STOCK PURCHASE AGREEMENT
among
FABRI DEVELOPMENT CORPORATION,
TCS TELEVISION PARTNERS, L.P.,
TCS TELEVISION, INC.
and
NEXSTAR BROADCASTING GROUP, L.L.C.
Dated: December 30, 1996
STOCK PURCHASE AGREEMENT
December 30, 1996
The parties to this agreement are TCS Television, Inc.,
a Delaware corporation, and TCS Television Partners, L.P., a
Delaware limited partnership (together, the "Sellers"), Fabri
Development Corporation, a Delaware corporation (the "Company"),
and Nexstar Broadcasting Group, L.L.C., a Delaware limited
liability company (the "Buyer").
The Sellers own all of the outstanding capital stock
(the "Stock") of the Company, which owns and operates television
stations WTWO in Terre Haute, Indiana and KQTV in St. Xxxxxx,
Missouri (together, the "Stations").
The Sellers desire to sell the Stock to Buyer, and
Buyer desires to purchase the Stock from the Sellers, on the
terms and conditions contained in this agreement.
Accordingly, it is agreed as follows:
1. Sale and Purchase of Stock.
1.1 Sale of Stock to Buyer. At the closing
referred to in section 3.1, the Sellers shall sell and assign to
the Buyer, and the Buyer shall purchase and acquire from the
Sellers, all of the Stock for an aggregate purchase price of
$31,800,000 (the "Base Amount"), payable to the Sellers as
provided in section 2.3, and subject to adjustment as provided in
section 2.1.
2. Adjustment of Base Amount; Payment of Purchase
Price.
2.1 Adjustment of Base Amount. (a) If the sum
of (i) the aggregate amount of Liabilities (as defined below) as
of the close of business on the day preceding the Closing Date
(the "Determination Time"), plus (ii) $1,544,000 exceeds the
aggregate amount of the Current Assets (as defined below) as of
the Determination Time, the Base Amount shall be decreased by an
amount equal to that excess.
(b) If the aggregate amount of the Current
Assets as of the Determination Time exceeds the sum of (i) the
aggregate amount of the Liabilities as of the Determination Time
plus (ii) $1,544,000, the Base Amount shall be increased by an
amount equal to that excess.
As used in this agreement, "Current Assets"
means the cash, accounts receivable, prepaid expenses and other
tangible current assets of the Company determined in accordance
with generally accepted accounting principles applied
consistently with prior periods, excluding any deferred tax
benefits and, except as provided below, excluding assets relating
to agreements for the acquisition of programming rights
("Programming Agreements"). For the purpose of calculating
Current Assets, the accounts receivable of the Company that are
outstanding 120 days or less shall be valued at 97% of the gross
amount of such accounts receivable (prior to any reserve) and the
accounts receivable that are outstanding more than 120 days shall
not be included (but shall be subject to section 6.15). As used
in this agreement, "Liabilities" means all of the obligations and
liabilities of the Company as of the Determination Time that
would be required to be reflected on a balance sheet of the
Company as of that date prepared in accordance with generally
accepted accounting principles applied consistently with prior
periods, including, but not limited to, accrued vacation,
severance and sick pay, all make-goods after the closing with
respect to advertisements broadcast prior to the closing but only
if the aggregate amount of such make-goods is greater than or
equal to $25,000 (determined based on the aggregate rate card
value of the time on the Stations required to be provided as
make-goods), trade or barter advertising liabilities to the
extent provided below and all other accounts payable and accrued
expenses, but excluding (1) indebtedness under the Note Purchase
Agreement dated as of June 1, 1990, as amended (the "Note
Purchase Agreement") between TCS Television Partners L.P. and the
lenders party thereto (the "Lenders") and related inter-company
indebtedness, all of which inter-company indebtedness shall be
paid or forgiven prior to or at the closing, (2) except as
provided below, liabilities relating to Programming Agreements,
and (3) indebtedness to the Sellers and ML Media Opportunity
Partners, L.P. and accrued management fees and consulting fees,
all of which indebtedness and fees shall be paid or forgiven
prior to or at the closing. In calculating Current Assets and
Liabilities, (1) any non-cash receivable or liability relating to
trade or barter agreements (excluding barter agreements for
programming) shall be excluded except that if as of the close of
business on the day preceding the Closing Date the aggregate rate
card value of the unused broadcast time on the Stations to be
provided in exchange for products or services pursuant to such
trade or barter agreements exceeds the fair market value of any
products or services to be received by the Stations after the
close of business on the day preceding the Closing Date by more
than $25,000, then the excess above $25,000 shall be included as
a liability, and (2) any payments under the Programming
Agreements becoming due during months prior to the month in which
the closing occurs that are unpaid as of the closing shall be
included as a liability and payments becoming due during the
month in which the closing occurs shall be pro-rated.
2.2 Determination of Adjustment to Base Amount.
Within 90 days after the closing, the Sellers shall cause
Deloitte & Touche (the "Accountants") to prepare and deliver to
the Sellers and the Buyer a statement of the Current Assets and
Liabilities as of the Determination Time. The Accountants'
statement shall be final and binding on the parties unless the
Sellers or the Buyer delivers a notice to the other disputing any
matter within 30 days after delivery of the statement, stating
its position with respect to any disputed matter. If the Buyer
or the Sellers delivers such notice, the parties shall seek to
resolve the disputed matter, and if the parties are unable to
resolve the disputed matter within 30 additional days, any
dispute shall be determined by KPMG Peat Marwick. The
determination of any disputed matter by KPMG Peat Marwick
pursuant to the preceding sentence shall be final and binding on
the parties, and their fees and expenses shall be borne 50% by
the Buyer and 50% by the Sellers.
2.3 Payment of Purchase Price. The aggregate
purchase price for the Stock shall be paid as follows:
(a) at the closing, the Buyer shall deliver
or cause to be delivered to The Chase Manhattan Bank, N.A. (the
"Indemnity Escrow Agent"), by wire transfer of immediately
available funds, an amount equal to $1,500,000 (the "Indemnity
Escrow Amount"), to be held by the Indemnity Escrow Agent in an
interest bearing account (the "Indemnity Escrow Account")
pursuant to an escrow agreement substantially in the form of
exhibit 2.3(a) (the "Indemnity Escrow Agreement"), which funds
shall be paid in whole or in part in accordance with the terms of
the Indemnity Escrow Agreement to (i) the Buyer if it is
determined that the Buyer is entitled to indemnification payments
under section 9.2 of this agreement or is entitled to payment
from the Indemnity Escrow Account pursuant to Section 2.3(c) of
this Agreement, or (ii) the Sellers to the extent the Buyer is
not determined to be entitled to any such payments;
(b) at the closing, the Buyer shall pay to
the Sellers, by wire transfer of immediately available funds, the
amount which, together with the Indemnity Escrow Amount, equals
the Base Amount plus (or minus) the estimated amount (determined
in accordance with section 2.4) of the increase (or decrease) in
the Base Amount pursuant to section 2.1; and
(c) not later than 10 days after the final
determination pursuant to section 2.2 of the increase (or
decrease) in the Base Amount pursuant to section 2.1, the Working
Capital Escrow Agent (as defined in section 2.6) shall deliver or
cause to be delivered to the Buyer or to the Sellers by wire
transfer of immediately available funds the amount payable as a
result of the difference between the estimate and the final
determination (and return the other amounts in the Working
Capital Escrow (as defined in section 2.6) as provided therein);
provided, however, that if the purchase price based on the
estimate exceeds the purchase price based on the final
determination by more than the Sellers Working Capital Escrow
Amount (as defined in section 2.6), then the Indemnity Escrow
Agent shall deliver or cause to be delivered to the Buyer by wire
transfer of immediately available funds the excess over the
Sellers Working Capital Escrow Amount from the Indemnity Escrow
Amount (such amount to reduce the portion of the Indemnity Escrow
Amount in excess of $750,000 that otherwise is reserved for loss,
liability, damage or expense suffered by the Buyer resulting from
a willful breach of covenant or other agreement by the Company or
the Sellers or a misrepresentation or breach of warranty by the
Sellers of which the Company or the Sellers had knowledge prior
to the closing, as provided in section 9.4).
2.4 Estimate of Adjustment. The Sellers, in
consultation with the Accountants, shall prepare and submit to
the Buyer, not later than 10 days prior to the Closing Date, a
written estimate (the "Sellers Estimate") of the amount of the
adjustment to the Base Amount pursuant to section 2.1 based on
the Current Assets and Liabilities; such estimate shall be
determined based upon the books and records of the Company. The
Sellers Estimate submitted to the Buyer shall be accompanied by
(a) a statement setting forth in reasonable detail the
calculation of the estimated Current Assets and Liabilities as of
the Determination Date, and (b) a certificate signed by an
officer of each of the Sellers confirming that such estimate was
calculated in accordance with the terms of this section 2. The
Buyer, in consultation with Price Waterhouse, LLP, shall review
the Sellers Estimate, and, if the Buyer disagrees with the
Sellers Estimate not later than five days prior to the Closing
Date, the Buyer shall submit its estimate (the "Buyer's
Estimate") to Sellers. The Buyer's Estimate submitted to the
Sellers shall be accompanied by (a) a statement setting forth in
reasonable detail the calculation of the estimated Current Assets
and Liabilities as of the Determination Date, and (b) a
certificate signed by an officer of the Buyer confirming that
such estimate was calculated in accordance with the terms of this
section 2 to the extent possible in light of the information
provided to Buyer. The amount payable at the closing shall be
based upon the Sellers' Estimate. If the Buyer's Estimate is
higher than the Sellers Estimate, the Sellers shall deposit the
amount of such difference into the Working Capital Escrow Account
pursuant to section 2.6.
2.5 Deposit. Upon execution of this agreement,
the Buyer is delivering to The Chase Manhattan Bank, N.A. (the
"Escrow Agent") cash in the amount of $1,125,000, or in lieu
thereof, a letter of credit in the face amount of $1,200,000
(such cash, or amounts drawn or drawable pursuant to such letter
of credit, being the "Deposit"), to be held by the Escrow Agent
pursuant to the terms of an Escrow Agreement (the "Escrow
Agreement") in the form of exhibit 2.5 and subject to the
following:
(a) If the purchase of the Stock under this
agreement is not consummated as a result of a breach by the Buyer
of any of its material obligations under this agreement (and the
Sellers have not breached any of their material obligations under
this agreement), the Sellers shall be entitled to the Deposit to
compensate the Sellers for the damages resulting to the Sellers
from such breach. The payment of the Deposit (in such amount as
is provided in the Escrow Agreement) by the Escrow Agent to the
Sellers shall be liquidated damages for any such default by the
Buyer and shall be in full settlement of any damages of any
nature or kind that the Sellers may suffer or allege to have
suffered as a result of any such breach by the Buyer, including
any misrepresentation or breach of warranty of Buyer set forth in
this agreement, if the closing does not occur. The receipt by
the Sellers of the Deposit (in such amount as is provided in the
Escrow Agreement) shall be the Sellers' sole and exclusive remedy
in the event of any such breach by the Buyer.
(b) If the purchase of the Stock under this
agreement is not consummated due to the nonfulfillment of any of
the conditions in section 7.1 or for any other reason except the
circumstances described in the first sentence of section 2.5(a),
the Sellers shall not be entitled to the Deposit and, promptly
after the termination of this agreement, the Deposit shall be
paid by the Escrow Agent to the Buyer.
(c) At the closing, the Deposit, or such
letter of credit, if it is then held by the Escrow Agent, shall
be returned to the Buyer.
2.6 Working Capital Escrow. At the closing, the
Sellers shall deliver or cause to be delivered, by wire transfer
of immediately available funds, to The Chase Manhattan Bank, N.A.
(the "Working Capital Escrow Agent") an amount equal to the sum
of (i) $250,000 plus (ii) the excess, if any, of the Buyer's
Estimate over the Sellers Estimate (the "Sellers Working Capital
Escrow Amount"). At the closing, the Buyer shall deliver or
cause to be delivered, by wire transfer of immediately available
funds, to the Working Capital Escrow Agent an amount equal to
$250,000 (the "Buyer's Working Capital Escrow Amount"). The sum
of the Sellers Working Capital Escrow Amount and the Buyer's
Working Capital Escrow Amount (the "Working Capital Escrow
Amount") shall be held by the Working Capital Escrow Agent in an
interest bearing account (the "Working Capital Escrow Account")
pursuant to an escrow agreement substantially in the form of
exhibit 2.6 (the "Working Capital Escrow Agreement"), which funds
shall be paid to the Sellers and the Buyer in accordance with the
terms of the Working Capital Escrow Agreement.
