees or agents.
Without limiting the generality of the foregoing, the FCC Licenses are valid for
the balance of the current license term applicable to television stations
licensed to communities in the states where the Xxx-NMBC Stations and the
Acquired Companies' Stations are located and are subject to no restrictions or
conditions outside of the ordinary course.
(c) There is not, to the knowledge of Xxx-NMBC and each Acquired
Company, any FCC investigation, notice of apparent liability or order of
forfeiture pending or outstanding against any of the Xxx-NMBC Stations and the
Acquired Companies' Stations respecting any violation, or allegation thereof, of
any FCC rule, regulation or written policy, or, to the knowledge of Xxx-NMBC and
each Acquired Company, any complaint before the FCC as a result of which an
investigation, notice of apparent liability, or order of forfeiture may issue
from the FCC relating to any of the Xxx-NMBC Stations and the Acquired
Companies' Stations.
4.9 Employees. Schedule 4.9 hereto contains a true, correct and complete list of
all employees of Xxx-NMBC or any Acquired Company who, as of the date of this
Agreement, have duties principally related to the Xxx-NMBC Stations and each
Acquired Company, as the case may be, including (and designating as such) any
such employee who is an inactive employee on paid or unpaid leave of absence,
and indicating date of employment, current title, currently accrued and unused
vacation (including both the number of days and dollar value), compensation
(including bonus arrangements), and arrangements (including amounts) for
termination or severance payments or benefits. Each employee set forth in
Schedule 4.9 hereto who remains employed by Xxx-NMBC and each Acquired Company
immediately prior to the Closing (whether actively or inactively), and each
additional employee who is hired to work in the Xxx-NMBC Stations and by each
Acquired Company following the date hereof and prior to the Closing who remains
employed by such respective company immediately prior to the Closing (whether
actively or inactively), shall be referred to herein individually as an
"Employee" and, collectively, as the "Employees".
4.10 Employee Benefit Plans.
(a) Schedule 4.10(a) hereto lists all bonus, deferred compensation,
pension, retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock and stock option plans, all
employment, completion, change of control or severance contracts, health,
medical, vision, and dental insurance plans, life insurance and accident and
disability insurance plans, leave of absence, layoff, vacation, day or dependent
care, legal services, education assistance, cafeteria (within the meaning of
Code Section 125), flexible spending and other employee benefit plans, policy
contracts, agreements or arrangements (including any collective bargaining
agreement), whether written or if material, oral, which cover Employees or
former employees of the Xxx-NMBC Stations and each Acquired Company or with
respect to which the Xxx-NMBC Stations and each Acquired Company has any
material actual or potential liability, including "employee benefit plans"
within the meaning of Section 3(3) of ERISA (the "Benefit Plans"). Except as set
forth in Schedule 4.10(a) hereto, no Benefit Plan is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA), and, except as set forth in Schedule
4.10(a) hereto, no Benefit Plan provides health or other welfare benefits to
former employees other than in compliance with Part 6 of Title I of ERISA or
Section 4980B of the Code or similar state Law ("COBRA"). True and complete
copies of the Benefit Plans have been made available to Purchaser.
(b) Each Benefit Plan has been maintained and administered in compliance
in all material respects with the applicable provisions of ERISA, the Code and
any other Laws (including compliance with all reporting and disclosure
obligations). Each Benefit Plan (other than any multiemployer plan) which is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter that it is so qualified; to the extent that there
have been any amendments to such Benefit Plan after the most recent favorable
determination letter, the remedial amendment period under Section 401(b) of the
Code has not expired as of the date of this Agreement with respect to such
amendments.
(c) Xxx-NMBC, with respect to the Employees, and each Acquired Company
does not have any Liability under Title IV of ERISA (other than for the payment
of premiums, none of which are overdue). Xxx-NMBC, with respect to the
Employees, and each Acquired Company or any ERISA Affiliates thereof, have not
incurred or expect to incur Liability in connection with an "accumulated funding
deficiency" within the meaning of Section 412 of the Code, whether or not
waived. Xxx-NMBC, with respect to the Employees, and each Acquired Company, have
not incurred, nor expect to incur, any withdrawal liability with respect to a
"multiemployer plan" under Title IV of ERISA. Xxx-NMBC, with respect to the
Employees, and each Acquired Company have not incurred any material Liability or
penalty under Section 4975 of the Code or Section 502(i) of ERISA with respect
to any Benefit Plan. Each Benefit Plan has been maintained and administered in
all material respects in compliance with its terms. There is no pending, nor has
Xxx-NMBC or any Acquired Company received notice of any threatened, material
claims against or otherwise involving any of the Benefit Plans. All material
contributions required to be made as of the date of this Agreement to the
Benefit Plans have been made or provided for.
(d) Xxx-NMBC and each Acquired Company has complied with the
requirements of COBRA.
4.11 Sufficiency of Assets.
(a) The Purchased Assets of the Xxx-NMBC Stations and the assets and
properties (including tangible, intangible, personal, real or mixed) of the
Acquired Companies, including but not limited to the assets listed on Schedule
4.5(a) hereto, together with such fixed assets of the Xxx-NMBC Stations and the
Acquired Companies with an original cost of less than $5,000 or which have been
fully depreciated, as the case may be (including the licenses or leasehold
interests in or relating to the Leased Assets), constitute all of the assets,
properties and rights necessary for the conduct of the operations of the
Xxx-NMBC Stations and for the conduct by each Acquired Company of each of its
Acquired Companies' Stations, in each case in the manner consistent with past
practice. Each of Xxx-NMBC or the Acquired Companies which owns the Xxx-NMBC
Station or Acquired Company Station in which any of such assets, properties or
rights are used in the operation of such station owns all of such assets,
properties and rights, free and clear of all Liens, except for Permitted
Encumbrances, and those Encumbrances set forth in Schedule 4.5(b) hereto.
(b) The tangible personal property included in the Purchased Assets of
the Xxx-NMBC Stations and the assets of the Acquired Companies listed on the
depreciation schedules set forth in Schedule 4.5(a) hereto or the Leased Assets
are in good condition and repair (ordinary wear and tear excepted) for property
of comparable type, age and usage, except for tangible personal property that is
obsolete, depleted or worn out and no longer used in the operation of the
Xxx-NMBC Stations and each Acquired Company.
4.12 Financial Statements. Attached as Schedule 4.12 hereto are true and
complete copies of the consolidated unaudited balance sheets of the Xxx-NMBC
Stations and each Acquired Company, and the unaudited balance sheet of each
Xxx-NMBC Station and Acquired Company Station individually, as of, and the
consolidated unaudited statements of income of the Xxx-NMBC Stations and each
Acquired Company, and the unaudited statement of income for each Xxx-NMBC
Station and Acquired Company Station individually, for the fiscal year ended
September 30, 1999, (the aforementioned financial statements referred to as the
"Financial Statements"). The Financial Statements have been prepared from the
books and records of the Xxx-NMBC Stations and each Acquired Company in a manner
consistent with the audited financial statements of Xxx and present fairly the
financial position and results of operations of the Xxx-NMBC Stations and each
Acquired Company as of the date and for the period indicated, in each case in
conformity with GAAP, except that the Financial Statements are summary in nature
and do not include the statement of stockholders' equity and cash flows or notes
and related disclosures required by GAAP.
4.13 No Undisclosed Liabilities. Xxx-NMBC, with respect to the Xxx-NMBC
Stations, and each Acquired Company have no liabilities other than (i) the
liabilities reflected on the Financial Statements, (ii) liabilities incurred in
the ordinary course of business after the date of the Financial Statements, none
of which is material to the assets, properties, business, results of operations
or condition (financial or otherwise) of the Xxx-NMBC Stations and each Acquired
Company, (iii) liabilities set forth in Schedule 4.13 hereto, and (iv)
liabilities that individually or in the aggregate are not material to any
Xxx-NMBC Station or Acquired Company Station.
4.14 Litigation; Governmental Orders.
(a) Except as set forth in Schedule 4.14 hereto, as of the date hereof,
there are no pending or, to the knowledge of Xxx-NMBC and each Acquired Company,
as the case may be, threatened material Actions by any Person or Governmental
Authority against or relating to such company with respect to the Xxx-NMBC
Stations or their assets or properties or any Acquired Company or its assets or
properties.
(b) Xxx-NMBC and each Acquired Company are not subject to or bound by
any materially adverse Governmental Order affecting any of the Xxx-NMBC
Stations, any Acquired Company or any Acquired Company Station.
4.15 Compliance with Laws. Except as set forth in Schedule 4.15 hereto, to the
knowledge of Xxx-NMBC and each Acquired Company as the case may be, each is in
compliance in all material respects with, and such company has never received
any claim or notice that it is in material noncompliance with, any material Law
or Governmental Order applicable to the Xxx-NMBC Stations and each Acquired
Company.
4.16 Environmental Matters. Except as disclosed in the environmental site
assessments identified in Schedule 4.16 hereto, all of which have been made
available to Purchaser:
(a) to the knowledge of Xxx-NMBC and each Acquired Company, as the case
may be, there has not been any release of any Hazardous Material in violation of
Environmental Law into the environment on the Owned Real Property.
(b) neither Xxx-NMBC, with respect to the Xxx-NMBC Stations, nor any
Acquired Company have operated in or is in violation of any Environmental Law in
any material respect.
(c) Xxx-NMBC and each Acquired Company have not received any directive,
order or notice from any Governmental Authority alleging any violation of or
failure to comply with any Environmental Law at the Owned Real Property, nor
have any of Xxx-NMBC and each Acquired Company received any directive, order or
notice from any Government Authority or any other Person alleging that such
company is actually or potentially liable under Environmental Laws for the costs
of environmental investigation or remediation of the Owned Real Property.
(d) With respect to the Owned Real Property, a copy of all environmental
inspections, studies, audits, tests, reviews or analysis by Xxx-NMBC and each
Acquired Company or any consultant engaged by such company within the last five
(5) years, has been previously provided to the Purchaser.
4.17 Insurance.
(a) Xxx-NMBC, with respect to the Xxx-NMBC Stations, and each Acquired
Company or Affiliates thereof, directly or through Xxx, maintain adequate
insurance coverage or self-insure with adequate reserves with respect to its
assets, properties and operations to insure against commercially reasonable
risks of Loss, damage or Liability.
(b) All of the insurance policies listed on Schedule 4.17 hereto in the
name of Xxx-NMBC, with respect to the Xxx-NMBC Stations, and each Acquired
Company with respect to libel shall be in full force and effect and enforceable
by the Purchaser following the consummation of the transactions contemplated by
this Agreement in respect of all reported or unreported libel claims arising out
of occurrences prior to the consummation of this Agreement.
(c) Schedule 4.17 hereto lists and briefly describes each insurance
policy maintained by Xxx-NMBC with respect to the Xxx-NMBC Stations and by or on
behalf of the Acquired Companies, and an insurance claims history for each
Xxx-NMBC Station and Acquired Company Station for the preceding five (5) years.
