EXHIBIT 10.5
ASSET PURCHASE AGREEMENT
BY AND AMONG
XXXXXXX BROADCASTING COMPANY, LLC
AND
BENEDEK BROADCASTING CORPORATION
AND
BENEDEK LICENSE CORPORATION
ASSET PURCHASE AGREEMENT
AGREEMENT dated this 4th day of June, 2002, by and among Xxxxxxx
Broadcasting Company, LLC, a Delaware limited liability company having its
principal place of business at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Purchaser"), and BENEDEK BROADCASTING CORPORATION, a Delaware
corporation ("Benedek"), and BENEDEK LICENSE CORPORATION, a Delaware corporation
("BLC"), each having its principal place of business at 0000 Xxxxxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxx Xxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H :
WHEREAS, Benedek and its wholly-owned subsidiary, BLC, own and operate
the television stations described on the signature page hereto (each a "Station"
and, collectively, the "Stations") pursuant to licenses issued by the Federal
Communications Commission (the "FCC"); and
WHEREAS, Benedek and BLC desire to sell, transfer, convey and assign,
and Purchaser desires to purchase and acquire substantially all of the assets,
properties and rights of Benedek and BLC in the Stations on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS. Unless otherwise stated in this Agreement, the
following terms shall have the following meanings:
1.1 The term "Affiliate" means, with respect to a Person,
any other Person which, directly or indirectly, is in control of, is controlled
by or is under common control with such Person. For purposes of the foregoing
definition, "control" of a Person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such Person whether by
contract or otherwise.
1.2 The term "Agreement" means this agreement, including
the schedules and all exhibits hereto, as the same may be amended or otherwise
modified from time to time, and the terms "herein", "hereof", "hereunder" and
like terms shall be taken as referring to this Agreement in its entirety and
shall not be limited to any particular section or provision hereof.
1.3 The term "Code" means the Internal Revenue Code of
1986, as amended.
1.4 The term "Communications Act" means the
Communications Act of 1934, as amended.
1.5 The term "DMA" means the designated market area of
each Station as designated by the X.X. Xxxxxxx Company and as listed on the
signature page hereto.
1.6 The term "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
1.7 The term "ERISA Affiliate" shall mean with respect to
Benedek, all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control and all other
entities which, together with Benedek, are treated as a single employer under
any or all of Sections 414(b), (c), (m) or (o) of the Code.
-1-
1.8 The term "FCC Consent" means action by the FCC
granting its consent to the assignment of the FCC Licenses to Purchaser as
contemplated by this Agreement.
1.9 The term "FCC Licenses" means the licenses, permits
and other authorizations issued by the FCC to BLC in connection with the conduct
of the business and operation of the Stations, including the licenses, permits
and other authorizations listed on Schedule 8.4 of the Disclosure Schedule.
1.10 The term "GAAP" means generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting Principals
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
1.11 The term "Intellectual Property" means any (i)
registered United States and foreign patents, patent applications, patent
disclosures and improvements thereto, (ii) registered United States and foreign
trademarks, service marks, trade dress, logos, trade names and corporate names,
the goodwill associated therewith, and the registrations and applications for
registration thereof and (iii) registered United States and foreign copyrights,
and the registrations and applications for registration thereof.
1.12 The term "knowledge" or similar words shall be deemed
to mean the actual personal knowledge as of the date specified or if no such
date is specified, as of the Closing Date, provided, however, that in the case
of Benedek or BLC, knowledge shall be limited to knowledge of those employees of
Benedek identified on Schedule 1.12 of the Disclosure Schedule.
1.13 The term "Lien" means any charge, lien, mortgage,
pledge, security interest or other encumbrance of any nature whatsoever upon, of
or in property or other assets of a Person, whether absolute or conditional,
voluntary or involuntary, whether created pursuant to agreement, arising by
force of statute, by judicial proceedings or otherwise.
1.14 The term "Local Time" means the local time in the
applicable DMA.
1.15 The term "Material Adverse Effect" means any change
or effect that is materially adverse to the properties, operations, business,
financial condition or results of operations of a Station or to the Assets of
such Station.
1.16 The term "Merger Agreement" means that certain
Agreement and Plan of Merger dated as of the date hereof between Xxxx
Communications Systems, Inc. and Stations Holding Company, Inc., as the same may
be amended from time to time.
1.17 The term "Permitted Liens" means any and all (i)
Liens 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, (ii) Liens for taxes and other liabilities
not yet due and payable, and for taxes and other liabilities being contested in
good faith, (iii) Liens and imperfections of title the existence of which does
not materially detract from the value, of or materially interfere with the use
and enjoyment, of the property subject thereto or affected thereby, for the same
use and operations as currently conducted, and (iv) with respect to 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 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,
-2-
(A) covenants, restrictions, agreements, reservations, easements, and rights of
way which would be shown by a current title report, (B) conditions that may be
shown by a current survey, title report or physical inspection or (C) zoning,
building or other similar restrictions imposed by applicable law.
1.18 The term "Person" shall include an individual, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, an estate, an unincorporated organization or association or a
governmental agency.
1.19 The term "Proprietary Rights" means any (i)
Intellectual Property, (ii) trade secrets and confidential business information
(including, without limitation, ideas, formulas, compositions, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
know-how, 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.
1.20 The term "Tradeout Agreement" means barter agreements
for the sale of advertising time in exchange for goods or services, but does not
include barter agreements for the acquisition of film or programming rights.
1.21 Unless the context otherwise requires:
1.21.1 a term has the meaning assigned to it;
1.21.2 an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP and all accounting
calculations will be determined in accordance with such principles;
1.21.3 "or" is not exclusive;
1.21.4 "including" means including without
limitation; and
1.21.5 words in the singular include the plural and
words in the plural include the singular.
2. PURCHASE AND SALE OF ASSETS.
2.1 ASSETS. On the terms and subject to the conditions of
this Agreement, Benedek and BLC shall sell, transfer, convey, assign and deliver
to Purchaser, and Purchaser shall acquire and accept from Benedek and BLC, on
the Closing Date, all of the right, title and interest of Benedek and BLC in and
to all assets, properties and rights of Benedek and BLC used or held for use in
connection with the operation of the Stations or located on or at the Real
Property, of every nature, kind and description, wherever located, tangible and
intangible, real, personal and mixed (excluding only the Excluded Assets as
specified in Section 2.2 below) as the same shall exist at and as of the Closing
Date (the "Assets"), including, without limitation, the following:
2.1.1 all rights in and to the licenses, permits
and other authorizations issued to Benedek or BLC by any governmental authority
and held by Benedek or BLC and used or intended for use exclusively in the
conduct of the business and operation of the Stations, including the FCC
Licenses listed on Schedule 8.4 of the Disclosure Schedule, together with any
renewals, extensions or
-3-
modifications thereof and additions thereto between the date hereof and the
Closing Date, the goodwill and other intangible personal property associated
with or related to each Station or the operation thereof, the business of each
Station as a going concern, and all of Benedek's and BLC's rights in and to the
call letters of each Station;
2.1.2 all land, leaseholds and other interests of
every kind and description in real property, buildings, towers and antennae, and
fixtures and improvements thereon owned by Benedek as of the date hereof and
used or held for use in connection with the operation of the Stations,
including, without limitation, those shown on Schedule 7.9 of the Disclosure
Schedule, and any additions, improvements, replacements and alterations thereto
made between the date hereof and the Closing Date;
2.1.3 all equipment, cameras, transmitters,
antennae, office furniture and fixtures, office materials and supplies, tools,
inventory, spare parts, and other tangible personal property of every kind and
description, owned by Benedek and used or held for use in connection with the
operation of the Stations or located on or at the Real Property, including the
property listed on Schedule 7.10 of the Disclosure Schedule, together with, to
the extent permitted by this Agreement, any replacements thereof and additions
thereto made between the date hereof and the Closing Date, and less any
retirements or dispositions thereof made between the date hereof and the Closing
Date which are permitted by this Agreement;
2.1.4 all leases, contracts, licenses, purchase
orders, sales orders, commitments and other agreements exclusively relating to
the business and operation of each Station to which Benedek or BLC is a party or
in which Benedek or BLC has rights, listed on Schedule 7.8 of the Disclosure
Schedule, or not required by Section 7.8 hereof to be set forth on Schedule 7.8
of the Disclosure Schedule, and those leases, contracts, licenses, purchase
orders, sales orders, commitments and other agreements relating to the business
and operation of each Station entered into by Benedek or BLC between the date
hereof and the Closing Date in accordance with Section 10.2 hereof, except for
those that expire by their terms or are cancelled between the date hereof and
the Closing Date;
2.1.5 all orders and agreements now existing, or
entered into in the ordinary course of business between the date hereof and the
Closing Date, for the sale of advertising time on each Station except those
which on the Closing Date have already been filled or cancelled in accordance
with Section 10.2 hereof or have expired;
2.1.6 all programs and programming materials and
elements of whatever form or nature as of the date hereof and used or held for
use in connection with the operation of the Stations, whether recorded on tape
or any other substance or intended for live performance, and whether completed
or in production, and all related common-law and statutory copyrights owned by
or licensed to Benedek or BLC and used or held for use in connection with the
operation of the Stations, together with all such programs, materials, elements
and copyrights acquired by Benedek or BLC in connection with the business and
operations of the Stations between the date hereof and the Closing Date, except
those that expire or are cancelled in accordance with Section 10.2 hereof
between the date hereof and the Closing Date;
2.1.7 all rights of Benedek or BLC in and to
Proprietary Rights and all licenses and other agreements relating thereto and
used exclusively in connection with the business and operation of the Stations,
including those listed on Schedule 7.11 of the Disclosure Schedule;
2.1.8 all causes of action, judgments, claims,
demands and other rights of Benedek or BLC of every kind or nature to the extent
the same relate to the business and operation of the
-4-
Stations except to the extent that such causes of action, judgments, claims,
demands or other rights relate to the Excluded Assets, the Excluded Liabilities
or the Excluded Contracts;
2.1.9 all rights of Benedek relating to or arising
out of or under express or implied warranties from suppliers with respect to the
tangible property included in the Assets;
2.1.10 all prepaid film and programming expenses
and all barter receivables arising in connection with Tradeout Agreements now
existing or hereafter entered into in the ordinary course of business (it being
understood that the consideration being paid by Purchaser includes consideration
for the contracts and commitments of Benedek relating to motion pictures and
other programming and for barter receivables arising in connection with Tradeout
Agreements of the Stations and that no further consideration shall be due to
Benedek and no proration shall be due in respect thereof);
2.1.11 all books and records, including, but not
limited to, correspondence, employment records, production records, accounting
records, property records, filings with the FCC, mailing lists, customer and
vendor lists and other records and files of or relating to the Assets, other
than the Excluded Records; provided, however, that such books and records shall
be maintained in existence for a period of six years following the Closing Date
and shall be made available for inspection and duplication by Benedek or BLC, at
its expense, upon reasonable notice during normal business hours;
2.1.12 all outstanding accounts receivable of
Benedek as of the Closing Date attributable to any of the Stations, including
without limitation amounts due from advertisers, amounts due as network
compensation, and amounts due in respect of copyright royalties;
2.1.13 cash on hand at each Station as of the
Closing Date, which amount will not be less than $100,000 for each Station;
2.1.14 any and all prepaid expenses, advances or
deposits made by Benedek on behalf of the Stations;
2.1.15 any refunds of local or other taxes,
including, without limitation, property or sales taxes, or other taxes of any
kind or description with respect to each Station which relate to periods prior
to and including the Closing Date (excluding local or other taxes based on
income);
2.1.16 refunds paid or payable in connection with
the cancellation or discontinuance of any insurance policies applicable to each
Station following the Closing and all rights for reimbursement under any such
insurance policies of costs incurred by Benedek prior to the Closing; and
2.1.17 those other assets, properties and rights
described on Schedule 2.1 of the Disclosure Schedule.
