PURCHASE AGREEMENT
by and between
XXXXXXXX COMMUNICATIONS, INC.
and
THE XXXXXXXX GROUP, INC.
Dated as of September 25, 1998
TABLE OF CONTENTS
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Article 1. Sale of Assets; Assumption of Liabilities...........................................................1
1.1 Assets to Be Acquired...............................................................................1
1.2 Excluded Assets.....................................................................................3
1.3 Assumption of Liabilities...........................................................................3
1.4 Closing and Closing Date............................................................................4
1.5 Additional Closing Deliveries.......................................................................4
Article 2. Purchase Price......................................................................................5
2.1 Escrow Deposit......................................................................................5
2.2. Purchase Price; Payment.............................................................................5
2.3 Post-Closing Adjustment.............................................................................5
2.4 Security Escrow.....................................................................................8
2.6 Investment of Escrow Amounts........................................................................8
2.7 Allocation of the Purchase Price....................................................................9
Article 3. Representations and Warranties Relating to the Company..............................................9
3.1 Organization and Standing..........................................................................10
3.2 Binding Agreement..................................................................................10
3.3 Absence of Conflicting Agreements or Required Consents.............................................10
3.4 Equity Investments.................................................................................10
3.5 Financial Statements...............................................................................11
3.6 Title to Assets; Related Matters...................................................................11
3.7 Absence of Certain Changes, Events and Conditions..................................................11
3.8 Litigation.........................................................................................12
3.9 Insurance..........................................................................................12
3.10 Material Contracts.................................................................................13
3.11 Permits and Licenses; Compliance with Law..........................................................13
3.12 FCC Licenses.......................................................................................13
3.13 Environmental Matters..............................................................................14
3.14 Employee Benefit Matters...........................................................................14
3.15 Labor Relations....................................................................................15
3.16 Intellectual Property..............................................................................16
3.17 Taxes..............................................................................................16
3.18 Commissions........................................................................................17
3.19 Affiliate Transactions.............................................................................17
3.20 Accuracy and Completeness of Representations and Warranties........................................17
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Article 4. Representations and Warranties of Purchaser........................................................17
4.1 Organization and Standing..........................................................................17
4.2 Binding Agreement..................................................................................17
4.3 Absence of Conflicting Agreements or Required Consents.............................................18
4.4 Litigation.........................................................................................18
4.5 Commissions........................................................................................18
4.6 Financing..........................................................................................18
4.7 Purchaser's Qualification..........................................................................19
4.8 Accuracy and Completeness of Representations and Warranties........................................19
Article 5. Covenants and Agreements...........................................................................19
5.1 Conduct of the Business Prior to Closing; Access...................................................19
5.2 Post-Closing Covenants and Agreement, and Other Employee Benefit Matters...........................22
5.3 Cooperation........................................................................................24
5.4 Confidentiality....................................................................................26
5.5 Public Announcements...............................................................................26
5.6 No Solicitation....................................................................................26
5.7 No Additional Representations......................................................................26
5.8. Certain Payments...................................................................................27
5.9 Bulk Sales Laws....................................................................................27
5.10 Control of the Stations............................................................................27
5.11 Use of Certain Names...............................................................................28
Article 6. Conditions to Obligations of Purchaser.............................................................28
6.1 Representations and Warranties.....................................................................28
6.2 Performance by the Company.........................................................................28
6.3 Certificate........................................................................................28
6.4 Consents; No Objections............................................................................28
6.5 No Proceedings or Litigation.......................................................................29
6.6 [Intentionally omitted]............................................................................29
6.7 FCC Consent........................................................................................29
6.8 No Material Adverse Change.........................................................................29
6.9 Opinions of Counsel................................................................................29
6.10 Good Standing Certificate..........................................................................29
6.11 No Transmission Defects............................................................................29
6.12 Closing on the Gannett Purchase Agreement..........................................................29
Article 7. Conditions to Obligations of the Company...........................................................29
7.1 Representations and Warranties.....................................................................30
7.2 Performance by Purchaser...........................................................................30
7.3 Certificate........................................................................................30
7.4 Consents; No Objections............................................................................30
7.5 No Proceedings or Litigation.......................................................................30
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7.6 FCC Consent........................................................................................30
7.7 Opinion of Counsel.................................................................................30
7.8 Good Standing Certificate..........................................................................30
7.9. Closing on Gannett Purchase Agreement..............................................................31
Article 8. Indemnification....................................................................................31
8.1 Indemnification by the Company.....................................................................31
8.2 Indemnification by Purchaser.......................................................................31
8.3 Limitations on Indemnification Claims and Liability; Termination of Indemnification................31
8.4 Computation of Claims and Damages..................................................................32
8.5 Notice of Claims...................................................................................33
8.6 Defense of Third Party Claims......................................................................33
8.7 Third Party Beneficiaries..........................................................................34
Article 9. Definitions........................................................................................34
Article 10. Miscellaneous Provisions..........................................................................46
10.1 Termination Rights................................................................................46
10.2 Litigation Costs..................................................................................47
10.3 Expenses..........................................................................................47
10.4 Notices...........................................................................................48
10.5 Benefit and Assignment............................................................................49
10.6 Waiver............................................................................................49
10.7 Severability......................................................................................49
10.8 Amendment.........................................................................................49
10.9 Effect and Construction of this Agreement.........................................................49
10.10 Transfer and Conveyance Taxes.....................................................................50
10.11 Specific Performance..............................................................................50
10.12 Survival of Representations, Warranties and Covenants.............................................50
Article 11. No Personal Liability for Representatives, Stockholders, Directors or Officers.....................50
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Exhibits
Exhibit A Xxxx of Sale, Assignment and Assumption Agreement
Exhibit B Deposit Escrow Agreement
Exhibit C Adjustment Escrow Agreement
Exhibit D Security Escrow Agreement
Exhibit E-1 Opinion of Xxxxxx & Xxxxxxxx, P.A.
Exhibit E-2 Opinion of Xxxxxx, Xxxxxxx, Xxxxxx, Leader & Xxxxxxxx L.L.P.
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Schedules
Section 1.1(d) Real Property
Section 1.2. Excluded Assets
Section 3.3. Absence of Conflicting Agreements or Required Consents
Section 3.3.1. Consents Required
Consents Required - Employment Agreement
Consents Required - Barter Programming
Section 3.5. Financial Statements
Section 3.6. Title to Assets; Related Matters
Section 3.7. Absence of Certain Changes, Events and Conditions
Section 3.8. Litigation
Section 3.9. Insurance
Section 3.9.1. Insurance Policies
Section 3.10. Material Contracts
Section 3.10.1. Material Contracts - Broadcasting
Section 3.10.2. Affiliation Agreement
Section 3.10.3. Program Licenses
Section 3.10.4. Employment Agreements
Section 3.10.6. Collective Bargaining Agreement
Section 3.10.7.A. Real Property Leases
Section 3.10.7.B. Equipment Leases and Intellectual Property
Section 3.10.8. Income Leases
Section 3.10.10. Loan Agreement
Section 3.11 Permits
Section 3.12 FCC
Section 3.13 Environmental Matters
Section 3.14 Employee Benefits
Section 3.14.1 Non-Corporate Employees (other than division heads)
Section 3.14.2 Severance and Retention Agreements - Division Heads
Section 3.14.3 Employee Benefit Plans/Contracts
Section 3.15 Labor Relations
Section 3.16 Intellectual Property
Section 3.16.1 Call Letters
Section 3.17 Taxes
Section 3.19 Affiliate Transactions
Section 4.3 Absence of Conflicting Agreements or Required Consents
Section 4.4 Litigation
Section 5.1 Covenants and Agreements
Section 5.2 Post-Closing Covenants and Agreements
Section 5.2.1 List of Names of Current Corporate Office Employees
Section 5.2.2 Fiduciary Liability Coverage Summary
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Section 6.4 Material Consents Required as a Condition of the
Purchaser's Obligation to Close
Section 7.4 Material Consents Required as a Condition of Seller's
Obligation to Close
Section 9 Closing Statement Differences and Inconsistencies
with GAAP
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PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of this
___ day of September, 1998, by and among XXXXXXXX COMMUNICATIONS, INC., a
Maryland corporation (the "Company"), THE XXXXXXXX GROUP, INC., a Delaware
corporation ("Purchaser").