4.18 Transactions with Affiliates. Except as set forth in Schedule 4.18 hereto,
no shareholder, officer, director or employee of Xxx-NMBC or any Acquired
Company or any of its Affiliates has (a) an outstanding loan from, or an
outstanding loan to, the Xxx-NMBC Stations and the Acquired Companies which will
remain outstanding as of the Closing, (b) except as set forth in Schedule 4.14
hereto, any material contractual or other claim, express or implied, of any kind
whatsoever which has been asserted or, to the knowledge of the Xxx-NMBC Stations
and the Acquired Companies, threatened, (c) any interest in any of the Purchased
Assets of the Xxx-NMBC Stations or the Acquired Companies' Common Stock, or (d)
engaged in any other transaction with the Xxx-NMBC Stations and the Acquired
Companies other than in such person's capacity as an employee, officer or
director of such respective company.
4.19 Taxes. Except as set forth in Schedule 4.19 hereto:
(a) Xxx-NMBC and each Acquired Company (i) have filed (or caused to be
filed) all Tax Returns required to be filed by such company prior to the date of
this Agreement, except for those Tax Returns for which requests for extensions
have been timely filed, and all such Tax Returns are accurate and complete in
all material respects, (ii) have paid all Taxes shown to be due and payable on
such Tax Returns and (iii) have accrued on the Financial Statements (or caused
to be accrued) all unpaid Taxes for all periods ending on or prior to the date
of the Financial Statements of such company. Xxx-NMBC and each Acquired Company
and its Subsidiaries have not incurred any liability for Taxes subsequent to the
date of the Financial Statements of such company other than in the ordinary
course of such company's business.
(b) There are no Liens for Taxes on the Purchased Assets of the Xxx-NMBC
Stations or the assets of any Acquired Company except for Permitted
Encumbrances, and there is no pending Tax audit, examination, refund, litigation
or adjustment in controversy with respect to the Purchased Assets or income of
the Xxx-NMBC Stations or the assets or income of any Acquired Company.
4.20 Labor Controversies. Except as set forth on Schedule 4.20 hereto, with
respect to the Xxx-NMBC Stations and the Acquired Companies, as the case may be,
no such company is a party to, or bound by, any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor union
organization. There is no material unfair labor practice or labor arbitration
proceeding pending or, to the knowledge of Xxx-NMBC and each Acquired Company,
threatened against any such company.
4.21 Cable Television Transmission. Schedule 4.21 lists (i) to the best
knowledge of Xxx-NMBC each cable television system on which the signal of any
Xxx-NMBC Station or any Acquired Company Station is currently being carried
(each, a "Carrying System"), (ii) the cable channel on which any Xxx-NMBC
Station or any Acquired Company Station is currently carried on each Carrying
System, and (iii) as to each Carrying System, whether carriage of the signal of
such station is pursuant to a "must-carry" election, a retransmission consent
agreement, or otherwise. Except as set forth in Schedule 4.21, at the date
hereof and extending, to the extent applicable, to the Closing, (i) each
Xxx-NMBC Station or each Acquired Company Station is carried on each applicable
Carrying System pursuant to a valid and timely must-carry election or a valid
and enforceable retransmission consent agreement, as the case may be, (ii) none
of Xxx-NMBC or the Acquired Companies is a party to an agreement to reimburse
any cable television system for any copyright royalties in respect of carriage
of the signal of any Xxx-NMBC Station or any Acquired Company Station, (iii) no
cable system has advised any of Xxx-NMBC, the Acquired Companies, the Xxx-NMBC
Stations, or the Acquired Companies' Stations of any signal quality or copyright
indemnity or other prerequisite to cable carriage of the applicable station's
signal, (iv) no cable system has declined or threatened to decline such carriage
or failed to respond to a request for carriage or sought any form of relief from
carriage from the FCC, and (v) there are no pending or decided requests to
modify any Xxx-NMBC Station's or any Acquired Company's Station's market for
signal carriage purposes.
4.22 Digital Television Authorizations. Except as set forth in Schedule 4.22
hereto, Xxx-NMBC and the Acquired Companies have timely filed, and shall use
their commercially reasonable efforts to prosecute, applications for digital
television authorizations for the Xxx-NMBC Stations and the Acquired Companies'
Stations including, without limitation, any applications necessary or
appropriate to "maximize" each such station's digital television facilities in
order that such facilities shall be protected from interference by Class A Low
Power Television stations.
4.23 Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Xxx directly with the Purchaser
without the intervention of any Person on behalf of Xxx-NMBC and any Acquired
Company, in such manner as to give rise to any valid claim by any Person against
the Purchaser for a finder's fee, brokerage commission or similar payment, other
than Credit Suisse First Boston Corporation and XxXxxxxxx Xxxxx & Co., L.L.C.,
whose fees and expenses shall be borne by Xxx.
4.24 Full Disclosure. None of the representations and warranties made by
Xxx-NMBC and each Acquired Company in this Agreement, the Schedules or Exhibits
hereto or any document, instrument, written statement or other information
furnished by or on behalf of such company in connection with the negotiations
and transactions set forth herein, contains any untrue statement of a material
fact or omits a material fact necessary to make the statements contained therein
or herein not misleading.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to Xxx-NMBC as follows:
5.1 Organization. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation.
5.2 Authority. The Purchaser has all requisite corporate power and authority to
enter into this Agreement and the Assignment and Assumption, to perform its
obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by the Purchaser of
this Agreement and the Assignment and Assumption, the performance by the
Purchaser of its obligations hereunder and thereunder, and the consummation by
the Purchaser of the transactions contemplated hereby and thereby, have been
duly authorized by all necessary corporate action on the part of the Purchaser.
This Agreement has been duly executed and delivered by the Purchaser and,
assuming the due authorization, execution and delivery of this Agreement by
Xxx-NMBC and any Acquired Company, as the case may be, this Agreement
constitutes a legally valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as such
enforceability may be limited by principles of public policy, and subject to (i)
the effect of any applicable Laws of general application relating to bankruptcy,
reorganization, insolvency, moratorium or similar Laws affecting creditors'
rights and relief of debtors generally, and (ii) the effect of rules of law and
general principles of equity, including rules of law and general principles of
equity governing specific performance, injunctive relief and other equitable
remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law). Upon the execution and delivery of the
Assignment and Assumption by the Purchaser at the Closing and, assuming the due
authorization, execution and delivery thereof by Xxx-NMBC, the Assignment and
Assumption will constitute a legally valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as such enforceability may be limited by principles of public policy, and
subject to (i) the effect of any applicable Laws of general application relating
to bankruptcy, reorganization, insolvency, moratorium or similar Laws affecting
creditors' rights and relief of debtors generally, and (ii) the effect of rules
of law and general principles of equity, including rules of law and general
principles of equity governing specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5.3 No Violation. Assuming that all consents, waivers, approvals, orders and
authorizations set forth in Schedule 5.4 hereto have been obtained and all
registrations, qualifications, designations, declarations or filings with any
Governmental Authorities set forth in Schedule 5.4 hereto have been made, and
except as set forth in Schedule 5.3 hereto, the execution and delivery by the
Purchaser of this Agreement and the Assignment and Assumption, the performance
by the Purchaser of its obligations hereunder and thereunder, and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby, will not conflict with or violate in any material respect, constitute a
material default (or event which with the giving of notice or lapse of time, or
both, would become a material default) under, give rise to any right of
termination, amendment, modification, acceleration or cancellation of any
material obligation or loss of any material benefit under, result in the
creation of any Encumbrance other than a Permitted Encumbrance on any of assets
or properties of the Purchaser pursuant to, or require the Purchaser to obtain
any consent, waiver, approval or Action of, make any filing with, or give any
notice to any Person as a result or under, the terms or provisions of (i) the
organizational documents of the Purchaser, (ii) any Contract to which the
Purchaser is a party or is bound, or (iii) any Law applicable to the Purchaser,
or any Governmental Order issued by a Governmental Authority by which the
Purchaser is in any way bound or obligated, except, in the case of clauses (ii)
and (iii) of this Section 5.3, as would not, in any individual case, have a
material adverse effect on the ability of the Purchaser to perform its
obligations under this Agreement and the Assignment and Assumption or to
consummate the transactions contemplated hereby or thereby.
5.4 Governmental Consents. No consent, waiver, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
Governmental Authority is required on the part of the Purchaser in connection
with the execution and delivery by the Purchaser of this Agreement and the
Assignment and Assumption, the performance by the Purchaser of its obligations
hereunder and thereunder, and the consummation by the Purchaser of the
transactions contemplated hereby and thereby, including the assumption of the
Assumed Liabilities of the Xxx-NMBC Stations, except (i) as set forth in
Schedule 5.4 hereto, and (ii) where the failure to obtain such consent, waiver,
approval, order or authorization, or to make such registration, qualification,
designation, declaration or filing, would not have a material adverse effect on
the ability of the Purchaser to perform its obligations under this Agreement and
the Assignment and Assumption or to consummate the transactions contemplated
hereby or thereby.
5.5 Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by the Purchaser directly with Xxx
without the intervention of any Person on behalf of the Purchaser in such manner
as to give rise to any valid claim by any Person against Xxx-NMBC and any
Acquired Company for a finder's fee, brokerage commission or similar payment .
5.6 Funding. Purchaser has cash available or has existing borrowing facilities
which, together with its available cash, are sufficient to enable it to
consummate the transactions contemplated by this Agreement and pay all related
fees and expenses for which Purchaser will be responsible and will, from time to
time, provide assurances and information to Xxx as shall reasonably be requested
by Xxx that it will have such financial capability at the Closing.
5.7 Investment Representation; Business Investigation. Purchaser is acquiring
the Acquired Companies' Common Stock for its own account or investment purposes
only and not with a view to the distribution of the shares of such common stock.
Purchaser acknowledges that none of the Acquired Companies' Common Stock has
been registered under the Securities Act or any state securities Law in reliance
upon an exemption therefrom for non-public offerings, that shares of common
stock must be held indefinitely unless the sale thereof is registered under the
Securities Act or such state securities law, or an exemption therefrom for such
registration is available under Rule 144, promulgated under the Securities Act,
or otherwise. Purchaser (a) has such knowledge, sophistication and experience in
business and financial matters that it is capable of valuing an investment in
the shares of the Acquired Companies' Common Stock, (b) has conducted an
examination of available reports and other materials relating to each Acquired
Company, (c) fully understands the nature, scope and duration of the limitations
on transfer applicable to the shares of the Acquired Companies' Common Stock and
(d) can bear the economic risk of an investment in the shares of the Acquired
Companies' Common Stock and can afford a complete loss of such investment.
5.8 FCC Matters. Except as set forth on Schedule 5.4, Purchaser is legally and
financially qualified under the Communications Act to enter into this Agreement
and to consummate the transactions contemplated hereby. Except as set forth on
Schedule 5.4, it is not necessary for Purchaser or any Affiliate of Purchaser
(or any Person in which Purchaser or any Affiliate of Purchaser has an
attributable interest under the Communications Act) to seek or obtain any waiver
from the FCC, dispose of any interest in any media or communications property or
interest (including the Xxx-NMBC Stations or the Acquired Companies' Stations),
terminate any venture or arrangement, or effectuate any changes or restructuring
of their ownership, including the withdrawal or removal of officers or directors
or the conversion or repurchase of equity securities of Purchaser or any
Affiliate of Purchaser (or any Person in which Purchaser or any Affiliate of
Purchaser has any attributable interest under the Communications Act). Purchaser
is able to certify on FCC Forms 314 and 315 that it is financially qualified.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 Conduct of Business.
