ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of this 7th
day of October, 1997, by and between RAINBOW BROADCASTING LIMITED
PARTNERSHIP, a Florida limited partnership ("Seller"), and UNITED
TELEVISION, INC., a Delaware corporation ("Buyer").
WHEREAS, Seller owns and operates Television Station WRBW(TV),
Orlando, Florida, together with certain auxiliary facilities
(collectively, the "Station"); and
WHEREAS, Buyer desires to purchase from Seller all the Assets
(as hereinafter defined), and Seller desires to sell all the Assets to
Buyer, all in accordance with and subject to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, and intending
to be legally bound, the parties hereto hereby agree as follows:
1. Definitions and References. As used herein, the following
terms shall have the meanings set forth below, unless the context
otherwise requires:
"Accounts Receivable" means all accounts receivable with respect
to the Station as of the end of the broadcast day immediately
preceding the Closing Date.
"Adjustment Closing" means the post-closing adjustment
arrangements set forth in Section 14.
"Appraisals" shall have the meaning set forth in Section 8.04.
"Assets" shall have the meaning set forth in Section 2.01.
"Assignment of Contracts and Leases" means that certain
Assignment of Contracts and Leases, dated as of the Closing Date and
executed by Seller, substantially in the form attached hereto as
Exhibit A.
"Assignment of FCC Licenses" means that certain Assignment of
FCC Licenses, dated as of the Closing Date and executed by Seller,
substantially in the form attached hereto as Exhibit B.
"Assumption Agreement" means that certain Assumption Agreement
dated the Closing Date and executed by Buyer and Seller, substantially
in the form attached hereto as Exhibit D.
"Xxxx of Sale" means that certain Xxxx of Sale and Assignment of
Assets, dated as of the Closing Date and executed by Seller,
substantially in the form attached hereto as Exhibit C.
"Bohbot Receivable" means the account receivable payable to
Seller by Bohbot.
"Cash Flow" shall mean, with respect to the applicable period,
the Station's operating income plus the Station's program amortization
and depreciation and other non-cash charges, minus its program
payments and non-cash revenues.
"Claims" shall have the meaning specified in Section 17.06.
"Closing" means the closing of the purchase, assignment and sale
of the Assets contemplated hereunder.
"Closing Date " means the time and date on which the Closing
takes place, as established by Section 11.01.
"Communications Act" means the Communications Act of 1934, as
amended.
"Deed" means the general warranty deed of Seller, substantially
in the form attached hereto as Exhibit E.
"Determination Date" means the fifth anniversary of the Closing
Date.
"Encumbrances" mean any mortgages, pledges, liens, claims,
security interests, agreements, restrictions, defects in title,
easements, encumbrances, or charges.
"Excluded Assets" shall have the meaning set forth in Section
2.02.
"Excluded Receivables" mean, collectively, the Bohbot Receivable
and all Accounts Receivable having an age of more than six (6) months.
"Extra Amount" means the amount, if any, by which the Fair
Market Value of the Station on the Determination Date exceeds
$100,000,000.
"Fair Market Value of the Station" shall have the meaning set
forth in Section 8.04.
"FCC" means the Federal Communications Commission.
"FCC Applications" shall have the meaning set forth in Section
5.
"FCC Licenses" shall have the meaning set forth in Section
2.01(c).
"FCC Order" means an order or action or orders or actions of the
FCC, or of the Chief, Mass Media Bureau, acting under delegated
authority, consenting to the assignment to Buyer of the FCC Licenses
for the Station, as proposed in the FCC Applications, without
conditions which are materially adverse to Buyer's operation of the
Station.
"Final Order" means an FCC order or action as to which the time
for filing a request for administrative or judicial review, or for
instituting administrative review sua sponte, shall have expired
without any such filing having been made or notice of such review
having been issued; or, in the event of such filing or review sua
sponte, as to which such filing or review shall have been disposed of
favorably to the grant and the time for seeking further relief with
respect thereto shall have expired without any request for such
further relief having been filed.
"General Partner" means Rainbow Broadcasting Co., Inc., a
Florida corporation, the sole general partner of Seller.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Indemnified Party" shall have the meaning specified in Section
17.05.
"Indemnifying Party" shall have the meaning specified in Section
17.05.
"Intellectual Property" shall have the meaning set forth in
Section 2.01(d).
"Interim Agreements" shall have the meaning set forth in Section
7.01(d).
"Laws" means all applicable common law and any statute, law,
code, ordinance, regulation, rule, resolution, order, determination,
writ, injunction, award (including, without limitation, any award of
any arbitrator), judgments and decrees applicable to the specified
persons or entities and to the businesses and assets thereof
(including, without limitation, Laws relating to securities
registration and regulation; the sale, leasing, ownership or
management of real property; employment practices, terms and
conditions, and wages and hours; building standards, land use and
zoning; safety, health and fire prevention; and environmental
protection, including Environmental Laws).
"Material Adverse Change" shall have the meaning set forth in
Section 9.07.
"Net Trade Obligations" means, as of the Closing Date, the value
of all broadcast time due the Station's trade clients under the Trade-
out Agreements less the value of all property and services due the
Station from such trade clients under the Trade-out Agreements.
"Note" means that certain Promissory Note of Buyer, to be dated
the Determination Date if the Fair Market Value of the Station on the
Determination Date exceeds $100,000,000, in the principal amount of an
amount equal to the Extra Amount, if any, up to a maximum of
$25,000,000, as contemplated by Section 8.04, substantially in the
form of Exhibit F attached hereto.
"Ordinary Course of Business" means, with respect to Seller, the
ordinary course of business consistent with past practices of Seller
in the operation of the Station.
"Plans" shall have the meaning specified in Section 3.15(b).
"Prime Rate" means the rate of interest published from time to
time in The Wall Street Journal listing of "Money Rates," and shall be
the average rate if more than one is quoted. If this index ceases to
be available, an alternate index of similar nature will be selected by
Seller and Buyer.
"Purchase Price" shall have the meaning specified in Section
2.03.
"Purchased Receivables" shall mean all of the Accounts
Receivable except for the Excluded Receivables.
"Real Property" means all realty, towers, fixtures, easements,
rights-of-way, leasehold and other interests in real property,
buildings and improvements owned, leased, occupied or used in the
business and operations of the Station or Seller.
"Station Contracts" shall have the meaning specified in Section
2.01(e).
"Trade-out Agreements" means all contracts and agreements
pursuant to which the Station has sold, traded or bartered commercial
air time on the Station in consideration for any property or services
in lieu of or in addition to cash, excluding, however, contracts or
agreements under which commercial air time availability within a
particular program is exchanged for the provision of such program.
All references to Sections, Exhibits and Schedules are to
Sections of and Exhibits and Schedules to this Agreement.
2. Sale and Purchase of Assets; Excluded Assets; Purchase
Price; Payment of Purchase Price; Assumption of Liabilities.
2.01 Asset Sale. On the basis of the representations,
warranties and agreements contained herein, and subject to the terms
and conditions hereof, upon the Closing, Seller agrees to sell,
assign, transfer, convey and deliver to Buyer, and Buyer agrees to
purchase from Seller, the Station and all real, personal and mixed
assets, rights, benefits and privileges, both tangible and intangible,
wheresoever situated or located, owned, leased, used or held for use
by Seller in connection with the business and operations of the
Station (the "Assets"); but excluding the Excluded Assets described in
Section 2.02. Subject to the provisions of Section 2.02, the Assets
shall include all such assets existing on the date hereof and all such
assets acquired between the date hereof and the Closing Date as
permitted by this Agreement. The Assets shall include, without
limitation, all of Seller's right, title and interest in, to and under
the following:
2.01(a) Real Property. All the Real Property of
Seller including, without limitation, all land, leaseholds, leases,
subleases, easements and other interests of every kind and description
in real property, buildings, structures, fixtures, appurtenances
(including appurtenant rights in and to all streets, roads and public
places, open or proposed), towers and antennae, and other improvements
thereon owned, leased or used by Seller in the business and operations
of the Station, all of which are listed or described in Schedule
2.01(a).
2.01(b) Tangible Personal Property. The furniture,
fixtures, furnishings, machinery, computers, equipment (mobile or
otherwise), inventory, supplies, antenna installations, towers, office
materials and other tangible property of every kind and description
maintained, owned, leased, used, held for use or otherwise held by
Seller in connection with the business and operations of the Station,
including, without limitation, those items described in Schedule
2.01(b).
2.01(c) FCC Licenses. All licenses, permits and other
authorizations issued by the FCC to Seller for the operation of the
Station (the "FCC Licenses"), including without limitation those
listed in Schedule 2.01(c), and all applications therefor, together
with any renewals, extensions or modifications thereof and additions
thereto.
2.01(d) Intellectual Property. All of the service
marks, copyrights, franchises, software, licenses (other than the FCC
Licenses), trademarks, trade names, jingles, slogans, logotypes and
other similar intangible assets maintained, owned, used, held for use
or otherwise held by Seller in connection with the business and
operations of the Station (including any and all applications,
registrations, extensions and renewals relating thereto) (the
"Intellectual Property"), and all of the rights, benefits and
privileges associated therewith including, without limitation, those
set forth and described in Schedule 2.01(d) and the right to use the
call letters for the Station.
2.01(e) Station Contracts. Those program contracts,
trade out agreements (pursuant to which the Station has sold, traded
or bartered commercial air time on the Station in consideration for
any property or services in lieu of or in addition to cash), leases,
network affiliation contracts, and other agreements relating to the
Station listed and described in Schedule 2.01(e) and those contracts,
agreements and leases relating to the Station entered into after the
date hereof which Buyer agrees in writing to assume (collectively, the
"Station Contracts").
2.01(f) Broadcast Time Sales Agreements. All
contracts for the sale of advertising for cash relating to the Station
entered into in the Ordinary Course of Business.
2.01(g) Deposits. All deposits relating to Station
Contracts, and all other deposits set forth on Schedule 2.01(g),
subject to adjustment pursuant to Section 14.
2.01(h) Motor Vehicles. The rights of Seller in all
automotive equipment and motor vehicles, including, without
limitation, those described in Schedule 2.01(h).
2.01(i) Books and Records. All engineering, business
and other books, papers, logs, files and records pertaining to the
business and operation of the Station and Seller, including without
limitation the Station's public inspection files.
2.01(j) Third Party Claims. All rights and claims of
Seller whether mature, contingent or otherwise, against third parties
relating to the Assets or the Station, whether in tort, contract, or
otherwise, including, without limitation, causes of action,
unliquidated rights and claims under or pursuant to all warranties,
representations and guarantees made by manufacturers, suppliers or
vendors, if any.
2.01(k) Goodwill. The business of the Station as a
"going concern," customer relationships and reputation of Seller.
2.01(l) Purchased Receivables. The Purchased
Receivables.