WHEREAS, the Company and Guy Gannett Communications ("Gannett") entered
into that certain Asset Purchase Agreement dated September 4, 1998 (the "Gannett
Purchase Agreement"), pursuant to which the Company agreed to purchase
substantially all of the assets of the Gannett Television Stations, one of which
is WOKR-TV, Channel 13, Rochester, New York (the "Station"); and
WHEREAS, the Company desires to sell, assign and transfer to Purchaser
the assets and business of the Station as described below, and Purchaser desires
to purchase and acquire the assets and business of the Business as described
below, on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties, intending legally to be bound, agree as follows:
[A list of defined terms is provided in Article 9 hereof]
Article 1. Sale of Assets; Assumption of Liabilities.
1.1 Assets to Be Acquired. Upon the terms and subject to the
satisfaction of the conditions set forth herein, at the Closing, the Company
shall sell, convey, assign, transfer and deliver to Purchaser, and Purchaser
shall purchase, acquire, accept and pay for, all of the Company's right, title
and interest in and to all of the real, personal and mixed properties, assets
and other rights, both tangible and intangible (other than the Excluded Assets),
owned or leased by, or licensed to or used or useful by, the Company on the
Closing Date in connection with the Business (collectively, the "Assets")
consisting of all of the Assets relating to the Station acquired by the Company
pursuant to the Gannett Purchase Agreement.
Without limiting the generality of the foregoing, the Assets shall
include the following:
(a) the FCC Licenses;
(b) the Equipment;
(c) all translators, earth stations and other auxiliary facilities,
and all applications therefor, acquired by the Company from Gannett
pursuant to the Gannett Purchase Agreement and useful in connection with
the Business;
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(d) the Real Property and Leased Property as set forth in Section
1.1(d) of the Disclosure Schedule;
(e) all orders and agreements for the sale of advertising time on the
Station for cash, and all trade, barter and similar agreements, excluding
Program Contracts (which are provided for below), for the sale of
advertising time on the Station for any property or services in lieu of or
in addition to cash, and any other orders and agreements relating to the
Station and entered into (other than in violation of this Agreement)
between the date of the Gannett Purchase Agreement and the Closing Date;
(f) all film and program licenses and contracts under which the
Company or Gannett has the right to broadcast film product or programs on
the Station ("Program Contracts"), including all cash and non-cash (barter)
program contracts and including, without limitation, the Program Contracts
set forth in Section 3.10 of the Disclosure Schedule and any other Program
Contracts relating to the Station and entered into (other than in violation
of this Agreement) between the date of the Gannett Purchase Agreement and
the Closing Date;
(g) all other contracts and agreements related to the Business,
including, without limitation, network affiliation agreements, all
employment contracts entered into with television talent and other Business
Employees, all collective bargaining agreements with respect to any
Business Employees, any time brokerage agreements and all national or local
advertising representation agreements for the Station, without limitation,
the contracts and agreements set forth in Section 3.10 of the Disclosure
Schedule, and any other such contracts and agreements relating to the
Station and entered into (other than in violation of this Agreement)
between the date of the Gannett Purchase Agreement and the Closing Date;
(h) the Intellectual Property, including, without limitation, the Call
Letters;
(i) all programs and programming materials acquired by the Company
from Gannett pursuant to the Gannett Purchase Agreement and used in
connection with the Business, whether recorded on tape or any other media
or intended for live performance, and whether completed or in production,
and all related common law and statutory copyrights owned by or licensed to
the Company or acquired by the Company from Gannett pursuant to the Gannett
Purchase Agreement and used in connection with the Business;
(j) all FCC logs and other records that relate to the operation of the
Station as acquired by the Company from Gannett pursuant to the Gannett
Purchase Agreement;
(k) except as set forth in Section 1.2(a) hereof, all files, books and
other records acquired by the Company pursuant to the Gannett Purchase
Agreement relating to the Business, including, without limitation, written
technical information, data, specifications, research and development
information, engineering, drawings, manuals, computer programs, tapes and
software relating directly to the Business, other than duplicate copies of
account books of original entry and duplicate copies of such files and
records, if any, that are maintained at the corporate offices of the
Company or Gannett for tax and
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accounting purposes;
(l) all of the Company's goodwill in, and "going concern" value of,
the Business;
(m) all accounts, notes and accounts receivable of the Business
relating to or arising out of the business and operations of the Station
immediately preceding the Closing;
(n) all deposits, reserves and prepaid expenses of the Business (other
than those relating to Excluded Assets or Liabilities that are not Assumed
Liabilities);
(o) to the extent transferable under applicable law, all franchises,
approvals, permits, licenses, orders, registrations, certificates,
exemptions, variances and similar rights obtained from Governmental
Authorities (other than the FCC License) in any jurisdiction that had
issued or granted such items to the Company or the Company has acquired
from Gannett pursuant to the Gannett Purchase Agreement, or that the
Company otherwise owns or uses or the Company has acquired from Gannett
pursuant to the Gannett Purchase Agreement, in each case relating to the
Business, and all pending applications therefor;
(p) except as set forth in Section 1.2(h) hereof, all insurance
proceeds claims arising out of or related to damage, destruction or loss of
any property or asset used or useful in connection with the Business to the
extent of any damage or destruction that remains unrepaired, or to the
extent any property or asset remains unreplaced, at the Closing Date; and
(q) to the extent assignable, the Company's rights to enforce any
non-competition provisions relating to the Business, the Business Employees
or the Station contained in any other written agreement with a Corporate
Office Employee, but only to the extent the Company acquires such rights
from Gannett pursuant to the Gannett Purchase Agreement.
1.2 Excluded Assets. Notwithstanding anything to the contrary herein, all
of the assets listed on Schedule 1.2 or defined in the Gannett Purchase
Agreement as Excluded Assets (collectively, the "Excluded Assets") shall be
excluded from the Assets.
1.3 Assumption of Liabilities. On and after the Closing Date, Purchaser
will assume and agree to perform and fully discharge when due all Liabilities of
the Company or Gannett (i) solely related to or solely arising from or in
connection with the Assets or the Business and (ii) in the case of any
Liabilities related to or arising partly from or in connection with the Assets
or the Business and partly from any other assets or business of the Company, to
the extent such Liabilities relate to or arise from or in connection with the
Assets or the Business (in each case including, without limitation, any Claims
and Damages arising from the assignment to Purchaser of any contract or other
agreement pursuant to the terms of this Agreement), whether such Liabilities
specified in clause (i) or (ii) are incurred or arise prior to, on, or after the
Closing Date, including, without limitation, those obligations of the Company
relating to the Business to be assumed by Purchaser pursuant to Section 5.2
hereof (collectively, the "Assumed Liabilities"). Except as set forth in this
Section 1.3 and except as otherwise expressly provided
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in this Agreement, Purchaser will assume no other Liabilities of any kind of
description of the Company or any of the liabilities defined in the Gannett
Purchase Agreement as Retained Liabilities.
1.4 Closing and Closing Date. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been terminated
pursuant to Section 10.1 hereof, the closing (the "Closing") of the transactions
herein contemplated shall take place at 10:00 a.m., New York City time, on a
date not later than ten days following the satisfaction or waiver of the
conditions set forth in Articles 6 and 7 hereof, or at such other time and date
as the Company and Purchaser shall agree; provided, however, that the Company
and Purchaser shall take such reasonable actions as may be necessary to hold the
Closing simultaneously with the Closing of the Gannett Purchase Agreement (such
time and date being referred to herein as the "Closing Date"), at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx, 425 Lexington Avenue, New York, New York, or at such
other place as the Company and Purchaser shall agree. At the Closing, each of
the parties hereto shall take, or cause to be taken, all such actions and
deliver, or cause to be delivered, all such documents, instruments, certificates
and other items as may be required under this Agreement or otherwise, in order
to perform or fulfill all covenants and agreements on its part to be performed
at or prior to the Closing. The Closing shall be effective as of 12:01 a.m., New
York City time, on the day of the Closing Date.