(a) At all times during the period commencing upon the execution and
delivery hereof by each of the parties hereto and terminating upon the earlier
to occur of the Closing or the termination of this Agreement pursuant to and in
accordance with the terms of Section 9.1 hereof, unless the Purchaser shall
otherwise consent in writing (which consent shall not be unreasonably withheld
or delayed), and except as otherwise set forth in Schedule 6.1 hereto, Xxx-NMBC
shall, and shall cause each Acquired Company, as the case may be, to (i) conduct
the operations of the Xxx-NMBC Stations and the Acquired Companies' Stations in
the ordinary course of business and consistent with past practices, (ii) use
commercially reasonable efforts to preserve intact the goodwill of the Xxx-NMBC
Stations and the Acquired Companies' Stations and the current relationships of
the Xxx-NMBC Stations and each Acquired Company with its officers, employees,
customers, suppliers and others with significant and recurring business dealings
with the Xxx-NMBC Stations and each Acquired Company, (iii) use commercially
reasonable efforts to maintain all of the Insurance Policies and all of the
Licenses and FCC Licenses that are necessary for Xxx-NMBC and each Acquired
Company to carry on the Xxx-NMBC Stations and Acquired Companies' Stations in
the manner conducted by such company as of the date hereof, (iv) maintain the
books of account and records of the Xxx-NMBC Stations and each Acquired Company
in the usual, regular and ordinary manner and consistent with past practices,
and (v) not take any action that would result in a breach of any of the
representations and warranties of Xxx-NMBC and each Acquired Company contained
in Article 4 hereof.
(b) At all times during the period commencing upon the execution and
delivery hereof by each of the parties hereto and terminating upon the earlier
to occur of the Closing or the termination of this Agreement pursuant to and in
accordance with the terms of Section 9.1 hereof, unless the Purchaser shall
otherwise consent in writing (which consent shall not be unreasonably withheld
or delayed), and except as otherwise set forth in Schedule 6.1 hereto, Xxx-NMBC
shall not, and shall cause each of the Acquired Companies not to, take, or cause
to be taken, any of the following actions to the extent such actions relate to
any of the Xxx-NMBC Stations, any Acquired Company or any of the Acquired
Companies' Stations:
(i) merge with or into, or consolidate with, any other Person;
provided, however, that nothing in this Section 6.1(b)(i) shall prohibit or
otherwise restrain Xxx-NMBC from entering into an agreement with another Person
which is an Affiliate of Xxx to merge with or into, or consolidate with, such
Person, provided that, if Xxx and NMBC do not survive the consummation of such
merger or consolidation, such Affiliate shall assume and agree to perform all of
the obligations of Xxx-NMBC under this Agreement pursuant to an assumption
agreement satisfactory to Purchaser within its reasonable judgment.
(ii) change or agree to rearrange in any material respect the
character of any Acquired Company;
(iii) adopt, enter into or amend any arrangement which is, or
would be, an Assumed Plan of the Xxx-NMBC Stations or Benefit Plan of any
Acquired Company except for any amendment to any Benefit Plan offered to all
employees of Xxx or unless otherwise required by applicable Law or this
Agreement;
(iv) knowingly waive any right of material value;
(v) make any change in the accounting methods or practices of
such company, or make any changes in depreciation or amortization policies or
rates adopted by such company;
(vi) make any material write-down of inventory or material write
off as uncollectible of accounts receivable;
(vii) increase any wage, salary, bonus or other direct or
indirect compensation payable or to become payable to any of the Employees, or
make any accrual for or commitment or agreement to make or pay the same, other
than increases in wages, salary, bonuses or other direct or indirect
compensation made in the ordinary course of business consistent with past
practice, and those required by any existing Contract or Law;
(viii) enter into any transactions with any of its shareholders,
officers, directors or employees, or any Affiliate of any of the foregoing,
other than employment arrangements made in the ordinary course of business
consistent with past practice;
(ix) except as required by the Additional Compensation
Agreements disclosed in Schedule 4.10 hereto, make any payment or commitment to
pay any severance or termination pay to any Employee or any independent
contractor, consultant, agent or other representative of the Xxx-NMBC Stations
and each Acquired Company, other than payments or commitments to pay such
Employees in the ordinary course of business consistent with past practice;
(x) (1) other than office leases entered into in the ordinary
course of business, enter into any real property lease (as lessor or lessee);
(2) sell, abandon or make any other disposition of any of the assets or
properties of such company other than in the ordinary course of business
consistent with past practice; or (3) grant or incur any Encumbrance on any of
the assets or properties of such company other than Permitted Encumbrances;
(xi) except in the ordinary course of business and except for
Excluded Liabilities of the Xxx-NMBC Stations, incur or assume any debt,
obligation or Liability pursuant to a Material Contract;
(xii) make any acquisition of all or any part of the capital
stock or all or substantially all of the assets, properties or business of any
other Person;
(xiii) pay, directly or indirectly, any of its Liabilities
before the same become due in accordance with its terms or otherwise than in the
ordinary course of business;
(xiv) enter into any commitments to make capital expenditures in
an aggregate amount materially exceeding its approved capital expenditure budget
for the current fiscal year or, with respect to any period subsequent to the
current fiscal year, the capital expenditure budget approved by Xxx-NMBC in good
faith and consistent with past practice;
(xv) amend in any material respect the charter or the bylaws of
any Acquired Company;
(xvi) issue, transfer, sell or dispose of, authorize or agree to
the issuance, transfer, sale or disposition of (whether through the issuance or
granting of options, rights, warrants, or otherwise), any shares of capital
stock or any voting securities of any Acquired Company or any options, rights,
warrants or other securities convertible into or exchangeable or exercisable for
any such shares of capital stock or voting securities of such Acquired Company
or amend any of the terms of any securities or agreements relating to such
capital stock or voting securities outstanding on the date hereof;
(xvii) acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or substantial portion
of the assets of, any business or any Person or otherwise acquire or agree to
acquire any materials assets, in any such case, except in the ordinary course of
business;
(xviii) sell, lease, license, encumber or otherwise dispose of
or agree to sell, license, encumber or otherwise dispose of, any of such
Acquired Company's material assets other than in the ordinary course of business
consistent with past practice or pursuant to existing contractual relationships
disclosed on Schedule 6.1(b)(xviii) hereto;
(xix) enter into or renew any contract or agreement to provide
or grant any party with a non-terminable exclusive right to develop, host,
service, provide or operate any Xxx-NMBC Station's or Acquired Company Station's
e-mail or internet site or portion thereof;
(xx) terminate without cause any employee of a Xxx-NMBC Station
or an Acquired Company Station who is a party to an employment contract with Xxx
as disclosed in Schedule 4.10(a) hereto; or
(xxi) voluntarily enter into any collective bargaining agreement
applicable to any employees of the Xxx-NMBC Stations or of the Acquired
Companies or otherwise voluntarily recognize any union as the bargaining
representative of any such employees; or
(xxii) amend, enter into, renew or extend any network
affiliation agreement, Scripps-Xxxxxx-HGTV Contract, CNN Contract, AP Contract,
programming Contract with a duration exceeding one (1) year, national media
advertising representation contract, talent agreement (unless for a term of not
more than one (1) year and total compensation of not more than One Hundred
Thousand Dollars ($100,000)), employment agreement (other than nonsolicitation,
noncompetition or nondisclosure agreement), antenna or transmitter lease, or any
agreement involving payments or other consideration having a value of more than
Twenty-Five Thousand Dollars ($25,000) that requires any of the Xxx-NMBC
Stations or the Acquired Companies to acquire goods or services exclusively from
a single supplier or provider or prohibiting any of the Xxx-NMBC Stations or
Acquired Companies from providing certain goods or services to any Person other
than a specified Person unless terminable on thirty (30) days notice without
further obligation or penalty.
(c) Notwithstanding anything to the contrary set forth in this Section
6.1 or elsewhere in this Agreement, (i) Xxx-NMBC shall be permitted, without
obtaining the consent or other approval of the Purchaser, to enter into, perform
its obligations under, and consummate the transactions contemplated by, any
existing or new agreements or other arrangements pursuant to which such company
shall sell, transfer or otherwise dispose of any of its assets other than the
Purchased Assets of the Xxx-NMBC Stations or shares of the stock or assets or
properties of any Acquired Company, it being expressly acknowledged and agreed
by each of the parties hereto that the foregoing shall include the right to
distribute the proceeds from any such sale, transfer or other disposition to the
shareholders of Xxx or NMBC without obtaining the consent or other approval of
the Purchaser, (ii) each Acquired Company shall be permitted, without obtaining
the consent or other approval of the Purchaser, to declare, issue, make or pay
any cash dividend or other cash distribution to its stockholders prior to the
Closing or make a dividend or distribution to its stockholders of any
intercompany receivables between Xxx, on the one hand, and any of the Acquired
Companies on the other, prior to the Closing, (iii) Xxx-NMBC and each Acquired
Company shall be permitted prior to the Closing, without obtaining the consent
or other approval of the Purchaser, the right to transfer any of the Purchased
Assets of the Xxx-NMBC Stations and the Assumed Liabilities of the Xxx-NMBC
Stations or any of the Acquired Companies' Common Stock, to any Affiliate
thereof and substitute such Affiliate as a party to this Agreement, provided
that (A) any such Affiliate shall assume and agree to perform all of the
obligations of Xxx-NMBC under this Agreement pursuant to an assumption agreement
satisfactory to Purchaser within its reasonable judgment, and (B) Xxx and NMBC
shall remain primarily and jointly and severally liable for the performance and
observance of all such obligations, and (iv) Xxx shall not be otherwise
prohibited from taking any action relating to the newspaper or online
information business or any activity related thereto.
6.2 Access and Information.
(a) Subject to the terms of the Confidentiality Agreement, at all times
during the period commencing upon the execution and delivery hereof by each of
the parties hereto and terminating upon the earlier to occur of the Closing or
the termination of this Agreement pursuant to and in accordance with the terms
of Section 9.1 hereof, Xxx-NMBC and each Acquired Company shall permit the
Purchaser and its authorized agents and representatives to have reasonable
access, upon reasonable notice and during normal business hours, to all of the
Employees, assets and properties and all relevant books, records and documents
of or relating primarily to the Xxx-NMBC Stations and each Acquired Company and
the Purchased Assets of the Xxx-NMBC Stations and the assets of the Acquired
Companies, and shall furnish to the Purchaser such information and data,
financial records and other documents relating thereto as the Purchaser may
reasonably request. Xxx-NMBC and each Acquired Company shall permit the
Purchaser and its agents and representatives reasonable access to such company's
accountants, auditors and suppliers for reasonable consultation or verification
of any information obtained by the Purchaser during the course of any
investigation conducted pursuant to this Section 6.2 relating primarily to the
Xxx-NMBC Stations and each Acquired Company, and shall use reasonable efforts to
cause such Persons to cooperate with the Purchaser and its agents and
representatives in such consultations and in verifying such information.
