SECOND MODIFICATION AGREEMENT
This SECOND MODIFICATION AGREEMENT (this "Agreement") made as
of April 30, 1999 by and between Guy Gannett Communications, a Maine corporation
(the "Company"), and Xxxxxxxx Communications, Inc., a Maryland corporation
(together with its successors and permitted assigns, "Purchaser") to modify the
Purchase Agreement dated as of September 4, 1998 by and between the Company and
Purchaser, as amended by the Amendment thereto dated as of March 16, 1999 and
modified by the Modification Agreement dated as of April 12, 1999 (as so amended
and modified, the "Purchase Agreement").
W I T N E S S E T H :
WHEREAS, the Company and Purchaser are parties to the Purchase
Agreement, pursuant to which the Company has agreed to sell to Purchaser the
assets and business of the Company's broadcast television business, including
all business, operations and activities of, among other broadcast television
stations, Station WOKR-TV, Rochester, New York (the "Xxxxxxxx Station") and
Stations KGAN-TV, Cedar Rapids, Iowa, WICD-TV, Champaign, Illinois, and WICS-TV,
Springfield, Illinois (such three stations, collectively, the "STC Stations"),
and Purchaser has agreed to purchase such assets and business and to assume
certain liabilities related to or arising from or in connection with such assets
or business;
WHEREAS, as permitted by the Purchase Agreement and in
accordance with that certain Purchase Agreement dated as of September 25, 1998
by and between Purchaser and The Xxxxxxxx Group, Inc., as amended by the
Amendment thereto dated April 12, 1999, the closing of the purchase and sale of
the assets and business of the Xxxxxxxx Station, and the assumption of
certain liabilities related to or arising from or in connection therewith (the
"First Closing") occurred on April 12, 1999;
WHEREAS, Purchaser has also entered into that certain Purchase
Agreement dated as of March 16, 1999 (the "STC Agreement") with STC
Broadcasting, Inc. ("STC"), pursuant to which Purchaser has agreed to transfer
to STC certain assets and business of the STC Stations, and STC has agreed to
acquire such assets and business and to assume certain liabilities related to or
arising from or in connection therewith;
WHEREAS, pursuant to the Purchase Agreement, the closing of
the purchase and sale of the assets and business of the Company's broadcast
television stations other than the Xxxxxxxx Station, and the assumption of
certain liabilities related to or arising from or in connection therewith (the
"Second Closing") is to occur on April 30, 1999;
WHEREAS, all conditions to the Second Closing under the
Purchase Agreement have been satisfied or waived as of the date hereof, but all
conditions to Purchaser's closing with STC under the STC Agreement have not yet
been satisfied or waived as a result of the extension of the applicable waiting
period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, relating to the transactions contemplated by the STC Agreement; and
WHEREAS, as an accommodation to Purchaser to permit the
resolution of the antitrust issues arising in connection with the transactions
contemplated by the STC Agreement or to permit Purchaser to secure one or more
alternative sources of financing necessary to effect the closing of the purchase
and sale of the assets and business of the STC Stations, and the assumption of
certain liabilities related to or arising from or in connection therewith, the
Company and Purchaser desire to modify the Purchase Agreement in certain
respects to permit at
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least one separate, subsequent closing to be effected with respect to the
transactions contemplated by the Purchase Agreement regarding the STC Stations;
NOW, THEREFORE, in consideration of the premises and the
mutual promises and covenants contained herein, the parties, intending legally
to be bound, agree as follows:
Section 1. Closings. There shall be two separate closings of
the transactions contemplated by the Purchase Agreement to occur at the Second
Closing. The first such closing (the "Principal Closing") of the transactions
contemplated by the Purchase Agreement other than those in respect of the
Xxxxxxxx Station (the closing of which occurred on April 12, 1999) or in respect
of the STC Stations (the closing or closings of which are being deferred under
this Agreement) shall take place at 10:00 a.m., New York City time, on April 30,
1999 (such time and date being referred to herein as the "Principal Closing
Date"). The closing (the "Deferred Closing") of the transactions contemplated by
the Purchase Agreement in respect of the STC Stations shall take place at 10:00
a.m., New York City time, on a date to be agreed upon by the parties hereto
(such time and date being referred to herein as the "Deferred Closing Date");
provided, however, that the Deferred Closing Date shall not occur later than
July 30, 1999 (or, if the parties hereto request FCC consent to extend its
initial 90-day consummation period and the FCC has denied such request in
writing, the Deferred Closing Date shall occur not later than July 5, 1999)
(July 30, 1999 or July 5, 1999, as the case may be, being the "Outside Closing
Date"). At the Principal Closing, the Company will convey, assign, transfer and
deliver all of the Company's right, title and interest in and to all of the
Assets and Business other than (i) the Assets and Business that were conveyed,
assigned, transferred or delivered in connection with the First Closing (the
"Xxxxxxxx Assets" and the "Xxxxxxxx Business," respectively) and (ii) the Assets
owned or leased by, or licensed to or used or useful by, the Company exclusively
in
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connection with the STC Stations (the "STC Assets") and the business, operations
and activities of the STC Stations (the "STC Business"), and Purchaser shall
assume and agree to perform and fully discharge when due all of the Assumed
Liabilities related to arising from or in connection with the Assets or the
Business other than the Xxxxxxxx Assets, the Xxxxxxxx Business, the STC Assets
or the STC Business. At the Deferred Closing, the Company will sell, convey,
assign, transfer and deliver to Purchaser or STC, as the case may be pursuant to
Section 8(b) hereof, all of the STC Assets and the STC Business, and Purchaser
shall assume and agree to perform and fully discharge when due all of the
Assumed Liabilities related to arising from or in connection with the STC Assets
or the STC Business (the "STC Assumed Liabilities").