1.5 Additional Closing Deliveries. At the Closing:
(a) The Company shall deliver to Purchaser:
(i) a duly executed counterpart of the Xxxx of Sale, Assignment
and Assumption Agreement substantially in the form set forth in
Exhibit A hereto (the "Xxxx of Sale, Assignment and Assumption
Agreement");
(ii) instruments of assignment with respect to all of the
Company's rights and interests in real property leases and special
warranty deeds (of a type equivalent to that known in New York as a
"bargain and sale deed with covenants against grantor's actions") in
recordable form sufficient to convey to Purchaser all of the Company's
rights and interests or rights and interest in the Real Property
acquired by the Company from Gannett pursuant to the Gannett Purchase
Agreement;
(iii) a duly executed counterpart of the Adjustment Escrow
Agreement and the Security Escrow Agreement;
(iv) all other instruments of conveyance and transfer sufficient
to convey the Assets to Purchaser; and
(v) all other documents, instruments and writings consistent with
the terms of this Agreement and required to be delivered by the
Company at or prior to the Closing Date pursuant to this Agreement.
(b) Purchaser shall deliver to Company:
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(i) the Purchase Price in accordance with Section 2.1 hereof;
(ii) a duly executed counterpart of the Xxxx of Sale, Assignment
and Assumption Agreement; and
(iii) all other documents, instruments and writings required to
be delivered by Purchaser at or prior to the Closing Date pursuant to
this Agreement.
Article 2. Purchase Price.
2.1 Escrow Deposit. For and in partial consideration of the execution and
delivery of this Agreement and simultaneously with the execution hereof, Buyers
shall deposit with an escrow agent ("Escrow Agent") by wire transfer in
immediately available funds TWELVE MILLION FIVE HUNDRED THOUSAND DOLLARS
($12,500,000.00) (the "Escrow Deposit"), such Escrow Deposit to be dealt with in
accordance with the terms and provisions of the Deposit Escrow Agreement
attached hereto as Exhibit B.
2.2. Purchase Price; Payment. (a) In consideration of the sale of the
Assets and the Business hereunder, Purchaser shall (i) pay the Company in cash
the aggregate amount of (x) $125,000,000, plus (if greater than or equal to
zero) or minus (if less than zero), as the case may be, (y) the amount of the
Net Financial Assets as of 11:59 p.m., New York City time, on the day
immediately preceding the Closing Date, subject to adjustment pursuant to
Section 2.3 hereof (the "Purchase Price") and (ii) assume the Assumed
Liabilities.
(b) On or before three Business Days prior to the Closing, the Company
shall deliver to Purchaser (i) a statement setting forth the amount estimated in
good faith by the Company to be the amount of the Net Financial Assets as of the
Closing Date (the "Estimated Net Financial Assets") and (ii) a notice
designating the accounts or accounts to which the payment to or on behalf of the
Company pursuant to clause (i) of Section 2.2(c) is to be made.
(c) At the Closing, Purchaser shall deliver
(i) the sum of (x) $120,564,800 plus (if the Estimated Net Financial
Assets is greater than or equal to zero) or minus (if the Estimated Net
Financial Assets is less than zero), as the case may be, (y) the Estimated
Net Financial Assets, by wire transfer in immediately available funds to
the account or accounts designated by the Company in accordance with
Section 2.2(b);
(ii) $1,209,600 (the "Adjustment Escrow") by wire transfer in
immediately available funds to the Adjustment Escrow Agent pursuant to the
Adjustment Escrow Agreement; and
(iii) $3,225,600 by wire transfer in immediately available funds to
the Security Escrow Agent pursuant to the Security Escrow Agreement.
2.3 Post-Closing Adjustment.
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(a) The parties agree that no later than 75 days after the Closing (or such
later date on which such statement reasonably can be prepared and delivered in
light of the compliance of Purchaser and the Company with their obligations set
forth in next two succeeding sentences), the Company shall deliver to Purchaser,
in the form received by the Company from Gannett (i) a statement of the actual
Net Financial Assets as of 11:59 p.m., New York City time, of the day
immediately preceding the Closing Date (the "Closing Statement") certified by
PriceWaterhouseCoopers L.L.P., independent accountants for Gannett, to be
prepared (except as otherwise provided in Section 9 of the Disclosure Schedule
to the Gannett Purchase Agreement) in conformity with GAAP and on a basis
consistent with the basis used in preparing the Unaudited Financial Statements
as of, and for the year ended, December 27, 1997 referred to in Section 3.5 of
the Gannett Purchase Agreement and (ii) a determination (the "Proposed
Adjustment") of the amount by which the actual Net Financial Assets is less than
or greater than the Estimated Net Financial Assets (the amount of such excess or
shortfall is referred to herein as the "Adjustment"). Purchaser shall provide
the Company and Gannett, and Gannett's independent accountants, access at all
reasonable times to the relevant personnel, properties, books and records of the
Business for such purposes and to assist the Company and Gannett, and Gannett's
independent accountants, in preparing the Closing Statement. Purchaser's
assistance shall include, without limitation, the closing of the Business's
books as of the Closing, the preparation of schedules supporting the amounts set
forth in the general ledger and other books and records of the Business, and
such other assistance as the Company, Gannett or Gannett's independent
accountants may reasonably request. During the 25-day period following the
delivery by the Company of the Closing Statement and the Proposed Adjustment
referred to in the first sentence of this Section 2.3(a), Purchaser and its
independent accountants will be permitted to review the working papers of
Gannett and its independent accountants relating to the preparation of the
Closing Statement and the Proposed Adjustment to the same extent as such working
papers have been made available to the Company by Gannett pursuant to the
Gannett Purchase Agreement. If, within 25 days after delivery by the Company of
the Closing Statement and the Proposed Adjustment, Purchaser notifies the
Company that it disagrees with the Closing Statement and the Proposed
Adjustment, the Company shall attempt to resolve the disagreement with Gannett.
In the event the Company, Gannett and Purchaser cannot agree with respect to the
Closing Statement and the Proposed Adjustment within five days of the notice of
disagreement provided by Purchaser to the Company (a "WOKR Dispute"), then the
Company shall seek an Accounting Firm Determination as defined in the Gannett
Purchase Agreement. In the event that (whether expressly or by failure of
Purchaser to provide notice of any disagreement within the applicable period)
the Purchaser agrees to the amount of the Adjustment without submitting the
matter for an Accounting Firm Determination (an "Adjustment Agreement"), the
parties shall deliver a joint certificate to the Adjustment Escrow Agent setting
forth the amount of the Adjustment Escrow to be paid to each of the Purchaser
and the Company pursuant to this Section 2.3. In the event of an Accounting Firm
Determination of a WOKR Dispute, the parties shall deliver a certificate to the
Adjustment Escrow Agent setting forth the amount (if any) by which the Actual
Net Financial Assets (as defined below) exceeds or is less than the Estimated
Net Financial Assets. The amount of Net Financial Assets as of 11:59 p.m., New
York City time, on the day immediately preceding the Closing Date, as
definitively determined pursuant to this Section 2.3(a) is referred to herein as
the "Actual Net Financial Assets."
(b) At the Closing, the Company, Purchaser and such financial institution
as shall have been agreed by the parties prior to the Closing Date (together
with any successor jointly appointed by the Company and the Purchaser, the
"Adjustment Escrow Agent")
7
shall execute and deliver an escrow agreement substantially in the form set
forth in Exhibit C to the Gannett Purchase Agreement, with such adjustments and
revisions necessary to reflect the provisions of this Agreement (the "Adjustment
Escrow Agreement'). From and after the Closing, the Adjustment Escrow Agent
shall act as escrow agent, pursuant to the Adjustment Escrow Agreement, in
effecting the payment of the amounts held in the Adjustment Escrow as set forth
herein.
(c) As soon as practicable after the earlier of an Adjustment Agreement or
an Accounting Firm Determination (but in any event within two Business Days
after the Adjustment Agreement or the Accounting Firm Determination):
(i) if the Actual Net Financial Assets is equal to or greater than the
Estimated Net Financial Assets, then:
(A) the Adjustment Escrow Agent shall pay to the Company from the
Adjustment Escrow the full amount of the Adjustment Escrow, and
(B) Purchaser shall pay to the Company the amount by which the
Actual Net Financial Assets exceeds the Estimated Net Financial
Assets;
(ii) if the Actual Net Financial Assets is less than the Estimated Net
Financial Assets but the amount of such shortfall does not exceed $3
million, when aggregated with any such shortfall under the Gannett Purchase
Agreement, then
(A) the Adjustment Escrow Agent shall pay to Purchaser from the
Adjustment Escrow an amount equal to the amount by which the Estimated
Net Financial Assets exceeded the Actual Net Financial Assets, and
(B) the Adjustment Escrow Agent shall pay to the Company from the
Adjustment Escrow the remaining amount of the Adjustment Escrow (after
giving effect to clause (A) above); and
(iii) if the Actual Net Financial Assets is less than the Estimated
Net Financial Assets and the amount of such shortfall exceeds $3 million,
when aggregated with any such shortfall under the Gannett Purchase
Agreement, then
(A) the Adjustment Escrow Agent shall pay to Purchaser from the
Adjustment Escrow the full amount of the Adjustment Escrow, and
(B) the Security Escrow Agent shall pay to the Purchaser from the
Security Escrow an amount equal to the amount by which (x) the
Estimated Net Financial Assets exceeds (y) the Actual Net Financial
Assets plus $1,209,600.