(b) The transactions contemplated hereby are expressly conditioned upon
each FCC Transfer Application becoming a Final Order, and nothing contained in
this Agreement shall give Purchaser the right to control the programming,
equipment, personnel or operations of the Xxx-NMBC Stations and the Acquired
Companies' Stations prior to the Closing.
6.3 Confidentiality. The terms of the Confidentiality Agreement are hereby
incorporated herein by reference and shall continue in full force and effect
from and after the Closing in accordance with the terms thereof, such that the
information obtained by any party hereto, or its officers, employees, agents or
representatives, during any investigation conducted pursuant to Section 6.2
hereof, in connection with the negotiation, execution and performance of this
Agreement, the consummation of the transactions contemplated hereby, or
otherwise, shall be governed by the terms set forth in the Confidentiality
Agreement.
6.4 Further Actions.
(a) Upon the terms and subject to the conditions set forth in this
Agreement (including the terms of Section 6.4(b) hereof), Xxx-NMBC and each
Acquired Company and the Purchaser shall each use their respective commercially
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, and to assist and cooperate with the other party
hereto in doing, all things necessary, proper or advisable under applicable Laws
to consummate the transactions contemplated hereby, including, without
limitation:
(i) obtaining all necessary Material Licenses, including the FCC
Licenses, actions or nonactions, waivers, consents, approvals, authorizations,
qualifications and other orders of any Governmental Authorities with competent
jurisdiction over the transactions contemplated hereby;
(ii) obtaining all necessary consents, approvals or waivers from
third parties;
(iii) defending any lawsuits or other Actions, challenging this
Agreement or the consummation of the transactions contemplated hereby, including
seeking to have vacated or reversed any stay or temporary restraining order
entered by any Governmental Authority prohibiting or otherwise restraining the
consummation of the transactions contemplated hereby; and
(iv) executing and delivering any additional instruments,
certificates and other documents necessary or advisable to consummate the
transactions contemplated hereby and to fully carry out the purposes of this
Agreement.
(b) Without limiting the generality of the foregoing, Xxx-NMBC and each
Acquired Company, and the Purchaser hereby agree to proceed diligently to
prepare and file, no later than ten (10) days after the date of this Agreement
(or as soon as practicable thereafter if additional time is necessary to
negotiate the spin-off described in Section 6.4(c)), as follows:
(i) any notification, transfer application and report form and
related material required under the HSR Act and to provide promptly to
Governmental Authorities with regulatory jurisdiction over enforcement of any
applicable antitrust Laws all information and documents requested by any such
Governmental Authorities or necessary, proper or advisable to permit
consummation of the transactions contemplated hereby;
(ii) the FCC Transfer Application, and, thereafter, to cooperate
with each other and use reasonable, diligent and good faith efforts to obtain
the FCC Final Order and the parties hereto shall make good faith efforts to
answer FCC inquiries and third-party objections, if any, with respect to the FCC
Transfer Application, and to avoid designation for hearing; and
(iii) any notification, transfer application and report form and
related material required under applicable Law and to provide promptly to
Governmental Authorities with regulatory jurisdiction over enforcement of any
applicable Laws all information and documents requested by any such Governmental
Authorities or necessary, proper or advisable to permit consummation of the
transactions contemplated hereby.
(c) Purchaser shall use its commercially reasonable efforts to obtain a
temporary waiver of the FCC "Local Television Multiple Ownership" rule to
permit, for a period following consummation of the transactions contemplated by
this Agreement, common ownership of (i) the television stations in the Honolulu
television market currently owned by Purchaser ("Purchaser's Hawaii Stations")
and (ii) the television stations in the Honolulu television market that are the
subject of this Agreement ("Xxx-NMBC's Hawaii Stations") . In the event that, as
of the date which is sixty (60) days following the date of filing of the FCC
Transfer Application, communications counsel for Xxx-NMBC, after due evaluation,
determines in such counsel's reasonable and good faith judgment that such waiver
is not likely to be granted or that FCC consent to the FCC Transfer Application
will be significantly delayed due to the pending waiver request, Purchaser (i)
shall, within fifteen (15) days after receipt of a written request by Xxx-NMBC,
file one or more applications (the "Spin-off Applications") with the FCC to
assign the licenses of either Purchaser's Hawaii Stations or Xxx-NMBC's Hawaii
Stations, at Purchaser's election, to either (A) a qualified trustee under a
trust which will permit FCC approval of the FCC Transfer Application or (B) a
legally and financially qualified third-party purchaser with which Purchaser
shall have entered into a definitive agreement for the purchase and sale of
either Purchaser's Hawaii Stations or the Xxx-NMBC Hawaii Stations; and (ii) in
either case, shall prosecute such application with due diligence. Purchaser
shall be solely responsible for all costs and expenses related to the Spin-off
Applications. Xxx-NMBC shall, when and as reasonably requested by Purchaser,
cooperate in the preparation, filing, and prosecution of the Spin-off
Applications. No assignment of licenses to a trustee or to any other third party
shall reduce or modify Purchaser's obligation to pay the full amount of the Cash
Payment pursuant to this Agreement.
Purchaser and Xxx-NMBC and each Acquired Company, hereby further agree to use
their respective commercially reasonable best efforts to (1) respond to any
request of any Governmental Authority for information, (2) contest and resist
any Action, including any legislative, administrative or judicial Action, and
have vacated, lifted, reversed or overturned, any Governmental Order (whether
temporary, preliminary or permanent) that restricts, prevents or prohibits the
consummation of the transactions contemplated hereby, including by using all
legal efforts to vigorously pursue all available avenues of administrative and
judicial appeal and all available legislative action, and (3) in the event that
any permanent or preliminary injunction or other Governmental Order is entered
or becomes reasonably foreseeable to be entered in any proceeding that would
make consummation of the transactions contemplated hereby in accordance with the
terms of this Agreement unlawful or that would prohibit, prevent, delay or
otherwise restrain the consummation of the transactions contemplated hereby, to
cause the relevant Governmental Authorities to vacate, modify or suspend such
injunction or order so as to permit the consummation of the transactions
contemplated hereby prior to the Termination Date.
6.5 Fulfillment of Conditions by Xxx-NMBC and the Acquired Companies. Xxx-NMBC
and each Acquired Company shall not knowingly take or cause to be taken, or fail
to take or cause to be taken, any action that would cause the conditions to the
obligations of such company or the Purchaser to consummate the transactions
contemplated hereby to fail to be satisfied or fulfilled at or prior to the
Closing, including by taking or causing to be taken, or failing to take or cause
to be taken, any action that would cause the representations and warranties made
by each company in Article 4 hereof to fail to be true and correct as of the
Closing in all material respects. Xxx-NMBC and each Acquired Company shall take,
or cause to be taken, all commercially reasonable actions within its power to
cause to be satisfied or fulfilled, at or prior to the Closing, the conditions
precedent to the Purchaser's obligations to consummate the transactions
contemplated hereby as set forth in Section 7.1 hereof.
6.6 Fulfillment of Conditions by the Purchaser. The Purchaser shall not
knowingly take or cause to be taken, or fail to take or cause to be taken, any
action that would cause the conditions to the obligations of Xxx-NMBC and each
Acquired Company or the Purchaser to consummate the transactions contemplated
hereby to fail to be satisfied or fulfilled, including by taking or causing to
be taken, or failing to take or cause to be taken, any action that would cause
the representations and warranties made by the Purchaser in Article 5 hereof to
fail to be true and correct as of the Closing in all material respects. The
Purchaser shall take, or cause to be taken, all commercially reasonable actions
within its power to cause to be satisfied or fulfilled, at or prior to the
Closing, the conditions precedent to the obligations of such company to
consummate the transactions contemplated hereby as set forth in Section 7.2
hereof. Purchaser will not cause any Acquired Company to take any action on the
Closing Date that is not in the ordinary course of business of such company.
6.7 Publicity. Xxx-NMBC and any Acquired Company and the Purchaser shall
cooperate with each other in the development and distribution of all news
releases and other public disclosures relating to the transactions contemplated
by this Agreement. Neither Xxx-NMBC or each Acquired Company nor the Purchaser
shall issue or make, or allow to have issued or made, any press release or
public announcement concerning the transactions contemplated by this Agreement
without the consent of the other party hereto, except as otherwise required by
applicable Law or stock exchange rules, but in any event only after giving the
other party hereto a reasonable opportunity to comment on such release or
announcement in advance, consistent with such applicable legal requirements.
6.8 Transaction Costs. The Purchaser shall pay all transaction costs and
expenses (including legal, accounting and other professional fees and expenses
and other fees described in Section 5.5 hereof) that it incurs in connection
with the negotiation, execution and performance of this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, any and all costs and expenses incurred in connection with the
spin-off of one of the Honolulu television stations pursuant to Section 6.4(c).
Xxx-NMBC and each Acquired Company shall pay all transaction costs and expenses
(including legal, accounting and other professional fees and expenses and other
fees described in Section 4.21 hereof) that it incurs in connection with the
negotiation, execution and performance of this Agreement and the consummation of
the transactions contemplated hereby. Notwithstanding the foregoing and anything
to the contrary contained in this Agreement, Xxx and the Purchaser shall share
equally any filing fees in connection with the HSR Act or FCC Transfer
Application and any real estate transfer, sales, use and deed Taxes, or refunds
thereof, and the fees and costs of recording or filing all applicable
conveyancing instruments associated with the transfer of the Purchased Assets of
the Xxx-NMBC Stations from Xxx-NMBC to the Purchaser pursuant to this Agreement
or the Acquired Companies' Common Stock from Xxx to Purchaser pursuant to this
Agreement. Xxx-NMBC and the Purchaser shall cooperate in the preparation,
execution and filing of all Tax Returns regarding any real estate transfer
Taxes, which become payable as a result of the transfer of the Purchased Assets
of the Xxx-NMBC Stations from such company to the Purchaser pursuant to this
Agreement or the Acquired Companies' Common Stock from Xxx to Purchaser pursuant
to this Agreement.
6.9 Employees and Employee Benefit Matters.
(a) The Purchaser shall offer employment as of the Closing Date to all
of the Employees. As of the Closing Date, the Purchaser shall employ each of the
Employees whose employment is not covered by a collective bargaining agreement
and who accepts the Purchaser's offer of employment ("Transferred Non-Union
Employees"). Purchaser shall cause all Transferred Non-Union Employees as of the
Closing Date to be eligible to participate in its "employee welfare benefit
plans" and "employee pension benefit plans" (as defined in Section 3(1) and 3(2)
of ERISA (respectively) of Purchaser in which similarly situated employees of
Purchaser are generally eligible to participate from time to time ("Purchaser's
Plans"), and all Transferred Non-Union Employees shall be eligible for coverage
immediately after the Closing Date (and shall not be excluded from coverage on
account of any pre-existing condition) under Purchaser's Plans constituting
employee welfare benefit plans to the extent permitted under such plans with
respect to the Transferred Non-Union Employees. Following the Closing Date,
Purchaser shall cause the Purchaser's Plans to recognize any prior accrued
service credit, credit towards satisfying deductible expense requirements and
out-of-pocket expense limits of Transferred Non-Union Employees for purposes of
Purchaser's Plans to the extent such prior service credits and limits are
recognized by Purchaser or the Purchaser's Plans for similarly situated
employees of Purchaser (including, but not limited to, eligibility to
participate and vesting, but excluding benefit accruals). As soon as practicable
following the Closing Date, Purchaser shall make available to the Transferred
Non-Union Employees Purchaser's 401(k) Plan in accordance with the terms and
provisions of such plan. Xxx-NMBC shall cause to be transferred to Purchaser's
401(k) Plan, in cash, all of the individual account balances of the Transferred
Non-Union Employees under the 401(k) plan in which the Employees now
participate. Notwithstanding any other provision of this Agreement, Employees
who become employed by the Purchaser as of the Closing who are covered by a
collective bargaining agreement on and after the Closing (the "Transferred Union
Employees" and, collectively with the Transferred Non-Union Employees, the
"Transferred Employees") shall receive benefits in accordance with the terms of
such agreement. Except for the employment contracts listed in Schedule 4.10,
nothing in this Agreement is intended to nor shall guarantee employment for any
Transferred Non-Union Employees or Transferred Union Employees for any length of
time after the Closing Date.