2.02 Excluded Assets. Notwithstanding anything to the contrary
in this Agreement, there shall be excluded from the Assets and
retained by Seller, to the extent in existence at midnight (Eastern
Time) on the date immediately preceding the Closing Date, the
following assets (collectively, the "Excluded Assets"):
2.02(a) Cash. All cash and cash equivalents held by
Seller, bank balances and rights in and to bank accounts of Seller and
marketable and other securities of Seller;
2.02(b) Excluded Receivables; Notes Receivable. The
Excluded Receivables and all notes receivable of Seller;
2.02(c) Insurance Contracts. All contracts of
insurance and all insurance plans;
2.02(d) Employee Benefit Plans. All Plans and the
assets thereof;
2.02(e) Tax Refunds. Any and all claims of Seller
with respect to any tax refunds;
2.02(f) Partnership Records. All of (a) Seller's
partnership records relating to Seller's organization as a limited
partnership, (b) duplicated copies of any books, records, accounts,
checks, payment records, tax records (including payroll, unemployment,
real estate and other tax records) and other similar books, records
and information of Seller relating to Seller's operation or the
business of the Station prior to the Closing, (c) all records prepared
by or on behalf of Seller in connection with the sale of the Station,
and (d) all records and documents relating to any Excluded Assets;
2.02(g) Rights Under Agreement. All of Seller's
rights under or pursuant to this Agreement or any other rights in
favor of Seller pursuant to the other agreements contemplated hereby;
2.02(h) Loan Agreements. Any financing or loan
agreements;
2.02(i) Other Excluded Assets. Those assets set forth
and described on Schedule 2.02(i).
2.03 Purchase Price. For and in consideration of the
conveyances and assignments described herein and in addition to the
assumption of liabilities as set forth in Section 2.05, Buyer agrees
to pay to Seller, and Seller agrees to accept from Buyer, a purchase
price equal to Sixty Million Dollars ($60,000,000), as adjusted by the
net amount of the adjustments provided in Section 14, plus an amount
equal to seventy five percent (75%) of the face value of the Purchased
Receivables (less agency, sales and agency commissions), as
contemplated in Section 13 (the "Purchase Price"). The Purchase Price
shall be payable as described in Section 2.04. The Purchase Price
shall be allocated among the Assets in accordance with Section 12.
2.04 Payment of Purchase Price. At the Closing, Buyer shall
deliver the Purchase Price, as adjusted by the net amount of the
adjustments provided in Section 14, to Seller by wire transfer of
federal funds to an account which will be identified by Seller not
less than three (3) days prior to the Closing Date.
2.05 Assumption of Liabilities. At the Closing, Buyer shall
assume only the following liabilities and obligations of Seller
relating to the Station (the "Assumed Liabilities"): (a) the
liabilities and obligations of Seller arising after the Closing Date
under the leases and Station Contracts set forth and described in
Schedules 2.01(a) and 2.01(e); (b) the liabilities and obligations of
Seller arising after the Closing Date under any contracts for the sale
of advertising for cash entered into by Seller in the Ordinary Course
of Business; (c) the liabilities and obligations of Seller arising
after the Closing Date under any Trade-out Agreements entered into by
Seller in the Ordinary Course of Business; provided, however, that the
value of all broadcast time due the Station's trade clients under such
Trade-out Agreements shall not exceed Two Hundred Fifty Thousand
Dollars ($250,000), and provided further, that Buyer shall not be
obligated to assume Net Trade Obligations under such Trade-out
Agreements that are in excess of twenty percent (20%) of the value of
all property and services due the Station's trade clients under such
Trade-out Agreements; (d) the liabilities and obligations of Seller
arising after the Closing Date under any contracts or agreements (not
required to be listed on the schedules hereto) which do not require
payments of more than $5,000 each or $10,000 in the aggregate; and (e)
the liabilities and obligations of Seller arising after the Closing
Date under any contracts, agreements and leases which are entered into
after the date hereof (in compliance with Section 7 pursuant to
Buyer's written consent) and which are identified in the certificate
referred to in Section 11.02(c). Buyer shall not assume or be deemed
to assume any debts, liabilities or obligations of Seller except as
specified in this Section 2.05. All such assumptions pursuant to this
Section 2.05 shall be subject to Buyer's confirmation with creditors
of existing unperformed obligations.
3. Representations and Warranties by Seller. Seller
represents and warrants to Buyer as follows:
3.01 Organization and Standing. Seller is a limited
partnership duly organized, validly existing and in good standing
under the laws of the State of Florida. Neither the nature of the
business conducted by Seller, nor the character of the properties
owned, leased or otherwise held by Seller makes any such qualification
necessary in any other state, country, territory or jurisdiction.
Seller has the full and unrestricted power and authority, limited
partnership and otherwise, to own, lease and operate the Assets, to
carry on its business as now conducted, and to enter into and perform
the terms of this Agreement, the agreements, and instruments referred
to herein, and the transactions contemplated hereby and thereby.
3.02 Authorization. The execution, delivery and performance of
this Agreement and of the agreements and instruments called for
hereunder, and the consummation of the transactions contemplated
hereby and by such agreements and instruments have been duly and
validly authorized by all necessary actions of Seller and the General
Partner (none of which actions has been modified or rescinded and all
of which actions are in full force and effect). This Agreement
constitutes, and upon execution and delivery each other agreement and
instrument will constitute, a valid and binding agreement and
obligation of Seller, enforceable in accordance with its respective
terms. Except as specified in Section 3.05, the execution, delivery
and performance by Seller of this Agreement and the agreements and
instruments called for hereunder will not require the consent,
approval or authorization of any person, entity or governmental
authority.
3.03 Litigation; Compliance with Law. There is no action,
suit, investigation, claim, arbitration or litigation pending or, so
far as Seller knows, threatened against or involving either Seller,
the Assets, the Station or the Station's business and operations, at
law or in equity, or before or by any court, arbitrator or
governmental authority, and Seller is not operating under or subject
to any order, judgment, decree or injunction of any court, arbitrator
or governmental authority, except for those listed in Schedule 3.03.
So far as Seller knows, Seller has complied and is in compliance in
all material respects with all Laws applicable to Seller, to the
Assets, to the Station and to its business and operations. Seller has
obtained all permits, licenses and approvals (none of which has been
modified or rescinded and all of which are in full force and effect)
from all governmental authorities required in order to conduct the
operations of the Station as presently conducted and to own, use and
maintain the Assets, except as set forth on Schedule 3.03.
3.04 Financial Statements and Condition; Liabilities.
3.04(a) Seller has prepared and furnished to Buyer the
unaudited balance sheets of the Station as of the dates specified on
Schedule 3.04, and the statements of income and changes in financial
position for the periods specified on Schedule 3.04. All of the
financial statements, including, without limitation, the notes
thereto, referred to in this Section or furnished to Buyer after the
date hereof pursuant to this Agreement: (i) are in accordance with
the books and records of the Station; (ii) are true, correct and
complete in all material respects and present fairly the financial
position of the Station as of the respective dates and the results of
operations and changes in cash flow for the respective periods
indicated; and (iii) except as set forth in Schedule 3.04(a), have
been prepared in accordance with generally accepted accounting
principles applied on a basis consistent with prior accounting
periods. The accounts receivable of Seller shown on such balance
sheets have been collected or are collectible in amounts not less than
the amounts thereof carried on the books of Seller, except to the
extent of the allowance for doubtful accounts shown on such balance
sheets, and have been entered into in the ordinary course of business.
3.04(b) Except as reflected in the balance sheets as of
August 31, 1997, including the notes thereto, there exist no
liabilities of the Station, contingent or absolute, matured or
unmatured, known or unknown. Since August 31, 1997, (i) Seller has
not made any contract, agreement or commitment or incurred any
obligation or liability (contingent or otherwise) relating to the
Assets or the Station which is not in the Ordinary Course of Business;
(ii) there has not been any discharge or satisfaction of any
obligation or liability owed to Seller with respect to the Station,
which is not in the Ordinary Course of Business; or (iii) there has
not occurred any loss or material injury to the Assets as the result
of any fire, accident, act of God or the public enemy, or other
casualty, or any adverse material change in the Assets.
3.05 Assets; Consents.
3.05(a) Except for the Excluded Assets, the Assets to be
acquired by Buyer at the Closing constitute all of the real, personal,
and mixed assets, both tangible and intangible, that are used or held
for use in the business and operations of the Station as presently
conducted.
3.05(b) Seller is the sole and exclusive legal and equitable
owner of all right, title and interest in and has good and marketable
title to the Assets, free and clear of any Encumbrances, except for
and subject only to those Encumbrances set forth in Schedule 3.05(b),
which shall be removed prior to or contemporaneously with the Closing
Date.
3.05(c) On the Closing Date, Buyer shall acquire good and
marketable title to, and all right, title and interest in, the Assets,
free and clear of all Encumbrances.
3.05(d) All of the Assets to be transferred hereunder are
transferable by Seller by Seller's sole act and deed, and no consent
on the part of any other person is necessary to validate the transfer
to Buyer, except (i) the FCC Licenses described in Schedule 2.01(c)
are not assignable without the consent of the FCC as provided by law,
(ii) the parties need to file notification pursuant to the HSR Act and
obtain any necessary clearance as contemplated in Section 6, and (iii)
certain of the leases and agreements described in Schedules 2.01(a)
and 2.02(e), as specified in Schedule 3.05(d), may be assigned only
with the consent of third parties.
3.06 Real Property.
3.06(a) Schedule 2.01(a) sets forth a list and description
of all Real Property owned (if any), leased, occupied or used by
Seller or the Station, which list specifies (i) the use made of such
Real Property by Seller in the business and operations of the Station,
and (ii) the owner of each parcel thereof.
3.06(b) Schedule 2.01(a) lists all leases and subleases
pursuant to which any of the Real Property is occupied or used by
Seller (the Leases"). Except as disclosed in Schedule 2.01(a) or
Schedule 2.01(e), there are no leases, employment contracts,
concession contracts or contracts for service or maintenance existing
and relating to or connected with the occupancy or operation of the
Real Property. Seller is the owner and holder of all the leasehold
interests purported to be granted by the Leases. Each of the Leases
is in full force and effect and constitutes a legal, valid and binding
obligation of, and is legally enforceable against, the respective
parties thereto and grants the leasehold interest it purports to
grant. Seller and, to the best of Seller's knowledge, each other
respective party thereto, have complied with all of the material
provisions of each of the Leases and are not in default thereunder in
any material respect, and there has not occurred any event which
(whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute such a default. There
are no offsets or defenses by Seller, or to Seller's knowledge, any
other party, under any of the Leases. There are no amendments or
changes to any of the Leases which would affect the full use and
enjoyment of the leasehold premises.
3.06(c) All buildings, structures, and fixtures on the Real
Property which are occupied or used by Seller are in a condition
adequate for the purposes which they are being used. All Real
Property and such buildings, structures, and fixtures on the Real
Property conform, including usage by Seller, with all material
contractual requirements and building, zoning, and other Laws
pertaining to or affecting such Real Property. Except as set forth on
Schedule 3.06(c), the transmitting facilities of the Station and all
other related buildings, fixtures, structures and appurtenances are
located entirely within the Real Property and related easements.
3.06(d) None of the Leases or, to the best of Seller's
knowledge, the Real Property, is subject to any contract or, to
Seller's knowledge, other restriction of any nature whatsoever
(recorded or unrecorded) preventing or limiting Seller's right to
convey or to use it (except for any third party consents which may be
required to assign the Leases to Buyer). Except as set forth in
Schedule 3.06(d), the assignment to Buyer of any Lease to which Seller
is a party as tenant will not permit the landlord to accelerate the
rent, cause the Lease terms to be renegotiated, or constitute a
default under the Lease.