Each of Purchaser and the Company shall timely give all necessary
instructions to the Adjustment Escrow Agent and the Security Agent so that the
Adjustment Escrow and (if applicable) the Security Escrow are paid and
distributed in accordance with this
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Section 2.3(c). All payments pursuant to this Section 2.3(c) shall be by wire
transfer in immediately available funds to the account or accounts designated by
the Company and/or Purchaser, as the case may be, no later than two Business
Days prior to such payment.
(d) Any interest or other investment income earned for the period from the
time that any portion of the Purchaser Price is delivered to the Adjustment
Escrow Agent pursuant to this Agreement until all amounts held in the Adjustment
Escrow have been distributed in accordance with the Adjustment Escrow Agreement
while held by the Adjustment Escrow Agent shall be paid to the Company in
addition to, and at the same time as, payment of the Adjustment Escrow in
accordance with the terms of this Agreement; provided, however, that, to the
extent that any portion of the Adjustment Escrow is paid to Purchaser pursuant
to Section 2.3(c) hereof, a pro rata portion of such interest or other
investment income (determined on the basis of the relative portions of the
Adjustment Escrow to be paid to Purchaser and the Company, respectively,
pursuant to Section 2.3(c) hereof) shall be instead paid to Purchaser. Any such
interest or other investment income shall be deemed not to constitute Adjustment
Escrow.
(e) The Company and Purchaser shall each be responsible for one-half of the
fees and expenses of the Adjustment Escrow Agent.
2.4 Security Escrow.
(a) At the Closing, the Company, Purchaser and such financial institution
as shall have been agreed by the parties prior to the Closing Date (together
with any successor jointly appointed by the Company and Purchaser, the "Security
Escrow Agent") shall execute and deliver an escrow agreement substantially in
the form set forth in Exhibit D to the Gannett Purchase Agreement, with such
adjustments and revisions necessary to reflect the provision of this Agreement
(the "Security Escrow Agreement"). From and after the Closing, the Security
Escrow Agent shall act as escrow agent, pursuant to the Security Escrow
Agreement, in effecting the payment of the amounts held in the escrow account
(the "Security Escrow") under the Security Escrow Agreement.
(b) Any interest or other investment income earned for the period from the
time that any portion of the Purchase Price is delivered to the Security Escrow
Agent pursuant to this Agreement until all amounts held in the Security Escrow
have been distributed in accordance with the Security Escrow Agreement while
held by the Security Escrow Agent shall be paid (beginning after the payment of
any amount required to be paid out of the Security Escrow pursuant to Section
2.3(c)(iii)(B) hereof) monthly to the Company; provided, however, that the
extent that any portion of the Security Escrow is paid to Purchaser pursuant to
Section 2.3(c)(iii)(B) hereof, a pro rata portion of such interest or other
investment income earned through the date of such payment (determined on the
basis of the relative portions of the Security Escrow so paid and that not so
paid) shall be instead paid to Purchaser. Any interest or other investment
income earned on amounts held in the Security Escrow shall be deemed not to
constitute Security Escrow.
(c) The Company and Purchaser shall each be responsible for one-half of the
fees and expenses of the Security Escrow Agent.
2.5 Investment of Escrow Amounts. The Adjustment Escrow Agent and the
9
Security Escrow Agent shall each be authorized to invest the portion of the
Purchase Price held by it, on receipt of instructions from the Company, in:
(i) Commercial paper of any corporation rated at least A-1 by S&P and
P-1 by Xxxxx'x;
(ii) Negotiable certificates of deposit of United States banks having
(A) a long-term senior debt rating of at least A by S&P and Xxxxx'x, (B)
deposits in excess of $2,000,000,000 and (C) commercial paper rating
designations of at least A-1 by S&P and P-1 by Xxxxx'x;
(iii) Repurchase agreements with any United States bank which are
fully collateralized by direct obligations of the United States or
obligations of agencies or sponsored agencies of the United States
government, excluding in all cases collateralized mortgage obligations of
any kind; and
(iv) Money market instruments rated at least A-1 by S&P and P-1 by
Xxxxx'x that are restricted to investments described in clause (iii);
provided that in no event shall any investment of the types described in clause
(i), (ii) or (iv) exceed ten percent of the net assets of the issuer thereof and
provided further that all investments shall have maturity dates on or before the
anticipated dates of the relevant payments hereunder.
The Adjustment Escrow Agent and the Security Escrow Agent shall each be
authorized to register securities held by it in its name or in the name of a
nominee or in bearer form and may deposit any securities or other property in a
depository or a clearing corporation.
2.7 Allocation of the Purchase Price. Pursuant to the Gannett Purchase
Agreement, the Company shall engage a nationally recognized appraiser to
determine the proper allocation of the Purchase Price allocated to, and the
Assumed Liabilities relating to the Assets of the Station, in each case in
accordance with Section 1060 of the Code and the Treasury Regulations
promulgated thereunder (the "Allocation"). The Allocation shall be binding upon
Purchaser and the Company, and none of the parties hereto shall file, or cause
to be filed, any Tax Return, Internal Revenue Service Form 8594 or other form,
or take a position with any Tax authority or jurisdiction, that is inconsistent
with the Allocation without obtaining the prior written consent of the Company
or Purchaser, as the case may be. The fees and disbursements of appraiser
engaged in connection with the Allocation as to the Assets of the Station shall
be paid by Purchaser.
Article 3. Representations and Warranties Relating to the Company.
10
The Company represents and warrants to Purchaser as follows:
3.1 Organization and Standing. The Company is a corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of Maryland. The Company and, to the Company's Knowledge, Gannett has all
requisite corporate power and authority to own, lease and operate their
respective properties and assets and to conduct its business as it is now being
conducted. The Company is and, to the Company's Knowledge, Gannett is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each state in which the operation of its business or ownership of
its assets makes such qualification necessary, except where the failure to so
qualify or be in good standing would not reasonably be expected to have a
Material Adverse Effect.
3.2 Binding Agreement. The Company has all requisite corporate power and
authority to enter into this Agreement, to execute and deliver this Agreement,
the Xxxx of Sale, Assignment and Assumption Agreement, to carry out its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement,
the Xxxx of Sale, Assignment and Assumption Agreement by the Company and the
consummation by the Company of its obligations hereunder and thereunder have
been duly and validly authorized by all necessary corporate and stockholder
action on the part of the Company. This Agreement has been, and on the Closing
Date the Xxxx of Sale, Assignment and Assumption Agreement will be, duly
executed and delivered on behalf of the Company and, assuming the due
authorization, execution and delivery by Purchaser, constitutes a legal, valid
and binding obligation of the Company enforceable in accordance with its terms,
subject to applicable bankruptcy and similar laws affecting the rights of
creditors generally and to general principles of equity (whether applied at law
or equity).
3.3 Absence of Conflicting Agreements or Required Consents. Except as set
forth in Section 3.3 of the Disclosure Schedule, the execution, delivery and
performance by the Company of this Agreement, the Xxxx of Sale, Assignment and
Assumption Agreement do not and will not (a) violate, conflict with or result in
the breach or default of any provision of the articles of incorporation or
by-laws of the Company, (b) conflict with or violate in any material respect any
material Law or material Governmental Order applicable to the Company or any of
its properties or assets, (c) except for (i) the notification requirements of
the HSR Act and (ii) such filings with, and orders of, the FCC as may be
required under the Communications Act and the FCC's rules and regulations in
connection with this Agreement and the transactions contemplated hereby, require
any material consent, approval, authorization or other order of, action by,
registration or filing with or declaration or notification to any Governmental
Authority, or (d) conflict with, result in any violation or breach of,
constitute a default (or event which with the giving of notice, or lapse of time
or both, would become a default) under, require any consent under, or give to
others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, or result in the creation of any Encumbrance on
any of the Assets, or result in the imposition or acceleration of any payment,
time of payment, vesting or increase in the amount of compensation or benefit
payable, pursuant to any Material Contract.
