EXHIBIT 2.1
PURCHASE AGREEMENT
dated as of August 28, 2000
by and among
AFFILIATED REGIONAL COMMUNICATIONS, LTD.
COMCAST CORPORATION
and
FOX ENTERTAINMENT GROUP, INC.
relating to the purchase and sale
of
a 34.298% Limited Partnership Interest
in
HOME TEAM SPORTS LIMITED PARTNERSHIP
TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions
Section 1.1. Certain Defined Terms...................................... 1
Section 1.2. Other Defined Terms........................................ 4
Section 1.3. Terms Generally............................................ 4
ARTICLE 2
Purchase and Sale
Section 2.1. Purchase and Sale.......................................... 5
Section 2.2. Closing.................................................... 5
Section 2.3. Closing Deliveries by Seller............................... 5
Section 2.4. Closing Deliveries by Purchaser............................ 5
Section 2.5. HTS Working Capital Adjustment............................. 5
Section 2.6. Payments and Computations.................................. 6
Section 2.7. Transfer Taxes............................................. 7
ARTICLE 3
Representations and Warranties of Seller
Section 3.1. Incorporation and Authority of Seller....................... 7
Section 3.2. No Conflict................................................. 7
Section 3.3. Consents and Approvals...................................... 7
Section 3.4. Absence of Litigation....................................... 8
Section 3.5. HTS Partnership Interest.................................... 8
Section 3.6. Brokers..................................................... 8
Section 3.7. Exclusivity of Representations.............................. 8
ARTICLE 4
Representations and Warranties of Purchaser
Section 4.1. Incorporation and Authority of Purchaser.................... 8
Section 4.2. No Conflict................................................. 8
Section 4.3. Consents and Approvals...................................... 9
Section 4.4. Absence of Litigation....................................... 9
Section 4.5. Brokers..................................................... 9
Section 4.6. Exclusivity of Representations.............................. 9
ARTICLE 5
Representations and Warranties of Seller Guarantor
Section 5.1. Incorporation and Authority of Seller....................... 9
Section 5.2. No Conflict................................................. 10
Section 5.3. Consents and Approvals...................................... 10
Section 5.4. Absence of Litigation....................................... 10
Section 5.5. Exclusivity of Representations.............................. 10
ARTICLE 6
Additional Agreements
Section 6.1. Confidentiality............................................. 10
Section 6.2. Regulatory and Other Authorizations; Consents............... 11
Section 6.3. Notification................................................ 11
TABLE OF CONTENTS--(Continued)
Page
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Section 6.4. Further Action............................................ 11
Section 6.5. Satisfaction of Conditions................................ 11
Section 6.6. Tax Matters............................................... 11
Section 6.7. Assignment to Subsidiary.................................. 11
ARTICLE 7
Conditions to Closing
Section 7.1. Conditions to Obligations of Seller....................... 11
Section 7.2. Conditions to Obligations of Purchaser.................... 12
ARTICLE 8
Termination, Amendment and Waiver
Section 8.1. Termination............................................... 13
Section 8.2. Termination Is Non-Exclusive Remedy....................... 13
Section 8.3. Waiver.................................................... 13
ARTICLE 9
Indemnification
Section 9.1. Indemnification by Purchaser.............................. 14
Section 9.2. Indemnification by Seller................................. 14
Section 9.3. Notification of Claims.................................... 15
Section 9.4. Certain Exclusive Remedies................................ 16
Section 9.5. Purchase Price Adjustment and Interest.................... 16
ARTICLE 10
General Provisions
Section 10.1. Survival.................................................. 16
Section 10.2. Expenses.................................................. 16
Section 10.3. Notices................................................... 16
Section 10.4. Public Announcements...................................... 18
Section 10.5. Headings.................................................. 18
Section 10.6. Severability.............................................. 18
Section 10.7. Entire Agreement.......................................... 18
Section 10.8. Successors and Assigns.................................... 18
Section 10.9. No Recourse............................................... 18
Section 10.10. No Third-Party Beneficiaries.............................. 18
Section 10.11. Amendment................................................. 18
Section 10.12. Governing Law............................................. 19
Section 10.13. WAIVER OF JURY TRIAL...................................... 19
Section 10.14. Counterparts.............................................. 19
Section 10.15. No Presumption............................................ 19
Section 10.16. Waiver.................................................... 19
Section 10.17. Guaranty by Seller Guarantor............................. 19
PURCHASE AGREEMENT, dated as of August 28, 2000 by and among AFFILIATED
REGIONAL COMMUNICATIONS, LTD., a Colorado limited partnership ("Seller"),
COMCAST CORPORATION a Pennsylvania corporation ("Purchaser"), and, solely for
purposes of Article 5 and Section 10.17, FOX ENTERTAINMENT GROUP, INC., a
Delaware corporation ("Seller Guarantor").
W I T N E S S E T H:
WHEREAS, Purchaser entered into an Asset Purchase Agreement, dated as of
June 30, 2000, as amended (the "Asset Purchase Agreement"), pursuant to which
Purchaser has agreed to purchase from Viacom the business unit known as "CBS
Cable Sports", which is comprised of (i) a 65.702% interest in Home Team
Sports Limited Partnership, a Delaware limited partnership ("HTS"), and (ii)
the MSC Business (as defined therein);
WHEREAS, Seller is the owner of the remaining 34.298% interest in HTS;
WHEREAS, Seller has certain rights to sell its limited partnership interest
in HTS to Purchaser (the "Tag-Along Right") in accordance with Section 7.9 of
the HTS Partnership Agreement (as hereinafter defined);
WHEREAS, Seller has agreed to hereby sell, and Purchaser has agreed to buy,
Seller's 34.298% partnership interest in HTS on the terms and subject to the
conditions set forth herein; and
WHEREAS, contemporaneous with the execution of this Agreement, Viacom,
Purchaser and Seller are entering into a settlement agreement (the "Settlement
Agreement") with respect to a lawsuit docketed in the Court of Chancery of the
State of Delaware in and for New Castle County as Civil Action No. 18164-NC
(the "Litigation") and a Memorandum of Understanding with respect to certain
related matters (the "MOU"), and this Agreement is required by and forms an
integral part of the agreements and other arrangements set forth in the
Settlement Agreement and the MOU.
NOW, THEREFORE, Purchaser, Seller and Seller Guarantor hereby agree as
follows:
ARTICLE 1
Definitions
Section 1.1. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Action" means any claim, action, suit, arbitration, inquiry or proceeding,
including any investigation by or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, any other Person
who or which, directly or indirectly through one or more intermediaries,
Controls, is Controlled by or is under common Control with such specified
Person.
"Agreement" means this Agreement, all exhibits hereto, all documents,
certificates and instruments delivered pursuant hereto and all amendments
hereto made in accordance with Section 9.11.
"Control" means, as to any Person, the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. The term
"Controlled" shall have a correlative meaning.
"Closing HTS Working Capital" means HTS Working Capital as of the close of
business on the day immediately proceeding the Closing Date, as reflected on
the Final HTS WC Statement.
"Estimated Closing HTS Working Capital" means 52.202% of the Estimated
Closing HTS Working Capital (as defined in the Asset Purchase Agreement).
"Governmental Authority" means any United States federal, state or local or
any foreign government, governmental, regulatory or administrative authority,
agency or commission or any court, tribunal, or judicial or arbitral body.
