EXHIBIT 10.13
ACQUISITION AGREEMENT
---------------------
This Agreement, dated as of November 30, 1998, by and among Xxxxx
Broadcast Group Limited Partnership, a Delaware limited partnership (the
"Company"), and AK Media Group, Inc., a Washington corporation ("Buyer").
WHEREAS, the Company and its subsidiary, WBG License Co., L.L.C., a
Delaware limited liability company ("License Co.") (collectively with the
Company, the "Companies") operate those television broadcast stations identified
on Schedule A annexed hereto, serving the respective markets identified therein,
----------
pursuant to FCC Licenses, as hereinafter defined (each such station being
hereinafter referred to as a "Station", and collectively as the "Stations"), and
own assets and properties used exclusively in the operation and business of the
Stations;
WHEREAS, the FCC Licenses may not be transferred without the prior
approval of the FCC;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, and upon the terms and subject
to the conditions hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE 1
---------
Purchase and Sale of Assets; Time Brokerage Agreement
-----------------------------------------------------
1.1 Sale and Assignment.
-------------------
(a) Subject to the terms and conditions hereof, at the Closing (as
such term is defined in Section 4.1 below) the Company shall, and shall cause
License Co. to, sell, assign, convey and otherwise transfer to Buyer, and Buyer
shall purchase from the applicable Companies, all right, title and interest of
the Companies in and to the following (the "Purchased Assets") (excluding the
Excluded Assets (as such term is defined in Section 1.2 below)), free and clear
of all Liens (as hereinafter defined) other than Permitted Liens (as hereinafter
defined):
(i) FCC Licenses. All right, title and interest of the
------------
Companies in and to all licenses, permits, variances, franchises,
certifications, approvals, construction permits and authorizations issued or
granted by the FCC for, or used in the operation of
the Stations (the "FCC Licenses"), together with any applications therefor,
renewals, extensions or modifications thereof and additions thereto.
(ii) Tangible Personal Property. All fixed and tangible
--------------------------
equipment, machinery, vehicles, furniture, transmitting towers, transmitters,
antennae, office materials and supplies, spare parts and other tangible personal
property owned by any of the Companies and used or held for use by the Companies
exclusively by or for any of the Stations or the operation thereof, with all
replacements thereof, additions and alterations thereto, and substitutions
therefor, made between the date hereof and the Closing Date (hereinafter
collectively the "Tangible Personal Property").
(iii) Real Properties. All land, buildings, improvements,
---------------
fixtures, and transmitting towers (to the extent they constitute fixtures or
other interests in real property and not Tangible Personal Property) and other
real property owned by any of the Companies, and all leaseholds and other
interests of any of the Companies in real property and/or buildings and/or
improvements thereon, and all security deposits with respect to any of the
foregoing, in each case used, or held for use, exclusively by or for any of the
Stations.
(iv) Advertising Contracts. All right, title and interest of
---------------------
the Companies in and to all orders and agreements for the sale of advertising
time on the Stations for cash and all trade, barter and similar agreements for
the sale of advertising time on the Stations other than for cash, and all such
orders and agreements for advertising time on the Stations entered into between
the date hereof and the Closing Date, each in the ordinary course of business,
and to the extent the foregoing have not been performed by the Companies as of
the Closing Date, in each case to which any of the Companies or any of the
Stations is a party (hereinafter collectively "Advertising Contracts").
(v) Agreements. All right, title and interest of the
----------
Companies in and to the contracts, agreements and leases, including, without
limitation, program licenses and agreements and contracts to broadcast product
or programs on the Stations, in each case pertaining exclusively to any of the
Stations, any of the Real Properties or any of the Tangible Personal Property,
to which any of the Companies or the Stations is a party, but in all cases other
than the Excluded Contracts (as hereinafter defined) (all of the foregoing
(other than the Excluded Contracts) being hereinafter, together with the
Advertising Contracts, collectively, "Contracts").
(vi) Intangibles. All right, title and interest of the
-----------
Companies in and to: the call letters for the Stations, all original programming
created exclusively for any of the Stations, and all copyrights, trademarks,
trade names, logos, slogans, jingles.
service marks, applications for any of the foregoing, and other intangible
proprietary property, in each case used, or held for use, by any of the
Companies exclusively for any of the Stations (hereinafter collectively the
"Intangibles").
(vii) Insurance Proceeds. All right, title and interest of the
------------------
Companies in and to insurance proceeds and rights thereto derived from loss,
damage or destruction of or to any properties or assets described in paragraph
(iii) or (iv) above, but only to the extent not utilized prior to the Closing to
repair or replace the lost, damaged or destroyed items included in the Purchased
Assets (collectively "Insurance Proceeds").
(viii) Barter Receivables. All Barter Receivables (as defined
------------------
below) of the Stations.
(ix) Prepaid Items. All right, title and interest of the
-------------
Companies in and to all prepaid items relating exclusively to any of the
Purchased Assets or the operation of any of the Stations (other than unearned
insurance premiums), but only to the extent dollar-for-dollar credit therefor is
given and paid to the Companies pursuant to Section 2.4 hereof.
(x) FCC Logs. All FCC logs and similar records of the
--------
Companies that relate exclusively to the operation of the Stations ("FCC Logs").
(xi) Business Records. All right, title and interest of the
----------------
Companies. in and to all engineering and advertising reports, programming
studies, consulting reports, marketing data, technical equipment information and
specifications, copies of personnel records, mailing lists, lists of vendors or
suppliers, and any other similar information in tangible form, used or held for
use by the Companies exclusively in the business or operation of the Stations
(hereinafter collectively "Business Records").
(xii) Goodwill. All goodwill in and going concern value of the
--------
Stations.
1.2 Excluded Assets. The Purchased Assets shall not include the
---------------
following (the "Excluded Assets"):
(a) All cash, cash equivalents or similar type investments of any of
the Companies, such as certificates of deposit, Treasury bills and other
marketable securities on hand and/or in banks, and unearned insurance premiums
and security deposits, excluding, however, Insurance Proceeds to the extent such
Insurance Proceeds have not been utilized prior to Closing in the manner
contemplated in Section 1.1(a)(vii) hereof;
-3-
(b) All accounts receivable in respect of air time broadcast on any
of the Stations prior to the Closing Date, other than any of the foregoing in
the nature of barter or trade receivables entitling any of the Companies to
goods or services, or to air time for the broadcast of advertising promoting any
of the Stations ("Barter Receivables"), and other than those in favor of Buyer
under the Time Brokerage Agreement (as hereinafter defined) (the "TBA
Receivables") (such accounts receivable other than Barter Receivables and TBA
Receivables being herein called "Receivables"), and all other accounts and other
amounts receivables of any of the Companies.
(c) All supplies and items of tangible property consumed or disposed
of in the ordinary course of business between the date of this Agreement and the
Closing Date;
(d) All personal effects belonging to personnel of any of the
Stations;
(e) All financial and tax reports, ledgers and books and records,
Tax returns, work sheets related to any of the foregoing, organizational
documents, and books and records pertaining to the organization, existence
and/or capitalization of any of the Companies;
(f) any and all policies of insurance, including, without
limitation, any and all rights thereunder;
(g) all rights of any of the Companies to enforce (i) the
obligations of Buyer to pay, perform or discharge the Assumed Liabilities, and
(ii) all other obligations of Buyer under or in connection with, as well as all
other rights of any of the Companies, under or in connection with, this
Agreement, the Time Brokerage Agreement and/or the Liabilities Undertaking (as
hereinafter defined) and/or any of the other Buyer Documents (as hereinafter
defined);
(h) all rights to claims for refunds of Taxes;
(i) any and all rights necessary to defend against any and all
debts, liabilities and obligations retained by any of the Companies, including,
but not limited to, rights of setoff which any of the Companies may have with
respect to any of such debts, liabilities and obligations;
(j) any and all claims or causes of action against third parties
which may have accrued in favor of any of the Companies prior to the Closing
Date or which may
-4-
have arisen or may arise out of any one or more events, conditions or
circumstances prior to the Closing Date;
(k) all Excluded Contracts (as hereinafter defined);
(l) any assets of any compensation or benefit plan or arrangement of
any of the Companies in effect as of the Closing Date;
(m) all assets, properties, business and rights of any of the
Companies pertaining or relating to any of the radio broadcast stations, or to
any of the other television broadcast stations (other than the Stations), owned,
operated or managed by any of the Companies;
(n) all shares of capital stock, partner interests and member
interests, and all other equity interests and securities, of or in any of the
Companies or any of the subsidiaries thereof; and
(o) the names Wicks, Wicks Broadcast Group, WBG, Wicks Group and any
and all variations thereof, and all goodwill related thereto.
1.3 Time Brokerage Agreement. Concurrently with the execution and
------------------------
delivery hereof, the Companies and Buyer are entering into a Time Brokerage
Agreement, with respect to the Stations, in the form of Exhibit 1.3 hereto (the
-----------
"Time Brokerage Agreement").
ARTICLE 2
---------
Consideration
-------------
2.1 Purchase Price.
--------------
In consideration of the sale, assignment and transfer of the
Purchased Assets pursuant to Section 1.1 hereof, Buyer (i) shall pay to the
Company an amount (the "Purchase Price") equal to the sum of $26,000,000, and
(ii) shall assume, pay, perform and discharge promptly when due the Assumed
Liabilities (as hereinafter defined).
2.2 Assumed Liabilities.
-------------------
In addition to the Purchase Price payable pursuant to Section 2.1
hereof, effective as of the Closing Date (as such term is defined in Section 4.1
below), Buyer
-5-
hereby agrees to assume, pay, perform, discharge and otherwise satisfy promptly
when due, and to indemnify and hold harmless the Companies from and against, all
liabilities and obligations of the Companies as shall be set forth or described
in the form of Liabilities Undertaking attached hereto as EXHIBIT 2.2 (the
-----------
"Liabilities Undertaking", and the liabilities and obligations of the Companies
assumed by Buyer thereunder being collectively the "Assumed Liabilities" and
individually an "Assumed Liability"); and, in furtherance of the foregoing, at
the Closing Buyer shall execute and deliver to the Companies a Liabilities
Undertaking in the form of such EXHIBIT 2.2. Except as provided in this
-----------
Agreement or in the Liabilities Undertaking, Buyer shall not assume any debts,
liabilities or obligations of any of the Companies, and all debts, liabilities
and obligations of the Companies not so assumed are herein referred to as the
"Excluded Liabilities".
2.3 Allocation of Purchase Price. The parties hereto agree that the
----------------------------
Purchase Price shall be deemed, for all purposes (e.g., those relating to taxes
----
and tax returns of any kind whatsoever, including, without limitation, Internal
Revenue Service Form 8594), to be allocated in accordance with an allocation
schedule to be established by mutual agreement of the parties, provided,
--------
however, that if the parties are unable to agree on such an allocation schedule
-------
within sixty (60) days after the date hereof, a third-party appraiser selected
by the Company and reasonable satisfactory to Buyer, the fees of which shall be
borne equally by Buyer and the Company, shall resolve the allocation of the
Purchase Price to any items with respect to which there is a dispute between the
parties.
2.4 Certain Closing Prorations and Adjustments.
------------------------------------------
(a) In all cases, except to the extent any of the following items
shall be required to be paid or assumed, or to be reimbursed to any of the
Companies, by Buyer pursuant to the Time Brokerage Agreement: all utilities
charges, real estate taxes, personal property taxes, monthly rental payments
under real property leases to be assumed by Buyer pursuant to this Agreement and
monthly equipment rental payments under leases of Tangible Personal Property to
be assumed by Buyer pursuant to this Agreement, annual FCC fees, and similar
prepaid items (to the extent included in the Purchased Assets), including any
accrued vacation or sick pay time or any Barter Receivables, shall be prorated
between Buyer and the Companies, as of Midnight on the day immediately preceding
the Closing Date, and the net amount resulting from the foregoing in favor of
Buyer or the Companies, as the case may be, shall then be paid to Buyer or the
Company, as the case may be, at the Closing, or credited against the Purchase
Price in the event the Company is to pay Buyer any such amount. The Company
shall pay to Buyer an amount in respect of advertising time which the Stations
are obligated to air under all orders and agreements in effect on the date
hereof relating to any of the Stations pursuant to which air time for
advertising is exchanged for goods,
-6-
services or air time for advertising elsewhere ("Barter Agreements"), in all
cases other than any programming Barter Agreements, which remain outstanding on
the Closing Date to the extent of the amount by which the aggregate net negative
barter balance outstanding on the Closing Date exceeds $20,000. Buyer shall pay
to the Company an amount in respect of advertising time which the Stations are
obligated to air under all Barter Agreements, in all cases other than any
programming Barter Agreements, in effect on the date hereof which remain
outstanding on the Closing Date to the extent of the amount by which the
aggregate net positive barter balance outstanding on the Closing Date exceeds
$20,000. If all the apportionments set forth above are not accomplished at the
Closing, then, as soon as practicable thereafter, representatives of the Company
and Buyer shall examine all appropriate books and records in order to make the
determination of said apportionments. Payments in respect thereof shall be made
within ten (10) days after each such determination, provided that if payments
with respect to real or personal property taxes are based in whole or in part on
the previous year's taxes, there shall be a later adjustment to reflect the
current year's taxes when the bills are finally rendered.
(b) In the event of any dispute between the parties as to prorations
or adjustments under this Section 2.4, the amounts not in dispute shall
nonetheless be paid and adjusted for at the Closing and such disputes shall be
promptly presented for resolution to an independent certified public accountant
mutually acceptable to the parties. The accountant's resolution of the dispute
shall be final and binding on the parties and a judgment may be entered thereon,
provided, however, that any such accountant shall have no authority to assess
damages or award attorney's fees or costs. The fees and expenses of such
accountant shall be paid one-half ( 1/2) by the Company and one-half ( 1/2) by
Buyer.
2.5 Nonassignability. Notwithstanding anything to the contrary
----------------
herein or in any document or instrument provided for herein or contemplated
hereby, to the extent that any lease, contract, license, agreement, sales or
purchase order, commitment, property interest or other asset included in the
Purchased Assets, or any claim, right or benefit arising thereunder or resulting
therefrom (each a "Contract Interest") is not capable of being sold, assigned,
transferred or conveyed without the approval, consent or waiver of the issuer
thereof or the other party or parties thereto, or any other third person
(including any government or governmental regulatory agency or authority
("Authority")), this Agreement shall not, in the event any such issuer or third
party shall object to such assignment, constitute a sale, assignment, transfer
or conveyance thereof, or an attempted sale, assignment, transfer or conveyance
thereof, absent such approval, consent or waiver; and none of the Companies
shall be obligated to sell, assign, transfer or convey to Buyer any of its
rights or obligations in or to any of such Contract Interests without first
obtaining all such necessary approvals, consents or waivers; provided, however,
-------- -------
Buyer
-7-
shall indemnify and hold each of the Companies harmless from and against any and
all costs of any of the Companies in performing any and all such obligations
from and after the Closing Date pursuant to the provisions of Section
10.1(a)(iii) hereof. The Company will request, and Buyer shall cooperate with
the Company to obtain, approvals, consents or waivers necessary to convey to
Buyer any material Contract Interests; provided, however, that none of the
-------- -------
Companies shall be obligated to pay any consideration therefor to any third
party from whom such approval, consent or waiver is requested. To the extent
that any of the approvals, consents or waivers referred to in this Section 2.5
shall not have been obtained as of the Closing, the obligations in connection
with such Contract Interests shall nevertheless be and remain Assumed
Liabilities but only to the extent that the Buyer receives a benefit associated
with such liability, and the Company shall act in good faith, with all costs
related thereto to be borne by Buyer but only to the extent that it receives
benefits through any reasonable and lawful arrangements that actually provide
the benefits of such Contract Interests to Buyer; but none of the Companies
shall have any obligation to expend any sums or incur any costs or liabilities
in connection with such efforts.
2.6 Discharge of Bank Debt Liens. At the Closing, the Company shall
----------------------------
cause all Liens on the Purchased Assets granted pursuant to the credit agreement
of the Company with its lending banks and other institutional lenders, as the
same may be amended from time to time (the "Company Credit Facility"), to be
released and discharged.