3.4 Equity Investments. The Assets do not include any capital stock of any
corporation or any equity interest in any Person.
11
3.5 Financial Statements. The Company has furnished to Purchaser statements
of operations for the Station for the year ended December 31, 1997, the six (6)
months ended June 30, 1998, the seven (7) months ended July 1, 1998, and August
31, 1998, which were supplied to the Company by Gannett.
3.6 Title to Assets; Related Matters. To the Company's Knowledge, except
for Permitted Exceptions or as disclosed in Section 3.6 of the Disclosure
Schedule (i) Gannett has good, valid and marketable title (as measured in the
context of their current uses) to, or, in the case of leased or subleased
assets, valid and subsisting leasehold interests (as measured in the context of
their current uses) in, or otherwise has the right to use, all of the Assets,
free and clear of all Encumbrances (except for any assets sold or otherwise
disposed of, or with respect to which the lease, sublease or other right to use
such Asset has expired or has been terminated, in each case after the date
hereof solely to the extent permitted under Section 5.1(a) hereof), (ii) each
lease or sublease pursuant to which any Leased Property is leased by Gannett is,
to the Company's Knowledge, legal, valid and binding on Gannett and the Company
(as the case may be) and, to the Company's Knowledge, the other parties thereto
and grants the leasehold interest it purports to grant, including, without
limitation, any rights to nondisturbance and peaceful and quiet enjoyment that
may be contained therein and, to the Company's Knowledge, Gannett and each other
party thereto is in compliance in all material respects with the provisions of
such leases and subleases, (iii) to the Company's Knowledge, the Assets,
together with the Excluded Assets, constitute all the assets and rights of
Gannett and its Affiliates used in or necessary for the operation of the
Business as currently conducted, (iv) to the Company's Knowledge, except for
Equipment scheduled to be replaced by Gannett's capital expenditure budget, the
Real Property, Leased Property and Equipment is, in all material respects, in
good operating condition and repair (ordinary wear and tear excepted) taking
into account the age thereof, (v) to the Company's Knowledge, there are no
contractual or legal restrictions to which Gannett or the Company is a party or
by which the Real Property is otherwise bound that preclude or restrict in any
material respect Gannett's ability to use the Real Property for the purposes for
which it is currently being used and (vi) no portion of the Real Property or
Leased Property is the subject of, or affected by, any condemnation, eminent
domain or inverse condemnation proceeding currently instituted or, to the
Company's Knowledge, threatened. On the Closing Date, the Company shall sell,
convey, assign, transfer and deliver to Purchaser all of the Company's right,
title and interest in and to all of the Assets, free and clear of all
Encumbrances other than Permitted Exceptions, Encumbrances disclosed in Section
3.6 of the Disclosure Schedule and Encumbrances arising from Purchaser's acts.
Schedule 1.1(d) contains a true and correct list of all Real Property owned by
Gannett used in the Business (other than the Excluded Assets), which is to be
acquired by the Company pursuant to the Gannett Purchase Agreement.
3.7 Absence of Certain Changes, Events and Conditions. To the Company's
Knowledge, since June 30, 1998, except as otherwise provided in or contemplated
by this Agreement or as disclosed in Section 3.7 of the Disclosure Schedule:
(a) other than in the ordinary course of business consistent with past
practice neither the Company nor Gannett has sold, transferred, leased,
subleased, licensed or otherwise disposed of any material assets used in
the Business, other than the sale of obsolete Equipment;
(b) (i) neither the Company nor Gannett have granted any increase, or
announced
12
any increase, in the wages, salaries, compensation, bonuses, incentives,
pension or other benefits payable to any of the Business Employees,
including, without limitation, any increase or change pursuant to any
Employee Benefit Plan, or (ii) established, increased or accelerated the
payment or vesting of any benefits under any Employee Benefit Plan with
respect to Business Employees, in either case except (A) as required by
Law, (B) that involve only increases consistent with the past practices of
Gannett or (C) as required under any existing agreement or arrangement;
(c) neither the Company nor Gannett have made any material change in
any method of accounting or accounting practice or policy used by Gannett
or the Company with respect to the Station, other than changes required by
law or under GAAP;
(d) neither the Company nor Gannett have suffered any extraordinary
casualty loss or damage with respect to any material assets used in the
Business, whether or not covered by insurance;
(e) there has not been any Material Adverse Effect;
(f) except in connection with the transactions contemplated hereby,
the Business has been conducted in all material respects only in the
ordinary and usual course consistent with past practice;
(g) neither the Company nor Gannett have created, incurred, assumed or
guaranteed any Indebtedness, except for net borrowings under existing lines
of credit;
(h) other than in the ordinary course of business, neither the Company
nor Gannett have compromised, settled, granted any waiver or release
relating to, or otherwise adjusted any Action, material Liabilities or any
other material claims or material rights of the Business; and
(i) neither the Company nor Gannett have entered into any agreement,
contract, commitment or arrangement to do any of the foregoing.
3.8 Litigation. Except as disclosed in Section 3.8 of the Disclosure
Schedule, as of the date hereof, (i) there are no Actions against the Company
or, to the Company's Knowledge, Gannett relating to the Business or the Assets
pending, or, to the Company's Knowledge, threatened to be brought by or before
any Governmental Authority, (ii) neither the Company nor, to the Company's
Knowledge, Gannett is subject to any Governmental Orders (nor, are there any
such Governmental Orders threatened to be imposed by any Governmental Authority)
relating to the Business or the Assets and (iii) there is no Action pending or,
to the Company's Knowledge, threatened to be brought before any Governmental
Authority, that seeks to question, delay or prevent the consummation of the
transactions contemplated hereby.
3.9 Insurance. Section 3.9 of the Disclosure Schedule lists all insurance
policies as of the date hereof relating to the Assets or the Business (the
"Insurance Policies"). Except as set forth in either Section 3.9 or Section 3.14
of the Disclosure Schedule, (i) to the Company's Knowledge, all insurance
policies relating to the Assets or Business to which the Company or Gannett is a
party or under which the Assets or the Business is covered (or replacement
policies
13
therefor) are in full force and effect and, to the Company's Knowledge, all
premiums due have been paid and are not in default, (ii) to the Company's
Knowledge, no notice of cancellation or non-renewal with respect to, or
disallowance of any claim under, any such policy has been received by either the
Company or Gannett and (iii) to the Company's Knowledge, neither the Company nor
Gannett have been refused insurance with respect to the Business or Assets, nor,
to the Company's Knowledge, has coverage with respect to the Business or Assets
been previously canceled or limited by an insurer to which Gannett or the
Company has applied for such insurance or with which the Company or, to the
Company's Knowledge, Gannett has held insurance within the last three years.
3.10 Material Contracts. Section 3.10 of the Disclosure Schedule sets forth
all Material Contracts relating to the Station, including, without limitation,
all amendments thereof, as of the date hereof. To the extent received by the
Company from Gannett, complete and accurate copies of all written Material
Contracts listed in Section 3.10 of the Disclosure Schedule and accurate
summaries of the material terms of all oral Material Contracts have been
delivered or made available to Purchaser (except as otherwise noted therein).
Except as set forth in Section 3.10 of the Disclosure Schedule, to the Company's
Knowledge, (1) each Material Contract and each other contract or agreement that
is material to the Business is legal, valid and binding on Gannett and, to the
Company's Knowledge, the other parties thereto, (2) to the Company's Knowledge,
neither the Company nor Gannett is in default under any Material Contract or
other contract or agreement that is material to the Business and no event has
occurred or failed to occur that, with or without the giving of notice or the
lapse of time or both, would result in such a default and (3) to the Company's
Knowledge, no other party to any Material Contract or other contract or
agreement that is material to the Business has breached or is in default
thereunder.