"Governmental Order" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"HTS Accounting Firm" means (a) an independent certified public accounting
firm in the United States of national recognition (other than a firm which
then serves as the independent auditor for Seller, Purchaser or any of their
respective Affiliates) mutually acceptable to Seller and Purchaser or (b) if
Seller and Purchaser are unable to agree upon such a firm, then the regular
independent auditors for Seller and Purchaser shall mutually agree upon a
third independent certified public accounting firm, in which event, "HTS
Accounting Firm" shall mean such third firm.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder.
"HTS Partnership Agreement" means the Limited Partnership Agreement of Home
Team Sports Limited Partnership dated as of December 31, 1990 between Viacom,
as successor in interest to Group W Services, Inc., and Seller.
"HTS Partnership Interest" means the 34.298% limited partnership interest in
HTS.
"HTS Working Capital" means, as of any date of determination, (a) the sum of
34.298% of the following of HTS to the extent owned by HTS at the Closing: (i)
Cash, (ii) accounts receivable, and (iii) prepaid sports rights and other
current assets (not including deferred income taxes) minus (b) the sum of
34.298% of the following of HTS: (i) accounts payable, (ii) accrued expenses
and (iii) all other current liabilities except the current portion of both
long term debt and capital lease obligations, in each case as of such date,
calculated in accordance with GAAP; provided that (w) in no event shall any
determination of HTS Working Capital reflect liabilities (1) that are
obligations of Purchaser pursuant to this Agreement (other than liabilities of
HTS) or (2) that arise from actions taken by Purchaser after the Closing, (x)
HTS Working Capital shall include prepaid sports rights and other current
assets only to the extent HTS would reasonably expect to realize the benefits
thereof within one year of the date of determination, (y) HTS Working Capital
will not include Insurance Proceeds that are related to long term assets of
the HTS Business and (z) HTS Working Capital shall be adjusted to account for
any payments or repayments occurring under Section 5.10 of the Asset Purchase
Agreement on the Closing Date.
"Law" means any federal, state, local or foreign statute, law, ordinance,
regulation, rule, code, order, injunction, decree, other requirement or rule
of law.
"Lien" means any mortgage, deed or trust, pledge, hypothecation, security
interest, encumbrance, claim, lien, lease (including any capitalized lease),
charge or other adverse claim of any kind, whether voluntarily incurred or
arising by operation of Law or otherwise, affecting any assets or property,
including any agreement to give or grant any of the foregoing, any conditional
sale, capital lease or other title retention agreement, or the filing of or
agreement to give any financing statement with respect to any assets or
property under the Uniform Commercial Code of any state or comparable Law of
any U.S. jurisdiction.
"Permitted Liens" means the following Liens: (a) Liens for Taxes,
assessments or other governmental charges or levies not yet due; (b) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and other Liens imposed by Law and on a basis consistent with past practice
for amounts not yet due; (c) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of
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business and on a basis consistent with past practice in connection with
worker's compensation, unemployment insurance or other types of social
security; and (d) Liens incurred in the ordinary course of business (and not
for borrowed money) and on a basis consistent with past practice securing
liabilities which are not individually or in the aggregate material.
"Person" means any natural person, general or limited partnership,
corporation, limited liability company, firm, association or other legal
entity or any Governmental Authority.
"Seller's Account" means an account designated from time to time by Seller
in a written notice to Purchaser for the payment of amounts due to Seller
pursuant to the terms hereof.
"Subsidiary" of any Person means an Affiliate of such Person that it
Controls.
"Tax" or "Taxes" means (i) all income, excise, gross receipts, ad valorem,
sales, use, employment, franchise, profits, gains, property, transfer, use,
payroll, intangibles or other taxes, fees, stamp taxes, duties, charges,
levies or assessments of any kind whatsoever (including, but not limited to,
any payment required to be made pursuant to any state abandoned property,
escheat or similar law and any withholding on amounts paid to or by any
Person), together with any interest and any penalties, additions to tax or
additional amounts imposed by any Tax authority with respect thereto or (ii)
liability for the payment of any amounts of the type described in (i) as a
result of being party to any agreement or any express or implied obligation to
indemnify any other Person.
"Tax Returns" means all returns and reports (including elections,
declarations, disclosures, schedules, estimates and information returns)
required to be supplied to a Tax authority relating to Taxes.
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Section 1.2. Other Defined Terms. The following terms have the meanings
defined for such terms in the Sections set forth below:
Term Section
---- --------
Asset Purchase Agreement............................................ Preamble
Closing............................................................. 2.02
Closing Date........................................................ 2.02
Estimated HTS Closing Working Capital............................... 2.05(a)
Final HTS WC Statement.............................................. 2.05(a)
HTS................................................................. Preamble
HTS Acquired Assets................................................. 2.01(a)
HTS Notice of Disagreement.......................................... 2.05(b)
HTS Partnership Rights.............................................. 2.01(a)
Indemnified Party................................................... 9.03(a)
Indemnifying Party.................................................. 9.03(a)
Initial HTS WC Statement............................................ 2.05(a)
Litigation.......................................................... Preamble
Losses.............................................................. 9.01(a)
MOU................................................................. Preamble
Notice of Disagreement.............................................. 2.05(a)
Purchaser........................................................... Preamble
Purchaser Indemnified Parties....................................... 9.02(a)
Retained Rights..................................................... 2.01(b)
Seller.............................................................. Preamble
Seller Guarantor.................................................... Preamble
Seller Indemnified Parties.......................................... 9.01(a)
Seller Obligations.................................................. 10.17
Seller's knowledge.................................................. 3.02
Settlement Agreement................................................ Preamble
Specified Sections.................................................. 10.02(b)
Submitted HTS Notice of Disagreement................................ 2.05(a)
Submitted HTS WC Statement.......................................... 2.05(a)
Tag-Along Right..................................................... Preamble
Transfer Taxes...................................................... 2.07
Viacom.............................................................. Preamble
Viacom Parties...................................................... 2.01(b)
Capitalized terms used herein without definition shall have the definitions
set forth in the Asset Purchase Agreement.
Section 1.3. Terms Generally.
(a) Words 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, (b) the terms "hereof," "herein," and "herewith" and words
of similar import shall, unless otherwise stated, be construed to refer to
this Agreement and not to any particular provision of this Agreement, and
Article, Section, paragraph and Exhibit references are to the Articles,
Sections, paragraphs and Exhibits to this Agreement unless otherwise
specified, (c) the word "including" and words of similar import when used in
this Agreement means "including, without limitation," unless otherwise
specified, and (d) the word "or" shall not be exclusive.
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ARTICLE 2
Purchase and Sale
Section 2.1. Purchase and Sale. (a) On the terms and subject to the
conditions set forth in this Agreement, at the Closing, Seller shall sell,
convey, assign, transfer and deliver, or cause to be sold, conveyed, assigned,
transferred and delivered, to Purchaser, and Purchaser shall purchase, acquire
and accept, the HTS Partnership Interest and, except for the Retained Rights,
all of the rights of Seller or its Affiliates under the HTS Partnership
Agreement (the "HTS Partnership Rights" and, together with the HTS Partnership
Interest, the "HTS Acquired Assets") free and clear of all Liens.