Section 2. Certain Payments. With respect to Business
Employees of Stations other than the Xxxxxxxx Station and the STC Stations, the
reimbursement of payments to be made pursuant to Section 5.8 of the Purchase
Agreement shall apply only to Business Employees whose employment is terminated
on or prior to 90 days after the Principal Closing Date. For the avoidance of
doubt, it is agreed that any such payment will be subject to the terms and
conditions of Section 5.8 (including, without limitation, the proviso to such
Section). With respect to Business Employees of the STC Stations, Section 5.8 of
the Purchase Agreement shall apply to Business Employees whose employment is
terminated on or prior to 90 days after the Deferred Closing Date.
Section 3. Bills of Sale, Assignments and Assumption
Agreements. (a) Notwithstanding provisions in the Purchase Agreement to the
contrary, at the Principal Closing bills of sale, assignments and assumption
agreements substantially in the forms set forth in Exhibit A hereto conveying
the Assets (with the exception of (i) the Xxxxxxxx Assets, (ii) the STC Assets,
(iii) the FCC Licenses related to Stations other than the Xxxxxxxx Station and
the
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STC Stations, which shall be conveyed to WGGB Licensee, LLC, WGME Licensee, LLC
or WTWC Licensee, LLC, as applicable, and (iv) the collective bargaining
agreements described in Section 3.10.6 of the Disclosure Schedule and the
employee benefit plans described in Section 3.14.3 of the Disclosure Schedule,
in each case other than such agreements and plans relating to Stations other
than the Xxxxxxxx Station and the STC Stations, which non-Xxxxxxxx Station and
non-STC Stations related agreements and plans shall be conveyed to Xxxxxxxx
Acquisition IV, Inc.) shall be delivered directly to Xxxxxxxx Acquisition IV,
Inc. In addition, notwithstanding provisions of the Purchase Agreement to the
contrary, at the Principal Closing an assumption agreement substantially in the
form of Exhibit B hereto and providing for assumption by Purchaser of the
Assumed Liabilities other than the Xxxxxxxx Assumed Liabilities and the STC
Assumed Liabilities shall be executed and delivered by Purchaser to the Company.
In addition, as an accommodation to Purchaser, the Company agrees that, subject
to the immediately succeeding sentence, at the request of Purchaser at the
Deferred Closing, (i) notwithstanding the provisions in the Purchase Agreement
to the contrary, an assignment of assets substantially in the form of Exhibit C
hereto (or, if such sale and assignment is to be made to Xxxxxxxx Acquisition
IV, Inc. pursuant to Section 8(b) hereof instead of directly to STC, a xxxx of
sale, assignment and assumption agreement substantially in the forms set forth
in Exhibit A hereto) conveying the Assets relating to the STC Stations (with the
exception of (x) the FCC Licenses, which shall be conveyed to WICD Licensee,
LLC, WICS Licensee, LLC and KGAN Licensee, LLC, as applicable, and (y) the other
License Assets (as defined in the STC Agreement) if such sale and assignment is
to be made to STC, the collective bargaining agreements described in Section
3.10.6 of the Disclosure Schedule relating to the STC Stations and the employee
benefit plans described in Section 3.14.3 of the Disclosure Schedule relating to
the STC Stations, each of
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which shall be conveyed to Xxxxxxxx Acquisition IV, Inc.), shall be delivered to
Purchaser or directly to STC, as the case may be pursuant to Section 8(b)
hereof, (ii) if the foregoing sale and assignment is being made to STC,
Purchaser and the Company shall execute and deliver a xxxx of sale, assignment
and assumption agreement substantially in the form of Exhibit D hereto conveying
the License Assets (other than the FCC Licenses, which shall be conveyed to WICD
Licensee, LLC, WICS Licensee, LLC and KGAN Licensee, LLC, as applicable) to
Xxxxxxxx Acquisition IV, Inc. and (iii) notwithstanding the provisions of the
Purchase Agreement to the contrary, Purchaser and the Company shall execute and
deliver an assumption agreement substantially in the form of Exhibit E hereto
and providing for the assumption by Purchaser of the STC Assumed Liabilities.