3. Closing.
3.1 Date of Closing. The closing under this
agreement shall take place at the offices of Proskauer Xxxx Xxxxx
& Xxxxxxxxxx LLP, 1585 Broadway, New York, New York, on a date
designated by the Buyer upon at least five business days' prior
notice to the Sellers, but not later than 10 business days after
the last of the conditions specified in sections 7.1(c), (d) and
(e) and 7.2(c) and (d) has been fulfilled (or waived), except as
otherwise provided in section 7.3 and section 10.3. The date on
which the closing is held is referred to in this agreement as the
"Closing Date." At the closing, the parties shall execute and
deliver the documents referred to in section 8.
3.2 Outside Date for Closing. If the closing has
not occurred by September 30, 1997, either the Sellers or the
Buyer may terminate this agreement by notice to the other; upon
such termination, none of the parties shall have any liability of
any kind arising out of this agreement other than for any
liability resulting from its breach of this agreement prior to
termination (which liability of the Buyer will be limited as
provided in section 2.5(a) of this Agreement). If the closing is
postponed pursuant to section 11 of this agreement, the date
referred to in the previous sentence shall be extended by the
period of the postponement.
4. Representations and Warranties by the Sellers.
As a material inducement to cause Buyer to enter
into this agreement and to agree to purchase the Stock, the
Sellers jointly and severally represent and warrant to the Buyer
as follows:
4.1 The Sellers' Organization and Authority. TCS
Television Partners, L.P. is a limited partnership duly organized
and validly existing under the law of Delaware and has the full
power and authority under Delaware law and its partnership
agreement to enter into and to perform this agreement, and TCS
Television, Inc. is a corporation duly organized and validly
existing under the law of Delaware and has the full corporate
power and authority to enter into and to perform this agreement.
Each of the Sellers is duly qualified to do business and in good
standing in each jurisdiction in which such qualification is
necessary because of the nature of the business conducted by it
or the properties and assets owned or leased by it.
4.2 Authorization of Agreement. The execution,
delivery and performance of this agreement by the Sellers have
been duly authorized by all necessary partnership or corporate
action of the Sellers and this agreement constitutes a legal,
valid and binding obligation of each of the Sellers, enforceable
against it in accordance with its terms, except as may be limited
by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
4.3 The Company's Organization. The Company is a
corporation duly organized, validly existing and in good standing
under the law of the state of Delaware and is in good standing in
each jurisdiction in which the nature of the business conducted
by it or the property owned, leased or operated by it requires
qualification. The copies of the certificate of incorporation,
by-laws, minute books and stock records of the Company that have
been delivered to the Buyer are complete and correct.
4.4 Capitalization of the Company; No Out-
standing Options. The Company's authorized capitalization
consists of 1,000 shares of common stock, no par value, of which
50 shares are issued and outstanding. All of the Company's
outstanding shares were duly authorized for issuance, were
validly issued, and are fully paid and non-assessable. There are
no outstanding options, puts, calls, warrants or rights of any
kind to acquire any shares of capital stock, and there are no
outstanding securities directly or indirectly convertible,
exercisable or exchangeable into any shares of capital stock, of
the Company; nor does the Company have any obligations to issue
any such options, puts, calls, warrants, rights or securities.
Except for arrangements made under the Note Purchase Agreement
which are to be terminated at closing, there are no existing
proxies or arrangements that require or permit any shares of the
Company to be voted by or at the discretion of anyone other than
the record owner, and there are no restrictions of any kind on
the transfer of any issued shares of the Company except as may be
imposed by the Securities Act of 1933 and the Communications Act
of 1934. There are no statutory or contractual stockholders
preemptive rights with respect to the Company's securities. The
Company has not violated any such preemptive right or any
applicable federal or state securities laws in connection with
the offer, sale or issuance of any of its capital stock.
4.5 Ownership of the Company's Shares. The
Sellers are the record and beneficial owners of all of the
outstanding capital stock of the Company. Upon payment of a
portion of the proceeds of the sale of the Stock to the Lenders
and release by the Lenders at the closing of their lien on the
Stock, the Buyer will receive valid title to all of the
outstanding shares of capital stock of the Company, free and
clear of any claim, lien, charge, security interest or
encumbrance ("Lien"). The Company does not own or hold, or have
any rights to acquire, any shares of capital stock, any debt
security or any other security of or interest in any other person
or entity.
4.6 Consents of Third Parties. Subject to
receipt of the consents and approvals referred to in schedule
4.6, the execution, delivery and performance of this agreement by
the Sellers will not, with or without the giving of notice or the
passage of time or both, (i) conflict with the organizational
documents of the Sellers or the Company and will not conflict
with, or result in a breach or termination of, constitute a
default under, or give any person or entity any right to
terminate or accelerate the Company's obligations under, or
require any consent under, any lease, agreement, commitment or
other instrument, or any order, judgment or decree, or any
governmental permit or authorization to which either of the
Sellers or the Company is a party or by which either of the
Sellers or the Company is bound, except for any conflicts,
breaches, terminations, defaults or failures to receive consents
that could not, individually and in the aggregate, have a
Material Adverse Effect; (ii) constitute a violation by either of
the Sellers or the Company of any law, regulation, ordinance or
any other requirement of any governmental authority applicable to
either of the Sellers or the Company; or (iii) result in the
creation of any Lien upon any of the assets of either of the
Stations or the Company. No consent, approval or authorization
of, or designation, declaration or filing with, any governmental
authority is required on the part of the Sellers or the Company
in connection with the execution, delivery and performance of
this agreement, except for the filings referred to in section
6.1.
4.7 FCC Licenses. (a) The Company holds, and
schedule 4.7 sets forth a true, correct and complete list of, the
licenses, authorizations or permits, together with all renewals,
extensions and modifications thereof and all additions thereto
(the "FCC Licenses") for the Stations issued by the Federal
Communications Commission (the "Commission"). The FCC licenses
are not subject to any condition outside the ordinary course.
There are no other material permits and authorizations necessary
for or used in the operations of the Stations or required under
the rules, regulations and policies of the Commission or the
Communications Act. Each of the FCC Licenses is in full force
and effect and is not subject to renewal prior to the date
specified for such FCC License set forth on schedule 4.7. No
application, action or proceeding is pending for the renewal or
modification of any of the FCC Licenses except that the
application for renewal of the main station license for WTWO-TV
will be filed with the Commission on or prior to April 1, 1997.
No application, investigation, order, action or proceeding is
pending or issued or, to the best of the Sellers' and the
Company's knowledge, threatened that may result in the denial of
the application for renewal, the revocation, modification, non-
renewal or suspension of any of the FCC Licenses, the issuance of
any order or notice, or the imposition of any administrative or
judicial sanction with respect to the Stations, the Company or
the FCC Licenses that may materially adversely affect the rights
of the Buyer under any such FCC License or have a Material
Adverse Effect. Except as set forth on schedule 4.7 (a):
(1) to the best of the Sellers' and the
Company's knowledge, no Station is short-spaced, on a
grandfathered basis or otherwise, to any existing broadcast
television station, outstanding construction permit or pending
application therefor, domestic or international, or to any
existing or proposed TV allotment, domestic or international;
(2) neither the Company nor any Station has,
since June 30, 1996, received any notice to the effect that it is
causing objectionable interference with the transmissions of any
other television station or communications facility or received
any written complaints with respect thereto; and
(3) to the best of the Sellers' and the
Company's knowledge, no other television station or
communications facility is causing objectionable interference
with either of the Stations' transmissions or the public's
reception of either of the Stations' transmissions.
(b) Schedule 4.7(b) sets forth (or has appended
to it, in the case of the items described in clauses (6) and (8)
below) for each Station:
(1) a list of all U.S. cable systems which
carry such Station's signal;
(2) a list of all Market Cable Systems to
which such Station has provided a must-carry or retransmission
consent election notice in accordance with the provisions of the
Cable Television Consumer Protection and Competition Act of 1992
and the FCC Regulations (collectively, the "Cable Act
Requirements"), and a list of all Market Cable Systems to which
such Station has not provided any such must-carry or
retransmission consent notice;
(3) a list of all retransmission consent
and/or copyright indemnification agreements, if any, entered into
by the Company with respect to such Station;
(4) a list of all must carry or
retransmission consent election notices referred to in clause (2)
above, if any, which were not delivered to the Market Cable
System in question on or before October 1, 1996;
(5) a list of all Market Cable Systems, if
any, which are carrying such Station's signal and which have
notified the Company or any Station of such Market Cable System's
intention to delete a Station from carriage or to change such
Station's channel position on such cable system, other than
pursuant to any agreement described in clause (3) above;
(6) each notice, if any, received by the
Company or any Station from any Market Cable System alleging that
a Station does not deliver an adequate signal level, as defined
in Section 76.55(c)(3) of the regulations of the Commission, to
such Market Cable System's principal headend (other than any such
notice as to which such failure has been remedied or been
determined not to exist), and all further correspondence between
the Company or any Station and any such Market Cable System
relating to such notice;
(7) a list of all pending petitions for
special relief to include any additional community or area as
part of such Station's television market, as defined in Section
76.55(e) of the regulations of the Commission, if any, filed by
the Company or any Station with respect to a Station; and
(8) each pending petition for special relief
requesting the deletion of any community or area from such
Station's television market, if any, which is pending.
4.8 Call Letters. The Company has the right to
the use of the call letters "WTWO-TV" and "KQTV", pursuant to the
rules and regulations of the Commission.
4.9 Ownership of Assets. Except as set forth on
schedule 4.9, the Company has valid title (in the case of
personal property) or good and marketable title (in the case of
real property) to, or a valid leasehold interest in, all tangible
and intangible property and assets used in or necessary for the
conduct of its business or located on its premises, free and
clear of any Lien, including all such property reflected on the
Company's balance sheet as of September 30, 1996 (except property
disposed of since that date in the ordinary cause of business),
except for the lien, if any, of current property taxes not yet
due and payable and except in the case of real property for any
Lien that does not materially interfere with the operations of
the property or materially detract from the value of the
property. Except as set forth on schedule 4.9, the Company's
buildings, equipment and other tangible assets are in reasonably
good operating condition in all material respects and are fit for
use in the ordinary course of business. The Company owns, or has
a valid leasehold or licensee interest in, all assets necessary
for the conduct of its businesses as presently conducted.
4.10 Financial Statements. The Sellers have
previously delivered to the Buyer the unaudited balance sheets of
the Company as of December 31, 1993, 1994, and 1995, and the
related statements of operations and cash flows for the years
then ended and the unaudited balance sheets of each of the
Stations as of September 30, 1996 and the related statement of
operations and cash flows of each of the Stations for the nine-
month period then ended. Except as set forth on schedule 4.10,
all of those financial statements have been prepared in
accordance with generally accepted accounting principles applied
on a consistent basis, are in accordance with the Company's books
and records (which are accurate and complete in all material
respects), and present fairly in all material respects the
financial position and the results of operations and cash flows
of the Company as of the dates and for the years indicated.
Except for liabilities reflected in the balance sheet (including
any footnote thereto) of the Company as of September 30, 1996 and
except for obligations under leases, commitments and other
agreements referred to in schedule 4.16 or 4.17, the Company has
no liabilities or obligations of any kind, whether accrued,
absolute, contingent or otherwise of a nature that would have
been required to be reflected on a balance sheet prepared in
accordance with generally accepted accounting principles applied
consistently with prior periods other than those incurred after
September 30, 1996 in the ordinary course of business consistent
with past practice.
4.11 Taxes. The Company has filed all Federal,
state and other tax returns required by law to be filed by it,
and all such tax returns are correct and complete in all material
respects. The information provided to the Buyer by the
Accountants (copies of which are attached as exhibit 4.11) is
correct and complete in all material respects. The Company has
paid, or made provision in its financial statements referred to
in section 4.10 for payment of, all taxes of the Company accrued
through the date of the financial statements referred to in
section 4.10. There are no claims pending against the Company
for past due taxes. There are no outstanding waivers or
agreements by the Company for the extension of the time for the
assessment of any tax. Except as set forth on schedule 4.11, the
Company is not a party to any tax allocation or tax sharing
agreement or a member of an affiliated group filing a
consolidated Federal income tax return (or any similar combined,
consolidated or unitary group tax return under state or local
law). The Company has no liability for taxes of any other person
or entity (A) under Treasury Regulations Section 1.1502-6 (or any
similar provision of state or local tax law), (B) as a
transferee, (C) by contract, or (D) otherwise. The Company has
withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third
party. The Company has not made any payments, and is not and
shall not become obligated (under any contract entered into on or
before the Closing Date) to make any payments, that shall be non-
deductible under Section 280G of the Code (or any corresponding
provision of state, local or foreign income tax law). The
Company will not be required (A) as a result of a change in
method of accounting for a taxable year ending on or prior to the
Closing Date, to include any adjustment in taxable income for any
taxable year or portion thereof ending after the Closing Date,
(B) as a result of any "closing agreement," as described in
Section 7121 of the Code (or any corresponding provision of
state, local or foreign income tax law), to include any item of
income in, or exclude any item of deduction from, taxable income
for any taxable year or portion thereof ending after the Closing
Date or (C) as a result of any deferred intercompany gain
described in Treasury Regulation Sections 1.1502-13 or any excess
loss account described in Treasury Regulation Section 1.1502-19
(or any corresponding or similar provision or administrative rule
of federal, state, or local income tax law), to include any item
of income in taxable income for any taxable year or portion
thereof ending after the Closing Date. The Company has not made
any election under Section 341(f) of the Code (or any
corresponding provision of state or local tax law). The
Company's Federal income tax returns for periods from and
including the tax year ended October 31, 1993 are subject to
audit. For purposes of this agreement, the term "tax" shall
include all taxes, charges, fees, levies, penalties or other
assessments imposed by any United States Federal, state or local
taxing authority, including any interest, penalties or additions
attributable thereto. Notwithstanding anything to the contrary
in this section 4.11, no representation or warranty is being made
as to the amount of the net operating losses of the Company at
any time.