3.11 Permits and Licenses; Compliance with Law. Except as disclosed in
Section 3.11 of the Disclosure Schedule, (i) to the Company's Knowledge, Gannett
currently holds all the material permits, licenses, authorizations,
certificates, exemptions and approvals of Governmental Authorities or other
Persons including, without limitation, Environmental Permits, necessary for the
current operation and the conduct (as it is being conducted prior to the
Closing) of the Business, other than the FCC Licenses (which are provided for in
Section 3.12 hereof) (collectively, "Permits"), and all material Permits are in
full force and effect, (ii) to the Company's Knowledge, since November 1, 1996,
Gannett has not received any written notice from any Governmental Authority
revoking, canceling, rescinding, modifying or refusing to renew any material
Permit and, (iii) to the Company's Knowledge, Gannett is in material compliance
with the requirements of all material Permits.
Except as disclosed in Section 3.11 of the Disclosure Schedule, to the
Company's Knowledge, (i) Gannett is in compliance in all material respects with
all Laws and Governmental Orders, other than the FCC Licenses, the
Communications Act and the rules and regulations of the FCC (which are provided
for in Section 3.12 hereof), applicable to the conduct of the Business as it is
being conducted prior to the Closing, and (ii) Gannett has not been charged,
since November 1, 1996, by any Governmental Authority with a violation of any
Law or any Governmental Order relating to the Station, which charge has not been
fully resolved and, to the extent required, accounted for.
3.12 FCC Licenses. Except as disclosed in Section 3.12 of the Disclosure
Schedule, (i) to the Company's Knowledge, Gannett holds, and immediately prior
to the Closing
14
the Company will hold, the FCC Licenses listed in Section 3.12 of the Disclosure
Schedule, which FCC Licenses expire on the respective dates set forth in Section
3.12 of the Disclosure Schedule; (ii) to the Company's Knowledge, Section 3.12
of the Disclosure Schedule sets forth a true and complete list of any and all
pending applications filed with the FCC by Gannett, true and complete copies of
which (to the extent received from Gannett by the Company) have been delivered
to Purchaser or made available for inspection by Purchaser; (iii) to the
Company's Knowledge, the FCC Licenses listed in Section 3.12 of the Disclosure
Schedule constitute all of the licenses and authorizations required under the
Communications Act and the current rules and regulations of the FCC in
connection with the operation of the Station as currently operated; (iv) to the
Company's Knowledge, the FCC Licenses are in full force and effect through the
dates set forth in Section 3.12 of the Disclosure Schedule, and there is not
pending or, to the Company's Knowledge, threatened any action by or before the
FCC to revoke, suspend, cancel, rescind, modify, or refuse to renew in the
ordinary course any of the FCC Licenses; (v) to the Company's Knowledge, the
Station is operating in compliance with the FCC Licenses and in compliance in
all material respects with the Communications Act and the current rules and
regulations of the FCC and have been assigned digital television frequencies;
and (vi) to the Company's Knowledge, there exist no facts, conditions or events
relating to Gannett or the Company that would reasonably be expected to cause
the revocation of FCC Licenses or denial by the FCC of the application for
consent to the assignment of the FCC Licenses as provided in this Agreement or
the Gannett Purchase Agreement. To the Company's Knowledge, Gannett has filed
all reports, forms and statements, including, without limitation, construction
permit applications for digital television channels required to be filed by
Gannett with the FCC and maintained in its public files in accordance with the
rules and regulations of the FCC.
3.13 Environmental Matters. Except as disclosed in Section 3.13 of the
Disclosure Schedule, to the Company's Knowledge, (i) Hazardous Materials have
not been Released on any Real Property except in material compliance with
applicable Law; (ii) there have been no events related to the Business or the
Real Property that would reasonably be expected to give rise to any material
liability under any Environmental Law; (iii) the Business, the Real Property and
the Leased Property is now, and for the past five years has been, in material
compliance with all applicable Environmental Laws and there are no extant
conditions that would reasonably be expected to constitute an impediment to such
compliance in the future; (iv) the Business has disposed of all wastes arising
from or otherwise relating to its business, including those wastes containing
Hazardous Materials, in material compliance with all applicable Environmental
Laws (including the filing of any required reports with respect thereto) and
Environmental Permits and (v) there are no pending or, to the Company's
Knowledge, threatened Environmental Claims against Gannett relating to the Real
Property.
3.14 Employee Benefit Matters. The Company has made available to Purchaser
copies of all material Employee Benefit Plans (including, without limitation,
all plans governed by ERISA, providing pension benefits or providing health,
life insurance or disability benefits) relating to the Station), which plans are
set forth in Section 3.14 of the Disclosure Schedule. To the Company's Knowledge
and except as set forth in Section 3.14 of the Disclosure Schedule, all such
Employee Benefit Plans are in compliance with the terms of the applicable plan
and the requirements prescribed by applicable law currently in effect with
respect thereto (including Sections 4980B and 5000 of the Code) and, to the
Company's Knowledge, Gannett has performed in all material respects all
obligations required to be performed by it under, and is not in default under or
in violation of, any of the terms of such Employee Benefit Plans where any
15
such noncompliance, nonperformance, default or violation would, individually or
in the aggregate, be reasonably expected to result in liability in excess of
$25,000. To the Company's Knowledge, Gannett has no post-retirement welfare
obligations with respect to the Business. To the Company's Knowledge, Gannett
has not incurred, and, to the Company's Knowledge, no event, transaction or
condition has occurred or exists which is reasonably expected to result in the
occurrence of any liability to the Pension Benefit Guaranty Corporation (other
than contributions to the plan and premiums to the Pension Benefit Guaranty
Corporation which, in either event, are not in default) or any "withdrawal
liability" within the meaning of Section 4201 of ERISA, or any other liability
pursuant to Title I or IV of ERISA or the penalty, excise tax or joint and
several liability provisions of the Code relating to employee benefit plans, in
any such case relating to any Employee Benefit Plan or any pension plan
maintained by any company that during the last five years was or currently would
be treated as a single employer with the Company or Gannett, as the case may be,
under Section 4001 of ERISA or Section 414 of the Code (an "ERISA affiliate"),
where individually or in the aggregate, in any of such events, any such
liability would be in excess of $25,000. To the Company's Knowledge, except as
set forth in Section 3.14 of the Disclosure Schedule and except for such matters
that would not, individually or in the aggregate, reasonably be expected to
result in liability in excess of $25,000, each Employee Benefit Plan relating to
the Station intended to be "qualified" within the meaning of Section 401(a) of
the Code has received a favorable determination letter that such plan is so
qualified and the trusts maintained thereunder are exempt from taxation under
Section 501(a) of the Code and, to the Company's Knowledge, is so qualified, and
no such Employee Benefit Plan holds employer securities. To the Company's
Knowledge and except as set forth in Section 3.14 of the Disclosure Schedule,
neither Gannett nor any ERISA Affiliate has ever made or been obligated to make,
or reimbursed or been obligated to reimburse another employer for, contributions
to any multiemployer plan (as defined in ERISA Section 3(37)). To the Company's
Knowledge and except as set forth in Section 3.14 of the Disclosure Schedule,
the Employee Benefit Plans are not presently under audit or examination (and
have not received notice of a potential audit or examination) by any
governmental authority, and no matters are pending with respect to the Qualified
Plan under any governmental compliance programs. To the Company's Knowledge,
with respect to each Employee Benefit Plan of the Station, there have been no
violations of Code Section 4975 or ERISA Sections 404 or 406 as to which
successful claims would, individually or in the aggregate, result in liability
in excess of $25,000 for Gannett, the Company or any Person required to be
indemnified by either of them. To the Company's Knowledge, except as set forth
in Section 3.14 of the Disclosure Schedule, and except as expressly provided in
this Agreement, the consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or officer of the
Business to severance pay, unemployment compensation or other payment, or (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee or officer. To the Company's Knowledge, there
are no pending or threatened or anticipated claims by or on behalf of any
Employee Benefit Plan relating to the Station, by any employee or beneficiary
covered under any such plan, or otherwise involving any such plan (other than
routine claims for benefits) where any such pending, threatened or anticipated
claims would, individually or in the aggregate, reasonably be expected to result
in liability in excess of $25,000. The $25,000 liability threshold in this
Section 3.14 is intended to apply only to this Section 3.14, and is in no way
intended to be used in defining materiality anywhere in this Agreement.