2.2 EXCLUDED ASSETS. Anything contained in Section 2.1
above to the contrary notwithstanding, Benedek and BLC shall not transfer,
convey or assign to Purchaser, and the Assets shall not include the following
(the "Excluded Assets"):
2.2.1 the consideration delivered by Purchaser to
Benedek pursuant to this Agreement and all other rights of Benedek or BLC under
this Agreement, any agreement, certificate, instrument or other document
executed and delivered by Benedek, BLC or Purchaser in connection with the
transactions contemplated hereby, or any side agreement between Benedek or BLC
and Purchaser entered into on or after the date of this Agreement;
-5-
2.2.2 all real and personal property (including,
without limitation, all equipment, furniture, fixtures, files, computers,
computer software and computer software licenses, supplies and other personal
property) used by the corporate and accounting departments of Benedek or its
Affiliates in Hoffman Estates, Illinois;
2.2.3 all assets, whether real or personal,
tangible or intangible, which are owned, used or held for use by Benedek or BLC
to conduct any business operation or activity other than the operation of the
Stations;
2.2.4 Benedek's and BLC's minute books and such
other books and records (other than books and records specifically described in
Section 2.1.11 hereof) as pertain to the organization, existence or ownership of
Benedek or BLC (the "Excluded Records");
2.2.5 Excluded Contracts and contracts,
commitments and agreements of Benedek or BLC to the extent the same relate to
Excluded Assets and not to the operation of any of the Stations and actions,
claims, suits, proceedings, arbitral actions, deposits, prepayments, refunds,
causes of action, choses 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 or the Excluded Liabilities;
2.2.6 assets sold by Benedek or BLC after the date
hereof and prior to the Closing Date in accordance with Section 10.2 hereof; and
2.2.7 those other assets, properties and rights
listed on Schedule 2.2 of the Disclosure Schedule.
2.3 TRANSFER OF ASSETS. The transfer of the Assets as
herein contemplated shall be made by Benedek and BLC, as applicable, free and
clear of all Liens other than: (i) Liens set forth on Schedules 7.9 and 7.10 of
the Disclosure Schedule and not required to be discharged on or prior to the
Closing Date pursuant to the terms of this Agreement; (ii) Liens assumed by
Purchaser pursuant to Section 3 hereof; and (iii) Permitted Liens. The transfer
of the Assets shall be effected by delivery by Benedek and BLC, as applicable,
of a xxxx of sale and assignment in the form of Exhibit A annexed hereto, an
assignment of FCC Licenses in the form of Exhibit B annexed hereto and such
other endorsements, assignments, drafts, checks, deeds, affidavits of title and
other instruments of transfer, conveyance and assignment, including customary
deeds with respect to real property to be conveyed hereunder, as shall be
necessary or appropriate to transfer, convey and assign the Assets to Purchaser
on the Closing Date as contemplated by this Agreement and as shall be reasonably
requested by Purchaser. The conveyancing documents with respect to Owned Real
Property shall be limited warranty deeds or their equivalent and such deeds
shall be subject to any Permitted Liens although such Permitted Liens shall not
be set forth in the deeds themselves. Benedek and BLC, as applicable, shall, at
any time and from time to time after the Closing Date, but at no cost to Benedek
or BLC, execute and deliver such other instruments of transfer and conveyance
and do all such further acts and things as may be reasonably requested by
Purchaser to transfer, convey, assign and deliver to Purchaser or to aid and
assist Purchaser in collecting and reducing to possession, any and all of the
Assets, or to vest in Purchaser good, valid and marketable title to the Assets.
2.4 NON-ASSIGNABLE ASSETS. Notwithstanding anything
contained in this Agreement to the contrary, this Agreement shall not constitute
an agreement or an attempted agreement to transfer or assign any contract,
license, lease, commitment, sales order, purchase order or other agreement, or
any claim or right of any benefit arising thereunder or resulting therefrom if
any such attempted transfer or assignment thereof, without the consent of any
other party thereto, would constitute a breach thereof or in
-6-
any way affect the rights of Purchaser thereunder. Benedek and BLC, as
applicable, shall, between the date hereof and the Closing Date, take
commercially reasonable efforts to obtain the consent of any party or parties to
any such material contracts, licenses, leases, commitments, sales orders,
purchase orders or other agreements to the transfer or assignment thereof by
Benedek or BLC, as applicable, to Purchaser hereunder in all cases in which such
consent is required for transfer or assignment; provided, that such efforts
shall not require the payment of any consideration by Benedek or BLC, as
applicable. If after Benedek or BLC, as applicable, has used commercially
reasonable efforts to obtain the consent of any such other party to such
material contract, license, lease, commitment, sales order, purchase order or
other agreement, such consent shall not be obtained at or prior to the Closing,
or an attempted assignment thereof at the Closing would be ineffective and would
affect the rights of Benedek or BLC, as applicable, thereunder, Benedek or BLC,
as applicable, will cooperate with Purchaser in any reasonable arrangement
designed to provide for Purchaser the benefits under any such material contract,
license, lease, commitment, sales order, purchase order or other agreement,
including the enforcement, at the cost and for the benefit of Purchaser, of any
and all rights of Benedek or BLC, as applicable, against such other party
thereto arising out of the breach or cancellation thereof by such other party or
otherwise.
2.5 TREATMENT OF CERTAIN CONTRACTS. Benedek and BLC, as
applicable, on the one hand, and Purchaser, on the other hand, shall, between
the date hereof and the Closing Date, take commercially reasonable efforts to
bifurcate any agreements that relate to both the Assets and other assets of
Benedek or BLC not being sold to Purchaser under this Agreement, such that as of
the Closing Date (i) Purchaser will be a party to agreements relating only to
the Assets and (ii) Benedek or BLC will be a party to agreements relating only
to assets of Benedek or BLC, respectively, not being sold to Purchaser under
this Agreement.
3. ASSUMPTION OF LIABILITIES.
3.1 ASSUMED LIABILITIES. Subject to the terms and
conditions of this Agreement and the performance by the parties hereto of their
respective obligations hereunder, on the Closing Date, simultaneously with the
transfer, conveyance and assignment by Benedek and BLC, as applicable, to
Purchaser of the Assets, Purchaser shall assume or otherwise be liable for,
subject to the limitations contained herein, the liabilities and obligations of
Benedek and BLC, as applicable, (the "Assumed Liabilities") under:
3.1.1 the contracts, agreements and commitments
pertaining to each Station set forth on Schedule 7.8 of the Disclosure Schedule,
other than Excluded Contracts, to the extent the liabilities and obligations
thereunder arise after the Closing Date;
3.1.2 contracts, agreements and commitments
pertaining to each Station in existence on the date hereof and not required by
Section 7.8 hereof to be set forth on Schedule 7.8 of the Disclosure Schedule,
other than Excluded Contracts, to the extent the liabilities and obligations
thereunder arise after the Closing Date;
3.1.3 contracts, agreements and commitments
pertaining to each Station with customers and advertising agencies accepted in
the ordinary course of business for the sale of advertising time to the extent
the liabilities and obligations thereunder arise after the Closing Date;
3.1.4 contracts, agreements and commitments
pertaining to each Station of the type set forth in Sections 3.1.1, 3.1.2 or
3.1.3, to the extent the liabilities and obligations thereunder arise after the
Closing Date, to which Benedek becomes a party in the ordinary course of
business subsequent to the date hereof and on or prior to the Closing Date,
which (i) are not fully performed or discharged on or prior to the Closing Date,
(ii) are permitted to be entered into by Benedek under the
-7-
terms and conditions of this Agreement and (iii) are assigned and transferred to
Purchaser as contemplated herein;
3.1.5 liabilities for accruals for commissions
(which have been earned and not paid as of the Closing Date), employee vacation
and sick time for Transferred Employees; and
3.1.6 the capital lease, note and mortgage
liabilities set forth on Schedule 3.1.6 of the Disclosure Schedule as of the
Closing Date (the "Assumed Indebtedness") to the extent outstanding on the
Closing Date;
3.1.7 any litigation, proceeding, or claim by any
Person relating exclusively to the business or operation of the Stations prior
to the Closing Date other than the litigations, proceedings or claims listed on
Schedule 3.3.5 of the Disclosure Schedule; and
3.1.8 without duplication, accounts payable and
accrued expenses (excluding accrued Federal, state, local and other taxes based
on income and any other Excluded Liabilities) directly attributable to the
Stations as of the Closing Date.
3.2 INSTRUMENTS OF ASSUMPTION FOR THE ASSUMED
LIABILITIES. The assumption by Purchaser of the Assumed Liabilities shall be
effected by an instrument of assumption in the form of Exhibit C annexed hereto
and such other instruments of assumption delivered to Benedek and BLC, as
applicable, on the Closing Date as shall be reasonably satisfactory to Purchaser
and Benedek and BLC, as applicable. Purchaser shall, at any time and from time
to time after the Closing Date, execute and deliver such other instruments of
assumption and do all such further acts and things as may be reasonably
requested by Benedek or BLC, as applicable, to implement the assumption of each
such liability and obligation. Assumption by Purchaser of the Assumed
Liabilities shall in no way expand the rights or remedies of third parties
against Purchaser as compared to the rights and remedies which such parties
would have had against Benedek or BLC, as applicable, had this Agreement not
been consummated.
3.3 EXCLUDED LIABILITIES. Purchaser does not and shall
not assume, pay, perform or discharge any liabilities or obligations of Benedek
or BLC other than the Assumed Liabilities, and, without limiting the foregoing,
it is expressly agreed by the parties hereto that Purchaser shall not assume or
be liable for any of the following liabilities or obligations of Benedek or BLC
(the "Excluded Liabilities"):
3.3.1 liabilities or obligations of Benedek or BLC
for borrowed money (other than the Assumed Indebtedness) or to any of their
stockholders or to any Person affiliated therewith;
3.3.2 liabilities or obligations of Benedek or BLC
incurred with respect to its entry into this Agreement or its consummation of
any of the transactions contemplated hereunder (including, without limitation,
Benedek's or BLC's legal and accounting fees;
3.3.3 liabilities or obligations for Federal,
state, local or other taxes based on income;
3.3.4 any pension, retirement, profit-sharing plan
or trust or other employee benefit plan of Benedek;
3.3.5 any litigation, proceeding, or claim by any
Person relating exclusively to the business or operation of the Stations prior
to the Closing Date in respect of which a loss would be
-8-
covered by any of Benedek's insurance policies, including the litigations,
proceedings or claims listed on Schedule 3.3.5 of the Disclosure Schedule; and
3.3.6 liabilities or obligations arising under or
with respect to the contracts, agreements and commitments listed on Schedule
3.3.6 of the Disclosure Schedule (the "Excluded Contracts").
4. CLOSING PAYMENT; ADJUSTMENTS; ALLOCATION.
4.1 PURCHASE PRICE. The purchase price (the "Purchase
Price") for the Assets shall be equal to the amount set forth on Schedule 4.1 of
the Disclosure Schedule less the amount of any Assumed Indebtedness. The
Purchase Price, less any amount transferred by the Escrow Agent to Benedek
pursuant to Section 4.4 hereof, shall be payable at the Closing by wire transfer
of immediately available funds to an account designated by Benedek.
4.2 DEPOSIT. On the date hereof, Purchaser has deposited
with Shack Xxxxxx Xxxx Xxxxxxxx & Xxxxxxx P.C. (the "Escrow Agent") the sum of
Five Million Dollars ($5,000,000) (the "Deposit"), which amount shall be held
and disbursed by the Escrow Agent pursuant to the terms of the Escrow Agreement
(the "Escrow Agreement") in the form of Exhibit D annexed hereto and pursuant to
Section 14 hereof.
4.3 ALLOCATION. As promptly as practicable, but in any
event, within 30 calendar days of the date hereof, Purchaser shall cause to be
prepared and deliver to Benedek and BLC a schedule of its proposed allocation
(the "Allocation Schedule") for tax purposes of the Purchase Price among the
Assets acquired by Purchaser. The Allocation Schedule shall be conclusive and
binding for purposes of this Section 4.3 on Purchaser, Benedek and BLC, unless
Benedek provides Purchaser with a notice of objection (the "Objection Notice")
within 30 calendar days after Benedek and BLC's receipt of the Allocation
Schedule, which notice shall state the allocation proposed by Benedek and BLC
(the "Benedek Allocation Schedule"). Purchaser shall have 15 calendar days from
receipt of the Objection Notice to accept or reject the Benedek Allocation
Schedule. The Benedek Allocation Schedule shall be conclusive and binding for
purposes of this Section 4.3 on Purchaser, Benedek and BLC, unless Purchaser
provides Benedek with notice of objection within 15 calendar days after receipt
of the Benedek Allocation Schedule. In the event that the parties are unable to
agree on an allocation after good faith negotiations, then the parties agree to
be bound by an appraisal of such assets by an independent nationally recognized
firm of valuation experts mutually acceptable to Benedek and Purchaser. The cost
of such appraisal shall shared equally between Benedek and Purchaser. Such
appraisal shall be conclusive and binding for the purposes of this Section 4.3
on Purchaser, Benedek and BLC. Purchaser, Benedek and BLC (i) shall execute and
file all tax returns and prepare all financial statements, returns and other
instruments in a manner consistent with the allocation as determined in
accordance with this Section 4.3, (ii) shall not take any position before any
governmental authority or in any judicial proceeding that is inconsistent with
such allocation and (iii) shall cooperate with each other in a timely filing,
consistent with such allocation, of Form 8594 with the Internal Revenue Service
(the "IRS").