(b) Immediately prior to the Closing Date, Xxx-NMBC shall cause each of
the Acquired Companies to cease to be a participating employer under, and
terminate its sponsorship of, each Benefit Plan. Except as otherwise provided in
Section 6.9(c), Xxx-NMBC shall pay, discharge and be solely responsible for all
Liabilities which arise or become payable under any Benefit Plan as a result of,
or in connection with, the termination of any Employee before, upon or after
Closing, including, without limitation, all severance or termination pay and all
accrued vacation, salary, wages and other compensation payments or benefits, if
any, which arise or become payable under any Benefit Plan as a result of or in
connection with such termination, except to the extent any such Liabilities are
included as Assumed Liabilities of the Xxx-NMBC Stations or Acquired Companies
Assumed Liabilities. Purchaser shall pay, discharge and be solely responsible
for all Liabilities which arise or become payable as a result of or in
connection with Purchaser's employment of any Transferred Employees upon Closing
or Purchaser's termination of any Transferred Employees after Closing,
including, without limitation, all severance or termination pay and all accrued
vacation, salary, wages and other compensation payments or benefits under or
pursuant to any employee benefit plan of Purchaser. Purchaser shall not,
however, assume or be obligated to pay or perform any Liabilities under any
Benefit Plans (including, but not limited to, any stay bonus or severance
policy, plan, arrangement or benefit), except that (i) Purchaser shall provide
vacations to Transferred Employees to the extent such vacations are accrued and
included as either (A) liabilities of the Xxx-NMBC Stations in the determination
of the Working Capital of the Xxx-NMBC Stations or (B) the Acquired Companies
Closing Liabilities, and (ii) Purchaser shall assume and agree to perform the
employer's obligations under the employment contracts included in the Contracts
of the Xxx-NMBC Stations or the Acquired Companies and listed in Schedule
4.10(a) hereto to the extent such obligations arise during and are attributable
to any period after Closing.
(c) Notwithstanding any other provisions of this Section 6.9, upon
consummation of the Closing, Purchaser shall (i) recognize the union which is a
party to the collective bargaining agreement set forth in Schedule 4.20 hereto,
and (ii) assume and be responsible for the obligations of Xxx-NMBC under such
collective bargaining agreement to the extent such obligations arise during and
are attributable to any period after Closing.
(d) Purchaser acknowledges and agrees that Purchaser's obligations
pursuant to this Section 6.9 are in addition to, and not in limitation of,
Purchaser's assumption of the employer's obligations under the employment
agreements included in the Contracts of the Xxx-NMBC Stations or the Acquired
Companies' Stations and listed in Schedule 4.10(a) hereto to the extent such
obligations arise during and are attributable to any period after Closing.
(e) The covenants and agreements set forth in this Section 6.9 shall be
solely for the benefit of, and shall only be enforceable by, the parties to this
Agreement and their permitted assigns. Without limiting the generality of the
foregoing, nothing in this Agreement shall provide or be construed to provide
any Employees with any rights under this Agreement, and no Person, other than
the parties to this Agreement, is or shall be entitled to bring any action to
enforce any provision of this Agreement.
(f) Nothwithstanding anything to the contrary contained to this
Agreement, in the event that after Closing, (i) Purchaser or an Affiliate of
Purchaser terminates any employee specified on Schedule 6.9(f) (or any such
employee terminates his or her employment) and Purchaser or its Affiliate pays
such terminated employee severance in connection with such termination in
accordance with the employee's employment agreement in effect as of the Closing,
and (ii) Xxx or any Affiliate of Xxx xxxxx such terminated employee within two
(2) years after such termination, Xxx shall promptly reimburse Purchaser or its
Affiliate for the amount of such severance paid by Purchaser or its Affiliate.
6.10 Interdivisional Agreements. Unless otherwise requested by the Purchaser in
writing, prior to Closing, Xxx-NMBC and any Acquired Company shall terminate,
without any continuing Liability to the Xxx-NMBC Stations and the Acquired
Companies resulting therefrom, all agreements between any division, Affiliate or
Subsidiary of such company not related to the Xxx-NMBC Stations and the Acquired
Companies, on the one hand, and the division, Affiliate or Subsidiary of the
Xxx-NMBC Stations and each Acquired Company, all of which are described in
Schedule 6.10 hereto.
6.11 Schedules. Xxx-NMBC and each Acquired Company shall have the right from
time to time after the date hereof to deliver written updates of the Schedules
attached hereto (the "Schedules") to reflect changes in the business condition
of the Xxx-NMBC Stations and each Acquired Company that occur or arise after the
date hereof until the date of the Closing; provided, however, that such updates
to the Schedules shall reflect matters consistent with the covenants applicable
to Xxx-NMBC and each Acquired Company pursuant to the terms hereof. Such updated
Schedules shall be promptly furnished to Purchaser. Purchaser shall have ten
(10) days after receipt of each updated Schedule within which to accept or
object to such updated Schedule. In the event Xxx-NMBC or any Acquired Company
delivers an updated Schedule to Purchaser prior to the Closing and Purchaser
does not object within ten (10) days after receipt of such update, the
disclosure in such updated Schedule shall be deemed to amend and supplement the
representations and warranties of Xxx-NMBC and the Acquired Companies and the
applicable Schedule hereto, and in such event Purchaser shall not have the right
to be indemnified for any matter contained in such updated Schedule. If
Purchaser objects to any updated or revised Schedule, Xxx-NMBC or the Acquired
Company shall have thirty (30) days in which to satisfy Purchaser's objection.
If the objection cannot reasonably be cured within thirty (30) days despite good
faith efforts to do so, Xxx-NMBC or the Acquired Company shall have a reasonable
period of time necessary to cure the objection. If Xxx-NMBC or the Acquired
Company does not cure an objection of Purchaser to a revised or updated
Schedule, and the objection is material to the assets, business, operations,
results of operations or financial condition of any Xxx-NMBC Station or Acquired
Company Station, Purchaser may elect to close and pursue the remedies, if any,
under Article 8 of this Agreement or pursue its remedies under Article 9 hereof;
provided that if such objection is not material to the assets, business,
operations, results of operations or a financial condition of any Xxx-NMBC
Station or Acquired Company Station, such objection shall not relieve Purchaser
of the obligation to close under this Agreement, but Purchaser shall retain its
rights under Article 8 with respect to such objection if such objection
constitutes a breach of this Agreement by Xxx-NMBC. Nothing contained in this
Section 6.11 shall be construed as limiting any party's right to terminate this
Agreement.
6.12 Retention of and Access to Records. From and after the Closing, the
Purchaser shall preserve, in accordance with the normal document retention
policy of the Xxx-NMBC Stations and each Acquired Company, all books and records
transferred by Xxx-NMBC and each Acquired Company to the Purchaser pursuant to
this Agreement. As soon as practicable following the Closing, the Purchaser
shall deliver a copy of all books and records of Xxx-NMBC relating to the
Xxx-NMBC Stations and each Acquired Company in the possession of Purchaser
pursuant hereto to Xxx in sufficient detail to enable Xxx to prepare Xxx'x
financial statements, the Statement of Closing Adjusted Net Worth of the
Acquired Companies, the Statement of Working Capital of the Xxx-NMBC Stations
and all Tax Returns of Xxx-NMBC and each Acquired Company relating to periods
ending on or prior to the Closing Date. In addition to the foregoing, from and
after the Closing, the Purchaser shall afford to Xxx, and its counsel,
accountants and other authorized agents and representatives, during normal
business hours, reasonable access to the employees, books, records and other
data relating to the Xxx-NMBC Stations and each Acquired Company with respect to
periods prior to the Closing, and the right to make copies and extracts
therefrom, to the extent that such access may be reasonably required by the
requesting party (a) to facilitate the investigation, litigation and final
disposition of any claims which may have been or may be made against any such
party or Person, or its Affiliates, (b) for the preparation of Tax Returns and
audits, and (c) for any other reasonable business purpose.
6.13 Tax Matters
(a) Xxx-NMBC will include the income of the Xxx-NMBC Stations and each
Acquired Company (pursuant to Section 1502 of the Code ) on Xxx'x consolidated
federal income Tax Returns for all periods through the Closing Date and pay any
federal income Taxes attributable to such income. The Purchaser shall cause each
Acquired Company to furnish Tax information to Xxx for inclusion in Xxx'x
federal consolidated income Tax Return for the period which includes the Closing
Date in accordance with the Xxx-NMBC Stations and each Acquired Company's past
custom and practice. Xxx will take no position on such returns that relate to
the Xxx-NMBC Stations and each Acquired Company that would adversely affect the
Xxx-NMBC Stations, and each Acquired Company after the Closing Date except to
the extent allowable by Law and consistent with past custom and practice. The
income and any Tax credits of the Xxx-NMBC Stations and each Acquired Company
will be apportioned to the period up to and including the Closing Date and the
period after the Closing Date by closing the books of the Xxx-NMBC Stations and
each Acquired Company as of the end of the Closing Date.
(b) All refunds of Taxes (including interest thereon) with respect to
taxable periods of each Acquired Company for which Xxx is responsible for the
payment of liabilities for Taxes which are received by each Acquired Company or
credited against liabilities for Taxes of any such Acquired Company for periods
for which Xxx is not so responsible (or against any other Liability for which
Xxx is not responsible) shall be paid in cash by wire transfer of immediately
available funds by Purchaser or each Acquired Company (as determined by
Purchaser) to Xxx promptly after receipt. Amounts paid pursuant to this Section
6.13(b) shall be treated as additional Stock Purchase Price for the shares of
the Acquired Companies' Common Stock.
(c) The Purchaser agrees that (i) on the Closing Date, all of the shares
of the Acquired Companies' Common Stock shall be acquired by a domestic
corporation, (ii) such corporation shall not make an election for any Acquired
Company pursuant to Section 338(g) of the Code, (iii) Purchaser, not Xxx, shall
be responsible for all Taxes arising from any sale or disposition of the assets
of each Acquired Company in any transaction (other than a deemed sale as a
result of the Section 338(h)(10) election referred to in the following clause
(iv)) that is consummated after the Closing, and (iv) at the Purchaser's request
and within the time required under Section 338(h)(10) of the Code and applicable
IRS regulations, Xxx shall make a joint election solely as to KOIN on IRS Form
8023 to enable the Purchaser to receive the benefits afforded under said Section
338(h)(10), provided that the contents of such election shall be reasonably
satisfactory to Xxx and Purchaser.