3.15 Labor Relations. To the Company's Knowledge, Section 3.15 of the
Disclosure Schedule sets forth a list of all labor organizations recognized as
representing the
16
employees of the Business. Complete and accurate copies of all collective
bargaining agreements and other labor union contracts relating to employees of
the Station and any such labor organizations (to the extent provided to the
Company by Gannett) have been delivered or made available to Purchaser. Except
as disclosed in Section 3.15 of the Disclosure Schedule, (i) the Company is not
and, to the Company's Knowledge, Gannett is not party to any collective
bargaining agreement or other labor union contract applicable to employees of
the Business, (ii) to the Company's Knowledge, there are no strikes, slowdowns
or work stoppages pending or, to the Company's Knowledge, threatened between
Gannett and any employees of the Business, and Gannett has not experienced any
such strike, slowdown, or work stoppage within the past two years, in each case,
as of the date of the Gannett Purchase Agreement, (iii) to the Company's
Knowledge, there are no unfair labor practice complaints pending or, to the
Company's Knowledge, threatened against the Business relating to employees of
the Business before the National Labor Relations Board or any other Governmental
Authority or, to the Company's Knowledge, any current union representation
questions involving employees of the Business and (iv) to the Company's
Knowledge, Gannett is in compliance in all material respects with its
obligations under all Laws and Governmental Orders governing its employment
practices with respect to employees of the Business, including, without
limitation, provisions relating to wages, hours and equal opportunity,
employment discrimination, workers' compensation, family and medical leave, the
Immigration Reform and Control Act, and occupational safety and health
requirements, (v) to the Company's Knowledge, all Persons classified by Gannett
as independent contractors with respect to the Business do satisfy the
requirements of law to be so classified, and, to the Company's Knowledge,
Gannett has fully and accurately reported their compensation on IRS Forms 1099
when required to do so, and (vi) to the Company's Knowledge, there is no charge
or compliance proceeding actually pending or, to the Company's Knowledge,
threatened against the Company or Gannett with respect to employees of the
Business before the Equal Employment Opportunity Commission or any state, local,
or foreign agency responsible for the prevention of unlawful employment
practices.
3.16 Intellectual Property. To the Company's Knowledge, Section 3.16 of the
Disclosure Schedule includes a complete list of all call letters of the Station
(the "Call Letters"). Except as disclosed in Section 3.16 of the Disclosure
Schedule, to the Company's Knowledge, (i) the rights of Gannett, and immediately
prior to the Closing, the Company, in or to the Call Letters and, to the
Company's Knowledge, the other Intellectual Property do not conflict with or
infringe on the rights of any other Person, (ii) the Company has not and, to the
Company's Knowledge, Gannett has not received any claim from any Person that the
rights of Gannett or the Company in or to the Intellectual Property conflict
with or infringe on the rights of any other Person and, to the Company's
Knowledge, no such claim is threatened, (iii) to the Company's Knowledge,
Gannett owns (free and clear of any Encumbrances other than Permitted
Exceptions), is licensed or otherwise has the right to use all Intellectual
Property necessary for the conduct of the Business as currently conducted by
Gannett (free and clear of any Encumbrances other than Permitted Exceptions),
except where the failure to have such rights would not reasonably be expected to
impair the operations of the Business in any material respect and (iv) to the
Company's Knowledge, no other Person is infringing or diluting the rights of
Gannett with respect to the Intellectual Property.
3.17 Taxes. Except as disclosed in Section 3.17 of the Disclosure Schedule
and except relating exclusively to the Gannett Maine Media Business, to the
Company's Knowledge (a) all material Tax Returns required to be filed by Gannett
(or to the extent required to be filed
17
by the Company) relating to the Business have been timely filed and all such Tax
Returns are correct and complete in all material respects; (b) all Taxes
required to be paid by Gannett (or to the extent required to be paid by the
Company) relating to the Business, whether or not shown as due on such Tax
Returns, have been timely paid other than such Taxes, if any, as are described
in Section 3.17 of the Disclosure Schedule and are being contested in good
faith; (c) there is no action, suit, proceeding, investigation, audit or claim
pending or, to the Company's Knowledge, threatened with respect to Taxes of
Gannett or the Company relating to the Station or for which Gannett or the
Company may be liable, and no adjustment relating to such Taxes of Gannett or
the Company relating to the Station has been proposed in writing by any Tax
authority and remains unresolved; (d) there are, and immediately prior to the
Closing there will be, no Tax liens on any of the assets of the Business (other
than liens for Taxes that are not yet due and payable); and (e) all Taxes that
the Business is required to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the proper Tax
authority.
3.18 Commissions. There is no broker or finder or other Person who has any
valid claim against the Company, Purchaser, or any of their respective
Affiliates or any of their respective assets for a commission, finders' fee,
brokerage fee or other similar fee in connection with this Agreement, or the
transactions contemplated hereby, by virtue of any actions taken by on or behalf
of the Company, its stockholders or the Company's officers, employees or agents.
3.19 Affiliate Transactions. Except as set forth in Section 3.19 of the
Disclosure Schedule or as expressly otherwise provided or permitted in this
Agreement, to the Company's Knowledge, since December 27, 1997, Gannett has not
engaged in any transaction with any Affiliate thereof that was material to the
Business, and, to the Company's Knowledge, Gannett is not a party to any
material agreements or arrangements relating to the Station with any Affiliates
that will continue in effect after the Closing for the Purchaser that are not
immediately terminable by the Purchaser without payment of any penalty or
premium.
3.20 Accuracy and Completeness of Representations and Warranties. No
representation or warranty made by the Company in this Article 3, to the
Company's Knowledge, contains any untrue statement of a material fact or omits a
material fact necessary in order to make the representation or warranty not
misleading.
Article 4. Representations and Warranties of Purchaser.
Purchaser represents and warrants to the Company as follows:
4.1 Organization and Standing. Purchaser is a corporation duly
incorporated, validly existing, and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and assets and to conduct its
business.
4.2 Binding Agreement. Purchaser has all requisite corporate power and
authority to enter into this Agreement, to execute and deliver this Agreement
and the Xxxx of Sale, Assignment and Assumption Agreement, to carry out its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Xxxx of Sale, Assignment and Assumption Agreement by
18
Purchaser and the consummation by Purchaser of its obligations hereunder and
thereunder have been duly and validly authorized by all necessary corporate and
stockholder action on the part of Purchaser. This Agreement has been and, on the
Closing Date, the Xxxx of Sale, Assignment and Assumption Agreement will be duly
executed and delivered on behalf of Purchaser and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of Purchaser enforceable in accordance with its terms,
subject to applicable bankruptcy and similar laws affecting the rights of
creditors generally and to general principles of equity (whether applied at law
or equity).
4.3 Absence of Conflicting Agreements or Required Consents. Except as set
forth in Section 4.3 of the Disclosure Schedule, the execution, delivery and
performance by Purchaser of this Agreement and the Xxxx of Sale, Assignment and
Assumption Agreement do not and will not (a) violate, conflict with or result in
the breach or default of any provision of the certificate or articles of
incorporation or by-laws of Purchaser, (b) materially conflict with or
materially violate any material Law or material Governmental Order applicable to
Purchaser or any of its properties or assets, (c) except for (i) the
notification requirements of the HSR Act, (ii) such filings with, and orders of,
the FCC as may be required under the Communications Act and the FCC's rules and
regulations in connection with this Agreement and the transactions contemplated
hereby and (iii) such matters that would not reasonably be expected to
materially impair or delay the consummation of the transactions contemplated
hereby, require any consent, approval, authorization or other order of, action
by, registration or filing with or declaration or notification to any
Governmental Authority or any other Person or (d) except for such matters that
would not reasonably be expected to materially impair or delay the consummation
of the transaction contemplated hereby, conflict with, result in any violation
or breach of, constitute a default (or event which with the giving of notice, or
lapse of time or both, would become a default) under, require any consent under,
or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any
Encumbrance on any of the Purchaser's assets pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license or permit,
or franchise to which Purchaser is a party or by which its assets are bound.
4.4 Litigation. Except as described in Section 4.4 of the Disclosure
Schedule, there are no Actions pending or, to Purchaser's knowledge, any Action
threatened to be brought by or before any Governmental Authority, against
Purchaser or any of its Affiliates that (i) seeks to question, delay or prevent
the consummation of the transactions contemplated hereby or (ii) would
reasonably be expected to affect adversely the ability of Purchaser to fulfill
its obligations hereunder, including without limitation, Purchaser's obligations
under Articles 1 and 2 hereof.