(b) As used herein, the term "Retained Rights" means all claims and causes
of action against Viacom and its Affiliates (but not HTS) (the "Viacom
Parties") for any breach by the Viacom Parties prior to the Closing of (i) the
terms of the HTS Partnership Agreement or (ii) the fiduciary duties of the
Viacom Parties as general partner of HTS, but only to the extent that such
breach by the Viacom Parties results in a recovery by a Purchaser Indemnified
Party under Section 9.02(a)(ii).
Section 2.2. Closing. Subject to the terms and conditions of this Agreement,
the closing of the sale and purchase of the HTS Acquired Assets contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 A.M.
(New York City time) on the second Business Day following the satisfaction or
waiver of the conditions to the obligations of the parties set forth in
Article 7 (other than those conditions that (i) by their nature are to be
satisfied at Closing and (ii) will be satisfied at Closing), at the offices of
Viacom, 1515 Broadway, New York, New York, or at such other time or on such
other date or at such other place as Seller and Purchaser may mutually agree
upon in writing (the day on which the Closing takes place being the "Closing
Date").
Section 2.3. Closing Deliveries by Seller. At the Closing, Seller shall
deliver or cause to be delivered to Purchaser:
(a) either (i) payment of an amount equal to 52.202% of any amount
payable by Viacom under Section 2.06(a)(i) of the Asset Purchase Agreement,
by wire transfer in immediately available funds to an account designated by
Purchaser in a written notice to Seller, or (ii) a receipt for payment by
Purchaser of any amount payable under Section 2.04(a);
(b) the certificates and other documents required to be delivered
pursuant to Section 7.02; and
(c) an instrument of assignment, in form reasonably satisfactory to
Seller and Purchaser, to evidence the transfer to Purchaser of the HTS
Acquired Assets in accordance herewith.
Section 2.4. Closing Deliveries by Purchaser. At the Closing, Purchaser
shall deliver or cause to be delivered to Seller:
(a) either (i) payment of an amount equal to 52.202% of any amount
payable by Purchaser under Section 2.07(a)(ii) of the Asset Purchase
Agreement, by wire transfer in immediately available funds to Seller's
Account, or (ii) a receipt for payment by Seller of any amount payable
under Section 2.03(a); and
(b) the certificates and other documents required to be delivered
pursuant to Section 7.01.
All deliveries under Sections 2.03 and 2.04 shall occur simultaneously.
Section 2.5. HTS Working Capital Adjustment. (a) Within 60 days after the
Closing Date, Purchaser shall prepare and deliver to Seller a statement
setting forth HTS Working Capital as of the close of business on the day
immediately preceding the Closing Date (the "Initial HTS WC Statement").
During the 30 days immediately following Seller's receipt of the Initial HTS
WC Statement, Seller will be permitted to review Purchaser's and its auditors'
working papers, if any, relating to the Initial HTS WC Statement, all of
Purchaser's books and records with respect thereto and such other books and
records of Purchaser as Seller may reasonably
5
request in connection with such review and shall be provided with reasonable
access to individuals involved in preparing or reviewing the Initial HTS WC
Statement. The Initial HTS WC Statement shall become final and binding upon
the parties (and shall thereupon become the Final HTS WC Statement) on the
31st day following receipt thereof by Seller, unless Seller shall provide a
written notice (the "HTS Notice of Disagreement") of its disagreement with the
Initial HTS WC Statement to Purchaser prior to such date. Any HTS Notice of
Disagreement shall specify in reasonable detail the nature of any disagreement
so asserted. If a timely HTS Notice of Disagreement is received by Purchaser,
then the Initial HTS WC Statement (as revised in accordance with clause (x) or
(y) below) shall become final and binding upon the parties, and shall
thereupon become the "Final HTS WC Statement", on the earlier of (x) the date
on which the parties hereto resolve in writing any differences they have with
respect to any matter specified in the HTS Notice of Disagreement, and agree
upon a Final HTS WC Statement, or (y) the date on which the HTS Accounting
Firm finally resolves in writing any matters with respect to the Initial HTS
WC Statement that are properly in dispute by providing each of the parties
hereto with a Final HTS WC Statement. During the 30 days immediately following
the delivery of an HTS Notice of Disagreement, Seller and Purchaser shall seek
in good faith to resolve in writing (and thereby agree on a Final HTS WC
Statement) any differences which they may have with respect to any matter
specified in the HTS Notice of Disagreement. During such period, Purchaser
shall have access to the working papers of Seller and its auditors, if any,
prepared in connection with Seller's preparation of the HTS Notice of
Disagreement and Purchaser shall be provided with reasonable access to
individuals involved in preparing or reviewing the HTS Notice of Disagreement.
At the end of such 30-day period, Seller and Purchaser shall submit to the HTS
Accounting Firm for review and resolution any and all matters which remain in
dispute and which were properly included in the HTS Notice of Disagreement
(the Initial HTS WC Statement, as it may be modified by Purchaser prior to
submission to the HTS Accounting Firm, being the "Submitted HTS WC Statement",
and the HTS Notice of Disagreement, as it may be modified by Seller prior to
submission to the HTS Accounting Firm, being the "Submitted HTS Notice of
Disagreement"), and, within 30 days of its receipt of the Submitted HTS WC
Statement and the Submitted HTS Notice of Disagreement, the HTS Accounting
Firm shall make a final determination, binding on the parties hereto, of HTS
Working Capital as of the close of business on the day immediately preceding
the Closing Date. The HTS Accounting Firm's determination as to any given
matter in dispute shall be within the range for such matter set forth in the
Submitted HTS WC Statement, on the one hand, and the Submitted HTS Notice of
Disagreement, on the other hand. Purchaser and Seller shall share equally the
cost of the HTS Accounting Firm's review and determination.
(b) (i) If Closing HTS Working Capital exceeds Estimated Closing HTS Working
Capital, then Purchaser shall pay to Seller an amount equal to such excess or
(ii) if Estimated Closing HTS Working Capital exceeds Closing HTS Working
Capital, then Seller shall pay to Purchaser an amount equal to such excess, in
either case within three Business Days after the Final HTS WC Statement
becomes final and binding on the parties hereto, together with interest
thereon from the Closing Date to the date of payment at the rate of interest
publicly announced by Citibank, N.A. in New York, New York from time to time
as its base rate. If Closing HTS Working Capital is equal to Estimated Closing
HTS Working Capital, then neither Purchaser nor Seller shall owe any amount to
the other party pursuant to this Section 2.06.
(c) Purchaser agrees that following the Closing through the date that
payment, if any, is made pursuant to Section 2.06(b), it will not take any
actions with respect to any accounting books, records, policy or procedure on
which the Initial HTS WC Statement is to be based that would make it
impossible or impracticable to calculate HTS Working Capital in the manner and
utilizing the methods required hereby.
Section 2.6. Payments and Computations. Each party shall make each payment
due to the other party hereunder as soon as practicable on the day when due in
U.S. dollars, in the case of payments to Seller at Seller's Account or as
otherwise directed by Seller, and in the case of payments to Purchaser as
directed by Purchaser in writing, by wire transfer in immediately available
funds. All computations of interest shall be made by the party entitled to
receive payment on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable. Whenever any
payment hereunder shall be stated to be due on a day other than a Business
Day, such payment
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shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest.