6.14 Interim Financial Statements. During the period commencing on October 1,
1999 and ending on the Closing Date, Xxx shall deliver to the Purchaser, as soon
as practicable after the end of each month in such period, an unaudited interim
consolidated balance sheet of the Xxx-NMBC Stations and each Acquired Company,
and an unaudited interim balance sheet of each Xxx-NMBC Station and each
Acquired Company Station, as of the end of such month, and the related
consolidated statement of income for the Xxx-NMBC Stations and the Acquired
Companies' Stations, and the related statement of income of each Xxx-NMBC
Station and each Acquired Company Station, in each case for the portion of the
fiscal year ended as of the end of such month. All such statements shall be
prepared in a manner consistent with the Financial Statements.
6.15 Audited Financial Statements. Xxx-NMBC recognizes that Purchaser is a
publicly reporting company and agrees that Purchaser shall be entitled at
Purchaser's expense to cause audited and unaudited financial statements of the
Xxx-NMBC Stations and the Acquired Companies to be prepared for such periods and
filed with the Securities and Exchange Commission, and included in a prospectus
distributed to prospective investors, as required by Law applicable to Purchaser
as a publicly reporting company or registrant. Xxx-NMBC agrees to cooperate with
Purchaser and the auditing accountants as reasonably requested by Purchaser in
connection with the preparation and filing of such financial statements,
including providing a customary management representation letter in the form
prescribed by generally accepted auditing standards and shall make a reasonable
request to obtain the consent of Xxx-NMBC's independent accounting firm to
permit Purchaser and Purchaser's auditors to have access to such firm's
workpapers.
6.16 Assignments of Network Affiliation Agreements. Promptly following the
execution of this Agreement, Xxx and the Purchaser shall jointly request and use
their respective commercially reasonable efforts to obtain the written consent,
in form and substance satisfactory to Purchaser within its reasonable judgment,
of each broadcast network with which Xxx-NMBC or the Acquired Companies has an
Affiliation Agreement to the assignment or transfer of control of such
Affiliation Agreement to the Purchaser, provided that neither Xxx nor Purchaser
shall be required to pay or provide material consideration to obtain such
consent. If such written consent from each such broadcast network is not
obtained within sixty (60) days after application therefor, then Purchaser may,
prior to the expiration of such sixty-day period, give notice of election to
terminate this Agreement without further obligation by either party to the
other. If each such consent is not obtained and this Agreement is not
terminated, Purchaser shall be deemed to have waived the requirement to secure
any such consent of a broadcast network as a condition precedent to the closing
of the transactions contemplated by this Agreement.
ARTICLE 7
CLOSING CONDITIONS
7.1 Conditions to Obligations of the Purchaser. The obligations of the Purchaser
to consummate the transactions contemplated by this Agreement are subject to the
satisfaction or fulfillment at or prior to the Closing of the following
conditions, any of which may be waived in whole or in part by the Purchaser in
writing:
(a) All representations and warranties of Xxx-NMBC and any Acquired
Company contained in this Agreement shall be true and correct in all material
respects at and as of the Closing with the same effect as though such
representations and warranties were made at and as of the Closing (except for
changes permitted or contemplated by this Agreement and except for any
representation or warranty that is expressly made as of a specified date, which
shall be true and correct in all material respects as of such specified date
only).
(b) Xxx-NMBC and each Acquired Company shall have performed and complied
in all material respects with all the covenants and agreements required by this
Agreement to be performed or complied with by it at or prior to the Closing.
(c) All applicable waiting periods (and any extensions thereof) under
the HSR Act shall have expired or otherwise been terminated.
(d) The FCC shall have granted its consent to the FCC Transfer
Application, such consent shall have become a Final Order, and any conditions
set forth in such consent shall have been satisfied.
(e) There shall be in effect no Law or injunction issued by a court of
competent jurisdiction making illegal or otherwise prohibiting or restraining
the consummation of the transactions contemplated by this Agreement.
(f) Xxx-NMBC and each Acquired Company shall have delivered to the
Purchaser all of the certificates, instruments and other documents required to
be delivered by such company at or prior to the Closing pursuant to Section 3.2
hereof.
(g) Xxx-NMBC shall have obtained prior to Closing the written consents
or waivers to the transactions contemplated by this Agreement, in form
reasonably satisfactory to Purchaser's counsel and without any modification or
condition materially adverse to Purchaser or any of the Xxx-NMBC Stations or
Acquired Companies' Stations, which are required under (i) each Material
Contract for each transmitter, antenna (including each satellite and translator
antenna or transmitter), office and studio site, (ii) unless waived under or by
reason of the provisions of Section 6.16, the network affiliation agreement for
each of the Xxx-NMBC Stations and each of the Acquired Companies' Stations, and
(iii) the programming agreements identified on Schedule 7.1(g).
7.2 Conditions to Obligations of Xxx-NMBC and Acquired Companies. The
obligations of Xxx-NMBC and each Acquired Company to consummate the transactions
contemplated by this Agreement are subject to the satisfaction or fulfillment at
or prior to the Closing of the following conditions, any of which may be waived
in whole or in part by Xxx in writing:
(a) All representations and warranties of the Purchaser contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing with the same effect as though such representations and warranties
were made at and as of the Closing (except for changes permitted or contemplated
by this Agreement and except for any representation or warranty that is
expressly made as of a specified date, which shall be true and correct in all
material respects as of such specified date only).
(b) The Purchaser shall have performed and complied in all material
respects with the covenants and agreements required by this Agreement to be
performed or complied with by it at or prior to the Closing.
(c) All applicable waiting periods (and any extensions thereof) under
the HSR Act shall have expired or otherwise been terminated.
(d) The FCC shall have granted its consent to the FCC Transfer
Application.
(e) There shall be in effect no Law or injunction issued by a court of
competent jurisdiction making illegal or otherwise prohibiting or restraining
the consummation of the transactions contemplated by this Agreement.
(f) The Purchaser shall have delivered to Xxx the Cash Payment and all
of the certificates, instruments and other documents required to be delivered by
the Purchaser at or prior to the Closing pursuant to Section 3.3 hereof.
ARTICLE 8
INDEMNIFICATION
8.1 Obligations of Xxx and NMBC. Subject to the limitations set forth herein,
Xxx agrees to and shall indemnify and hold Purchaser, and its directors,
officers, employees, Affiliates (including the Acquired Companies if Closing
occurs), agents and assigns harmless from and against any and all Losses
resulting from, based upon or arising out of, directly or indirectly:
(a) Any breach of any representation or warranty made by Xxx or NMBC in
or pursuant to this Agreement or any Xxx Document; or
(b) Any nonfulfillment or breach of any covenant or agreement of Xxx or
NMBC under this Agreement or any Xxx Document; or
(c) All Benefit Plans, including but not limited to (i) any claim
arising under any Benefit Plan in connection with termination of any Employee
before, upon or after Closing; (ii) termination of any Benefit Plan, (iii)
termination of any Employee's participation in any Benefit Plan, (iv) withdrawal
of any Acquired Companies from any Benefit Plan, or (v) the obligation under any
Benefit Plan to pay or provide any Employee a bonus, severance, or any other
benefit as a result of or in connection with the transactions under this
Agreement; except in each case to the extent included as Acquired Companies
Closing Liabilities, or as liabilities of the Xxx-NMBC Stations in the
determination of the Working Capital of the Xxx-NMBC Stations pursuant to
Section 2.3(b); or
(d) All other Excluded Liabilities of the Xxx-NMBC Stations and all
other Acquired Companies Excluded Liabilities.
8.2 Obligations of Purchaser. Subject to the limitations set forth herein,
Purchaser agrees to indemnify and hold Xxx and NMBC and their respective
directors, officers, employees, Affiliates, agents and assigns harmless (after
the Closing) from and against any and all Losses of Xxx and NMBC, resulting
from, based upon or arising out of, directly or indirectly:
(a) Any breach of any representation or warranty made by Purchaser in or
pursuant to this Agreement;
(b) Any non-fulfillment or breach of any covenant or agreement of
Purchaser in this Agreement or other document delivered pursuant to this
Agreement;
(c) Any Assumed Liabilities of the Xxx-NMBC Stations and any Acquired
Companies Assumed Liabilities; or
(d) Any Liability to the extent relating to and arising out of the
operation of the Xxx-NMBC Stations or any Acquired Company following the
Closing, excluding, however, all Excluded Liabilities of the Xxx-NMBC Stations
and all Acquired Companies Excluded Liabilities.
8.3 Procedure for Indemnification. The procedure for indemnification shall be as
follows:
(a) The party or parties claiming indemnification (the "Claimant") shall
give written notice to the party from which indemnification is sought (the
"Indemnitor") reasonably promptly after the Claimant learns of any claim or
proceeding covered by the foregoing agreements to indemnify and hold harmless,
but failure to provide prompt notice shall not be deemed to jeopardize
Claimant's right to demand indemnification if Indemnitor is not materially
prejudiced by the delay in receiving notice. If Indemnitor is materially
prejudiced, the Claimant's right to indemnification shall be reduced according
to the extent of the actual Loss or prejudice which Indemnitor can demonstrate
was caused by the delay. Purchaser shall not be deemed to have notice of any
claim or proceeding by reason of any knowledge acquired on or before the Closing
Date by an Employee, independent contractor or other agent of any Xxx-NMBC
Station or Acquired Company.
(b) With respect to claims between the parties, following receipt of
notice from the Claimant of a claim, the Indemnitor shall have 15 days to make
any investigation of the claim that the Indemnitor deems necessary or desirable,
or such lesser time if a 15 day period would jeopardize any rights of Claimant
to oppose or protest the claim. For the purpose of this investigation, the
Claimant agrees to make available to the Indemnitor and its authorized
representatives the information relied upon by the Claimant to substantiate the
claim. If the Claimant and the Indemnitor cannot agree as to the validity and
amount of the claim within the 15-day period, or lesser period if required by
this Section (or any mutually agreed upon extension hereof) the Claimant may
seek appropriate legal remedies.
(c) The Indemnitor shall have the right to undertake, by counsel or
other representatives of its own choosing, the defense of such claim. In the
event that the Indemnitor shall elect not to undertake such defense, or within
15 days after notice of such claim from the Claimant shall fail to defend, the
Claimant shall have the right to undertake the defense, compromise or settlement
of such claim, by counsel or other representatives of its own choosing, on
behalf of and for the account and risk of the Indemnitor. Anything in this
Section 8.3 to the contrary notwithstanding, (i) if there is a reasonable
probability that a claim may materially and adversely affect the Claimant other
than as a result of money damages or other money payments, the Claimant shall
have the right, at the reasonable cost and expense of the Indemnitor, to
participate in the defense, compromise or settlement of the claim, (ii) the
Indemnitor shall not, without the Claimant's written consent (such consent not
to be unreasonably withheld), settle or compromise any claim or consent to entry
of any judgment which does not include as an unconditional term thereof the
giving by the plaintiff to the Claimant of a release from all Liability in
respect of such claim, and (iii) in the event that the Indemnitor undertakes
defense of any claim consistent with this Section, the Claimant, by counsel or
other representative of its own choosing and at the reasonable cost and expense
of the Indemnitor, shall have the right to consult with the Indemnitor and its
counsel or other representatives concerning such claim and the Indemnitor and
the Claimant and their respective counsel or other representatives shall
cooperate with respect to such claim. If any disagreement arises in the handling
of the claim, the Indemnitor shall have the right to make the final
determination consistent with the requirements of this Section.