4.4 DISPOSITION OF DEPOSIT. Purchaser shall be entitled
to receive all interest earned with respect to the Deposit prior to the date of
payment of the Deposit (except as otherwise provided in Section 14 hereof) and
if Purchaser so instructs, Purchaser and Benedek shall instruct the Escrow Agent
to pay any such interest accumulated on the Closing Date to Benedek in payment
to be credited toward the Purchase Price. At the Closing, contemporaneously with
the performance by Benedek and Purchaser of their respective obligations to be
performed at the Closing, Purchaser and Benedek shall instruct the Escrow Agent
to pay the Deposit to Benedek in immediately available funds. In the event the
transactions contemplated by this Agreement are not consummated in accordance
with the terms hereof,
-9-
Purchaser and Benedek shall instruct the Escrow Agent to disburse the Deposit
and all interest earned thereon in accordance with Section 14 hereof.
5. CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at 10:00 a.m., eastern time, on a
date within five days following the date when all conditions to the obligations
of Purchaser and Benedek and BLC hereunder shall have been satisfied or waived
in writing. The Closing shall take place at the offices of Shack Xxxxxx Xxxx
Xxxxxxxx & Xxxxxxx P.C., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as may be agreed to by Purchaser and Benedek. The date of the
Closing is hereinafter referred to as the "Closing Date." For accounting and tax
purposes, the transactions contemplated by this Agreement shall be effective as
of 11:59 p.m. Local Time, on the day immediately prior to the Closing Date.
6. GOVERNMENTAL CONSENTS.
6.1 FCC CONSENT. The assignment of the FCC Licenses to
Purchaser as contemplated by this Agreement is subject to prior FCC Consent.
6.1.1 Promptly after the execution of this
Agreement, Purchaser and Benedek and BLC shall proceed to prepare for filing
with the FCC appropriate applications for consent to the assignment of the FCC
Licenses to Purchaser (the "FCC Application"), which shall be filed with the FCC
as soon as practicable but in no event later than 10 business days after the
date hereof. The FCC Application shall include such information relating to each
Station in order to effect the timely closing of the transactions contemplated
by this Agreement. The parties shall thereafter prosecute the FCC Application
with all reasonable diligence and otherwise use their reasonable best efforts to
obtain the grant of such application as expeditiously as practicable (but no
party shall have any obligation to take any unreasonable steps to satisfy
complainants, if any). If the FCC Consent imposes any condition on any party
hereto, such party shall use its reasonable best efforts to comply with such
condition unless compliance would have a material adverse effect upon it, its
parent entity, or any of its or its parent entity's subsidiaries or Affiliates,
as appropriate. Purchaser and Benedek shall each pay 50% of all filing fees
payable with respect to all filings required by the FCC in connection with the
transactions contemplated by this Agreement and made pursuant to this Section
6.1.1.
6.1.2 The transfer of the Assets hereunder is
expressly conditioned upon the grant of the FCC Consent and compliance by the
parties hereto with the conditions (if any) imposed in such consent.
6.2 OTHER GOVERNMENTAL CONSENTS. Promptly following the
execution of this Agreement, the parties will proceed to prepare and file with
the appropriate governmental authorities any other requests for approval or
waiver that are required from governmental authorities in connection with the
transactions contemplated hereby, and shall diligently and expeditiously
prosecute, and shall cooperate fully with each other in the prosecution of, such
requests for approval or waiver and all proceedings necessary to secure such
approvals and waivers.
7. REPRESENTATIONS AND WARRANTIES OF BENEDEK. Prior to the
execution hereof, Benedek has delivered to Purchaser a schedule (the "Disclosure
Schedule") setting forth for each Station, among other things, items the
disclosure of which is necessary or appropriate either (i) in response to an
express informational requirement contained in or requested by a provision
hereof or (ii) as an exception to one or more representations or warranties
contained in Sections 7 or 8; provided, that the listing of an item in one
section of the Disclosure Schedule shall be deemed to be a listing in the other
sections of the Disclosure Schedule to the extent that such information is
reasonably determinable to be so applicable to
-10-
such other section or sections of the Disclosure Schedule. Except as provided in
the Disclosure Schedule, Benedek hereby makes the following representations and
warranties to Purchaser:
7.1 ORGANIZATION AND STANDING. Benedek is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and Benedek has all requisite power and authority to own,
lease, use and operate its properties and assets at and carry on its business in
the places where such properties and assets are now owned, leased or operated or
where such business is now conducted. Benedek is duly qualified to do business
and is in good standing in the jurisdictions which constitute the DMA for each
Station.
7.2 POWER AND AUTHORITY. Benedek has all requisite power
and authority to enter into this Agreement and the documents and instruments
contemplated hereby and to assume and perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the documents and
instruments contemplated hereby and the performance by Benedek of its
obligations hereunder and thereunder have been duly and validly authorized by
all necessary action and no further action or approval is required in order to
constitute this Agreement and the documents and instruments contemplated hereby
as valid and binding obligations of Benedek, enforceable in accordance with
their terms, except as the enforceability of such agreements, documents and
instruments, may be limited by or subject to, any bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and that the remedies of specific
performance, injunction, and other forms of equitable relief are subject to
certain principles of equity jurisdiction, equitable defenses and the discretion
of the court before which any proceeding therefor may be brought.
7.3 NO CONFLICTS. Except as set forth on Schedule 7.3 of
the Disclosure Schedule and except for any consent required for the assignment
to Purchaser of any contract, lease, agreement or commitment included within the
Assets, the execution and delivery by Benedek of this Agreement and the
documents and instruments contemplated hereby, the consummation by Benedek of
the transactions contemplated hereby and the performance by Benedek of its
obligations hereunder and thereunder:
7.3.1 do not and will not conflict with or violate
any provision of the Certificate of Incorporation or Bylaws of Benedek;
7.3.2 do not and will not conflict with or result
in any breach of any condition or provision of, or constitute a default under or
give rise to any right of termination, cancellation or acceleration or (whether
after the giving of notice or lapse of time or both) result in the creation or
imposition of any Lien (other than Permitted Liens) upon any of the Assets owned
by Benedek by reason of the terms of any contract, mortgage, Lien, lease,
agreement, indenture, instrument, judgment or decree to which Benedek is a party
or which is or purports to be binding upon Benedek or which affects or purports
to affect any of the Assets owned by Benedek except as would not, individually
or in the aggregate, have, or could reasonably be expected to have, a Material
Adverse Effect; and
7.3.3 subject to the receipt of any governmental
approvals required in connection with the transfer of the Assets owned by
Benedek to Purchaser, do not and will not conflict with or result in a violation
of or default under (with or without notice of the lapse of time or both) any
statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge or other restriction of any court, administrative agency or commission or
other governmental authority or instrumentality except as would not,
individually or in the aggregate, have, or could reasonably be expected to have,
a Material Adverse Effect.
7.4 GOVERNMENT APPROVAL. Other than FCC rulemaking
procedures of general applicability or as set forth in Schedule 8.4 of the
Disclosure Schedule, there are no fines, forfeitures,
-11-
notices of apparent liability, orders to show cause or any other administrative
or judicial orders outstanding nor any proceedings pending or, to Benedek's
knowledge, threatened, the effect of which would be the revocation,
cancellation, non-renewal, suspension or material adverse modification of the
FCC Licenses or otherwise have any Material Adverse Effect. Except as
contemplated in Section 6 hereof, no action, approval, consent, authorization or
other action by or filing with any governmental or quasi-governmental agency,
commission, board, bureau or instrumentality, is necessary or required as to
Benedek for the due execution, delivery or performance by Benedek of this
Agreement or any document or instrument contemplated hereby except where the
failure to obtain such approval, consent, authorization or filing, would not,
individually or in the aggregate, have, or could reasonably be expected to have,
a Material Adverse Effect.
7.5 VALIDITY. This Agreement constitutes and the other
documents and instruments contemplated hereby will, on the due execution and
delivery thereof, constitute the legal, valid and binding obligations of
Benedek, enforceable in accordance with their respective terms, except as the
enforceability of such agreements, documents and instruments, may be limited by
or subject to, any bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and that the remedies of specific performance, injunction, and other forms of
equitable relief are subject to certain principles of equity jurisdiction,
equitable defenses and the discretion of the court before which any proceeding
therefor may be brought.
7.6 FINANCIAL STATEMENTS. Schedule 7.6 of the Disclosure
Schedule sets forth the following financial statements of Benedek (collectively
the "Financial Statements"): internal unaudited statements of operations of each
Station for the years ended December 31, 2000 and 2001 and the three months
ended March 31, 2002. Except as set forth on Schedule 7.6 of the Disclosure
Schedule, the Financial Statements are true, correct and complete in all
material respects, are in accordance with GAAP and the books and records of
Benedek and fairly, completely and accurately present the results of operations
for the periods covered.
7.7 TAXES. Except as set forth on Schedule 7.7 of the
Disclosure Schedules, Benedek has duly filed, and has caused BLC to file, all
material foreign, Federal, state, county and local income, excise, sales,
property, withholding, social security, franchise, license, information returns
and other tax returns and reports required to have been filed by Benedek or BLC,
as applicable, to the date hereof pertaining to the operation of each Station
and Benedek or BLC, as applicable, has paid all amounts shown to be due thereon.
7.8 CONTRACTS.
7.8.1 Except only those contracts, agreements or
commitments listed and described on Schedule 7.8 of the Disclosure Schedule
(copies of which have been heretofore delivered or made available to Purchaser
or, with respect to oral agreements, written summaries of the terms of which
have been heretofore delivered or made available to Purchaser), the Excluded
Contracts and contracts, agreements or commitments entered into in the ordinary
course of business of each Station and (i) involving less than $25,000 over
their term or (ii) involving more than $25,000 over their term but not more than
$100,000 in the aggregate for all such contracts, agreements or commitments of
such Station or (iii) involving sales of advertising time in accordance with
each Station's customary rate practices, Benedek is not a party to nor does
Benedek have any contract, agreement or commitment of any kind or nature
whatsoever, written or oral, formal or informal, with respect to the business
and operation of each Station. Except as set forth on Schedule 7.8 of the
Disclosure Schedule, each of the written contracts and commitments referred to
therein is valid and existing, in full force and effect, and enforceable in
accordance with its terms, except as the enforceability of such agreements,
documents and instruments, may be limited by or subject to, any bankruptcy,
insolvency, reorganization, moratorium or other similar
-12-
laws now or hereafter in effect relating to creditors' rights generally, and no
party thereto is in default and no claim of default by any party has been made
or is now pending, except for such defaults as would not, in any individual
case, reasonably be expected, as of the date hereof, to have a Material Adverse
Effect.
7.8.2 Each Station is currently affiliated with
the television network listed on Schedule 13.1.3 of the Disclosure Schedule
pursuant to the network affiliation contract listed on such Schedule 13.1.3 for
such Station. Said network affiliation contracts are in full force and effect
and Benedek is not aware of any state of facts which would permit the
termination for cause of any such network affiliation contract prior to the
expiration of the term thereof.
7.9 REAL PROPERTY.
7.9.1 Schedule 7.9 of the Disclosure Schedule is a
complete and correct list of all real property or premises owned in whole or in
part by Benedek and used exclusively in the business and operation of each
Station (other than Excluded Assets) (the "Owned Real Property") and all real
property or premises leased in whole or in part by Benedek and used exclusively
in the business and operation of each Station (other than Excluded Assets) (the
"Leased Real Property", and together with the Owned Real Property, the "Real
Property"). Copies of the leases with respect to the Leased Real Property or,
with respect to oral leases, written summaries of the terms (the "Leases") and
the other documents referred to on Schedule 7.9 of the Disclosure Schedule
(other than those that will not survive the Closing) have been heretofore
delivered or made available to Purchaser.