2.7 Collection of Receivables. After the Closing, the Company will
-------------------------
deliver to Buyer a schedule of Receivables. Buyer agrees to use commercially
reasonable efforts to collect the Receivables for the benefit of the Company.
From the Closing Date through the one hundred twenty (120) day period following
the Closing (the "Collection Period"), Buyer shall collect the cash proceeds
from the Receivables (the "Collections"). Any collections from any account
debtor who is an account debtor on any of the Receivables shall be credited
against the account of such account debtor in the order the accounts receivable
owing therefrom with respect to any of the Stations were invoiced, except to the
extent a legitimate dispute exists with respect to a particular receivable and
Buyer promptly notifies the Company of such dispute or to the extent that any
account debtor designates in writing to which invoice any payment should be
applied. Within five (5) days after the end of each broadcast month during the
Collection Period, Buyer shall deliver to the Company (i) a statement or report
showing all Collections during such broadcast month, (ii) a wire transfer in an
amount equal to the aggregate amount of the Collections during such broadcast
month, and (iii) all records of uncollected Receivables. Within five (5) days
after the end of the Collection Period, Buyer shall deliver to the Company (i) a
final statement or report showing all Collections made during the Collection
Period, (ii) a wire transfer in an amount equal to any remaining Collections
-8-
which had not been previously remitted to the Company, and (iii) all records of
uncollected Receivables, and thereafter Buyer shall have no further obligations
with respect thereto, except that Buyer shall promptly remit to the Company all
Collections made or received after the Collection Period. Buyer shall not agree
to any settlement, discount or reduction of any of the Receivables without the
prior written consent of the Company. Buyer's collection obligation under this
Section shall not include any obligation to bring suit or take other legal
action for the collection of the Receivables. Buyer shall not assign, pledge or
grant a security interest in any of the Receivables to any third party or claim
a security interest or right in or to any of the Receivables and Buyer's
obligations to make payment to the Company of the Collections shall not be
subject to any set-off whatsoever.
ARTICLE 3
---------
Application to and Consent By the FCC; HSR Act
----------------------------------------------
3.1 FCC Consent. The Closing (as hereinafter defined) is subject to the
-----------
condition that the FCC shall have issued its approval of the transfer of the FCC
Licenses for the Stations to Buyer (such approval being herein called the
"Initial Order"), and without any conditions materially adverse to Buyer on the
one hand, or any of the Companies, on the other hand, respectively, and such
Initial Order shall have become a Final Order (as hereinafter defined). The
following shall not be deemed to be conditions materially adverse to Buyer (and
are herein referred to as "Permitted Conditions"): any condition or requirement
by the FCC that the Closing not occur until the grant of applications for
renewal of any of the FCC Licenses. For purposes of this Section 3.1, the "FCC"
shall mean the FCC or its staff.
3.2 Application for FCC Consent.
---------------------------
(a) The Company and Buyer agree to proceed expeditiously and with
due diligence and to use their respective best efforts and to cooperate with
each other in seeking and applying for the Initial Order and the Final Order
(the "Application"). Within ten (10) days after the date this Agreement is
executed and delivered, each of the Company and Buyer shall cause to be prepared
and filed with the FCC their respective portions of the Application and all
information, data, exhibits, resolutions, statements, and other materials
necessary and proper, and required to be provided by it, in connection with the
Application. Each of the Company and Buyer further agrees expeditiously to
cause to be prepared any Application amendments whenever such amendments are
required by the FCC or its rules and regulations.
-9-
(b) Except as otherwise provided herein, the Company, on the one
hand, and Buyer, on the other hand, will be solely responsible for the expenses
incurred by it in the preparation, filing and prosecution of the respective
portions of the Application. All filing fees and grant fees imposed shall be
paid by Buyer.
(c) Buyer and the Company shall use their respective best efforts
to oppose any efforts, before or after the grant or proposed grant of the
Initial Order, to oppose, for reconsideration or judicial review of, the grant
by the FCC of the Initial Order. In furtherance, but not in limitation of the
foregoing, Buyer shall, and shall cause its affiliates to, consent to and
perform any Permitted Conditions.
3.3 Notice of Application. The Company will give notice of the filing
---------------------
of the Application by such means as may be required by the rules and regulations
of the FCC.
3.4 Definition of Final Order. For purposes of this Agreement, the term
-------------------------
"Final Order" shall mean the Initial Order which becomes a final order of the
FCC which is not reversed, stayed, enjoined or set aside, and with respect to
which no timely request for stay, reconsideration, review, rehearing or notice
of appeal or determination to reconsider or review is pending, and as to which
the time for filing any such request, petition or notice of appeal or for review
by the FCC, and for any reconsideration, stay or setting aside by the FCC on its
own motion or initiative, has expired.
3.5 HSR Compliance. Buyer and the Company shall, within ten (10) days
--------------
after the date hereof, file all necessary notifications under the Xxxx Xxxxx
Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), with
respect to the transactions contemplated under this Agreement. Buyer and the
Company shall each pay one-half of all filing fees required in connection with
such filing. Buyer and the Company shall promptly comply with any and all
requests by the United States Department of Justice (the "Department of
Justice") or the Federal Trade Commission (the "FTC") for additional documents
or information with respect to the notification filed with the Department and
the FTC pursuant to the HSR Act and shall use their respective best efforts to
obtain prompt termination of the waiting period under the HSR Act. Without
intending to limit the foregoing, Buyer shall, and shall cause its affiliates
to, consent to and comply with any and all Permitted Conditions.
-10-
ARTICLE 4
---------
Closing; Deliveries; Conditions Precedent
-----------------------------------------
4.1 Closing.
-------
(a) The Closing under this Agreement (the "Closing") shall take
place at the offices of the Company's counsel, no later than 10:00 a.m., local
time, on the third (3rd) day after the issuance of the Initial Order; provided
that if the FCC Application is then being actively contested by a challenger
seeking the revocation or rescission thereof, then on the third (3rd) day after
the Initial Order becomes a Final Order, or, if the parties hereto shall
mutually agree upon another date, then such other mutually agreed upon date.
The date of the Closing is herein called the "Closing Date".
(b) All proceedings to be taken and all documents to be executed and
delivered by the parties at the Closing shall be deemed to have been taken and
executed simultaneously and no proceedings shall be deemed taken nor any
documents executed or delivered until all have been taken, executed and
delivered.
4.2 Company Deliveries. At the Closing, the Company shall deliver to
------------------
Buyer:
(a) complete and correct copies of the Certificate of Limited
Partnership of the Company (the "L/P Certificate"), and the Limited Partnership
Agreement of the Company, as amended (the "Partnership Agreement") and the
Certificate of Formation and Limited Liability Company Agreement of the License
Co.
(b) certificates of good standing with respect to the Companies, as
of a then recent date, by the Secretary of State of the State of Delaware, and
in the case of the Company by the Secretary of State of the State of Oregon;
(c) copies of all resolutions of the corporate general partner of
the Company authorizing the execution and delivery on behalf of the Company of
this Agreement and the consummation of the transactions by the Company
contemplated hereby, certified by an officer of such general partner;
(d) xxxx(s) of sale and deeds for the Purchased Assets executed by
the appropriate Companies;
(e) evidence of the release of the Purchased Assets from the Liens
granted pursuant to the Company Credit Facility; and
-11-
(f) all other documents required by the terms of this Agreement to
be delivered by the Company to Buyer at the Closing.
4.3 Buyer's Deliveries. At the Closing, Buyer will deliver:
------------------
(a) the Purchase Price by wire transfer of immediately available
funds to such account(s) as the Company shall specify;
(b) the Liabilities Undertaking, executed by Buyer;
(c) a copy of resolutions of Buyer, authorizing the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, certified by an officer of Buyer;
(d) certificate of good standing with respect to Buyer, issued as of
a then recent date, by the Secretary of State of the State of Washington; and
(e) all other documents required by the terms of this Agreement to
be delivered by Buyer at the Closing.
4.4 Buyer's Conditions Precedent. The obligations of Buyer under this
----------------------------
Agreement to proceed with the Closing are subject, at the option of Buyer, to
the fulfillment of the following conditions at or prior to the Closing:
(a) the representations and warranties of the Company contained in
this Agreement, or any certificate delivered by it at the Closing pursuant to
this Agreement, shall be true and correct when made, except where the failure to
be true and correct would not have a Material Adverse Effect (as hereinafter
defined) or a material adverse effect on the ability of the Company to
consummate the transactions contemplated hereby, and, except for changes
permitted by this Agreement and representations and warranties made as of a
specific, indicated date, shall also be true and correct at the time of the
Closing with the same force and effect as though such representations and
warranties were made at that time, except, in each case where the failure to be
true and correct would not have a Material Adverse Effect or a material adverse
effect on the ability of the Company to consummate the transactions contemplated
hereby, and except in each case for changes or failures to be true and correct
arising out of or in connection with or as a result of any matter or transaction
contemplated by the Time Brokerage Agreement or any act or omission or
instruction by or on behalf of Buyer in the course of its authority or
activities under or in connection with the Time Brokerage Agreement;
-12-
(b) each covenant, agreement and obligation required by the terms of
this Agreement to be complied with and performed by the Company, at or prior to
the Closing, shall have been complied with and performed, in all material
respects, in each case except for failures arising out of or in connection with
or as a result of any matter or transaction contemplated by the Time Brokerage
Agreement or any act or omission or instruction by or on behalf of Buyer in the
course of its authority or activities under or in connection with the Time
Brokerage Agreement;
(c) the waiting period under the HSR Act shall have expired or been
terminated;
(d) no United States or state governmental authority or other agency
or commission or United States or state court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, injunction or other order which is in effect and has the effect of
making the transactions contemplated by this Agreement illegal or otherwise
restraining or prohibiting consummation of such transactions; provided, however,
-------- -------
that Buyer shall have used its best efforts to have any such order or injunction
vacated;
(e) the Initial Order shall have become a Final Order;
(f) there shall be delivered to and for the benefit of Buyer a
certificate of the Company executed on the Closing Date that the conditions set
forth in subsections (a) and (b) of this Section 4.4 have been fulfilled; and
(g) there shall have been delivered to Buyer an opinion or opinions
of counsel to the Companies in form and substance reasonably satisfactory to
counsel to Buyer.
4.5 The Company's Conditions Precedent. The obligations of the Company
----------------------------------
under this Agreement to proceed with the Closing are subject, at the option of
the Company, to the fulfillment of each of the following conditions at or prior
to the Closing:
(a) the representations and warranties of Buyer contained in this
Agreement, or any certificate delivered by it at the Closing pursuant to this
Agreement, shall be true and correct in all material respects when made, and
shall also be true and correct in all material respects at the time of the
Closing with the same force and effect as though such representations and
warranties were made at that time, except for changes expressly permitted by
this Agreement;
-13-
(b) each covenant, agreement and obligation required by the terms of
this Agreement to be complied with and performed by Buyer at or prior to the
Closing shall have been duly and properly complied with and performed, in all
material respects;
(c) the Initial Order shall have become a Final Order;
(d) the waiting period under the HSR Act shall have expired or been
terminated;
(e) no United States or state governmental authority or other agency
or commission or United States or state court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, injunction or other order which is in effect and has the effect of
making the transactions contemplated by this Agreement illegal or otherwise
restraining or prohibiting consummation of such transactions; and
(f) there shall be delivered to the Company, a certificate of Buyer
executed on the Closing Date that the conditions set forth in subsections (a)
and (b) of this Section 4.5 have been fulfilled; and
(g) there shall have been delivered to the Companies an opinion or
opinions of counsel to Buyer reasonably satisfactory in form and substance to
counsel to the Companies.
ARTICLE 5
---------
Representations and Warranties of the Company
---------------------------------------------
The Company hereby makes each of the following representations and
warranties:
5.1 Organization, Standing and Qualification; Subsidiaries; Authority.
-----------------------------------------------------------------
(a) The Company is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company is duly
qualified to do business and is in good standing as a foreign limited
partnership under the laws of each state where the failure to be so qualified
would result in a Material Adverse Effect. The Company has the requisite
limited partnership power and limited partnership authority to own and lease its
properties and to carry on its business in the places such properties are now
owned or leased or where such business is presently conducted. The copies of
the L/P Certificate and the Partnership Agreement heretofore delivered to Buyer
are complete
-14-
and correct. WBG Management, Inc., a Delaware corporation ("WBGM"), is the sole
general partner of the Company and is a corporation validly existing and in good
standing under the laws of the State of Delaware. WBGM has the requisite
corporate power and corporate authority to own and lease its properties and to
carry on its business in the places such properties are now owned or leased or
where such business is presently conducted.
(b) Except as listed on Schedule 5.1 (b) of the Disclosure Schedule
----------------
delivered by the Company concurrently with the execution and delivery of this
Agreement (the "Disclosure Schedule"), the Company has no subsidiaries, nor any
interest, direct or indirect, nor has any commitment to purchase any interest,
direct or indirect, in any other corporation, partnership, joint venture or
other business enterprise or entity, in any case which holds any of the
Purchased Assets or engages in any operations pertaining to the Stations. The
entities listed in Schedule 5.1(b) of the Disclosure Schedule (the
---------------
"Subsidiaries", and individually a "Subsidiary") are limited liability
companies, corporations or limited partnerships, validly existing under the laws
of their respective states of formation or incorporation, as indicated in said
Schedule 5.1(b). The Subsidiaries have the requisite limited liability company,
---------------
corporate or limited partnership power and limited liability company, corporate
or limited partnership authority to own or lease their respective properties and
to carry on their respective businesses and in the places such respective
properties are now owned or leased and where such respective businesses are
presently conducted. Except as indicated in said Schedule 5.1(b), none of the
business, assets or properties of the Companies relating to any of the Stations
is owned, used or conducted by any partner or affiliate of the Company other
than the Companies.
(c) The Companies have all requisite limited partnership or limited
liability company power and limited partnership or limited liability company
authority to enter into this Agreement and each of the other agreements
(including, without limitation, the Time Brokerage Agreement), certificates and
instruments to be executed and delivered by any of them pursuant hereto
(collectively the "Company Documents") and to carry out the transactions
contemplated hereby and thereby. This Agreement has been duly executed by, and
constitutes the legal, valid and binding obligation of, the Company and each of
the Company Documents, when executed and delivered by such of the Companies as
is party thereto, shall, when so executed and delivered, constitute the legal,
valid and binding obligations of such of the Companies as is party thereto. All
limited partnership and limited liability company proceedings required to be
taken by the Companies relating to the execution, delivery and performance of
this Agreement and the Company Documents and the consummation of the
transactions contemplated hereby have been duly taken.
-15-
5.2 No Violation. Except for the filing of the Application and the
------------
granting of the Initial Order and the Final Order, and except as may be caused
or made necessary by facts relating solely to Buyer, and except as indicated in
Schedule 5.2 of the Disclosure Schedule: the execution, delivery and
------------
performance of this Agreement and the Company Documents by the Companies, and
the consummation by Companies of the transactions contemplated hereby and
thereby, will not conflict with or violate the certificate of limited
partnership or limited partnership agreement, or the certificate of formation or
limited liability company agreement of any of the Companies or any lease,
license, promissory note, conditional sales contract, indenture, mortgage, deed
of trust or other agreement or instrument to which any of Companies is a party,
or any law, rule or regulation to which any of the Companies is subject, which
in any case would have a Material Adverse Effect or violate any court or
administrative order by which any of the Companies is bound, and no approval or
consent of any governmental authority or any third party is necessary for the
execution, delivery and performance by any of the Companies of this Agreement or
any of the Company Documents which, if not obtained, would have a Material
Adverse Effect.
5.3 Financial Statements. Attached as Schedule 5.3 to the Disclosure
-------------------- ------------
Schedule are copies of the following financial statements (the "Financial
Statements"):
(a) audited consolidated balance sheets and related audited
consolidated statements of income and cash flow of the Company and its
subsidiaries as at and for the fiscal years ended December 31, 1996 and December
31, 1997, and the unaudited consolidated balance sheet of the Company and its
subsidiaries as at September 30, 1998 (the "September 30 Balance Sheet"), and
(b) those unaudited statements of operating income for the Stations,
and an unaudited balance sheet for the Stations, as are identified on Schedule
--------
5.3 of the Disclosure Schedule (the "Station Statements").