4.12 Absence of Certain Changes. Since
September 30, 1996, the Company has operated the business of the
Stations in the usual and ordinary course and substantially
consistent with past practice, and, except as set forth on
schedule 4.12:
(a) through the date of this agreement,
there has been no material adverse change in the business or
operations of the Stations taken as a whole;
(b) the Company has not entered into any
transaction or incurred any liability or obligation except in the
ordinary course of its business consistent with past practice;
(c) the Company has not sold, pledged,
assigned or transferred any of the assets of the Company other
than in the ordinary course of business consistent with past
practice;
(d) none of the Sellers, with respect to the
Stations, nor the Company has incurred any indebtedness other
than trade accounts payable incurred in the ordinary course of
business consistent with past practice;
(e) the Company has continued to collect its
accounts receivable and pay its accounts payable in the ordinary
course of business consistent with past practices;
(f) the Company has not granted or agreed to
grant any increase in any rate or rates of salaries or
compensation or other benefits or bonuses payable to employees of
the Company, except for increases in accordance with the
Company's past employment practices, and has not granted or
agreed to effect any changes in the Company's management
personnel, policies or employee benefits;
(g) the Company has not sold, assigned or
transferred any patents or patent applications, trademarks,
service marks, trade names, corporate names, copyrights or
copyright registrations, trade secrets or other intangible
assets;
(h) the Company has not suffered any
extraordinary losses or waived any rights of material value,
whether or not in the ordinary course of business or consistent
with past practice;
(i) the Company has not made capital
commitments for cash expenditures that aggregate in excess of
$25,000; and
(j) the Company has not agreed to do any of
the foregoing.
4.13 Commission Reports. All material returns,
reports and statements required to be filed by the Sellers or the
Company with the Commission relating to the Company or the
Stations have been filed and complied with and are complete and
correct in all material respects as filed.
4.14 Intangible Assets. Schedule 4.14 contains a
complete list of the trademarks, trade names, logos, jingles and
slogans used by the Company in the operation of the Stations.
The Company owns, free and clear of any Liens, each of the
trademarks, trade names, logos, jingles and slogans listed on
schedule 4.14. To the best of the Sellers' knowledge, the
Company is not operating either of the Stations in a manner that
infringes and has not infringed in any material respect any
patent, copyright or trademark of any third party or otherwise
violates in any material respect the rights of any third party,
and no claim has been made or threatened against it alleging any
such violation. To the best of the Sellers' knowledge, there has
been no material violation by others of any right of the Company
in any trademark, trade name, logo, jingle or slogan used in the
operation of the Stations.
4.15 Litigation; Compliance with Laws. Except as
set forth on schedule 4.15, there is no claim, litigation,
proceeding or governmental investigation pending or, to the best
of the Sellers' knowledge, threatened, or any order, injunction
or decree outstanding, against the Sellers or the Company or any
of their respective affiliates, which if adversely determined
might (i) have a Material Adverse Effect, or (ii) materially
delay approval by the Commission of the transactions contemplated
by this agreement. The Company has all material governmental
franchises, permits, authorizations, licenses and other rights
necessary for the conduct of its business as currently conducted
and is not in violation of any law, regulation, ordinance or any
other requirement of any governmental body or court, which
violation could have, individually or in the aggregate, a
Material Adverse Effect, and no notice has been received by the
Sellers or the Company alleging any such violation. The Stations
are being operated in all material respects in accordance with
the FCC Licenses and in compliance with the Communications Act of
1934 and the policies, rules and regulations thereunder.
4.16 List of Agreements, etc. Schedules 4.16 and
4.17 together contain, with respect to the Company, a true,
correct and complete list of: (a) all commitments and other
agreements for the purchase of materials, supplies or equipment,
other than commitments and other agreements that were entered
into in the ordinary course of business consistent with past
practice and involve an expenditure by the Company of less than
$10,000 for any one commitment or two or more related
commitments; (b) all notes and agreements relating to any
indebtedness of the Sellers or the Company; (c) all leases or
other rental agreements under which the Company is lessee, other
than any such leases which do not call for annual lease payments
in excess of $10,000 individually or $50,000 in the aggregate or
and which are not otherwise material to the Company; (d) all
network affiliation agreements; (e) all "barter," "trade" and
other agreements for the sale of advertising time other than for
cash; (f) all collective bargaining agreements; (g) all
Programming Agreements (together with a programming expense
schedule and a programming liability schedule, showing all future
programming payments for each program, and for Full House on WTWO
and Xxxxxxxx and Home Improvement on KQTV, an updated schedule
showing the number of remaining runs and the remaining
programming payments); (h) all employment and consulting
agreements that (A) provide for compensation in excess of $50,000
a year, (B) are written and are not terminable at the Company's
will or (C) require any severance or termination payment; (i) all
agreements with regional or national sales representatives or
with rating services; (j) all license agreements with licensing
organizations; (k) all agreements that restrict the Company or,
to the best of the Sellers' knowledge, any employees of the
Stations, from engaging in any business activities anywhere; (l)
all assignments, licenses, or indemnification agreements with
respect to any intangible property; (m) all contracts under which
the Company has advanced or loaned any other person or entity
amounts in the aggregate exceeding $10,000; (n) all guarantees of
any indebtedness or obligation of others in excess of $10,000;
and (o) all other agreements, commitments and understandings
(written or oral), other than those as to which both (i) the
consideration involved is not more than $10,000 individually or
$100,000 in the aggregate and (ii) the termination of which could
not be reasonably expected to have a Material Adverse Effect.
True and complete copies of all written (and true and complete
descriptions of the material terms and conditions of all oral)
leases, commitments and other agreements referred to on schedules
4.16 and 4.17 have been delivered to the Buyer.
4.17 Agreements Regarding Employees. Except as
set forth in schedule 4.17, the Company is not a party to or
bound by any fringe benefit or other non-cash compensation plan,
or any pension, thrift, annuity, retirement, savings, profit
sharing or deferred compensation plan or agreement, or any bonus,
vacation, holiday, sick leave, group insurance, health or other
personal insurance or other incentive or benefit agreement, plan
or arrangement. Except as set forth on schedule 4.17, the
Company does not have any severance policy and no employee of the
Company is entitled to any severance payment, either by law or by
agreement, upon the termination of his or her employment. Except
as set forth on schedule 4.17, no employee of the Company is
represented by any union or other collective bargaining agent and
there are no collective bargaining or other labor agreements with
respect to any employee of the Company.
4.18 Status of Agreements. All leases, commitments
and other agreements of the Company were entered into in the
ordinary course of the business of the Company. Each of the
leases, commitments and other agreements set forth on schedules
4.16 and 4.17 is presently in full force and effect and is valid,
binding and enforceable against the Company in accordance with
its terms and, except as set forth on schedule 4.18, the Company
has performed all material obligations required to be performed
by it and is not in default, and, to the best of the Sellers'
knowledge, no other party is in default, under any agreement
referred to in section 4.16 or 4.17, which default would have,
individually or in the aggregate, a Material Adverse Effect. No
party to any of the leases, commitments and other agreements set
forth on schedules 4.16 and 4.17 has made, asserted or has any
defense, setoff or counterclaim under any of those agreements or
has exercised any option granted to it to cancel or terminate its
agreement, to shorten the term of its agreement, or to renew or
extend the term of its agreement and neither the Sellers nor the
Company has received any notice to that effect.
4.19 Insurance. Schedule 4.19 contains a complete
list of all of the Company's insurance policies specifying the
policy limit, type of coverage, location of the property covered,
annual premium, premium payment date and expiration date of each
of the policies. The insurance policies are in full force and
effect, but will be cancelled as of the closing.
4.20 Labor Matters. Except as set forth on
schedule 4.20, (a) there is no unfair labor practice charge or
complaint against the Company pending before the National Labor
Relations Board, any state labor relations board or any court or
tribunal and, to the best of the Sellers' knowledge, none is or
has been threatened; (b) there is no labor strike, dispute,
request for representation, slowdown or stoppage actually pending
against or affecting the Company and, to the best of the Sellers'
knowledge, none is or has been threatened; (c) the Company, to
the best of its knowledge, knows of no plans by any of its
employees to terminate employment; and (d) no grievance which
might have an adverse effect on the conduct of the operations of
the Stations or any arbitration proceeding arising out of or
under any collective bargaining agreement is pending and, to the
best of the Sellers' knowledge, none is or has been threatened.
4.21 Environmental Matters. (a) Except as
disclosed on schedule 4.21, to the best of the Sellers'
knowledge, the Company and all of the property (whether owned or
leased) of the Company is in compliance in all material respects
with all material federal, foreign, state and local laws,
regulations, ordinances and other similar provisions having the
force and effect of law, relating to pollution, the protection of
human health or the environment, including, but not limited to,
laws relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials
of Environmental Concern. "Materials of Environmental Concern"
means hazardous substances, chemicals, pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products,
asbestos and polychlorinated biphenyls, radioactive substances,
odors and noise.
(b) Except as disclosed on schedule 4.21, to
the best of the Sellers' knowledge, there are no past or present
actions, activities, circumstances, conditions, events or
incidents, including, but not limited to, the release, emission,
discharge or disposal of any Material of Environmental Concern,
that could form the basis of any material liability of, or
material violation by, the Company.
(c) Except as set forth on schedule 4.21,
(1) there are no underground storage tanks located on property
owned or leased by the Company, (2) there is no asbestos
contained in or forming part of any building, building component,
structure or office space owned or leased by the Company, (3) no
polychlorinated biphenyls (PCBs) are used or stored at any
property owned or leased by the Company, and (4) none of the
electrical equipment located at the real property owned or leased
by the Company contains any PCBs. There are no on-site or off-
site locations where the Company has stored, disposed or arranged
for the disposal of Materials of Environmental Concern.
(d) At or prior to the closing, the Sellers
shall deliver to the Buyer a reliance letter from the firm that
performed the Phase One Environmental Site Assessments on the
real property of the Company (copies of which have been delivered
to the Buyer).
4.22 ERISA. Schedule 4.22 lists each "employee
benefit plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), at
any time sponsored or maintained by the Company or either of the
Stations for the benefit of employees of either of the Stations
(the "Employee Benefit Plans").
Each such Employee Benefit Plan and any related
trust, insurance contract or fund has been maintained, funded and
administered in compliance with its respective terms and in
compliance in all material respects with all applicable laws and
regulations, including, but not limited to, ERISA and the
Internal Revenue Code of 1986, as amended (the "Code"), and
including, but not limited to, all reporting and disclosure
obligations. None of the Employee Benefit Plans (i) is subject
to Title IV of ERISA or the minimum funding standards imposed by
Section 412 of the Code, (ii) is a multiemployer plan (as such
term is defined in Section 3(37) of ERISA), or (iii) provides
health, accident or life insurance benefits to current or future
retirees, current or future former employees, current or future
former independent contractors, or any of their respective
spouses, dependents, or other beneficiaries, other than in
accordance with Section 4980B of the Code ("COBRA") or applicable
state continuation coverage law.
With respect to each Employee Benefit Plan, no
actions, investigations, suits or claims with respect to such
plan (other than routine claims for benefits) are pending or, to
the best of Sellers' or the Company's knowledge, threatened that
could subject Buyer to any material liability.
There is no employee benefit plan, program, policy
or arrangement presently or formerly maintained or contributed to
by Sellers or the Company or any other entity (where such entity
and one or more of the Sellers or the Company are or were treated
as a single employer within the meaning of Code Section 414(b),
(c), (m), or (o)) which could subject Buyer to any material
liability (other than routine claims for benefits).