Anything in the immediately succeeding sentence to the contrary notwithstanding,
the Company's obligation to take the actions contemplated by the immediately
preceding sentence are conditioned on the following actions taking place at the
Deferred Closing (it being understood that, if such conditions are not satisfied
all STC Assets and the STC Business will be transferred directly to Xxxxxxxx
Acquisition IV, Inc.): (a) Purchaser, STC and the Company executing and
delivering to the Company a letter agreement substantially in the form of
Exhibit F hereto and (b) Purchaser executing and delivering an indemnity
agreement substantially in the form of Exhibit G hereto.
Section 4. Allocation of Purchase Price; Further Adjustments
to Purchase Price. (a) As previously agreed by the parties hereto, the purchase
price for the STC Assets and the STC Business shall be the aggregate amount of
(x) $81,000,000 of the $310,000,000 specified in Section 2.1(a) of the Purchase
Agreement as a portion of the Purchase Price plus (if greater than or equal to
zero) or minus (if less than zero), as the case may be, (y) the amount of the
Net Financial Assets based on the STC Assets and STC Assumed Liabilities as of
11:59
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p.m., New York City time, on the day immediately preceding the Principal Closing
Date, subject to adjustment pursuant to Sections 4(g) and 4(h) hereof, and
further subject to adjustment pursuant to Section 2.2 of the Purchase Agreement
(with the amount described in clause (y) being referred to as the "STC Net
Financial Assets" and the aggregate amount described in clause (x) and (y)
collectively the "STC Purchase Price").
(b) At the Principal Closing, the amounts to be delivered by
Purchaser pursuant to Section 2.1(c) of the Purchase Agreement shall be the full
Purchase Price under the Purchase Agreement minus the amounts delivered at the
First Closing to the Company, the Security Escrow Agent and the Adjustment
Escrow Agent pursuant to the Purchase Agreement and the amounts to be delivered
to the Company, the Security Escrow Agent and the Adjustment Escrow Agent at the
Deferred Closing pursuant to this Agreement (such portion of the Purchase Price
being the "Principal Purchase Price"). The amount of the Net Financial Assets
relating to the Stations other than the Xxxxxxxx Station and the STC Stations
shall be separately calculated and shall also be determined as of 11:59 p.m.,
New York City time, on the day immediately preceding the Principal Closing Date
(the "Principal Net Financial Assets"). For the avoidance of doubt, the Purchase
Price payable at the Principal Closing shall be subject to the Proposed Earnings
Adjustment in respect of 1998 BCF, which results in an increase to the Purchase
Price of $7,000,000, subject in all respects to the procedures set forth in
Section 2.2 of the Purchase Agreement.
(c) On or before the Principal Closing, the Company shall
deliver to Purchaser (i) a statement setting forth the amount estimated in good
faith by the Company to be the amount of the Principal Net Financial Assets as
of the Principal Closing Date (the "Estimated Principal Net
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Financial Assets") and (ii) a notice designating the account or accounts to
which the payment to or on behalf of the Company pursuant to Section 4(b) hereof
is to be made.
(d) At the Principal Closing, (i) $2,684,000 (the "Principal
Closing Security Escrow") of the Principal Purchase Price shall be delivered to
the Security Escrow Agent by wire transfer in immediately available funds
pursuant to the Security Escrow Agreement , as such agreement shall be modified
in accordance with this Agreement, (ii) $8,006,500 (the "Principal Closing
Adjustment Escrow") of the Principal Purchase Price shall be delivered to the
Adjustment Escrow Agent by wire transfer in immediately available funds pursuant
to the Adjustment Escrow Agreement , as such agreement shall be modified in
accordance with this Agreement, and (iii) the sum of $100,309,500 plus or minus,
as the case may be, the Estimated Principal Net Financial Assets shall be paid
by wire transfer in immediately available funds to the account or accounts
designated by the Company in accordance with Section 4(c) hereof.