---
Except as indicated in Schedule 5.3 of the Disclosure Schedule, the Financial
------------
Statements have been prepared in accordance with generally accepted accounting
principles ("GAAP") and (other than the Station Statements) fairly present in
all material respects the consolidated financial position of the Company and its
subsidiaries and the consolidated results of operations of the Company and its
subsidiaries as of the respective dates thereof and for the fiscal years covered
thereby, and the Station Statements fairly present in all material respects the
combined operating income of the Stations taken as a whole, for the periods
covered thereby, subject, in the case of all interim period Financial
Statements, to reasonable year-end audit adjustments.
-16-
5.4 Absence of Undisclosed Liabilities. To the knowledge of the Company,
----------------------------------
neither the Company nor any of the Subsidiaries has any material debt or
liability relating to any of the Stations which would be required in accordance
with GAAP to be set forth or reserved against on a consolidated balance sheet of
the Company and its subsidiaries which has not been set forth on the September
30 Balance Sheet, or referred to in the notes to the most recent audited
consolidated balance sheet included among the Financial Statements, except as
indicated on Schedule 5.4 of the Disclosure Schedule, or on any one or more of
------------
the other Schedules of the Disclosure Schedule, and except for those (i)
incurred after such date in the ordinary course of business, (ii) incurred as a
result of the Time Brokerage Agreement or any act, omission or instruction of
Buyer taken or made under or in connection with the Time Brokerage Agreement or
any activities or transactions in furtherance thereof or in connection
therewith, (iii) covered by insurance, indemnification or comparable
arrangements, or (iv) which would not reasonably be expected to have a Material
Adverse Effect.
5.5 Absence of Certain Changes or Events. Except as set forth in
------------------------------------
Schedule 5.5 of the Disclosure Schedule, or as contemplated or permitted by this
------------
Agreement, since September 30, 1998: (i) there has not been any increase in the
rate or terms of salary or bonus payable by the Company or the Subsidiaries to
any of the key employees of the Stations, except increases occurring in the
ordinary course of business in accordance with customary practices, (ii) there
has not been any material increase in the rates or terms of pension and similar
employee benefit plans, except increases occurring in the ordinary course of
business in accordance with the Company's customary practices, (iii) there has
not been any material grant of severance pay by the Company or any of the
Subsidiaries in favor of any present or past employee of the Stations except in
the ordinary course of business in accordance with customary practices, (iv)
there has not been any entry into any material agreement or material transaction
relating to any of the Stations, outside the ordinary course of business, by the
Company or by any of the Subsidiaries, except on reasonable and prudent terms,
(v) there has not been any material change by the Company in its accounting
methods, principles or practices, other than as required by GAAP, (vi) the
Company and the Subsidiaries have not mortgaged, pledged or granted a security
interest on any of their material assets relating to any of the Stations, (vii)
the Company and the Subsidiaries have not sold, transferred, leased to others or
otherwise disposed of any of the material assets or properties relating to any
of the Stations, except in the ordinary course of business, (viii) the Company
and the Subsidiaries have not encountered any labor union organizing activity,
had any actual or threatened employee strike, work stoppage, slow down or
lockout, or had any change in their relations with their employees as a group,
in each case relating to any of the Stations and which has had or is expected to
have a Material Adverse Effect, (ix) prior to the date of this Agreement
-17-
there has not been a Material Adverse Effect, and (x) neither the Company nor
any of the Subsidiaries has entered into any agreement to effect any of the
foregoing.
5.6 Tax Liabilities. Except as set forth on Schedule 5.6 of the
--------------- ------------
Disclosure Schedule, to the knowledge of the Company: the Companies have paid
or adequately accrued for all material liabilities for Federal, state and local
taxes or similar charges imposed by any taxing authority, including federal,
state, local and foreign income, sales, use, excise, franchise, withholding,
transfer, real property and personal property taxes (collectively, "Taxes") due
and payable by any of the Companies.
5.7 Real Property.
--------------
(a) Schedule 5.7 of the Disclosure Schedule identifies all of the
------------
Company's real property, including fee interests, leasehold interests and
easements necessary to conduct or used in the business or operations of the
Stations ("Real Property").
(b) The Company is the owner of the fee parcel identified on said
Schedule 5.7 of the Disclosure Schedule (the "Fee Parcel"). Except as disclosed
------------
in said Schedule 5.7 and except for the Permitted Liens, the Fee Parcel is or at
------------
Closing will be free and clear of all Liens.
(c) The Company is the holder of a valid and subsisting interest as
lessee under the leases listed in Schedule 5.7 of the Disclosure Schedule (the
------------
"Real Property Leases").
(d) Except as indicates in said Schedule 5.7:
------------
The Company is not in default under any lease with respect to
the Real Property Leases listed on said Schedule 5.7, and, to the Company's
------------
knowledge, the other parties to any such leases are not in default thereunder,
in each case except for such defaults that would not have a Material Adverse
Effect. Except as disclosed on said Schedule 5.7 and subject to any consents
------------
required by suchReal Property Leases, and all applicable governmental required
consents and approvals and the expiration of all applicable waiting periods, the
Company has full legal power and authority to assign its rights under the Real
Property Leases listed on said Schedule 5.7 to Buyer in accordance with this
------------
Agreement .
(e) Except as indicated in said Schedule 5.7:
------------
-18-
Any and all improvements made on the Fee Parcel conform to all
restrictive covenants, building codes, and federal, state and local laws,
regulations and ordinances including without limitation all zoning laws,
regulations and ordinances, in each case except for such nonconformities that
would not have a Material Adverse Effect. To the Company's knowledge, the
improvements on the Fee Parcel are in all material respects in working
condition. There are no pending, or to the Company's knowledge, threatened or
contemplated action to take by eminent domain or otherwise to condemn any part
of the Fee Parcel. To the Company's knowledge, there are no physical or
mechanical defects or deficiencies in the condition of the improvements on the
Fee Parcel, including but not limited to, the transmission facilities, roofs,
exterior walls or structural components of the improvements thereon and the
heating, air conditioning, plumbing, ventilating, elevator, utility, sprinkler
and other mechanical and electrical systems, apparatus and appliances located
in, or servicing, such improvements, in each case except for such defects or
deficiencies that would not have a Material Adverse Effect. To the Company's
knowledge, all operating systems included in the Fee Parcel are in all material
respects in working order. The improvements on the Fee Parcel do not encroach
on any property not included in the Fee Parcel, and to the best of the Company's
knowledge there is no encroachment on the Fee Parcel by improvements located on
property not included in the Fee Parcel, in each case except for such
encroachments that would not have a Material Adverse Effect. The Fee Parcel is
a separate and distinct parcel for tax purposes and is not subject to property
taxes or similar charges against any other land. The improvements on the Fee
Parcel are served by the utilities required for the present use and operation
thereof.
(f) Except as indicated in said Schedule 5.7:
Any improvements of the Company made on property which is the
subject of the Real Property Leases (the "Leased Real Property") conform to all
lease restrictions, restrictive covenants, building codes, and federal, state
and local laws, regulations and ordinances, in each case except for such
nonconformities that would not have a Material Adverse Effect. To the Company's
knowledge, the Company's improvements on the Leased Real Property are, in all
material respects, in working condition. The Company has no knowledge of any
pending, threatened or contemplated action to take by eminent domain or
otherwise to condemn any part of the Leased Real Property. To the Company's
knowledge, there are no physical or mechanical defects or deficiencies in the
condition of the improvements on the Leased Real Property, including but not
limited to, the roofs, exterior walls or structural components of the
improvements thereon and the heating, air conditioning, plumbing, ventilating,
elevator, utility, sprinkler and other mechanical and electrical systems,
apparatus and appliances located in, or servicing, such improvements, in each
case except for such defects or deficiencies that
-19-
would not have a Material Adverse Effect. To the Company's knowledge, all
operating systems included in the Leased Real Property are, in all material
respects, in working order. To the Company's knowledge, the improvements on the
Leased Real Property do not encroach on any property not included in the Leased
Real Property, and to the best of the Company's knowledge, there is no
encroachment on the Leased Real Property by improvements located on property not
included in the Leased Real Property, in each case except for such encroachments
that would not have a Material Adverse Effect. The improvements on the Leased
Real Property leased by the Companies are served by the utilities required for
the present use and operation thereof.
5.8 Other Tangible Property. Except as set forth on Schedule 5.8 of the
----------------------- ------------
Disclosure Schedule, the books and records of the Company and the Subsidiaries
in all material respects reflect the vehicles, machinery, equipment and other
tangible personal property owned or leased by the Company and the Subsidiaries
and used exclusively for the operations of any of the Stations. Except as set
forth on said Schedule 5.8, no material personal property of the Company and the
------------
Subsidiaries used primarily for the operations of any of the Stations is held
under any lease, security agreement, conditional sales contract, or other title
retention or security arrangement, or is located other than in the possession or
under the control of the Company or any of the Subsidiaries.
5.9 Trade Names, Trademarks and Copyrights. Schedule 5.9 of the
-------------------------------------- ------------
Disclosure Schedule sets forth a list of all registered trade names, trademarks,
service marks and copyrights (and all applications in respect of the foregoing)
owned by the Company or any of the Subsidiaries which are material to the
businesses of the Stations taken as a whole. To the knowledge of the Company,
there is no infringement or alleged infringement by others of any such material
trade name, trademark, service xxxx or copyright which is reasonably expected to
have a Material Adverse Effect. To the knowledge of the Company, except as set
forth on Schedule 5.9 of the Disclosure Schedule, neither the Company nor any of
------------
the Subsidiaries is infringing on any trade name, trademark, service xxxx or
copyright of any other person or entity, in each case except for such
infringements which would not have a Material Adverse Effect. Except for
arrangements relating to television network or Station affiliation
relationships, and except for rights to broadcast programming granted to or
obtained by the Company or any Subsidiary in the ordinary course of business,
and, except as set forth on said Schedule 5.9, neither the Company nor any of
------------
the Subsidiaries is, as of the date of this Agreement, a party to any license
agreement or arrangement, whether as licensor, licensee, franchisor, franchisee
or otherwise, with respect to any trademarks, service marks, trade names or
copyrights relating to any of the Stations.
-20-
5.10 Title to Assets. Except as described in Schedule 5.10 of the
--------------- -------------
Disclosure Schedule, the Companies have or at Closing will have good title to
all Tangible Personal Property (and to all other tangible personal property and
assets to be sold to Buyer hereunder), free and clear of any Lien, except for
Permitted Liens. Except as described in said Schedule 5.10, the Tangible
-------------
Personal Property is in all material respects in operating condition and repair;
and all such Tangible Personal Property is in compliance with the rules and
regulations of the FCC and, to Seller's knowledge, in all material respects with
all other applicable federal, state and local statutes, ordinances, rules and
regulations, in each case except where such noncompliance would not have a
Material Adverse Effect. Except as disclosed in Schedule 5.10 of the Disclosure
Schedule, the Tangible Personal Property includes all such tangible personal
property reasonably necessary to conduct the business and operations of the
Stations as now conducted.
5.11 Insurance Policies. Schedule 5.11 of the Disclosure Schedule sets
------------------ -------------
forth a list of material insurance policies held by the Company and the
Subsidiaries as of the date of this Agreement concerning the operations and
properties of the Stations. Except as set forth in Schedule 5.11, no claim is
-------------
pending under any such policy which would have a Material Adverse Effect.
5.12 Contracts. Schedule 5.12 of the Disclosure Schedule lists or
--------- -------------
describes all Contracts as of the date of this Agreement other than (A)
contracts and agreements in the nature of air time, advertising, barter or
trade, purchase, supply and service orders or arrangements in the ordinary
course of business, (B) retransmission and "must-carry" agreements and
arrangements entered into in the ordinary course of business and not requiring
retransmission fee payments by the Company or the Subsidiaries, (C) any
contracts and agreements relating to the acquisition of any of the Stations or
assets related thereto if the obligations of the Company have been substantially
performed (except for customary assumptions of liabilities of the sellers and
indemnification obligations as to post-closing operations of the acquired
business(es)), (D) any of the agreements referred to in Schedule 5.12(A) of the
----------------
Disclosure Schedule (the "Excluded Contracts"), or (E) agreements not covered in
clauses (A) through (D) above entered into in the ordinary course of business
involving payments by the Companies of less than $10,000 in any single case or
more than $50,000 in the aggregate. The Company has delivered or made available
to Buyer true and complete copies of all Contracts listed on Schedule 5.12 of
the Disclosure Schedule, To the knowledge of the Company, all Contracts set
forth on Schedule 5.12 of the Disclosure Schedule are in full force and effect,
-------------
and no proceedings are pending, or to the knowledge of the Company, threatened
in which the unenforceability of any such Contract has been asserted, in each
case except where the absence of same would not have a Material Adverse Effect.
The Company has complied in all respects with all Contracts and is not in
default under any of the Contracts, in each
-21-
case except for such noncompliance and defaults that would not have a Material
Adverse Effect. To the knowledge of the Company, no other contracting party is
in default under any of the Contracts, in each case other than defaults that
would not have a Material Adverse Effect. The Contracts listed on said Schedule
--------
5.12, together with those not required to be listed, include all those as of the
----
date of this Agreement necessary in all material respects to conduct the
business and operations of the Stations as now conducted. To the knowledge of
the Company, the Company has not received written notice of any intention by any
party to any Contract (i) to terminate the Contract, (ii) to refuse to renew the
Contract upon expiration of its term, or (iii) to renew the Contract upon
expiration only on terms and conditions which are more onerous than those now
existing, in each case other than where the same would not have a Material
Adverse Effect.
5.13 Compliance with Laws. Except as set forth on Schedule 5.13 of the
-------------------- -------------
Disclosure Schedule, to the knowledge of the Company, there is no violation by
the Company or any of the Subsidiaries of any applicable federal, state or local
statute, law or regulation (including, without limitation, any applicable
building, zoning, environmental protection, or other law, ordinance or
regulation) affecting the properties or operations of any of the Stations , in
each case except for such violations that would not have a Material Adverse
Effect.
5.14 Litigation. Except as set forth on Schedule 5.14 of the Disclosure
---------- -------------
Schedule, there is not pending, nor, to the knowledge of the Company,
threatened, any suit, action, arbitration, or legal or administrative
proceeding, against the Company, or any of the Subsidiaries, arising out of the
operations of any of the Stations, or in connection with the transactions
contemplated by this Agreement , in each case which is reasonably expected to
have a Material Adverse Effect or a material adverse effect on the ability of
the Company to consummate the transactions contemplated by this Agreement.
Neither the Company nor any of the Subsidiaries is in violation of any order,
writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality, in each case except for such violations
that would not have a Material Adverse Effect.
5.15 Authorizations. The Company and the Subsidiaries have all
--------------
governmental authorizations, licenses, franchises and permits necessary to the
operation of the Stations, and the conduct of the business of the Stations,
taken as a whole, in each case except where the failure to have the same, and
the cost of obtaining the same, would not have a Material Adverse Effect
(collectively, the "Authorizations"). The FCC Licenses identified in Schedule
--------
5.15 of the Disclosure Schedule constitute those licenses and permits required
----
under the Communications Act of 1934, as amended (the "Communications Act"), or
the rules, regulations, and policies of the FCC, with respect to the operation
of the Stations as currently operated. Except as set forth on Schedule 5.15
-------------
-22-
of the Disclosure Schedule, the FCC Licenses are in full force and effect and
are unimpaired by any act or omission of the Company or any of the Subsidiaries,
except where the contrary would not have a Material Adverse Effect. Except for
administrative rule making or other proceedings of general applicability to the
broadcast industry and except for the Application, there is no action pending
nor, to the knowledge of the Company, threatened before the FCC to revoke,
refuse to renew, suspend or materially and adversely modify the FCC Licenses, or
to impose any Commission sanction with respect to any Station. To the knowledge
of the Company, except as set forth on Schedule 5.15 of the Disclosure Schedule,
-------------
there is not pending any investigation by or before the FCC, or any order to
show cause, notice of material violation, notice of apparent liability, or
notice of forfeiture or complaint by, before or with the FCC, against the
Station or the Company or any of its Subsidiaries, nor, to the knowledge of the
Company, are any of the foregoing threatened, in each case which would
reasonably be expected to have a Material Adverse Effect. Except as set forth
on Schedule 5.15 of the Disclosure Schedule, the Stations are operating in
-------------
compliance with the FCC Licenses, the Act, and the current rules, regulations,
and policies of the FCC, in each case except where the failure to so comply
would not have a Material Adverse Effect. All material reports, forms and
statements required to be filed with the FCC in connection with the Stations
have been filed with the FCC.
5.16 Employment Contracts and Benefits. (a) Schedule 5.16 of the
--------------------------------- -------------
Disclosure Schedule contains a true and complete list of all persons employed at
the Stations as of the date hereof and a description of all salary, bonus
arrangements and employee benefit plans or arrangements applicable to such. The
Company is not a party to any agreement, written or oral, with salaried or non-
salaried employees at the Stations, except those setting forth terms of at will
employment and except as described on said Schedule 5.16.
-------------
(b) Except as disclosed in said Schedule 5.16, the Company is not a
-------------
party to any Contract or agreement with any labor organization, nor has the
Company agreed to recognize any union or other collective bargaining unit, nor
has any union or other collective bargaining unit been certified as representing
any of the Company's employees at the Stations. The Company has no knowledge of
any organizational effort currently being made or threatened by or on behalf of
any labor union with respect to employees of the Company at the Stations. Except
as set forth on said Schedule 5.16, Seller has no knowledge of any unfair labor
-------------
practice charges pending against the Company with respect to the Stations; there
are no pending or, to the Company's knowledge, threatened strikes or arbitration
proceedings involving labor matters affecting the Company; and the Company has
not experienced any strikes, work stoppage or other significant labor
difficulties of any nature at the Stations in the past two years.
-23-
(c) The Company has complied with respect to the Stations with all
laws relating to the employment of labor, including, without limitation, those
laws relating to safety, health, wages, hours, collective bargaining,
unemployment insurance, workers' compensation, equal employment opportunity and
payment and withholding of taxes, except for such noncompliance that would not
have a Material Adverse Effect.
(d) Except as set forth in said Schedule 5.16, the Company is not a
-------------
party to or bound by any employee benefit plan within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), covering the employees at the Stations, whether or not such plan is
otherwise exempt from the provisions of ERISA, and no employee or spouse of an
employee is entitled to any benefits that would be payable pursuant to any such
plan. The Company has in all material respects administered any plan listed on
said Schedule 5.16 in accordance with all provisions of ERISA, and its otherwise
-------------
complied in all material respects with ERISA. Buyer shall not assume or hereby
become obligated to pay any debt, obligation or liability arising from the
Company's employee benefit plans, or any other employment arrangement, except as
specifically provided in this Agreement and coverage under such plans and
arrangements for employees of the Company shall remain the responsibility of the
Company so long as such employees remain employees of the Company.
5.17 Fees. The Company has not become obligated to pay any fee or
----
commission to any broker, finder or investment banker in connection with the
transactions contemplated by this Agreement except as set forth on Schedule 5.17
-------------
of the Disclosure Schedule.
5.18 Environmental Laws. Except as disclosed on Schedule 5.18 of the
------------------ -------------
Disclosure Schedule: all operations on the Fee Parcel are in material compliance
with all Environmental Laws; the Company has obtained all material environmental
permits necessary for the operation of the Stations, and all such permits are in
full force and effect and the Company is in material compliance with the terms
and conditions of all such permits; there are no outstanding Liens (other than
inchoate statutory liens) on the Company's interest in any of the Real
Properties under any Environmental Laws; the Company has not received any
written notice, and is not aware, of any administrative or judicial
investigations, proceedings or actions with respect to material violations,
alleged or proven, of Environmental Laws by the Company, or any tenants or
subtenants of the Company at, or otherwise involving, any of the Real Properties
or the operations of the Company conducted on any of the Real Properties; no
material amount of Asbestos-Containing Material and no material amount of
Hazardous Substance is present in violation of any Environmental Law in any of
the improvements in the Fee Parcel, or to the Company's knowledge, the Leased
Real Property due to actions of the Company or
-24-
for which the Company would have liability, except for ordinary quantities of
Hazardous Substances found in consumer or commercial products that are used in
the normal course of broadcast station operations, including grounds and
building operation and maintenance; and the Fee Parcel and, to the Company's
knowledge, the Leased Real Property, and all operations of the Company conducted
on or in the Fee Parcel and, to the Company's knowledge, the Leased Real
Property are in material compliance with all applicable federal and state
statutes and regulations relating to Asbestos and Hazardous Substances. The
operation of the Stations does not exceed in any material respect the
permissible levels of exposure to RF radiation specified in the FCC's applicable
rules, regulations and policies concerning RF radiation.
5.19 Programming. Schedule 5.19 of the Disclosure Schedule sets forth
----------- -------------
certain indicated information, as of approximately the date indicated therein,
with respect to contracts authorizing the broadcast of programming on the
Stations in exchange for cash payments and is accurate in all material respects
as of approximately such date.
5.20 Certain Understandings. Notwithstanding anything to the contrary
----------------------
contained in the Agreement:
(a) For purpose of this Agreement, the terms "knowledge of the
Company", and variations thereof, shall be deemed to refer only to the actual
knowledge of senior management of the Company, including Xxxxx X'Xxxxxx and
Xxxxx X. Xxxxx.
(b) It is understood and agreed that whenever the Company is
called upon to list any contracts or agreements, there shall be deemed excluded
from the applicable representation or warranty any agreement where the primary
obligations of the parties thereto have been performed or will be performed on
or before the Closing.
(c) Certain matters and items disclosed in any Schedule of the
Disclosure Schedule may not be required to be disclosed therein, but may be
disclosed therein for informational purposes only, and no such disclosure shall
constitute an indication or admission of the materiality thereof or create a
standard of disclosure.
(d) Notwithstanding any cross-referencing which may be undertaken
in the Disclosure Schedule or any Schedule thereof, any matter identified in any
one or more of the Schedules of the Disclosure Schedule shall be deemed
disclosed for purposes of any other Schedule of the Disclosure Schedule.
(e) No representation or warranty in or made pursuant to this
Agreement shall be deemed breached or be deemed untrue or inaccurate if such
representation or
-25-
warranty ceases to be true or correct or accurate as a result of any matter, or
any act, omission or instruction of Buyer taken, made or arising out of or in
connection with the Time Brokerage Agreement and/or Buyer's activities or
transactions in furtherance thereof or in connection therewith.
5.21 Transactions with Affiliates. All Real Property Leases and
----------------------------
Purchased Assets used or necessary in the business or operations of the Station
are owned, leased, licensed or held by the Companies, and except as disclosed in
Schedule 5.21 of the Disclosure Schedule and except for Excluded Contracts, no
-------------
affiliate of the Company owns or leases property or is a party to any lease or
agreement directly affecting the operations of the Stations.
5.22 Disclosure. As of the date of this Agreement, no representation or
----------
warranty contained in this Agreement contains any untrue statement of a material
fact.
ARTICLE 6
---------
Representations and Warranties of Buyer
---------------------------------------
Buyer represents and warrants to the Company that:
6.1 Organization and Standing. Buyer is a corporation validly existing
-------------------------
and in good standing under the laws of the State of Washington. Buyer has all
requisite corporate power and corporate authority to own and lease its assets
and properties and to carry on its businesses as and in the places such assets
and properties are now owned or leased and where such businesses are presently
conducted.
6.2 Authority. Buyer has all requisite corporate power and corporate
---------
authority to enter into this Agreement and each other agreement (including,
without limitation, the Time Brokerage Agreement), certificate and instrument to
be executed and delivered by it pursuant to this Agreement (collectively the
"Buyer Documents") and to carry out the transactions contemplated hereby and
thereby. This Agreement has been duly executed by Buyer and constitutes, and
each Buyer Document, when executed and delivered, will constitute, the legal,
valid and binding obligations of Buyer. All corporate proceedings and actions
required to be taken by Buyer relating to the execution, delivery and
performance of this Agreement and the Buyer Documents and the consummation of
the transactions contemplated hereby and thereby have been duly taken.
6.3 Litigation. Except for administrative rule making or other
----------
proceedings of general applicability to the broadcast industry and except for
the Application
-26-
contemplated by this Agreement and matters pertaining thereto: there is no
action, suit, proceeding, arbitration or investigation pending, or to the
knowledge of Buyer threatened, against Buyer or any of its affiliates, and there
is not outstanding any order, writ, injunction, award or decree of any court or
arbitrator or any federal, state, municipal or other governmental department,
commission, board, agency or instrumentality to which Buyer or any of its
affiliates is subject, which could reasonably be expected to materially
adversely affect the ability of Buyer to consummate the transactions
contemplated by this Agreement and by the Buyer Documents.
6.4 Financing. Buyer has, and at the Effective Time will have, all
---------
funds necessary to consummate the transactions contemplated by this Agreement
and by the Buyer Documents.
6.5 Qualification. Buyer is, and at all times through the Closing will
-------------
be, legally, technically, financially and otherwise qualified under the
Communications Act and all rules, regulations and policies of the FCC
(collectively, Communications Requirements"), and all applicable laws pertaining
to competition and anti-trust matters ("Anti-trust Requirements"), to control,
acquire and operate the Stations. There are no facts or proceedings that could
reasonably be expected to disqualify or restrict Buyer under the Communications
Act, any Communications Requirements, any Anti-trust Requirements or otherwise
from controlling, acquiring or operating any of the Stations or that could
reasonably be expected to cause the FCC not to grant the approvals required, or
cause the Department of Justice or the FTC not to permit the prompt expiration
of all waiting periods under the HSR Act, in connection with the transactions
contemplated by this Agreement and by the Buyer Documents. Buyer has no
knowledge of any fact or circumstance relating to Buyer or any of Buyer's
affiliates that could reasonably be expected to (i) cause the filing with the
FCC of any valid objection to any of the transactions contemplated by this
Agreement and by the Buyer Documents, or (ii) lead to a delay in the processing
by the FCC of the Application, or in the termination of any waiting period under
the HSR Act. No waiver of any FCC rule or policy is necessary to be obtained
for the grant of the Application, nor will processing pursuant to any exception
or rule of general applicability be requested or required in connection with any
of the transactions contemplated by this Agreement and by the Buyer Documents.
Buyer has provided to the Company in writing a list of all media properties in
which Buyer or any of its affiliates, alone or together, has any "attributable
interest" or any "meaningful relationship" under current FCC rules and
regulations.
6.6 No Violation. Except for the filing of the Application and the
------------
granting of the Initial Order and the Final Order and the expiration or
termination of the waiting period under the HSR Act, and except as may be caused
or made necessary by facts
-27-
relating solely to the Company: (a) the execution, delivery and performance of
this Agreement and Buyer Documents by Buyer and the consummation by it of the
transactions contemplated by this Agreement and by the Buyer Documents will not
(i) conflict with or violate any provision of any of the governing documents of
Buyer, (ii) with or without the giving of notice or the passage of time, or
both, result in a breach of, or violate, or be in conflict with, or constitute a
material default under, or permit the termination of, or cause or permit
acceleration under, any material agreement, instrument, debt or obligation to
which Buyer is a party or to or by which it is subject or bound, or (iii)
violate any material law, rule or regulation or any order, judgment, decree or
award of any court, governmental authority or arbitrator to or by which Buyer is
subject or bound, except as would not reasonably be expected to have a material
adverse effect on the ability of Buyer to consummate the transactions
contemplated by this Agreement and by the Buyer Documents; and (b) no consent,
approval or authorization of, or declaration, filing or registration with, or
notice to, any governmental or regulatory authority or any other third party is
required to be obtained or made by Buyer in connection with the execution,
delivery and performance of this Agreement and the Buyer Documents or the
consummation of the transactions contemplated by this Agreement and by the Buyer
Documents.
6.7 Brokerage or Finder's Fee. No person is entitled to any brokerage
-------------------------
commissions or finder's fees in connection with the transactions contemplated by
this Agreement as a result of any action taken by Buyer or any of the
affiliates, officers, directors or employees thereof.
6.8 Own Investigation; etc. (a) Buyer understands and agrees that
----------------------
THE COMPANY IS NOT MAKING ANY, AND HEREBY DISCLAIMS ALL, REPRESENTATIONS OR
WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ALL
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
EXCEPT AS SPECIFICALLY SET FORTH IN ARTICLE 5 HEREOF.
(b) Buyer acknowledges and agrees that (i) it has made its own
inquiry and investigation into, and, based thereon, has formed an independent
judgment concerning, the Company, the Subsidiaries and the Stations and their
businesses and assets, and (ii) it has been furnished with or been given
adequate access to such information about the Company, the Subsidiaries and the
Stations and their businesses and assets, as it has requested.
(c) In connection with Buyer's investigation of the Company, the
Subsidiaries and the Stations and their businesses and assets, Buyer has
received certain
-28-
projections and other forecasts, plans and budgets. Buyer acknowledges that
there are uncertainties inherent in attempting to make such projections,
forecasts, plans and budgets, that Buyer is familiar with such uncertainties and
is not relying upon such projections, forecasts, plans or budgets, that Buyer is
taking full responsibility for making its own evaluation of the adequacy and
accuracy of all estimates, projections, forecasts, plans and budgets so
furnished to it, and that Buyer will not assert or permit to be asserted any
claim against the Company or any partner thereof or any of their respective
directors, officers, employees, agents, stockholders, affiliates, consultants,
counsel, accountants, investment bankers or representatives, or hold the Company
or any partner thereof or any of such persons liable, with respect thereto.
Accordingly, the Company makes no representation or warranty with respect to the
business, operations, assets, liabilities or financial condition of the Company
or any of the Subsidiaries or the Stations other than as specifically set forth
in this Agreement. Buyer has not relied on or is relying on any statement,
representation or warranty not made in this Agreement. To the knowledge of Buyer
or any of its affiliates, employees, representatives or agents that has been
actively involved in the due diligence process associated with this Agreement
and the transactions contemplated by this Agreement, there is no breach of any
of the representations and warranties set forth in Article 5 hereof.
6.9 Disclosure. As of the date of this Agreement no representation or
----------
warranty contained in this Agreement contains any untrue statement of a material
fact.
ARTICLE 7
---------
Certain Covenants
-----------------
7.1 Consents. Each of the Company and Buyer shall use its reasonable
--------
efforts to obtain all consents required of third persons in connection with the
transactions contemplated by this Agreement, including all consents under each
television network affiliation agreement applicable to the respective Stations
(each an "Affiliation Agreement") and each national sales representative
agreement applicable to the respective Stations (each a "Sales Rep Agreement").
Without limiting the generality of the foregoing, Buyer (i) shall provide such
guarantees and financial statements and other financial information with respect
to Buyer as may reasonably be requested, (ii) if requested, shall agree, in
writing in form and substance satisfactory to the other party thereto, as the
case may be, to assume and perform each Affiliation Agreement and each Sales Rep
Agreement, as the case may be, in its entirety, and (iii) shall use all
reasonable efforts, and shall assist the Company in its efforts, to obtain for
the benefit of the
-29-
Companies, from the other party or parties thereto, the release of the Companies
from all liabilities and obligations under the Contracts assumed or to be
assumed by Buyer accruing or arising on or after Closing Date. The provisions of
this Section 7.1 shall survive the Closing.
7.2 Conduct of Business. During the period from the date of this
-------------------
Agreement until the Closing, the Company shall not, without the prior written
consent of Buyer (such consent not to be unreasonably withheld or delayed), and
shall not permit any of the Companies to:
(a) enter into any agreement or contract which if entered into
prior to the date hereof would have been required to be disclosed on Schedule
--------
5.12 of the Disclosure Schedule pursuant to the representations set forth in
----
Section 5.12 hereof, other than agreements or contracts in the nature of
renewals or replacements on substantially similar or then reasonable or
prevailing commercial terms in the ordinary course of business;
(b) intentionally subject to any Lien, other than Permitted
Liens, any material Asset ;
(c) fail to prosecute with diligence any pending application
(other than the Application) with respect to any of the FCC Licenses;
(d) dissolve, liquidate, merge or consolidate or sell, transfer,
lease or otherwise dispose of any material Assets other than in the ordinary
course of business or as otherwise permitted by this Agreement; or
(e) perform any acts or transactions described in any of clauses
(i), (ii), (iii), (iv), (v), (vi) or (vii) of Section 5.5 hereof which would
have been inconsistent with the representations and warranties set forth in
Section 5.5 hereof had the same occurred after September 30, 1998 and prior to
the date hereof.
7.3 Operations. During the period from the date of this Agreement to
----------
the Closing Date, the Companies shall have sole responsibility for the Stations
and during such period the Company shall and shall cause the Companies to use
reasonable commercial efforts to operate the Stations in all material respects
in accordance with the rules and regulations of the FCC and the FCC Licenses,
and file ownership reports, employment reports and other documents required to
be filed with the FCC during such period with respect to the Stations and
maintain and deliver to Buyer true and complete copies of such required filings.
-30-
7.4 Going Off the Air. If any Station goes off the air (other than in
-----------------
the ordinary course of business consistent with past or reasonable commercial
practices) for any engineering reason, or because of any act of God, or for any
other reason, the Company shall promptly notify Buyer.
7.5 Restrictions on Buyer. Nothing contained in this Agreement shall
---------------------
give Buyer any right to control the programming or operations of any of the
Stations prior to the Closing Date and the Companies shall have complete control
of the programming and operation of the Stations between the date hereof and the
Closing Date.
7.6 Access to Information. During the period from the date of this
---------------------
Agreement until the Closing, Buyer and its representatives shall be given
reasonable access upon reasonable prior notice and during times mutually
convenient to Buyer and senior management of the Company to the facilities,
properties, and key management employees, books and records of the Stations as
from time to time may be reasonably requested, and provided the same would not
cause undue disruption of business or activities of any of the Stations.
7.7 No Shop. (a) The Company agrees that, from and after the date
-------
hereof and until the earlier of (i) termination of this Agreement in accordance
with the terms hereof, and (ii) nine months after the date hereof, the Company
will not, nor will it permit any of the Subsidiaries to, sell, transfer or
otherwise dispose of any of the assets, properties, business or rights of any of
the Stations (except for dispositions in the ordinary course of business or as
permitted elsewhere in this Agreement), and the Company will not respond to
inquiries or proposals, or enter into or pursue any negotiations, or enter into
any agreements (oral or written), with respect to, the sale or purchase of any
of the assets, properties, business or rights of any of the Stations (except for
dispositions in the ordinary course of business or as permitted elsewhere in
this Agreement).
(b) Buyer agrees that, from and after the date hereof and until the
earlier of termination of this Agreement in accordance with the terms hereof or
the Closing, neither Buyer nor any of its affiliates will purchase or acquire
the assets of any television or radio broadcasting station with a transmitter
located within the Designated Market Area (as such term is used by Xxxxxxx Media
Research) of any of the Stations or assume control of any such station or enter
into a local marketing agreement or other time brokerage agreement with respect
to any such station, or pursue any negotiations or enter into any agreements
(oral or written) with respect to the purchase of any direct or indirect
interest in such station or any of the assets, business or rights relating to
any such station.
-31-
7.8 Buyer's Qualifications. Buyer will not take any action or omit to
----------------------
take any action, or cause to be taken or to occur any action or omission, which
would cause the representation set forth in Section 6.5 hereof to have been
untrue if such action or omission had been taken or occurred prior to the date
hereof.
7.9 Cooperation. From the date hereof until the earlier of the Closing
-----------
or the termination of this Agreement, each of the Company and Buyer shall, at
its own respective expense, (i) use its commercially reasonable efforts to take
any additional action that is necessary or required in connection with any
notices to, filings with, and authorizations, consents and approvals of, any
governmental agency or any third party that it is required to give, make or
obtain in order to effect the transactions contemplated under this Agreement,
and (ii) furnish to the other party hereto such necessary information and
reasonable assistance as such other party may reasonably request in connection
with its preparation of such necessary notices to or filings with or
authorizations, consents and approvals of any such governmental agency or third
party.
7.10 Certain Employee Matters. (a) Subject to Section 7.10(c) below,
------------------------
Buyer may extend offers of employment, effective as of the Closing, to certain
employees of the Stations in Buyer's sole discretion and each such offer shall
be at the same salary and with substantially the same medical and health
insurance benefits as in effect immediately prior to the Closing and such that
no loss of employment would occur for any employee if such employee accepted his
or her respective offer. All employees who accept their respective offers of
employment with Buyer shall immediately be and become employees of Buyer. To
the extent that service is relevant for eligibility, vesting and benefit
accruals under any retirement or employee benefit plan, program or arrangement
established or maintained by Buyer or any of its affiliates for the benefit of
employees of any of the Stations, such plan, program or arrangement shall credit
such employees for service on or prior to the Effective Time with the Company or
any affiliate or predecessor thereof. In addition, Buyer shall cause to be
waived all limitations on benefits relating to any pre-existing conditions and
recognize, for purposes of annual deductible and out-of-pocket limits under its
medical and dental plans, deductible and out-of-pocket expenses paid by
employees and their dependents under the medical and dental plans in which they
participate in the calendar year in which the Closing occurs. The Buyer shall
not be responsible for any severance claims, costs or causes of action of
employees of the Stations to whom Buyer does not offer employment. Except as
provided in this Agreement, nothing herein shall restrict Buyer's ability to
change or terminate the benefits or benefit plans provided to any employees
(including former employees of the Company), nor shall Buyer be required to
provide any employee any of the terms and conditions of employment provided by
the Company.
-32-
(b) The Buyer shall have no responsibility or liability for any
medical, disability or other benefits owed under the Company's benefit plans to
its employees, including without limitation, expenses for health or dental
benefits incurred but not submitted for reimbursement prior to the Closing Date
that are covered under the Company's benefit plans and any incentive bonuses
offered to employees of the Company. The Buyer shall not be responsible for
providing any medical, life and other insurance coverage and benefits, and
disability benefits to which any employee of the Company who retired or was
terminated from service with the Company prior to the Closing Date, or who was
disabled prior to the Closing Date, to which such employee may be entitled under
the Company's benefit plans.
(c) Buyer is not planning or contemplating, and has not made or
taken, and shall not make or take, any decisions or actions concerning the
Stations' employees that would require the service of notice under the Worker
Adjustment and Retraining Notification Act of 1988 (the "WARN Act"), or any
employee notice provision of applicable state law, including, without
limitation, any decision not to offer employment to any employees at the
Stations which would cause a violation of the WARN Act or any such similar state
law.
(d) This Section 7.10 shall operate exclusively for the benefit of
the parties to this Agreement (and their permitted assigns) and not for the
benefit of any other person or entity.
7.11 Environmental Assessment Period. Within thirty (30) days of the date
-------------------------------
of this Agreement, Buyer shall, at Buyer's cost and expense, cause an
environmental consulting firm reasonably acceptable to the Company to perform a
Phase I Environmental Assessment (the "Environmental Assessment") of the Fee
Parcel and the improvements thereon and shall deliver to the Company a report
prepared by such environmental consulting firm (the "Environmental Report").
If the Environmental Assessment shall indicate that the representations
contained in Section 5.18 hereof are not true in any material respect, Buyer
shall have the right to terminate this Agreement provided that (i) the Company
is notified in writing of any such material misrepresentation within 45 days
after the date hereof in order for this termination right to be applicable, and
(ii) the Company does not undertake at its expense to correct the condition
giving rise to such termination right.
7.12 Time Brokerage Agreement. Anything to the contrary contained in this
------------------------
Agreement notwithstanding, the Company shall not be deemed to have breached or
failed to comply with any of its covenants under this Agreement, if such breach
or failure is due
-33-
or caused by the Time Brokerage Agreement or any act, omission or instruction of
Buyer under or in connection with the Time Brokerage Agreement or any activities
or transactions in furtherance thereof or in connection therewith.
ARTICLE 8
---------
Certain Additional Covenants
----------------------------
8.1 Confidential Information.
------------------------
(a) Buyer agrees that from and after the date hereof until and
including the Closing Date:
(i) it shall preserve and maintain all confidential or
proprietary information and trade secrets of or relating to the Company or any
of the Subsidiaries received or obtained in any form by Buyer or any of its
affiliates or representatives from the Company or any of the Subsidiaries or any
of their respective representatives, and shall not disclose any of same to any
person or entity or use any such confidential or proprietary information or
trade secret for personal advantage or to the detriment of the Company or any of
the Subsidiaries or any of the partners, shareholders or members thereof, except
that Buyer shall be free to use and disclose such proprietary information and
trade secrets which (A) was already in Buyer's possession at the time of
disclosure to Buyer or any of its affiliates or representatives by the Company
or any of the Subsidiaries or any of their respective representatives, (B) are a
matter of public knowledge other than as a result of actions taken or
disclosures made by or on behalf of Buyer or any of its affiliates or
representatives, or (C) are lawfully obtained by Buyer from a third person not
under any restriction or duty as to confidentiality.
(b) Nothing contained herein should be deemed to negate or limit
the Company's rights or any obligations of Buyer or any of its affiliates under
that certain letter agreement with the Company (the "Confidentiality
Agreement"). The Confidentiality Agreement shall remain in full force and
effect.
(c) Because the remedy at law for any breach of the provisions of
subsection (a) immediately above would be inadequate, Buyer hereby consents to
the granting by any court of an injunction or other equitable relief, without
the necessity of actual damage or irreparable harm being proved or the posting
of any bond or other security, with respect to any breach or threatened breach
of any of such provisions.
-34-
(d) The provisions of this Section 8.1 shall survive any
termination of this Agreement. In addition, it is the desire and intent of the
parties hereto that the provisions of this Section 8.1 shall be enforced to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement may be sought. Accordingly, if any particular
provision of this Section 8.1 shall be adjudicated to be invalid, illegal or
unenforceable in any respect, such provision shall be deemed amended to delete
therefrom the portion thus adjudicated to be invalid, illegal or unenforceable,
such deletion to apply only with respect to the operation of such provision in
the particular jurisdiction in which such adjudication is made, and the
remaining provisions contained herein shall not in any way be affected thereby.
Further, if any one or more of the provisions contained in this Section 8.1
shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, such provision(s) shall be construed by
limiting and reducing the same, so as to be enforceable to the maximum extent
under the applicable law as it shall then exist.
8.2 Bulk Sales Laws. Buyer hereby waives compliance by the Company and
---------------
the Subsidiaries with any bulk sales law, including, but not limited to, Article
6 of the Uniform Commercial Code, which may be applicable to any of the
Transactions. The Company agrees to indemnify and hold harmless the Buyer from
and against any and all claims, losses charges or damages resulting from the
failure of the Company to comply with any such bulk sales law except to the
extent any such claim, loss, charge or damage is an Assumed Liability.
8.3 Transactional Taxes. Buyer and the Company shall each pay one-half
-------------------
of any and all sales, transfer, conveyance, or other similar Taxes or
governmental charges imposed by any taxing jurisdiction with respect to the
transfer or assignment of the Purchased Assets or otherwise on account of the
transactions contemplated by this Agreement or any of the Company Documents
(collectively "Transaction Taxes").
8.4 Books and Records.
-----------------
(a On reasonable notice at any time and from time to time after
the Closing Date, Buyer shall permit the Company and its successors, and the
representatives thereof, reasonable access, during normal business hours, to all
correspondence, contracts, agreements and other books and records pertaining to
any of the Stations for purposes of inspection and/or copying. Buyer shall
cause all such materials to be preserved for at least seven (7) years after the
Closing Date and shall not thereafter destroy or otherwise dispose of any such
materials unless they shall have notified the Company and its successors at
least six (6) months before such disposition and give the Company and its
successors the opportunity to remove and retain such materials.
-35-
(b Without limiting the foregoing, Buyer agrees that, for a period
of seven (7) years after the Closing Date, it shall assist and cooperate with
the Company and its successors in collecting and assembling information relating
to the operations of the Company and/or the Subsidiaries prior to the Closing,
which customarily has been provided or used in connection with the preparation
of any and all Tax returns, information returns or other reports required to be
filed by the Company and/or any of the Subsidiaries, with any taxing authority
and shall make available to the Company and its successors the services of
personnel reasonably necessary to enable any of them or any affiliate or agent
of any of them to prepare and file any and all Tax returns, information returns
or other reports required to be filed with any taxing authority and/or to
respond to and conduct any and all Tax audits or other Tax determinations or
proceedings.
ARTICLE 9
---------
Termination
-----------
9.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Closing:
(a by mutual written consent of the Company and Buyer;
(b by either Buyer or the Company, if the Closing does not occur
on or before the earlier of (i) nine (9) months after the date of this Agreement
(the "Termination Date"), (ii) the denial or dismissal of the Application, or
(iii) receipt of notice of the Commission's designation of the Application for
hearing;
(c by Buyer, if the Company shall breach or default in
performance of any of its material representations, warranties or obligations
under this Agreement, and either (i) such breach or default in performance is
not capable of being cured or shall not have been cured or waived within thirty
(30) days after written notice thereof from Buyer to the Company, or (ii) the
Company shall not have provided reasonable assurance that such breach or default
in performance shall be cured on or before the then scheduled Closing Date,
except, in any case, such breaches and defaults which would not reasonably be
expected to have a Material Adverse Effect or to affect materially and adversely
the ability of the Company to effect the Closing;
(d by the Company, if Buyer shall breach or default in
performance of any of its material representations, warranties or obligations
under this Agreement, and
-36-
such breach or default in performance is not capable of being cured or shall not
have been cured or waived within thirty (30) days after notice thereof from the
Company to Buyer;
(e by Buyer, if any of the material conditions set forth in
Section 4.4 of this Agreement shall not have been fulfilled by the Closing Date
(unless the nonfulfillment results from Buyer's breach of any material
representation or warranty or failing to perform any material covenant or
agreement contained in this Agreement);
(f by the Company, if any of the material conditions set forth
in Section 4.5 of this Agreement shall not have been fulfilled by the Closing
Date (unless the nonfulfillment results from the Company breaching any material
representation or warranty or failing to perform any material covenant or
agreement contained in this Agreement); or
(g by the Buyer, if the termination right set forth in Section
7.11 hereof is applicable.
9.2 Effect of Termination. Without intending to limit the provisions of
---------------------
Section 8.1 hereof, if this Agreement shall be terminated pursuant to Section
9.1 above, or otherwise, Buyer shall (i) immediately deliver to the Company all
documents, work papers and other materials furnished to Buyer or any of its
affiliates or representatives, whether obtained before or after the execution of
this Agreement, and (ii) destroy all documents, work papers and other materials
developed by or for Buyer or any of its affiliates, accountants, agents or
employees, which embody proprietary or confidential information or trade secrets
of the Company or any of the Subsidiaries or immediately deliver such documents,
work papers and other materials to the Company.
ARTICLE 10
----------
Indemnification
---------------
10.1 Obligation to Indemnify.
-----------------------
(a From and after the Closing, and subject to the terms and
conditions of this Article 10, Buyer hereby assumes and agrees to save,
indemnify and hold harmless the Companies and their respective partners and
members and all officers, directors, partners and stockholders of any of them
(collectively "Company Indemnitees") from and against:
-37-
(i any loss, liability or damage suffered or incurred by any
Company Indemnitee(s) by reason of any breach by Buyer of any representation or
warranty of Buyer sets forth in this Agreement;
(ii any loss, liability or damage suffered or incurred by any
Company Indemnitee(s) by reason of the nonfulfillment by Buyer of any covenant
or agreement to be performed or complied with by Buyer under or pursuant to this
Agreement;
(iii any liability or damage suffered or incurred by any Company
Indemnitee(s) with respect to or in connection with any one or more of the
Assumed Liabilities and/or any failure of Buyer to timely comply with the
Liabilities Undertaking;
(iv any liability or damage suffered or incurred by any Company
Indemnitee(s) arising out of or related to the ownership or use of any of the
Purchased Assets and/or the operations, business or activities after the Closing
of any of the Stations or any act, omission or instruction of Buyer under or in
furtherance of the Time Brokerage Agreement, or any of the activities or
transactions in furtherance thereof or in connection therewith; and
(v any actions, suits, proceedings, judgments, costs and expenses,
including reasonable attorneys' fees, incident to any of the foregoing, or
incurred in enforcing any of the obligations under this Section 10.1(a).
(b From and after the Closing, and subject to the terms and
conditions of this Article 10, the Company hereby agrees to save, indemnify and
hold harmless Buyer and Buyer's officers, directors and stockholders
(collectively "Buyer Indemnitees") from and against:
(i any loss, liability or damage suffered or incurred by any Buyer
Indemnitee(s) by reason of any breach by the Company of any representation or
warranty of the Company set forth in this Agreement;
(ii any loss, liability or damage suffered or incurred by Buyer by
reason of the nonfulfillment by the Company of any covenant or agreement to be
performed or complied with by the Company under or pursuant to this Agreement;
(iii any liability suffered or incurred by any Buyer Indemnitee(s)
arising out of claims by third parties against any Buyer Indemnitee(s) for any
Excluded Liabilities; and
-38-
(iv any actions, suits, proceedings, judgments, costs and expenses,
including reasonable attorneys' fees, incident to any of the foregoing, or
incurred in enforcing any of the obligations under this Section 10.1(b).
10.2 Provisions Regarding Indemnification. In the event any action, suit
------------------------------------
or proceeding is brought, or any claim, demand or assessment is asserted,
against a party entitled to indemnification under Section 10.1 hereof, by reason
thereof (the "indemnified party"), with respect to which an indemnifying party
(the "indemnifying party") may have liability under the indemnity agreements
contained in Section 10.1 hereof, no indemnifying party shall be liable therefor
unless the indemnified party complies with the following provisions, it being
understood that the indemnifying party and the indemnified party shall have the
following rights and obligations in any such event: (i) the indemnified party
shall promptly notify the indemnifying party of such action, suit, proceeding,
claim, demand or assessment (each a "Claim") within 20 days of acquiring
knowledge thereof and shall furnish the indemnifying party with all information
and documents relating thereto within 20 days after the indemnified party's
receipt thereof (or such earlier practicable date as shall be appropriate to
enable the indemnifying party to timely respond thereto and defend the same);
(ii) the indemnifying party shall be entitled to defend the Claim with counsel
selected by it and reasonably acceptable to the indemnified party; (iii) the
indemnified party shall have the right to employ its own counsel in any such
case, but the fees and expenses of such counsel shall be at the indemnified
party's own expense; (iv) the indemnified party shall be kept fully informed of
such Claim whether or not it is so represented; (v) the indemnified party shall
make available to the indemnifying party and its attorneys and accountants all
books and records of the indemnified party relating to such Claim and shall
render such assistance as is reasonably required in order to ensure the proper
and adequate defense of any Claim; and (vi) in the event the indemnifying party
shall be actively defending any Claim, the indemnified party shall not make any
settlement of such Claim without the written consent of the indemnifying party
and shall accept any settlement thereof recommended by the indemnifying party so
long as the amount thereof is paid or discharged in full by the indemnifying
party.
10.3 Survival and Other Matters. Notwithstanding anything to the contrary
--------------------------
contained in this Agreement or any of the Company Documents:
(a Each representation, warranty, indemnity, covenant and agreement
of each of the parties hereto shall survive the Closing; provided, however, that
-------- -------
no party shall be entitled to assert any claim against the other for
misrepresentation or breach of warranty, indemnity, covenant or agreement under
or pursuant to this Agreement unless the party asserting such claim shall notify
the other in writing of such claim, in reasonable
-39-
detail, during the period ending on the first anniversary of the Closing Date
(the "Survival Period"), in which case the indemnified party's right to
indemnification will survive, but only with respect to the matters so described
in such notice, provided, however, that it is expressly acknowledged that any
-------- -------
claim made pursuant to the provisions of Section 10.1(a)(iii) or Section
10.1(a)(iv) hereof (and/or the provisions of Section 10.1(a)(v) hereof relating
to said Section 10.1(a)(iii) or said Section 10.1(a)(iv)), and Company
Indemnitees' rights and Buyer's obligations thereunder, shall survive
indefinitely and shall not be subject to, or limited by, any aforementioned
Survival Period; provided further that the representations and warranties made
by the Company in Sections 5.6, 5.16 and 5.18 shall survive until the second
anniversary of the Closing Date.
(b The Company shall not have any liability under this Article 10 or
otherwise under this Agreement or any Company Document for any reason or matter
whatsoever, except to the extent that the aggregate amount of all of the
Company's liabilities under this Article 10 or otherwise under this Agreement
(but for this Section 10.3(b)) exceeds One Hundred Thousand Dollars ($100,000);
provided, however, the maximum aggregate liability that the Company shall have
-------- -------
under or in connection with any and all of this Agreement and the Company
Documents and/or any and all of the transactions contemplated by this Agreement
and/or the Company Documents shall in no event exceed the aggregate sum of
$2,600,000 (the "Cap"). Neither Buyer nor any Buyer Indemnitee shall be
entitled to assert any claim or demand for any amount that in the aggregate,
together with the aggregate amount of all other claims and demands previously
made by Buyer or any Buyer Indemnitee and for which the Company is or was
liable, exceeds or will exceed the Cap.
(c In the event that a misrepresentation or breach of warranty,
agreement or covenant is discovered by Buyer after the Closing, or in the event
of any other claim relating to or arising under this Agreement or any of the
Company Documents or any of the transactions contemplated by this Agreement or
any of the Company Documents, the sole and exclusive rights and remedies of
Buyer shall be as set forth in, and only to the extent expressly provided for
in, this Article 10, and Buyer shall not be entitled to a rescission of this
Agreement.
(d In the event that any misrepresentation or breach of warranty,
agreement or covenant is known to or discovered by Buyer prior to the Closing,
the same shall not affect any right of Buyer to elect not to close the
transactions contemplated by this Agreement, as provided in Section 4.4 hereof,
it being understood, however, that if, despite such right to elect not to close,
Buyer nevertheless elects to close, Buyer shall be deemed to have waived such
misrepresentation or breach and shall have no claim against the Company by
reason of such misrepresentation or breach.
-40-
(e In the event the effect of any misrepresentation or breach of
warranty or other provision contained in this Agreement or in any Schedule of
the Disclosure Schedule or Exhibit hereto or in any Company Document is that the
amount of assets of the Company or any of the Subsidiaries has been overstated
or the amount of liabilities of the Company or any of the Subsidiaries has been
understated as of the end of any fiscal period, Buyer's damages caused by such
overstatement or understatement shall in no event exceed the net amount by which
such overstated assets and/or understated liabilities reduces the net worth of
the applicable business or Station as of the end of such fiscal period, and
subject further to all other limitations set forth in and the provisions of this
Section 10.3; it being understood, however, that the foregoing is not intended
to affect Buyer's rights under this Article 10 in the event of a breach of the
Company's representations under Section 5.3 hereof, subject, however, to the
limitations set forth in and the provisions of this Section 10.3 (other than
this paragraph (e)).
(f The effect of any misrepresentation, breach of warranty, covenant
or agreement of, or any indemnifiable claim against, the Company under or in
respect of this Agreement or any of the Company Documents, or any of the
transactions contemplated by this Agreement or any of the Company Documents, and
any damages resulting therefrom, shall be determined based solely on actual
damages (1) on a net after-tax basis (that is, with the amount thereof reduced
to reflect the tax benefit resulting therefrom), and (2) net of any amounts
recovered or recoverable by or on behalf of Buyer or any affiliate thereof in
respect thereof or in connection therewith under any one or more policies of
insurance maintained by any party hereto or any third party. NO PARTY SHALL BE
HELD LIABLE HEREUNDER FOR INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR FOR LOST PROFITS OR LOST OPPORTUNITY COSTS, WHETHER OR
NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(g Buyer agrees that the sole liability and obligations of the
Companies and the sole remedy of Buyer for any claim with respect to or in
connection with this Agreement or any of the Company Documents or any of the
transactions contemplated by this Agreement or any of the Company Documents
(including without limitation under Environmental Requirements) shall be limited
to indemnification by the Company under this Article 10, and Buyer hereby waives
any and all statutory and common law rights and remedies (including without
limitation rights of indemnification and contribution) which it has or may
hereafter have. Under no circumstances shall any direct or indirect subsidiary
of the Company or any general or limited partner or member of the Company or any
such subsidiary, or any officer, director, partner, shareholder or principal of
any such partner, member or subsidiary have any liability or obligation under or
in connection
-41-
with this Agreement, any Company Document or any of the transactions
contemplated hereby or thereby, nor shall Buyer have any recourse against any of
the foregoing persons or entities. Without limiting the generality of the
foregoing, in no event shall Buyer or any Buyer Indemnitee(s) have any right of
set-off against any of, or any right to withhold timely payment and remittance
to the Company of, the proceeds and collections of the Receivables.
ARTICLE 11
----------
Miscellaneous
-------------
11.1 Certain Defined Terms. As used in this Agreement, the following
---------------------
terms shall have the following meanings:
"Affiliate" when used with respect to any person or entity, means any
person or entity which directly or indirectly, alone or together with others,
controls, is controlled by or is under common control with such person or
entity.
"Business Day" means any day that is not a Saturday, a Sunday or other day
on which banks are required or authorized by law to be closed in the State of
New York.
"Code" means the Internal Revenue Code of 1986, as amended.
"Communications Act" means the Communications Act of 1934, as amended, and
the rules and regulations thereunder.
"Environmental Laws" means all applicable local, state and federal statutes
and regulations relating to the protection of the environment including the
FCC's regulations concerning radio frequency radiation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"FCC" or the "Commission" means the Federal Communications Commission or
any successor entity.
"Hazardous Substance" means any and all hazardous or toxic substances,
materials or wastes as may be defined or listed under the Resource Conservation
and
-42-
Recovery Act, the Toxic Substances Control Act, the Comprehensive Environmental
Response, Compensation and Liability Act or any comparable state statute or any
regulation promulgated under any of such federal or state statutes.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations thereunder.
"Lien" means any security interest, mortgage, deed of trust, pledge, lien
or similar encumbrance.
"Material Adverse Effect" means any change in, or effect on the Company or
the Subsidiaries that has a materially adverse effect on the results of
operations or the financial condition of the Stations, taken as a whole, except
for any such changes or effects affecting the U.S. economy or the television
broadcasting industry in general.
"Permitted Liens" means (i) liens for taxes not yet due and payable; (ii)
easements, rights-of-way, mineral rights or other restrictions or imperfections
of title (governmental or otherwise), which are either of record or which
individually or in the aggregate do not materially and adversely affect or
interfere with the use of such property in the business and operations of the
Stations as presently conducted; (iii) such other liens or encumbrances as
agreed upon by the parties; (iv) Liens referred to on Schedule 5.7 or Schedule
------------ --------
5.10 of the Disclosure Schedule; (v) Liens in favor of the Company's lending
----
banks and other institutional lenders from which the Purchased Assets are, as
provided herein, to be released at Closing; and (vi) mechanics', workmens',
landlords' and other statutory liens (or other liens arising by operation of
law) incurred in the ordinary course of business for amounts not in default.
11.2 Binding Agreement. All the terms and provisions of this Agreement
-----------------
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties hereto and their respective heirs, legal representatives, successors and
assigns.
11.3 Assignment. This Agreement and all rights and obligations of Buyer
----------
shall be assignable by Buyer prior to the Closing only with the prior written
consent of the Company, except that after Closing Buyer may assign this
agreement to an affiliate or wholly owned subsidiary of The Xxxxxxxx Group, Inc.
No assignment shall relieve the assigning party of its obligations hereunder.
11.4 Public Announcements. No party to this Agreement shall make any
--------------------
public announcement in respect of this Agreement or the transactions
contemplated by this Agreement or otherwise communicate with any news media
without prior notification to
-43-
the other party, and the parties shall cooperate as to the timing and contents
of any such announcement.
11.5 Law To Govern. This Agreement shall be construed and enforced in
-------------
accordance with the internal laws of the State of New York, without regard to
principles of conflict of laws. Any litigation arising hereunder or related
thereto shall be tried by the United States District Court for the Southern
District of New York, provided that if such litigation shall not be permitted to
be tried by such court then such litigation shall be held in the state courts of
New York sitting in New York City. Each party irrevocably consents to and
confers personal jurisdiction on the United States District Court for the
Southern District of New York, or, if (but only if) the litigation in question
shall not be permitted to be tried by such court, on the state courts of New
York sitting in New York City, and expressly waives any objection to the venue
of such court, as the case may be, and agrees that service of process may be
made on such party by mailing a copy of the pleading or other document by
registered or certified mail, return receipt requested, to its or his addresses
for the giving of notice provided for in Section 11.6 hereof, with service being
deemed to be made five (5) business days after the giving of such notice.
11.6 Notices. All notices shall be in writing and shall be deemed to
-------
have been duly given if delivered personally or when deposited in the mail if
mailed via registered or certified mail, return receipt requested, postage
prepaid to the other party hereto at the following addresses:
if to the Company, to:
c/o The Xxxxx Group of Companies, Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxx X. Xxxxx
with a copy to:
Golenbock, Eiseman, Assor & Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
-44-
if to Buyer, to:
c/o The Xxxxxxxx Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx
with a copy to:
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Xxxxx, Esquire
or to such other addresses as any such party may designate in writing in
accordance with this Section 11.6.
11.7 Entire Agreement. This Agreement sets forth the entire
----------------
understanding of the parties hereto in respect of the subject matter hereof and
may not be modified or amended except by a written agreement specifically
referring to this Agreement signed by all of the parties hereto. This Agreement
supersedes all prior agreements and understandings among the parties with
respect to such subject matter, except that the Confidentiality Agreement dated
shall continue to remain in full force and effect prior to the Closing.
11.8 Waivers. Any failure by any party to this Agreement to comply with
-------
any of its obligations hereunder may be waived by such party. No waiver shall be
effective unless in writing and signed by the party granting such waiver, and no
such waiver shall be deemed a waiver of any subsequent breach or default of the
same or similar nature.
11.9 Severability. Any provision of this Agreement which is rendered
------------
unenforceable by a court of competent jurisdiction shall be ineffective only to
the extent of such prohibition or invalidity and shall not invalidate or
otherwise render ineffective any or all of the remaining provisions of this
Agreement.
11.10 Income Tax Position. No party hereto shall take a position for
-------------------
income Tax purposes which is inconsistent with this Agreement.
11.11 Third-Party Beneficiaries. Nothing herein, express or implied, is
-------------------------
intended or shall be construed to or shall confer upon or give to any person,
firm, corporation or legal entity, other than the parties hereto (and the
respective Company Indemnitees and
-45-
Buyer Indemnitees to the extent provided in Article 10 hereof), any rights,
remedies or other benefits under or by reason of this Agreement or any documents
executed in connection with this Agreement.
11.12 Time of the Essence. Time is of the essence with respect to each
-------------------
party's respective obligations under or pursuant to this Agreement.
11.13 Waiver of Jury Trial. Each of the parties hereto hereby irrevocably
--------------------
waives, to the fullest extent permitted by law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or any
agreement or instrument executed in connection with this Agreement or any of the
transactions contemplated by this Agreement or any such agreement or instrument.
11.14 Drafting. This Agreement has been drafted and negotiated in the
--------
State of New York. No party shall be deemed to have drafted this Agreement but
rather this Agreement is a collaborative effort of the undersigned parties and
their attorneys.
11.15 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement.
11.16 Headings. The Section and paragraph headings contained herein are
--------
for the purposes of convenience only and are not intended to define or limit the
contents of said Sections and paragraphs.
-46-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
XXXXX BROADCAST GROUP LIMITED PARTNERSHIP
By: WBG Management, Inc., general partner
By: _______________________________________
Name:
Title:
AK MEDIA GROUP, INC.
By: ____________________________________________
Name:
Title:
Schedule A
----------
KMTR-TV, Eugene, Oregon
KMTZ-TV, Coos Bay, Oregon
KMTX-TV, Roseburg, Oregon
KMOR-LP, Eugene, Oregon
Exhibit 1.3 to Acquisition Agreement
TIME BROKERAGE AGREEMENT
------------------------
THIS TIME BROKERAGE AGREEMENT (the "Agreement") is made as of this
30th day of November, 1998, by and between XXXXX BROADCAST GROUP LIMITED
PARTNERSHIP, a Delaware limited partnership ("WBG"), and WBG License Co., L.L.C.
, a Delaware limited liability company ("License Co.", and collectively with
WBG, "Licensee"), and AK MEDIA GROUP, INC., a Washington corporation
("Programmer" or "Broker").
WHEREAS, Licensee is the owner, operator and licensee of television
broadcast stations KMTR-TV, Eugene, Oregon, KMTZ-TV, Coos Bay, Oregon, KMTX,
Roseburg, Oregon and KMOR-LP, Eugene, Oregon (collectively, the "Stations");
WHEREAS, WBG and Programmer have entered into as of the date hereof
that certain Acquisition Agreement (the "Purchase Agreement") relating to the
sale by Licensee and the purchase by Programmer of all licenses, permits and
other authorizations for the Stations (collectively, the "FCC Licenses") issued
by the Federal Communications Commission ("FCC") to Licensee and certain other
assets related to the Stations; and
WHEREAS, Programmer wishes to provide programming for broadcast on the
Stations and Licensee desires to accept and broadcast the programming supplied
by Programmer on the Stations, subject to the terms and conditions hereof.
NOW, THEREFORE, for and in consideration of the mutual covenants
herein contained, the parties hereto have agreed and do agree as follows:
1. Air Time and Transmission Services. (a) Subject to the provisions
----------------------------------
of this Agreement, Licensee agrees to make available to Programmer air time and
transmission capabilities, for the broadcast, on the Stations for up to twenty-
four (24) hours per day, seven (7) days a week of programming provided by
Programmer and conforming to the requirements of this Agreement (the
"Programming"), which may include, without limitation, original programs,
syndicated programs, barter programs, paid-for programs, locally produced
programs and advertising.
(b) Programmer acknowledges that WBG and/or one or more of the
Stations is currently party to and bound by an affiliation agreement with the
NBC Television Network ("the "Affiliation Agreement") and other contracts for
the licensing and broadcast of programming on one or more of the Stations (which
contracts are disclosed or not required to be disclosed
49
pursuant to the Purchase Agreement (collectively, with the Affiliation
Agreement, the "Programming Contracts"). Programmer shall assume and comply with
all the obligations of WBG and/or the Stations under all Programming Contracts
applicable to the term of this Agreement, and shall incorporate all programming
required to be broadcast pursuant to the Programming Contracts in the
Programming provided by Programmer (and shall not delay the broadcast of any
programming covered by any of the Programming Contracts so as to increase the
broadcasting obligations of WBG or any of the Stations with respect to periods
which could fall outside of the term of this Agreement). Programming covered by
any of the Programming Contracts or developed or produced by WBG or any
affiliate thereof, including without limitation, news and current affairs
programming, is herein called "Licensee Programming".
(c) Programmer shall assure that no contract or commitment for
Programming arranged by Programmer shall give rise to any liability or
obligation of Licensee; provided that Programmer shall promptly inform Licensee
of each such contract and commitment and of the terms thereof and, if WBG shall
elect to assume any such contract or commitment, Programmer shall, in the event
that the Purchase Agreement terminates without a Closing, upon the termination
of the term of this Agreement arrange for the immediate assignment to WBG of
such contract or commitment and for the concurrent consent of each other party
thereto to such assignment.
(d) Programmer shall timely fulfill all orders for advertising on the
Stations applicable to any of the Programming. Programmer shall assure that all
orders for advertising on any of the Stations procured after the date hereof
shall be the sole obligation and responsibility of Programmer and that no such
order shall give rise to any liability or obligation of Licensee. In the event
any such order calls for the placement of any advertising on any of the Stations
after the termination of the term of this Agreement, Programmer shall if, and
only if, and to the extent WBG elects to fulfill such order, cooperate with
Licensee to enable such advertising to be broadcast on the Station in accordance
with the terms of such order and all revenues and accounts receivable relating
to or arising from such orders shall be the sole and exclusive asset of WBG.
(e) Programmer shall not enter into any contract or commitment with
any person or entity which will bind WBG, License Co. or the Station without
WBG's express prior written approval.
50
2. Payments. As consideration for the rights granted hereunder,
--------
Programmer hereby agrees to pay to WBG the following (collectively "Time
Brokerage Fee") in a timely manner: the Fixed Fee Amount, and all other cost
and expense payments and reimbursements, referred to on Attachment 1 hereto
------------
and/or otherwise provided for in this Agreement, in each case on the dates
specified in said Attachment 1 or where applicable as otherwise provided in this
------------
Agreement. The provisions of Attachment 1 are incorporated herein by reference
------------
as if set forth in full herein.
Anything to the contrary contained in this Agreement notwithstanding, in no
event shall Programmer be entitled to delay payment of, reduce, or set off any
claim against, any amount payable by Programmer under this Agreement, whether by
reason of a breach or default by Licensee or otherwise.
3. Term. The term of this Agreement shall begin on December 1, 1998
----
(the "Commencement Date"), and shall continue in force from that date for a
period of three (3) months, except that it shall be automatically extended if
the Closing (as defined in the Purchase Agreement) on the sale of the Stations
by Licensee has not occurred and the Purchase Agreement has not been terminated,
until the earlier of the occurrence of (i) such Closing or (ii) the termination
of the Purchase Agreement.
4. Programming. Programmer's Programming shall comply with the
-----------
Stations' Policy Guidelines attached on Exhibit A hereto, as the same may be
---------
reasonably amended by Licensee from time to time, and with the provisions of
this Agreement, and, provided such compliance obligations are satisfied, shall
be entertainment programming of Programmer's own selection, together with
commercial matters, news, public service announcements and other programming
suitable for broadcast on the Stations. All actions or activities of Programmer
under this Agreement, and all Programming provided by Programmer shall be in
accordance with (a) the Communications Act of 1934, as amended, (b) the rules,
requirements and policies of the FCC, including, without limitation, the FCC's
rules on children's television programming, plugola/payola, lotteries and
contests, hoaxes, station identification, minimum operating schedule,
sponsorship identification, political programming and political advertising
rates; (c) all applicable federal, state and local laws, regulations and
policies (collectively, "Applicable Government Regulations"); and (d) generally
accepted quality
51
standards of the television broadcast industry. In the event that Licensee
determines, based on the exercise of Licensee's good faith reasonable business
judgment, that Programmer has failed to comply in any material respect with any
of the standards provided for in this Agreement. Licensee may suspend or cancel
any Programming not in compliance. In the event of any such suspension or
cancellation, Programmer shall retain the right to use the Programming provided
by it (other than any of the Licensee Programming) and to authorize the use of
such Programming (other than any of the Licensee Programming) in any manner and
in any media whatsoever.
Programmer will consult with Licensee prior to any general or primary
election period to set political rates and procedures for handling political
advertisements. In addition, all questions relating to political programming,
political advertisements, "Reasonable Access, " "Equal Time," "Lowest Unit
Charge," political editorials and any broadcast matter involving elected or
appointed government officials shall be immediately directed to Licensee and its
counsel. In addition, Programmer shall deliver to Licensee each week during the
time when the "Lowest Unit Charge" rates are in effect a list of all political
advertisements and sufficient data to demonstrate compliance with the FCC's
"Lowest Unit Charge" rules.
5. Special Events. Licensee reserves the right in its discretion,
--------------
and without liability, to preempt, delay or delete any of the broadcasts of the
Programming and to broadcast in substitution such other programming which, in
Licensee's judgment, is of greater local or national importance. In all such
cases (except for those involving breaking news), Licensee shall use reasonable
efforts to provide Programmer with at least twenty-four (24) hours notice of
Licensee's intention to preempt, delay or delete such Programming. Programmer
agrees to cooperate in the airing of Licensee's substitute programming,
including the use of Programmer's personnel and equipment as reasonably
required.
6. Advertising and Programming Revenues. Programmer shall retain all
------------------------------------
advertising and promotion-related revenues, and all accounts receivable, in
respect thereof, arising from the Programming provided by Programmer, or
utilized by Programmer and arising under those Programming Contracts assumed by
Licensee pursuant to this Agreement, and in fact broadcast during the term
hereof. Programmer shall be responsible for payment of all agency commissions
and the commissions payable to any sales representative engaged by Programmer or
Licensee for the purpose of selling advertising with respect to any of the
Stations. Licensee
52
shall retain the revenue from the sale of any advertising on the Stations on any
other programs not produced or delivered to Licensee by Programmer. Licensee and
Programmer each shall have the right, at its own expense, to seek copyright
royalty payments for its own programming (and in the case of Licensee, Licensee
Programming). Subject to compliance with applicable laws, Programmer may sell
advertising on the Stations in combination with the sale of advertising on other
television or radio stations.
7. Station Facilities. Subject to the terms and conditions set forth
-------------------
in this Agreement, Licensee hereby agrees to make the facilities of the Stations
that are owned or leased by Licensee ("Licensee Station Facilities") available
to Programmer twenty-four (24) hours a day, seven (7) days per week for
operation and broadcast. Licensee shall pay and Programmer shall promptly
compensate and reimburse Licensee on a dollar-for-dollar basis for all expenses
in connection with operating the Stations and shall perform reasonable and
customary maintenance of all Licensee Station Facilities and equipment and in
furtherance of its obligations to comply with applicable FCC rules, regulations
and policies, and Licensee's obligations set forth in this Paragraph 7. Any
downtime in the Licensee Station Facilities occasioned by any such maintenance
shall not be deemed to be a default or violation by Licensee.
8. Right of Access. Licensee shall provide Programmer with access at
---------------
all times to its owned and leased property used for the Stations' operations to
conduct, at Programmer's expense, all activities for which such property is
currently used and permitted to be used. Licensee shall have access at all
times to its equipment and facilities used in conjunction with the production
and broadcast of the Programming so as to permit Licensee to operate and control
the Stations and to broadcast the Programming and Licensee's own programming as
provided herein. Programmer shall have the right, upon Licensee's express prior
written consent, such consent not to be unreasonably withheld, to install and
maintain at the Licensee Station Facilities, at Programmer's expense, any
microwave studio/transmitter relay equipment, telephone lines, transmitter
remote control, monitoring devices or any other equipment necessary for the
proper transmission of the Programming on the Station, and Licensee and
Programmer shall take, at Programmer's expense, all steps reasonably necessary
to prepare and file any applications with the FCC to effectuate such proper
transmission.
9. Force Majeure. Any failure or impairment of the Licensee Station
-------------
Facilities or any Station equipment or services or any delay or interruption in
the broadcast of the
53
Programming, or failure at any time by Licensee to furnish the Licensee Station
Facilities, or any station equipment or services, in whole or in part, for the
broadcast of the Programming or otherwise, due to acts of God, strikes, or
threats thereof or force majeure, or due to causes beyond the control of
Licensee, shall not constitute a breach of this Agreement, and Licensee shall
not be liable to Programmer.
10. Equipment. The parties agree that Licensee shall retain title to
---------
all of the Purchased Assets (as such term is defined in the Purchase Agreement)
until the Closing of the Purchase Agreement. Programmer shall hold title to any
new equipment or assets purchased or otherwise acquired by Programmer for the
Stations during the term of this Agreement; provided that in the event the term
of this Agreement shall end and the Closing under the Purchase Agreement shall
not then have occurred, any equipment or asset obtained as a replacement for any
equipment or assets of Licensee without the express written consent of WBG
automatically shall become and hereinafter be deemed owned by WBG, and, in the
case of any such replacement items so consented to, WBG shall have the right to
purchase the same at the net book value thereof, in each case free and clear of
all Liens (as defined in the Purchase Agreement). Programmer shall execute and
deliver to WBG all instruments necessary to effectuate the foregoing.
11. Licensee Control of Station. Notwithstanding anything to the
---------------------------
contrary in this Agreement, Licensee shall have full authority, control and
power over the operation of the Stations during the term of this Agreement.
Licensee shall retain control over the policies, programming, finances,
personnel and operations of the Station, including, without limitation, the
right to accept or reject any Programming or advertisements pursuant to
Paragraphs 4 and 5, and the right to take any other actions necessary for
compliance with Applicable Government Regulations. Licensee's control over the
finances, personnel and operations of the Stations shall be exercised in good
faith. Licensee shall be responsible to the Federal Communications Commission
for the Station's compliance with all Applicable Government Regulations,
including but not limited to FCC requirements with respect to ascertainment of
the problems, needs and interests of the community, public service programming,
children's programming, political broadcasting, main studio staffing,
maintenance of public inspection files, and maintenance of appropriate Emergency
Alert System equipment, in all cases without intending to limit any
compensation, reimbursement or other obligations of Programmer under this
Agreement. Programmer shall provide Licensee with all
54
necessary information with respect to the Programming that is responsive to the
problems, needs and interests of the community, and shall assist Licensee in all
reasonable respects requested by Licensee in the preparation of information to
enable Licensee to prepare records, reports and logs required by the FCC or
other local, state or federal governmental agencies. All correspondence
(including E-Mail) from members of the public concerning any Station's
programming shall be provided to the Licensee.
12. Responsibility for Employees and Expenses. During this term of
-----------------------------------------
this Agreement, WBG hereby agrees to employ two full-time employees for the
Station, one of whom shall be a management level employee, both of whom shall
report to and be accountable solely to Licensee, and who shall be ultimately
responsible for the day-to-day operations of the Station. WBG shall also be
entitled to retain in its employ all employees of the Stations which it deems
advisable, and Programmer shall not employ or seek to employ any of such
employees without WBG's express written consent. WBG shall be responsible for
paying the salaries, payroll taxes, health insurance and other employment
related costs for all personnel employed by WBG with respect to the Stations,
and Programmer shall compensate WBG on a dollar-for-dollar basis for all such
costs and expenses. Effective the date of this Agreement, Programmer shall
employ and be responsible for all personnel, equipment and facilities used in
the production of the Programming (including, without limitation, salespeople,
traffic personnel and programming staff), except for those personnel whom WBG
elects to employ and who shall be covered by the immediately preceding sentence.
All Programmer personnel shall be subject to the supervision and the direction
of Licensee's designated personnel in connection with the performance of their
duties at the Station. WBG shall be responsible for all expenses of Licensee
related to the operation of the Stations and the Licensee Station Facilities and
the Stations' equipment, and Programmer shall compensate WBG, on a dollar-for-
dollar basis, for all such expenses, including without limitation, all amounts
becoming due and payable under any and all Programming Contracts during or in
respect of the period coinciding with the term of this Agreement. Licensee
shall also be responsible for income taxes relating to Licensee's earnings from
this arrangement. Programmer shall pay promptly when due all copyright fees
attributable to Programming broadcast on the Station during the term of this
Agreement.
13. Compliance with Law. Programmer agrees that, throughout the term
-------------------
of this Agreement, Programmer shall comply with all laws and regulations
applicable to the conduct of Programmer's business and activities, including all
Applicable Government Regulations.
55
14. Payola/Plugola/EEO. Programmer agrees that it shall not accept,
------------------
and shall not permit any of its employees to accept, any consideration,
compensation, gift or gratuity of any kind whatsoever, regardless of its value
or form, including, but not limited to, a commission, discount, bonus,
materials, supplies or other merchandise, services or labor, whether or not
pursuant to written contracts or agreements between Programmer and merchants or
advertisers, unless the payer is identified in the Programming as having paid
for or furnished such consideration, in accordance with FCC requirements.
Programmer agrees that, on an annual basis, or more frequently at the request of
Licensee, it will execute and provide Licensee with affidavits regarding
payola/plugola compliance in such form and substance as Licensee shall
reasonably require. Programmer shall comply with all equal employment
opportunity regulations and policies (including but not limited to those of the
FCC) to the extent such regulations and policies apply, or may in the future be
deemed to apply, to the employment practices of Programmer's personnel assigned
to duties in connection with the operation of the Stations; and Programmer shall
timely provide Licensee with all information that may be necessary or
appropriate to comply with any reporting obligations of the FCC pursuant to such
regulations or policies.
15. Indemnification. Programmer hereby agrees to indemnify and hold
---------------
harmless each entity comprising Licensee and all members and partners thereof,
and all members, partners, shareholders, directors, officers, agents, employees,
successors, and assigns of any of the foregoing against all liability, damages,
cost and expense (including without limitation reasonable attorney's fees)
suffered or incurred by any of them for, or arising out of, or by reason of (a)
libel, slander, illegal competition or trade practice, infringement of trade
marks, trade names, or program titles, violation of rights of privacy,
infringement of copyrights and proprietary rights and other liabilities
resulting from or relating to the broadcast of any Programming, and (b) all
other matters arising out of or related to Programmer's activities involving any
of the Stations or use of any of the Licensee Station Facilities and/or any
equipment or assets of any of the Stations. Licensee hereby agrees to indemnify
and hold harmless Programmer and its directors, officers, agents, employees,
successors, and assigns against all liability arising out of liabilities of the
type described in clause (a) of the first sentence of this Paragraph 15 that
arise as a result of Licensee's alteration of any Programming prior to broadcast
by Licensee which alteration is not consented to by Programmer. Programmer's
and
56
Licensee's obligations under this Paragraph 15 shall survive any termination
of this Agreement until the expiration of all applicable statutes of limitation.
16. Events of Default; Cure Periods and Remedies.
--------------------------------------------
16.1. Events of Default. The following shall, after the expiration
-----------------
of the "applicable cure periods," constitute events of default under the
Agreement ("Events of Default"):
16.1.1. Programmer's failure to timely pay any consideration provided
for in this Agreement or any amount then due under this Agreement or the
Purchase Agreement;
16.1.2. The default by any party hereto in the material observance or
performance of any material covenant or agreement contained herein; provided,
that any failure of Licensee to comply with Applicable Government Regulations
shall not be deemed to be a default of a material covenant or agreement by
Licensee if Programmer has failed to provide information or cooperation to
Licensee that could have allowed Licensee to avoid such noncompliance or if
Programmer's Programming or any other act or omission, or any instruction or
request to station personnel, by Programmer is a basis or cause of such failure
to comply with Applicable Government Regulations;
16.1.3. Any party (a) shall make a general assignment for the benefit
of creditors, or (b) files or has filed against it a petition for bankruptcy,
for reorganization, or for the appointment of a receiver, trustee or similar
creditors' representative for the property or assets of such party under any
federal or state insolvency law, which, if filed against such party, has not
been dismissed or discharged within sixty (60) days thereof;
16.1.4. The default by any party hereto (after the expiration of all
applicable cure periods) in the material observance or performance of any
material covenant or agreement contained in the Purchase Agreement which
entitles the other party to terminate the Purchase Agreement.
16.2 Cure Periods. An Event of Default under Section 16.1.2 above
------------
shall not be deemed to have occurred until thirty (30) business days after the
nondefaulting party has
57
provided the defaulting party with written notice specifying the event or events
that if not cured would constitute an Event of Default. The Event of Default
which is subject to a cure period hereunder shall not be deemed to have occurred
if actions necessary and sufficient to cure are taken during the relevant cure
period.
16.3 Right of Termination. In addition to other remedies available at
--------------------
law or equity, but subject to the requirements and limitations set forth herein,
this Agreement may be terminated as set forth below by either Licensee or
Programmer by written notice to the other upon the occurrence of the following:
(a) this Agreement is declared invalid or illegal in whole or
substantial part by an order or decree of an administrative agency or court of
competent jurisdiction and such order or decree has become final and no longer
subject to further administrative or judicial review;
(b) an Event of Default by the other party has occurred and the party
seeking to terminate is not then in material default or breach hereof;
(c) the termination of the Purchase Agreement;
(d) the mutual consent of all parties; or
(e) there has been a material change in FCC rules, policies or
precedent that would cause this Agreement to be in violation thereof and such
change is in effect and not the subject of a timely appeal or further
administrative review, provided that in such event the parties shall first
negotiate in good faith and attempt to agree on an amendment to this Agreement
that will provide the parties with a valid, binding and enforceable agreement
that conforms to the new FCC rules, policies or precedent.
16.4 Termination Requirements and Procedures. Unless otherwise
---------------------------------------
mutually agreed by Programmer and Licensee, any termination of this Agreement
shall, at the election of Licensee, not become effective until the effective
date specified by Licensee which shall not be more than ninety (90) days after
notice of termination is provided by Programmer or Licensee pursuant to Section
16.3.
58
16.5. Liabilities Upon Termination. Upon termination of this
----------------------------
Agreement for any reason, Programmer shall be responsible for all liabilities,
debts and obligations of Programmer accrued from the purchase of air time and/or
transmission services and all Programming provided by Programmer, including,
without limitation, accounts payable, barter agreements and unaired
advertisements, but not for Licensee's federal, state, and local tax liabilities
associated with Programmer's payments to Licensee as provided for herein. With
respect to Programmer's obligations to broadcast programming, advertisements and
other material over the Stations after termination hereunder, WBG may propose
compensation to WBG for meeting these obligations, but Licensee shall be under
no duty to propose such compensation or to perform such obligations and
Programmer shall accept any such proposal by WBG which is reasonable and
equitable under the circumstances and cooperate with WBG to effectuate such
performance. In no event shall Licensee be under any obligation to make
available to Programmer any broadcast time or broadcast transmission facilities
and all amounts accrued or payable to Licensee up to the date of termination
which have not been paid shall immediately become due and payable.
16.6 Survival. Anything to the contrary contained in this Agreement
--------
notwithstanding, all obligations under this Agreement accrued or arising prior
to or by reason of the termination of this Agreement shall survive such
termination and the following provisions shall also survive any such
termination: Paragraphs 1(b), (c), (d) and (e) (with respect to periods prior
to the effective date of such termination), 2, 6, 7, 10, 12, 15, 16, 19.3 and
20.
17. Responsive Programming, Programmer and Licensee mutually
----------------------
acknowledge their interest in ensuring that the Stations serve the needs and
interests of the residents of their communities of license, and the surrounding
service areas and agree to cooperate in doing so. Licensee may request, and
Programmer shall provide, information concerning such of Programmer's
Programming that is responsive to community issues so as to assist Licensee in
the satisfaction of its public service programming obligations.
18. Time Brokerage Challenge. If this Agreement is challenged in
------------------------
whole or in part at the FCC or in another administrative or judicial forum,
whether or not in connection with the Station's license renewal application,
counsel for Licensee and counsel for Programmer shall, at Programmer's expense,
jointly defend the Agreement and the parties' performance hereunder throughout
all such proceedings. If portions of this Agreement do not receive the approval
of the FCC's staff, or the Agreement receives such approval with conditions that
are adverse to
59
Licensee or Programmer, then the parties shall endeavor in good faith to reform
the Agreement as necessary to satisfy the FCC staff's concerns, while preserving
the respective benefits to and without increasing the respective obligations of
the parties, or seek reversal of the staff decision and approval from the full
Commission on appeal.
19.1 Certification. Pursuant to Section 73.3555(a)(2)(ii) of the
-------------
FCC's Rules, Licensee certifies that it will maintain ultimate control over the
Stations' facilities, including control over Station finances, personnel and
programming, and Programmer certifies that the arrangement contemplated by this
Agreement complies with the provisions of Sections 73.3555(e)(1) of the FCC's
Rules.
19.3. Programmer's Representations, Warranties and Covenants.
-------------------------------------------------------
Programmer makes the following additional representations, warranties and
covenants:
19.3.1. Compliance with Applicable Law. Programmer's performance of
------------------------------
its obligations under this Agreement and its furnishing of Programming shall be
in compliance with, and shall not violate or cause Licensee to violate any
applicable laws or any applicable rules, regulations, or orders of the FCC or
any other governmental agency.
19.3.2. Handling of Complaints. Programmer shall promptly advise
----------------------
Licensee of any public or FCC complaint or inquiry that Programmer receives
concerning the Programming and shall cooperate with Licensee and take all
actions as may be reasonably requested by Licensee in responding to any such
complaint or inquiry.
19.3.3. Copyright and Licensing. Programmer shall have throughout
-----------------------
the term of this Agreement the full authority to broadcast the Programming on
the Station, and Programmer shall not broadcast on the Stations any material in
violation of the Copyright Act.
19.3.4. Insurance. Programmer shall maintain throughout the term of
---------
this Agreement general liability insurance and errors and omissions insurance
covering broadcasts made on the Station, and shall name Licensee as an
additional insured on such insurance policies.
60
19.3.5. Information for FCC Reports. Upon request by Licensee,
---------------------------
Programmer shall provide in a timely manner any such information in its
possession that shall enable Licensee to prepare, file or maintain the records
and reports required by the FCC.
20. Miscellaneous.
-------------
20.1 Certain Limitations. Anything to the contrary contained in
-------------------
the Agreement notwithstanding:
(a) in the event the Closing under the Purchase Agreement shall
occur, Licensee shall have no liability or obligation whatsoever under this
Agreement, whether for matters arising prior to such Closing or otherwise.
(b) Programmer's sole remedy for any breach or default by Licensee
under this Agreement shall be such rights as Programmer may have under the
Purchase Agreement upon the termination thereof.
(c) Nothing herein, express or implied, is intended or shall be
construed to confer upon or give to any person or entity, other than the parties
hereto, any rights, remedies or other benefits under or by reason of this
Agreement.
(d) Programmer acknowledges and agrees that, notwithstanding anything
contained to the contrary in the Agreement, WBG shall be solely and exclusively
responsible and liable for all obligations of License Co. arising under this
Agreement and the transactions contemplated hereby and License Co. shall not
have or incur any liability whatsoever arising out of this Agreement or any of
the transactions contemplated hereby.
20.2. Amendment; Waiver. No modification, amendment or waiver of any
-----------------
provision of this Agreement shall in any event be effected unless the same shall
be in writing and signed by the party adversely affected by the waiver or
modification, and then such waiver and consent shall be effective only in the
specific instance and for the purpose for which given.
20.3. No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of Licensee or Programmer in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment
61
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. Except
as otherwise provided in this Agreement or in the Purchase Agreement, the rights
and remedies of Licensee and Programmer herein provided are cumulative and are
not exclusive of any right or remedy which Licensee or Programmer may otherwise
have.
20.4. Construction. This Agreement shall be construed in accordance
------------
with the laws of the State of New York, excluding the choice of law rules
thereof.
20.5. Headings. The headings contained in this Agreement are
--------
included for convenience only and no such heading shall in any way alter the
meaning of any provision.
20.6. Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement shall be assignable only to the same extent
as and solely in connection with any assignment of the Purchase Agreement
permitted pursuant to the terms thereof.
20.7. Notices. Any notice required hereunder shall be in writing and
-------
any payment, notice or other communication shall be deemed given when delivered
personally, or mailed by certified mail or Federal Express, postage prepaid,
with return receipt requested:
If to Licensee:
c/o The Xxxxx Group of Companies, Inc.
000 Xxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxx
With a copy to:
Golenblock, Xxxxxxx, Assor & Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Esquire
If to Programmer:
AK Media Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
00
Xxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxx
With a copy to:
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, LLP
0000 Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
20.8. Entire Agreement. This Agreement, together with the Purchase
----------------
Agreement and the Schedules, Attachments and Exhibits hereto and thereto, embody
the entire agreement between the parties and there are no other agreements,
representations, warranties, or understandings, oral or written, between them
with respect to the subject matter hereof.
20.9. Severability. In the event that any of the provisions
------------
contained in this Agreement is held to be invalid, illegal or unenforceable,
this Agreement shall be construed as if such invalid, illegal or unenforceable
provisions had not been contained herein, subject to the termination rights
contained in Paragraph 16 hereof.
20.10. Signatures. This Agreement may be signed in one or more
----------
counterparts, each of which shall be deemed a duplicate original, binding on the
parties hereto notwithstanding that the parties are not signatory to the
original or the same counterpart. This Agreement shall be binding and effective
as of the date on which the executed counterparts are exchanged by the parties.
The parties agree to be bound upon the exchange of signature pages transmitted
by facsimile; provided, however, upon execution of this Agreement, Programmer
agrees to send to Licensee and Licensee agrees to send to Programmer, the
original signature pages via overnight delivery.
63
IN WITNESS WHEREOF, the parties have executed this Time Brokerage
Agreement as of the date first above written.
Xxxxx Broadcast Group Limited Partnership
By: WBG Management, Inc., general partner
By:_________________________________
Name:
Title:
WBG License Co., L.L.C.
By: Wicks Broadcast Limited
Partnership, managing member
By: WBG Management, Inc.,
general partner
By:_____________________________
Name:
Title:
AK Media Group, Inc.
By:________________________________
Name:
Title:
64
Exhibit 2.2 to Acquisition Agreement
LIABILITIES UNDERTAKING
-----------------------
LIABILITIES UNDERTAKING, dated as of ___________________, 1998, by AK
MEDIA GROUP, INC., a Washington corporation ("Buyer"), in favor of XXXXX
BROADCAST GROUP LIMITED PARTNERSHIP, a Delaware limited partnership (the
"Company") and WBG License Co., L.L.C., a Delaware limited liability company
(collectively, with the Company, the "Companies").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and Buyer are parties to an Agreement, dated as
of ___________________, 1998 (the "Purchase Agreement"); and
WHEREAS, pursuant to the Purchase Agreement, the Companies have
concurrently herewith sold, assigned, conveyed, transferred and delivered to
Buyer the Purchased Assets (as such term is defined in the Purchase Agreement);
WHEREAS, in partial consideration therefor, the Purchase Agreement
requires Buyer to execute and deliver to the Companies this Liabilities
Undertaking;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by Buyer, Buyer hereby agrees for the benefit of the Companies as
follows:
(a Buyer hereby undertakes, assume and agree to pay, perform,
discharge and otherwise satisfy in full promptly as and when due, and agrees to
indemnify and hold harmless the Companies and all Company Indemnitees from and
against the following (the "Assumed Liabilities"): (a) all outstanding
obligations as of the Closing Date incurred by any of the Companies or the
Stations under all Barter Agreements; (b) all accounts payable, accrued expenses
and liabilities for which an adjustment or allocation in favor of Buyer is made
pursuant to Section 2.4 of the Purchase Agreement, (c) all accrued vacation time
and sick pay as of the Closing Date of employees of the respective Stations who
become employees of Buyer or any affiliate of Buyer for which an adjustment is
made in favor of Buyer under Section 2.4, (d) all liabilities and obligations
accruing or arising on or after the Closing Date under all contracts, leases and
agreements, and normal course advertising, supply service and similar orders and
arrangements, of any of the Stations and/or any of the Companies or by which any
of them is bound, entered into exclusively in the course of or exclusively in
connection with the operations or business of any one or more of the Stations,
(e) Buyer's share of the Transaction Taxes, and (f) all liabilities and
obligations incurred or caused by Buyer or which are the responsibility of
Buyer, or for which the Companies are entitled to reimbursement, pursuant to the
Time Brokerage Agreement or any activities or transactions in furtherance
thereof or in connection therewith. Notwithstanding the foregoing the Assumed
Liabilities shall not include any of the following ("Excluded Liabilities"): (i)
any liability for income or franchise Taxes of any of the Companies; (ii) any
liabilities or obligations of the Companies under any of the Excluded Contracts;
(iii) any liabilities or obligations of any of the Companies under the Purchase
65
Agreement; (iv) any liability owing by any of the Companies to any of the other
Companies or any shareholder or partner thereof; or (v) any liability or
obligation under the Companies' group health insurance plans or 401(k) Profit
Sharing Plan. Except as provided in the Purchase Agreement or in this
Liabilities Undertaking, Buyer shall not assume any debts, liabilities or
obligations of any of the Companies.
(b This Liabilities Undertaking shall inure to the benefit of the
Companies and their respective successors and assigns, and shall be binding upon
Buyer and its respective successors and assigns.
(c This Liabilities Undertaking is irrevocable and may not be
amended or modified without the express written consent of the Companies.
(d Capitalized terms used but not defined herein shall have the
meanings set forth in the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed this Liabilities
Undertaking by and through its duly authorized representative as of the date
first above written.
BUYER
AK MEDIA GROUP, INC.
By: ______________________________________
Name:
Title:
66