7.9.2 Benedek has all required legal and valid
occupancy permits and other licenses or government approvals for each of the
Real Properties used or held for use exclusively in connection with the
operation of each Station, except where the failure to obtain such permit or
license would not, in any individual case, reasonably be expected, as of the
date hereof, to have a Material Adverse Effect.
7.9.3 Benedek has the legal right (without the
consent or other approval of any other party) to possess and quietly enjoy the
premises and properties under each of the Leases. Each Lease is in full force
and effect and constitutes a legal, valid and binding obligation of Benedek and
there is not under any Lease any claim of default or event which, with or
without notice or the lapse of time or both, could reasonably be expected, in
any individual case, as of the date hereof, to have a Material Adverse Effect.
7.9.4 Except for Permitted Liens and as set forth
on Schedule 7.9 of the Disclosure Schedule, Benedek has good, marketable and
insurable title to the Owned Real Property, free and clear of all Liens and
except as set forth on Schedule 7.9 of the Disclosure Schedule, no party has the
right to acquire or use such Owned Real Property or any improvements, fixtures
or equipment located thereon. Except as set forth on Schedule 7.9 or Schedule
7.10 of the Disclosure Schedule, Benedek has good and marketable title and owns
outright, free and clear of all Liens (other than Permitted Liens), each
improvement, fixture and item of equipment located in or on each Real Property.
7.9.5 None of the Real Properties has been
condemned or otherwise taken by any public authority, and no condemnation or
taking is, to Benedek's knowledge, threatened or contemplated.
7.10 PERSONAL PROPERTY. Schedule 7.10 of the Disclosure
Schedule is a true and complete list of (i) all tangible personal property owned
by Benedek and used exclusively in connection with the business and operation of
each Station or located on or at the Real Property (other than Excluded Assets)
having a book value at the date hereof in excess of $25,000 per item (other than
items of personal
-13-
property having a book value in excess of $25,000 but not in excess of $100,000
in the aggregate per Station) and (ii) all personal property owned by a third
party which is leased or otherwise used exclusively by Benedek in connection
with the business and operation of each Station or located on or at the Real
Property (other than Excluded Assets), including, without limitation, leases or
other agreements relating to the use or operation of any machinery, equipment,
motor vehicles, office furniture or fixtures owned by any third party (copies of
which leases or other agreements have been heretofore delivered or made
available to Purchaser) but excluding leases not required to be set forth on
Schedule 7.8 of the Disclosure Schedule. Each such personal property lease is in
full force and effect and constitutes a legal, valid and binding obligation of
Benedek and there is not under any such lease any default or any claim of
default or of an event which, with or without notice or the lapse of time or
both, could reasonably be expected, in any individual case, as of the date
hereof, to have a Material Adverse Effect. Except for Permitted Liens and as set
forth on Schedule 7.10 of the Disclosure Schedule, all personal property
purported to be owned by Benedek is owned by it, free and clear of all Liens.
7.11 INTELLECTUAL PROPERTY. Schedule 7.11 of the
Disclosure Schedule is a complete and correct list of all material Intellectual
Property owned by Benedek as of the date hereof, to the extent such Intellectual
Property is exclusively used or held for use in connection with the operation of
any of the Stations. Benedek owns or has a valid right to use all Proprietary
Rights used or held for use by Benedek exclusively in connection with the
operation of any of the Stations as currently conducted by Benedek, without
infringing upon the rights of any other Person, except as would not, in any
individual case, reasonably be expected, as of the date hereof, to have a
Material Adverse Effect.
7.12 INSURANCE. Schedule 7.12 of the Disclosure Schedule
is a complete and correct list, and brief description (including name of
insurer, agent, type of coverage, policy number, amount of coverage, expiration
date and any pending claims thereunder) of all insurance policies, including,
without limitation, liability, burglary, theft, fidelity, errors and omissions,
life, fire, product liability, workers' compensation, health and other forms of
insurance of any kind held by Benedek in connection with the business and
operation of each Station; each such policy is in full force and effect; except
as set forth on Schedule 7.12 of the Disclosure Schedule, Benedek and its
Affiliates are the sole beneficiaries of each such policy; no such policy has
been, and none of the future proceeds thereof have been, assigned to any other
Person; to Benedek's knowledge, there is no act or fact or failure to act which
has or might cause any such policy to be cancelled or terminated; and each such
policy is adequate for the business and operation of each Station. No notice of
cancellation or non-renewal with respect to, or disallowance of any material
claim under, any insurance policies or binders of insurance which relate to the
Assets or any of the Stations has been received by Benedek.
7.13 LITIGATION. Except as set forth on Schedule 7.13 of
the Disclosure Schedule, no action, suit, claim, investigation, proceeding or
controversy, whether legal or administrative or in mediation or arbitration, is
pending or, to Benedek's knowledge, threatened, at law or in equity or
admiralty, before or by any court or Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
which could reasonably be expected, in any individual case, as of the date
hereof, to have a Material Adverse Effect against Benedek with respect to any of
the Stations or seeking to restrain, prohibit, invalidate, set aside, rescind,
prevent or make unlawful this Agreement or the carrying out of this Agreement or
the transactions contemplated hereby. Benedek is not operating under or subject
to, or in default in respect of, any judgment, order, writ, injunction or decree
of any court or any Federal, state, municipal or other governmental department
commission, board, bureau, agency or instrumentality.
7.14 COMPLIANCE WITH LAW. Except as set forth on Schedule
7.14 of the Disclosure Schedule, to Benedek's knowledge, (i) Benedek has all
material permits, licenses, orders and approvals of all Federal, state or local
governmental regulatory bodies required for it to conduct the business and
-14-
operation of each Station as conducted on the date hereof, (ii) all such
permits, licenses, orders and approvals are in full force and effect in all
material respects and no suspension or cancellation of any of them is pending or
to Benedek's knowledge threatened and (iii) Benedek is in compliance in all
material respects with each law, rule, ordinance, regulation, order and decree
applicable to the business and operation of the Station, including, without
limitation, laws, rules and regulations respecting occupational safety,
environmental protection and employment practices except where the failure to so
comply could not reasonably be expected, in any individual case, as of the date
hereof, to have a Material Adverse Effect.
7.15 LABOR. Except as set forth on Schedule 7.15 of the
Disclosure Schedule, Benedek is not a party to any representation or labor
contract with respect to any employees at any of the Stations. Except as set
forth on Schedule 7.15 of the Disclosure Schedule, Benedek has not received any
written notice from any labor union or group of employees that such union or
group represents or believes or claims it represents or intends to represent any
of the employees of Benedek; to Benedek's knowledge, no strike or work
interruption by the employees of any of the Stations is planned, under
consideration, threatened or imminent; and Benedek has not made any loan or
given anything of value, directly or indirectly, to any officer, official, agent
or representative of any labor union or group of employees other than salaries
and ordinary course compensation.
7.16 EMPLOYEES. Schedule 7.16 of the Disclosure Schedule
is a complete and correct list of the names and current annual salary, bonus,
commission and perquisite arrangements, written or unwritten, for each employee
of each Station (including any employee who is an inactive employee on paid or
unpaid leave of absence). Benedek does not have any written contract for the
future employment of any employee except as may be listed on Schedule 7.16 of
the Disclosure Schedule.
7.17 EMPLOYEE BENEFIT PLANS. Schedule 7.17 of the
Disclosure Schedule is a complete and correct list of all employment, bonus,
incentive compensation, deferred compensation, pension, profit sharing,
retirement, stock purchase, stock option, stock ownership, stock appreciation
rights, phantom stock, equity (or equity-based), leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
medical, accident, disability, workers' compensation or other insurance,
severance, separation, termination, change of control or other benefit plan,
agreement (including any collective bargaining agreement), practice, policy or
arrangement, whether written or oral, and whether or not subject to ERISA
(including, without limitation, any "employee benefit plan" within the meaning
of Section 3(3) of ERISA) sponsored, maintained or contributed to by Benedek or
any ERISA Affiliate of Benedek in connection with the business and operation of
each Station (the "Employee Plans"). True and complete copies of each Employee
Plan have been heretofore delivered or made available to Purchaser. All Employee
Plans, related trust instruments or annuity contracts (or any other funding
instruments) are legal, valid and binding and are in full force and effect, and
each Employee Plan intended to be qualified under Section 401(a) of the Code is
so qualified and has been so qualified at all times since its inception. All
Employee Plans have been maintained, in all material respects, in accordance
with the requirements of the Code and ERISA, or any other applicable statute,
regulation or rule. There are no pending claims against any Employee Plan (other
than routine claims for benefits in accordance with its terms) nor, to the
knowledge of Benedek, has any claim been threatened in writing by any
participant thereof or beneficiary thereunder.
7.17.1 No Employee Plan is covered by Title IV of
ERISA, Section 302 of ERISA or Section 412 of the Code.
7.17.2 With respect to all Employee Plans that are
defined contribution plans, Benedek and any ERISA Affiliate have made all
contributions due thereunder for plan years prior to the date hereof.
-15-
7.17.3 Neither Benedek nor any ERISA Affiliate or
any plan fiduciary of any Employee Plan is or has engaged in any transaction
with respect to an Employee Plan in violation of Section 406(a) or 406(b) of
ERISA for which no exemption exists under ERISA or under applicable sections of
the Code. Neither Benedek nor any ERISA Affiliate, or the administering
committee or trustees of any Employee Plan has received (i) notice from the IRS
or the Department of Labor of the occurrence of a prohibited transaction within
the meaning of Section 406 of ERISA with respect to an Employee Plan or (ii)
notice of any breach of loyalty, prudence or diversification within the meaning
of Section 404 of ERISA with respect to an Employee Plan.
7.17.4 No Employee Plan is a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA.
7.17.5 Except as set forth on Schedule 7.17 of the
Disclosure Schedule, all Employee Plans are in material compliance with all
applicable reporting, disclosure, filing and other administrative requirements
pertaining to employee benefit plans set forth in the Code and ERISA and rules
and regulations promulgated under either, including but not limited to those set
forth in Sections 6057, 6058 and 6059 of the Code and applicable rules and
regulations thereunder, and in Sections 101, 102, 103, 104, 105, and 107 of
ERISA.
7.17.6 Benedek and any ERISA Affiliate at all times
have been in material compliance with respect to each Employee Plan with all
provisions of the Title X of the Consolidation Omnibus Budget Reconciliation Act
of 1985, as amended, and with the provisions of Part 6 of Title I of ERISA.
7.17.7 Except as set forth on Schedule 7.17 of the
Disclosure Schedule, during the twelve-consecutive month period prior to the
date of this Agreement, no steps have been taken to terminate any Employee Plan,
and no contribution failure has occurred with respect to any Employee Plan
sufficient to give rise to a lien under Section 302(f) of ERISA. To Benedek's
knowledge, no condition exists or event or transaction has occurred with respect
to an Employee Plan which might result in the incurrence of any material
liability, fine or penalty by Benedek or any ERISA Affiliate of Benedek. Neither
Benedek nor any ERISA Affiliate of Benedek has any contingent liability with
respect to any post-retirement benefit under any welfare plan, as such term is
defined in Section 3(1) of ERISA which is an Employee Plan, other than liability
for continuation coverage described in Part 6 of Title I of ERISA.
7.17.8 The transactions contemplated by this
Agreement will not result in any payment or series of payments by Benedek to any
Person of a parachute payment within the meaning of Section 280G of the Code.
7.18 ENVIRONMENTAL MATTERS.
7.18.1 Except as provided below in this Section
7.18.1, Benedek makes no representation or warranty, express or implied, with
respect to: (i) the existence or presence on, at, under or about the Real
Property of any environmental hazards, conditions, defects or hazardous
materials, including but not limited to any flammables, explosives, radioactive
materials, asbestos, asbestos containing material, PCBs, hazardous waste, any
petroleum, petroleum product derivative, compound or mixture, and without
limitation, those substances defined as "hazardous substances" or "hazardous
wastes" (collectively referred to as "Hazardous Substances") under any
Environmental Laws or (ii) the Real Property's compliance with the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 and Superfund
Amendments and Preauthorization Act of 1986, the Hazardous Materials
Transportation Act, the Resource Conservation and Recovery Act of 1976, the
Water Pollution Control Act, the Clean Air Act, all regulations promulgated
under all such Acts, as well as any other
-16-
Federal, state or local law, ordinance or regulation pertaining to health,
industrial hygiene or the environment and/or applicable to the existence,
removal, generation, transportation, discharge, process, storage or treatment of
Hazardous Substances (collectively referred to as "Environmental Laws"). Benedek
represents that: (i) during the period that Benedek has owned or leased the Real
Property, Benedek has not caused or knowingly permitted (nor, at any time prior
to the Closing, will Benedek cause or consent to) any Hazardous Substances to be
deposited in or on the Real Property in violation of any Environmental Laws and
(ii) as of the date of this Agreement, Benedek is not aware of any environmental
contamination at the Real Property except as may be reflected in the
environmental assessment reports listed on Schedule 7.18 of the Disclosure
Schedule, a complete copy of which has been delivered or made available to
Purchaser.