3.06(e) To the best of Seller's knowledge, no portion of the
Real Property or any building, structure, fixture or improvement
thereon is the subject of, or affected by, any condemnation, eminent
domain or inverse condemnation proceeding currently instituted or
pending, and Seller has no knowledge that any of the foregoing are, or
will be, the subject of, or affected by, any such proceeding.
3.06(f) On the Closing Date, no assets used in the business
and operations of the Station will be located on any real property not
included in the Real Property described on Schedule 2.01(a) (except
for the Excluded Assets).
3.07 Condition of Tangible Assets. All tangible Assets are in
good operating condition and repair for equipment of its age and
usage, ordinary wear and tear excepted, and are suitable, adequate and
fit for the uses for which they are intended or are being used; and
the present use of such Assets do not violate in any material respect
any applicable licenses or any other Laws.
3.08 Intellectual Property. Schedule 2.01(d) contains a true
and complete listing of all Intellectual Property owned or licensed by
or registered in the name of Seller and used or held for use in the
business and operations of the Station, other than the FCC Licenses,
all of which are transferable to Buyer by the sole act and deed of
Seller; and no consent on the part of any other person is necessary to
validate the transfer to Buyer, except as set forth on Schedule
2.01(d). Seller pays no royalty to anyone under any of the foregoing
and has the right to bring action for the infringement thereof.
Seller does not have any knowledge nor has Seller received any notice
to the effect that any service rendered by Seller relating to the
business of the Station may infringe on any trademark, service xxxx,
trade name, copyright, patent, trade secret or legally protectable
right of another.
3.09 FCC Matters.
3.09(a) Schedule 2.01(c) contains a true and complete list
of the FCC Licenses for the conduct of the business and operations of
the Station in the manner and to the full extent they are presently
conducted. Seller is the authorized legal holder of the FCC Licenses
and the FCC Licenses are valid and in full force and effect through
the dates set forth on Schedule 2.01(c). The operations of the
Station are in accordance with the FCC Licenses.
3.09(b) Except as set forth in Schedule 3.09(b) and except
for actions or proceedings affecting television stations generally,
(i) no application, action, complaint, petition, notice of violation,
or proceeding is pending or, to Seller's knowledge, threatened before
the FCC relating to the business or operations of the Station and (ii)
to Seller's knowledge, no investigation is pending or threatened
before the FCC relating to the business or operations of the Station.
Except as set forth in Schedule 3.09(b), no application, action,
complaint, petition, notice of violation, or proceeding is pending or,
to Seller's knowledge, threatened, and to Seller's knowledge, there
has been no act or omission of Seller or the General Partner or any of
the General Partner's shareholders, officers, directors, agents or
employees, which may result in the revocation, modification, non-
renewal or suspension of any of the FCC Licenses, the denial of any
pending applications, the issuance of any cease and desist order, the
imposition of any administrative actions by the FCC with respect to
the FCC Licenses or which may affect Buyer's ability to continue to
operate the Station as it is currently being operated.
3.09(c) The Station, its transmitting and studio equipment
are in and have been operated in compliance in all material respects
with the rules, regulations and policies of the FCC. Seller has
complied in all material respects with all requirements of the FCC and
the Federal Aviation Administration with respect to the construction
and/or any alteration of Seller's antenna structures, except as set
forth in Schedule 3.09(b).
3.09(d) Except as set forth in Schedule 3.09(b),
Seller knows of no facts, conditions or events relating to Seller or
the Station that might cause the FCC to deny consent to the assignment
of the FCC Licenses as provided for in this Agreement.
3.10 Reports and Records. All returns, reports and statements
relating to the Station currently required to be filed by Seller with
the FCC or any other governmental instrumentality have been filed and
are true, correct and complete in all material respects. All such
reports, returns and statements shall continue to be filed on a
current basis until the Closing Date, and will be true, correct, and
complete in all material respects. All documents required by the
FCC's rules to be placed in the Station's public files have been
placed and are being held in such files. All logs and business
records of every type and nature relating to the business and
operations of the Station, including but not limited to political and
public record files, program, operating and maintenance logs,
equipment performance measurements, policies or evidence of insurance,
licenses, payroll, social security and withholding tax returns,
operator agreements and other records pertaining to the business and
operations of the Station are at the Station. The political and
public record files, program, operating and maintenance logs,
equipment performance measurements, licenses, and operator agreements
have been maintained in all material respects in accordance with the
rules of the FCC.
3.11 Contracts. The contracts, agreements and leases set forth
and described in Schedules 2.01(a) and 2.01(e) are all of the
contracts, agreements and leases (both written and oral) relating to
the Assets, to the Station or to the business and operations thereof,
other than (i) contracts for the sale of advertising for cash entered
into by Seller in the Ordinary Course of Business and (ii) contracts
or agreements which do not require payments of more than $5,000 each
or $10,000 in the aggregate. Seller has delivered or made available
to Buyer at the Station true and complete copies or descriptions of
all such contracts, agreements and leases (and all amendments and
modifications thereto) prior to the execution of this Agreement. The
unperformed obligations ascertainable from the terms on the face of
such contracts, agreements and leases (and any amendments or
modifications thereto) are the existing unperformed obligations
thereunder. Each contract, agreement and lease listed on Schedule
2.01(a) and Schedule 2.01(e) is in full force and effect, and
constitutes a valid and binding obligation of, and is legally
enforceable in accordance with its terms against, the parties thereto.
Seller has complied with all of the provisions of such contracts,
agreements, leases and commitments and is not in default thereunder,
and there has not occurred any event which (whether with or without
notice, lapse of time, or the happening or occurrence of any other
event) would constitute such a default. So far as Seller knows, there
has not been (i) any failure of any party to any such contract,
agreement or lease to comply with all provisions thereof; (ii) any
default by any party thereunder; (iii) any threatened cancellation
thereof; (iv) any outstanding dispute thereunder; or (v) any basis for
any claim of breach or default thereunder.
3.12 Conflicts. Except as set forth in Schedule 3.12, the
execution and delivery of this Agreement and the agreements and
instruments called for hereunder, the fulfillment of and the
compliance with the respective terms and provisions of each, and the
consummation of the transactions described in each, do not and will
not conflict with or violate any law, ordinance, regulation, order,
award, judgment, injunction or decree applicable to Seller, to the
General Partner, to the Assets or to the Station, or conflict with or
result in a breach of or constitute a default under any of the terms,
conditions or provisions of Seller's articles of incorporation or
bylaws, or any contract, agreement, lease, commitment, or
understanding to which Seller is a party or by which Seller is bound
or to which any of the Assets or the Station is subject, or result in
the acceleration of any indebtedness or in the creation of any
Encumbrance upon the Assets.
3.13 Related Parties. Neither Seller nor any partner, officer
or director of Seller has any interest whatsoever in any corporation,
firm, partnership or other business enterprise which has had any
business transactions with Seller relating to the Assets or the
Station, and no partner of Seller has entered into any transactions
with Seller relating to the Assets or the Station, except for those
set forth in Schedule 3.13.
3.14 Taxes. Seller has filed all tax returns and forms
required to be filed, and has paid in full all taxes, estimated taxes,
interest, penalties, assessments and deficiencies which have become
due pursuant to such returns or without returns or pursuant to any
assessments received by Seller. Such returns and forms are true and
correct in all material respects, and Seller is not required to pay
any other taxes except as shown on such returns. Seller is not a
party to any pending action or proceeding, and , so far as Seller
knows, there is no action or proceeding threatened by any government
or authority against Seller, for assessment or collection of taxes;
and no unresolved claim for assessment or collection of taxes has been
asserted against Seller.
3.15 Employee Benefit Plans.
3.15(a) Except as described in Schedule 3.15, neither Seller
nor any Affiliates (as defined below) have at any time established,
sponsored, maintained, or made any contributions to, or been parties
to any contract or other arrangement or been subject to any statute or
rule requiring them to establish, maintain, sponsor, or make any
contribution to (i) any "employee pension benefit plan" (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended, and regulations thereunder ("ERISA")); (ii) any "employee
welfare benefit plan" (as defined in Section 3(1) of ERISA); or (iii)
any deferred compensation, bonus, stock option, stock purchase, or
other employee benefit plan, agreement, commitment, or arrangement
("Other Plan"). Seller and the Affiliates have no obligations or
liabilities (whether accrued, absolute, contingent, or unliquidated,
whether or not known, and whether due or to become due) with respect
to any "employee benefit plan" (as defined in Section 3(3) of ERISA)
or Other Plan that is not listed in Schedule 3.15. For purposes of
this Section 3.14, the term "Affiliate" shall include all persons
under common control with Seller within the meaning of Sections
4001(a)(14) or (b)(1) of ERISA or any regulations promulgated
thereunder, or Sections 414(b) or (c) of the Internal Revenue Code of
1986, as amended (the "Code").
3.15(b) Each plan or arrangement listed in Schedule 3.15
(and any related trust or insurance contract pursuant to which
benefits under such plans or arrangements are funded or paid)
(collectively, the "Plans") has been administered in all respects in
full compliance with its terms and in both form and operation is in
full compliance with applicable provisions of ERISA, the Code, the
Consolidated Omnibus Budget Reconciliation Act of 1986 and regulations
thereunder, and other applicable law. Each Plan listed in Schedule
3.15 has been determined by the Internal Revenue Service to be
qualified under Section 401(a) and, if applicable, Section 401(k) of
the Code, and nothing has occurred or been omitted since the date of
the last such determination that resulted or will result in the
revocation of such determination. Seller and the Affiliates have made
all required contributions or payments to or under each Plan listed in
Schedule 3.15 on a timely basis and have made adequate provision for
reserves to meet contributions and payments under such Plans that have
not been made because they are not yet due.
3.16 Environmental Matters.
3.16(a) For purposes of this section, "Hazardous Materials"
means any wastes, substances, or materials, whether solids, liquids or
gases, that are deemed hazardous, toxic, pollutants, or contaminants,
including but not limited to substances defined as "hazardous wastes,"
"hazardous substances," "toxic substances," "radioactive materials,"
or other similar designations in, or otherwise subject to regulation
under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), 42 U.S.C. 9601
et seq.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C. 2601 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. 1802 et
seq.; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
9601 et seq.; the Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq.;
the Safe Drinking Water Act, 42 U.S.C. 300f et seq.; the Clean Air
Act ("CAA"), 42 U.S.C. 7401 et seq.; or other Laws, including any
plans, rules, regulations, orders, or ordinances adopted, or other
criteria and guidelines promulgated pursuant to the preceding Laws or
other similar Laws now or hereafter in effect relating to the
protection of human health and the environment (collectively
"Environmental Laws"). "Hazardous Materials" includes but is not
limited to polychlorinated biphenyls (PCBs), asbestos and lead-based
paints.