(d) The Indemnitor and its duly appointed representatives shall have the
sole right to negotiate, resolve, settle or contest any claim for Tax made by a
Tax authority with respect to which the Indemnitor is bound to indemnify
Claimant under Section 8.1 or Section 8.2. If the Indemnitor does not assume the
defense of a claim for the Tax made by a Tax authority with respect to which the
Indemnitor is bound to indemnify a Claimant under Section 8.1 or Section 8.2,
the Claimant may defend the same at the reasonable expense of the Indemnitor (in
accordance with the provisions of Article 8) in such manner as it may deem
appropriate, including, but not limited to, settling such audit or proceeding
with the consent of the Indemnitor, which consent shall not be unreasonably
withheld
(e) Xxx and NMBC waive and release, effective as of the Closing Date,
all claims against any of the Acquired Companies for any Liabilities as of the
Closing not included as Acquired Companies Closing Liabilities, including any
right to contribution or indemnification for any indemnity payments made by Xxx
or NMBC after the Closing Date pursuant to this Agreement.
8.4 Sole Remedy. Each party agrees that the sole Liability and obligations of
the other party and the sole right, remedy and entitlement of each party for
recovery of any monetary claim with respect to or in connection with this
Agreement or any of the transactions contemplated by this Agreement shall be
limited to indemnification under this Article 8, and all such parties hereby
waive any and all other statutory and common law rights and remedies (including
without limitation rights of indemnification and contribution) which it has or
may hereafter have, provided such waiver shall in no event be construed to
prevent Purchaser from seeking specific performance or other equitable relief or
remedies.
8.5 Limitations on Indemnification; Exclusive Remedy.
(a) No claim for indemnification under Section 8.1(a) or Section 8.2(a)
for breach of any representation or warranty shall be valid unless made within
the applicable Survival Period as defined in Section 8.6.
(b) No party shall be obligated to indemnify any other party or parties
under Section 8.1(a) or Section 8.2(a) unless the Claimant's aggregate amount of
Losses as to which a right of indemnification is provided under Section 8.1(a)
or Section 8.2(a) shall exceed $2,500,000, in which event $1,250,000 plus all of
such Losses above $2,500,000 shall be indemnifiable; provided that Purchaser's
right to recover under Section 8.1(a) for breach of any representation or
warranty contained in Section 4.1, 4.2 or 4.3 shall not be subject to such
limitation.
(c) In no event shall the aggregate liability (i) of Xxx pursuant to
Section 8.1(a), on the one hand, or of the Purchaser pursuant to Section 8.2(a),
on the other hand, exceed $75,000,000 (provided that Xxx'x liability for breach
of any representation or warranty contained in Sections 4.1, 4.2 or 4.3 shall
not be subject to such limitation); or (ii) of Xxx pursuant to Section 8.1(a)
for breach of any representation or warranty contained in Section 4.1, 4.2 or
4.3 and pursuant to Section 8.1(b), (c) and (d), on the one hand, or of the
Purchaser pursuant to Section 8.2(b), (c) or (d), on the other hand, exceed the
sum of the Asset Purchase Price plus the Stock Purchase Price.
(d) Any Loss relating to any of the Acquired Companies for which
indemnification is provided under this Agreement shall be (i) increased by any
Tax Cost and (ii) reduced by any Tax Benefit which the Claimant incurs or
receives prior to or during the Taxable Period in which the corresponding
indemnification payment is received by the Claimant. In addition, if
indemnification under this Agreement results in an increase in the basis of any
asset (other than stock) or increase in the amount of any net operating loss of
the Claimant, the Claimant shall pay the Indemnitor, within ninety (90) days
after the end of each Tax Period, the Tax Benefit, if any, realized for such Tax
Period by the Claimant that is attributable to such increase in basis or net
operating loss. In the event any indemnification paid by an Indemnitor is
reduced by a Tax Benefit, or the Claimant pays the Indemnitor the amount of any
Tax Benefit, and there is a subsequent Final Determination denying the Tax
Benefit, the Indemnitor shall promptly reimburse the Claimant for the amount of
the Tax Benefit that was denied. In the event any indemnification paid by an
Indemnitor is increased by a Tax Cost, or the Claimant receives payment for any
Tax Cost, and there is a subsequent Final Determination reducing the Tax Cost,
the Indemnitor shall promptly be reimbursed by the Claimant for the amount of
the Tax Cost that was reduced. To the extent permitted by law, any indemnity
payments made under this Agreement relating to any of the Acquired Companies
shall be treated as an adjustment to the Stock Purchase Price.
(e) If any remediation or other work or action is required in order to
correct or cure a violation of any Environmental Law or of any demand (a
"Violation"), Purchaser shall promptly notify Xxx-NMBC after acquiring knowledge
of such requirement and shall present a remediation plan to Xxx-NMBC at least
twenty (20) days prior to performing such remediation. The remediation plan
shall be designed to minimize the remediation cost to the extent feasible while
providing for a reasonable and customary level of clean-up in compliance with
applicable Law. Xxx shall have ten (10) days to review and approve the
remediation plan, the approval of which cannot be unreasonably withheld.
(f) If Purchaser acquires knowledge prior to Closing that any
representation, warranty, covenant or agreement of Xxx-NMBC contained in this
Agreement or any of the Schedules attached hereto has been materially breached,
is materially false or requires material modification or amendment to be
correct, Purchaser shall notify Xxx-NMBC within ten (10) days after acquiring
such knowledge. Xxx-NMBC shall have up to thirty (30) days to take corrective
action to cure such breach. If Xxx-NMBC cannot reasonably cure such breach
within thirty (30) days, despite its good faith efforts, Xxx-NMBC shall have
such additional time as may be reasonably necessary to effectuate a cure if such
breach is capable of being cured, but in no event more than an additional sixty
(60) days. If Xxx-NMBC fails to cure such a breach, and the breach is material
to the assets, business, operations, results of operations or financial
condition of any Xxx-NMBC Station or Acquired Company Station, Purchaser may
close the transactions contemplated by this Agreement and pursue its rights to
indemnification under Article 8 or terminate this Agreement under Article 9.
8.6 Survival. Subject to the provisions of Section 8.5(f), all representations,
warranties, covenants and agreements of the parties made in this Agreement or
any of the Xxx Documents shall survive the Closing regardless of any
investigation or inquiry on the part of any party, and the Closing shall not be
deemed a waiver by any party of the representations, warranties, covenants or
agreements of any other party in this Agreement or any of the Xxx Documents;
provided, however, that the period of survival shall (i) with respect to the
representations and warranties in Sections 4.1, 4.2, 4.3, 5.1, 5.2 and 5.3,
continue indefinitely; and (ii) in the case of any other representation and
warranty, end one (1) year after the Closing Date (in each case, the "Survival
Period"). No claim for breach of any representation or warranty may be brought
under this Agreement or any of the Xxx Documents unless written notice
describing in reasonable detail the nature and basis of such claim is given on
or prior to the last day of the applicable Survival Period. In the event such
notice of such a claim is so given, the right to indemnification with respect to
such claim shall survive the applicable Survival Period until the claim is
finally resolved and any obligations with respect to the claim are fully
satisfied. All covenants and agreements under this Agreement or any of the Xxx
Documents shall survive the Closing for the applicable statutory limitation
period.
ARTICLE 9
TERMINATION
9.1 Termination. This Agreement may be terminated
(a) By either Xxx, acting in its own right or on behalf of NMBC or each
Acquired Company (Xxx, together with NMBC and each Acquired Company, "Xxx" for
purposes of this Article 9), or the Purchaser at any time prior to the Closing
with the mutual written consent of the other party hereto;
(b) Unless the Closing has not occurred as a result of a material breach
of this Agreement by the party seeking such termination, by either Xxx or the
Purchaser if the Closing has not occurred on or prior to 5:00 p.m. CST on the
date which is nine (9) months following the date of this Agreement (the
"Termination Date"); provided, however, that either Xxx or Purchaser in its sole
discretion may elect to extend the Termination Date until 5:00 p.m. (CST time)
on the date which is one (1) year following the date of this Agreement by
written notice to the other at least ten (10) calendar days prior to the initial
Termination Date; or
(c) By either Xxx or the Purchaser if any Governmental Authority with
jurisdiction over such matters shall have issued a final and nonappealable
Governmental Order permanently restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated by this Agreement; provided,
however, that neither Xxx nor the Purchaser may terminate this Agreement
pursuant to this Section 9.1(c) unless the party seeking to so terminate this
Agreement has used all commercially reasonable best efforts to oppose any such
Governmental Order or to have such Governmental Order vacated or made
inapplicable to the transactions contemplated by this Agreement, but nothing
contained in this Section 9.1(c) shall prevent a party that is otherwise
entitled to terminate this Agreement pursuant to Section 9.1(b) or 9.1(d) from
doing so;
(d) If the Closing has not occurred, by either Xxx or the Purchaser, if
not then in material breach of this Agreement, if the other party has continued
in material breach of this Agreement for thirty (30) days after receipt of
written notice of such breach from the terminating party, and such breach is not
cured within such thirty (30) day period provided, however, that if a party has
undertaken but is not able to cure such breach within thirty (30) days, despite
its good faith efforts, the party shall have such additional time as may be
reasonably necessary to effectuate a cure if such breach is capable of being
cured, but in no event more than an additional sixty (60) days; or
(e) By Purchaser if entitled to do so under Section 6.11, 6.16 or
8.5(f).
9.2 Effect of Termination. If this Agreement is terminated pursuant to Section
9.1 hereof, neither party hereto shall have any further Liability hereunder
except that (i) the provisions of Sections 6.7 and 6.8, and Articles 8 and 9
shall remain in full force and effect, and (ii) each party hereto shall remain
liable to each other party hereto for any breach of its obligations under this
Agreement prior to such termination.
ARTICLE 10
MISCELLANEOUS
10.1 Notices. All notices that are required or may be given pursuant to this
Agreement must be in writing and delivered personally, by a recognized courier
service, by a recognized overnight delivery service, by telecopy or by
registered or certified mail, postage prepaid, to the parties at the following
addresses (or to the attention of such other person or such other address as any
party may provide to the other parties by notice in accordance with this Section
10.1):
if to the Purchaser, to: with copies to:
---------------------------------- ----------------------------------
Emmis Communications Corporation Emmis Communications Corporation
00 Xxxxxxxx Xxxxxx, Xxxxx 000 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Chairman Attn: Xxxx Xxxxxx, Esq.
Attn: J. Xxxxx Xxxxxxx, Esq.