7.18.2 By negotiation and execution of this
Agreement, the parties have expressly allocated certain environmental risks,
liabilities and expenses whether historical, current or prospective from Benedek
to Purchaser. In this regard, upon Closing, Benedek shall have no liability in
the future to Purchaser or to any Person claiming by, through or under Purchaser
with respect to: (i) any past, present or future claim, cause of action,
proceeding or otherwise, whether known or unknown, relating to or arising out of
any past, present or future environmental condition at, under or about the Real
Property; (ii) the presence of Hazardous Substances at, under or about the Real
Property; (iii) a violation of any Environmental Law relating to the Real
Property and (iv) any losses, damages, penalties, costs (foreseen or unforeseen,
known or unknown), counsel, engineering and other professional or expert fees
with respect to the foregoing (the foregoing clauses (i), (ii), (iii) and (iv)
are collectively referred to as "Environmental Claims"). Upon Closing: (i)
Purchaser hereby unconditionally releases and discharges Benedek from any and
all Environmental Claims, whether sustained by Purchaser directly or relating to
any claims by Purchaser for indemnification, contribution or otherwise with
respect to Environmental Claims against Purchaser by third parties and (ii)
Purchaser hereby agrees to indemnify, defend and hold Benedek harmless from and
against all such Environmental Claims, including any and all Environmental
Claims made hereafter directly against Benedek by third parties claiming by,
through or under Purchaser.
8. REPRESENTATIONS AND WARRANTIES OF BENEDEK AND BLC. Except as
provided in the Disclosure Schedule, Benedek and BLC hereby jointly and
severally make the following representations and warranties to Purchaser:
8.1 ORGANIZATION AND STANDING. BLC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own, lease, use and
operate its properties and assets at and carry on its business in the places
where such properties and assets are now owned, leased or operated or where such
business is now conducted. BLC is duly qualified to do business and is in good
standing in the jurisdictions which constitute the DMA for each Station. BLC
does not own any assets, properties or rights used or held for use in connection
with the operation of each Station other than the FCC Licenses listed on
Schedule 8.4 of the Disclosure Schedule.
8.2 POWER AND AUTHORITY. BLC has all requisite power and
authority to enter into this Agreement and the documents and instruments
contemplated hereby and to assume and perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the documents and
instruments contemplated hereby and the performance by BLC of its obligations
hereunder and thereunder have been duly and validly authorized by all necessary
action and no further action or approval is required in order to constitute this
Agreement and the documents and instruments contemplated hereby as valid and
binding obligations of BLC, enforceable in accordance with their terms, except
as the enforceability of such agreements, documents and instruments, may be
limited by or subject to, any bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally and that the remedies of specific performance, injunction, and other
-17-
forms of equitable relief are subject to certain principles of equity
jurisdiction, equitable defenses and the discretion of the court before which
any proceeding therefor may be brought.
8.3 NO CONFLICTS. Except as set forth on Schedule 8.3 of
the Disclosure Schedule, the execution and delivery by BLC of this Agreement and
the documents and instruments contemplated hereby, the consummation by BLC of
the transactions contemplated hereby and the performance by BLC of its
obligations hereunder and thereunder:
8.3.1 do not and will not conflict with or violate
any provision of the Certificate of Incorporation or Bylaws of BLC;
8.3.2 do not and will not conflict with or result
in any breach of any condition or provision of, or constitute a default under or
give rise to any right of termination, cancellation or acceleration or (whether
after the giving of notice or lapse of time or both) result in the creation or
imposition of any Lien (other than Permitted Liens) upon any of the Assets owned
by BLC by reason of the terms of any contract, mortgage, Lien, lease, agreement,
indenture, instrument, judgment or decree to which BLC is a party or which is or
purports to be binding upon BLC or which affects or purports to affect any of
the Assets owned by BLC except as would not, individually or in the aggregate,
have, or could reasonably be expected to have, a Material Adverse Effect; and
8.3.3 subject to the receipt of any governmental
approvals required in connection with the transfer of the Assets owned by BLC to
Purchaser, do not and will not conflict with or result in a violation of or
default under (with or without notice of the lapse of time or both) any statute,
regulation, rule, judgment, order, decree, stipulation, injunction, charge or
other restriction of any court, administrative agency or commission or other
governmental authority or instrumentality except as would not, individually or
in the aggregate, have, or could reasonably be expected to have, a Material
Adverse Effect.
8.4 GOVERNMENT APPROVAL. BLC is the holder of the FCC
Licenses, all of which are set forth on Schedule 8.4 of the Disclosure Schedule,
which constitute all necessary authorizations from the FCC to enable each
Station to broadcast and transmit the present television programming of each
Station. Other than FCC rulemaking procedures of general applicability or as set
forth on Schedule 8.4 of the Disclosure Schedule, there are no fines,
forfeitures, notices of apparent liability, orders to show cause or any other
administrative or judicial orders outstanding nor any proceedings pending or, to
BLC's knowledge, threatened, the effect of which would be the revocation,
cancellation, non-renewal, suspension or material adverse modification of the
FCC Licenses or otherwise have any Material Adverse Effect. Except as
contemplated in Section 6 hereof, no action, approval, consent, authorization or
other action by or filing with any governmental or quasi-governmental agency,
commission, board, bureau or instrumentality, is necessary or required as to BLC
for the due execution, delivery or performance by BLC of this Agreement or any
document or instrument contemplated hereby except where the failure to obtain
such approval, consent, authorization or filing, would not, individually or in
the aggregate, have, or could reasonably be expected to have, a Material Adverse
Effect.
8.5 VALIDITY. This Agreement constitutes and the other
documents and instruments contemplated hereby will, on the due execution and
delivery thereof, constitute the legal, valid and binding obligations of BLC,
enforceable in accordance with their respective terms, except as the
enforceability of such agreements, documents and instruments, may be limited by
or subject to, any bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and that the remedies of specific performance, injunction, and other forms of
equitable relief are subject to certain principles of equity jurisdiction,
equitable defenses and the discretion of the court before which any proceeding
therefor may be brought.
-18-
9. REPRESENTATIONS AND WARRANTIES OF PURCHASER. In order to
induce Benedek and BLC to enter into this Agreement and to perform their
obligations hereunder, Purchaser hereby makes the following representations and
warranties to Benedek and BLC:
9.1 ORGANIZATION AND STANDING. Purchaser is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all requisite power and authority, to
own, lease, use and operate its properties and assets at and carry on its
business in the places where such properties and assets are now owned, leased or
operated or where such business is now being conducted.
9.2 POWER AND AUTHORITY. Purchaser has all requisite
power and authority to enter into this Agreement and the documents and
instruments contemplated hereby and to assume and perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement and the
documents and instruments contemplated hereby and the performance by Purchaser
of its obligations hereunder and thereunder have been duly and validly
authorized by all necessary action and no further action or approval, is
required in order to constitute this Agreement and the documents and instruments
contemplated hereby as valid and binding obligations of Purchaser, enforceable
in accordance with their terms, except as the enforceability of such agreements,
documents and instruments, may be limited by or subject to, any bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and that the remedies of specific
performance, injunction, and other forms of equitable relief are subject to
certain principles of equity jurisdiction, equitable defenses and the discretion
of the court before which any proceeding therefor may be brought.
9.3 NO CONFLICTS. The execution and delivery by Purchaser
of this Agreement and the documents and instruments contemplated hereby, the
consummation by Purchaser of the transactions contemplated hereby and the
performance by Purchaser of its obligations hereunder and thereunder:
9.3.1 do not and will not conflict with or violate
any provision of the Certificate of Formation or the Operating Agreement of
Purchaser;
9.3.2 do not and will not conflict with or violate
any agreements, contracts or instruments to which Purchaser is a party except as
would not, individually or in the aggregate, have, or could reasonably be
expected to have, a material adverse effect upon the properties, operations,
business, financial condition or results of operations of Purchaser; and
9.3.3 subject to the receipt of any governmental
approvals required in connection with the transfer of the Assets to Purchaser,
do not and will not conflict with or result in a violation of or default under
(with or without notice of the lapse of time or both) any statute, regulation,
rule, judgment, order, decree, stipulation, injunction, charge or other
restriction of any court, administrative agency or commission or other
governmental authority or instrumentality except as would not, individually or
in the aggregate, have, or could reasonably be expected to have, a material
adverse effect upon the properties, operations, business, financial condition or
results of operations of Purchaser.
9.4 GOVERNMENT APPROVAL. Purchaser is legally and
financially qualified under the Communications Act to enter into this Agreement,
and to consummate the transactions contemplated hereby. In connection with the
transactions contemplated by this Agreement, 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, without limitation, any of the
Stations or any part thereof), terminate any venture or arrangement, or
effectuate any changes or restructuring of its ownership, including, without
limitation, the withdrawal or removal of
-19-
officers or directors or the conversion or repurchase of equity securities of
Purchaser or any Affiliate of Purchaser or owned by 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 an FCC Form 314 that it is financially qualified. Additionally,
except as contemplated in Section 6 hereof, no action, approval, consent or
authorization or other action, including, without limitation, any action,
approval, consent or authorization or other action by or filing with any
governmental or quasi-governmental agency, commission, board, bureau or
instrumentality, is necessary or required as to Purchaser for the due execution,
delivery or performance by Purchaser of this Agreement or any document or
instrument contemplated hereby except where the failure to obtain such approval,
consent, authorization or filing, would not, individually or in the aggregate,
have, or could reasonably be expected to have, a material adverse effect upon
the properties, operations, business, financial condition or results of
operations of Purchaser.
9.5 VALIDITY. This Agreement constitutes and the other
documents and instruments contemplated hereby will, on the due execution and
delivery thereof, constitute the legal, valid and binding obligations of
Purchaser, enforceable in accordance with their respective terms, except as the
enforceability of such agreements, documents and instruments, may be limited by
or subject to, any bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and that the remedies of specific performance, injunction, and other forms of
equitable relief are subject to certain principles of equity jurisdiction,
equitable defenses and the discretion of the court before which any proceeding
therefor may be brought.
9.6 ADEQUACY OF FINANCING. Purchaser has adequate funds
on hand or available to pay the Purchase Price.
9.7 LITIGATION. No action, suit, claim, investigation,
proceeding or controversy, whether legal or administrative or in mediation or
arbitration, is pending or, to Purchaser's knowledge, threatened, at law or in
equity or admiralty, before or by any court or Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality which, if adversely determined, would affect Purchaser's ability
to carry out this Agreement or the transactions contemplated hereby.
9.8 INDEPENDENT INVESTIGATION. Purchaser has conducted an
independent investigation of the Stations and their business operations, assets,
liabilities, results of operations, financial condition and prospects in making
its determination as to the propriety of the transactions contemplated by this
Agreement and in entering into this Agreement and the documents and instruments
required hereby, has relied solely on the results of said investigation and on
the representations and warranties of Benedek or BLC expressly contained in this
Agreement and the instruments, certificates or schedules furnished pursuant
hereto.
10. COVENANTS OF BENEDEK.
Benedek covenants as follows:
10.1 BOOKS AND RECORDS. Between the date hereof and the
Closing Date, Benedek shall give, and shall cause BLC to give, Purchaser and its
authorized representatives reasonable access, during regular business hours and
upon advance written notice, to any and all of its premises, properties,
contracts, books and records relating to the business and operation of each
Station and will cause its employees to furnish to Purchaser and its authorized
representatives any and all data and information pertaining to the business and
operation of brought upon the properties, operations, business, financial
-20-
condition or results of operations of each Station as Purchaser or its
authorized representatives shall from time to time reasonably request.