With respect to each Employee Benefit Plan,
Sellers have furnished to Buyer (i) true and accurate copies of
all written plan documents, (ii) IRS Form 5500 annual reports for
the past three years (including all schedules and attachments),
(iii) IRS determination letters, and (iv) all correspondence
during the past three years to or from the Department of Labor or
the IRS.
The TCS Television Partners 401(k) Savings Plan
(the "401(k) Plan") has received a favorable determination letter
from the Internal Revenue Service ("IRS") with respect to its
qualification under the Code and the IRS has not taken any action
to revoke any such letter. To the best of the Sellers'
knowledge, nothing has occurred which would adversely affect the
qualified status of the 401(k) Plan.
4.23 Powers of Attorney. Except as set forth on
schedule 4.23, there are no outstanding powers of attorney
executed on behalf of the Company or the Stations.
4.24 Certain Transactions. Except as set forth on
schedule 4.24, there are no contracts, agreements or commitments
between the Company, on the one hand, and either of the Sellers
and/or any affiliate of the Company or either of the Sellers, on
the other hand.
4.25 Real Property. (a) Attached as schedule
4.25(a) is a legal description of each parcel of real property
owned by the Company (the "Owned Property"). The Company has
good and marketable title in and to all of the Owned Property
subject to no liens, except as described on such schedule and
except for imperfections of title that do not materially reduce
the value or materially impair the use of any Owned Property.
(b) Attached as schedule 4.25(b) is a list of
all leases, subleases and other occupancy agreements, including
all amendments, extensions and other modifications (the
"Leases"), for real property (the "Leased Property"; the "Owned
Property"; and the "Leased Property" collectively the "Real
Property") to which the Company is a party. The Company has good
and valid leasehold interests in and to all of the Leased
Property, subject to no liens except as described in such
schedule. Each Lease is in full force and effect and is
enforceable in accordance with its terms. There exists no
default by Sellers or the Company, or to the best of the
knowledge of Sellers and the Company, the other party thereto,
and no condition which, with the giving of notice, the passage of
time or both, could become a default under any Lease. Sellers
have previously delivered to Buyer true and complete copies of
all the Leases. Except as described on schedule 4.25(b), no
consent, waiver, approval or authorization is required from the
landlord under any Lease as a result of the execution of this
agreement or the consummation of the transactions contemplated
hereby.
(c) The Real Property constitutes all of the
real property owned, leased, occupied or otherwise utilized in
connection with the business of the Company. Other than the
Company, there are no parties in possession or parties having any
current or future right to occupy any of the Real Property. The
Real Property is in reasonably good condition and repair and is
sufficient and appropriate for the conduct of the Company's
business. The Real Property and all buildings and improvements
located thereon conform in all material respects to all
applicable building, zoning and other laws, ordinances, rules and
regulations. All material permits, licenses and other approvals
necessary to the current occupancy and use of the Real Property
have been obtained, are in full force and effect and have not
been violated in any material respect. There exists no material
violation of any covenant, condition, restriction, easement,
agreement or order affecting any portion of the Real Property.
All improvements located on the Real Property have direct access
to a public road adjoining such Real Property. No such
improvements or accessways encroach on land not included in the
Real Property and no such improvement is dependent for its
access, operation or utility on any land, building or other
improvement not included in the Real Property. There is no
pending or, to the best of the knowledge of the Sellers or the
Company, any threatened condemnation proceeding affecting any
portion of the Real Property.
5. Representations and Warranties by the Buyer.
As a material inducement to cause Sellers to enter
into this agreement and to agree to sell the Stock, the Buyer
represents and warrants to the Sellers as follows:
5.1 The Buyer's Organization. The Buyer is a
limited partnership duly organized and validly existing under the
law of the state of Delaware and has the full power and authority
to enter into and perform this agreement and to own and operate
the Stations.
5.2 Authorization of Agreement. The execution,
delivery and performance of this agreement by the Buyer has been
duly authorized by all necessary action of the Buyer, and this
agreement constitutes a valid and binding obligation of the Buyer
enforceable against it in accordance with its terms, except as
may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
5.3 Consents of Third Parties. The execution,
delivery and performance of this agreement by the Buyer will not
(a) conflict with the Buyer's partnership agreement and will not
conflict with or result in the breach or termination of, or
constitute a default under any lease, agreement, commitment or
other instrument, or any order, judgment or decree, to which the
Buyer is a party or by which the Buyer is bound except for such
breaches, terminations and defaults that could not have,
individually and in the aggregate, a material adverse effect on
the consummation of the transactions contemplated hereby or (b)
constitute a violation by the Buyer of any law applicable to it.
No consent, approval or authorization of, or designation,
declaration or filing with, any governmental authority is
required on the part of the Buyer in connection with the exe-
cution, delivery and performance of this agreement, except for
the filings referred to in section 6.1.
5.4 Litigation. There is no claim, litigation,
proceeding or governmental investigation pending or, to the best
of the Buyer's knowledge, threatened, or any order, injunction or
decree outstanding, against the Buyer or any of its affiliates
that would prevent the consummation of the transactions
contemplated by this agreement.
5.5 Buyer's Qualification. To the best of
Buyer's knowledge, it is legally, financially and otherwise
qualified under the rules and regulations of the Commission and
the Communications Act of 1934, as amended, to become the owner,
operator and licensee of the Stations.
5.6 Availability of Funds. The partners of a
member of Buyer have made (and will have outstanding at the time
of the closing) commitments to make capital contributions to such
member (at the discretion of the general partner of such member)
in amounts which would enable such member to contribute and/or
loan to Buyer funds in amounts which would be sufficient to
enable Buyer to consummate the transactions contemplated by this
agreement, including the payment of the Base Amount (it being
understood that such member is not obligated to make any such
contribution or loan, nor is the general partner of such member
obligated to require the partners of such member to make capital
contributions to such member, and neither such member nor such
general partner will be so obligated at any time).
6. Further Agreements of the Parties.
6.1 Filings. (a) As soon as practicable, but in
no event later than 15 days after the date of this agreement, the
parties shall file with the Commission an application (the "FCC
Application") requesting consent to the transactions contemplated
by this agreement; the parties shall with due diligence take all
reasonable steps necessary to expedite the processing of the FCC
Application and to secure such consent or approval and to cause
the same to become a Final Order (as defined below). Each party
shall bear its own costs and expenses (including the fees and
disbursements of its counsel) in connection with the preparation
of the portion of the FCC Application to be prepared by it and in
connection with the processing of that application. All filing
and grant fees, if any, paid to the Commission, shall be borne by
the Buyer.
(b) Within five business days after the
expiration of the 30-day public comment period with respect to
the FCC Application, if such period has passed without any
objections to the FCC Application or, if there are objections,
within five business days after all objections to the FCC
Application have been resolved to the reasonable satisfaction of
Buyer, or, in any event, at Buyer's request, the Sellers and the
Buyer shall, in cooperation with the other, file in connection
with the transactions contemplated by this agreement any reports
or notifications that may be required to be filed by them under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx
"XXX Xxx"), with each of the Department of Justice and the
Federal Trade Commission. Each of the Sellers and the Buyer
shall comply promptly with all requests for further documents and
information made by the Department of Justice or the Federal
Trade Commission, and shall furnish to the other all such
information in its possession as may be necessary for the
completion of the reports or notifications to be filed by the
other.
6.2 Operations of the Station. Without limiting
the requirement that the representations and warranties of
Sellers be true and correct in all material respects on the
Closing Date, from the date of this agreement through the Closing
Date:
(a) the Company shall, and the Sellers shall
cause the Company to operate the business of the Stations in the
usual and ordinary course and substantially consistent with past
practices and in substantial conformity with (i) the FCC
Licenses, the Communications Act of 1934, and the rules and
regulations of the Commission, and (ii) all other laws,
ordinances, regulations, rules or orders relating to the
operations of the Stations;
(b) the Company shall, and the Sellers shall
cause the Company to, use reasonable efforts, consistent with its
past practices, (i) to preserve the business organization of each
of the Stations intact and to preserve the goodwill and business
of the advertisers, suppliers and others having business
relations with each of the Stations, (ii) to retain the services
of the employees of each of the Stations, and (iii) to preserve
all trademarks, trade names, service marks and copyrights and
related registrations of each of the Stations, and all slogans
and logos, owned by the Company or in which it has any rights;
(c) the Company shall, and the Sellers shall
cause the Company to, deliver to the Buyer copies of all written
(and descriptions of the material terms and conditions of all
oral) contracts, agreements, commitments and understandings
entered into by the Company after the date of this agreement
(whether or not disclosed pursuant to section 4) other than
agreements for the sale of advertising time for cash entered into
in the ordinary course of business consistent with past practice;
(d) the Company shall, and the Sellers shall
cause the Company to maintain its books and records in accordance
with generally accepted accounting principles applied
consistently with past practice and not to sell or transfer any
of the assets relating to either of the Stations, other than
assets that have worn out or been replaced with other assets of
equal or greater value; and
(e) the Company shall not, and the Sellers
shall cause the Company not to, except with the Buyer's prior
approval, (i) enter into or renew any lease, commitment or other
agreement relating to either of the Stations that, if entered
into prior to the date of this agreement, would have been
required to be included on schedule 4.16 or 4.17 (or that would
require receipt of a consent or approval that would be required
to be included on schedule 4.6), (ii) enter into any new time
sale agreement for either of the Stations except in the ordinary
course of business for consideration consisting solely of cash
and consistent with past practices, (iii) grant or agree to grant
any general increases in the rates of salaries or compensation
payable to employees of either of the Stations except in the
ordinary course of business and consistent with past practices,
(iv) grant or agree to grant any specific bonus or increase to
any executive or management employee of either of the Stations
whose total annual compensation after the increase would be at an
annual rate in excess of $50,000 except in the ordinary cause of
business and consistent with past practices, (v) provide for any
new pension, retirement or other employment benefits for
employees of either of the Stations or any increase in any
existing benefits, establish any new employee benefit plan or
amend or modify any existing employee benefit plan, or otherwise
incur any obligation or liability under any employee benefit plan
materially different in nature or amount from obligations or
liabilities incurred during similar periods in prior years, or
(vi) distribute any cash except to the extent consistent with the
operational needs of the Company and consistent with past
practice; provided, however, the Company may apply cash to pay
interest or principal on the indebtedness under the Note Purchase
Agreement.
6.3 No Control. The provisions of this agreement
shall not, between the date of this agreement and the Closing
Date, be deemed to give the Buyer the right, directly or
indirectly, to control, supervise or direct, or attempt to
control, supervise or direct, the operations of either of the
Stations, but such operations shall be solely the responsibility
of the Sellers and the Company and, subject to the provisions of
this agreement, shall be in their complete discretion.
6.4 Expenses. Each party shall bear its own
expenses incurred in connection with the negotiation and pre-
paration of this agreement and in connection with all obligations
required to be performed by it under this agreement, except where
specific expenses have been otherwise allocated by this
agreement.
6.5 Access to Information. Prior to the closing,
the Buyer and its representatives and advisors and proposed
providers of financing to the Buyer and their respective
representatives and advisors may make such investigation of the
property, assets and businesses of the Company as it may desire,
and the Sellers and the Company shall give to the Buyer and to
its counsel, accountants and other representatives and advisors,
and to proposed providers of financing to the Buyer and their
respective representatives and advisors, upon reasonable notice,
full access during normal business hours throughout the period
prior to the closing to all of the assets, books, properties,
commitments, agreements, records and files of the Company and to
the Company's executive personnel and the Sellers and the Company
shall furnish to the Buyer and such other persons during that
period all documents and copies of documents and information
concerning the properties, businesses and affairs of the Company
as the Buyer or such other persons reasonably may request. The
Buyer shall hold, and shall cause its representatives and
advisors to hold, all such information and documents and all
other information and documents delivered pursuant to this
agreement confidential except to the extent that (a) such
information was known by the recipient when received, (b) such
information and documents are or hereafter become lawfully
obtainable from other sources, (c) it is necessary to disclose
such information or documents to a governmental agency, (d) any
requirement of law, legal process or governmental rule or
regulation requires otherwise or (e) such duty as to
confidentiality is waived by the Company. If the purchase and
sale contemplated by this agreement is not consummated for any
reason, the Buyer and its representatives and advisors shall
return to the Sellers all such information and documents and any
copies as soon as practicable. The Sellers shall not disclose
any confidential information with respect to the Stations to any
third party except to its counsel, accountants and other
representatives and its lenders and their representatives and as
otherwise required by applicable laws, including the securities
laws. The Buyer's and the Sellers' obligations under this
section shall survive the termination of this agreement.
6.6 Consents; Assignment of Agreements. The
Sellers shall use reasonable efforts (but shall not be required
to make any payment other than its incidental out-of-pocket
expenses or any mandatory filing, consent or similar fee to a
governmental authority) to obtain at the earliest practicable
date all consents and approvals referred to in section 4.6.
6.7 Further Assurances. At any time and from
time to time after the closing, each of the parties shall,
without further consideration, execute and deliver to the other
such additional instruments and shall take such other action as
the other may reasonably request to carry out the transactions
contemplated by this agreement. The parties hereto agree to use
reasonable efforts to cause each of the conditions set forth in
sections 7.1 and 7.2 to be satisfied. The parties hereto agree
to timely file all applications, reports and other submissions in
such form and with such information as may be required by the
Commission in connection with the transactions contemplated by
this agreement or the renewal of any FCC license, including,
without limitation, renewal applications and transfer
applications, and to effect all necessary filings contemplated by
this agreement. Subject to section 6.5, for a period of three
years after the closing, each party shall grant the other reason-
able access during normal business hours upon reasonable prior
notice to the books and records of that party relating to the
period during which the other party operated the Stations (and
the right, at the requesting party's expense, to make copies of
relevant portions of such books and records) for the purpose of
preparing any required public disclosure, completing any required
audits or complying with any applicable law or governmental rule
or request or as otherwise may be reasonably required.
6.8 Additional Financial Statements. The Sellers
shall promptly deliver to the Buyer copies of all weekly pacing
reports and all monthly, quarterly or annual financial statements
relating to the Stations that may be prepared during the period
from the date of this agreement to the Closing Date. All
financial statements delivered pursuant to this section 6.8 shall
be in accordance with the books and records of the Company.
6.9 Employee Benefit Plans. Prior to the
closing, Sellers shall take all actions necessary or desirable to
transfer to the Company all Employee Benefit Plans maintained for
the benefit of the employees (whether current or former) of the
Stations or their beneficiaries other than the 401(k) Plan.
Without limiting the generality of the foregoing, prior to
closing Sellers shall (i) cause the Company to become the "plan
sponsor" and "plan administrator" of the Employee Benefit Plans
other than the 401(k) Plan, (ii) make a contribution to the
401(k) Plan in an amount consistent with contributions in prior
years, and (iii) terminate the 401(k) Plan. Sellers shall be
responsible for any payment to Massachusetts Mutual Life
Insurance Company, including, but not limited to, adjustments due
to changes in market rates or penalties, which otherwise would be
deducted from 401(k) Plan participants' accounts as a result of
the termination of the 401(k) Plan. It is the intent of the
Buyer to provide to the employees of the Stations (and their
beneficiaries) for a period of one year after the closing
benefits that in the aggregate are no less favorable than the
benefits provided under the Employee Benefit Plans in effect
prior to closing. The foregoing statement of the Buyer's intent
shall not limit the Buyer's right to change such intent or the
benefits to be provided to any employee of the Company at any
time after the closing, it being understood that in any event
during the first 12 months after the closing the compensation and
benefits for such employees shall in the aggregate be, in the
Buyer's food faith judgment, no less favorable than the
compensation and benefits provided to the employees of the other
television stations owned by the Buyer. For a period of six
months after the closing the Buyer shall not reduce the severance
amounts payable to employees pursuant to the Company's severance
plan. The Buyer shall provide, or cause the Company to provide,
for all purposes (including, without limitation, eligibility
purposes and for purposes of calculating the amount of benefits),
past service credit (for service performed for, or otherwise
recognized by, the Company, Sellers, affiliates of the Company
and Sellers and their respective predecessors) to employees under
the severance, sick pay, vacation and similar plans of the
Company, Sellers or their affiliates.
6.10 Other Action. No party to this agreement
shall take any action that would result in any of its
representations and warranties not being true as of the Closing
Date. Each of the parties to this agreement shall use its best
efforts to cause the fulfillment at the earliest practicable date
of all of the conditions to the obligations of the parties to
consummate the sale and purchase under this agreement.
6.11 Non-Solicitation. After the closing,
Sellers shall not, directly or indirectly, solicit for
employment, employ, hire or attempt to hire as an independent
contractor or consultant any individual who has been an employee
of the Stations at any time during the one-year period before the
closing except with the prior consent of Buyer.
6.12 No Other Bids. The Company and Sellers will
not, and will not authorize any of its officers, directors,
employees, agents and other representatives ("Company
Representatives") to, solicit, initiate or encourage (including
by way of furnishing information) any inquiries or the making of
any proposal or offer from any person or entity which
constitutes, or may reasonably be expected to lead to, (i) the
acquisition of any significant portion of the capital stock or
other equity securities, or any significant portion of the
assets, of the Company or the Stations (including any acquisition
structured as a merger, consolidation, recapitalization, business
combination or share exchange) or (ii) the incurrence of
indebtedness for purposes of redeeming any capital stock or
equity securities of the Company. The Company and the Sellers
shall immediately cease and cause to be terminated any existing
solicitation, discussion or negotiation with any person or entity
conducted heretofore by the Company, either the Sellers or any
Company Representatives with respect to any of the foregoing.
6.13 Taxes. From the date of this agreement
through the Closing Date, the Company shall timely file any tax
returns required to be filed by it and shall pay any taxes that
become due and payable as such taxes become due and payable.
Prior to filing the consolidated tax return for the Company for
the tax year ended October 31, 1996, the Sellers shall consult
with the Buyer (and the Buyer's accountants) with respect to the
preparation of the return. Promptly after filing the
consolidated tax return for the consolidated group that includes
the Company for the year in which the closing occurs, the Sellers
shall deliver a copy of the return to the Buyer (and the Buyer's
accountants). Buyer and its accountants shall have a period of
30 days after receipt of such a copy (the "Review Period") to
review such tax return. Sellers will (and will cause the
Accountants to) provide Buyer and its accountants all information
(including work papers) which Buyer or its accountants may
reasonably request relating to such tax return, any position
taken thereon or any liability which may arise thereunder. If
the Buyer (and its accountants) determine that it is reasonable
to expect that the tax liability with respect to such return
would exceed the amount of tax liability, if any, shown on the
return as prepared by Seller, then the Buyer's accountants and
the Accountants shall seek to resolve the dispute. If the
Buyer's accountants and the Accountants are unable to resolve any
dispute within 30 days, the dispute shall be referred to a third
"Big 6" accounting firm jointly selected by Buyer and Sellers (or
if they are unable to agree, to KPMG Peat Marwick) to determine
if it is reasonable to expect that the tax liability with respect
to such return would exceed the amount shown on the return
prepared by Sellers, and if so, by how much. Each party shall
make available to the third accounting firm and to each other all
information relevant to the determination and shall have an
opportunity to present its case to the accounting firm. If the
Buyer's accountants and the Accountants agree on any change in
the final return that would increase the tax liability for that
return, or if the third accounting firm determines there should
be any change in the final return that would increase the tax
liability for that return, then either (a) the Sellers shall
amend the final return accordingly and pay any resulting tax
liability, or (b) there shall be retained in the Indemnity Escrow
Account that portion of the Indemnity Escrow Amount not
previously paid to Buyer equal to the amount of such potential
additional liability until the statute of limitations on the
final return has expired. No portion of the Indemnity Escrow
Amount shall be distributed to Sellers until the consolidated tax
return described in the third sentence of this section 6.13 has
been filed and either (i) the Review Period has lapsed without
Buyer disputing any position taken on such tax return or (ii) all
such disputes have been resolved and the actions described in
clause (a) or (b) above (including an appropriate amendment to
the Indemnity Escrow Agreement, in the case of the actions
described in clause (b) above) have been effected.
6.14 Indemnification for Litigation. Subject to
sections 9.1, 9.3, 9.4 and 9.5, the Sellers shall jointly and
severally indemnify and hold harmless the Buyer against all loss,
liability, damage or expense (including reasonable fees and
expenses of counsel) that the Buyer may suffer, sustain or become
subject to as a result of any claims or litigations set forth on
schedule 4.15 and any claims or litigations against the Company
relating to the operation of the Stations that may arise between
the date of this agreement and the Closing Date (the "Business
Litigations"). With respect to each Business Litigation of which
Sellers give Buyer written notice prior to the closing, the
Sellers and the Buyer shall negotiate in good faith to reach an
agreement with respect to each Business Litigation under which,
in exchange for a payment by the Sellers, the Buyer shall release
the Sellers from their indemnification obligation with respect to
that Business Litigation. If such an agreement cannot be reached
with respect to any Business Litigation, the Sellers shall not be
released from their indemnification obligation with respect to
such Business Litigation. Neither the indemnity described in the
first sentence of this section nor Buyer's obligation to enter
into such negotiation shall be deemed to limit the condition set
forth in section 7.1(a).
6.15 Accounts Receivable.
(a) Promptly after the closing, the Company
shall prepare a list of the accounts receivable of the Company
that are outstanding for more than 120 days as of the
Determination Time (the "Collected Accounts Receivable"). For a
period of five months after the Closing, the Company, as Sellers'
agent, shall, without compensation, use reasonable efforts to
collect (and have the exclusive right to collect) the Collected
Accounts Receivable for Sellers. Within 10 days after the last
day of each month during the five-month period, the Company shall
remit to Sellers the amount collected by the Company during that
month with respect to the Collected Accounts Receivable. Within
10 days after the last day of each month during the five-month
period, the Company shall provide Sellers with a report setting
forth the Collected Accounts Receivable collected by the Company
during the preceding month. The Company shall furnish Sellers
with such records and other information as Sellers may reasonably
require to verify the amounts collected by the Company with
respect to the Collected Accounts Receivable.
(b) For the purpose of determining amounts
collected by the Company with respect to the Collected Accounts
Receivable, if the intended application of any collections is
specified by the remitting account debtor, then such collections
shall be applied as such account debtor has specified; if the
remitting account debtor does not so indicate, then (i) in the
absence of a bona fide dispute between an account debtor and the
Company relating to a Collected Account Receivable, such
collections shall first be applied to Collected Accounts
Receivable due from that account debtor, and (ii) any amount
received by the Company which is from an account debtor who
claims to have a bona fide dispute with the Company relating to a
Collected Account Receivable shall be deemed to have been
received with respect to accounts receivable of the Company which
are not Collected Accounts Receivable to the extent of such
dispute.
(c) The Company shall not be required to
retain a collection agency, bring any suit, or take any action
out of the ordinary course of business to collect any of the
Collected Accounts Receivable. The Company shall not compromise,
settle or adjust the amount of any of the Collected Accounts
Receivable without the written consent of Sellers.
7. Conditions Precedent to Closing.
7.1 Conditions Precedent to the Obligations of
the Buyer. The Buyer's obligation to consummate the purchase of
the Stock under this agreement is subject to the fulfillment, at
or prior to the closing, of each of the following conditions (any
of which may be waived in writing by the Buyer):
(a) all representations and warranties of
the Sellers under this agreement shall be true at and as of the
time of the closing with the same effect as though those
representations and warranties had been made again at and as of
that time (without regard to any materiality qualification
contained in or otherwise applicable to such representations and
warranties), with such exceptions as do not and could not
reasonably be expected to in the aggregate have a Material
Adverse Effect;
(b) the Company and the Sellers shall have
performed and complied in all material respects with all
obligations, covenants and conditions required by this agreement
to be performed or complied with by them prior to or at the
closing (in each case without regard to any materiality
qualifications in such obligations, covenants and conditions);
(c) the Commission shall have given all
requisite approvals and consents relating to the sale of the
Stock (the "FCC Approvals"), without any condition or
qualification which has, had or which reasonably could be
expected to have a Material Adverse Effect and such approvals
shall have become a Final Order (as defined below);
(d) all applicable waiting periods under the
HSR Act with respect to the transactions contemplated by this
agreement shall have expired or been terminated;
(e) the Sellers shall have duly received,
without any condition which has, had or which reasonably could be
expected to have a Material Adverse Effect, all consents and ap-
provals referred to in schedule 7.1(e);
(f) all Liens on the Stock or the assets of
the Company, or the Stations, including the Lenders', shall have
been released;
(g) there shall not be in effect an in-
junction or restraining order issued by a court of competent
jurisdiction in an action or proceeding against the consummation
of the transactions contemplated by this agreement;
(h) the Sellers shall have delivered to
Buyer the certificates, opinions and documents set forth in
section 8.1;
(i) the Indemnity Escrow Agreement and the
Working Capital Escrow Agreement (and the Litigation Escrow
Agreement, if required by section 10.3) shall have been executed
and delivered by the parties thereto and shall be in full force
and effect;
(j) the consolidated tax return for the
Company for the year ended October 31, 1996 shall have been
filed; and
(k) the Buyer shall have been furnished with
a certificate of an officer of each of the Sellers, dated the
Closing Date, in form and substance satisfactory to the Buyer,
certifying to the fulfillment of the conditions set forth in
sections 7.1(a) and (b).
For the purpose of this agreement, "Final
Order" means action by the Commission (a) which has not been
vacated, reversed, stayed, set aside, annulled or suspended, (b)
with respect to which no appeal, request for stay, or petition
for rehearing, reconsideration or review by any party or by the
Commission on its motion, is pending, and (c) as to which the
time for filing any such appeal, request, petition, or similar
document for the reconsideration or review by the Commission on
its own motion under the express provisions of the Communications
Act of 1934 and the rules and regulations of the Commission, has
expired (or if any such appeal, request, petition or similar
document has been filed, a Commission order has been upheld in a
proceeding pursuant thereto and no additional review or
reconsideration may be sought).
7.2 Conditions Precedent to the Obligations of
the Sellers. The Sellers' obligation to consummate the sale of
the Stock under this agreement is subject to the fulfillment, at
or prior to the closing, of each of the following conditions (any
of which may be waived in writing by the Sellers):
(a) all representations and warranties of
the Buyer under this agreement shall be true at and as of the
time of the closing with the same effect as though those
representations and warranties had been made at and as of that
time, with such exceptions as do not in the aggregate have a
material adverse effect on the ability of the Buyer to consummate
the transactions contemplated by this agreement;
(b) the Buyer shall have performed and
complied in all material respects with all obligations, covenants
and conditions required by this agreement to be performed or
complied with by it prior to or at the closing;
(c) the Commission shall have given all
requisite approvals and consents relating to the sale of the
Stock, without any condition or qualification materially adverse
to the Sellers, to the acquisition of control of the Stations by
the Buyer as provided in this agreement;
(d) all applicable waiting periods under the
HSR Act with respect to the transactions contemplated by this
agreement shall have expired or been terminated;
(e) the Buyer shall have paid the amounts
payable at the closing in accordance with sections 2.3(a) and (b)
and the Lenders shall have released their lien on the Stock in
exchange for payment to the Lenders of a portion of the net
proceeds of the sale of the Stock;
(f) there shall not be in effect an in-
junction or restraining order issued by a court of competent
jurisdiction in an action or proceeding against the consummation
of the transactions contemplated by this agreement;
(g) the Sellers shall have delivered to
Buyer the certificates, opinions and documents set forth in
section 8.1; and
(h) the Indemnity Escrow Agreement and the
Working Capital Escrow Agreement shall have been executed and
delivered by the parties thereto and shall be in full force and
effect; and
(i) the Sellers shall have been furnished
with a certificate of an officer of the Buyer, dated the Closing
Date, in form and substance satisfactory to the Sellers,
certifying to the fulfillment of the conditions set forth in
sections 7.2(a).
7.3 Renewal Application. An application for the
renewal of the main station license for station WTWO in Terre
Haute, Indiana must be filed with the Commission or before on
April 1, 1997. If the closing does not occur before the date of
such filing, then the closing shall not occur until after the
renewal of such main station license has been granted by the
Commission and, if the Buyer so requires, has become a Final
Order, except that if the Commission grants the FCC Approvals
(without any condition or qualification which has had or which
reasonably could be expected to have a Material Adverse Effect)
prior to the date of such filing but the FCC Approvals shall not
have become a Final Order prior to such date, then the closing
shall occur not later than 10 business days after the last of the
conditions specified in sections 7.1(c), (d) and (e) and 7.2(c)
and (d) has been fulfilled (or waived).
8. Transactions at the Closing.
8.1 Documents to be Delivered by the Sellers. At
the closing, the Sellers shall deliver to the Buyer (or the
appropriate escrow agent, as described in section 8.1(l)) the
following:
(a) stock certificates representing all of
the outstanding shares of capital stock of the Company as of the
Closing Date, free and clear of any Lien, duly endorsed in blank
or accompanied with stock transfer powers and with any requisite
stock transfer tax stamps attached;
(b) an opinion of Proskauer Xxxx Xxxxx &
Xxxxxxxxxx LLP, counsel to the Sellers, dated the Closing Date,
in substantially the form of exhibit 8.1(b);
(c) an opinion of Wiley, Rein & Fielding,
Commission counsel to the Sellers, dated the Closing Date, in
substantially the form of exhibit 8.1(c);
(d) the certificate referred to in section
7.1(k);
(e) copies of all consents and approvals
received pursuant to section 6.6;
(f) resignations of each director and each
officer of the Company;
(g) a certificate from each Seller in the
form set forth in Treasury Regulations section 1.1445-2(b)(2)(iii) that
such Seller is not a foreign person within the meaning of such
section;
(h) a payoff letter from the Lenders and
UCC-3 termination statements terminating the Lenders' security
interest in the Stock;
(i) a release of the Company from each
Seller of any liability for any inter-company indebtedness or any
management fees or consulting fees payable to such Seller or its
affiliates;
(j) all minute books and stock records of
the Company;
(k) a reliance letter (in form reasonably
acceptable to Buyer) from the firm that performed the Phase One
Environmental Assessments on the real property owned by the
Company allowing the Buyer (and its lenders) to rely on such
Assessments;
(l) wire transfer of the Sellers' Working
Capital Escrow Amount to the Working Capital Escrow Agent (and
wire transfer of the Litigation Escrow to the Litigation Escrow
Agent, if required by section 10.3); and
(m) any other instruments or certificates
Buyer may reasonably request consistent with the terms of this
agreement.
8.2 Documents to be Delivered by the Buyer. At
the closing, the Buyer shall deliver to the Sellers the
following:
(a) wire transfer of funds in the amount
provided in section 2.3(b) (and the Buyer shall also deliver the
Indemnity Escrow Amount to the Indemnity Escrow Agent and the
Buyer's Working Capital Escrow Amount to the Working Capital
Escrow Agent);
(b) an opinion of Xxxxxxxx & Xxxxx, counsel
to the Buyer, dated the Closing Date, in substantially the form
of exhibit 8.2(b);
(c) a copy of resolutions of the general
partner of the Buyer authorizing the execution, delivery and
performance of this agreement by the Buyer, and a certificate of
the general partner of the Buyer, dated the Closing Date, that
such resolutions were duly adopted and are in full force and
effect;
(d) the certificate referred to in section
7.2(i); and
(e) any other instruments or certificates
Sellers may reasonably request consistent with the terms of this
agreement.
8.3 Documents to be Executed at Closing. At the
closing, Buyer and the Sellers shall execute and deliver the
Indemnity Escrow Agreement, the Working Capital Escrow Agreement
and, if required by section 10.3, the Litigation Escrow
Agreement.
9. Survival of Representations and Warranties;
Indemnification.
9.1 Survival. All representations and warranties
of the Sellers and the Buyer contained in this agreement shall
survive the Closing Date and shall not be affected by any
examination made for or on behalf of, or any notice to (except as
provided in the following sentence), the Company, any Seller or
Buyer, the knowledge of Buyer, the Company, any Seller or any of
their respective officers, directors, stockholders, partners,
employees, agents or other representatives. No party shall be
liable to the others for misrepresentation or breach of warranty
except to the extent that notice of a claim is asserted in
writing and delivered prior to six months after the Closing Date.
Any notice of a claim for misrepresentation or breach of warranty
shall state specifically, to the extent then known to the
claiming party, the representation or warranty with respect to
which the claim is made, the facts giving rise to an alleged
basis for the claim, and the amount of liability asserted against
the other party by reason of the claim.
9.2 Indemnification. (a) Subject to sections
9.1, 9.3 and 9.4, the Sellers shall jointly and severally
indemnify and hold harmless the Buyer against all loss,
liability, damage (including diminution in value) or expense
(including reasonable fees and expenses of counsel), that the
Buyer may suffer, sustain or become subject to as a result of
(i) any misrepresentation by the Sellers contained in this
agreement or in the certificate delivered pursuant to section
7.1(k), (ii) any breach by the Company or the Sellers of any
warranty, covenant or other agreement contained in this agreement
or (iii) any of the matters set forth on schedule 4.15 except as
otherwise may be agreed by Buyer and Sellers as provided in
section 6.14. Any loss, liability, damage or expense that Buyer
may suffer as a result of any misrepresentation or breach of
warranty, covenant or other agreement, shall be determined
without regard to any materiality qualification contained in or
otherwise applicable to such representation, warranty, covenant
or other agreement.
(b) Subject to sections 9.1 and 9.3, the
Buyer shall indemnify and hold harmless the Sellers against all
loss, liability, damage or expense (including reasonable fees and
expenses of counsel) that the Sellers may suffer, sustain or
become subject to as a result of any misrepresentation by the
Buyer or any breach by the Buyer of any warranty, covenant or
other agreement contained in this agreement.
(c) Any payments pursuant to this section
9.2 shall be treated by the parties as an adjustment to the
purchase price for the Stock.
9.3 Limitation on Liability. Notwithstanding
anything to the contrary in this agreement, neither the Sellers
nor the Buyer shall be liable to the other for misrepresentation
or breach of warranty except to the extent that the aggregate
amount of loss, liability, damage and expense incurred as a
result of all such misrepresentations and breaches of warranty
exceeds the sum of $200,000 (except that such $200,000 "basket"
amount shall not apply to losses, liabilities, damages or
expenses resulting from misrepresentation or breach of warranty
in section 4.5 or 13.2). The amount of any damage for
misrepresentation or breach of warranty shall be reduced for any
actual reduction in tax liability as and when obtained.
9.4 Further Limitation on Liability.
Notwithstanding anything to the contrary in this agreement,
except with respect to liability for misrepresentation or breach
of warranty in section 4.5 or 13.2, after the closing the
aggregate liability of the Sellers to the Buyer for
indemnification or otherwise under this agreement shall be
limited solely to the funds held in the Indemnity Escrow Account,
the Working Capital Account and the Litigation Escrow and after
the closing the Buyer shall have no other recourse against either
of the Sellers or any of the partners of TCS Television Partners,
L.P. with respect to such indemnity obligations or otherwise
(including any claim based on any other theory of liability,
including, without limitation, fraud) arising under this
agreement. With respect to the funds held in the Indemnity
Escrow Account, the Buyer shall be entitled pursuant to this
section 9 to any amount in excess of $750,000 (the "Excess
Amount") only to the extent that the loss, liability, damage or
expense suffered by the Buyer resulted from a willful breach of
covenant or other agreement by the Company or the Sellers or a
misrepresentation or breach of warranty by the Sellers of which
the Company or the Sellers had knowledge prior to the closing.
9.5 Conditions of Indemnification for Third Party
Claims. The obligation and liabilities of the parties under this
agreement with, as a result of, or relating to, claims of third
parties (individually, a "Third Party Claim" and collectively,
"Third Party Claims"), shall be subject to the following terms
and conditions:
(a) The party or parties entitled to be
indemnified hereunder (the "Indemnified Party") shall give the
party or parties obligated to provide the indemnity (the
"Indemnifying Party") prompt notice of any Third Party Claim,
and, provided that the Indemnifying Party acknowledges in writing
its obligation to indemnify in accordance with the terms of this
agreement, the Indemnifying Party may undertake the defense of
that claim by representatives chosen by it. The Indemnified
Party at any time may participate in such defense at its own
expense. Any such notice of a Third Party Claim shall identify
with reasonable specificity, to the extent known, the basis for
the Third Party Claim, the facts giving rise to the Third Party
Claim, and the amount of the Third Party Claim. Failure to give
prompt notice of any Third Party Claim shall only relieve the
Indemnifying Party of its indemnification obligation to the
extent that it is actually prejudiced by the delay in notice.
The Indemnified Party shall make available to the Indemnifying
Party copies of all relevant documents and records in its
possession. Notwithstanding the foregoing, the Sellers shall not
be entitled to undertake the defense of any action if the
aggregate damages sought in that action and all other actions
being defended by Sellers under this section 9 and all other
claims asserted against Sellers under this section 9 would exceed
the Indemnity Escrow Amount or the portion of the Indemnity
Escrow Amount available to satisfy those actions and claims
giving effect to section 9.4 unless the Sellers agree to waive
any limitation on their liability for indemnifications with
respect thereto and, in the case of actions referred to in the
following sentence, the Sellers agree to indemnify the Buyer for
all losses, liabilities, damages and expenses relating thereto
(including future lost profits). For purposes of the preceding
sentence, the aggregate damages sought in an action shall equal
the sum of the actual money damages sought plus a reasonable
estimate of the loss, liability, damage or expense that the Buyer
would incur as a result of any injunctive or other non-monetary
remedies sought (including for this purpose only future lost
profits of the Buyer).
(b) If the Indemnifying Party, within a
reasonable time after notice of any such Third Party Claim, does
not assume the defense in accordance with section 9.5(a), the
Indemnified Party shall (upon further notice to the Indemnifying
Party) have the right to undertake the defense, compromise or
settlement of the Third Party Claim, subject to the right of the
Indemnifying Party to the defense of such Third Party Claim in
accordance with section 9.5(a) at any time prior to settlement,
compromise or final determination thereof, provided, however,
that at the time of the assumption of defense the Indemnifying
Party shall acknowledge in writing its obligation to indemnify in
accordance with the terms of this agreement and shall reimburse
the Indemnified Party for its reasonable, actual, documented out-
of-pocket expenses incurred prior to the assumption of defense by
the Indemnifying Party.
(c) Anything in this section 9.5 to the
contrary notwithstanding, the Indemnifying Party shall not,
without the written consent of the Indemnified Party, settle or
compromise any Third Party Claim or consent to the 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 an unconditional release from all liability in respect
of the Third Party Claim.
10. Termination.
10.1 Termination. Except with respect to
provisions that expressly survive termination, this agreement may
be terminated:
(a) by written agreement of the Buyer and
the Sellers;
(b) by the Buyer or the Sellers, by notice
to the other, if at any time prior to the Closing Date any event
shall have occurred or any state of facts shall exist that
renders any of the conditions to its obligations as provided in
this agreement incapable of fulfillment; or
(c) by the Buyer as provided in section 11;
(d) by the Buyer or the Sellers, by notice
to the other, if the Commission designates for a hearing the
application for Commission consent contemplated by this
agreement;
(e) by the Buyer or the Sellers, by notice
to the other, if the closing has not occurred by September 30,
1997, subject to postponement pursuant to section 11, provided
that the terminating party (and in the case of Sellers, the
Company and each Seller) is not in material breach of the terms
of this agreement; or
(f) by the Buyer as provided in section 10.3
or section 10.4.
10.2 Liability. The termination of this agreement
under section 10.1 shall not relieve any party of any liability
for breach of this agreement prior to the date of termination.
10.3 Litigation Against Transaction.
Notwithstanding anything to the contrary in this agreement, if
any person or entity (other than Buyer or an affiliate of Buyer)
commences an action (the "Action") challenging the transactions
contemplated by this agreement and names the Buyer or the Company
as a party in the Action, then the Buyer shall not be required to
consummate the transactions contemplated by this agreement unless
either (a) the Action is terminated, by settlement or by a court
decision that is final and not subject to appeal, (b) each of the
Buyer and Company is dismissed with prejudice as a party to the
Action, and the dismissal is final and not subject to appeal, or
(c) the Sellers deposit in escrow (the "Litigation Escrow"), with
the Escrow Agent (the "Litigation Escrow Agent") pursuant to an
escrow agreement (the "Litigation Escrow Agreement") reasonably
satisfactory to the Buyer and the Sellers, the greater of (i)
$3,000,000 (the "Minimum Deposit") or (ii) the Maximum Amount,
determined as provided below, which deposit Sellers shall make at
the Closing if the conditions in clause (a) and (b) above do not
exist at such time (except as provided below). If the Action is
commenced, the Sellers shall promptly thereafter provide to the
Buyer copies of all pleadings in the Action and all other
information or documents relating to the Action, and the Sellers'
attorneys and the Buyer's attorneys shall consult with respect to
the facts relating to the Action and the legal bases for the
Action. Based on the foregoing, the Sellers and the Buyer shall
negotiate in good faith whether the Minimum Deposit is
sufficient, or, if not, the maximum amount of the loss,
liability, damage or expense (including reasonable attorneys'
fees) that it is reasonable to expect that the Buyer and/or the
Company would incur as a result of the Action (the "Maximum
Amount"). If by the third business day after FCC Approval or
within 10 business days after the commencement of the Action,
whichever is later, the Buyer and the Sellers are unable to agree
that the Minimum Deposit is sufficient or on the Maximum Amount,
then on the next business day each of the Buyer and the Sellers
shall notify the other in writing of its determination of the
Maximum Amount, and the Maximum Amount shall be determined by an
arbitrator designated by the Buyer and the Sellers from the
Judicial Arbitration and Mediation Services in New York, New York
(or if they fail to agree, designated by the Judicial Arbitration
and Mediation Services) pursuant to the rules of the Judicial
Arbitration and Mediation Services (or if the Judicial
Arbitration and Mediation Services is no longer providing
arbitration services, by a comparable mediation service selected
by Sellers reasonably acceptable to Buyer). Either or both of
Buyer and Sellers shall promptly contact the Judicial Arbitration
and Mediation Service and the parties shall use their respective
best efforts to cause the arbitrator to be selected and the
determination of the Maximum Amount to be made within 30 days.
The arbitrator shall be given the following instructions: First,
determine if there is a reasonable possibility, based on the
facts relating to the Action and the legal bases for the Action,
that the Buyer and/or the Company would suffer any such loss,
liability, damage or expense as a result of the Action; and
second, if you determine there is such a reasonable possibility,
then determine the Maximum Amount. The determination of the
Maximum Amount by each of the parties shall not be disclosed to
the arbitrator. Each party shall make available to the
arbitrator and to each other all information relevant to the
arbitration and shall have an opportunity to present its case to
the arbitrator. The cost of the arbitration shall be borne by
Sellers. If the Maximum Amount determined in accordance with the
foregoing procedure is less than the Minimum Deposit, the Sellers
shall deposit the Minimum Amount in the Litigation Escrow; if the
Maximum Amount as so determined exceeds the Minimum Deposit,
then, within 10 days after the determination of the Maximum
Amount, the Sellers shall determine and shall notify the Buyer
whether they are willing to deposit the Maximum Amount in the
Litigation Escrow (if Sellers do not give such notice, they shall
be deemed to have elected not to deposit the Maximum Amount). If
the Sellers so indicate that they are willing to deposit the
Maximum Amount in the Litigation Escrow, the Sellers shall do so
at closing and the Buyer shall have no right to terminate this
agreement as a result of the Action (so long as the condition set
forth in Section 7.1(g) is satisfied at the time of the closing);
if the Sellers elect not to deposit the Maximum Amount in the
Litigation Escrow, the Buyer may elect, by notice to the Sellers
within 10 days of the notice from the Sellers, to terminate this
agreement (and if the Buyer fails to give such notice of
termination timely, the Buyer shall have no right to terminate
this agreement as a result of the Action). Upon such
termination, neither Buyer nor Sellers shall have any obligations
or liabilities under this agreement. The determination by the
parties or by the arbitrator of the Maximum Amount shall be
solely for purposes of determining the Buyer's right to terminate
this agreement pursuant to this section 10.3, and such
determination shall have no res judicata, collateral estoppel or
other effect for any other purpose or as to any other party. The
Buyer may also elect, by notice to the Sellers given not later
than five days after the determination of the Maximum Amount, to
terminate this agreement if, as a result of the commencement of
the Action, and despite the deposit in escrow of the Minimum
Deposit or the Maximum Amount, the lenders that were to provide
financing to the Buyer to consummate the transactions
contemplated by this agreement (a) refuse to provide such
financing or (b) materially increase the cost to Buyer for the
financing (or otherwise modify the terms of the financing in a
manner materially adverse to the Buyer).
10.4 Network Affiliation Agreement. The Company
has notified the Buyer that it intends to give notice of
termination on or prior to January 31, 1997, effective July 31,
1997, of the network affiliation agreement between station KQTV
and Capital Cities ABC, Inc. The Company may negotiate with any
of the four largest networks the terms of a new primary
affiliation agreement with respect to KQTV effective August 1,
1997, and the Buyer shall have the right to participate in those
negotiations or to hold any separate negotiations with any such
network. Through April 30, 1997, the Company shall not enter
into any new affiliation agreement (other than any such agreement
which by its terms will cease to be effective upon the closing)
without the consent of the Buyer. If by April 30, 1997 the
Company has not entered into a new primary network affiliation
agreement with respect to KQTV with the Buyer's consent,
thereafter the Company may enter into a new primary network
affiliation with respect to KQTV with any such network without
the Buyer's consent. Notwithstanding the foregoing, if as a
result of the negotiations with a network by the Company or by
the Buyer, a network has proposed a new network affiliation
agreement with respect to KQTV on terms satisfactory to the Buyer
and the Buyer has requested that the Company enter into such
agreement, but the Company has refused to enter into such
agreement, then the Buyer may elect, by notice to the Sellers, to
terminate this agreement. The Buyer may also elect, by notice to
the Sellers, to terminate this agreement if the Company fails to
give notice of termination as provided in the first sentence of
this section or if the Company enters into a new affiliation
agreement in breach of the third sentence of this section.
11. Risk of Loss. The risk of loss or damage to any
of the assets of either of the Stations or the Company shall be
on the Company and Sellers prior to the closing and thereafter
shall be on the Buyer. If any material tangible asset of either
of the Stations or the Company is damaged or destroyed prior to
the Closing Date (any such event being referred to as an "Event
of Loss"), the Sellers shall immediately notify Buyer in writing
of the Event of Loss. The notice shall specify with particu-
larity the loss or damage incurred, the cause of the Event of
Loss, if known or reasonably ascertainable, and the applicable
insurance coverage. The Sellers shall cause the Company to take
reasonable efforts to repair, replace or restore the asset. If
the asset so damaged or destroyed cannot be repaired, replaced or
restored by the scheduled date of the closing but can be
accomplished within 90 days after that date, the Buyer may elect,
by written notice to the Sellers within 20 days after notice of
the Event of Loss, to postpone the date of the closing for up to
that 90-day period to allow the Company an opportunity to
complete the repair, replacement or restoration of the asset or
to close the transaction on the scheduled date of the closing and
accept the damaged asset as is (and any applicable insurance
proceeds). If the Sellers seek to repair, replace or restore the
damaged asset and repair, replacement or restoration cannot be
accomplished within that 90-day period, the Buyer may elect, by
written notice to the Sellers within 10 days after the end of the
90-day period:
(a) to close the transaction, accept the
damaged asset as is and receive from the Sellers any applicable
insurance proceeds together with (by means of a reduction in the
amount payable to Sellers at the closing) any additional amounts
necessary to complete the repair, replacement or restoration of
the damaged assets; or
(b) to terminate this agreement without
liability, in which event the Escrow Agent shall return the
Deposit to Buyer.
If the date of the closing is postponed
beyond the time specified in section 3.2, the parties shall amend
their application or applications to the Commission to request an
extension of the date of closing.
12. Definitions
As used in this agreement, the following terms
have the following definitions:
"401(k) Plan" has the meaning specified in section
4.22.
"Accountants" has the meaning specified in section 2.2.
"Base Amount" has the meaning specified in section 1.1.
"Buyer" has the meaning specified in the introduction
to this agreement.
"Buyer's Estimate" has the meaning specified in section
2.4.
"Buyer's Working Capital Escrow Amount" has the meaning
specified in section 2.6.
"Cable Act Requirements" has the meaning specified in
section 4.7.
"Closing Date" has the meaning specified in section
2.1.
"COBRA" has the meaning specified in section 4.22.
"Code" has the meaning specified in section 4.22.
"Commission" has the meaning specified in section 4.7.
"Company Representatives" has the meaning specified in
section 6.12.
"Company" has the meaning specified the introduction to
this agreement.
"Current Assets" has the meaning specified in section
2.1.
"Deposit" has the meaning specified in section 2.5.
"Determination Time" has the meaning specified in
section 2.1.
"ERISA" has the meaning specified in section 4.22.
"Escrow Agent" has the meaning specified in section
2.5.
"Escrow Agreement" has the meaning specified in section
2.5.
"Event of Loss" has the meaning specified in section
11.
"FCC Application" has the meaning specified in section
6.1.
"FCC Licenses" has the meaning specified in section
4.7.
"Final Order" has the meaning specified in section 7.1.
"HSR Act" has the meaning specified in section 6.1.
"Indemnified Party" has the meaning specified in
section 9.5.
"Indemnifying Party" has the meaning specified in
section 9.5.
"Indemnity Escrow Account" has the meaning specified in
section 2.3.
"Indemnity Escrow Agent" has the meaning specified in
section 2.3.
"Indemnity Escrow Agreement" has the meaning specified
in section 2.3.
"Indemnity Escrow Amount" has the meaning specified in
section 2.3.
"IRS" has the meaning specified in section 4.22.
"Leased Property" has the meaning specified in section
4.25.
"Leases" has the meaning specified in section 4.25.
"Lenders" has the meaning specified in section 2.1.
"Liabilities" has the meaning specified in section 2.1.
"Lien" has the meaning specified in section 4.5.
"Market Cable System" means any United States of
America cable television system located within any Station's
market, as defined in section 76.55 of the regulations of the
Commission.
"Material Adverse Effect" means a material adverse
effect upon (i) the business, assets, operations or financial
condition of the Company and Stations taken as a whole, (ii) the
ability of the Company or Sellers to perform their respective
obligations hereunder or consummate the transactions contemplated
hereby, or (iii) the Buyer's ownership and rights with respect to
the Stock or the Stations taken as a whole after the closing.
"Materials of Environmental Concern" has the meaning
specified in section 4.21.
"Note Purchase Agreement" has the meaning specified in
section 2.1.
"Owned Property" has the meaning specified in section
4.25.
"Programming Agreements" has the meaning specified in
section 2.1.
"Real Property" has the meaning specified in section
4.25.
"Sellers Estimate" has the meaning specified in section
2.4.
"Sellers" has the meaning specified in the introduction
to this agreement.
"Sellers Working Capital Escrow Amount" has the meaning
specified in section 2.6.
"Stations" has the meaning specified in the
introduction to this agreement.
"Stock" has the meaning specified in the introduction
to this agreement.
"Third Party Claims" has the meaning specified in
section 9.5.
"Title Company" has the meaning specified in section
4.25.
"Working Capital Escrow Account" has the meaning
specified in section 2.6.
"Working Capital Escrow Agent" has the meaning
specified in section 2.6.
"Working Capital Escrow Agreement" has the meaning
specified in section 2.6.
"Working Capital Escrow Amount" has the meaning
specified in section 2.6.
13. Miscellaneous.
13.1 Notices. Any notice or other communication
under this agreement shall be in writing and shall be considered
given when delivered personally or three business days after
mailing by registered mail, return receipt requested, to the
parties at the addresses set forth below (or at such other
address as a party may specify by notice to the other):
to the Buyer, to it at:
ABRY Partners, Inc.
00 Xxxxxxx Xx.
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
with a copy to (which will not constitute
notice for purposes of this agreement):
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
if to either of the Sellers, to it at:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: I. Xxxxxx Xxxxxxxx
with a copy to (which will not constitute
notice for purposes of this agreement):
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
13.2 Brokers. Each of the Buyer and the Sellers
represents and warrants to the other that it has not retained or
dealt with any broker or finder in connection with the
transactions contemplated by this agreement, except that the
Sellers have retained and shall pay any fees payable to Xxxxxx
Xxxx Incorporated.
13.3 Entire Agreement. This agreement, including
the schedules and exhibits, contains a complete statement of all
the arrangements between the parties with respect to its subject
matter, supersedes any previous agreement between them relating
to that subject matter, and cannot be changed or terminated
orally. Except as specifically set forth in this agreement
(including the schedules) and the certificate delivered pursuant
to section 7.1(k), there are no representations or warranties by
any party in connection with the transactions contemplated by
this agreement.
13.4 Headings. The section headings of this
agreement are for reference purposes only and are to be given no
effect in the construction or interpretation of this agreement.
13.5 Governing Law. This agreement shall be
governed by and construed in accordance with the law of the state
of New York applicable to agreements made and to be performed in
New York.
13.6 Separability. If any provision of this
agreement is invalid or unenforceable, the balance of this
agreement shall remain in effect.
13.7 Assignment. No party may assign any of its
rights or delegate any of its duties under this agreement without
the consent of the other except that (a) prior to the filing of a
transfer application with the Commission with respect to the sale
of the Stock the Buyer may assign this agreement to any
affiliate, (b) after the filing of such transfer application and
prior to the closing the Buyer may assign this agreement to a
person or entity only if such assignment would require only a pro
forma amendment to the transfer application, and (c) at any time
at or after the closing Buyer may assign this agreement to any
purchaser of either Station or the Stock or any person or entity
providing financing for the purchase of the Stock; any assignment
pursuant to clause (a) or (b) shall be pursuant to an assignment
agreement reasonably satisfactory to Sellers.
13.8 Publicity. Except as required by applicable
law, no party shall issue any press release or other public
statement regarding the transactions contemplated by this
agreement without consulting with the others.
13.9 Jurisdiction. The courts of the State of
New York in New York County and the United States District Court
for the Southern District of New York shall have jurisdiction
over the parties with respect to any dispute or controversy
between them arising under or in connection with this agreement
and, by execution and delivery of this agreement, each of the
parties to this agreement submits to the jurisdiction of those
courts, including, but not limited to, the in personam and
subject matter jurisdiction of those courts, waives any objection
to such jurisdiction on the grounds of venue or forum non
conveniens, the absence of in personam or subject matter
jurisdiction and any similar grounds, consents to service of
process by mail (in accordance with section 12.1) or any other
manner permitted by law, and irrevocably agrees to be bound by
any judgment rendered thereby in connection with this agreement.
These consents to jurisdiction shall not be deemed to confer
rights on any person or entity other than the parties to this
agreement.
13.10 Specific Performance. The Sellers
acknowledge that each of the Stations is of a special, unique and
extraordinary character, and that any breach of this agreement by
the Sellers could not be compensated for by damages.
Accordingly, if the Company or the Sellers breach any of their
material obligations under this agreement the Buyer shall be
entitled, in addition to any other remedies that it may have,
subject to obtaining approval of the Commission, to enforcement
of this agreement by a decree of specific performance requiring
the Sellers to fulfill their respective obligations under this
agreement.
13.11 Third-Parties. No person or entity shall
be a third-party beneficiary of this agreement. Without limiting
the foregoing, no employee or former employee, nor any
beneficiary or dependent of any employee or former employee, of
the Company shall be a third-party beneficiary of section 6.9.
13.12 Counterparts. This agreement may be
executed in any number of counterparts, which together shall
constitute one and the same instrument.
IN WITNESS, the undersigned have caused this Agreement
to be executed as of the date first written above.
NEXSTAR BROADCASTING GROUP, L.L.C.
By:
Name:
Title:
TCS TELEVISION PARTNERS, L.P.
By:
Name:
Title:
TCS TELEVISION, INC.
By:
Name:
Title:
FABRI DEVELOPMENT CORP.
By:
Name:
Title:
Table of Contents
Page
1. Sale and Purchase of Stock . . . . . . . . . . . . . . . 1
1.1 Sale of Stock to Buyer . . . . . . . . . . . . . 1
2. Adjustment of Base Amount; Payment of Purchase Price . . 1
2.1 Adjustment of Base Amount. . . . . . . . . . . . 1
2.2 Determination of Adjustment to Base Amount . . . 3
2.3 Payment of Purchase Price. . . . . . . . . . . . 4
2.4 Estimate of Adjustment . . . . . . . . . . . . . 5
2.5 Deposit. . . . . . . . . . . . . . . . . . . . . 6
2.6 Working Capital Escrow . . . . . . . . . . . . . 7
3. Closing. . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Date of Closing. . . . . . . . . . . . . . . . . 8
3.2 Outside Date for Closing . . . . . . . . . . . . 8
4. Representations and Warranties by the Sellers. . . . . . 8
4.1 The Sellers' Organization and Authority. . . . . 8
4.2 Authorization of Agreement . . . . . . . . . . . 9
4.3 The Company's Organization . . . . . . . . . . . 9
4.4 Capitalization of the Company; No Out-
standing Options . . . . . . . . . . . . . . . . 9
4.5 Ownership of the Company's Shares. . . . . . . . 10
4.6 Consents of Third Parties. . . . . . . . . . . . 10
4.7 FCC Licenses . . . . . . . . . . . . . . . . . . 11
4.8 Call Letters . . . . . . . . . . . . . . . . . . 14
4.9 Ownership of Assets. . . . . . . . . . . . . . . 14
4.10 Financial Statements . . . . . . . . . . . . . . 14
4.11 Taxes. . . . . . . . . . . . . . . . . . . . . . 15
4.12 Absence of Certain Changes . . . . . . . . . . . 17
4.13 Commission Reports . . . . . . . . . . . . . . . 18
4.14 Intangible Assets. . . . . . . . . . . . . . . . 18
4.15 Litigation; Compliance with Laws . . . . . . . . 18
4.16 List of Agreements, etc. . . . . . . . . . . . . 19
4.17 Agreements Regarding Employees . . . . . . . . . 20
4.18 Status of Agreements . . . . . . . . . . . . . . 21
4.19 Insurance. . . . . . . . . . . . . . . . . . . . 21
4.20 Labor Matters. . . . . . . . . . . . . . . . . . 21
4.21 Environmental Matters. . . . . . . . . . . . . . 22
4.22 ERISA. . . . . . . . . . . . . . . . . . . . . . 23
4.23 Powers of Attorney . . . . . . . . . . . . . . . 24
4.24 Certain Transactions . . . . . . . . . . . . . . 24
4.25 Real Property. . . . . . . . . . . . . . . . . . 25
5. Representations and Warranties by the Buyer. . . . . . . 26
5.1 The Buyer's Organization . . . . . . . . . . . . 26
5.2 Authorization of Agreement . . . . . . . . . . . 26
5.3 Consents of Third Parties. . . . . . . . . . . . 27
5.4 Litigation . . . . . . . . . . . . . . . . . . . 27
5.5 Buyer's Qualification. . . . . . . . . . . . . . 27
5.6 Availability of Funds. . . . . . . . . . . . . . 27
6. Further Agreements of the Parties. . . . . . . . . . . . 28
6.1 Filings. . . . . . . . . . . . . . . . . . . . . . 28
6.2 Operations of the Station. . . . . . . . . . . . . 29
6.3 No Control . . . . . . . . . . . . . . . . . . . . 31
6.4 Expenses . . . . . . . . . . . . . . . . . . . . . 31
6.5 Access to Information. . . . . . . . . . . . . . . 31
6.6 Consents; Assignment of Agreements . . . . . . . . 32
6.7 Further Assurances . . . . . . . . . . . . . . . . 32
6.8 Additional Financial Statements. . . . . . . . . . 33
6.9 Employee Benefit Plans . . . . . . . . . . . . . . 33
6.10 Other Action . . . . . . . . . . . . . . . . . . . 34
6.11 Non-Solicitation . . . . . . . . . . . . . . . . . 35
6.12 No Other Bid . . . . . . . . . . . . . . . . . . . 35
6.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . 35
6.14 Indemnification for Litigation . . . . . . . . . . 37
6.15 Accounts Receivable. . . . . . . . . . . . . . . . 37
7. Conditions Precedent to Closing. . . . . . . . . . . . . 39
7.1 Conditions Precedent to the Obligations of
the Buyer. . . . . . . . . . . . . . . . . . . . 39
7.2 Conditions Precedent to the Obligations of
the Sellers. . . . . . . . . . . . . . . . . . . 41
7.3 Renewal Application. . . . . . . . . . . . . . . 42
8. Transactions at the Closing. . . . . . . . . . . . . . . 42
8.1 Documents to be Delivered by the Sellers . . . . 42
8.2 Documents to be Delivered by the Buyer . . . . . 44
8.3 Documents to be Executed at Closing. . . . . . . 44
9. Survival of Representations and Warranties;
Indemnification. . . . . . . . . . . . . . . . . . . . . 45
9.1 Survival . . . . . . . . . . . . . . . . . . . . 45
9.2 Indemnification. . . . . . . . . . . . . . . . . 45
9.3 Limitation on Liability. . . . . . . . . . . . . 46
9.4 Further Limitation on Liability. . . . . . . . . 46
9.5 Conditions of Indemnification for Third Party
Claims . . . . . . . . . . . . . . . . . . . . . 47
10. Termination. . . . . . . . . . . . . . . . . . . . . . . 49
10.1 Termination. . . . . . . . . . . . . . . . . . . 49
10.2 Liability. . . . . . . . . . . . . . . . . . . . 49
10.3 Litigation Against Transaction . . . . . . . . . 50
10.4 Network Affiliation Agreement. . . . . . . . . . 52
11. Risk of Loss . . . . . . . . . . . . . . . . . . . . . . 53
12. Definitions. . . . . . . . . . . . . . . . . . . . . . . 54
13. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . 57
13.1 Notices. . . . . . . . . . . . . . . . . . . . . . 57
13.2 Brokers. . . . . . . . . . . . . . . . . . . . . . 58
13.3 Entire Agreement . . . . . . . . . . . . . . . . 58
13.4 Headings . . . . . . . . . . . . . . . . . . . . 59
13.5 Governing Law. . . . . . . . . . . . . . . . . . 59
13.6 Separability . . . . . . . . . . . . . . . . . . 59
13.7 Assignment . . . . . . . . . . . . . . . . . . . 59
13.8 Publicity. . . . . . . . . . . . . . . . . . . . 59
13.9 Jurisdiction . . . . . . . . . . . . . . . . . . 60
13.10 Specific Performance . . . . . . . . . . . . . . 60
13.11 Third-Parties. . . . . . . . . . . . . . . . . . 60
13.12 Counterparts . . . . . . . . . . . . . . . . . . 61