3.16(b) Seller's Environmental Representations and
Warranties. Seller hereby represents and warrants that, except as set
forth on Schedule 3.16(b):
(i) There are no pending or threatened actions, suits, claims,
legal proceedings or any other proceedings based on Hazardous
Materials or the Environmental Laws at the Real Property, or any part
thereof, or otherwise arising from Seller's activities at the Real
Property involving Hazardous Materials;
(ii) To the best of Seller's knowledge, there are no
conditions, facilities, procedures or any other facts or circumstances
which could give rise to claims, expenses, losses, liabilities, or
governmental action against Buyer in connection with any Hazardous
Materials present at or disposed of from the Real Property, including
without limitation the following conditions arising out of, resulting
from, or attributable to, the assets, business, or operations of
Seller at the Real Property: (A) the presence of any Hazardous
Materials on the Real Property or the release or threatened release of
any Hazardous Materials into the environment from the Real Property;
(B) the off-site disposal of Hazardous Materials originating on or
from the Real Property or the business or operations of Seller; (C)
the release or threatened release of any Hazardous Materials into any
storm drain, sewer, septic system or publicly owned treatment works;
(D) any noncompliance with federal, state or local requirements
governing occupational safety and health, or presence or release in
the air and water supply systems of the Real Property of any
substances that pose a hazard to human health or an impediment to
working conditions; or (E) any facility operations, procedures or
designs, which do not conform to the statutory or regulatory
requirements of any Environmental Laws.
(iii) To the best of Seller's knowledge, neither polychlorinated
biphenyls nor asbestos-containing materials are present on or in the
Real Property.
(iv) To the best of Seller's knowledge, the property contains
no underground storage tanks, or underground piping associated with
tanks, used currently or in the past for the management of Hazardous
Materials.
3.17 Labor Relations. There are no strikes, work stoppages,
grievance proceedings, union organization efforts, or other
controversies pending or threatened between Seller and any of its
employees or agents or any union or collective bargaining unit.
Seller has complied and is in compliance in all material respects with
all Laws relating to the employment of labor, including without
limitation provisions relating to wages, hours, collective bargaining,
occupational safety and health, equal employment opportunity, and the
withholding of income taxes and social security contributions. Except
as set forth in Schedule 3.17 hereto, there are no collective
bargaining agreements or employment agreements between Seller and any
of its employees. The consummation of the transactions contemplated
hereby will not cause Buyer to incur or suffer any liability relating
to, or obligation to pay, severance, termination, or other payments to
any person or entity. Except as set forth in Schedule 3.17 hereto, no
employee of Seller has any contractual right to continued employment
by Seller following consummation of the transactions contemplated by
this Agreement. Seller has previously delivered to Buyer an accurate
and complete list, dated as of the date of this Agreement, of all
employees of Seller and the rate of compensation (including salary,
bonuses and commissions) of each such employee.
3.18 Insurance. Schedule 3.18 contains a list and brief
description of all policies of title, property, fire, casualty,
liability, life, workmen's compensation, and other forms of insurance
of any kind relating to the Assets or the business and operations of
the Station and owned or held by Seller. All such policies are in
full force and effect.
3.19 Disclosure. All facts of material importance to the
Assets, to the Station and to the business of Seller have been fully
and truthfully disclosed to Buyer in this Agreement. No
representation or warranty by Seller and no document, statement,
certificate, schedule or exhibit to be furnished or delivered to Buyer
pursuant to or in connection with this Agreement contains or will
contain any material untrue or misleading statement of fact or omits
or will omit any fact necessary to make the statements contained
herein or therein not materially misleading.
4. Representations and Warranties by Buyer. Buyer
represents, warrants and covenants to Seller as follows:
4.01 Organization and Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and by the Closing Date will be duly qualified to do
business as a foreign corporation in the State of Florida. Buyer has
the full and unrestricted power and authority, corporate and
otherwise, to enter into and perform the terms of this Agreement, the
agreements and instruments referred to herein, and the transactions
contemplated hereby and thereby.
4.02 Authorization. The execution, delivery and performance of
this Agreement and of the agreements and instruments called for
hereunder, and the consummation of the transactions contemplated
hereby and thereby, have been duly and validly authorized by all
necessary actions of Buyer (none of which actions has been modified or
rescinded and all of which actions are in full force and effect).
This Agreement constitutes, and upon execution and delivery each other
agreement and instrument will constitute, a valid and binding
agreement and obligation of Buyer, enforceable in accordance with its
respective terms. Except for the consent of the FCC to the assignment
to Buyer of the FCC Licenses described in Schedule 2.01(c), the
execution, delivery and performance by Buyer of this Agreement and the
agreements and instruments called for hereunder will not require the
consent, approval or authorization of any person, entity or
governmental authority.
4.03 Litigation; Compliance with Law. There is no action,
suit, investigation, claim, arbitration or litigation pending or, so
far as Buyer knows, threatened against or involving either Buyer or
its properties which would have an adverse effect on the transactions
contemplated hereby, at law or in equity, or before or by any court,
arbitrator or governmental authority, and Buyer is not operating under
or subject to any order, judgment, decree or injunction of any court,
arbitrator or governmental authority. So far as Buyer knows, Buyer
has complied and is in compliance in all material respects with all
Laws applicable to Buyer and to its business and operations.
4.04 Conflicts. The execution and delivery of this Agreement
and the agreements and instruments called for hereunder, the
fulfillment of and the compliance with the respective terms and
provisions of each, and the consummation of the transactions described
in each, do not and will not conflict with or violate any law,
ordinance, regulation, order, award, judgment, injunction or decree
applicable to Buyer or conflict with or result in a breach of or
constitute a default under any of the terms, conditions or provisions
of Buyer's articles of incorporation or bylaws, or any material
contract, agreement, lease, commitment, or understanding to which
Buyer is a party or by which Buyer is bound.
4.05 Qualification as Broadcast Licensee. Buyer knows of no
fact that would, under the Communications Act or the rules,
regulations and policies of the FCC, disqualify Buyer from becoming
the licensee of the Station. There are no proceedings, complaints,
notices of forfeiture, claims, investigations pending or, to the
knowledge of Buyer, threatened against any of the broadcast stations
licensed to Buyer or its affiliates that would materially impair the
qualifications of Buyer to become a licensee of the Station or
materially delay the FCC's proceeding of the Applications. Buyer is
financially qualified to meet all terms, conditions and undertakings
contemplated by this Agreement.
4.06 Disclosure. All facts known to Buyer of material
importance to Buyer and its business have been fully and truthfully
disclosed to Seller in this Agreement. No representation or warranty
by Buyer and no document, certificate, Schedule or Exhibit to be
furnished or delivered to Seller pursuant to or in connection with
this Agreement contains or will contain any material untrue or
misleading statement of fact or omits or will omit any fact necessary
to make the statements contained herein or therein not materially
misleading.
5. Application for FCC Consent. As promptly as practicable
and no later than fifteen (15) days following the execution of this
Agreement, Seller and Buyer shall take all steps reasonably necessary
to file and shall participate in the filing of applications with the
FCC requesting its written consent to the assignment of the FCC
Licenses for the Station (and any extensions and renewals thereof)
from Seller to Buyer (the "FCC Applications"). Seller and Buyer will
diligently take, or fully cooperate in the taking of, all necessary,
desirable and proper steps, provide any additional information
reasonably requested, and otherwise use their best efforts in order to
obtain promptly the requested consent and approval of the FCC
Applications; provided that neither of the parties hereto shall have
any obligation to take any unreasonable steps to satisfy complainants,
if any, or to participate in any evidentiary hearing (other than a
hearing at which only oral argument is to be presented).
6. Xxxx-Xxxxx-Xxxxxx. Prior to the Closing, Seller and Buyer
shall complete any filing that may be required pursuant to the HSR Act
or shall mutually agree that no such filing is required. Seller and
Buyer shall diligently take, or fully cooperate in the taking of, all
necessary and proper steps, and provide any additional information
reasonably requested in order to comply with, the requirements of the
HSR Act.
7. Covenants and Agreements of Seller. Seller covenants and
agrees with Buyer as follows:
7.01 Negative Covenants. Pending and prior to the Closing,
Seller will not, without the prior written approval of Buyer, do or
agree to do any of the following:
7.01(a) Dispositions; Mergers. Sell, assign, lease or
otherwise transfer or dispose of any of the Assets or merge or
consolidate with or into any other entity or enter into any agreements
relating thereto; provided, however, Seller may sell, assign, lease or
otherwise transfer or dispose of any asset described in Schedule
2.01(b) if such asset is expended in the Ordinary Course of Business,
and consistent with customary practices in the television broadcast
industry, and property or equipment of like kind and equivalent value
is substituted therefor.
7.01(b) Trade-Outs. Enter into any Trade-out Agreements,
except those which are in the Ordinary Course of Business; provided,
however, that as of the Closing Date, the value of all broadcast time
due the Station's trade clients under the Trade-out Agreements shall
not exceed Two Hundred Fifty Thousand Dollars ($250,000), and provided
further, that Buyer shall not be obligated to assume Net Trade
Obligations that are in excess of twenty percent (20%) of the value of
all property and services due the Station's trade clients under such
Trade-out Agreements.
7.01(c) Broadcast Time Agreements. Enter into any broadcast
time sales agreement, contract, commitment or understanding except
those that are in the Ordinary Course of Business.
7.01(d) Interim Agreements. Materially modify or amend any
of the agreements listed in Schedule 3.05(d) which are marked by an
asterisk or enter into any other agreements, contracts, leases,
commitments, understandings, or licenses (collectively, "Interim
Agreements") or incur any obligation or liability (contingent or
absolute); provided, however, that Seller may enter into such Interim
Agreements in the Ordinary Course of Business so long as such Interim
Agreements do not (i) involve the acquisition of any real property or
(ii) require the payment to or by, or performance by Seller in an
amount in excess of Fifty Thousand Dollars ($50,000) of cash or
services over the remaining term thereof for each such Interim
Agreement, or in the aggregate under all such Interim Agreements in an
amount in excess of One Hundred Thousand Dollars ($100,000).
7.01(e) Breaches; Employment Contracts. Do or omit to do
any act (or permit such action or omission) which will cause a
material breach of any contract, understanding, commitment,
obligation, lease, license or other agreement to which Seller is a
party or by which Seller is bound; or enter into or become subject to
any employment, labor or union contract to which Buyer would be bound
or subject after the Closing Date; or enter into or become subject to
any professional service contract not terminable at will, or any
bonus, pension, insurance, profit sharing, deferred compensation,
severance pay, retirement, hospitalization, employee benefit, or other
similar plan; or increase the
compensation payable or to become payable to any employee, or pay or
arrange to pay any bonus payment to any employee which following the
Closing would become a liability of Buyer.
7.01(f) Actions Affecting Licenses or Contracts. Take any
action which may jeopardize the validity or enforceability of or
rights under the FCC Licenses or any other material lease or contract.
7.01(g) Acceleration of Accounts Receivable. Engage in any
extraordinary efforts with respect to the collection of the Station's
accounts receivable (including, without limitation, offering discounts
or abatements to account debtors) or otherwise accelerate the
collection of the accounts receivable.
7.02 Affirmative Covenants. Pending and prior to the Closing
Date, Seller will:
7.02(a) Preserve Existence. Preserve its limited
partnership existence and business organization intact, maintain its
existing franchises and licenses, use commercially reasonable efforts
to preserve for Buyer its relationships with suppliers, customers,
employees and others having business relations with Seller, and keep
all Assets in their present condition, ordinary wear and tear
excepted. Without limiting the foregoing, Seller will make
commercially reasonable efforts to develop the Station's growth
potential, and in any case each of certain of the Station's actual
budget categories as set forth in Schedule 7.02(a) shall increase by
at least five percent (5%) over the prior year. Without limiting the
foregoing, in the reasonable judgment of Buyer, Seller will maintain
the quality and quantity of its programming for the Station at a level
not less than it currently broadcasts.