10.2 INTERIM OPERATIONS. From the date hereof until the
earlier of the Closing Date or the termination of this Agreement pursuant to
Section 15, except as otherwise consented to or approved in writing by Purchaser
(which consent shall not be unreasonably conditioned, withheld or delayed) or as
required by this Agreement, Benedek shall not:
10.2.1 sell, assign, lease, transfer or otherwise
dispose of any of the Assets except in the ordinary course of business;
10.2.2 mortgage, pledge or grant any Lien (other
than Permitted Liens) on any of the Assets;
10.2.3 effect any change in the accounting
practices, procedures or methods of any of the Stations, unless such change is
required by GAAP; or
10.2.4 except as set forth in Schedule 10.2 of the
Disclosure Schedules, enter into any transaction other than in the ordinary
course of business and consistent with past practices of each Station. Without
limiting the foregoing, at the Closing, Benedek shall cause each Station to be
current in its payment obligations with respect to film and programming
agreements.
10.3 DISCHARGE OF LIENS. On or prior to the Closing Date,
Benedek and BLC will cause all Liens with respect to the Assets (other than
Permitted Liens and the Liens set forth on Schedule 7.9 and 7.10 of the
Disclosure Schedule which are not required to be discharged on or prior to the
Closing Date pursuant to the terms of this Agreement and except only those
assumed by Purchaser pursuant to Section 3 hereof, including Liens relating to
the Assumed Indebtedness) to be discharged. Until the Closing Date, Benedek
shall periodically pay the amounts in respect of the Assumed Indebtedness in
accordance with the terms thereof.
10.4 MAINTENANCE OF INSURANCE. From the date hereof
through and including the Closing Date, Benedek will maintain in full force and
effect all insurance policies listed on Schedule 7.12 of the Disclosure Schedule
or renewals or replacements thereof.
10.5 COMPLIANCE. Benedek shall use, and shall cause BLC to
use, its reasonable best efforts to take or cause to be taken all action and
shall use its reasonable best efforts to do, and shall cause BLC to do, or cause
to be done, all things necessary, proper or advisable to consummate the
transactions contemplated by this Agreement, including, without limitation, to
obtain all consents, approvals and authorizations of third parties and to make
all filings with and give all notices to third parties which may be necessary or
required in order to effectuate the transactions contemplated hereby.
10.6 PAYMENT OF TAXES. Benedek shall be responsible for
all Federal, state, county, local, income, property, sales, use, intangibles and
other taxes attributable to the operation or ownership of each Station or the
Assets for all periods prior to the Closing Date. Thereafter, Purchaser shall be
responsible for all such taxes. Benedek shall file, and shall cause BLC to file,
all Federal, state, county and local income and other tax returns and reports
required to be filed by it pertaining to the operation of any of the Stations
through the Closing Date and shall pay all taxes, interest and penalties shown
on such returns or reports.
10.7 FINANCIAL STATEMENTS. Benedek shall provide Purchaser
with the following financial information with respect to each Station:
-21-
10.7.1 as soon as practicable (but in no event
later than 30 calendar days after the end of each month), an unaudited statement
of income and expense for each month after the date hereof and before the
Closing Date; and
10.7.2 such other financial information with
respect to each Station as Purchaser may from time to time reasonably request.
10.8 FCC COMPLIANCE. Benedek will comply in all material
respects with all rules and regulations of the FCC pertaining to the operation
of each Station, and with all other applicable laws, rules, ordinances and
regulations pertaining to the operation of each Station. Upon receipt of notice
of violation of any of such laws, rules, ordinances and regulations, Benedek
shall use its reasonable best efforts to contest in good faith or to cure such
violation prior to the Closing Date. Benedek will file with the FCC, when due,
all ownership reports, renewal applications, financial reports and other
documents required to be filed between the date hereof and the Closing Date, and
all such reports, applications and documents will be true and correct to
Benedek's knowledge and will comply in all material respects with the
Communications Act and the rules and regulations of the FCC. From the date
hereof through and including the Closing Date, Benedek will take all reasonable
actions to preclude the suspension, revocation or adverse modification of the
FCC Licenses and any other material governmental licenses, permits and other
authorizations listed on Schedule 8.4 of the Disclosure Schedule. Benedek will
not take any action, by commission or omission, which would cause the FCC or any
other governmental authority to institute proceedings for the suspension,
revocation or adverse modification of any of said licenses, permits and
authorizations, or fail to prosecute with due diligence any pending application
to any governmental authority, or take any action within its control which would
result in any of the Stations being in non-compliance with the requirements of
the Communications Act or the rules and regulations of the FCC material to the
transactions contemplated by this Agreement.
10.9 FCC CONSENT. Benedek shall, and shall cause BLC to,
diligently prosecute the FCC Application and use all reasonable efforts to
obtain the FCC Consent as promptly and expeditiously as possible. Benedek shall
not, and shall not permit BLC to, intentionally take or omit to take any action
that will cause the FCC to deny, delay or fail to approve the FCC Application or
cause the FCC Consent not to be granted.
10.10 FURTHER ASSURANCES. Benedek shall, and shall cause
BLC to, at any time, and from time to time, after the Closing Date, but at no
cost to Benedek or BLC (other than the salaries or wages of any Benedek
employees), use its reasonable best efforts to: (i) take, or cause to be taken,
all appropriate action, and to do, all things necessary, proper or advisable to
consummate the transactions contemplated by this Agreement, including, without
limitation, executing and delivering any additional instruments, certificates or
other documents; and (ii) have the present and future officers, directors and
employees of Benedek and BLC cooperate with Purchaser in furnishing information,
evidence, testimony and other assistance in connection with any tax return
filing obligations, actions, proceedings, arrangements or disputes of any nature
with respect to matters relating to any of the Stations for all periods prior to
the Closing Date.
10.11 WEBSITE AGREEMENT. At the Closing, Benedek shall, and
shall cause Benedek Interactive Media, LLC, a wholly-owned subsidiary of Benedek
("BIM"), to enter into a website services agreement with Purchaser in the form
annexed hereto as Exhibit E pursuant to which Benedek and BIM will provide the
website services specified therein to each Station.
10.12 MANAGEMENT SERVICES AGREEMENT. After the Closing,
Benedek shall provide certain management consulting services to each Station
upon the terms and conditions set forth on Exhibit
-22-
F annexed hereto. At the Closing, Benedek and Purchaser shall enter into an
agreement with respect to the provision of such services in form reasonable
satisfactory to Benedek and Purchaser.
10.13 CAPITAL EXPENDITURES. Benedek will continue to make
capital expenditures in the ordinary course of business of each Station and
pursuant to such Station's 2002 capital expenditure plan. Without limiting the
foregoing, prior to the Closing, Benedek shall complete the digital conversion
for each of Stations WYTV, KAUZ, KHQA and KGWN (other than its satellite station
KSTF) in accordance with such Station's plan and budget therefor as set forth in
Exhibit H annexed hereto, provided that if such digital conversion is not
completed by the Closing, Purchaser shall nonetheless be obligated to complete
the transactions contemplated by this Agreement in a timely manner and shall be
entitled to a credit against the Purchase Price for the portion of the budget
that remains to be incurred after the Closing.
10.14 NON-SOLICITATION BY BENEDEK. Benedek will not, and
will not permit any to its Affiliates to, without the prior written consent of
Purchaser, directly or indirectly employ or seek to employ any general manager,
sales manager, business manager or senior engineer of any of the Stations until
the earlier of (i) one (1) year after the Closing Date or (ii) the date on which
Purchaser sells the Station by which such person is employed to an unaffiliated
third-party.
11. COVENANTS OF BENEDEK AND BLC.
Benedek and BLC covenant as follows:
11.1 FCC COMPLIANCE. BLC will comply in all material
respects with all rules and regulations of the FCC pertaining to the operation
of each Station, and with all other applicable laws, rules, ordinances and
regulations pertaining to the operation of each Station. Upon receipt of notice
of violation of any of such laws, rules, ordinances and regulations, BLC shall
use its reasonable best efforts to contest in good faith or to cure such
violation prior to the Closing Date. BLC will file with the FCC, when due, all
ownership reports, renewal applications, financial reports and other documents
required to be filed between the date hereof and the Closing Date, and all such
reports, applications and documents will be true and correct to Benedek's and
BLC's knowledge and will comply in all material respects with the Communications
Act and the rules and regulations of the FCC. From the date hereof through and
including the Closing Date, BLC will take all reasonable actions to preclude the
suspension, revocation or adverse modification of the FCC Licenses and any other
material governmental licenses, permits and other authorizations listed on
Schedule 8.4 of the Disclosure Schedule. BLC will not take any action, by
commission or omission, which would cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation or adverse
modification of any of said licenses, permits and authorizations, or fail to
prosecute with due diligence any pending application to any governmental
authority, or take any action within its control which would result in any of
the Stations being in non-compliance with the requirements of the Communications
Act or the rules and regulations of the FCC material to the transactions
contemplated by this Agreement.
12. COVENANTS OF PURCHASER.
Purchaser covenants as follows:
12.1 COMPLIANCE. Purchaser shall use its reasonable best
efforts to take or cause to be taken all action and do or cause to be done all
things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, including, without limitation, to obtain all
consents, approvals and authorizations of third parties and to make all filings
with and give all notices to third parties which may be necessary or required in
order to effectuate the transactions contemplated hereby.
-23-
12.2 CONTROL OF THE STATIONS. Prior to the Closing,
Purchaser shall not, directly or indirectly, control, supervise, direct, or
attempt to control, supervise or direct, the operations of any of the Stations,
such operations, including complete control and supervision of all the Stations'
programs, employees and policies, shall be the sole responsibility of Benedek
until the consummation of the Closing hereunder.
12.3 FCC CONSENT. Purchaser shall diligently prosecute the
FCC Application and use all reasonable efforts to obtain the FCC Consent as
promptly and expeditiously as possible. Purchaser shall not intentionally take
or omit to take any action that will cause the FCC to deny, delay or fail to
approve the FCC Application or cause the FCC Consent not to be granted.
12.4 FCC COMPLIANCE. Between the date hereof and the
Closing Date, Purchaser agrees that it will not take or fail to take any action
within its control which would result in material noncompliance by Purchaser
with the requirements of the Communications Act and the rules and regulations of
the FCC material to the transactions contemplated by this Agreement. Purchaser
will take no action that Purchaser knows, or has reason to know, would
disqualify Purchaser from being the assignee of the FCC Licenses or the owner or
operator of any of the Stations.
12.5 BOOKS AND RECORDS. If the acquisition contemplated
herein is consummated, Purchaser covenants and agrees that it shall preserve and
keep the records of Benedek and BLC delivered to it hereunder for a period of
six years after the Closing Date and shall make such records available to
Benedek and BLC and their authorized representatives as reasonably required by
Benedek or BLC in connection with any legal proceedings brought by or against
Benedek or BLC or in connection with any tax examination or governmental
investigation of Benedek or BLC. No such records shall be destroyed or discarded
without first advising Benedek in writing and giving Benedek a reasonable
opportunity to obtain possession thereof.
12.6 EMPLOYEES AND EMPLOYEE BENEFIT MATTERS. Purchaser
shall offer employment as of the Closing Date to each employee set forth in
Schedule 7.16 of the Disclosure Schedule who remains employed by Benedek
immediately prior to the Closing, and each additional employee who is hired to
work at any of the Stations following the date hereof and prior to the Closing
who remains employed by Benedek immediately prior to the Closing. As of the
Closing Date, Purchaser shall employ each employee whose employment is not
covered by a collective bargaining agreement and who accepts Purchaser's offer
of employment ("Transferred Non-Union Employees") at a salary and on other terms
and conditions that are substantially equivalent as those provided by Benedek
immediately before the Closing. As of the Closing Date, Purchaser shall employ
each employee whose employment is covered by a collective bargaining agreement
and who accepts Purchaser's offer of employment ("Transferred Union Employees"
and collectively with the Transferred Non-Union Employees, the "Transferred
Employees") at a salary and on terms and conditions that are in accordance with
the terms of such collective bargaining agreement and on such other terms and
conditions that are substantially equivalent as those provided by Benedek
immediately before the Closing. Nothing herein shall confer or be construed to
confer on any such employee any right to continue in the employment of Purchaser
or interfere in any way with the right of Purchaser to terminate the employment
of such Transferred Employee at any time, with or without cause; subject,
however to the provisions of any employment agreement or collective bargaining
agreement entered into or assumed by Purchaser. Purchaser shall provide each
Transferred Employee credit for years of service prior to the Closing with
Benedek or any prior owner of the applicable Station for (a) the purpose of
eligibility and vesting under Purchaser's health, vacation and other employee
benefit plans, and (b) any eligibility waiting periods under group health plans
of Purchaser. Purchaser and Benedek covenant and agree that neither severance
pay nor severance benefits of any kind shall be payable to any Transferred
Employee by Purchaser or Benedek as a result of the transactions contemplated by
this Agreement. Purchaser and Benedek further covenant and
-24-
agree that Purchaser shall be solely responsible for any severance payments or
liabilities arising from Purchaser's termination of any of the Transferred
Employees after the Closing Date, in accordance with the terms of Purchaser's
severance policies, plans, programs, arrangements or practices. Purchaser agrees
to indemnify Benedek for all losses incurred by Benedek resulting from any claim
for severance pay or severance benefits made by or on behalf of a Transferred
Employee. Purchaser and Benedek covenant and agree that any individual who is
covered, or who is eligible to elect to continue his or her coverage, as of the
Closing Date, under any Employee Plan that constitutes a "group health plan,"
pursuant to the provisions of Part 6 of Title I, Substitute B of ERISA or
Section 4980B of the Code, shall be eligible to continue such coverage under an
employee benefit plan of Purchaser that constitutes a "group health plan,"
within the meaning of Section 5000(b)(1) of the Code, as of the Closing Date,
pursuant to the provisions of Part 6 of Title I, Subtitle B of ERISA of Section
4980B of the Code and that meets all of the applicable requirements for
provision of COBRA continuation coverage. Purchaser agrees to indemnify Benedek
for all losses incurred by Benedek or Benedek's group health plan resulting from
any claim for COBRA continuation coverage made by or on behalf of a Transferred
Employee or a spouse or other dependent of such an employee. Benedek shall pay
to Purchaser any amounts received by Benedek or its Affiliates from any
Transferred Employee for COBRA continuation coverage promptly upon receipt
thereof.