(e) On or before the Deferred Closing, the Company shall
deliver to Purchaser (i) a statement setting forth the amount estimated in good
faith by the Company to be the amount of the STC Net Financial Assets as of
11:59 p.m., New York City time, on the day immediately preceding the Deferred
Closing Date (the "Estimated STC Net Financial Assets") and (ii) a notice
designating the account or accounts to which the payment to or on behalf of the
Company pursuant to Section 4(a) hereof is to be made.
(f) At the Deferred Closing, (i) $2,090,400 (the "Deferred
Closing Security Escrow") of the STC Purchase Price shall be delivered to the
Security Escrow Agent by wire transfer in immediately available funds pursuant
to the Security Escrow Agreement, as such agreement shall be modified in
accordance with this Agreement, (ii) $783,900 (the "Deferred Closing Adjustment
Escrow") of the STC Purchase Price shall be delivered to the Adjustment
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Escrow Agent by wire transfer in immediately available funds pursuant to the
Adjustment Escrow Agreement, as such agreement shall be modified in accordance
with this Agreement, and (iii) the sum of $78,125,700 plus or minus, as the case
may be, the Estimated STC Net Financial Assets plus or minus, as the case may
be, the estimated adjustment to the STC Purchase Price pursuant to Section 4(g)
hereof and plus the adjustment to the STC Purchase Price, if any, pursuant to
Section 4(h) hereof shall be paid by wire transfer in immediately available
funds to the account or accounts designated by the Company in accordance with
Section 4(e) hereof. If an Early KGAN-TV Closing shall occur, the parties hereby
agree that $20,000,000 of the $81,000,000 specified in clause (x) of Section
4(a) hereof as part of the STC Purchase Price and the appropriate proportions of
the STC Net Financial Assets and of the adjustments to the STC Purchase Price
pursuant to Sections 4(g) and 4(h) hereof shall be allocated as the purchase
price relating to the Early KGAN-TV Closing.
(g) Notwithstanding anything in the Purchase Agreement to the
contrary, the STC Purchase Price shall be decreased (if such net cash flow is
greater than or equal to zero) or increased (if such net cash flow is less than
zero), as the case may be, by the Net Cash Flow (as hereinafter defined) of the
STC Stations for the period from and including April 30, 1999 through, but not
including, the Deferred Closing Date, subject to adjustment as provided below.
For purposes of this Section 4(g), "Net Cash Flow" means (i) the earnings before
interest, income taxes, depreciation and amortization of the STC Stations for
the relevant period, calculated in conformity with GAAP and on a basis
consistent with the basis used in preparing the Unaudited Financial Statements
as of, and for year ended, December 27, 1997 referred to in Section 3.5 of the
Purchase Agreement, in each case after adding back corporate overhead expense
(to the extent otherwise deducted in computing earnings) and film and program
expenses and
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subtracting actual cash payments on film and program contracts either made or
due but not yet made (in each case adjusted to include one month's payment for
each month in which any such payment is due) less (ii) all capital expenditures
paid in respect of the STC Stations during the relevant period. The Company
shall include the amount estimated in good faith by the Company to be the amount
of the adjustment to the STC Purchase Price under this Section 4(g) in the
statement delivered to Purchaser on or before five Business Days prior to the
Deferred Closing pursuant to Section 2.1(b) (as modified by this Agreement) of
the Purchase Agreement and such adjustment shall be subject to the procedures
set forth in Section 2.2 of the Purchase Agreement; provided, however, that,
whether or not the parties agree to submit the referenced statement relating to
the Deferred Closing to certification or review by independent accountants
(other than the submission of such statement for resolution by an independent
accounting firm, the fees and expense of which the Company and Purchaser have
agreed to bear equally) (in each case which would otherwise be required under
the provisions of Section 2.2 of the Purchase Agreement), the Company shall not
be obligated to pay any fees and expenses in connection with any certification
or review relating to the determination of the STC Net Financial Assets.
(h) Notwithstanding anything in the Purchase Agreement to the
contrary, the STC Purchase Price shall be increased by the aggregate of (i) an
amount equal to $22,191.78 for each day from and including April 30, 1999
through, but not including, May 30, 1999 that the Deferred Closing shall not
have yet occurred and (ii) an amount equal to $26,630.14 for each day from and
including May 30, 1999 through and including the Outside Closing Date that the
Deferred Closing shall not have occurred; provided, however, if Purchaser shall
have elected pursuant to Section 12 hereof to have an Early KGAN-TV Closing (as
defined in Section 12(a) hereof) take place, the per diem amounts set forth in
clauses (i) and (ii) above shall be reduced,
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beginning as of the date of the Early KGAN-TV Closing (the "Early KGAN-TV
Closing Date"), to (x) $16,712.33 for each day, if any, from and including the
Early KGAN-TV Closing Date through, but not including, May 30, 1999 that the
Final Closing (as defined in Section 12(a) hereof) shall not have yet occurred
and (y) $20,054.79 for each day from and including the later of May 30, 1999 and
the Early KGAN-TV Closing Date through and including the Outside Closing Date
that the Final Closing shall not have occurred.
Section 5. Adjustment Escrow Agreement. The form of Adjustment
Escrow Agreement shall be modified to the reasonable satisfaction of the
Company, Purchaser and the Adjustment Escrow Agent to permit (i) separate
deliveries to be made in respect of the Principal Closing and the Deferred
Closing, and (ii) payment to the Company of the aggregate of the Principal
Closing Adjustment Escrow and the Deferred Closing Adjustment Escrow, less any
amounts due to Purchaser in respect of the Principal Net Financial Assets or the
STC Net Financial Assets, as the case may be, pursuant to the terms of Section
2.1(c) of the Purchase Agreement, as modified hereby.
Section 6. Security Escrow Agreement. The form of Security
Escrow Agreement shall be modified to the reasonable satisfaction of the
Company, Purchaser and the Security Escrow Agent to permit (i) separate
deliveries to be made in respect of the Principal Closing and the Deferred
Closing, and (ii) payment to the Company of the aggregate of the Principal
Closing Security Escrow and the Deferred Closing Security Escrow, less any
amounts of Claims and Damages in respect of Stations other than the Xxxxxxxx
Station on the one year anniversary of the Principal Closing Date.
Section 7. Net Financial Asset Adjustment. The Remaining Net
Financial Assets shall be comprised of (i) the Principal Net Financial Assets
and (ii) the STC Net Financial
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Assets. The calculation and release of the Principal Adjustment Escrow Account
shall be made pursuant to the procedure set forth in Section 2.2 of the Purchase
Agreement (treating the Principal Closing Date as the "Closing Date" for
purposes of such Section 2.2) and the calculation and release of the Deferred
Adjustment Escrow Account shall be made pursuant to the procedure set forth in
Section 2.2 of the Purchase Agreement (treating the Deferred Closing Date as the
"Closing Date" for purposes of such Section 2.2); provided that if the Deferred
Closing does not occur, only the Principal Net Financial Assets shall be
determined, but otherwise in accordance with the terms of Section 2.2 of the
Purchase Agreement (treating as the "Closing Date" for purposes of such Section
2.2 the Principal Closing Date when determining the Principal Net Financial
Assets).
Section 8. Closing Conditions. (a) Purchaser and the Company
each hereby acknowledges and agrees that all conditions to Closing set forth in
Articles 6 and 7 of the Purchase Agreement have been satisfied or waived as of
the date hereof for all purposes under the Purchase Agreement.
(b) Purchaser and the Company each hereby acknowledges and
agrees that following the Principal Closing the obligation of the Company to
sell, convey, assign, transfer and deliver directly to STC (or, if the closing
of all of the transactions contemplated by the STC Agreement has not occurred on
or prior to the Outside Closing Date, to Purchaser or, other than with respect
to the FCC Licenses which shall be assigned to the Person designated in the FCC
Consent, one or more wholly owned subsidiaries of Purchaser) the STC Assets and
the obligation of Purchaser to pay the STC Purchase Price in accordance with
Section 4 hereof and to assume the STC Assumed Liabilities, in each case not
later than the Outside Closing Date, shall each be irrevocable and
unconditional; provided that the Company shall not be obligated to sell, convey,
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assign, transfer or deliver to Purchaser or directly to STC, as the case may be,
any of the STC Assets if Purchaser shall not have paid the STC Purchase Price in
accordance with Section 4 hereof and assumed the STC Assumed Liabilities. For
the avoidance of doubt, neither Purchaser nor the Company shall be relieved of
its obligation under this Section 8(b) even if any condition to Closing set
forth in Articles 6 or 7 of the Purchase Agreement would have ceased to have
been satisfied following the Principal Closing if any such condition were to be
considered in respect of the Deferred Closing.
Section 9. Certificate. Purchaser acknowledges that the
Company has delivered to Purchaser a certificate, dated as of the Principal
Closing Date, executed on behalf of the Company by its duly authorized officers
or representatives to the effect of Sections 6.1 and 6.2 of the Purchase
Agreement with respect all Stations other than the Xxxxxxxx Station. For the
avoidance of doubt, as previously agreed by the parties hereto, materiality (or
"Material Adverse Effect") for purposes of such certificate and all other
purposes under the Purchase Agreement has been, and shall be, determined on the
basis of all Stations taken as a whole, including the Xxxxxxxx Station and the
STC Stations; provided, however, that in determining materiality or Material
Adverse Effect, any circumstance, change in, or effect relating to, the Xxxxxxxx
Station after the First Closing Date has not been, and shall not be, taken into
consideration.
Section 10. Indemnification; Survival. The representations and
warranties of the Company contained in the Purchase Agreement or in any
certificate or special warranty deed delivered pursuant thereto and any and all
covenants and agreements therein with respect to the Xxxxxxxx Station, the
Xxxxxxxx Assets or the Xxxxxxxx Assumed Liabilities (other than those covenants
and agreements required by the Purchase Agreement to be performed after the
First Closing) shall expire with, and be terminated and extinguished upon, the
one year anniversary of
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the First Closing Date. Except as provided in the immediately proceeding
sentence, all representations and warranties of the Company or Purchaser
contained in the Purchase Agreement or in any certificate or special warranty
deed pursuant thereto and any and all covenants and agreements in the Purchase
Agreement shall expire in accordance with the terms of the Purchase Agreement
(treating the Principal Closing Date as "the Closing Date"). For purposes of
Section 8.1 and 8.2 of the Purchase Agreement, the term "Closing Date" shall be
deemed to refer to (x) the First Closing Date in respect of the Xxxxxxxx
Station, the Xxxxxxxx Assets and the Xxxxxxxx Assumed Liabilities, (y) the
Principal Closing Date in respect of the Stations (other than the Xxxxxxxx
Station and the STC Stations), Assets (other than the Xxxxxxxx Assets and the
STC Assets) and Assumed Liabilities (other than the Xxxxxxxx Assumed Liabilities
and the STC Assumed Liabilities) and (z) the date of the Final Closing (the
"Final Closing Date") in respect of the STC Stations, the STC Assets and the STC
Assumed Liabilities. Following the Principal Closing, all pre-Closing covenants
and agreements in Article 5 of the Purchase Agreement shall no longer apply to
any Station other than the STC Stations.
Section 11. Termination Rights. (a) Neither the Company nor
Purchaser shall have any right to terminate the Purchase Agreement; provided,
however, that if the Deferred Closing shall not have occurred on or before the
Outside Closing Date, the Company may terminate its obligations with respect to
the Deferred Closing and be entitled to abandon the Deferred Closing in
accordance with the procedures set forth in Section 10.1 of the Purchase
Agreement relating to termination of the Purchase Agreement. If the Company
abandons the Deferred Closing in accordance with this Section 11 then the
obligations of the Company to effect the Deferred Closing shall terminate, all
representations, warranties, convents, agreements, liabilities and obligations
of the Company under the Purchase Agreement shall thereupon
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become void and of no further effect whatsoever to the extent such
representations, warranties, covenants, agreements, liabilities and obligations
relate to the STC Stations, the STC Assets, the STC Assumed Liabilities or the
Deferred Closing, except (i) to the extent of the Company's liability for
willful material breaches of the Purchase Agreement prior to the time of such
abandonment, (ii) as set forth in Section 5.4 of the Purchase Agreement, (iii)
the obligations of the Company for its own expenses incurred in connection with
the transactions contemplated by the Purchase Agreement and this Agreement as
provided therein and modified hereby and (iv) if an Early KGAN-TV Closing shall
have occurred, to the extent such representations, warranties, covenants,
agreements, liabilities and obligations relate to Station KGAN-TV, the STC
Assets acquired, or the STC Assumed Liabilities assumed, in connection with the
Early KGAN-TV Closing, or the Early KGAN-TV Closing. For the avoidance of doubt,
the representations, warranties, convents, agreements, liabilities and
obligations of the Company under the Purchase Agreement relating to Station
WOKR-TV, Station WGGB-TV, Station WGME-TV and WTWC- TV, the assets acquired, or
the Assumed Liabilities assumed, in connection with the First Closing and the
Principal Closing, and the First Closing and the Principal Closing shall not be
affected by any abandonment pursuant to this Section 11(a), but shall expire,
and be terminated and extinguished, at the time provided in the Purchase
Agreement with respect thereto.
(b) If the Deferred Closing shall not have occurred by July 1,
1999 (if an Early KGAN-TV Closing has not occurred as permitted by Section 12
hereof) or the Outside Closing Date (if an Early KGAN-TV Closing has occurred on
or before July 1, 1999), other than as a result of a material breach by the
Company of its obligation under Section 8(b) hereof to effect the Deferred
Closing as described therein, Purchaser shall pay the Company, as liquidated
damages, the aggregate of (i) 15% of the STC Purchase Price (or, if an Early
KGAN-TV Closing
15
has occurred, that portion of the STC Purchase Price not paid in connection with
the Early KGAN-TV Closing) calculated as if the Deferred Closing were to have
occurred on the Outside Closing Date (which amount represents the parties' best
estimate of the costs and expenses (including, without limitation, attorney's,
accountant's and other professionals' fees) of the Company related to the
negotiation and execution of this Agreement and the separate Deferred Closing,
which costs and amounts the parties acknowledge and agree would be otherwise
difficult to determine) and (ii) the amount of the excess, if any, of the STC
Purchase Price (or, if an Early KGAN-TV Closing has occurred, that portion of
the STC Purchase Price not paid in connection with the Early KGAN-TV Closing),
calculated as if the Deferred Closing were to have occurred on the Outside
Closing Date, over the purchase price received by the Company in respect of a
sale or sales of STC Assets and STC Business to one or more third parties on
substantially the same terms as those in the Purchase Agreement with respect to
post-closing liabilities and obligations of the seller (each, an "Alternative
Sale") (which amount the parties acknowledge and agree is not capable of
estimation as of the date hereof). The Company shall undertake the negotiations
relating to an agreement with respect to any Alternative Sale in good faith so
as to mitigate to the extent reasonably practicable any damages under clause
(ii) of the immediately preceding sentence; provided, however, that any breach
by the Company shall not void Purchaser's obligation to pay an amount under such
clause (ii), but, in the case of such breach, Purchaser's liability thereunder
shall be limited to the excess, if any, of the STC Purchase Price (or the
applicable portion of the STC Purchase Price, as the case may be) over the
purchase price that would reasonably have been received by the Company in
respect of one or more Alternative Sales if the Company were not to have so
breached its obligation under this sentence.
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The foregoing aggregate payment is intended by the parties to be liquidated
damages and not a penalty.
Section 12. Additional Separate Closing. (a) If Purchaser so
elects, the closing of the transactions contemplated by the Purchase Agreement
and this Agreement in respect of Station KGAN-TV (the "Early KGAN-TV Closing")
may take place on a date separate and earlier than the closing of the
transactions contemplated by the Purchase Agreement and this Agreement in
respect of Station WICD-TV and Station WICS-TV (the "Final Closing"), and if
Purchaser so elects, the parties hereto agree to make all appropriate changes to
this Agreement, and interpretations of the Purchase Agreement, necessary to
reflect such earlier closing; provided, however, that the parties hereby agree
that, if an Early KGAN-TV Closing were to occur, the references to "Deferred
Closing" or "Deferred Closing Date" in the proviso to the third sentence of
Section 1 hereof and in Section 11 hereof shall refer to the Final Closing.
(b) If Purchaser elects to have an Early KGAN-TV Closing take,
then, notwithstanding the provisions of Section 10.3 of the Purchase Agreement
or any other amounts required to be paid under the Purchase Agreement or this
Agreement, Purchaser shall, not later than the Early KGAN-TV Closing Date,
reimburse the Company for its reasonable costs and expenses (including, without
limitation, attorney's, accountants and other professionals' fees and expenses)
incurred in connection with effecting the Early KGAN-TV Closing. For the
avoidance of doubt, Purchaser shall not be obligated hereunder to reimburse the
Company for any costs and expenses incurred in connection with the Final
Closing, except to the extent provided in Section 11(b) hereof if the Final
Closing shall not have occurred on or before the Outside Closing Date.
Section 13. Additional Agreements. (a) Purchaser agrees to use
its best efforts to (i) assist STC in resolving the antitrust issues arising,
whether on the date hereof or at time on
17
or before the Deferred Closing, in connection with the transactions contemplated
by the STC Agreement and (ii) secure one or more alternative sources of
financing, in each case such that the Deferred Closing (whether the STC Assets
are to be conveyed directly to STC or to Purchaser, as the case may be under
Section 8(b) hereof) shall occur not later than the Outside Closing Date.
(b) Notwithstanding the foregoing Section 13(a), the Deferred
Closing shall take place as soon as practicable following the satisfaction of
the condition set forth in Sections 6.4(a) and 7.4(a) of the STC Agreement, but
in no event later than ten days following the date on which such condition has
been satisfied.
(c) Notwithstanding the provisions of Section 10.3 of the
Purchase Agreement or any other amounts required to be paid under the Purchase
Agreement or this Agreement, Purchaser shall, not later than the earlier of the
Deferred Closing and the Outside Closing Date, pay to the Company in cash an
aggregate amount equal to $115,000 for each calendar month, and/or a pro-rated
portion thereof for the part of a calendar month (if any), during the period
from, but not including, May 31, 1999 through and including the Deferred Closing
Date, which amount is intended to reimburse the Company for its costs and
expenses incurred to maintain the Corporate Office (including, without
limitation, the retention of Corporate Office Employees) during such period.
(d) The parties hereby agree to each use their reasonable
efforts, to cooperate fully with each other and STC, and otherwise to use their
respective reasonable efforts to obtain the requisite clearances under the HSR
Act with respect to the transactions contemplated by the STC Agreement in
respect of the purchase and sale of the STC Stations.
(e) The parties hereby also agree to each use their reasonable
efforts, to cooperate fully with each other, and otherwise to use their
respective reasonable efforts to obtain FCC
18
consent to extend its initial 90-day consummation period to the extent the
Deferred Closing, the Early KGAN-TV Closing or the Final Closing, as the case
may be, has not closed or is highly unlikely to close within the relevant period
of time.
(f) For the avoidance of doubt, the covenants and agreements
set forth in Sections 5.1, 5.3, 5.4 and 5.10 of the Purchase Agreement shall
remain in full force and effect with respect to the business, operations and
activities of the STC Stations until such time as the Deferred Closing shall
have taken place (or, if Purchaser shall have elected pursuant to Section 12
hereof to have an Early KGAN-TV Closing take place, such covenants and
agreements shall remain in full force and effect with respect to the business,
operations and activities of all the STC Stations until such time as the Early
KGAN-TV Closing shall have taken place and, following the Early KGAN-TV Closing,
with respect to the business, operations and activities of Station WICD-TV and
WICS-TV until the earlier of the Final Closing or the Outside Closing Date.
Section 14. Other Modifications to the Purchase Agreement. (a)
With respect to the actions to be taken pursuant to Section 5.2(i) or Section
5.2(j) of the Purchase Agreement, the term "Business Employees" shall mean (i)
Business Employees other than Business Employees of the Xxxxxxxx Station and the
STC Stations in connection with the Principal Closing and (ii) Business
Employees of the STC Stations in connection with the Deferred Closing.
(b) With respect to the actions to be taken pursuant to
Section 5.2(k) of the Purchase Agreement, the terms "Closing" and "Closing Date"
shall mean the earlier of (i) the Deferred Closing and the Deferred Closing
Date, respectively, and (ii) the Outside Closing Date.
Section 15. No Third Party Rights. Nothing in this Agreement
shall be deemed to provide any Person with any legal or equitable rights,
benefits or remedies of any nature
19
whatsoever under or by reason of this Agreement, the Purchase Agreement or any
certificate or instrument delivered hereto or thereto, except to the extent
previously provided in the Purchase Agreement with respect to certain wholly
owned subsidiaries of Purchaser. For the avoidance of doubt, neither STC nor any
of its affiliates will be considered an assignee of Purchaser for purposes of
the Purchase Agreement (and will not have any of Purchaser's rights or remedies
under the Purchase Agreement).
Section 16. References. All references to "this Agreement" in
the Purchase Agreement shall mean the Purchase Agreement as modified hereby.
Section 17. Definitions. All capitalized terms not otherwise
defined in this Agreement shall have the meanings set forth in the Purchase
Agreement.
Section 18. Headings. The headings of the sections of this
Agreement are inserted as a matter of convenience and for reference purposes
only and in no respect define, limit or describe the scope of this Agreement or
the intent of any section or subsection.
Section 19. Counterparts. This Agreement may be executed in
one or more counterparts and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
Section 20. Governing Law. This Agreement and the rights and
duties of the parties hereunder shall be governed by, and construed in
accordance with, the laws of the State of New York.
Section 21. No Other Amendments or Modifications. This
Agreement constitutes an amendment to the Purchase Agreement and in the event of
any conflict between the terms of this Agreement and the Purchase Agreement the
terms of this Agreement will
20
govern. Except as expressly contemplated to be modified hereby, the terms and
conditions of the Purchase Agreement shall continue in full force and effect.
21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GUY GANNETT COMMUNICATIONS
By: /s/ Xxxxx Xxxxx
-------------------------------------
Its Vice-President-Finance
XXXXXXXX COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxx
-------------------------------------
Name: Xxxxx X. Xxx
Title: Secretary
ACCEPTED AND AGREED
as of the date first above written:
WGME LICENSEE, LLC
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
WTWC LICENSEE, LLC
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
22
WICS LICENSEE, LLC
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
WICD LICENSEE, LLC
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
WGGB LICENSEE, LLC
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
KGAN LICENSEE, LLC
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
WGME, INC.
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
23
WTWC, INC.
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
XXXXXXXX ACQUISITION IV, INC.
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
WGGB, INC.
By: /s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Secretary
24