7.02(b) Normal Operations. Subject to the terms and
conditions of this Agreement (including, without limitation, Section
7.01), (i) carry
on the business and activities of the Station, including without
limitation, the sale of advertising time, entering into trade or
barter arrangements, entering into other agreements, leases,
commitments or understandings, or purchasing and scheduling of
programming, in the Ordinary Course of Business; (ii) pay or otherwise
satisfy all obligations (cash and barter) of the Station in the
Ordinary Course of Business; (iii) maintain all of its properties in
customary repair, order and condition; and (iv) maintain its books of
account, records, and files in substantially the same manner as
heretofore.
7.02(c) Maintain FCC Licenses; Contracts. Maintain the
validity of the FCC Licenses and comply in all material respects with
all rules and regulations of the FCC, and maintain in full force and
effect those contracts in the schedules marked with a double
asterisk..
7.02(d) Taxes. Pay all tax liabilities and obligations, as
and when they become due and payable.
7.02(e) Partnership Action. Take all partnership action
(including, without limitation, all action required by the General
Partner) under the law of any state having jurisdiction over Seller or
the General Partner necessary to effectuate the transactions
contemplated by this Agreement and by the agreements and instruments
called for hereunder.
7.02(f) Access; Audits. Upon prior notice, give to Buyer
and Buyer's authorized representatives access to Seller's properties,
books, records, contracts, commitments, facilities, premises, and
equipment and to Seller's officers and employees, including access to
enable Buyer and its authorized representatives to perform prior to
the Closing, at Buyer's sole expense, an audit of Seller's financial
statements, with the scope of such audit to be identified by Buyer in
its sole discretion. In addition, in the event that Seller, with
Buyer's consent as required by Section 7.01(d), acquires any Real
Property prior to the Closing Date, Seller shall give to Buyer and
Buyer's authorized representatives access upon reasonable notice
during normal business hours to perform an appropriate environmental
audit of such Real Property. Seller shall cooperate with Buyer and
its authorized representatives in connection with the performance of
such audits.
7.02(g) Other Information. Provide to Buyer all such other
information and copies of documents concerning Seller, the operation
of the Station and the Assets and Seller's customers and suppliers as
Buyer reasonably may request.
7.02(h) Insurance. Maintain in full force and effect all of
its existing casualty, liability, and other insurance through the day
following the Closing Date in amounts not less than those in effect on
the date hereof.
7.02(i) Violations. Upon receiving notice or otherwise
becoming aware of any violation relating to the FCC Licenses, any
material violation by the Seller or the Station of any rules and
regulations of the FCC, or any material violations under any other
applicable Laws, promptly notify Buyer and, at Seller's expense, cure
all such violations prior to the Closing Date; provided, however, that
Seller shall not be required to pay any penalties or fees relating to
such violations so long as Seller is contesting any such penalties or
fees in good faith.
7.02(j) Financial Statements. Provide Buyer with (i)
unaudited monthly balance sheets and statements of revenues and
expenses reflecting the results of business and operations of the
Station and of Seller for September 30, 1997 and for each month
thereafter, within thirty (30) days of the end of each such month and
(ii) with unaudited statements of assets and liabilities and
statements of revenues and expenses reflecting the results of the
business and operations of the Station for the preceding twelve (12)
months, within forty-five (45) days of the end of the fiscal year.
All of the foregoing financial statements shall comply with the
requirements concerning financial statements set forth in Section
3.04.
7.02(k) Interruption in Broadcast Operations. Promptly
notify Buyer in writing if any Station ceases to broadcast at its
authorized power for more than forty-eight (48) consecutive hours.
7.02(l) Consents. Obtain third party consents to assign to
Buyer those agreements on Schedule 3.05(d) which are marked with an
asterisk and use its best efforts to obtain third party consents for
assignment of all other agreements listed on Schedule 3.05(d).
7.02(m) Vacation Time. Use its best efforts to have
Seller's employees use their vacation time prior to the Closing Date.
7.03 Confidentiality. Seller will maintain strict
confidentiality with respect to all documents and information
furnished to Seller by or on behalf of Buyer, except as Seller
reasonably believes may be required by law and/or the rules and
regulations of the FCC or other applicable laws. In the event this
Agreement is terminated, Seller will return to Buyer all documents,
drafts, work papers, and other material prepared or furnished by Buyer
relating to the transactions contemplated hereunder which it has in
its possession or in the possession of Seller's agents, whether
obtained before or after the execution of this Agreement.
7.04 Employees. For a period commencing upon the execution of
this Agreement and ending twelve (12) months following the Closing
Date, Seller and its affiliates will not offer employment elsewhere
than at the Station to any employee of Seller currently employed at
the Station without the prior written approval of Buyer.
7.05 Digital Channel. Notwithstanding anything to the contrary
set forth in this Agreement, Seller shall take or cause to be taken
such actions and do or cause to be done all things that may be
necessary under FCC regulations or otherwise reasonably required in
order to preserve its rights to the digital channel allocated to
Seller by the FCC and to comply with all rules and regulations of the
FCC relating to such digital channel.
8. Covenants and Agreements of Buyer. Buyer covenants and
agrees with Seller as follows:
8.01 Confidentiality. Buyer will maintain strict
confidentiality with respect to all documents and information
furnished to Buyer by or on behalf of Seller, except as Buyer
reasonably believes may be required by law and/or the rules and
regulations of the FCC or other applicable laws. In the event this
Agreement is terminated, Buyer will return to Seller all copies in its
possession of documents, drafts, work papers, and other material
prepared or furnished by Seller relating to the transactions
contemplated hereunder, whether obtained before or after the execution
of this Agreement and the agreements and instruments called for
hereunder.
8.02 Corporate Action. Prior to the Closing, Buyer shall take
all corporate action under the law of the jurisdiction of its
incorporation necessary to effectuate the transactions contemplated by
this Agreement and by the agreements and instruments called for
hereunder.
8.03 Buyer's Cooperation. Buyer agrees to cooperate with
Seller and provide whatever information is reasonably necessary to
third parties, as applicable, in order to effectuate the consent to
assignment of the agreements listed on Schedule 3.05(d) which are
marked with an asterisk, and any other consents Seller has contracted
to obtain.
8.04 Supplemental Payment. Buyer agrees that as soon as
practicable following the Determination Date, if Buyer is the licensee
of the Station and if the Fair Market Value of the Station exceeds
$100,000,000, Buyer shall deliver to Seller cash or, at Buyer's
option, the Note in an amount equal to the Extra Amount, up to a
maximum of $25,000,000, except as described in Appendix A. For
purposes of this Section 8.04, "Fair Market Value of the Station"
shall mean the fair market value of the Assets as determined by taking
an average of separate appraisals performed by two bona fide
appraisers, one selected by Buyer and one selected by Seller
(collectively, the "Appraisals"); provided that, if the Appraisals
differ by more than ten percent (10%), such appraisers shall jointly
designate a third bona fide appraiser, and Fair Market Value of the
Station shall be whichever of the Appraisals is closest to the
appraisal determined by the third appraiser. In performing the
Appraisals, such appraisers shall take into consideration the
additional expenditures that will be required to complete the
conversion at the Station to permit or provide for digital
broadcasting. Fair Market Value of the Station shall be determined as
soon as practicable after the Determination Date.
9. Conditions Precedent to Buyer's Obligation to Close. The
obligations of Buyer to purchase the Assets and to proceed with the
Closing are subject to the satisfaction (or waiver by Buyer) at or
prior to the Closing of each of the following conditions:
9.01 Representations and Covenants. The representations and
warranties of Seller made herein or in any agreement, instrument or
document called for hereunder shall have been true and correct in all
material respects when made, and shall be true and correct in all
material respects on the Closing Date as though such representations
and warranties were made on and as of the Closing Date and Seller
shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or
complied with by Seller prior to the Closing Date.
9.02 Consents. Seller shall have obtained prior to the Closing
Date all consents necessary to effect valid assignments to Buyer of
those contracts on Schedule 3.05(d) which are marked with an asterisk
and all other consents necessary to consummate the transactions
contemplated hereby (except for the FCC Order which shall be governed
by Section 9.04).
9.03 Delivery of Documents. Seller shall have delivered to
Buyer all agreements, instruments and documents required to be
delivered by Seller to Buyer pursuant to Section 11.02.
9.04 FCC Order. The FCC Order shall have become a Final Order.
9.05 Legal Proceedings. No action or proceeding by or before
any governmental authority shall have been instituted or (to Buyer's
and Seller's knowledge) threatened (and not subsequently dismissed,
settled or otherwise terminated) which might restrain, prohibit or
invalidate the transactions contemplated by this Agreement (but not
including an action or proceeding instituted or threatened by Buyer).
9.06 Xxxx-Xxxxx-Xxxxxx. All applicable waiting periods under
the HSR Act shall have expired.
9.07 Absence of Material Change. There shall have been no
Material Adverse Changes since the date of this Agreement in the
business, operations, condition (financial or otherwise), properties,
assets or liabilities of Seller, of the Station or of the Assets
(regardless of whether or not such events or changes are consistent
with the representations and warranties given herein by Seller). As
used herein "Material Adverse Change" shall mean an event or change
that either (i) individually or in the aggregate results or would
result in a significant impairment in the ability of Buyer to continue
the business and operations of the Station as presently conducted, or
(ii) individually or in the aggregate involves or would reasonably be
expected to involve adverse impact to the Station or Seller that in
the aggregate exceeds Two Hundred Thousand Dollars ($200,000).
Notwithstanding the foregoing, this closing condition shall apply only
if the Closing is consummated on or after the second anniversary of
the date hereof, and such condition shall not apply if the Closing is
consummated prior to the second anniversary of the date hereof.
10. Conditions Precedent to Seller's Obligation to Close. The
obligation of Seller to sell, transfer, convey and deliver the Assets
and to proceed with the Closing are subject to the satisfaction (or
waiver by Seller) at or prior to the Closing of each of the following
conditions:
10.01 Representations and Covenants. The representations and
warranties of Buyer made in this Agreement or in any agreement,
instrument or document called for hereunder shall have been true and
correct in all material respects when made, and shall be true and
correct in all material respects on the Closing Date as though such
representations and warranties were made on and as of the Closing
Date; and Buyer shall have performed and complied in all material
respects with all covenants and agreements required to be performed or
complied with by Buyer prior to the Closing Date.
10.02 Delivery of Documents. Buyer shall have delivered to
Seller the Purchase Price and all agreements, instruments and
documents required to be delivered by Buyer to Seller pursuant to
Section 11.03.
10.03 FCC Order. The FCC Order shall have become a Final Order
with respect to the Station.
10.04 Legal Proceedings. No action or proceeding by or before
any governmental authority shall have been instituted or (to Buyer's
and Seller's knowledge) threatened (and not subsequently dismissed,
settled, or otherwise terminated) that might restrain, prohibit, or
invalidate the transactions contemplated by this Agreement, other than
an action or proceeding instituted or threatened by Seller.
10.05 Xxxx-Xxxxx-Xxxxxx. All applicable waiting periods under
the HSR Act shall have expired.