12.7 NON-SOLICITATION BY PURCHASER. During the period from
the Closing Date through the first anniversary thereof, Purchaser will not, and
will not permit any to its Affiliates to, without the prior written consent of
Benedek, directly or indirectly employ or seek to employ any general manager,
sales manager, business manager or senior engineer employed at any of Benedek's
television stations (other than the Stations).
12.8 FURTHER ASSURANCES. Purchaser shall, at any time, and
from time to time, after the Closing Date, but at no cost to Purchaser (other
than the salaries or wages of any of its employees), use its reasonable best
efforts to: (i) take, or cause to be taken, all appropriate action, and to do,
all things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, including, without limitation, executing and
delivering any additional instruments, certificates or other documents; and (ii)
have the present and future officers, directors, employees of Purchaser,
including the Transferred Employees, cooperate with Benedek and BLC in
furnishing information, evidence, testimony and other assistance in connection
with any tax return filing obligations, actions, proceedings, arrangements or
disputes of any nature with respect to matters relating to any of the Stations
for all periods prior to the Closing Date.
13. CONDITIONS OF CLOSING.
13.1 OBLIGATION OF PURCHASER TO CLOSE. The obligation of
Purchaser to close hereunder shall be subject to the fulfillment and
satisfaction, prior to or at the Closing, of the following conditions or the
written waiver thereof by Purchaser:
13.1.1 REPRESENTATIONS. The representations and
warranties of Benedek and BLC in this Agreement shall be true and correct in all
material respects when made and shall be true and correct in all material
respects on and as of the Closing Date (other than 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) except for
changes permitted or contemplated by this Agreement.
13.1.2 COVENANTS. Each of the agreements and
covenants of Benedek and BLC to be performed under this Agreement at or prior to
the Closing Date shall have been duly performed in all material respects.
-25-
13.1.3 NETWORK AFFILIATION CONSENT. The television
networks listed on Schedule 13.1.3 of the Disclosure Schedule shall have
consented to the assignment of the network affiliation agreement with respect to
each Station set forth opposite its name on Schedule 13.1.3 without material
modification thereof.
13.1.4 NO INJUNCTION. No injunction or restraining
order shall be in effect to forbid or enjoin the consummation of the transaction
contemplated by this Agreement and no Federal, state or local statute, rule or
regulation shall have been enacted which prohibits, restricts or delays the
consummation of such transaction.
13.1.5 STATION LICENSES. BLC shall be the holder of
the FCC Licenses and all other material governmental licenses, permits and other
authorizations listed on Schedule 8.4 of the Disclosure Schedule, and there
shall not have been any modification of any of such licenses, permits and other
authorizations which could reasonably be expected to have a Material Adverse
Effect.
13.1.6 FCC CONSENT. The FCC Consent shall have been
granted.
13.1.7 INSTRUMENTS OF TRANSFER. Purchaser shall
have received the deeds, endorsements, assignments, drafts, checks and other
documents of transfer, conveyance and assignment contemplated by Section 2.3
valid to transfer all of Benedek's and BLC's, as applicable, right, title and
interest in and to the Assets to Purchaser and to vest in Purchaser good,
marketable and insurable title to the Assets, subject only to Permitted Liens
and the Liens set forth on Schedules 7.9 and 7.10 of the Disclosure Schedule and
not required to be discharged (in the manner herein provided) on or prior to the
Closing Date pursuant to the terms of this Agreement.
13.1.8 BOOKS OF ACCOUNT. Purchaser shall have
received Benedek's and BLC's books of account, records, leases, indentures,
contracts, agreements, correspondence and other documents pertaining to the
Assets and each Station (other than the Excluded Records). Unless otherwise
requested by Purchaser, delivery of the foregoing shall not be effected by
physical delivery at the Closing but by surrendering access to the premises
containing the foregoing to Purchaser.
13.1.9 MERGER AGREEMENT. The Merger Agreement shall
remain in full force and effect and shall not have been terminated.
13.1.10 REORGANIZATION PLAN. The reorganization plan
with respect to Stations Holding Company, Inc., a summary of which plan is
annexed hereto as Exhibit G, shall have been approved by the United States
Bankruptcy Court for the District or Delaware.
13.2 OBLIGATION OF BENEDEK TO CLOSE. The obligation of
Benedek and BLC to close hereunder shall be subject to the fulfillment and
satisfaction, prior to or at the Closing, of the following conditions or the
written waiver thereof by Benedek and BLC:
13.2.1 REPRESENTATIONS. The representations and
warranties of Purchaser in this Agreement shall be true and correct in all
material respects when made and shall be true and correct in all material
respects on and as of the Closing Date (other than 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) except for
changes permitted or contemplated by this Agreement.
13.2.2 COVENANTS. Each of the agreements and
covenants of Purchaser to be performed under this Agreement at or prior to the
Closing Date shall have been duly performed in all material respects.
-26-
13.2.3 NO INJUNCTION. No injunction or restraining
order shall be in effect to forbid or enjoin the consummation of the transaction
contemplated by this Agreement and no Federal, state, or local statute, rule or
regulation shall have been enacted which prohibits, restricts or delays the
consummation of such transaction.
13.2.4 FCC CONSENT. The FCC Consent shall have been
granted.
13.2.5 RECEIPT OF PURCHASE PRICE PAYABLE AT
CLOSING. Benedek shall have received the Purchase Price by wire transfer of
immediately available funds.
13.2.6 ASSUMPTION AGREEMENTS. Purchaser shall have
executed and delivered the instruments of assumption contemplated by Section 3.2
hereof.
13.2.7 MERGER AGREEMENT. The Merger Agreement shall
remain in full force and effect and shall not have been terminated.
13.2.8 REORGANIZATION PLAN. The reorganization plan
with respect to Stations Holding Company, Inc., a summary of which plan is
annexed hereto as Exhibit G, shall have been approved by the United States
Bankruptcy Court for the District or Delaware.
14. REMEDIES FOR BREACH.
14.1 PURCHASER DECLINES TO CLOSE. If Purchaser shall be
entitled to decline to close, and shall decline to close the transaction
contemplated by this Agreement, Purchaser shall have no liability to Benedek or
BLC under or in any way by reason hereof, and Purchaser shall be entitled to
have the Deposit, together with interest earned thereon, returned promptly to it
upon demand to the Escrow Agent pursuant to the Escrow Agreement, and Purchaser
shall, subject to the terms and conditions of this Agreement, have all such
rights and remedies against Benedek or BLC, as applicable, as may be available
to it in law or equity or otherwise.
14.2 PURCHASER ELECTS TO CLOSE. If Purchaser shall be
entitled to decline to close the transaction contemplated by this Agreement but
Purchaser shall elect nevertheless to close, Purchaser shall be deemed to have
waived any claims of any nature arising from the failure of Benedek or BLC to
comply with any of the terms and conditions of this Agreement of which Purchaser
had knowledge at the time of the Closing. If Purchaser elects to close the
transaction contemplated by this Agreement and Benedek or BLC wrongfully refuses
to do so, or if Benedek or BLC fails, or if a failure by Benedek or BLC is
threatened, to comply with any of its covenants and agreements contained in this
Agreement, then, in addition to all other remedies which may be available to it,
Purchaser shall be entitled to injunctive and other equitable relief, including,
without limitation, specific performance, and shall be entitled to recover from
Benedek its losses, costs and expenses, including reasonable attorneys' fees
incurred by Purchaser in securing such injunctive or equitable relief.
14.3 PURCHASER FAILS TO CLOSE. If Benedek and BLC shall be
entitled to decline to close, and shall decline to close the transaction
contemplated by this Agreement, neither Benedek nor BLC shall have any liability
to Purchaser under or in any way by reason hereof. In such event, unless Benedek
and BLC shall be entitled to decline to close by reason of a breach by
Purchaser, Purchaser shall be entitled to have the Deposit, together with
interest earned thereon, returned promptly to it upon demand to the Escrow
Agent. If this Agreement fails to close or is terminated by reason of or under
circumstances arising from a breach by Purchaser of its representations,
warranties, or covenants hereunder in any material respect, or if Purchaser
refuses or fails to close after the conditions to its Closing have been
satisfied, in either case without Benedek or BLC being in breach of any of its
-27-
representations, warranties or covenants hereunder in any material respect,
then, in that event, Benedek and BLC shall be entitled to the Deposit, together
with interest earned thereon, as liquidated damages, it being understood that
such sum shall constitute full payment for any and all damages suffered by
Benedek and BLC by reason of Purchaser's failure to close this Agreement. The
parties acknowledge that the damages actually suffered by Benedek and BLC would
be difficult to determine, but that the amount of the Deposit, together with
interest earned thereon, is a reasonable estimate of the damages anticipated to
be suffered by Benedek and BLC in such event.
14.4 BENEDEK ELECTS TO CLOSE. If Benedek or BLC shall be
entitled to decline to close the transaction contemplated by this Agreement but
Benedek and BLC shall elect nevertheless to close, Benedek and BLC shall be
deemed to have waived any claims of any nature arising from the failure of
Purchaser to comply with any of the terms and conditions of this Agreement of
which Benedek and BLC had knowledge at the time of the Closing.
14.5 REMEDIES CUMULATIVE. Except as otherwise provided in
this Section 14 and/or Section 17, the specific remedies to which any party may
resort under the terms of this Agreement are cumulative and are not intended to
be exclusive of any other remedies or means of redress to which such party may
lawfully be entitled in case of any breach, threatened breach or failure of
observance or performance of any representation, warranty, covenant, agreement
or commitment made hereunder or relating hereto or by reason of any such
representation, warranty, covenant, agreement or commitment being untrue or
incorrect.
15. TERMINATION RIGHTS. This Agreement may be terminated upon
written notice from one party to the other upon the occurrence of any of the
following:
15.1 by either Benedek and BLC or Purchaser (i) at any
time prior to the Closing with the mutual written consent of the other parties
hereto or (ii) if the Merger Agreement is terminated at any time pursuant to the
terms thereof prior to the Closing;
15.2 by Benedek and BLC, if Purchaser has materially
breached this Agreement and Benedek and BLC are not in material breach of this
Agreement, except that, if such breach is curable by Purchaser through the
exercise of its commercially reasonable efforts, then, for a period of up to 30
days, but only as long as Purchaser continues to use its commercially reasonable
efforts to cure such breach (the "Purchaser Cure Period"), such termination
shall not be effective, and such termination shall become effective only if the
breach is not cured within the Purchaser Cure Period; provided, however,
Purchaser's failure to pay the Purchase Price in full to Benedek at the Closing
shall not be subject to the Purchaser Cure Period and shall be an incurable
breach of this Agreement;
15.3 by Purchaser, if Benedek or BLC has materially
breached this Agreement and Purchaser is not in material breach of this
Agreement, except that, if such breach is curable by Benedek or BLC through the
exercise of its commercially reasonable efforts, then, for a period of up to 30
days, but only as long as Benedek and BLC, as applicable, continue to use their
commercially reasonable efforts to cure such breach (the "Benedek Cure Period"),
such termination shall not be effective, and such termination shall become
effective only if the breach is not cured within the Benedek Cure Period; or
15.4 by either Purchaser or Benedek and BLC, if not then
in material default, if the purchase of the Assets by Purchaser pursuant to this
Agreement shall not have been effected by March 31, 2003.
16. EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 15 hereof, this Agreement shall become null and void and
neither party hereto shall have any further liability
-28-
hereunder except that (i) the provisions of Sections 14, 15, 16, 17, 20.1 and
20.8 hereof shall remain in full force and effect and (ii) each party hereto
shall remain liable to the other party hereto for any willful breach of its
obligations under this Agreement prior to such termination.
17. SURVIVAL. None of the representations and warranties of
Benedek, BLC or Purchaser contained in this Agreement, or in any certificate,
instrument or other document delivered by Benedek, BLC or Purchaser pursuant to
this Agreement or in connection with the transactions contemplated hereby, shall
survive the Closing. No claim shall be made or action brought by any party
hereto after the Closing for the breach of, or inaccuracy in, any representation
or warranty contained in this Agreement, or in any certificate, instrument or
other document delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby. None of the covenants of Benedek, BLC or
Purchaser contained in this Agreement, or in any certificate, instrument or
other document delivered by Benedek, BLC or Purchaser pursuant to this Agreement
or in connection with the transactions contemplated hereby, shall survive the
Closing, except to the extent such covenants and agreements by their terms
contemplate performance after the Closing. No claim shall be made or action
brought by any party hereto after the Closing for the breach of any covenant
contained in this Agreement, or in any certificate, instrument or other document
delivered pursuant to this Agreement or in connection with the transactions
contemplated hereby, except with respect to those covenants that by their terms
contemplate performance after the Closing.
18. THIRD PARTY BENEFICIARIES. This Agreement is made solely for
the benefit of the parties hereto 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.
19. BROKERS. Benedek and BLC, on the one hand, and Purchaser, on
the other, covenant and represent to each other that, they had no dealings with
any broker or finder in connection with this Agreement or the transactions
contemplated hereby, and no broker, finder or other Person is entitled to
receive any broker's commission or finder's fee or similar compensation in
connection with any such transaction.
20. MISCELLANEOUS.
20.1 CONFIDENTIALITY.
20.1.1 Purchaser recognizes and acknowledges that
it has had in the past, currently has, and in the future may possibly have
access to certain confidential information regarding the Stations, including
oral or written information which is either non-public, confidential or
proprietary in nature, which information together with Purchaser's analyses,
compilations, studies or other documents prepared by Purchaser or its
representations is hereinafter referred to as the "Information." Purchaser
agrees that it will not disclose the Information to any Person for any purpose
or reason whatsoever, except to authorized representatives of Purchaser, unless
(i) the Information becomes known to the public generally through no fault of
Purchaser, or (ii) disclosure is required by law or the order of any
governmental authority under color of law, provided, that prior to disclosing
any information pursuant to this clause (ii), Purchaser shall, if possible, give
prior written notice thereof to Benedek and provide Benedek with the opportunity
to contest such disclosure. In the event of a breach or threatened breach of the
provisions of this Section 20.1, Benedek shall be entitled to injunctive or
other equitable relief restraining Purchaser from disclosing, in whole or in
part, such Information. Nothing herein shall be construed as prohibiting Benedek
from pursuing any other available remedy for such breach or threatened breach,
including recovery of damages.
-29-
20.1.2 Benedek and BLC agree that after the Closing
neither of them will disclose the Information to any Person for any purpose or
reason whatsoever, except to authorized representatives of Purchaser, unless (i)
the Information becomes known to the public generally through no fault of
Benedek or BLC, or (ii) disclosure is required by law or the order of any
governmental authority under color of law, provided, that prior to disclosing
any information pursuant to this clause (ii), Benedek and BLC shall, if
possible, give prior written notice thereof to Purchaser and provide Purchaser
with the opportunity to contest such disclosure.
20.1.3 Because of the difficulty of measuring
economic losses as a result of the foregoing covenants, and because of the
immediate and irreparable damage that would be caused for which there would be
no other adequate remedy, each party agrees that the foregoing covenants may be
enforced against it by injunctions, restraining orders and other appropriate
equitable relief.
20.1.4 The obligations under this Section 20.1
shall survive the termination of this Agreement for a period of two years.
20.2 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties (and supersedes any prior understanding of the
parties) with respect to the subject matter hereof. The representations,
warranties, covenants and agreements set forth in this Agreement, and in any
financial statements, schedules or exhibits delivered pursuant hereto constitute
all the representations, warranties, covenants and agreements of the parties
hereto and upon which the parties have relied and except as may be specifically
provided herein, no change, modification, amendment, addition or termination of
this Agreement or any part thereof shall be valid unless in writing and signed
by or on behalf of the party to be charged therewith. The information disclosed
on any schedule to this Agreement shall be deemed to be disclosed on any other
applicable schedule.
20.3 NOTICES. Any and all notices or other communications
or deliveries required or permitted to be given or made pursuant to any of the
provisions of this Agreement shall be deemed to have been duly given or made for
all purposes if sent by certified or registered mail, return receipt requested
and postage prepaid, hand delivery, overnight delivery service or telephone
facsimile:
If to Purchaser, at:
c/o Xxxxxxx Capital
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
If to Benedek or BLC c/o Benedek Broadcasting Corporation, at:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
-30-
or at such other address as any party may specify by notice given to the other
party in accordance with this Section 20.3. The date of the giving of any notice
sent by mail shall be three business days following the date of the posting of
the mail, if delivered in person, the date delivered in person, the next
business day following delivery to an overnight delivery service, or the date
sent by telephone facsimile.
20.4 PUBLIC ANNOUNCEMENT. Except for any disclosures or
announcements which Benedek, BLC or Purchaser shall be required to make pursuant
to the Communications Act or the rules and regulations of the FCC, or
disclosures or announcements required to be made pursuant to the rules and
regulations of the Securities and Exchange Commission or any other Federal or
state governmental agency, Purchaser and Benedek will jointly prepare and
determine the timing of any press release or other announcement to the public
(including any announcement to the employees of each Station) concerning the
execution of this Agreement and the transactions contemplated herein. Except as
provided for in the preceding sentence, no party hereto will issue any press
release or make any other public announcement relating to the execution of this
Agreement or the transactions contemplated herein, except that any party may
make any disclosure required to be made by it under applicable law if it
determines in good faith that it is appropriate to do so and gives prior notice
and a reasonable time to comment to the other party hereto.
20.5 NO WAIVER. No waiver of the provisions hereof shall
be effective unless in writing and signed by the party to be charged with such
waiver. No waiver shall be deemed a continuing waiver in respect of any
subsequent breach or default, either of similar or different nature, unless
expressly so stated in writing.
20.6 GOVERNING LAW. This Agreement shall be governed,
interpreted and construed in accordance with the laws of the State of New York
applicable to contracts to be performed entirely within that State. Should any
clause, section or part of this Agreement be held or declared to be void or
illegal for any reason, all other clauses, sections or parts of this Agreement
which can be effected without such illegal clause, section or part shall
nevertheless continue in full force and effect.
20.7 CONSENT TO JURISDICTION. Each of the parties hereto
hereby consents to the exclusive jurisdiction and venue of the Courts of the
State of New York, located in the County of New York and the United States
District Court for the Southern District of New York with respect to any matter
relating to this Agreement and performance of the parties' obligations
hereunder, the documents and instruments executed and delivered concurrently
herewith or pursuant hereto and performance of the parties' obligations
thereunder and each of the parties hereto hereby consents to the personal
jurisdiction of such courts and shall subject itself to such personal
jurisdiction. Any action, suit or proceeding relating to such matters shall be
commenced, pursued, defended and resolved only in such courts and any
appropriate appellate court having jurisdiction to hear an appeal from any
judgment entered in such courts. Service of process in any action, suit or
proceeding relating to such matters may be made and served within or outside the
State of New York, County of New York or the Southern District of New York by
registered or certified mail to the parties and their representatives at their
respective addresses specified in Section 20.3 hereof, provided that a
reasonable time, not less than 30 days, is allowed for response. Service of
process may also be made in such other manner as may be permissible under the
applicable court rules.
20.8 EXPENSES. Except as otherwise provided herein,
Purchaser, on the one hand, and Benedek and BLC, on the other, shall each bear
their own costs and expenses in connection with the transactions contemplated by
this Agreement. If attorneys' fees or other costs are incurred to secure
performance of any obligations hereunder, or to establish damages for the breach
thereof or to obtain any other appropriate relief, whether by way of prosecution
or defense, the prevailing party will be entitled to recover reasonable
attorneys' fees and costs incurred in connection therewith. Notwithstanding the
-31-
foregoing, Benedek and BLC, on the one hand, and Purchaser, on the other, shall
each pay one-half of all deed transfer taxes and the fees and costs of recording
or filing all applicable conveyance instruments associated with respect to the
transfer of the Assets from Benedek and BLC to Purchaser pursuant to this
Agreement.
20.9 BINDING AGREEMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that no party may assign any of its
rights or delegate any of its duties under this Agreement without the prior
written consent of the other parties hereto. Notwithstanding the foregoing,
Purchaser may, without the prior written consent of Benedek and BLC, assign all
its rights and obligations under this Agreement with respect to one or more of
the Stations to one or more of Purchaser's Affiliates; provided, that such
assignment (i) will not delay the Closing in any way or manner, (ii) is not
prohibited by the Communications Act and (iii) will not require any additional
governmental or third party consents or approvals. Any such assignee shall
become solely liable for Purchaser's obligations under this Agreement as the
same relate to the applicable Station and Purchaser shall be relieved of any
such liability, provided that the foregoing shall not affect Purchaser's
obligation hereunder with respect to the Deposit and Purchaser's obligations
under the Escrow Agreement.
20.10 GOOD FAITH. Recognizing the complex nature of the
transactions contemplated in this Agreement, the parties hereto agree to
cooperate in good faith to effectuate the transactions set forth herein in
accordance with the intent of the parties as expressed herein.
20.11 HEADINGS. The headings or captions under sections of
this Agreement are for convenience and reference only and do not in any way
modify, interpret or construe the intent of the parties or effect any of the
provisions of this Agreement.
20.12 COUNTERPARTS. This Agreement may be executed in one
or more counterparts each of which when taken together shall constitute one
agreement.
20.13 RESCISSION. If, notwithstanding the satisfaction of
the conditions set forth in Sections 13.1.9, 13.1.10, 13.2.7 and 13.2.8 hereof,
subsequent to the Closing the Merger Agreement is terminated for any reason, the
parties shall rescind the transactions contemplated by this Agreement. In such
event, Benedek shall pay all costs and expenses incurred in connection with the
transfer of the Assets from Purchaser to Benedek and Benedek shall reimburse the
Purchaser for all reasonable costs and expenses incurred by it in connection
with the transfer of the Assets to Purchaser, including without limitation
reasonable attorneys fees and expenses. Prior to the Closing, the parties shall
enter into a more formal rescission agreement giving effect to the foregoing, in
form and substance satisfactory to both Benedek and Purchaser.
-32-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on the date and year first above written.
XXXXXXX BROADCASTING COMPANY, LLC
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Name:
Title:
BENEDEK BROADCASTING CORPORATION
By: /s/ K. Xxxxx Xxxxx
----------------------------------
Name: K. Xxxxx Xxxxx
Title: President and Chief
Operating Officer
BENEDEK LICENSE CORPORATION
By: /s/ K. Xxxxx Xxxxx
----------------------------------
Name: K. Xxxxx Xxxxx
Title: President and Chief
Operating Officer
STATION DMA
------- ---
1. WYTV Youngstown, OH
2. WHOI Peoria-Bloomington, IL
3. KDLH Duluth, MN/Superior, WI
4. KMIZ/K02NQ/K11TB Columbia/Jefferson City, MO
5. KAUZ Wichita Falls, TX/ Lawton, OK
6. KHQA Quincy, IL/Hannibal, MO/Keokuk, IA
7. KGWN/KSTF Cheyenne, WY/ Scottsbluff, NE/ Sterling, CO
8. KGWC/KGWL/KGWR Casper-Riverton/ Lander/Rock Springs, WY
-33-