Section 2.7. Transfer Taxes. All sales, use, transfer, recording, and other
similar taxes and fees, including, without limitation, all bulk sales taxes
("Transfer Taxes"), arising out of or in connection with the transactions
effected pursuant to this Agreement shall be borne equally by Seller and
Purchaser. The party which has primary responsibility under applicable law for
the payment of any particular Transfer Tax shall prepare and file the relevant
Tax Return and notify the other party in writing of the Transfer Taxes shown
on such Tax Return. The other party shall pay the first party an amount equal
to one-half of such Transfer Taxes in immediately available funds within five
days of receipt of such notice and the first party shall promptly remit the
Transfer Taxes to the proper Tax authority.
ARTICLE 3
Representations and Warranties of Seller
Seller represents and warrants to Purchaser as follows as of the date hereof
and as of the Closing Date:
Section 3.1. Incorporation and Authority of Seller. (a) Seller is a duly
formed limited partnership, validly existing and in good standing under the
Laws of the State of Colorado and has all necessary partnership power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Seller, the performance by Seller of its
obligations hereunder and the consummation by Seller of the transactions
contemplated hereby have been duly authorized by all requisite partnership
action on the part of Seller.
(b) This Agreement has been duly executed and delivered by Seller and
(assuming due authorization, execution and delivery by Purchaser) constitutes
the legal, valid and binding obligations of Seller, enforceable against Seller
in accordance with its terms, subject, as to enforceability, to the effect of
any applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or similar Laws affecting creditors' rights generally and to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at Law).
Section 3.2. No Conflict. The execution, delivery and performance of this
Agreement by Seller do not and will not (a) violate or conflict with the
limited partnership agreement or certificate of formation of Seller or the HTS
Partnership Agreement, (b) conflict with or violate any Law or Governmental
Order applicable to Seller or any of its Affiliates or, to Seller's knowledge,
to the HTS Acquired Assets or HTS, in any material respect or (c) result in
any breach of, or constitute a default (or event which, with the giving of
notice or lapse of time, or both, would become a default) under, or give to
any Person any rights of termination, amendment, acceleration or cancellation
of, or any other rights under, or result in the creation of any Lien on the
HTS Acquired Assets (other than any Permitted Lien) pursuant to, any material
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument relating to such assets or properties to which
Seller or any of its Affiliates is a party or by which any of such assets or
properties is bound or affected, or any Law or Governmental Order, except as
would not, individually or in the aggregate, prohibit or materially delay
Seller from consummating the purchase and sale of the HTS Acquired Assets as
contemplated hereby. For the purposes of this Section 3.02, "Seller's
knowledge" means the actual knowledge of any executive officer of Seller or
Seller Guarantor.
Section 3.3. Consents and Approvals. The execution and delivery of this
Agreement by Seller does not, and the performance of this Agreement by Seller
will not, require any consent, approval, authorization or other action by, or
filing with or notification to, any Governmental Authority or other Person
that will not be obtained pursuant to Paragraph 7 of the MOU except (i) for
compliance with any applicable requirements of the HSR Act, and (ii) where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not, individually or in the aggregate,
prohibit or materially delay Seller from consummating the purchase and sale of
the HTS Acquired Assets as contemplated hereby.
7
Section 3.4. Absence of Litigation. There are no Actions pending against
Seller or any of its Affiliates as of the date hereof which in any manner
challenge or seek to prevent, enjoin, alter or materially delay the
transactions contemplated hereby or which would have a material adverse effect
on the HTS Acquired Assets.
Section 3.5. HTS Partnership Interest.
(a) The HTS Partnership Interest consists of a 34.298% limited partnership
interest in HTS.
(b) At Closing, Seller will transfer to Purchaser good and valid title to
the HTS Acquired Assets free and clear of all Liens. Seller has not
participated in the control of the business of HTS.
Section 3.6. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller.
Section 3.7. Exclusivity of Representations. EXCEPT AS MAY BE SET FORTH IN
ANOTHER AGREEMENT EXECUTED BY SELLER, THE REPRESENTATIONS AND WARRANTIES MADE
BY SELLER IN THIS AGREEMENT ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER
REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES. SELLER
HEREBY DISCLAIMS ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR WARRANTIES,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO PURCHASER OR ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION (INCLUDING, WITHOUT LIMITATION, ANY FINANCIAL PROJECTIONS OR OTHER
SUPPLEMENTAL DATA).
ARTICLE 4
Representations and Warranties of Purchaser
Purchaser represents and warrants to Seller as follows as of the date hereof
and as of the Closing Date:
Section 4.1. Incorporation and Authority of Purchaser. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
Laws of its jurisdiction of incorporation or organization and has all
necessary corporate power and authority to enter into this Agreement, to carry
out its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Purchaser, the
performance by Purchaser of its obligations hereunder and the consummation by
Purchaser of the transactions contemplated hereby have been duly authorized by
all requisite corporate action on the part of Purchaser. This Agreement has
been duly executed and delivered by Purchaser and (assuming due authorization,
execution and delivery by Seller) constitutes the legal, valid and binding
obligations of Purchaser enforceable against Purchaser in accordance with its
terms, subject, as to enforceability, to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or
similar Laws affecting creditors' rights generally and to the effect of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at Law).
Section 4.2. No Conflict. Except as may result from any facts or
circumstances relating solely to Seller, the execution, delivery and
performance of this Agreement by Purchaser do not and will not (a) violate or
conflict with the Articles of Incorporation or By-laws (or other similar
applicable documents) of Purchaser, (b) conflict with or violate any Law or
Governmental Order applicable to Purchaser, in any material respect or (c)
result in any breach of, or constitute a default (or event which, with the
giving of notice or lapse of time, or both, would become a default) under, or
give to any Person any rights of termination, amendment, acceleration or
cancellation of, or any other rights under, or result in the creation of any
Lien on any of the assets or properties of Purchaser (other than any Permitted
Lien) pursuant to, any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument relating to
such assets or properties to which Purchaser is a
8
party or by which any of such assets or properties is bound or affected, or
any Law or Governmental Order, except as would not, individually or in the
aggregate, prohibit or materially delay Purchaser from consummating the
purchase and sale of the HTS Acquired Assets as contemplated hereby.
Section 4.3. Consents and Approvals. The execution and delivery of this
Agreement by Purchaser do not, and the performance of this Agreement by
Purchaser will not, require any consent, approval, authorization or other
action by, or filing with or notification to, any Governmental Authority or
other Person, except (a) for compliance with any applicable requirements of
the HSR Act and (b) where failure to obtain such consent, approval,
authorization or action, or to make such filing or notification, would not,
individually or in the aggregate, prohibit or materially delay Purchaser from
consummating the purchase and sale of the HTS Acquired Assets as contemplated
hereby.
Section 4.4. Absence of Litigation. Except for the review and request for
additional information by antitrust authorities under the HSR Act and except
for the Litigation, there are no Actions pending against Purchaser as of the
date hereof which in any manner challenge or seek to prevent, enjoin, alter or
materially delay the transactions contemplated hereby.
Section 4.5. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Purchaser.
Section 4.6. Exclusivity of Representations. EXCEPT AS MAY BE SET FORTH IN
ANOTHER AGREEMENT EXECUTED BY PURCHASER, THE REPRESENTATIONS AND WARRANTIES
MADE BY PURCHASER IN THIS AGREEMENT ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL
OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES.
PURCHASER HEREBY DISCLAIMS ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR
WARRANTIES, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO SELLER OR ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION
OR OTHER INFORMATION.
ARTICLE 5
Representations and Warranties of Seller Guarantor
Seller Guarantor represents and warrants to Purchaser as follows as of the
date hereof and as of the Closing Date:
Section 5.1. Incorporation and Authority of Seller. (a) Seller Guarantor is
a corporation, validly existing and in good standing under the Laws of the
State of Delaware and has all necessary power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Seller Guarantor, the performance by Seller Guarantor of its obligations
hereunder and the consummation by Seller Guarantor of the transactions
contemplated hereby have been duly authorized by all requisite action on the
part of Seller Guarantor.
(b) This Agreement has been duly executed and delivered by Seller Guarantor
and (assuming due authorization, execution and delivery by Purchaser)
constitutes the legal, valid and binding obligations of Seller Guarantor,
enforceable against Seller Guarantor in accordance with its terms, subject, as
to enforceability, to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance or similar Laws affecting
creditors' rights generally and to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law) and to principles limiting the enforceability of
restrictions on competition.
9
Section 5.2. No Conflict. The execution, delivery and performance of this
Agreement by Seller Guarantor does not and will not (a) violate or conflict
with the certificate of incorporation or bylaws of Seller Guarantor, (b)
conflict with or violate any Law or Governmental Order applicable to Seller
Guarantor or any of its Affiliates, in any material respect or (c) result in
any breach of, or constitute a default (or event which, with the giving of
notice or lapse of time, or both, would become a default) under, or give to
any Person any rights of termination, amendment, acceleration or cancellation
of, or any other rights under, or result in the creation of any Lien on any of
the assets or properties of Seller Guarantor (other than any Permitted Lien)
pursuant to, any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument relating to
such assets or properties to which Seller Guarantor or any of its Affiliates
is a party or by which any of such assets or properties is bound or affected,
or any Law or Governmental Order, except as would not, individually or in the
aggregate, prohibit or materially delay Seller from consummating the
transactions as contemplated hereby.
Section 5.3. Consents and Approvals. The execution and delivery of this
Agreement by Seller Guarantor does not, and the performance of this Agreement
by Seller Guarantor will not, require any consent, approval, authorization or
other action by, or filing with or notification to, any Governmental Authority
or other Person except (i) for compliance with any applicable requirements of
the HSR Act, and (ii) where failure to obtain such consent, approval,
authorization or action, or to make such filing or notification, would not,
individually or in the aggregate, prohibit or materially delay Seller
Guarantor from consummating the transactions as contemplated hereby.
Section 5.4. Absence of Litigation. There are no Actions pending against
Seller Guarantor or any of its Affiliates as of the date hereof which in any
manner challenge or seek to prevent, enjoin, alter or materially delay the
transactions contemplated hereby.
Section 5.5. Exclusivity of Representations. EXCEPT AS MAY BE SET FORTH IN
ANOTHER AGREEMENT EXECUTED BY SELLER GUARANTOR, THE REPRESENTATIONS AND
WARRANTIES MADE BY SELLER GUARANTOR IN THIS AGREEMENT ARE IN LIEU OF AND ARE
EXCLUSIVE OF ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED
WARRANTIES. SELLER GUARANTOR HEREBY DISCLAIMS ANY SUCH OTHER OR IMPLIED
REPRESENTATIONS OR WARRANTIES, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO
PURCHASER OR ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF
ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING, WITHOUT LIMITATION, ANY
FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA).
ARTICLE 6
Additional Agreements
Section 6.1. Confidentiality. Except as Seller in its good faith discretion
may determine to be required by applicable Law or by any stock exchange rule,
after the Closing, Seller agrees that it and its Affiliates and its and their
officers, directors, agents and employees will deliver to Purchaser and to
keep confidential all non-public information with respect to HTS and all non-
public information obtained by it with respect to Purchaser in connection with
this Agreement and the negotiations preceding this Agreement. Notwithstanding
the foregoing, Seller and such other Persons shall not be required to keep
confidential or return any information which (a) is provided to Seller or such
Persons after the Closing by lawful sources not, to the knowledge of Seller,
either subject to a confidentiality agreement with the disclosing party or in
possession of such information as a result of prior disclosure by Seller or
its Affiliates, (b) is or becomes publicly known through no breach of a
confidentiality obligation owed by Seller or such Persons or (c) is developed
by Seller or any such Person after Closing independently of any disclosure by
Purchaser and independent of information in its or their possession prior to
the Closing.
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Section 6.2. Regulatory and Other Authorizations; Consents. (a) Each party
hereto shall use its commercially reasonable efforts to obtain all
authorizations, consents, orders and approvals of all Governmental Authorities
that may be or become necessary for its execution and delivery of, and the
performance of its obligations pursuant to, this Agreement and will cooperate
fully with the other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. Notwithstanding any other
provision of this Agreement, neither the Purchaser nor any of its Affiliates
shall be required to enter into any consent decree or to dispose or hold
separate any assets or otherwise agree to any action which may adversely
affect the Purchaser or any of its Affiliates or the HTS Acquired Assets in
order to satisfy any objection of any Governmental Authority.
Section 6.3. Notification. Seller shall notify Purchaser, and Purchaser
shall notify Seller, of any litigation, arbitration or administrative
proceeding pending or threatened in writing against Seller or any of its
Affiliates, on one hand, or Purchaser, on the other hand, which challenges the
transactions contemplated hereby. The parties shall keep each other informed
and shall consult with each other concerning the status, scope and nature of
their respective efforts to comply with the covenant in Section 6.02.
Section 6.4. Further Action. Each of the parties hereto shall execute and
deliver such documents and other papers and take such further actions as may
be reasonably required to carry out the provisions of this Agreement and give
effect to the transactions contemplated hereby.
Section 6.5. Satisfaction of Conditions. Subject to the other terms hereof,
each party will use its commercially reasonable efforts to satisfy, or to
cause to be satisfied, the conditions to the obligations of the other party to
consummate the transactions contemplated by this Agreement, as set forth in
Article 7.
Section 6.6. Tax Matters. (a) Purchaser agrees to furnish or cause to be
furnished to Seller, upon request, as promptly as practicable, such
information and assistance relating to the HTS Business (including, without
limitation, access to books and records) as is reasonably necessary for the
filing of all Tax Returns, the making of any election relating to Taxes, the
preparation for any audit by any taxing authority, and the prosecution or
defense of any claim, suit or proceeding relating to any Tax. Purchaser shall
retain all books and records with respect to Taxes pertaining to the HTS
Business for a period of at least six years following the Closing Date. Seller
and Purchaser shall cooperate with each other in the conduct of any audit or
other proceeding relating to Taxes involving the HTS Business.
Section 6.7. Assignment to Subsidiary. If necessary in the reasonable
opinion of Seller's counsel in order to keep HTS from ceasing to exist as a
limited partnership for purposes of the Delaware Revised Uniform Limited
Partnership Act, Purchaser agrees to assign to one of its Subsidiaries either
its right to purchase the HTS Acquired Assets hereunder or its right under the
Asset Purchaser Agreement to purchase from Viacom the 65.702% general
partnership interest in HTS so that the HTS Acquired Assets, on the one hand,
and such 65.702% general partnership interest, on the other hand, are held
immediately after the Closing by separate entities.
ARTICLE 7
Conditions to Closing
Section 7.1. Conditions to Obligations of Seller. The obligations of Seller
to consummate the transactions contemplated by this Agreement shall be subject
to the fulfillment or waiver, at or prior to the Closing, of each of the
following conditions:
(a) Representations and Warranties; Covenants. (i) The representations
and warranties of Purchaser contained in Article 4 (A) that are qualified
as to materiality, shall be true and correct and (B) that are not qualified
as to materiality, shall be true and correct in all material respects, in
each case as of the Closing, other than representations and warranties made
as of another date, which representations and warranties shall have been
true and correct, or true and correct in all material respects, as the case
may be, as of such
11
date; (ii) the obligations, covenants and agreements of Purchaser contained
in this Agreement to be performed or complied with on or prior to the
Closing Date (A) that are qualified as to materiality shall have been
performed or complied with and (B) that are not qualified as to materiality
shall have been performed or complied with in all material respects, in
each case on or prior to the Closing Date; and (iii) Seller shall have
received a certificate to such effect signed by a duly authorized senior
officer of Purchaser;
(b) HSR Act. Any waiting period (and any extension thereof) under the HSR
Act applicable to the purchase and sale of the HTS Acquired Assets
contemplated hereby shall have expired or shall have been terminated;
(c) No Governmental Order. There shall be no Governmental Order in
existence which restrains or which materially and adversely affects the
transactions contemplated by this Agreement or is likely to render it
impossible or unlawful to consummate such transactions;
(d) Resolutions. Seller shall have received a true and complete copy,
certified by the Secretary or an Assistant Secretary of Purchaser, of the
resolutions duly and validly adopted by the Executive Committee of the
Board of Directors of Purchaser evidencing its authorization of the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and such other customary documents as
Seller may reasonably request evidencing Purchaser's existence, good
standing and authority to enter into this Agreement and consummate the
transactions contemplated hereby; and
(e) Closing under Asset Purchase Agreement. The closing of the
transactions under the Asset Purchase Agreement shall have previously
occurred or shall be occurring simultaneously with the Closing hereunder.
Section 7.2. Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment or waiver, at or prior to the Closing, of each
of the following conditions:
(a) Representations and Warranties; Covenants. (i) The representations
and warranties of Seller contained in this Agreement (A) that are qualified
as to materiality, shall be true and correct and (B) that are not qualified
as to materiality, shall be true and correct in all material respects, in
each case as of the Closing, other than representations and warranties made
as of another date, which representations and warranties shall have been
true and correct, or true and correct in all material respects, as the case
may be, as of such date; (ii) the obligations, covenants and agreements of
Seller contained in this Agreement to be performed or complied with on or
prior to the Closing Date (A) that are qualified as to materiality, shall
have been performed or complied with and (B) that are not qualified as to
materiality, shall have been performed or complied with in all material
respects, in each case on or prior to the Closing Date; and (iii) Purchaser
shall have received a certificate to such effect signed by a duly
authorized senior officer of Seller;
(b) HSR Act. Any waiting period (and any extension thereof) under the HSR
Act applicable to the purchase and sale of the HTS Acquired Assets
contemplated hereby shall have expired or shall have been terminated;
(c) No Governmental Order. There shall be no Governmental Order in
existence which restrains or which materially and adversely affects the
transactions contemplated by this Agreement or is likely to render it
impossible or unlawful to consummate such transactions;
(d) Resolutions. Purchaser shall have received a true and complete copy,
certified by the Secretary or an Assistant Secretary of Seller, of the
resolutions duly and validly adopted by the partners of Seller evidencing
its authorization of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and such other
customary documents as Purchaser may reasonably request evidencing Seller's
existence, good standing and authority to enter into this Agreement and
consummate the transactions contemplated hereby;
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(e) Legal Proceedings. No Action instituted by any State Attorney
General, the Federal Trade Commission or the Department of Justice shall be
pending before any Governmental Authority and no Law or Governmental Order
shall exist which would or which seeks to (i) prohibit or interfere with
Purchaser's or any of its Affiliates' ownership or operation of all or a
material portion of HTS, (ii) prevent or make illegal the consummation of
any transactions contemplated by this Agreement or (iii) compel Purchaser
or any of its Affiliates to dispose of or hold separate all or any material
portion of HTS; and
(f) Closing under Asset Purchase Agreement. The closing of the
transactions under the Asset Purchase Agreement shall have previously
occurred or be occurring simultaneously with the Closing hereunder.
ARTICLE 8
Termination, Amendment and Waiver
Section 8.1. Termination. This Agreement may be terminated at any time prior
to the Closing as follows:
(a) by the mutual written consent of Seller and Purchaser;
(b) by either Seller or Purchaser, if the Closing shall not have occurred
prior to December 31, 2001; provided, however, that the right to terminate
this Agreement under this Section 8.01(b) shall be suspended as to any
party whose breach, misrepresentation or failure to fulfill any material
obligation under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Closing to occur prior to such date, until
the 10th day after such failure has been cured;
(c) by Seller upon a breach of any representation, warranty, covenant or
agreement on the part of Purchaser set forth in this Agreement, or if any
representation or warranty of Purchaser shall have become untrue, in either
case such that the condition set forth in Section 7.01(a) would not be
satisfied, unless such breach or untruth can be cured prior to December 25,
2001 and after receipt of notice thereof Purchaser proceeds in good faith
to cure such breach or untruth as promptly as practicable;
(d) by Purchaser upon breach of any representation, warranty, covenant or
agreement on the part of Seller set forth in this Agreement, or if any
representation or warranty of Seller shall have become untrue, in either
case such that the condition set forth in Section 7.02(a) would not be
satisfied, unless such breach or untruth can be cured prior to December 25,
2001 and after receipt of notice thereof Seller proceeds in good faith to
cure such breach or untruth as promptly as practicable;
(e) by either Seller or Purchaser in the event of the issuance of a
final, nonappealable Governmental Order restraining or prohibiting the
transactions contemplated herein; or
(f) by either party if the Asset Purchase Agreement terminates without
the closing thereunder occurring.
If a party elects to terminate this Agreement under Section 8.01(b), (c), (d),
(e) or (f), it shall provide written notice to the other party.
Section 8.2. Termination Is Non-Exclusive Remedy. The termination rights of
Seller and Purchaser under Section 8.01 are in addition to, and not exclusive
of, any other rights or remedies Seller or Purchaser may have hereunder, at
Law or otherwise. In the event of the termination of this Agreement as
provided in Section 8.01, this Agreement shall forthwith become void and there
shall be no liability on the part of any party hereto, except as set forth in
Section 10.02 and nothing herein shall relieve either party from liability for
any breach hereof or failure to perform hereunder.
Section 8.3. Waiver. At any time prior to the Closing, any party may (a)
extend the time for the performance of any of the obligations or other acts of
any other party hereto, (b) waive any inaccuracies in the representations and
warranties of the other party hereto contained herein or in any document
delivered pursuant
13
hereto or (c) waive compliance by the other party hereto with any of the
agreements or conditions contained herein. Any such extension or waiver shall
be valid only if set forth in an instrument in writing signed by the party to
be bound thereby.
ARTICLE 9
Indemnification
Section 9.1. Indemnification by Purchaser. (a Subject to Section 10.01 to
the extent applicable, and except to the extent a Purchaser Indemnified Party
is entitled to indemnification from Seller in respect of the relevant matter
in accordance with this Agreement, Purchaser shall indemnify and hold Seller,
its Affiliates and their respective employees, officers and directors
(collectively, the "Seller Indemnified Parties") harmless from and against,
and agrees to promptly defend any Seller Indemnified Party from and reimburse
any Seller Indemnified Party for, any and all Losses, damages, costs,
expenses, liabilities, obligations and claims of any kind (including any
Action brought by any Governmental Authority or Person and including
reasonable attorneys' fees and expenses reasonably incurred including those
incurred to enforce the indemnity rights hereunder) (collectively, "Losses"),
which such Seller Indemnified Party may at any time suffer or incur, or become
subject to, as a result of or in connection with:
(i) the inaccuracy as of the date of this Agreement or the Closing Date
of any representations and warranties made by Purchaser in or pursuant to
this Agreement or in any instrument or certificate delivered by Purchaser
at the Closing in accordance herewith;
(ii) any failure by Purchaser to carry out, perform, satisfy and
discharge any of its covenants, agreements, undertakings, liabilities or
obligations under this Agreement or under any of the documents and/or other
instruments delivered by Purchaser pursuant to this Agreement; or
(iii) all obligations and liabilities of Seller under the HTS Partnership
Agreement or as limited partner of HTS.
(b) Notwithstanding any other provision to the contrary, Purchaser shall not
be required to indemnify and hold harmless any Seller Indemnified Party
pursuant to Section 9.01(a)(i) unless Seller has asserted a claim with respect
to such matters within the applicable survival period set forth in Section
10.01.
Section 9.2. Indemnification by Seller. (a Subject to Section 10.01 to the
extent applicable, Seller shall indemnify and hold Purchaser, its Affiliates
and their respective employees, officers and directors (collectively, the
"Purchaser Indemnified Parties") harmless from and against, and agrees to
promptly defend any Purchaser Indemnified Party from and reimburse any
Purchaser Indemnified Party for,
(i) any and all Losses which such Purchaser Indemnified Party may at any
time suffer or incur, or become subject to, as a result or in connection
with:
(A) the inaccuracy as of the date of this Agreement or the Closing
Date of any representations and warranties made by Seller in or
pursuant to this Agreement or in any instrument or certificate
delivered by Seller at the Closing in accordance herewith; or
(B) any failure by Seller to carry out, perform, satisfy and
discharge any of its covenants, agreements, undertakings, liabilities
or obligations under this Agreement or under any of the documents
and/or other instruments delivered by Seller pursuant to this
Agreement; and
(ii) 34.298% of any and all Losses which such Purchaser Indemnified Party
may at any time suffer or incur, or become subject to, as a result of or in
connection with the inaccuracy as of the date of this Agreement or the
Closing Date of any representations and warranties made by Viacom in or
pursuant to the Asset Purchase Agreement or in any instrument or
certificate delivered by Viacom at the Closing in accordance with the Asset
Purchase Agreement, to the extent such representations and warranties
relate to HTS (including the HTS Business, the HTS Assets, the Liabilities
of HTS, the HTS Partnership Agreement
14
and the HTS Business Employees, but not including the partnership interest
in HTS held by Viacom) but not including the representations and warranties
made by Viacom in Section 3.07(b) of the Asset Purchase Agreement.
(b) Notwithstanding any other provision to the contrary, Seller shall not be
required to indemnify and hold harmless any Purchaser Indemnified Party
pursuant to Sections 9.02(a)(i)(A) or 9.02(a)(ii), (i) unless Purchaser has
asserted a claim with respect to such matters within the applicable survival
period set forth in Section 10.01, and (ii) except for Losses arising from the
inaccuracy of any of the representations and warranties set forth in Sections
3.01(a), 3.05(b) and 3.06 of this Agreement (the "Specified Sections"), until
the aggregate amount of Purchaser Indemnified Parties' Losses exceeds
$754,550, after which Seller shall be obligated for all Losses of Purchaser
Indemnified Parties in excess of the first $377,275 of Loss; provided,
however, that (A) except in respect of the Specified Sections the cumulative
indemnification obligation of Seller under Sections 9.02(a)(i)(A) or
9.02(a)(ii) shall in no event exceed $45,273,000. For the avoidance of doubt,
for purposes of the preceding sentence a Purchaser Indemnified Party's Losses
in respect of the matters addressed in Section 9.02(a)(ii) means the 34.298%
of Losses referred to in that clause.
(c) For purposes of calculating the amount of Losses subject to
indemnification pursuant to Sections 9.01 and 9.02, it is understood and
agreed between the parties hereto that to determine if there has been an
inaccuracy or breach of a representation or warranty which is qualified as to
materiality by the party making such representation or warranty, then such
representation or warranty shall be read as if it were not so qualified or
contained no such exception.
Section 9.3. Notification of Claims. (a) A party entitled to be indemnified
pursuant to Section 9.01 or 9.02 (the "Indemnified Party") shall promptly
notify the party liable for such indemnification (the "Indemnifying Party") in
writing of any claim or demand which the Indemnified Party has determined has
given or could give rise to a right of indemnification under this Agreement;
provided, however, that a failure to give prompt notice or to include any
specified information in any notice will not affect the rights or obligations
of any party hereunder except and only to the extent that, as a result of such
failure, any party which was entitled to receive such notice was damaged as a
result of such failure. Subject to the Indemnifying Party's right to defend in
good faith third party claims as hereinafter provided, the Indemnifying Party
shall satisfy its obligations under this Article 9 within 30 days after the
receipt of written notice thereof from the Indemnified Party.
(b) If the Indemnified Party shall notify the Indemnifying Party of any
claim or demand pursuant to Section 9.03(a), and if such claim or demand
relates to a claim or demand asserted by a third party against the Indemnified
Party and the Indemnifying Party agrees to indemnify the Indemnified Party for
all Losses arising therefrom or relating thereto, the Indemnifying Party shall
have the right to employ counsel reasonably acceptable to the Indemnified
Party to defend any such claim or demand asserted against the Indemnified
Party for so long as the Indemnifying Party shall continue in good faith to
diligently defend against such action or claim. The Indemnified Party shall
have the right to participate in the defense of any such claim or demand at
its own expense. The Indemnifying Party shall notify the Indemnified Party in
writing, as promptly as possible (but in any case five Business Days before
the due date for the answer or response to a claim) after the date of the
notice of claim given by the Indemnified Party to the Indemnifying Party under
Section 9.03(a) of its election to defend in good faith any such third party
claim or demand. So long as the Indemnifying Party is defending in good faith
any such claim or demand asserted by a third party against the Indemnified
Party, the Indemnified Party shall not settle or compromise such claim or
demand without the consent of the Indemnifying Party, which consent shall not
be unreasonably withheld, and the Indemnified Party shall make available to
the Indemnifying Party or its agents all records and other material in the
Indemnified Party's possession reasonably required by it for its use in
contesting any such third party claim or demand. Whether or not the
Indemnifying Party elects to defend any such claim or demand, the Indemnified
Party shall have no obligation to do so. In the event the Indemnifying Party
elects not to defend such claim or action or if the Indemnifying Party elects
to defend such claim or action but fails to diligently defend such claim or
action in good faith, the Indemnified Party shall have the right to settle or
compromise such claim or action without the consent of the Indemnifying Party,
except that the Indemnified Party shall not settle or compromise any such
claim or demand unless the Indemnifying Party is
15
given a full and completed release of any and all liability in respect thereof
by all parties with which the Indemnified Party is settling or compromising
such claim or action. Notwithstanding the foregoing, the Indemnifying Party
shall not be entitled to assume or maintain control of the defense of any
action or claim if (A) the action or claim relates to or arises in connection
with any criminal proceeding, action, indictment, allegation or investigation,
(B) the action or claim seeks an injunction or equitable relief against the
Indemnified Party or (C) the action or claim relates to Taxes (other than
Income Taxes) and if determined adversely could reasonably be expected to
result in an increase in the liability of the Indemnified Party for the
payment of any Tax for any period beginning after the Closing Date. Seller's
rights under this Section 9.03(b) in respect of claims under Section
9.02(a)(ii) shall be subject to the rights of Viacom under Section 9.03(b) of
the Asset Purchase Agreement and in the event of any conflict between such
rights, the provisions of Section 9.03(b) of the Asset Purchase Agreement
shall prevail.
Section 9.4. Certain Exclusive Remedies. Except (i) as provided in Section
8.02 and (ii) for the indemnification obligations specified in Article 9,
Seller and Purchaser acknowledge and agree that the indemnification provisions
of Sections 9.01 and 9.02 shall be the sole and exclusive remedies of Seller
and Purchaser, respectively, for any breach of the representations or
warranties herein or nonperformance of any covenants and agreements herein of
the other party.
Section 9.5. Purchase Price Adjustment and Interest. Any amount paid by
Seller or Purchaser under Article 9 will be treated as an adjustment to the
consideration for the HTS Acquired Assets.
ARTICLE 10
General Provisions
Section 10.1. Survival. The representations and warranties of Seller and
Purchaser contained in or made pursuant to this Agreement or in any
certificate furnished pursuant hereto or of Viacom in the Asset Purchase
Agreement or in any certificate furnished pursuant thereto (to the extent
relating to HTS including the HTS Business, the HTS Assets, the Liabilities of
HTS, the HTS Partnership Agreement and the HTS Business Employees, but not
including the partnership interest in HTS held by Viacom) shall survive in
full force and effect until the one-year anniversary of the Closing Date;
provided that the representations and warranties in Sections 3.01(a), 3.05(b)
and 3.06 of this Agreement shall survive in perpetuity. Notwithstanding the
preceding sentence, any representation or warranty in respect of which
indemnity may be sought under this Agreement shall survive the time at which
it would otherwise terminate pursuant to the preceding sentence, if notice of
the inaccuracy or breach thereof giving rise to such right of indemnity shall
have been given to the party against whom such indemnity may be sought prior
to such time.
Section 10.2. Expenses. Except as may be otherwise specified herein, all
costs and expenses, including fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
costs and expenses, whether or not the Closing shall have occurred.
Section 10.3. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or made when delivered in person, one Business Day after having
been dispatched via a nationally recognized overnight courier service, when
dispatched by facsimile, or three Business Days after being sent by registered
or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
10.03):
(a) if to Seller:
c/o Fox Channels Group
0000 X. Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
With a copy to:
The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
and:
Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxx X. Xxxxxxxxx, Esq.
(b) if to Purchaser:
Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: General Counsel
Telecopier: (000) 000-0000
With a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
(c) if to Seller Guarantor:
c/o Fox Channels Group
0000 X. Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
With a copy to:
The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
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and:
Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxx X. Xxxxxxxxx, Esq.
Section 10.4. Public Announcements. Except as may be required by Law or
stock exchange or quotation system rules, no party to this Agreement shall
make any public announcements in respect of this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media in respect
thereof without prior notification to the other party, and the parties shall
cooperate as to the timing and contents of any such announcement.
Section 10.5. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 10.6. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced because of any Law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not materially affected
in any manner adverse to any party hereto. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated hereby
be consummated as originally contemplated to the greatest extent possible.
Section 10.7. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof and supersedes all prior agreements and undertakings, both written and
oral, between Seller, Purchaser and Seller Guarantor with respect to the
subject matter hereof and thereof, except as otherwise expressly provided
herein or therein.
Section 10.8. Successors and Assigns. This Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns but will not be assignable or delegable by any party
without the prior written consent of the other party which shall not be
unreasonably withheld. Notwithstanding the foregoing, Purchaser may transfer
or assign, in whole or in one or more parts, to one or more of its wholly
owned Subsidiaries, its rights and obligations hereunder without the consent
of Seller; provided that no such assignment shall relieve Purchaser of any of
its obligations hereunder. For the avoidance of doubt, any assignment of this
Agreement in order to comply with Section 6.07 will be subject to the proviso
to the preceding sentence.
Section 10.9. No Recourse. Notwithstanding any of the terms or provisions of
this Agreement, each of Seller on the one hand, and Purchaser, on the other
hand, agree that neither it nor any Person acting on its behalf may assert any
claims or cause of action against any employee, officer or director of the
other party or stockholder of such other party in connection with or arising
out of this Agreement or the transactions contemplated hereby.
Section 10.10. No Third-Party Beneficiaries. Except as expressly provided in
Article 9, this Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other Person or entity any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
Section 10.11. Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by Seller and Purchaser.
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Section 10.12. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of New York applicable to
agreements made and performed wholly therein. All actions and proceedings
arising out of or relating to this Agreement may be heard and determined in a
New York state or federal court sitting in the City of New York, and the
parties hereto hereby irrevocably submit to the nonexclusive jurisdiction of
such courts in any such action or proceeding and irrevocably waive the defense
of an inconvenient forum to the maintenance of any such action or proceeding.
Section 10.13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 10.14. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as manual delivery of an originally executed counterpart of this
Agreement.
Section 10.15. No Presumption. This Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation
against the party drafting or causing any instrument to be drafted.
Section 10.16. Waiver. This Agreement or any of its provisions may not be
waived except in writing. The failure of any party to enforce any right
arising under this Agreement on one or more occasions will not operate as a
waiver of that or any other right on that or any other occasion. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
Section 10.17. Guaranty by Seller Guarantor. Seller Guarantor hereby
irrevocably and unconditionally guarantees to Purchaser the prompt and full
discharge by Seller of all of Seller's covenants, agreements, obligations and
liabilities under this Agreement (collectively, the "Seller Obligations"), in
accordance with the terms hereof. Seller Guarantor acknowledges and agrees
that, with respect to all Seller Obligations to pay money, such guaranty shall
be a guaranty of payment and performance and not of collection and shall not
be conditioned or contingent upon the pursuit of any remedies against Seller.
If Seller shall default in the due and punctual performance of any Seller
Obligation, Seller Guarantor will forthwith perform or cause to be performed
such Seller Obligation and will forthwith make full payment of any amount due
with respect thereto at its sole cost and expense.
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IN WITNESS WHEREOF, Seller, Purchaser and Seller Guarantor have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
AFFILIATED REGIONAL COMMUNICATIONS,
LTD.
/s/ Xxxxxx X. Xxxxxxx
By: _________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
COMCAST CORPORATION
/s/ Xxx Xxxxx
By: _________________________________
Name: Xxx Xxxxx
Title: Vice President,
Programming and Investment
Solely for Purposes of Article 5 and
Section 10.17
FOX ENTERTAINMENT GROUP, INC.
/s/ Xxxxxx X. Xxxxxxx
By: _________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Senior Executive Vice
President
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