11. The Closing.
11.01 Closing. Unless otherwise agreed by the parties hereto,
the Closing hereunder shall be held on a date specified by Buyer
within ten (10) days following the date that the FCC Order becomes a
Final Order and all other conditions to Closing have been satisfied;
provided, however, Buyer shall have the right to extend the Closing
Date for an additional period of 50 days following such ten day period
in order to perform an audit of Seller's financial statements as
contemplated by Section 7.02(f). The Closing shall be held at 10:00
A.M. local time at the offices of Xxxxx & Xxxxxxx in Washington, D.C.
or at such other time and place as the parties may agree.
11.02 Delivery by Seller. At or before the Closing, Seller
shall deliver to Buyer:
11.02(a) Agreements and Instruments. The following bills of
sale, statements, assignments and other instruments of transfer, dated
as of the Closing Date, in form sufficient to transfer and convey to
Buyer title (of the quality provided for in this Agreement) to the
Assets and reasonably satisfactory to counsel to Buyer:
(i) Assignment of Contracts and Leases;
(ii) Xxxx of Sale;
(iii) Assignment of FCC Licenses;
(iv) Assumption Agreement;
(v) Such other instruments or documents as Buyer may
reasonably request.
11.02(b) Consents. Copies of all consents necessary to
effect valid assignments to Buyer of all of the agreements listed on
Schedule 3.05(d) which are marked with an asterisk and any other
consents Seller has been able to obtain.
11.02(c) Certificate Concerning Interim Agreements. A
certificate of Seller certifying that all broadcast time sales
agreements made, all trade-out agreements entered into, and all other
contracts, agreements and leases entered into by Seller between the
date hereof and the Closing Date were entered into in accordance with
Section 7.01.
11.02(d) Lien Releases. Duly executed originals of all
termination statements, mortgage satisfactions and other lien releases
necessary to release all Encumbrances from the Assets. (except for the
Permitted Encumbrances).
11.02(e) Resolutions. Copies of the resolutions and/or
certificates of Seller and the General Partner, certified by the
Secretary or the Assistant Secretary of the General Partner as being
correct and complete and then in full force and effect, authorizing
the execution, delivery and performance of this Agreement, and of the
agreements and instruments called for hereunder, and the consummation
of the transactions contemplated hereby and by such agreements and
instruments.
11.02(f) Officers' Certificate. A certificate of Seller
signed by the President of the General Partner certifying that the
representations and warranties of Seller made herein were true and
correct in all material respects as of the date of this Agreement and
are true and correct in all material respects as of the Closing Date,
and that Seller has performed and complied with all covenants and
agreements required to be performed or complied with by Seller on or
prior to the Closing Date.
11.02(g) Opinion of Counsel. An opinion of counsel for
Seller, dated the Closing Date and addressed to Buyer, substantially
in the form attached hereto as Exhibit G.
11.02(h) Seller's IRS Form 8594. Internal Revenue Service
Form 8594 completed by Seller in connection with the acquisition of
the Assets by Buyer.
11.02(i) Updated Schedules. A copy of all of the Schedules
hereto, revised and updated as of the Closing Date.
11.03 Delivery by Buyer. At or before the Closing, Buyer shall
deliver to Seller:
11.03(a) Payments. The Purchase Price in the amount and
manner set forth in Sections 2.03 and 2.04.
11.03(b) Assumption Agreement. The Assumption Agreement.
11.03(c) Corporate Resolutions. Copies of the resolutions of
the directors of Buyer, certified by the Secretary or Assistant
Secretary of Buyer as being correct and complete and then in full
force and effect, authorizing the execution, delivery and performance
of this Agreement, and of the agreements and instruments called for
hereunder, and the consummation of the transactions contemplated by
this Agreement and by such agreements and instruments.
11.03(d) Officers' Certificate. A certificate of Buyer
signed by the President of Buyer certifying that the representations
and warranties of Buyer made herein were true and correct in all
material respects as of the date of this Agreement and are true and
correct in all material respects as of the Closing Date, and that
Buyer has performed and complied with all covenants and agreements
required to be performed or complied with by Buyer prior to the
Closing Date.
11.03(e) Opinion. An opinion of counsel for Buyer, dated the
Closing Date and addressed to Seller, substantially in the form
attached hereto as Exhibit H.
11.03(f) Buyer's IRS Form 8594. Internal Revenue Service
Form 8594 completed by Buyer in connection with the acquisition of the
Assets by Buyer.
12. Allocation of Purchase Price. Seller and Buyer agree to
allocate the Purchase Price among the classes of Assets for the
Station as set forth in an appraisal of the Assets to be performed by
Bond & Xxxxxx (at Buyer's sole expense), which appraisal shall be
reasonably acceptable to Buyer and Seller.
13. Accounts Receivable. At the Closing, Buyer shall purchase
from Seller the Purchased Receivables for a purchase price equal to
seventy five percent (75%) of the face value of the Purchased
Receivables (less, agency, sales and representative commissions), as
provided for in Section 2.03. On the Closing Date, Seller shall
deliver to Buyer a complete statement of each Purchased Receivable,
showing the name of the account debtor and the amount and age thereof.
In the event that Buyer's collections with respect to the Purchased
Receivables exceed seventy five percent (75%) of the Purchased
Receivables, less agency, sales and representative commissions (the
"Threshold Amount"), Buyer shall be obligated to remit to Seller every
thirty (30) days thereafter seventy percent (70%) of any collections
that are in excess of the Threshold Amount with respect to the
Purchased Receivables, less agency, sales and representative
commissions. Nothing herein contained shall obligate Buyer to bring
suit or take any other legal action for the collection of any
Purchased Receivable, or to employ a collection agency in connection
therewith.
14. Adjustments.
14(a) Adjustments. The Purchase Price shall be subject to
adjustment on account of expenses of the Station that apply to periods
both before and after the Closing Date. All income and expenses
arising from the business and operations of the Station shall be
prorated or allocated in cash between Buyer and Seller as of the end
of the broadcast day immediately preceding the Closing Date at the
Adjustment Closing. Such income and expenses shall include, without
limitation, all assessments, taxes and other similar charges, general
and special, ordinary and extraordinary, whether the same are then due
or are payable thereafter (in installments or otherwise), or which
have been confirmed by any public authority at the Closing Date; and
all business and license fees, wages and salaries paid to employees,
prepaid expenses, deposits set forth on Schedule 2.01(g), taxes and
utility expenses arising from the business and operations of the
Assets, lease rental agreements, insurance, rents payable or
receivable, and all other items normally prorated in the sale of the
assets of a business and of a television broadcast station in
particular. In addition, Buyer shall receive credit at the Adjustment
Closing for the amount equal to the amount of any and all liabilities
for advertising time to be provided after the Closing Date for which
payment has been, is or will be made to Seller.
14(b) Special Adjustments. Notwithstanding the foregoing, (i)
other than any adjustment necessary to prorate between Buyer and
Seller any monthly license fees due and payable in the month during
which the Closing takes place under any programming agreements assumed
by Buyer, there shall be no adjustment between the parties with
respect to the amortization schedule relating to Seller's rights to
broadcast motion pictures, feature films and syndicated programs, (ii)
there shall be an adjustment and (A) Seller and Buyer shall be liable
equally for any sick leave or vacation pay accrued as of the Closing
Date with respect to any employees of Seller retained as employees of
Buyer after the Closing Date and (B) Seller shall be liable for any
sick leave or vacation pay accrued as of the Closing Date with respect
to any employees of Seller that Buyer does not hire as employees of
Buyer after the Closing Date, and (iii) there shall be an adjustment
and Seller shall pay Buyer an amount equal to one-half of the amount
necessary to buy out as of the Closing Date all capital leases
relating to the Station to which Seller is a party, which are
identified on Schedule 14(b) hereto.
14(c) Schedule of Adjustments. On the Closing Date, Seller
shall deliver to Buyer an estimated schedule of adjustments (the
"Estimated Schedule of Adjustments"). To the extent that Buyer and
Seller agree on the Estimated Schedule of Adjustments, any payment
required thereunder by Buyer or Seller, as the case may be, shall be
made on the Closing Date. Within thirty (30) days following the
Closing Date, Buyer shall deliver to Seller its schedule of
adjustments (the "Buyer Adjustments") that shall set forth the
adjustments it claims under Section 14, taking into effect any payment
made pursuant to the Estimated Schedule of Adjustments. Seller shall
have thirty (30) days following receipt of the Buyer Adjustments to
notify Buyer either that it accepts or rejects the Buyer Adjustments.
If Seller provides notice of objection to the Buyer Adjustments, the
parties shall endeavor for a period of sixty (60) days to resolve such
dispute in a mutually satisfactory manner. If Buyer and Seller are
unable to reach agreement within such sixty (60)-day period, Buyer and
Seller shall request a mutually acceptable nationally recognized
independent public accounting firm to resolve the dispute and
determine the final schedule of adjustments (the "Final Schedule of
Adjustments"). Such accounting firm shall, within thirty (30) days of
such submission, deliver to Seller and Buyer a written report
resolving the disputed matters, and its determination shall be final,
conclusive and binding upon Buyer and Seller. Any payment required
under the Final Schedule of Adjustments shall be made by interbank
wire transfer in immediately available funds to the bank account
designated by Buyer or Seller, as the case may be, within 3 days of
the final determination of the Final Schedule of Adjustments. The
parties shall cooperate with each other and such public accounting
firm in order to facilitate the determination of the Final Schedule of
Adjustments.
15. Possession and Control. Between the date hereof and the
Closing Date, Buyer shall not directly or indirectly control,
supervise or direct, or attempt to control, supervise or direct, the
business and operations of the Station, and such operation, including
complete control and supervision of all programs, shall be the sole
responsibility of Seller.
16. Risk of Loss. The risk of loss or damage by fire or other
casualty or cause to the Assets until the Closing Date shall be upon
Seller. In the event of such loss or damage prior to the Closing
Date, Seller shall promptly restore, replace or repair the damaged
Assets to their previous condition at Seller's sole cost and expense.
In the event such loss or damage shall not be restored, replaced, or
repaired as of the Closing Date, Buyer shall, at its option, either
(a) proceed with the Closing and receive all insurance proceeds to
which Seller would be entitled as a result of such loss or damage
(provided, however, if such proceeds do not equal the loss, Seller
shall pay the deficiency to Buyer), or (b) defer the Closing Date
until such restorations, replacements or repairs are made (provided
that no such deferral shall affect the rights of the parties hereto to
terminate this Agreement pursuant to the provisions of Section 18).
17. Survival; Indemnification.
17.01 Survival of Seller's Representations. Except as otherwise
specified, the representations and warranties made by Seller in this
Agreement or pursuant hereto shall survive the Closing Date for a
period of one (1) year, and shall also survive and shall be unaffected
by (and shall not be deemed waived by) any investigation, audit,
appraisal, or inspection at any time made by or on behalf of Buyer.
Notwithstanding the foregoing, Seller's representations and warranties
set forth in Sections 3.14 and 3.15 shall survive until the expiration
of the applicable statue of limitations, and Seller's representations
and warranties for matters relating to title to the Assets shall
continue in full force and effect in perpetuity.
17.02 Indemnification by Seller. Subject to the conditions and
provisions of Section 17.05, Seller agrees to indemnify, defend and
hold harmless Buyer from and against any and all demands, claims,
complaints, actions or causes of action, suits, proceedings,
investigations, arbitrations, assessments, losses, damages,
liabilities, costs and expenses, including, but not limited to,
interest, penalties and reasonable attorneys' fees and disbursements,
asserted against, imposed upon or incurred by Buyer, directly or
indirectly, by reason of or resulting from (a) any liability,
obligation, or claim (whether absolute, accrued, contingent or
otherwise and whether a contractual, tax or any other type of
liability or obligation or claim) not expressly assumed by Buyer
pursuant to Section 2.05, arising out of, or relating to or resulting
from the Assets or the business and operations of the Station during
the period prior to the Closing Date; (b) any misrepresentation or
breach of the representations and warranties of Seller contained in or
made pursuant to this Agreement; or (c) any noncompliance by Seller
with any covenants, agreements or undertakings of Seller contained in
or made pursuant to this Agreement. Notwithstanding the foregoing,
Seller shall have no obligation to indemnify Buyer unless and until
the aggregate amount of actual damages exceeds Fifty Thousand Dollars
($50,000), at which time indemnification for the full amount of all
damages (including the first Fifty Thousand Dollars ($50,000) shall be
due. In the event of any indemnification of Buyer pursuant to this
Section 17.02, Buyer shall be entitled, in addition to its rights and
remedies pursuant to this Agreement, or otherwise at law or in equity,
to deduct the amount of such indemnification from any payment
otherwise due or made to Buyer pursuant to Appendix A hereto.
17.03 Survival of Buyer's Representations. The representations
and warranties made by Buyer in this Agreement or pursuant hereto
shall survive the Closing Date for a period of one (1) year, and shall
also survive and shall be unaffected by (and shall not be deemed
waived by) any investigation, audit, appraisal or inspection at any
time made by or on behalf of Seller.
17.04 Indemnification by Buyer. Subject to the conditions and
provisions of Section 17.05, Buyer hereby agrees to indemnify, defend
and hold harmless Seller from and against all demands, claims, actions
or causes of action, assessments, losses, damages, liabilities, costs
and expenses, including, but not limited to, interest, penalties and
reasonable attorneys' fees and disbursements, asserted against,
imposed upon or incurred by Seller, directly or indirectly, by reason
of or resulting from (a) any liability, obligation, or claims (whether
absolute, accrued, contingent or otherwise and whether contractual,
tax or any other type of liability or obligation or claim) expressly
assumed by Buyer hereunder; (b) any misrepresentation or breach of the
representations and warranties of Buyer contained in or made pursuant
to this Agreement; or (c) any noncompliance by Buyer with any
covenants, agreements or undertakings of Buyer contained in or made
pursuant to this Agreement.
17.05 Conditions of Indemnification. The obligations and
liabilities of Seller and of Buyer hereunder with respect to their
respective indemnities pursuant to this Section 17, resulting from any
claim or other assertion of liability by third parties (hereinafter
called collectively, "Claims"), shall be subject to the following
terms and conditions:
17.05(a) The party seeking indemnification (the "Indemnified
Party") must give the other party or parties, as the case may be (the
"Indemnifying Party"), notice of any such Claim promptly after the
Indemnified Party receives notice thereof.
17.05(b) The Indemnifying Party shall have the right to
undertake, by counsel or other representatives of its own choosing,
the defense of such claim.
17.05(c) In the event that the Indemnifying Party shall elect
not to undertake such defense, or within a reasonable time after
notice of any such Claim from the Indemnified Party shall fail to
defend, the Indemnified Party (upon further written notice to the
Indemnifying Party) shall have the right to undertake the defense,
compromise or settlement of such Claim, by counsel or other
representatives of its own choosing, on behalf of and for the account
and risk of the Indemnifying Party (subject to the right of the
Indemnifying Party to assume defense of such Claim at any time prior
to settlement, compromise or final determination thereof).
17.05(d) Anything in this Section 17.05 to the contrary
notwithstanding, (i) if there is a reasonable probability that a Claim
may materially and adversely affect the Indemnified Party other than
as a result of money damages or other money payments, the Indemnified
Party shall have the right, at its own cost and expense, to
participate in the defense, compromise or settlement of the Claim;
(ii) the Indemnifying Party shall not, without the Indemnified Party's
written consent, settle or compromise any Claim or consent to entry of
any judgment which does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the Indemnified Party
of a release from all liability in respect of such Claim; and (iii) in
the event that the Indemnifying Party undertakes defense of any Claim,
the Indemnified Party, by counsel or other representative of its own
choosing and at its sole cost and expense, shall have the right to
consult with the Indemnifying Party and its counsel or other
representatives concerning such Claim and the Indemnifying Party and
the Indemnified Party and their respective counsel or other
representatives shall cooperate with respect to such Claim.
17.05(e) Any representation or warranty that is the subject
of a Claim which is asserted in a reasonably detailed writing prior to
the expiration of the applicable period set forth in Section 17.01 or
Section 17.03, as the case may be, shall survive with respect to such
Claim until the final resolution thereof.
18. Termination.
18.01 Termination. This Agreement may be terminated prior to
the Closing by:
18.01(a) the mutual consent of Seller and Buyer;
18.01(b) Buyer, by written notice of termination delivered to
Seller, if (i) the Closing has not occurred before the fifth (5th)
anniversary of the date of this Agreement; (ii) the FCC designates the
FCC Applications for an evidentiary hearing; (iii) the FCC issues an
adverse order refusing to issue the FCC Order; or (iv) the FCC issues
any order in connection the FCC Applications with conditions that are
materially adverse to Buyer's operation of the Station (except any
such conditions expressly accepted by Buyer in writing); provided,
that written notice of termination is given prior to the date on which
the FCC Order shall have become a Final Order; and provided, further,
that Buyer shall not be in material default or material breach under
this Agreement.
18.02 Effect of Termination. In the event this Agreement is
terminated as provided in Section 18.01, this Agreement shall be
deemed null, void and of no further force or effect, and the parties
hereto shall be released from all future obligations hereunder;
provided, however, that the obligations of Buyer and Seller set forth
in Sections 7.03, 8.01, 20.03, and Appendix B, if applicable, shall
survive such termination.
19. Remedies.
19.01 Default by Buyer. If Buyer shall default in the
performance of its obligations under this Agreement in any material
respect or if, as a result of Buyer's action or failure to act, the
conditions precedent to Seller's obligation to close specified in
Section 10 are not satisfied, and for such reason or reasons this
Agreement is not consummated, and provided that Seller shall not then
be in default in the performance of Seller's obligations hereunder,
Seller shall be entitled, by written notice to Buyer, to terminate
this Agreement and to recover, as its sole remedy, liquidated damages
in the amount of Three Million Dollars ($3,000,000), it being agreed
that in light of the nature of the transactions contemplated hereby,
damages are impossible to calculate with any precision, and Buyer
agrees to waive any and all defenses against such recovery based on
the grounds that there is an adequate remedy for money damages
available to Seller.
19.02 Default by Seller. If Seller shall default in the
performance of Seller's obligations under this Agreement in any
material respect, or if, as a result of Seller's action or failure to
act, the conditions precedent to Buyer's obligation to close specified
in Section 9 are not satisfied and for such reason or reasons this
Agreement is not consummated, and provided that Buyer shall not then
be in default in any material respect in the performance of Buyer's
obligations hereunder, Buyer shall be entitled, at Buyer's sole
option:
19.02(a) To require Seller to consummate and specifically
perform the sale in accordance with the terms of this Agreement, if
necessary through injunction or other court order or process; or
19.02(b) By written notice to Seller, to terminate this
Agreement and to pursue any other remedies Buyer has at law or in
equity or otherwise.
19.03 Specific Performance. Seller acknowledges that the Assets
to be sold and delivered to Buyer pursuant to this Agreement are
unique and that Buyer has no adequate remedy at law if Seller shall
fail to perform any of its obligations hereunder, and Seller therefore
confirms and agrees that Buyer's right to specific performance is
essential to protect the rights and interests of Buyer. Accordingly,
in addition to any other remedies which Buyer may have hereunder or at
law or in equity or otherwise, Seller hereby agrees that Buyer shall
have the right to have all obligations, undertakings, agreements and
other provisions of this Agreement specifically performed by Seller
and that Buyer shall have the right to obtain an order or decree of
such specific performance in any of the courts of the United States or
of any state or other political subdivision thereof.
20. Miscellaneous Provisions.
20.01 Additional Actions and Documents. Each of the parties
hereto agrees that it will, at any time, prior to, at or after the
Closing Date, take or cause to be taken such further actions, and
execute, deliver and file or cause to be executed, delivered and filed
such further documents and instruments, and obtain such consents, as
may be necessary or reasonably requested in connection with the
consummation of the purchase and sale contemplated by this Agreement
or in order to fully effectuate the purposes, terms and conditions of
this Agreement.
20.02 Brokers. Seller represents to Buyer that Seller has not
engaged, or incurred any unpaid liability (for any brokerage fees,
finders' fees, commissions or otherwise) to, any broker, finder or
agent in connection with the transactions contemplated by this
Agreement; Buyer represents to Seller that Buyer has not engaged, or
incurred any unpaid liability (for any brokerage fees, finders' fees,
commissions or otherwise) to, any broker, finder or agent in
connection with the transactions contemplated by this Agreement; and
Seller agrees to indemnify Buyer, and Buyer agrees to indemnify
Seller, against any claims asserted against the other parties for any
such fees or commissions by any person purporting to act or to have
acted for or on behalf of the indemnifying party. Notwithstanding any
other provision of this Agreement, this representation and warranty
shall survive the Closing Date without limitation as to time.
20.03 Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Agreement and in the preparation for
and consummation of the transactions provided for herein.
Notwithstanding the foregoing, (a) Buyer and Seller shall each pay
one-half of all costs of conveyances, all notary fees, all filing and
application fees to any federal, state or local agency (including the
FCC), all sales, stamp, documentary, transfer, and recording taxes and
fees applicable to the transactions contemplated by this Agreement and
the instruments and documents called for hereunder, and (b) Buyer
shall pay all fees and expenses of the appraiser referred to in
Section 12 and all HSR Act filing fees.
20.04 Notices. All notices, demands, requests, or other
communications which may be or are required to be given or made by any
party to any other party pursuant to this Agreement shall be in
writing and shall be hand delivered (including delivery by overnight
courier), mailed by first-class registered or certified mail, return
receipt requested, postage prepaid, or transmitted by telegram, telex,
or facsimile transmission addressed as follows:
(i) If to Buyer:
United Television, Inc.
000 X. Xxxxx Xxxxx
Xxxxxx xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attn.: Xx. Xxxx X. Xxxxxxxx
Chief Executive Officer/President
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attn.: Xxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
(ii) If to Seller:
Rainbow Broadcasting Limited Partnership
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Xx. Xxxxxx Xxx
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn.: Xxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
or such other address as the addressee may indicate by written notice.
Each notice, demand, request, or communication which shall be
given or made in the manner described above shall be deemed
sufficiently given or made for all purposes at such time as it is
delivered to the addressee (with the return receipt, the delivery
receipt, the affidavit of messenger or (with respect to a telex) the
answer back being deemed conclusive but not exclusive evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.
20.05 Mail. Seller hereby authorizes and empowers Buyer from
and after the Closing Date (a) to receive and open mail addressed to
Seller and (b) to deal with the contents thereof in any manner Buyer
sees fit, provided such mail and the contents thereof relate to the
Assets or otherwise to the business currently conducted by Seller or
to any of the Assumed Liabilities hereunder. Seller agrees to deliver
to Buyer any mail, checks or other documents received by it pertaining
to the Assets or any of the Assumed Liabilities hereunder. Buyer
agrees to deliver to Seller any mail which it receives to which it is
not entitled by reason of the Agreement or otherwise and to which
Seller is entitled.
20.06 Waiver. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this
Agreement or under any other instrument or document given in
connection with or pursuant to this Agreement shall impair any such
right, power or privilege or be construed as a waiver of any default
or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of
such right, power or privilege, or the exercise of any other right,
power or privilege. No waiver shall be valid against any party hereto
unless made in writing and signed by the party against whom
enforcement of such waiver is sought and then only to the extent
expressly specified therein.
20.07 Benefit and Assignment. Except as hereinafter
specifically provided in this Section 20.07, no party hereto shall
assign this Agreement, in whole or in part, whether by operation of
law or otherwise, without the prior written consent of Seller (if the
assignor is Buyer) or Buyer (if the assignor is Seller); and any
purported assignment contrary to the terms hereof shall be null, void
and of no force and effect. In no event shall any assignment by
Seller of its rights and obligations under this Agreement, whether
before or after the Closing, release Seller from its liabilities
hereunder. Notwithstanding the foregoing, Buyer or any permitted
assignee of Buyer may assign this Agreement and any and all rights
hereunder, in whole or in part, to any subsidiary of Buyer or to any
entity in which the controlling shareholders of Buyer maintain
control. Subject to the foregoing, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. No person or entity other than the
parties hereto is or shall be entitled to bring any action to enforce
any provision of this Agreement against any of the parties hereto, and
the covenants and agreements set forth in this Agreement shall be
solely for the benefit of, and shall be enforceable only by, the
parties hereto or their respective successors and assigns as permitted
hereunder.
20.08 Remedies Cumulative. Except as specifically provided
herein, the remedies provided herein shall be cumulative and shall not
preclude the assertion by Seller or by Buyer of any other rights or
the seeking of any other remedies against the other. Nothing
contained herein shall preclude a party from seeking equitable relief,
where appropriate.
20.09 Entire Agreement; Amendment. This Agreement, together
with all Exhibits and Schedules hereto, constitutes the entire
agreement among the parties pertaining to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, and the parties
hereto have not relied on any statements, representations or
warranties other than those set forth in this Agreement. No
supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by the party to be bound thereby.
20.10 Severability. If any part of any provision of this
Agreement or any other agreement, document or writing given pursuant
to or in connection with this Agreement shall be invalid or
unenforceable under applicable law, such part shall be ineffective to
the extent of such invalidity or unenforceability only, without in any
way affecting the remaining parts of such provisions or the remaining
provisions hereof or of said agreement, document or writing.
20.11 Press Releases. All notices to third parties and other
publicity relating to the transactions contemplated by this Agreement
shall be jointly planned, coordinated and agreed to by Buyer and
Seller. Prior to the Closing Date neither of the parties hereto shall
act unilaterally in this regard without the prior written approval of
the other, except as Seller or Buyer reasonably believes may be
required by law and/or the rules and regulations of the FCC or other
applicable laws.
20.12 Headings. The headings of the sections and subsections
contained in this Agreement are inserted for convenience only and do
not form a part or affect the meaning, construction or scope thereof.
20.13 Governing Law. This Agreement, the rights and obligations
of the parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed under and in accordance with the
laws of the State of New York, excluding the choice of law rules
thereof.
20.14 Signature in Counterparts. This Agreement may be executed
in separate counterparts, neither of which need contain the signatures
of both parties, each of which shall be deemed to be an original, and
both of which taken together constitute one and the same instrument.
It shall not be necessary in making proof of this Agreement to produce
or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or has caused this Agreement to be duly executed and
delivered in its name on its behalf, all as of the day and year first
above written.
SELLER
RAINBOW BROADCASTING
LIMITED PARTNERSHIP
By: Rainbow Broadcasting Co., Inc.
General Partner
By:________________________
BUYER
UNITED TELEVISION , INC.
By:_____________________________________
APPENDIX A
In the event of the sale of the Station by Buyer prior to the
Determination Date, the terms of this Appendix A shall govern payment
of the Extra Amount, if any. If the Station is resold by Buyer to a
third party (excluding, Change of Control Transactions (as hereinafter
defined)) prior to the Determination Date, Seller would have the right
to elect (within thirty (30) days following notice from Buyer that it
has or intends to enter into an agreement with a third party for sale
of the Station) either (a) to have the third party purchaser obligated
to pay the Extra Amount as described and calculated pursuant to the
terms of Section 8.04 of this Agreement, or (b) to receive the Extra
Amount determined as follows, which amount would be payable in cash
within thirty (30) days following the later of the resale date and the
date of determination of Fair Market Value of the Station, as
described below. If Seller fails to give Buyer notice of the election
within the specified thirty (30) day period, Buyer may elect either
option (a) or option (b) above as the default election:
1. If the Station is resold by Buyer in the first year
following the Closing, the Extra Amount would be 50% of the amount (if
any) by which the Fair Market Value of the Station on the resale date
exceeds $68.053 million, to a maximum of $17.015 million.
2. If the Station is resold by Buyer in the second year
following the Closing, the Extra Amount would be 60% of the amount (if
any) by which the Fair Market Value of the Station on the resale date
exceeds $73.503 million, to a maximum of $18.376 million.
3. If the Station is resold by Buyer in the third year
following the Closing, the Extra Amount would be 70% of the amount (if
any) by which the Fair Market Value of the Station on the resale date
exceeds $79.383 million, to a maximum of $19.846 million.
4. If the Station is resold by Buyer in the fourth year
following the Closing, the Extra Amount would be 80% of the amount (if
any) by which the Fair Market Value of the Station on the resale date
exceeds $85.734 million, to a maximum of $21.433 million.
5. If the Station is resold by Buyer in the fifth year
following the Closing, the Extra Amount would be 90% of the amount (if
any) by which the Fair Market Value of the Station on the resale date
exceeds $92.593 million, to a maximum of $23.148 million.
For purposes of this Appendix A, Fair Market Value shall be the
resale price of the Station, except that, if the Station is sold in
combination with one or more other stations, the Fair Market Value
shall be determined as of the resale date and shall be the average of
the appraisal determined by a bona fide appraiser designated by Seller
and the appraisal determined by a bona fide appraiser designated by
Buyer, provided that, if such appraisals differ by more than 2%, the
appraisers would jointly designate a third bona fide appraiser, and
the Fair Market Value would be whichever of the first two appraisals
is closest to the appraisal determined by the third appraiser. In
performing the Appraisals, such appraisers shall take into
consideration the additional expenditures that may be required to
complete the conversion at the Station to permit or provide for
digital broadcasting.
For purposes of this Appendix A, "Change of Control
Transactions" shall include, without limitation, transfers to persons
or entities controlling, controlled by or under common control with
Buyer, a sale of substantially all of the assets of Buyer, or a
transaction where there is a change of control of Buyer, BHC
Communications, Inc. or Xxxxx Craft Industries, Inc.
APPENDIX B
Anything in this Agreement to the contrary notwithstanding:
1. The obligation of Buyer to purchase the Assets and to
proceed with the Closing are subject to the satisfaction (or waiver by
Buyer) at or prior to the Closing of the additional condition that the
FCC shall have issued orders in GC Docket No. 95-172 granting the
applications of Rainbow Broadcasting Company for Extension of Time to
Construct and for Assignment of its Construction Permit for the
Station to Seller without conditions which are materially adverse to
Buyer's operation of the Station (the "Docket 95-172 Orders") and such
orders shall have become Final Orders, subject to subparagraph 3 of
this Appendix B. The parties hereto agree that this additional
condition shall be deemed to be included in Section 9 of the
Agreement.
2. This Agreement may be terminated prior to the Closing by
Buyer, by written notice of termination delivered to Seller, if (i)
the FCC Order and the Docket 95-172 Orders have not been issued by
December 31, 1998; or (ii) the FCC issues an adverse order refusing to
issue the FCC Order or either of the Docket 95-172 Orders; provided
that Buyer shall not then be in material default or material breach
under this Agreement; and this provision shall be deemed to be
included in Section 18 of the Agreement.
3. If the FCC issues the FCC Order and the Docket 95-172
Orders but such orders have not become Final Orders within thirty (30)
days following the latest date of public notice of such three orders
(the "Plus 30 Date"), Buyer shall be obligated to begin paying to
Seller, at the end of each calendar month, an amount equal to the
product of multiplying $60,000,000 by the greater of 0.004167 or the
actual monthly yield earned by Buyer on its own invested portfolio of
government securities (the "Post Grant Payments"). The Post Grant
Payments would cease at the earliest of (i) the completion of the
Closing, (ii) the second anniversary of the Plus 30 Date, or (iii) the
termination of this Agreement. If this Agreement is terminated
without a Closing having taken place, Seller shall be obligated to
repay to Buyer, within thirty (30) days following such termination, an
amount equal to the sum of all Post Grant Payments received by Seller
(if any), plus interest of five percent (5%) compounded monthly to the
date of payment, which repayment obligation shall be guaranteed by
Seller and certain of its principals (with financial resources and net
worths satisfactory to Buyer) in accordance with a Guaranty to be
entered into on the Plus 30 Date in form and substance satisfactory to
Buyer.
LIST OF EXHIBITS
Exhibit A Assignment of Contracts and Leases
Exhibit B Assignment of FCC Licenses
Exhibit C Xxxx of Sale
Exhibit D Assumption Agreement
Exhibit E Intentionally Omitted
Exhibit F Note
Exhibit G Opinion of Seller's Counsel
Exhibit H Opinion of Buyer's Counsel
LIST OF SCHEDULES
Schedule 2.01(a) Real Property and Leasehold Interests
Schedule 2.01(b) Tangible Personal Property
Schedule 2.01(c) FCC Licenses
Schedule 2.01(d) Intellectual Property
Schedule 2.01(e) Station Contracts
Schedule 2.01(g) Deposits Subject to Adjustment
Schedule 2.01(h) Motor Vehicles
Schedule 2.02(i) Other Excluded Assets
Schedule 3.03 Litigation
Schedule 3.04 Financial Statements
Schedule 3.05(b) Encumbrances To be Removed Prior to Closing
Schedule 3.05(d) Consents Required to Transfer Assets
Schedule 3.06(c) Location of Improvements on Real Property
Schedule 3.06(d) Lease Matters
Schedule 3.09(b) FCC Matters
Schedule 3.12 Conflicts
Schedule 3.13 Related Parties
Schedule 3.15 Employee Benefit Plans
Schedule 3.16(b) Environmental Matters
Schedule 3.17 Employment Agreements and Collective
Bargaining Agreements
Schedule 3.18 Insurance
Schedule 3.19 Miscellaneous Matters
Schedule 7.02(a) Budget Categories to Increase Minimum 5% Per Year
Schedule 14(b) Capital Leases to be Bought Out