Bose XxXxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx
if to Xxx-NMBC, to: with copies to:
---------------------------------- ----------------------------------
Xxx Enterprises, Incorporated Lane & Xxxxxxxx
000 X. Xxxx Xxxxxx 000 X. Xxxx Xx., Xxxxx 000
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attn: Chairman and CEO Attn: C. Xxxx Xxxxxxxx III
Any such notice or other communication will be deemed to have been given and
received (whether actually received or not) on the day it is personally
delivered or delivered by courier or overnight delivery service or sent by
telecopy (receipt confirmed) or, if mailed, when actually received.
10.2 Attorneys' Fees and Costs. If any judicial action at law or in equity,
including an action for specific enforcement or declaratory relief, is brought
to enforce or interpret any provision of this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees and expenses from the
other party, which shall be in addition to any other relief which may be
awarded. For purposes of this section, the prevailing party shall be the
claimant if the claimant is successful in obtaining substantially all of the
relief sought, and shall be the defendant or respondent if the defendant or
respondent is successful in denying substantially all the relief sought by the
claimant.
10.3 Amendments and Waiver. This Agreement may not be modified or amended except
in writing signed by the party against whom enforcement is sought. The terms of
this Agreement may be waived only by a written instrument signed by the party
waiving compliance. No waiver of any provision of this Agreement shall be deemed
or shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
provided. No delay on the part of any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. Unless otherwise provided in this Agreement, the rights
and remedies herein provided are cumulative and are not exclusive of any rights
or remedies which the parties hereto may otherwise have at law or in equity.
Whenever this Agreement requires or permits consent by or on behalf of a party,
such consent shall be given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth in this Section 10.3.
10.4 Assignment. Except as provided in Section 6.1(c), neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned or
delegated by Xxx-NMBC or the Purchaser without the prior written consent of the
other party and any purported assignment or delegation in violation hereof shall
be null and void. Notwithstanding the foregoing, (a) Xxx-NMBC shall be entitled
after the Closing Date to assign its obligations under this Agreement to another
entity which succeeds to all or substantially all of such company's assets and
properties, whether by sale, merger, consolidation, liquidation or otherwise,
provided that (i) such successor assumes and agrees to perform all of Xxx-NMBC's
obligations under this Agreement pursuant to an assumption agreement
satisfactory to Purchaser within its reasonable judgment, and (ii) the successor
to Xxx or NMBC shall remain liable for the performance and observance of all
such obligations; (b) Purchaser may assign its rights under this Agreement as
collateral security to any lender providing financing to Purchaser or any of its
Affiliates; provided that no such assignment shall relieve Purchaser of its
obligations hereunder; (c) Purchaser may assign all of its rights under this
Agreement to a direct or indirect wholly-owned subsidiary of Purchaser or to an
entity in which Purchaser holds at least a twenty-five percent (25%) equity
interest, provided that (i) the representations and warranties of Purchaser
hereunder shall be true and correct in all respects as applied to the assignee,
(ii) both Purchaser and the assignee shall execute and deliver to Xxx-NMBC a
written instrument in form and substance satisfactory to Xxx-NMBC within their
reasonable judgment in which both Purchaser and the assignee agree to be jointly
and severally liable for performance of all Purchaser's obligations under this
Agreement, (iii) such assignment shall not materially delay issuance by the FCC
of its consent to the FCC Transfer Application, expiration or termination of the
waiting period under the HSR Act, or the Closing, and (iv) Purchaser and the
assignee shall deliver such other documents and instruments as reasonably
requested by Xxx-NMBC, including appropriate certified resolutions of the boards
of directors of Purchaser and the assignee, and (d) Purchaser may assign all of
its rights, but not its obligations, under this Agreement to a purchaser of
Station KGMB in order to accomplish the spin-off of a Honolulu television
station as provided in Section 6.4(c).
10.5 Entire Agreement. This Agreement, the Confidentiality Agreement and the
related documents contained as Exhibits and Schedules hereto or expressly
contemplated hereby (including Xxx Documents) contain the entire understanding
of the parties relating to the subject matter hereof and supersede all prior
written or oral and all contemporaneous oral agreements and understandings
relating to the subject matter hereof. The Exhibits and Schedules to this
Agreement are hereby incorporated by reference into and made a part of this
Agreement for all purposes.
10.6 Representations and Warranties Complete. The representations, warranties,
covenants and agreements set forth in this Agreement, the Xxx Documents and the
Confidentiality Agreement constitute all the representations, warranties,
covenants and agreements of the parties hereto and their respective
shareholders, directors, officers, employees, Affiliates, advisors (including
financial, legal and accounting), agents and representatives and upon which the
parties have relied.
10.7 Third Party Beneficiaries. This Agreement is made for the sole benefit of
the parties hereto, their respective successors and permitted assigns, and
nothing contained herein, express or implied, is intended to or shall confer
upon any other Person any third party beneficiary right or any other legal or
equitable rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
10.8 Governing Law. This Agreement will be governed by and construed and
interpreted in accordance with the substantive laws of the State of Illinois,
without giving effect to any conflicts of law rule or principle that might
require the application of the Laws of another jurisdiction.
10.9 Neutral Construction. The parties to this Agreement agree that this
Agreement was negotiated fairly between them at arms' length and that the final
terms of this Agreement are the product of the parties' negotiations. Each party
represents and warrants that it has sought and received legal counsel of its own
choosing with regard to the contents of this Agreement and the rights and
obligations affected hereby. The parties agree that this Agreement shall be
deemed to have been jointly and equally drafted by them, and that the provisions
of this Agreement therefore should not be construed against a party or parties
on the grounds that the party or parties drafted or was more responsible for
drafting the provision(s).
10.10 Severability. In the event that any one or more of the provisions or parts
of a provision contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement or any other jurisdiction, but this
Agreement shall be reformed and construed in any such jurisdiction as if such
invalid or illegal or unenforceable provision or part of a provision had never
been contained herein and such provision or part shall be reformed so that it
would be valid, legal and enforceable to the maximum extent permitted in such
jurisdiction.
10.11 Bulk Sales Laws. The parties hereby waive compliance with the bulk sales
or transfer Laws of any state in which the Purchased Assets of the Xxx-NMBC
Stations are located or in which operations relating to the Xxx-NMBC Stations or
Acquired Stations are conducted.
10.12 Headings; Interpretation; Schedules and Exhibits.
(a) The descriptive headings of the several Articles and Sections of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement. References to Sections or Articles, unless otherwise indicated,
are references to Sections and Articles of this Agreement. The word "including"
means including without limitation. Words (including defined terms) in the
singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other gender as the context requires. The
terms " hereof," "herein" and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole
(including all of the Schedules and Exhibits hereto) and not to any particular
provision of this Agreement unless otherwise specified. It is understood and
agreed that neither the specifications of any dollar amount in this Agreement
nor the inclusion of any specific item in the Schedules or Exhibits is intended
to imply that such amounts or higher or lower amounts, or the items so included
or other items, are or are not material, and no party shall use the fact of
setting of such amounts or the fact of the inclusion of such item in the
Schedules or Exhibits in any dispute or controversy between the parties as to
whether any obligation, item or matter is or is not material for purposes
hereof.
(b) Whenever Xxx-NMBC or each Acquired Company is called upon to list
any contracts or agreements, there shall be deemed excluded from the applicable
representation or warranty any agreement where the primary obligations of all
the parties thereto have been performed or will be performed before the Closing
Date.
(c) Certain matters and items disclosed in any Schedule or Exhibit may
not be required to be disclosed therein, but may be disclosed therein for
informational purposes only, and no such disclosure shall constitute an
indication or admission of the materiality thereof or create a standard of
disclosure.
(d) If any fact or item is included on a Schedule referenced by a
particular section in this Agreement and the existence of the fact or item or
its contents is relevant to any other section in this Agreement, the fact or
item shall be deemed to be disclosed with respect to such other section whether
or not an explicit cross-reference appears in the Schedules if such relevance is
readily apparent from examination of the Schedules.
10.13 Counterparts. This Agreement may be executed in one or more counterparts
for the convenience of the parties hereto each of which shall be deemed an
original and all of which together will constitute one and the same instrument.
Signatures to faxed copies of this Agreement shall be binding so long as
original counterparts thereof are provided to the other party via overnight
delivery service received within three (3) business days thereafter.
10.14 Cooperation. From and after the Closing, Purchaser will cooperate with
Xxx-NMBC in the investigation defense or prosecution of any Action which is
pending or threatened against such company or any of its Affiliates and which
relates to the Xxx-NMBC Stations and each Acquired Company, whether or not any
party has notified the other of a claim for indemnity with respect to such
matter. Without limiting the generality of the foregoing, Purchaser will make
available its employees employed by the Xxx-NMBC Stations and each Acquired
Company to give depositions or testimony and will furnish all documentary or
other evidence in each case as Xxx may reasonably request. Xxx-NMBC shall
reimburse Purchaser for all reasonable and necessary out-of-pocket expenses
incurred in connection with the performance of its obligations under this
Section 10.14.
10.15 Insurance. Purchaser acknowledges that all insurance policies maintained
by Xxx-NMBC and each Acquired Company and its Affiliates with respect to the
Xxx-NMBC Stations and each Acquired Company and Purchased Assets of Xxx-NMBC
Stations will be terminated effective on the Closing Date.
10.16 Joint and Several Liability. Xxx and NMBC shall be jointly and severally
liable for each representation, warranty, covenant, agreement, liability or
obligation of both or either of them under this Agreement or any of the Xxx
Documents whether or not so indicated in any other provision of this Agreement
or in any of the Xxx Documents.
10.17 Specific Performance. Xxx and NMBC acknowledge that each of the Xxx-NMBC
Stations and the Acquired Companies' Stations is of a special, unique and
extraordinary character, and that damages alone are an inadequate remedy for a
breach of this Agreement by Xxx-NMBC. Accordingly, as an alternative to
termination of this Agreement under Section 9.1, if Purchaser is not then in
material default hereunder, Purchaser shall be entitled, in the event of
Xxx-NMBC's breach, to enforcement of this Agreement (subject to obtaining any
required approval of the FCC or under the HSR Act) by a decree of specific
performance or injunctive relief requiring Xxx-NMBC to fulfill its obligations
under this Agreement. Such right of specific performance or injunctive relief
shall be in addition to, and not in lieu of, Purchaser's right to recover
damages and to pursue any other remedies available to Purchaser for Xxx-NMBC's
breach. In any action to specifically enforce Xxx-NMBC's obligation to close the
transactions contemplated by this Agreement, Xxx-NMBC shall waive the defense
that there is an adequate remedy at law or in equity and agrees that Purchaser
shall be entitled to obtain specific performance of Xxx-NMBC's obligation to
close without being required to prove actual damages. As a condition to seeking
specific performance, Purchaser shall not be required to tender the Cash Payment
but shall be required to demonstrate that Purchaser is ready, willing and able
to tender the Cash Payment as prescribed in this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer as of the date first above written.
XXX ENTERPRISES, INCORPORATED NEW MEXICO BROADCASTING CO.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------------- ----------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxx
Title: Chairman and CEO Title: President
EMMIS COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman
