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Exhibit 10.189
ASSET AND STOCK PURCHASE AND OPTION GRANT AGREEMENT
DATED AS OF NOVEMBER 14, 1997
BY AND AMONG
VALUEVISION INTERNATIONAL, INC.;
VVI SEATTLE, INC.;
VVILPTV, INC.;
VVI SPOKANE, INC.;
VVI TALLAHASSEE, INC.
AND
XXXXXX COMMUNICATIONS CORPORATION
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TABLE OF CONTENTS
Page
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SECTION 1 CERTAIN DEFINITIONS....................................................................2
1.1 Terms Defined in this Section..........................................................2
1.2 Terms Defined Elsewhere in this Agreement..............................................5
SECTION 2 PURCHASE AND SALE OF ASSETS AND STOCK..................................................7
2.1 Agreement to Sell and Buy Assets.......................................................7
2.2 Agreement to Sell and Buy Shares.......................................................7
2.3 Excluded Assets........................................................................8
2.4 Purchase Price.........................................................................8
2.5 Working Capital Credits and Payment....................................................9
(a) Prorations....................................................................9
(b) Expenses and Revenues Not Prorated...........................................10
(c) Manner of Determining Prorations and Credits.................................10
(d) Payments at Closing With Respect to Working Capital Credits..................11
(e) Payments to Reflect Final Determination of Working Capital
Credits......................................................................11
2.6 Assumption of Liabilities and Obligations.............................................12
SECTION 3 OPTION................................................................................12
3.1 Grant.................................................................................12
3.2 Spokane Option Exercise...............................................................12
3.3 Tallahassee Option Exercise...........................................................13
3.4 Exercise Price........................................................................13
3.5 Determination of Fair Market Value....................................................13
SECTION 4 REPRESENTATIONS AND WARRANTIES OF SELLERS.............................................13
4.1 Organization, Standing, and Authority.................................................13
4.2 Authorization and Binding Obligation..................................................13
4.3 Absence of Conflicting Agreements.....................................................14
4.4 Governmental Licenses.................................................................14
4.5 Real Property.........................................................................15
4.6 Tangible Personal Property............................................................15
4.7 Assumed Contracts.....................................................................15
4.8 Consents..............................................................................15
4.9 Intangibles...........................................................................15
4.10 Financial Statements..................................................................15
4.11 Insurance.............................................................................16
4.12 Reports...............................................................................16
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4.13 Labor Relations.......................................................................16
4.14 Taxes.................................................................................16
4.15 Claims and Legal Actions..............................................................16
4.16 Compliance with Licenses..............................................................16
4.17 Conduct of Business in Ordinary Course................................................16
4.18 Transactions with Affiliates..........................................................17
4.19 No Broker.............................................................................17
4.20 Title to Shares.......................................................................17
4.21 Delivery of Channel 51 Agreement......................................................17
4.22 Disclaimer of Warranties..............................................................17
SECTION 5 REPRESENTATIONS AND WARRANTIES OF BUYER...............................................18
5.1 Organization, Standing, and Authority.................................................18
5.2 Authorization and Binding Obligation..................................................18
5.3 Absence of Conflicting Agreements.....................................................18
5.4 Licensee Qualifications...............................................................18
5.5 No Broker.............................................................................19
5.6 Investment Representation.............................................................19
5.7 Acknowledgment of "As-Is-Where-Is" Sale...............................................19
SECTION 6 OPERATIONS OF THE STATIONS PRIOR TO CLOSING...........................................19
6.1 Generally.............................................................................19
6.2 Contracts.............................................................................20
6.3 Disposition of Assets.................................................................20
6.4 Encumbrances..........................................................................20
6.5 Licenses..............................................................................20
6.6 Obligations...........................................................................20
6.7 Exclusivity...........................................................................20
6.8 Access to Information.................................................................21
6.9 Maintenance of Assets.................................................................21
6.10 Insurance.............................................................................22
6.11 Consents..............................................................................22
6.12 Books and Records.....................................................................22
6.13 Notification..........................................................................22
6.14 Financial Information.................................................................22
6.15 Compliance with Laws..................................................................22
SECTION 7 SPECIAL COVENANTS AND AGREEMENTS......................................................22
7.1 FCC Consents..........................................................................22
7.2 Control of the Stations...............................................................23
7.3 Risk of Loss..........................................................................24
7.4 Confidentiality.......................................................................24
7.5 Cooperation...........................................................................24
7.6 Access to Books and Records...........................................................25
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7.7 [Intentionally omitted]...............................................................25
7.8 HSR Act Filing........................................................................25
7.9 [Intentionally omitted]...............................................................25
7.10 [Intentionally omitted]...............................................................25
7.11 [Intentionally omitted]...............................................................25
7.12 Sales Tax Filings.....................................................................25
7.13 Accounts Receivable...................................................................25
(a) Collection...................................................................25
(b) Payments to ValueVision......................................................26
(c) Further Obligations..........................................................26
7.14 No Inconsistent Action................................................................26
7.15 VVI Spokane and VVI Tallahassee.......................................................26
7.16 Channel 51 Agreement..................................................................26
7.17 Control of Spokane Application and Tallahassee Application
Proceedings...........................................................................27
SECTION 8 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS AT
CLOSING...............................................................................27
8.1 Conditions to Obligations of Buyer....................................................27
(a) FCC Consents.................................................................27
(b) Final Orders.................................................................27
(c) HSR Act......................................................................27
(d) Deliveries...................................................................28
(e) Judgments....................................................................28
8.2 Conditions to Obligations of Sellers..................................................28
(a) Representations and Warranties...............................................28
(b) Covenants and Conditions.....................................................28
(c) Deliveries...................................................................28
(d) FCC Consents.................................................................28
(e) HSR Act......................................................................28
(f) Judgments....................................................................28
SECTION 9 CLOSING AND CLOSING DELIVERIES........................................................28
9.1 Closing...............................................................................28
(a) Closing Date.................................................................28
(b) Closing Place................................................................29
9.2 Deliveries by Sellers.................................................................29
(a) [Intentionally omitted]......................................................29
(b) Conveyancing Documents.......................................................29
(c) Working Capital Payment......................................................29
(d) Estoppel Certificates and Lessor's Consents..................................29
(e) Consents.....................................................................29
(f) Certificate..................................................................29
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(g) Licenses, Contracts, Business Records, Etc...................................30
9.3 Deliveries by Buyer...................................................................30
(a) Purchase Price...............................................................30
(b) Working Capital Payment......................................................30
(c) Assumption Agreements........................................................30
(d) Certificate..................................................................30
SECTION 10 TERMINATION...........................................................................30
10.1 Termination by Sellers................................................................30
(a) Conditions...................................................................30
(b) Judgments....................................................................30
(c) Upset Date...................................................................31
(d) Breach.......................................................................31
(e) Buyer's Wrongful Failure To Close............................................31
10.2 Termination by Buyer..................................................................31
(a) Conditions...................................................................31
(b) Judgments....................................................................31
(c) Intentionally omitted........................................................31
(d) Material Contracts...........................................................31
(e) Upset Date...................................................................31
10.3 Escrow Deposit; Rights on Termination.................................................31
10.4 Specific Performance..................................................................32
10.5 No Special Damages....................................................................32
SECTION 11 INDEMNIFICATION.......................................................................33
11.1 Indemnification by Sellers............................................................33
11.2 Indemnification by Buyer..............................................................33
11.3 Procedure for Indemnification........................................................33
SECTION 12 [Intentionally omitted]...............................................................34
SECTION 13 MISCELLANEOUS.........................................................................34
13.1 Fees and Expenses.....................................................................34
13.2 Notices...............................................................................35
13.3 Arbitration...........................................................................35
13.4 Benefit and Binding Effect............................................................36
13.5 Further Assurances....................................................................37
13.6 GOVERNING LAW.........................................................................37
13.7 Headings..............................................................................37
13.8 Gender and Number.....................................................................37
13.9 Entire Agreement......................................................................37
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13.10 Waiver of Compliance: Consents........................................................37
13.11 Counterparts..........................................................................37
13.12 Survival of Representations and Warranties............................................38
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ASSET AND STOCK PURCHASE AND OPTION GRANT AGREEMENT
This ASSET AND STOCK PURCHASE AND OPTION GRANT AGREEMENT (the
"Agreement") is dated as of November 14, 1997, by and among VALUEVISION
INTERNATIONAL INC., a Minnesota corporation ("ValueVision"); VVI SEATTLE, INC.
("VVI Seattle"), a Minnesota corporation; VVILPTV, INC., a Minnesota corporation
("VVILP"); VVI SPOKANE, INC., a Minnesota corporation ("VVI Spokane"); VVI
TALLAHASSEE, INC., a Minnesota corporation ("VVI Tallahassee") and XXXXXX
COMMUNICATIONS CORPORATION, a Delaware corporation ("Buyer").
PRELIMINARY STATEMENT
WHEREAS, VVI Seattle is the licensee of television station KBGE-TV,
Bellevue, Washington ("Station KBGE-TV") pursuant to licenses issued by the
Federal Communications Commission (the "FCC") and the owner of certain assets
used in the operation of Station KBGE-TV; and
WHEREAS, VVILP is the licensee of low power television station X00XX,
Xxxxxxxx, Oregon ("Channel 43") pursuant to licenses issued by the FCC and the
owner of certain assets used in the operation of Channel 43; and
WHEREAS, VVILP has entered into an asset purchase agreement dated
November 10, 1997 with Television Interests Company, Inc. (the "Channel 51
Agreement"), pursuant to which VVILP has agreed to purchase from Television
Interests Company, Inc. the license and the assets of low power television
station W51BU, in Indianapolis, Indiana ("Channel 51"); and
WHEREAS, VVI Spokane is an applicant for a television construction
permit to construct Channel 34 in Spokane, Washington, pursuant to FCC File
Number XXXX-000000XX (the "Spokane Application"); and
WHEREAS, VVI Tallahassee is an applicant for a television construction
permit to construct Channel 24 in Tallahassee, Florida, pursuant to FCC File
Number XXXX-000000XX (the "Tallahassee Application"); and
WHEREAS, VVI Seattle, VVILP, VVI Spokane and VVI Tallahassee are
wholly-owned subsidiaries of ValueVision; and
WHEREAS, VVI Seattle desires to sell the assets used or held for use in
the operation of Station KBGE-TV to Buyer, and Buyer desires to purchase such
assets, for the consideration and on the terms and conditions herein provided;
and
WHEREAS, VVILP desires to sell the assets used or held for use in the
operation of Channel 43 to Buyer, and Buyer desires to purchase such assets, for
the consideration and on the terms and conditions herein provided; and
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WHEREAS, VVILP desires to sell the assets used or held for use in the
operation of Channel 51, which assets shall be acquired pursuant to the closing
of the Channel 51 Agreement (the "Channel 51 Closing"), to Buyer and Buyer
desires to purchase such assets, for the consideration and on the terms and
conditions herein provided; and
WHEREAS, ValueVision desires to sell 49% of the issued and outstanding
shares of the capital stock of VVI Spokane to Buyer (the "VVI Spokane Shares"),
and Buyer desires to purchase the VVI Spokane Shares for the consideration and
on the terms herein provided; and
WHEREAS, ValueVision desires to grant to Buyer an option (the "Spokane
Option") to purchase all, but not less than all, of the remaining 51% of the
issued and outstanding shares of VVI Spokane to Buyer (the "Spokane Option
Shares") and Buyer desires to acquire the Spokane Option, for the consideration
and on the terms herein provided; and
WHEREAS, ValueVision desires to sell 49% of the issued and outstanding
shares of the capital stock of VVI Tallahassee to Buyer (the "VVI Tallahassee
Shares"; together with the VVI Spokane Shares at times herein, the "Shares"),
and Buyer desires to purchase the VVI Tallahassee Shares for the consideration
and on the terms herein provided; and
WHEREAS, ValueVision desires to grant to Buyer an option (the
"Tallahassee Option"; together with the Spokane Option, the "Options") to
purchase all, but not less than all, of the remaining 51% of the issued and
outstanding shares of VVI Tallahassee to Buyer (the "Tallahassee Option Shares";
together with the Spokane Option Shares, the "Option Shares") and Buyer desires
to acquire the Tallahassee Option, for the consideration and on the terms herein
provided; and
WHEREAS, each of ValueVision, VVI Seattle, and VVILP is each sometimes
hereinafter referred to as a "Seller," and together they are hereinafter
sometimes referred to as "Sellers."
AGREEMENTS
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the parties hereto, intending to be bound
legally, agree as follows:
SECTION 1 CERTAIN DEFINITIONS.
1.1 Terms Defined in this Section. The following terms, as used in this
Agreement, shall have the meanings set forth in this Section:
"Affiliate" means "affiliate" as defined in Rule 12b-2 promulgated
under the Exchange Act.
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"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (a) all Material Contracts, (b) any other
Contract listed on Schedule 4.7 with respect to which Sellers are able to obtain
and deliver to Buyer at or prior to the Closing any Consent required for the
assignment of such Contract to Buyer, (c) contracts entered into prior to the
date of this Agreement with advertisers for the sale of advertising time or
production services for cash at rates consistent with past practices, (d) any
Contracts entered into by any Seller between the date of this Agreement and the
Closing Date that Buyer agrees in writing to assume, and (e) other contracts
entered into by any Seller between the date of this Agreement and the Closing
Date in compliance with Section 6.2.
"Closing" means the consummation of the transactions contemplated by
this Agreement in accordance with the provisions of Section 9.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 9.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets, the
Shares, and the Options to Buyer or otherwise to consummate the transactions
contemplated by this Agreement, including consents to the assignment of the
Assumed Contracts.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which any Seller is a party or that are binding upon any Seller and
that relate to or affect the Assets, the Shares, the Options or the conduct of
the business or operations of any of the Stations, and (a) that are in effect on
the date of this Agreement or (b) that are entered into by any Seller between
the date of this Agreement and the Closing Date; provided, however, that
"Contracts" shall not include any programming agreements.
"Effective Time" means 12:01 a.m., Eastern time, on the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means First Union National Bank.
"Escrow Agreement" means the Escrow Agreement to be entered into among
Buyer, ValueVision, and the Escrow Agent in accordance with Section 10.3.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
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"Excluded Assets" means the assets described in Section 2.2(a) through
(h) of this Agreement.
"Exercise Price" has the meaning set forth in Section 3.4.
"Fair Market Value" means, as of the date of determination, the cash
price at which a willing seller would sell, and a willing buyer would buy, each
being apprised of all relevant facts and neither acting under compulsion, in an
arm's length negotiated transaction with an unaffiliated third party without
time constraints.
"FCC Consent" means action or actions by the FCC granting its consent
to the assignment of all the FCC Licenses to Buyer, as contemplated by this
Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Sellers in
connection with the existing or currently authorized business or operations of
the Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment warranties,
and other similar intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or owned by any
Seller or under which any Seller is licensed or franchised and that are used or
useful in connection with the conduct of the business or operations of the
Stations, together with any additions thereto between the date of this Agreement
and the Closing Date.
"Licenses" means all licenses, permits, construction permits, and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental authorities to any Seller, currently
in effect and used or useful in connection with the conduct of the business or
operations of the Stations, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Material Contracts" means those Assumed Contracts that are designated
on Schedule 4.7 as "Material Contracts."
"Permitted Encumbrances" means (a) liens for current taxes not yet due
and payable, (b) easements, covenants, conditions, and restrictions that are
disclosed on Schedule 4.5, and (c) other easements, covenants, conditions, and
restrictions of record that affect any Real
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Property and do not have a material adverse effect on the use of such Real
Property in the conduct of the business or operations of the Stations or
materially detract from the value of such Real Property in the conduct of the
business or operations of the Stations.
"Person" means an individual, corporation, association, partnership,
joint venture, joint stock company, trust, estate, limited liability company,
limited liability partnership, governmental entity, or other entity or
organization.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all interests in real property, including fee
estates, leaseholds and subleaseholds, purchase options, easements, licenses,
rights to access, and rights of way, and all buildings and other improvements
thereon, owned or held by any Seller, that are used or useful in connection with
the conduct of the business or operations of the Stations.
"Securities Act" means the Securities Act of 1933, as amended.
"Stations" means Station KBGE-TV, Channel 43, and, at all times
subsequent to the Channel 51 Closing, Channel 51.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts, and other tangible personal property owned or held by any Seller
that is used or useful in connection with the conduct of the business or
operations of the Stations, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Transferee" means any Person to whom Buyer or its successors in
interest transfers all or any part of its ownership interest in or sells all or
substantially all of the assets of Station KBGE-TV, except in a transaction
authorized by Section 13.4(a)(ii) of this Agreement.
1.2 Terms Defined Elsewhere in this Agreement. For purposes of this
Agreement, the following terms have the meanings set forth in the Sections
indicated:
Term Section
---- -------
Acceptable Power Level Section 7.1(f)
Agreement Preliminary Statement
Buyer Preliminary Statement
Buyer's Working Capital Credits Section 2.4(a)
Channel 51 Agreement Preliminary Closing
Channel 51 Closing Preliminary Statement
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Claimant Section 11.3(a)
Collection Period Section 7.13(a)
DOJ Section 7.8
FCC Preliminary Statement
Financial Statements Section 4.10
FTC Section 7.8
In A Material Way Section 9.2(f)
Indemnifying Party Section 11.3
Options Preliminary Statement
Option Shares Preliminary Statement
Seller Preliminary Statement
Sellers' Working Capital Credits Section 2.4(a)
Shares Preliminary Statement
Spokane Application Preliminary Statement
Spokane Option Preliminary Statement
Spokane Option Exercise Date Section 3.2
Spokane Option Expiration Date Section 3.2
Spokane Option Shares Preliminary Statement
Station KBGE-TV Preliminary Statement
Stations' Receivables Section 7.13(a)
Tallahassee Application Preliminary Statement
Tallahassee Option Preliminary Statement
Tallahassee Option Exercise Date Section 3.3
Tallahassee Option Expiration Date Section 3.3
Tallahassee Option Shares Preliminary Statement
ValueVision Preliminary Statement
VVILP Preliminary Statement
VVI Seattle Preliminary Statement
VVI Spokane Preliminary Statement
VVI Spokane Shares Preliminary Statement
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VVI Tallahassee Preliminary Statement
VVI Tallahassee Shares Preliminary Statement
Working Capital Credits Section 2.4(a)
301 Application Section 7.1(c)
302 Application Section 2.3(a)
SECTION 2 PURCHASE AND SALE OF ASSETS AND STOCK.
2.1 Agreement to Sell and Buy Assets. Subject to the terms and
conditions set forth in this Agreement, Sellers hereby agree to sell, transfer,
convey, assign, and deliver to Buyer on the Closing Date (and ValueVision agrees
to cause each other Seller to sell, transfer, convey, assign, and deliver to
Buyer on the Closing Date), and Buyer agrees to purchase, all of each Seller's
right, title, and interest in the tangible and intangible assets used or useful
in connection with the conduct of the business or operations of the Stations,
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.3, free and clear
of any claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges, covenants, easements, restrictions, encroachments, leases,
or encumbrances of any nature (except for Permitted Encumbrances), including the
following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of any
Seller relating to the operation of the Stations that are not specifically
included within the Intangibles, including the goodwill of the Stations, if any;
(f) All of each Seller's proprietary information,
technical information and data, machinery and equipment warranties, maps,
computer discs and tapes, plans, diagrams, blueprints, and schematics, including
filings with the FCC relating to the business and operation of the Stations;
(g) All choses in action of any Seller relating to the
ownership or operations of the Stations to the extent they relate to the period
after the Effective Time; and
(h) Copies of all books and records relating to the
business or operations of the Stations, including executed copies of the Assumed
Contracts, and all records required by the FCC to be kept by the Stations.
2.2 Agreement to Sell and Buy Shares. Subject to the terms and
conditions set forth in this Agreement, ValueVision hereby agrees to sell,
transfer, convey, assign, and deliver to
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Buyer on the Closing Date, and Buyer agrees to purchase, all of ValueVision's
right, title, and interest in the Shares and all choses in action of ValueVision
relating to the ownership thereof to the extent they relate to the period after
the Effective Time.
2.3 Excluded Assets. The Assets shall exclude the following:
(a) [Intentionally omitted.]
(b) Any Seller's cash or cash equivalents on hand as of
the Closing and any Seller's interest in its bank accounts;
(c) Any insurance policies, promissory notes, amounts due
from employees, bonds, letters of credit, certificates of deposit, other similar
items, or deposits or prepaid items (except to the extent that Sellers receive a
Working Capital Credit for any such deposit or prepaid item pursuant to Section
2.5(a)), and any cash surrender value in regard thereto;
(d) Any pension, profit-sharing, or employee benefit
plans, including any Seller's interest in any welfare plan, pension plan, or
benefit arrangement;
(e) Any collective bargaining agreements;
(f) All tax returns and supporting materials, all
original financial statements and supporting materials, all books and records
that any Seller is required by law to retain, and all records of any Seller
relating to the sale of the Assets and the Shares;
(g) Any interest in and to any refunds of federal, state,
or local franchise, income, or other taxes for periods prior to the Closing
Date; and
(h) All accounts receivable, prepaids, and deposits of
Sellers as of the Closing Date and any intercompany accounts between the Sellers
or any Affiliates thereof.
2.4 Purchase Price.
(a) Subject to Sections 2.4(b)-(g) below, the aggregate
purchase price for the Assets, the Shares, and the Options (the "Purchase
Price") shall be Thirty-Five Million Dollars ($35,000,000), payable as follows:
(i) Twenty-Five Million Dollars ($25,000,000) in cash by wire transfer of
immediately available funds at Closing, plus (ii) Ten Million Dollars
($10,000,000) in cash by wire transfer of immediately available funds within
thirty (30) days of the earlier of (A) the date on which Buyer files or is
required to file FCC Form 302 (License Application) for Station KBGE-TV (the
"302 Application"), as provided in Section 7.1(f) below, or (B) the Improved
Coverage Date (as defined in Section 7.1(d)). The Purchase Price shall be
allocated among the Assets (allocable to each of the Stations), the respective
Shares, and each of the Options as set forth on Schedule 2.4 to this Agreement.
(b) In the event that Sellers are unable to obtain the
FCC Consents required to transfer to Buyer the FCC Licenses pertaining to
Channel 43, or the Consent identified as item 1 on Schedule 4.3 hereto, there
shall be a decrease in the Purchase Price equal to the allocated purchase price
for the portion of the Assets allocable to Channel 43 as set forth on Schedule
2.4.
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(c) In the event that Sellers are unable to obtain the
FCC Consents required to transfer to Buyer the FCC Licenses pertaining to
Channel 51, or the Consent identified as item 2 on Schedule 4.3 hereto, there
shall be a decrease in the Purchase Price equal to the allocated purchase price
for the portion of the Assets allocable to Channel 51 as set forth on Schedule
2.4.
(d) In the event that the FCC concludes or the parties
reasonably determine that transfer of the VVI Spokane Shares to Buyer at Closing
would jeopardize the Spokane Application, there shall be a decrease in the
Purchase Price equal to the allocated purchase price for the VVI Spokane Shares
as set forth on Schedule 2.4.
(e) In the event that the FCC concludes or the parties
reasonably determine that transfer of the VVI Tallahassee Shares to Buyer at
Closing would jeopardize the Tallahassee Application, there shall be a decrease
in the Purchase Price equal to the allocated purchase price for the VVI
Tallahassee Shares as set forth on Schedule 2.4.
(f) In the event that the FCC concludes or the parties
reasonably determine that ValueVision's grant of the Spokane Option to Buyer at
Closing would jeopardize the Spokane Application, there shall be a decrease in
the Purchase Price equal to the allocated purchase price for the Spokane Option
as set forth on Schedule 2.4.
(g) In the event that the FCC concludes or the parties
reasonably determine that ValueVision's grant of the Tallahassee Option to Buyer
at Closing would jeopardize the Tallahassee Application, there shall be a
decrease in the Purchase Price equal to the allocated purchase price for the
Tallahassee Option as set forth on Schedule 2.4.
(h) In the event of an adjustment to the Purchase Price
pursuant to Sections 2.4(b), (c), (d), (e), (f) or (g), the parties to this
Agreement shall be relieved of any obligation hereunder to transfer or acquire
only that portion or portions of the Assets, the Shares, or the Options, as the
case may be, to which such adjustment (or adjustments) relates.
2.5 Working Capital Credits and Payment.
(a) Prorations. All revenues and expenses arising from
the ownership of the Shares and the operation of the Stations, including tower
rental, business and license fees, utility charges, real and personal property
taxes and assessments levied against the Assets, property and equipment rentals,
applicable copyright or other fees, sales and service charges, taxes (except for
taxes arising from the transfer of the Assets and the Shares under this
Agreement), and similar prepaid and deferred items, shall be prorated between
Buyer and Sellers in accordance with the principle that Sellers shall receive
all revenues and shall be responsible for all expenses, costs, and liabilities
allocable to the ownership of the Shares and the operations of the Stations for
the period prior to the Effective Time, and Buyer shall receive all revenues and
shall be responsible for all expenses, costs, and obligations allocable to the
ownership of the Shares and the operations of the Stations for the period after
the Effective Time, subject to Section 2.5(b). To effectuate the proration of
expenses and revenues pursuant to this Section 2.5(a), but subject to Section
2.5(b), Sellers shall receive a credit equal to the amount of any expenses,
costs, or liabilities that are paid or incurred by Sellers and are allocable to
the ownership of the Shares and the operations of the Stations for the period
after the Effective Time plus the amount of any revenues that are received by
Buyer, and are allocable to the ownership of the Shares and the
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operations of the Stations for the period before the Effective Time, and Buyer
shall receive a credit equal to the amount of any expenses, costs, or
liabilities that are paid or incurred by Buyer and are allocable to the
ownership of the Shares and the operations of the Stations for the period before
the Effective Time plus the amount of any revenues that are received by Sellers
and are allocable to the ownership of the Shares and the operations of the
Stations for the period after the Effective Time. The credits to Sellers
pursuant to this Section 2.5(a) are referred to as "Sellers' Working Capital
Credits," the credits to Buyer pursuant to this Section 2.5(a) are referred to
as "Buyer's Working Capital Credits," and Sellers' Working Capital Credits and
Buyer's Working Capital Credits are referred to collectively as the "Working
Capital Credits."
(b) Expenses and Revenues Not Prorated.
(1) There shall be no proration of, and Sellers
shall remain solely liable with respect to, liabilities and obligations arising
under any Contracts not included in the Assumed Contracts and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.6.
(2) Buyer shall receive a credit pursuant to
Section 2.5(a) to the extent that Buyer assumes any liability under any Assumed
Contract to refund (or to credit against payments otherwise due) any security
deposit or similar prepayment paid to any Seller by any lessee or other third
party.
(3) No proration shall be made in favor of
either Sellers or Buyer for any difference between the value of the goods or
services to be received by the Stations under their trade or barter agreements
as of the Effective Time and the value of any advertising time remaining to be
run by the Stations as of the Effective Time.
(4) There shall be no proration of earned
vacation time or other employee compensation. Sellers shall be solely
responsible for the payment of all compensation and commissions owed to the
Stations' employees up to the Effective Time. Buyer may, as of the Effective
Time, employ those employees of the Stations as Buyer may elect on terms and
conditions determined by Buyer.
(5) There shall be no proration of music license
fees (ASCAP, BMI, SESAC, etc.); Sellers shall be responsible for filing and
paying all music license fees due and payable as of the Effective Time, and
Buyer shall be responsible for filing and paying all such fees after the
Effective Time.
(c) Manner of Determining Prorations and Credits. The
prorations and Working Capital Credits required by Section 2.5(a) shall be
determined finally in accordance with the following procedures:
(1) ValueVision, on behalf of Sellers, shall
prepare and deliver to Buyer not later than five (5) days before the Closing
Date a preliminary settlement statement which shall set forth ValueVision's good
faith estimate of the Working Capital Credits, taking into account all
prorations under Section 2.5(a). The preliminary settlement statement (A) shall
contain all information reasonably necessary to determine the Working Capital
Credits, taking into account all prorations under Section 2.5(a), to the extent
such prorations can be determined
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or estimated as of the date of the preliminary settlement statement, and such
other information as may be reasonably requested by Buyer, and (B) shall be
certified by ValueVision to be true and complete to ValueVision's knowledge as
of the date thereof.
(2) Not later than sixty (60) days after the
Closing Date, Buyer shall deliver to ValueVision a statement setting forth
Buyer's determination of the Working Capital Credits pursuant to Section 2.5(a).
Buyer's statement (A) shall contain all information reasonably necessary to
determine the Working Capital Credits, taking into account all prorations under
Section 2.5(a), and such other information as may be reasonably requested by
ValueVision, and (B) shall be certified by Buyer to be true and complete to
Buyer's knowledge as of the date thereof. If ValueVision disputes the amount of
the Working Capital Credits determined by Buyer, it shall deliver to Buyer
within thirty (30) days after its receipt of Buyer's statement a statement
setting forth its determination of the amount of the Working Capital Credits. If
ValueVision notifies Buyer of its acceptance of Buyer's statement, or if
ValueVision fails to deliver its statement within the thirty-day period
specified in the preceding sentence, Buyer's determination of the Working
Capital Credits shall be conclusive and binding on Sellers as of the last day of
the thirty-day period.
(3) If ValueVision disputes the amount of the
Working Capital Credits determined by Buyer, Buyer and ValueVision shall use
good faith efforts to resolve any dispute involving the determination of the
Working Capital Credits as expeditiously as practicable.
(d) Payments at Closing With Respect to Working Capital
Credits. At Closing:
(1) Sellers shall pay or cause to be paid to or
for the account of Buyer, by wire transfer, the amount, if any, by which Buyer's
Working Capital Credits exceed Sellers' Working Capital Credits, each as
estimated in ValueVision's preliminary settlement statement pursuant to Section
2.5(c)(1).
(2) Buyer shall pay or cause to be paid to or
for the account of Sellers, by wire transfer, the amount, if any, by which
Sellers' Working Capital Credits exceed Buyer's Working Capital Credits, each as
estimated in ValueVision's preliminary settlement statement pursuant to Section
2.5(c)(1).
(e) Payments to Reflect Final Determination of Working
Capital Credits. Within five (5) business days after the date on which the
Working Capital Credits are finally determined pursuant to Section 2.5(c):
(1) Sellers shall pay or cause to be paid to or
for the account of Buyer, by wire transfer, the amount, if any, by which the sum
of the amount of Buyer's Working Capital Credits, as finally determined pursuant
to Section 2.5(c), plus the amount of any payment made by Buyer pursuant to
Section 2.5(d)(2) exceeds the sum of amount of Sellers' Working Capital Credits,
as finally determined pursuant to Section 2.5(c), plus the amount of any payment
made by Sellers pursuant to Section 2.5(d)(1).
(2) Buyer shall pay or cause to be paid to or
for the account of Sellers, by wire transfer, the amount, if any, by which the
sum of the amount of Sellers' Working Capital
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Credits, as finally determined pursuant to Section 2.5(c), plus the amount of
any payment made by Sellers pursuant to Section 2.5(d)(1) exceeds the sum of
amount of Buyer's Working Capital Credits, as finally determined pursuant to
Section 2.5(c), plus the amount of any payment made by Buyer pursuant to Section
2.5(d)(2).
2.6 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Sellers under the Licenses and the Assumed
Contracts to the extent that either (a) the obligations and liabilities relate
to the time after the Effective Time or (b) Buyer received a Working Capital
Credit therefor under Section 2.5(a) as a result of the proration of such
obligations and liabilities. Buyer shall not assume any other obligations or
liabilities of any Seller, including (i) any obligations or liabilities under
any Contract (including any film or programming license agreement) not included
in the Assumed Contracts, (ii) any obligations or liabilities under the Assumed
Contracts relating to the period prior to the Effective Time except insofar as
Buyer receives a Working Capital Credit therefor under Section 2.5(a), (iii) any
claims, litigation, or proceedings relating to the operation of the Stations
prior to the Closing, whether asserted or filed before or after the Effective
Time, (iv) any obligations or liabilities of any Seller under any management
incentive, employee pension, retirement, or other benefit plans, (v) any
obligations or liabilities of any Seller under any collective bargaining
agreements, (vi) any obligation to any employee of the Stations for severance
benefits, vacation time, or sick leave accrued prior to the Closing Date, (vii)
any credit agreements, note purchase agreements, indentures, or other financing
arrangements, other than leases or agreements listed on Schedule 4.7 and
included in the Assumed Contracts, (viii) any agreements entered into other than
in the ordinary course of business of the Stations, or (ix) any obligations or
liabilities caused by, arising out of, or resulting from any action or omission
of any Seller prior to the Closing, and all such obligations and liabilities
shall remain and be the obligations and liabilities solely of Sellers.
SECTION 3 OPTION.
3.1 Grant. Subject to Sections 2.4(f) and (g), ValueVision shall
grant to Buyer at Closing (a) the Spokane Option to purchase the Spokane Option
Shares and (b) the Tallahassee Option to purchase the Tallahassee Option Shares.
3.2 Spokane Option Exercise. Buyer may exercise the Spokane Option
to purchase the Spokane Option Shares only by giving written notice to
ValueVision of its election to exercise said Spokane Option no earlier than (a)
thirty (30) days after the later to occur of (i) the Closing and (ii) the date
on which FCC action on the Spokane Application has become a Final Order (the
"Spokane Option Exercise Date"), and no later than (b) ninety (90) days after
the Spokane Option Exercise Date (the "Spokane Option Expiration Date"). If
Buyer shall not have timely exercised the Spokane Option on or before the
Spokane Option Expiration Date, the Spokane Option shall automatically be and
become null and void and of no further force or effect. Such notice shall
specify a date not more than thirty (30) days after any necessary FCC approval
shall have become a Final Order, on which the closing of the Spokane Option
shall occur and Buyer shall pay to ValueVision an amount of cash, by wire
transfer of immediately available funds, equal to the Exercise Price for the
Spokane Option.
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3.3 Tallahassee Option Exercise. Buyer may exercise the
Tallahassee Option to purchase the Tallahassee Option Shares only by giving
written notice to ValueVision of its election to exercise said Tallahassee
Option no earlier than (a) thirty (30) days after the later to occur of (i) the
Closing and (ii) the date on which FCC action on the Tallahassee Application has
become a Final Order (the "Tallahassee Option Exercise Date"), and no later than
(b) ninety (90) days after the Tallahassee Option Exercise Date (the
"Tallahassee Option Expiration Date"). If Buyer shall not have timely exercised
the Tallahassee Option on or before the Tallahassee Option Expiration Date, the
Tallahassee Option shall automatically be and become null and void and of no
further force or effect. Such notice shall specify a date not more than thirty
(30) days after any necessary FCC approval shall have become a Final Order, on
which the closing of the Tallahassee Option shall occur and Buyer shall pay to
ValueVision an amount of cash, by wire transfer of immediately available funds,
equal to the Exercise Price for the Tallahassee Option.
3.4 Exercise Price. The Exercise Price for the Spokane Option
shall be the Fair Market Value of the Spokane Option Shares on the date Buyer
gives ValueVision written notice of its election to exercise the Spokane Option.
The Exercise Price for the Tallahassee Option shall be the Fair Market Value of
the Tallahassee Option Shares on the date Buyer gives ValueVision written notice
of its election to exercise the Tallahassee Option.
3.5 Determination of Fair Market Value. The Fair Market Value of
the Option Shares shall be determined (a) by mutual agreement of ValueVision and
Buyer or (b) if no such agreement is reached, within ten (10) days of the
relevant date of determination, by arbitration pursuant to Section 13.3 of this
Agreement.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF SELLERS.
Sellers, jointly and severally, represent and warrant to Buyer as
follows:
4.1 Organization, Standing, and Authority. Each of the Sellers,
VVI Spokane, and VVI Tallahassee is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Minnesota. Each
Seller is duly qualified to conduct business as a foreign corporation in each
state in which the nature of its business or the ownership of its assets
requires it to be so qualified. Schedule 4.1 sets forth the states in which the
Sellers are qualified to conduct business relevant to the ownership and
operation of the Assets and the Stations. Each Seller has all requisite
corporate power and authority (a) to own, lease, and use the Assets as now
owned, leased, and used by it, (b) to conduct the business and operations of the
Stations as now conducted, and (c) to execute and deliver this Agreement and the
documents contemplated hereby, and to perform and comply with all of the terms,
covenants, and conditions to be performed and complied with by such Seller
hereunder and thereunder. In addition, ValueVision has all requisite corporate
power and authority to transfer to Buyer the Shares and the Options. ValueVision
owns, directly or indirectly, all of the issued and outstanding shares of each
Seller (other than ValueVision), VVI Spokane and VVI Tallahassee.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by each Seller have been duly
authorized by all necessary actions on the part of such Seller. This Agreement
has been duly executed and delivered by each Seller and
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constitutes the legal, valid, and binding obligation of each Seller, enforceable
against it in accordance with its terms except as the enforceability of this
Agreement may be affected by bankruptcy, insolvency, or similar laws affecting
creditors rights generally and by judicial discretion in the enforcement of
equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
governmental Consents provided for in Section 7.1 and Section 7.8 and the other
Consents listed on Schedule 4.3, the execution, delivery, and performance of
this Agreement and the documents contemplated hereby (with or without the giving
of notice, the lapse of time, or both): (a) do not require the consent of any
third party; (b) will not conflict with any provision of the Articles of
Incorporation or By-Laws of any Seller, VVI Spokane or VVI Tallahassee; (c) will
not conflict with, result in a breach of, or constitute a default under, any
law, judgment, order, ordinance, injunction, decree, rule, regulation, or ruling
of any court or governmental instrumentality; (d) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement (including the Channel 51 Agreement),
instrument, license, or permit to which any Seller, VVI Spokane or VVI
Tallahassee is a party or by which any Seller, VVI Spokane or VVI Tallahassee
may be bound legally; and (e) will not create any claim, liability, mortgage,
lien, pledge, condition, charge, or encumbrance of any nature upon any of the
Shares or the Assets.
4.4 Governmental Licenses.
(a) Schedule 4.4(a) includes a true and complete list of
the Licenses. Sellers have made available to Buyer true and complete copies of
the Licenses (including any amendments and other modifications thereto). The
Licenses have been validly issued, and the Seller designated as such on Schedule
4.4(a) is the authorized legal holder thereof. The Licenses listed on Schedule
4.4(a) comprise all licenses, permits, and other authorizations required from
the FCC and, to each Seller's knowledge, from any other governmental or
regulatory authority for the lawful conduct in all material respects of the
business and operations of the Stations in the manner and to the full extent
they are now conducted, and none of the Licenses is subject to any unusual or
special restriction or condition that could reasonably be expected to limit the
full operation of the Stations as now operated. Sellers have no reason to
believe that, under existing law, rules, regulations, policies, and procedures
of the FCC, any of the Licenses would not be renewed by the FCC or other
granting authority in the ordinary course. Except as set forth in Schedule
4.4(a), the Licenses are in full force and effect. Sellers have timely paid to
the FCC all annual regulatory fees payable with respect to the FCC Licenses.
(b) Schedule 4.4(b) includes a true and complete list,
to each Seller's knowledge, of (i) all cable television systems that carry the
signals of the Stations, (ii) all retransmission consent and other similar
agreements entered into by any Seller with respect to the Stations, and (iii)
all cable television systems to which either Seller has delivered a must carry
notice or retransmission consent notice in accordance with Section 4 of the
Cable Television Consumer Protection and Competition Act of 1992 and the rules
and regulations of the FCC promulgated thereunder.
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4.5 Real Property. Schedule 4.5 contains a complete and accurate
description of all Real Property (including street address, legal description
(where known), owner, and Sellers' use thereof), and all claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges, covenants,
easements, restrictions, encroachments, leases, or encumbrances known to any
Seller.
4.6 Tangible Personal Property. Schedule 4.6 lists all material
items of Tangible Personal Property, to the best of Sellers' knowledge without
inquiry. Except as described in Schedule 4.6, one of the Sellers, as designated
on Schedule 4.6, owns and has good title to each item of Tangible Personal
Property and none of the Tangible Personal Property owned by any Seller is
subject to any security interest, mortgage, pledge, conditional sales agreement,
or other lien or encumbrance, except for liens for current taxes not yet due and
payable.
4.7 Assumed Contracts. Schedule 4.7 is a true and complete list
of all Assumed Contracts except contracts with advertisers for production or the
sale of advertising time on the Stations for cash at rates consistent with past
practices and that may be canceled by Sellers without penalty on not more than
thirty (30) days' notice. Sellers have delivered to Buyer true and complete
copies of all written Assumed Contracts and true and complete written
descriptions of all oral Assumed Contracts (including any amendments and other
modifications to such Contracts). Schedule 4.7 also includes a schedule
summarizing as of the date of such schedule all contracts with advertisers for
production or the sale of advertising time on the Stations. Except for the need
to obtain the Consents listed on Schedule 4.3, the Seller that is a party to
each Assumed Contract has full legal power and authority to assign its rights
under such Assumed Contracts to Buyer in accordance with this Agreement, and
such assignment will not affect the validity, enforceability, or continuation of
such Assumed Contract.
4.8 Consents. Except for the governmental Consents provided for in
Section 7.1 and Section 7.8 and the other Consents described in Schedule 4.3, to
each Seller's knowledge, no consent, approval, permit, or authorization of, or
declaration to, or filing with any governmental or regulatory authority or any
other third party is required to consummate this Agreement and the transactions
contemplated hereby or to permit Sellers to assign or transfer the Assets, the
Shares, and the Options to Buyer.
4.9 Intangibles. Schedule 4.9 is a true and complete list of all
Intangibles (exclusive of Licenses listed in Schedule 4.4(a)) that are used in
the conduct of the business and operations of the Stations as now conducted.
Sellers have made available to Buyer copies of all documents establishing or
evidencing the Intangibles listed on Schedule 4.9. There is no claim or action
pending, or to the knowledge of any Seller threatened, relating to the Stations
with respect to any actual or alleged infringement by any Seller upon any
trademark, trade name, service xxxx, service name, copyright, patent, patent
application, know-how, method, or process owned by any other Person.
4.10 Financial Statements. Sellers have furnished Buyer with true
and complete copies of the unaudited financial statements of Station KBGE-TV
containing balance sheets as of January 31, 1997, and August 31, 1997, and a
statement of operations for the seven (7) months ended August 31, 1997
(collectively, the "Financial Statements").
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4.11 Insurance. Schedule 4.11 is a true and complete list of all
insurance policies of any Seller that insure any part of the Assets or the
business of the Stations. All policies of insurance listed in Schedule 4.11 are
in full force and effect.
4.12 Reports. All reporting requirements of the FCC and, to each
Seller's knowledge, any other governmental authority with respect to the
Stations have been complied with by Sellers in all material respects.
4.13 Labor Relations. No labor union or other collective bargaining
unit represents or claims to represent any of the employees of the Stations. To
each Seller's knowledge, there is no union campaign being conducted to solicit
cards from employees to authorize a union to request a National Labor Relations
Board certification election with respect to any employees at the Station.
4.14 Taxes. Each Seller has filed or caused to be filed all
federal, state, county, local, or city tax returns that are required to be filed
with respect to the ownership and operation of the Stations. ValueVision has
filed or caused to be filed all federal, state, county, local or city tax
returns that are required to be filed with respect to the ownership of the
shares of capital stock of VVI Spokane and VVI Tallahassee. Each Seller has paid
or caused to be paid all taxes shown on those returns or on any tax assessment
received by it to the extent that such taxes have become due. There are no
legal, administrative, or tax proceedings pursuant to which any Seller is or
could be made liable for any taxes, penalties, interest, or other charges, the
liability for which could extend to Buyer as transferee of the business of the
Stations or as transferee of the Shares, and no event has occurred that could
impose on Buyer any transferee liability for any taxes, penalties, or interest
due or to become due from any Seller.
4.15 Claims and Legal Actions. Except as disclosed on Schedule
4.15 and except for any FCC rulemaking proceedings generally affecting the
television broadcasting industry and not particular to any Seller, there is no
claim, legal action, counterclaim, suit, arbitration, or other legal,
administrative, or tax proceeding, nor any order, decree, or judgment, in
progress or pending, or to the knowledge of any Seller threatened, against or
relating to any Seller with respect to its ownership of the Shares or its
ownership or operation of any Station or otherwise relating to the Shares, the
Options, the Assets or the business or operations of the Stations, nor does any
Seller know of any basis for the same.
4.16 Compliance with Licenses. Each Seller has complied in all
material respects with the Licenses.
4.17 Conduct of Business in Ordinary Course. With respect to
Station KBGE-TV and Channel 43, since August 31, 1997, and with respect to
Channel 51, since the date of the Channel 51 Closing, the Sellers have or will
have conducted the business and operations of each Station only in the ordinary
course and, except as disclosed in Schedule 4.17:
(a) No Station has suffered any material damage,
destruction, or loss affecting any assets or transferred any material assets
used or useful in the conduct of the business of the Station;
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(b) No Station has suffered any material write-down of
the value of any Assets; and
(c) No Station has transferred or granted any right
under, or entered into any settlement regarding the breach or infringement of,
any license, patent, copyright, trademark, trade name, franchise, or similar
right, or modified any existing right relating to any Station.
4.18 Transactions with Affiliates. Except as set forth on Schedule
4.18, no Seller has been involved in any business arrangement or relationship
relating to any Station with any Affiliate of any Seller (other than another
Seller), and no Affiliate of any Seller (other than another Seller) owns any
property or right, tangible or intangible, that is used in the business of the
Stations.
4.19 No Broker. Except as set forth on Schedule 4.19, no Seller
has employed, nor obligated itself or Buyer to compensate, any finder, broker,
advisor or similar Person in connection with the transactions contemplated by
this Agreement.
4.20 Title to Shares. ValueVision is the holder of record and owns
beneficially that number of shares of the capital stock of each of VVI Spokane
and VVI Tallahassee set forth on Schedule 4.20, free and clear of all liens.
That number of shares of the capital stock of each of VVI Spokane and VVI
Tallahassee set forth on Schedule 4.20 represents all of the issued and
outstanding capital stock of each of VVI Spokane and VVI Tallahassee.
ValueVision has delivered to Buyer true and complete copies of the charter and
bylaws for each of VVI Spokane and VVI Tallahassee. The authorized capital
structure of VVI Spokane is as follows: 10,000 shares of capital stock, par
value $.01 per share, of which 1,000 shares are issued and outstanding. The
authorized capital structure of VVI Tallahassee is as follows: 10,000 shares of
capital stock, par value $.01 per share, of which 1,000 shares are issued and
outstanding. At the Closing, ValueVision will deliver to Buyer good and
marketable title to the Shares, free and clear of any lien, security interest,
mortgage, pledge, conditional sales agreement or other encumbrance. Other than
this Agreement, none of the Shares are subject to any voting trust agreement or
other contract, agreement, arrangement, commitment or understanding.
4.21 Delivery of Channel 51 Agreement. ValueVision has delivered to
Buyer a true and complete copy of the Channel 51 Agreement. To the best
knowledge of ValueVision, the representations and warranties of VVILP contained
in the Channel 51 Agreement are true and correct in all material respects as of
the date hereof.
4.22 Disclaimer of Warranties. Except for the foregoing
representations and warranties specifically set forth in Section 4.1 through
Section 4.21 of this Agreement and the representations and warranties in the
certificate delivered by Sellers pursuant to Section 9.2(f), the Assets, the
Shares, and the Options are being transferred by Sellers to Buyer on an
"as-is-where-is" basis without any representation or warranty, all other
representations and warranties of any kind, either express or implied, including
warranties of fitness, being hereby expressly disclaimed.
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SECTION 5 REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Sellers as follows:
5.1 Organization, Standing, and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and, except as otherwise not required due to Sections
2.4(b)-(h), on the Closing Date, Buyer (or its wholly owned subsidiary or
subsidiaries, to be designated by Buyer prior to Closing) will be duly qualified
to conduct business in the States of Florida, Washington, Indiana, and Oregon.
Buyer has all requisite corporate power and authority to execute and deliver
this Agreement and the documents contemplated hereby, and to perform and comply
with all of the terms, covenants, and conditions to be performed and complied
with by it hereunder and thereunder.
5.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by Buyer has been duly authorized by all
necessary actions on the part of Buyer. This Agreement has been duly executed
and delivered by Buyer and constitutes the legal, valid, and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by judicial discretion in
the enforcement of equitable remedies.
5.3 Absence of Conflicting Agreements. Subject to obtaining the
governmental Consents provided for in Section 7.1 and Section 7.8 and the other
Consents listed on Schedule 5.3, the execution, delivery, and performance by
Buyer of this Agreement and the documents contemplated hereby (with or without
the giving of notice, the lapse of time, or both): (a) do not require the
consent of any third party; (b) will not conflict with the Certificate of
Incorporation or By-Laws of Buyer; (c) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (d) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or accelerate
or permit the acceleration of any performance required by the terms of, any
agreement, instrument, license, or permit to which Buyer is a party or by which
Buyer may be bound legally, such that Buyer could not acquire the Assets, the
Shares, or the Options, operate the Assets, or could not perform its obligations
hereunder.
5.4 Licensee Qualifications. To Buyer's knowledge, there is no
fact that would, under the Communications Act of 1934, as amended, and the rules
and regulations of the FCC, each as in effect on the date of this Agreement,
disqualify Buyer from being the licensee of any Station. Buyer has sufficient
net liquid assets on hand or available from committed sources to consummate the
transactions contemplated by this Agreement and to operate the Stations for
three (3) months after Closing and is otherwise financially qualified under the
Communications Act of 1934, as amended, and the rules and regulations of the
FCC, each as in effect on the date of this Agreement, to be the licensee of the
Stations.
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5.5 No Broker. Except as set forth in Schedule 5.5, Buyer has not
employed, nor obligated itself or any Seller to compensate, any finder, broker,
advisor or similar Person in connection with the transactions contemplated by
this Agreement.
5.6 Investment Representation. Buyer is acquiring the Shares and
the Options, and, if Buyer exercises the Options, Buyer will acquire the Option
Shares, for Buyer's own account for investment and not as a nominee or agent for
any other Person. Buyer does not intend to distribute or resell such securities
or any part thereof in any transactions that would be in violation of the
securities laws of the United States or any state thereof. Buyer is an
"accredited investor" within the meaning of Rule 501 under the Securities Act.
5.7 Acknowledgment of "As-Is-Where-Is" Sale. Buyer acknowledges
and agrees that it is purchasing and accepting the Assets, the Shares, and the
Options, and, if Buyer exercises the Options, will purchase and accept the
Option Shares, on an "as-is-where-is" basis, except for the representations and
warranties specifically set forth in Section 4.1 through Section 4.21 of this
Agreement and the representations and warranties in the certificate delivered by
Sellers pursuant to Section 9.2(f). To the fullest extent permitted by law,
Buyer hereby unconditionally and irrevocably waives and releases any and all
actual or potential claims that it might have against any Seller regarding any
form of warranty, express or implied, of any kind or type, including warranties
of fitness, relating to or in connection with the purchase of the Assets, the
Shares and the Options, other than the representations and warranties
specifically set forth in Section 4.1 through Section 4.21 of this Agreement and
the representations and warranties in the certificate delivered by Sellers
pursuant to Section 9.2(f). This waiver and release is, to the fullest extent
permitted by law, absolute, complete, total, and unlimited in every way and
includes, to the fullest extent permitted by law, a waiver and release of
express warranties (other than the representations and warranties specifically
set forth in Section 4.1 through Section 4.21 of this Agreement and the
representations and warranties in the certificate delivered by Sellers pursuant
to Section 9.2(f)), implied warranties, warranties of fitness for a particular
use, warranties of merchantability, warranties of habitability, claims based on
apparent or latent defects or deficiencies, whether now or hereafter existing,
and strict liability rights and claims of every kind and type (including claims
regarding defects that were not or are not discoverable and all other extant or
later created or conceived of strict liability or strict liability-type claims
and rights).
SECTION 6 OPERATIONS OF THE STATIONS PRIOR TO CLOSING.
Between the date of this Agreement and the Closing Date, Sellers shall
comply, and ValueVision shall cause each Seller to comply, with the covenants in
this Section 6 with respect to the Stations owned by Sellers:
6.1 Generally. Except as otherwise provided in this Agreement,
Sellers shall operate the Stations diligently in the ordinary course of business
in accordance with past practices (except where such conduct would conflict with
the following covenants or with Sellers' other obligations under this
Agreement).
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6.2 Contracts. Sellers will not amend or terminate any Material
Contract (or waive any material right thereunder), or enter into any contract or
commitment relating to the Stations, the Assets, the Shares, or the Options or
incur any obligation (including obligations relating to the borrowing of money
or the guaranteeing of indebtedness and obligations arising from the amendment
of any existing Contract, regardless whether such Contract is a Material
Contract) that will be binding on Buyer after Closing, except for (a) cash time
sales agreements and production agreements made in the ordinary course of
business consistent with Sellers' past practices, and (b) other contracts
(excluding film or programming license agreements and trade or barter
agreements) entered into in the ordinary course of business consistent with
Sellers' past practices that do not involve consideration, in the aggregate, in
excess of $25,000 measured at Closing. Prior to the Closing Date, Sellers shall
deliver to Buyer a list of all Contracts entered into between the date of this
Agreement and the Closing Date and shall make available to Buyer copies of such
Contracts.
6.3 Disposition of Assets. No Seller shall sell, assign, lease, or
otherwise transfer or dispose of any assets that are used or useful in
connection with the conduct of the business or operations of the Stations,
except for (a) dispositions of assets in connection with the acquisition of
replacement property of equivalent kind and value and (b) the assignment and
transfer of assets and liabilities between Sellers.
6.4 Encumbrances. No Seller shall create, assume, or permit to
exist any claim, liability, security interest, mortgage, lien, pledge,
condition, charge, covenant, easement, restriction, encroachment, lease, or
encumbrance of any nature upon the Shares or the Assets, except for (a) liens
disclosed on Schedule 4.5, Schedule 4.6 or Schedule 4.20 that will be removed
prior to the Closing Date, and (b) Permitted Encumbrances.
6.5 Licenses. No Seller shall cause or permit, by any act or
failure to act, any of the Licenses required to be listed on Schedule 4.4 to
expire or to be revoked, suspended, or modified, or take any action that could
reasonably be expected to cause the FCC or any other governmental authority to
institute proceedings for the suspension, revocation, or material adverse
modification of any of the Licenses. Sellers shall use reasonable efforts to
prosecute (a) any applications to any governmental authority necessary for the
operation of the Stations and (b) any must-carry proceedings described on
Schedule 6.5.
6.6 Obligations. Sellers shall pay all obligations relating to the
Stations as they become due, consistent with past practices, so that all such
obligations shall be current as of the Closing Date.
6.7 Exclusivity.
(a) Neither any Seller nor any officer, director,
representative, or agent of any Seller shall, directly or indirectly, (i)
solicit, initiate, or encourage the submission of any proposal or offer relating
to (A) any liquidation, dissolution, or recapitalization of any Seller, (B) any
merger or consolidation of any Seller with any other Person, (C) any acquisition
or purchase of securities or assets by any Person from any Seller, or (D) any
similar transaction or business combination involving any Seller, or (ii)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner
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any effort or attempt by any Person to do or seek any of the foregoing. Sellers
shall notify Buyer as soon as practicable if any Person makes any proposal with
respect to any of the foregoing.
(b) Section 6.7(a) shall not apply to any action by any
Seller or any officer, director, representative, or agent of any Seller with
respect to (i) the assignment and transfer by any Seller of all its assets and
liabilities to another Seller, or (ii) so long as ValueVision's ability to
perform its obligations under this Agreement is not adversely affected, any
recapitalization of ValueVision, any merger or consolidation of ValueVision with
any other Person, or any acquisition or purchase of securities or assets (other
than the Assets) by any Person from ValueVision.
6.8 Access to Information.
(a) Each Seller shall give Buyer and its counsel,
accountants, engineers, and other authorized representatives reasonable access
to the Assets and to all other books, records, and documents relating to the
Shares and the Stations for the purpose of audit and inspection, and will
furnish or cause to be furnished to Buyer or its authorized representatives all
information with respect to the affairs and business of the Stations that Buyer
may reasonably request (including any financial reports and operations reports
produced with respect to the affairs and business of VVI Spokane, VVI
Tallahassee and the Stations, a list of all employees of the Stations and a
description of their base compensation).
(b) Without limiting the generality of the foregoing, Sellers
shall give Buyer and its counsel, accountants, and other authorized
representatives reasonable access to Sellers' financial records relating to the
operations of the Stations and the Stations' employees, counsel, accountants,
and other representatives for the purpose of preparing and auditing such
financial statements as Buyer determines, in its reasonable judgment, are
required or advisable to comply with federal or state securities laws and the
rules and regulations of securities markets as a result of the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby. Sellers agree to provide financial statements concerning the operations
of the Stations, reviewed by Sellers' accountants, containing reasonably
requested customary representations; provided, however, that the parties hereto
agree that Buyer shall have no right under any circumstance to delay the Closing
or terminate this Agreement on account of the information contained in any such
financial statement or the inability of Sellers or their accountants in good
faith to make any representation requested by Buyer. The preparation and
auditing of any financial statements pursuant to this Section 6.8(b) shall be at
Buyer's sole cost and expense.
6.9 Maintenance of Assets. Sellers shall maintain all of the
Assets in their condition on the date of this Agreement (ordinary wear and tear
excepted), and use, operate, and maintain all of the Assets in a reasonable
manner. Sellers shall maintain inventories of spare parts and expendable
supplies at levels consistent with past practices. If any insured or indemnified
loss, damage, impairment, confiscation, or condemnation of or to any of the
Assets occurs, Sellers shall repair, replace, or restore the Assets to their
prior condition as soon thereafter as possible, and Sellers shall use the
proceeds of any claim under any property damage insurance policy or other
recovery solely to repair, replace, or restore any of the Assets that are lost,
damaged, impaired, or destroyed.
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6.10 Insurance. Sellers shall maintain the existing insurance
policies on the Stations and the Assets.
6.11 Consents. Sellers shall use their respective reasonable
efforts to obtain all Consents, without any change in the terms or conditions of
any Assumed Contract or License that could reasonably be expected to be less
advantageous to Buyer than those pertaining under the Assumed Contract or
License as in effect on the date of this Agreement. Sellers shall request
estoppel certificates from the lessors of all leasehold and subleasehold
interests included in the Real Property, consents of such lessors to the
collateral assignment by Buyer to its lenders of such leasehold and subleasehold
interests, and estoppel certificates of contracting parties to all Material
Contracts. Sellers shall promptly advise Buyer of any difficulties experienced
in obtaining any of the Consents and of any conditions proposed, considered, or
requested for any of the Consents.
6.12 Books and Records. Each Seller shall maintain its books and
records relating to each Station, VVI Spokane and VVI Tallahassee in accordance
with past practices.
6.13 Notification. Sellers shall promptly notify Buyer in writing
of any material change in any of the information contained in Sellers'
representations and warranties contained in Section 4 of this Agreement.
6.14 Financial Information. Sellers shall furnish to Buyer within
forty-five (45) days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense and a balance
sheet for and as of the end of such month for Station KBGE-TV. All financial
information delivered by Sellers to Buyer pursuant to this Section shall be
prepared from the books and records of Sellers in accordance with generally
accepted accounting principles consistently applied, shall accurately reflect
the books, records, and accounts of the Stations, shall be complete and correct
in all material respects, and shall present fairly the financial condition of
the Stations as at their respective dates and the results of operations for the
periods then ended.
6.15 Compliance with Laws. Each Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership of the Shares and the ownership and operation of the Stations.
SECTION 7 SPECIAL COVENANTS AND AGREEMENTS.
7.1 FCC Consents.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Within five (5) business days after the date of this
Agreement, Sellers and/or Buyer, as the case may be, shall (i) prepare and file
with the FCC appropriate applications for all FCC Consents that may be
necessary; (ii) to the extent necessary, use its best efforts to file all
applications for FCC Consent necessary to consummate the Channel 51 Closing; and
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(iii) unless such amendments have already been filed, file with the FCC
appropriate application amendments to designate VVI Spokane as the applicant
for the Spokane Application and VVI Tallahassee as the applicant for the
Tallahassee Application. The parties shall prosecute the foregoing applications
with all reasonable diligence and otherwise use their reasonable efforts to
obtain a grant of the applications, as expeditiously as practicable. Each party
agrees to comply with any condition imposed on it by the FCC Consent. Without
limitation of the foregoing, Buyer agrees to divest any interest and terminate
or modify any time brokerage or other agreement as may be required by FCC
rules, regulations, and policies (now or as they may hereafter be modified) to
permit Buyer to acquire the Stations.
(c) In accordance with Section 73.3517(a) of the FCC's
rules, Buyer, at its sole expense, shall prepare and, as soon as is reasonably
practicable after the date of this Agreement, shall file with the FCC a
contingent Form 301 construction permit application for Station KBGE-TV (the
"301 Application"). The 301 Application shall be prepared in accordance with FCC
rules, regulations, and policies and sound engineering practices, and Buyer
shall use its best efforts to obtain FCC approval thereof. Buyer shall also make
reasonable efforts to prepare and file promptly any amendments to such 301
Application as may be requested by the FCC or as may be necessary to secure FCC
approval for a site having an Acceptable Power Level.
(d) If Buyer's 301 Application is denied by the FCC,
Buyer shall be under no further obligation to seek the approval of the FCC for a
construction permit application for Station KBGE-TV; provided, however, that if
Buyer or any Transferee shall file any Form 301 application that would improve
the predicted coverage of Station KBGE-TV at an Acceptable Power Level within
twenty (20) years of the date of this Agreement, Buyer or such Transferee shall
pay to Sellers the portion of the Purchase Price payable to Sellers pursuant to
Section 2.4(a)(ii) of this Agreement within fifteen (15) business days of the
date such application is granted (the "Improved Coverage Date"); and provided
further that Buyer and its successors in interest hereby irrevocably and
unconditionally guarantee to Sellers the obligations of any Transferee pursuant
to this Section 7.1(d).
(e) For purposes of this Section 7.1, the requirement of
an Acceptable Power Level shall be deemed to be satisfied by any grant of
authority (i) of a site located within a radius of five (5) miles or less from
the building currently known as Columbia SeaFirst Center, situated at 000 Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx (the "Seafirst Building") having an effective
radiated power level of not less than 500,000 xxxxx or (ii) of a site located
more than five (5) miles from the Seafirst Building having an effective radiated
power level of not less than 1,500,000 xxxxx.
(f) Buyer, at its sole expense, shall prepare and within
180 days after the Closing Date or the grant of the 301 Application, whichever
is later, file with the FCC the 302 Application for Station KBGE-TV.
(g) Time shall be deemed to be of the essence with
respect to each of Buyer's obligations sets forth in this Section 7.1.
7.2 Control of the Stations. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of any
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Station; such operations, including complete control and supervision of all of
the Stations' programs, employees, and policies, shall be the sole
responsibility of Sellers (or their current licensee, as the case may be) until
the Closing.
7.3 Risk of Loss.
(a) The risk of any loss, damage or impairment,
confiscation, or condemnation of any of the Assets from any cause shall be borne
by Sellers at all times prior to the completion of the Closing, except that
Buyer will be required to purchase the Assets notwithstanding any such loss,
damage or impairment, confiscation, or condemnation if the conditions contained
in Section 8.1 to the obligations of Buyer at the Closing are nonetheless
satisfied.
(b) In the event of any damage or destruction of the
Assets described above, if the damaged or destroyed Assets have not been
restored or replaced prior to the Closing Date, Sellers shall deliver to Buyer
all insurance proceeds received in connection with such damage or destruction of
the Assets to the extent of the costs and expenses arising in connection with
such restoration and replacement.
7.4 Confidentiality. (a) Except as necessary for the consummation
of the transactions contemplated by this Agreement, including Buyer's obtaining
of financing related hereto, and except as and to the extent required by law,
including disclosure requirements of federal or state securities laws and rules
and regulations of securities markets, each party will keep confidential any
information obtained from any other party in connection with the transactions
contemplated by this Agreement. If this Agreement is terminated, each party will
return to any other party that furnished it with information in connection with
the transactions contemplated by this Agreement all such information.
(b) No party shall publish any press release or make any
other public announcement concerning this Agreement or the transactions
contemplated hereby without the prior written consent of each other party, which
shall not be withheld unreasonably; provided, however, that nothing contained in
this Agreement shall prevent any party, after notification to each other party,
from making any filings with governmental authorities that, in its judgment, may
be required or advisable in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
7.5 Cooperation. Each party hereto shall cooperate fully with each
other party and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and the parties hereto shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their reasonable efforts to consummate the
transactions contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, and except as otherwise expressly
provided in this Agreement, (a) Buyer shall have no obligation to expend funds
to obtain any of the Consents (other than any fee payable to the FCC in
connection with the filing of the applications for FCC Consents, the 301
Application, and the 302 Application, and any fee imposed by the FTC in
connection with filings made pursuant to the HSR Act, in each case to the extent
provided in Section 13.1, and
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any expenses necessary to file and prosecute successfully the 301 Application
and the 302 Application), and (b) Sellers shall have no obligation to expend
funds to obtain any of the Consents (other than any fee payable to the FCC in
connection with the filing of the applications for FCC Consent or for the
amendments to the Spokane Application and the Tallahassee Application set forth
in Section 7.1(b)(iii), and any fee imposed by the FTC in connection with
filings made pursuant to the HSR Act, in each case to the extent provided in
Section 13.1).
7.6 Access to Books and Records. Each Seller shall provide Buyer
access and the right to copy for a period of two (2) years from the Closing Date
any books and records relating to the Shares and the Assets but not included in
the Assets. Buyer shall provide Sellers access and the right to copy for a
period of two (2) years after the Closing Date any books and records relating to
the Assets that are included in the Assets.
7.7 [Intentionally omitted].
7.8 HSR Act Filing. ValueVision and Buyer agree to (a) file, or
cause to be filed, with the U.S. Department of Justice ("DOJ") and Federal Trade
Commission ("FTC") all filings, if any, that are required in connection with the
transactions contemplated hereby under the HSR Act within forty-five (45) days
of the date of this Agreement; (b) submit to the other party, prior to filing,
their respective HSR Act filings to be made hereunder, and to discuss with the
other any comments the reviewing party may have; (c) cooperate with each other
in connection with such HSR Act filings, which cooperation shall include
furnishing the other with any information or documents that may be reasonably
required in connection with such filings; (d) promptly file, after any request
by the FTC or DOJ, any information or documents requested by the FTC or DOJ; and
(e) furnish each other with any correspondence from or to, and notify each other
of any other communications with, the FTC or DOJ that relates to the
transactions contemplated hereunder, and to the extent practicable, to permit
each other to participate in any conferences with the FTC or DOJ.
7.9 [Intentionally omitted].
7.10 [Intentionally omitted].
7.11 [Intentionally omitted].
7.12 Sales Tax Filings. Sellers shall continue to file state sales
tax returns with respect to the Stations and, to the extent necessary, the
Shares in accordance with all applicable legal requirements and shall
concurrently deliver copies of all such returns to Buyer.
7.13 Accounts Receivable.
(a) Collection. At the Closing, Sellers shall designate
Buyer as their agent to collect any accounts receivable of Sellers in existence
on the Closing Date and arising from the sale of advertising time by the
Stations prior to the Closing Date (the "Stations' Receivables"). Buyer shall
use reasonable efforts to collect the Stations' Receivables during the
"Collection Period," which shall be the period beginning on the Closing Date and
ending on the last day of the fourth calendar month beginning after the Closing
Date. Buyer shall not be obligated to use any extraordinary efforts to collect
any of the Stations' Receivables or to refer any of the Stations' Receivables to
a collection agency or attorney for collection, and Buyer shall not make
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any such referral or compromise, nor settle or adjust the amount of any of the
Stations' Receivables, except with the approval of ValueVision. Sellers and
their respective representatives and agents may undertake to collect any of the
Stations' Receivables during the Collection Period so long as Sellers first
notify and consult with Buyer concerning Sellers' proposed collection efforts.
(b) Payments to ValueVision. On or before the twentieth
day after the end of each full calendar month during the Collection Period,
Buyer shall furnish to ValueVision (i) a list of the amounts collected before
the end of such month with respect to the Stations' Receivables, and (ii) the
amount collected during such month with respect to the Stations' Receivables. On
or before the twentieth day after the end of the Collection Period, Buyer shall
furnish ValueVision with a list of all of the Stations' Receivables that remain
uncollected at the end of the Collection Period.
(c) Further Obligations. After the expiration of the
Collection Period, Buyer shall have no further obligation hereunder other than
to make the payment under Section 7.13(b) and to remit to ValueVision any
payments with respect to any of the Stations' Receivables that Buyer
subsequently receives, and any Seller itself may act to collect any of the
Stations' Receivables that remain uncollected without restriction.
7.14 No Inconsistent Action. Between the date of this Agreement
and the date on which Buyer has fulfilled all of its obligations under Sections
2.4 and 7.1 of this Agreement, no party shall take any action that is
inconsistent with its obligations under this Agreement in any material respect
or that could reasonably be expected to hinder or delay the consummation of any
of the transactions contemplated by this Agreement. Between the date of this
Agreement and the Closing Date, Buyer shall not take any action that would
disqualify Buyer from being the licensee of the Stations under the
Communications Act of 1934, as amended, and the rules and regulations of the
FCC, each as in effect on the date of this Agreement, and Buyer shall further
comply with its obligations set forth in Section 7.1(b) of this Agreement with
respect to any future modifications in FCC rules, regulations, and policies.
7.15 VVI Spokane and VVI Tallahassee. Between the date of this
Agreement and the completion of the Closing, ValueVision shall not (a) split,
combine, divide, distribute, or reclassify any shares of the capital stock of
VVI Spokane or VVI Tallahassee, declare, pay, or set aside for payment any
dividend or other distribution in respect of the capital stock of VVI Spokane or
VVI Tallahassee, or directly or indirectly, redeem, purchase, or otherwise
acquire any shares of the capital stock of VVI Spokane or VVI Tallahassee; (b)
issue, sell, pledge, dispose of, encumber, or deliver (whether through the
issuance or granting of any options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any stock of any class or any securities
convertible into or exercisable or exchangeable for shares of stock of any class
of VVI Spokane or VVI Tallahassee (other than the issuance of certificates in
replacement of lost certificates); or (c) change or amend the charter documents
or bylaws of VVI Spokane or VVI Tallahassee.
7.16 Channel 51 Agreement. ValueVision will not waive any material
right relating to the Assets related to Channel 51 or the Channel 51 Agreement
without the prior written consent of Buyer. ValueVision will not terminate the
Channel 51 Agreement. ValueVision will not
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amend or modify the Channel 51 Agreement in any material respect without the
prior written consent of Buyer. ValueVision shall comply with the terms of the
Channel 51 Agreement and shall use commercially reasonable efforts to enforce
its rights under the Channel 51 Agreement. ValueVision shall (a) as soon as
practicable after the time of receipt or delivery by ValueVision, deliver to
Buyer copies of all notices and other documents received or delivered by
ValueVision under the Channel 51 Agreement, (b) notify Buyer promptly upon
learning of any material breach or default under the Channel 51 Agreement, and
(c) notify Buyer promptly of any amendment or modification to the Channel 51
Agreement or any waiver by ValueVision of any of its rights or of any of the
obligations of Television Interests Company, Inc. under the Channel 51
Agreement.
7.17 Control of Spokane Application and Tallahassee Application
Proceedings. No Seller shall transfer any assets to VVI Spokane or VVI
Tallahassee, or cause VVI Spokane or VVI Tallahassee, or cause VVI Spokane or
VVI Tallahassee to assume any liabilities, after the date of this Agreement
unless such transfer or assumption is necessary or desirable in the reasonable
judgment of ValueVision in connection with the Spokane Application or the
Tallahassee Application. ValueVision shall not permit VVI Spokane or VVI
Tallahassee to dismiss either such application without the consent of Buyer,
which consent shall not be unreasonably withheld. Notwithstanding the foregoing,
the parties hereto agree that (a) if Buyer shall acquire the VVI Spokane Shares
or the Spokane Option at the Closing, Sellers shall not enter into any
settlement agreement with any competing applicants for the facilities requested
in the Spokane Application without the prior written consent of Buyer, which
shall not be unreasonably withheld, conditioned or delayed; and (b) if Buyer
shall acquire the VVI Tallahassee Shares or the Tallahassee Option at the
Closing, Sellers shall not enter into any settlement agreement with any
competing applicants for the facilities requested in the Tallahassee Application
without the prior written consent of Buyer, which shall not be unreasonably
withheld, conditioned or delayed.
SECTION 8 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS AT
CLOSING.
8.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject to the fulfillment prior to or at the Closing Date of
each of the following conditions, any of which (except for the grant of FCC
Consents and with respect to the HSR Act) may be waived by Buyer in writing:
(a) FCC Consents. Except as otherwise provided by
Section 2.4, all of the FCC Consents shall have been granted.
(b) Final Orders. The FCC Consents, to the extent such
are granted, shall have become Final Orders.
(c) HSR Act. The waiting period under the HSR Act shall
have expired or been terminated without action by the DOJ or the FTC to prevent
the Closing.
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(d) Deliveries. Sellers shall have made or stand willing
to make all the deliveries to Buyer set forth in Sections 9.2(b), (c), (e) and
(f).
(e) Judgments. There shall not be in effect any judgment,
decree, or order that will prevent or make unlawful the Closing.
8.2 Conditions to Obligations of Sellers. All obligations of
Sellers at the Closing are subject to the fulfillment prior to or at the Closing
Date of each of the following conditions, any of which (except for the
requirement of FCC Consents and with respect to the HSR Act) may be waived by
ValueVision in writing:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time, and Sellers shall have received a certificate, executed on behalf
of Buyer by an authorized officer, to that effect.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date, and Sellers shall have received a certificate,
executed on behalf of Buyer by an authorized officer, to that effect.
(c) Deliveries. Buyer shall have made or stand
willing to make all the deliveries set forth in Section 9.3.
(d) FCC Consents. Except as otherwise provided by Section
2.4, all of the FCC Consents shall have been granted.
(e) HSR Act. The waiting period under the HSR Act shall
have expired or been terminated without action by the DOJ or the FTC to prevent
the Closing.
(f) Judgments. There shall not be in effect any judgment,
decree, or order that would prevent or make unlawful the Closing.
SECTION 9 CLOSING AND CLOSING DELIVERIES.
9.1 Closing.
(a) Closing Date.
(1) Except as provided in the following sentence
or as otherwise agreed to by Buyer and ValueVision, but subject to Section
9.1(a)(2), the Closing shall take place at 10:00 a.m. on a date, to be set by
Buyer on at least five (5) days' written notice to ValueVision, which shall be
not later than ten (10) business days following the date upon which the last FCC
Consent has become a Final Order. Except as otherwise agreed to by Buyer and
ValueVision, but subject to Section 9.1(a)(2), if Buyer fails to specify the
date for Closing pursuant to the preceding sentence prior to the fifth business
day after the date upon which the last FCC Consent has become a Final Order, the
Closing shall take place on the tenth business day after the date upon which the
last FCC Consent has become a Final Order.
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(2) Notwithstanding Section 9.1(a)(1), if on the
date that, but for this Section 9.1(a)(2), would be the Closing Date pursuant to
Section 9.1(a)(1), the certificate provided to Buyer under Section 9.2(f)
discloses, or the Buyer has notified Sellers in writing that it has determined
that, any representation or warranty of Sellers contained in this Agreement is
not true and complete In A Material Way, or that Sellers have failed to comply
with their obligations and covenants to be performed under this Agreement In A
Material Way, then (A) Sellers shall take any actions necessary or appropriate
to make such representation or warranty true and complete or to comply with such
obligations and covenants, and (B) the Closing shall be postponed for such
period as is required to cure the conditions warranting such postponement.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Xxxxxx & Xxxxxxxxx, PLLC in Washington, D.C., or any other place
that is agreed upon by Buyer and ValueVision.
9.2 Deliveries by Sellers. Prior to or on the Closing Date,
Sellers shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) [Intentionally omitted]
(b) Conveyancing Documents. Duly executed bills of sale,
motor vehicle titles, stock certificates, stock powers, assignments, and other
transfer documents that are sufficient to vest good title to all of the Assets,
the Shares, and the Options in the name of Buyer, free and clear of all claims,
liabilities, security interests, mortgages, liens, pledges, conditions, charges,
covenants, easements, restrictions, encroachments, leases, or encumbrances of
any nature.
(c) Working Capital Payment. Any payment required to be
made by Sellers pursuant to Section 2.5(d)(1).
(d) Estoppel Certificates and Lessor's Consents. Any
estoppel certificates and consents of lessors that Sellers shall have obtained
pursuant to Section 6.11.
(e) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent.
(f) Certificate. A certificate, dated as of the Closing
Date, executed on behalf of each Seller by an authorized officer, certifying
that, except as specifically stated in such certificate, (1) the representations
and warranties of Sellers contained in this Agreement are true and complete in
all material respects as of the Closing Date as though made on and as of that
date, and (2) each Seller has in all material respects performed and complied
with all of its obligations, covenants, and agreements set forth in this
Agreement to be performed and complied with on or prior to the Closing Date;
provided, however, that if such certificate shall disclose, or Buyer shall
notify Sellers in writing prior to the Closing Date that Buyer has determined
that, any representation or warranty of Sellers contained in this Agreement is
not true and complete as of the Closing Date In A Material Way, or that Sellers
have failed to comply with their obligations and covenants to be performed under
this Agreement as of the Closing Date In A Material Way, Buyer may elect to
delay the Closing until such representation or warranty is made materially true
and complete or such obligation or covenant is complied with in all
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material respects, as the case may be, and Buyer's sole remedy hereunder shall
be the remedy of specific performance to compel Sellers to make such
representation or warranty materially true and complete or such obligation or
covenant to be complied with in all material respects. For purposes of this
Agreement, "In A Material Way" shall mean that an expenditure in excess of
$100,000.00 is reasonably estimated to be required to make such representation
or warranty materially true and complete or to materially comply with such
obligation or covenant.
(g) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by any
Seller in connection with its operation of the Stations and included in the
Assets.
9.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Sellers the following, in form and substance reasonably
satisfactory to Sellers and their counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.4.
(b) Working Capital Payment. Any payment required to be
made by Buyer pursuant to Section 2.5(d)(2).
(c) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform each
Seller's obligations under the Licenses and Assumed Contracts to the extent
provided in Section 2.5.
(d) Certificate. A certificate, dated as of the Closing
Date, executed on behalf of Buyer by an authorized officer, certifying that,
except as specifically stated in such certificate, (1) the representations and
warranties of Buyer contained in this Agreement are true and complete in all
material respects as of the Closing Date as though made on and as of that date,
and (2) Buyer has in all material respects performed and complied with all of
its obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date.
SECTION 10 TERMINATION.
10.1 Termination by Sellers. This Agreement may be terminated by
Sellers and the purchase and sale of the Assets, the Shares, and the Options
abandoned, if Sellers are not then in material default under this Agreement,
upon written notice to Buyer, upon the occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Sellers
set forth in this Agreement have not been satisfied or waived in writing by
Sellers.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
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(c) Upset Date. If the Closing shall not have occurred on
or prior to November 14, 1998; provided, however, that Sellers shall not be
entitled to terminate this Agreement pursuant to this Section 10.1(c) if (a) the
Closing shall not have occurred on or prior to November 14, 1998, as a result of
the intentional breach of this Agreement by Sellers or (b) the Closing has been
postponed beyond November 14, 1998 pursuant to Section 9.1(a)(2), but only for
such period as is required to cure the condition warranting such postponement.
(d) Breach. If Buyer is in breach in any material respect
of any of its representations, warranties, or covenants under this Agreement.
(e) Buyer's Wrongful Failure To Close. If Buyer
wrongfully fails to close the purchase and sale of the Assets, the Shares, and
the Options on the Closing Date for any reason, including without limitation,
Buyer's failure to use good faith efforts to satisfy the conditions to Buyer's
obligations set forth in Section 8.1 or to make the deliveries required by
Section 9.3.
10.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Shares, the Options and the Assets
abandoned, if Buyer is not then in material default under this Agreement, upon
written notice to Sellers, upon the occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date, any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date, any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Intentionally omitted.
(d) Material Contracts. If Sellers shall not have
obtained and delivered to Buyer, within ninety (90) days after the date of this
Agreement, with respect to the Material Contracts identified as items 3-7 on
Schedule 4.7 hereto, any Consent required for the assignment to Buyer of such
Material Contract, without any change in the terms or conditions of such
Material Contract that could reasonably be expected to be less advantageous to
Buyer than those pertaining under the Material Contract as in effect on the date
of this Agreement; provided, however, that Buyer may only terminate this
Agreement pursuant to this Section 10.2(d) by delivering written notice to
ValueVision within seven (7) days after the end of such ninety-day period if
such Consent has not been delivered to Buyer.
(e) Upset Date. If Closing shall not have occurred on or
prior to November 14, 1998; provided, however, that Buyer shall not be entitled
to terminate this Agreement pursuant to this Section 10.2(e) if (a) the Closing
shall not have occurred on or prior to November 14, 1998, as a result of the
intentional breach of this Agreement by Buyer or (b) the Closing has been
postponed beyond November 14, 1998 pursuant to Section 9.1(a)(2), but only for
such period as is required to cure the condition warranting such postponement.
10.3 Escrow Deposit; Rights on Termination. Simultaneously with the
execution and delivery of this Agreement, Buyer has deposited with the Escrow
Agent the amount of Three
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Million Dollars ($3,000,000.00) in accordance with the Escrow Agreement. All
funds and documents deposited with the Escrow Agent shall be held and disbursed
in accordance with the terms of the Escrow Agreement and the following
provisions:
(a) At the Closing, Buyer and ValueVision shall jointly
instruct the Escrow Agent to disburse all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, to or at the direction of
ValueVision.
(b) If this Agreement is terminated pursuant to Section
10.1(a), (b), (c) or (d) by Sellers or pursuant to Section 10.2 by Buyer, Buyer
and ValueVision shall jointly instruct the Escrow Agent to disburse all amounts
held by the Escrow Agent pursuant to the Escrow Agreement, including any
interest or other proceeds from the investment of funds held by the Escrow
Agent, to or at the direction of Buyer.
(c) If this Agreement is terminated by Sellers pursuant
to Section 10.1(e), Buyer and ValueVision shall jointly instruct the Escrow
Agent to promptly pay or cause to be paid to Sellers the sum of Three Million
Dollars ($3,000,000.00), which amount shall be liquidated damages and shall
constitute full payment and the exclusive remedy for any damages suffered by
Sellers by reason of such event. Any remaining amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment or funds held by the Escrow Agent shall be disbursed to or at the
direction of Buyer. The parties hereto agree in advance that actual damages
would be difficult to ascertain and that the sum of Three Million Dollars
($3,000,000.00) is a fair and equitable amount to reimburse Sellers for damages
sustained due to such event. Nothing in this Section 10.3 shall operate to limit
Sellers' rights at law or in equity with respect to any breach of this Agreement
by Buyer other than Buyer's obligation to close on the Closing Date.
(d) Termination of this Agreement by Buyer pursuant to
Section 10.2 shall be without liability or obligation on the part of any Seller.
10.4 Specific Performance. The parties recognize that if any
Sellers breach this Agreement and refuse to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled to obtain specific performance of
the terms of this Agreement, which shall be Buyer's exclusive remedy hereunder.
If any action is brought by Buyer to enforce this Agreement, each Seller shall
waive the defense that there is an adequate remedy at law.
10.5 No Special Damages. No party to this Agreement shall be
entitled to any special, incidental, or consequential damages as a result of the
breach of this Agreement by any other party to this Agreement.
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SECTION 11 INDEMNIFICATION.
11.1 Indemnification by Sellers. After the Closing, and regardless
of any investigation made at any time by or on behalf of Buyer or any
information Buyer may have, each Seller hereby agrees, jointly and severally, to
indemnify and hold Buyer and its officers, directors, employees, and
representatives harmless against and with respect to, and shall reimburse Buyer
and its officers, directors, employees, and representatives for:
(a) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Stations prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts that relate
to events occurring prior the Closing Date, or resulting from any other
obligations of any Seller that are not assumed by Buyer pursuant to this
Agreement, including any liabilities arising at any time under any Contract that
is not included in the Assumed Contracts;
(b) Any loss, liability, obligation, or cost resulting
from any agreement with any finder, broker, advisor, or similar Person retained
by or on behalf of any Seller relating to the transactions contemplated by this
Agreement;
(c) Any and all out-of-pocket costs and expenses,
including reasonable legal fees and expenses, incident to any action, suit,
proceeding, claim, demand, assessment, or judgment incident to the foregoing or
incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity.
11.2 Indemnification by Buyer. After the Closing, and regardless of
any investigation made at any time by or on behalf of any Seller or any
information any Seller may have, Buyer hereby agrees, to indemnify and hold each
Seller and its officers, directors, employees, and representatives harmless
against and with respect to, and shall reimburse each Seller and its officers,
directors, employees, and representatives for:
(a) Any and all obligations of such Seller assumed by
Buyer pursuant to this Agreement;
(b) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Stations after the Closing;
(c) Any loss, liability, obligation, or cost resulting
from any agreement with any finder, broker, advisor, or similar Person retained
by or on behalf of Buyer relating to the transactions contemplated by this
Agreement; and
(d) Any and all out-of-pocket costs and expenses,
including reasonable legal fees and expenses, incident to any action, suit,
proceeding, claim, demand, assessment, or judgment incident to the foregoing or
incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity.
11.3 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
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(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty (30) days to make such investigation of the claim as the
indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and its authorized representatives the information relied upon by the Claimant
to substantiate the claim. If the Claimant and the Indemnifying Party agree at
or prior to the expiration of the thirty-day period (or any mutually agreed upon
extension thereof) to the validity and amount of such claim, the Indemnifying
Party shall immediately pay to the Claimant the full amount of the claim. If the
Claimant and the Indemnifying Party do not agree within the thirty-day period
(or any mutually agreed upon extension thereof), the Claimant may seek
appropriate remedy at law or equity or under the arbitration provisions of this
Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, if the
Indemnifying Party notifies the Claimant in writing within ten (10) days of its
receipt of notice from the Claimant of the third-party claim that the
Indemnifying Party acknowledges its potential liability to the Claimant under
this Agreement, the Indemnifying Party shall have the right at its own expense,
to participate in or assume control of the defense of such claim, and the
Claimant shall cooperate fully with the Indemnifying Party, subject to
reimbursement for actual out-of-pocket expenses incurred by the Claimant as the
result of a request by the Indemnifying Party. If the Indemnifying Party elects
to assume control of the defense of any third-party claim, the Claimant shall
have the right to participate in the defense of such claim at its own expense.
If the Indemnifying Party fails timely to notify the Claimant in writing that
the Indemnifying Party acknowledges its potential liability to the Claimant
under this Agreement or if the Indemnifying Party does not elect to assume
control or otherwise participate in the defense of any third-party claim, the
Indemnifying Party shall be bound by the results obtained by the Claimant with
respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
SECTION 12 [Intentionally omitted]
SECTION 13 MISCELLANEOUS.
13.1 Fees and Expenses. ValueVision and Buyer shall each pay
one-half of any filing fees, transfer taxes, recordation taxes, sales taxes,
document stamps, or other charges levied by any governmental entity in
connection with the transactions contemplated by this Agreement, including any
fees payable to the FCC in connection with the filing of the applications for
FCC
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41
Consents and the fee imposed by the FTC in connection with filings made pursuant
to the HSR Act. Except as otherwise provided in this Agreement, each party shall
pay its own expenses incurred in connection with the authorization, preparation,
execution, and performance of this Agreement, including all fees and expenses of
counsel, accountants, agents and representatives, and each party shall be
responsible for all fees or commissions payable to any finder, broker, advisor,
or similar Person retained by or on behalf of such party.
13.2 Notices. All notices, demands, and requests required or permitted
to be given under the provisions of this Agreement shall be (a) in writing, (b)
delivered by telecopier, by personal delivery, by commercial delivery service,
or by registered or certified mail, return receipt requested, (c) deemed to have
been given on the date on which the telecopy is confirmed, the date of personal
delivery, or the date set forth in the records of the delivery service or on the
return receipt, as applicable, and (d) addressed as follows:
If to any Seller: ValueVision International, Inc.
0000 Xxxxx Xxx Xxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopier: 0-000-000-0000
With copies to: Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: M. Xxxxxxx Xxx
Telecopier: 0-000-000-0000
If to Buyer: Xxxxxx Communications Corporation
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Chairman
Telecopier: 0-000-000-0000
With a copy to: Dow, Xxxxxx & Xxxxxxxxx
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxxx, Xx.
Telecopier: 1-202-776-2222
or to any other or additional Persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 13.2.
13.3 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Sellers and
Buyer are unable to resolve by themselves shall be settled by arbitration in
Washington, D.C., by a panel of three arbitrators.
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Sellers and Buyer shall each designate one disinterested arbitrator, and the two
arbitrators so designated shall select the third arbitrator. The persons
selected as arbitrators need not be professional arbitrators, and persons such
as lawyers, accountants, brokers, and bankers shall be acceptable. Before
undertaking to resolve the dispute, each arbitrator shall be duly sworn
faithfully and fairly to hear and examine the matters in controversy and to make
a just award according to the best of his or her understanding. The arbitration
hearing shall be conducted in accordance with the commercial arbitration rules
for large cases of the American Arbitration Association. The written decision of
a majority of the arbitrators shall be final and binding on all Sellers and
Buyer. The costs and expenses of the arbitration proceeding shall be assessed
between Sellers and Buyer in a manner to be decided by a majority of the
arbitrators, and the assessment shall be set forth in the decision and award of
the arbitrators. Judgment on the award, if it is not paid within thirty (30)
days, may be entered in any court having jurisdiction over the matter. No action
at law or suit in equity based upon any claim arising out of or related to this
Agreement shall be instituted in any court by any Seller or Buyer against any
other party except (a) an action to compel arbitration pursuant to this Section
13.3, (b) an action to enforce the award of the arbitration panel rendered in
accordance with this Section, or (c) a suit for specific performance pursuant to
Section 10.5.
13.4 Benefit and Binding Effect. (a) No party may assign any of its
rights, interests or obligations under this Agreement without the prior written
consent of the other parties hereto, except that (i) without the consent of any
Seller, Buyer may collaterally assign its rights, interests and obligations
under this Agreement to its lenders, (ii) without the consent of any Seller,
Buyer may assign its rights, interests and obligations under this Agreement to a
wholly owned subsidiary or subsidiaries of Buyer, and (iii) without the consent
of Buyer, any Seller may assign its rights, interests and obligations under this
Agreement to ValueVision in connection with the assignment of all its assets and
liabilities to ValueVision. If any Seller assigns all its assets to the other or
to ValueVision as contemplated by the preceding sentence and, in connection
therewith, ValueVision assumes all obligations and liabilities of such Seller
under this Agreement, Buyer and Sellers agree to amend this Agreement so as to
eliminate such Seller as a party hereto and to reflect the assumption by
ValueVision of all obligations and liabilities of Seller under this Agreement.
This Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. If Buyer assigns its rights,
interests and obligations under this Agreement to a wholly owned subsidiary or
subsidiaries, Buyer shall contemporaneously execute in writing a guarantee of
such party's or parties' obligations hereunder.
(b) Upon notice by either Seller or Buyer that an
assignment permitted by Section 13.4(a) has occurred, the other party shall
enter into an Amended and Restated Asset and Stock Purchase and Option Grant
Agreement to reflect the new parties hereto as a result of such assignment;
provided that the other party shall not condition its execution of such Amended
and Restated Asset and Stock Purchase and Option Grant Agreement upon the
modification or inclusion of any provision therein. The other party shall
execute any such Amended and Restated Asset and Stock Purchase and Option Grant
Agreement within two (2) business days of
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43
presentation of same by Sellers or Buyer, as the case may be, and any failure or
refusal to do so shall be a material breach of this Agreement.
13.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Sellers, any additional deeds, bills of sale, stock powers, or other transfer
documents that, in the reasonable opinion of Buyer, may be necessary to ensure,
complete, and evidence the full and effective transfer of the Assets, the
Shares, and the Options to Buyer pursuant to this Agreement.
13.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
13.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
13.8 Gender and Number. Words used in this Agreement, regardless of
the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
13.9 Entire Agreement. This Agreement, the Escrow Agreement, the
schedules, hereto, and all documents, certificates, and other documents to be
delivered by the parties pursuant hereto, collectively represent the entire
understanding and agreement between Buyer and Sellers with respect to the
subject matter of this Agreement. This Agreement supersedes all prior
negotiations among Buyer and Sellers and cannot be amended, supplemented, or
changed except by an agreement in writing that makes specific reference to this
Agreement and that is signed by the party against which enforcement of any such
amendment, supplement, or modification is sought.
13.10 Waiver of Compliance: Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition in this
Agreement may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 12.10.
13.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
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44
13.12 Survival of Representations and Warranties. The
representations and warranties of the parties hereto shall be deemed to be
continuing representations and warranties and shall survive the Closing and
shall expire on the first anniversary of the Closing Date.
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45
IN WITNESS WHEREOF, this Agreement has been executed by Sellers and
Buyer as of the date first written above.
VALUEVISION INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------------
Title: Chief Executive Officer
--------------------------------------
VVI SEATTLE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------------
Title: Chief Executive Officer
--------------------------------------
VVILPTV, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------------
Title: Chief Executive Officer
--------------------------------------
VVI SPOKANE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------------
Title: Chief Executive Officer
--------------------------------------
- 00 -
00
XXX XXXXXXXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------------
Title: Chief Executive Officer
--------------------------------------
XXXXXX COMMUNICATIONS
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------------
Title: Chairman
--------------------------------------
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