4.5 Commissions. There is no broker or finder or other Person who has any
valid claim against the Company, Purchaser, any of their respective Affiliates
or any of their respective assets for a commission, finders' fee, brokerage fee
or other similar fee in connection with this Agreement, or the transactions
contemplated hereby, by virtue of any actions taken by on or behalf of
Purchaser, or its officers, employees or agents.
4.6 Financing. Purchaser will at Closing have sufficient funds to pay the
Purchase Price pursuant to this Agreement and otherwise to satisfy its
obligations hereunder.
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4.7 Purchaser's Qualification. Except as set forth in Section 4.7 of the
Disclosure Schedule, (i) Purchaser does not know of any fact or circumstance
that could reasonably be expected to result in a finding by the FCC that
Purchaser is not qualified legally, financially or otherwise to be the licensee
of the Stations as its operations are now being conducted and (ii) except for
the FCC's Duopoly Rule, a waiver of which will be requested by Purchaser,
Purchaser does not know of any policy, rule, regulation or ruling of the FCC
that could reasonably be expected to be violated by the acquisition of the
Stations by Purchaser.
4.8 Accuracy and Completeness of Representations and Warranties. No
representation or warranty made by Purchaser in this Article 4 contains any
untrue statement of a material fact or omits a material fact necessary in order
to make the representation or warranty not misleading.
Article 5. Covenants and Agreements.
5.1 Conduct of the Business Prior to Closing; Access. The Company covenants
as follows:
(a) Prior to Closing, the Company will not with respect to the
Business:
(i) create, assume or subject any of the assets of the Business
to any Encumbrance, other than Permitted Exceptions and Encumbrances
that will be released at or prior to the Closing;
(ii) make any material changes in the operations of the Business;
(iii) other than, in each case, in the ordinary course of
business consistent with past practice, sell, transfer, lease,
sublease, license or otherwise dispose of any material assets of the
Business, other than the sale of obsolete Equipment that has been or
is replaced with Equipment of like kind;
(iv) (A) grant any increase, or announce any increase, in the
wages, salaries, compensation, bonuses, incentives, pension or other
benefits payable by the Company to any of the officers or key
employees of the Business, including, without limitation, any increase
or change pursuant to any Employee Benefit Plan, or (B) establish or
increase or promise to increase or accelerate the payment or vesting
of any benefits under any Employee Benefit Plan with respect to
officers or employees of the Business, in the case of either (A) or
(B) except (I) as required by Law, (II) that involve only increases
consistent with the past practices of the Company or Gannett (or as
otherwise required or allowed under the Gannett Purchase Agreement, as
the case may be, but in no event more than 5%, (III) as required under
any existing agreement or arrangement, (IV) that involve increases
related to promotions to the extent such increases result in the
compensation and benefits of the relevant employee being consistent
with the compensation and benefits provided to the holder of such
position in the past or
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(V) that relate to the supplemental executive retirement plans
identified in Section 3.14 of the Disclosure Schedule;
(v) make any change in any method of accounting or accounting
practice or policy used by the Company or Gannett in respect of the
Business, other than as required by law or under GAAP;
(vi) fail to maintain in full force and effect all of its
existing casualty, liability or other insurance relating to the
Station through the Closing in amounts at least equal to those in
effect on the date hereof;
(vii) make any capital expenditures relating to the Station in
excess of $500,000 in the aggregate that are not contemplated in the
capital improvements budgeted for 1998;
(viii) (A) amend the payment terms of any Program Contract to
provide that payments that would otherwise be made prior to the
Closing are made after the Closing or (B) acquire, enter into, modify,
change or extend the term of (x) any Program Contract providing for
payments in excess of $10,000 or with a term greater than one year or
(y) Program Contracts not subject to clause (x) that in the aggregate
provide for payments in excess of $200,000;
(ix) acquire, enter into, modify, change or extend the term of
any Material Contract, provided that this clause (ix) will not apply
to the acquisition or entering into of any new Material Contract not
otherwise subject to clauses (i) to (viii) or clauses (x) to (xvi)
hereof with respect to which all Liabilities of the Company thereunder
relating to the Station will be fully satisfied, discharged and
performed prior to the Closing with no adverse effect on Purchaser;
(x) compromise, settle, grant any waiver or release relating to,
or otherwise adjust, any material Action, material Liabilities or any
other material claims or material rights relating to the Station;
(xi) enter into any new agreement, contract, commitment or
arrangement with any Affiliate of the Company that will be binding
upon Purchaser, the Assets or the Station after the Closing;
(xii) apply to the FCC for any construction permit that would
adversely affect the Station's present operations, or make any
material change in the Station's buildings, leasehold improvements, or
fixtures;
(xiii) except with respect to promotion during ratings sweep
periods (which shall not be subject to this clause (xiii)), enter into
any trade, barter or similar agreements (other than Program Contracts)
for the sale of advertising time that would be binding on the Station
after the Closing for any property or services in lieu of or in
addition to cash that requires the provision of broadcast time having
a value that exceeds $10,000 in any individual agreement or
21
$200,000 in the aggregate;
(xiv) take any action, or refrain from taking any action, that
would constitute a material breach of, constitute a default (or event
which with the giving of notice, or lapse of time or both, would
become a default) under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of,
any Material Contract;
(xv) enter into or renew any time sales agreement except in the
ordinary course of business for a term not exceeding 12 months; or
(xvi) enter into any agreement, contract, commitment or
arrangement to do any of the foregoing.
(b) Pending the Closing, the Company shall:
(1) To the extent allowed by Gannett under the Gannett Purchase
Agreement, give to Purchaser and its representatives reasonable access
during normal business hours to all of the employees, properties,
books and records of Gannett or the Company that relate to the Station
and, to the extent available from, or allowed by, Gannett pursuant to
the Gannett Purchase Agreement, furnish Purchaser and its
representatives with such information concerning the Station as
Purchaser may reasonably require, including such access and
cooperation as may be necessary to allow Purchaser and its
representatives to interview the employees, to examine the books and
records of the Station, and to inspect the Real Property and Equipment
(which right of access shall not be exercised in any way which would
unreasonably interfere with the normal operations, business or
activities of the Station);
(2) To the extent provided by Gannett pursuant to the Gannett
Purchase Agreement, furnish to Purchaser within 20 days after the end
of each month ending between the date of this Agreement and the
Closing an unaudited statement of income and expense and a balance
sheet for the Station for the month just ended; and
(3) To the extent provided by Gannett pursuant to the Gannett
Purchase Agreement, from time to time, furnish to Purchaser such
additional information (financial or otherwise) concerning the Station
as Purchaser may reasonably request (which right to request
information shall not be exercised in any way which would unreasonably
interfere with the normal operations, business or activities of the
Station).
(c) The Company will deliver to Purchaser, within ten Business Days
after delivery or receipt, copies of any reports, applications or
communications to or from the FCC or its staff related to the Station which
are delivered or received between the date of the Gannett Purchase
Agreement and the Closing Date.
5.2 Post-Closing Covenants and Agreement, and Other Employee Benefit
22
Matters. (a) Purchaser shall at all reasonable times after reasonable
notice to Purchaser from and after the Closing, make available without
cost, for inspection and/or copying by the Company and any Person that was
a stockholder of Gannett during any of the tax years (or portions thereof)
immediately preceding the closing under the Gannett Purchase Agreement for
which the relevant statute of limitations (including any waiver thereof)
has not expired, or their respective representatives, the books and records
of the Business). Such books and records shall be preserved by Purchaser
until the later of the closing by tax audit of, or the expiration of the
relevant statute of limitations (including any waiver thereof) with respect
to, all open tax periods of Gannett and such stockholders prior to and
including the time immediately prior to the Closing. After the period set
forth above, Purchaser may destroy the books and records in its possession
unless, before expiration of such notice period the Company objects in
writing to the destruction of any or all of such books and records, in
which case, such books and records shall be delivered to the Company.
Notwithstanding the foregoing, Purchaser shall continue to preserve and, at
all reasonable times after the Closing, to make available without cost, for
inspection and/or copying by any Person that was a trustee or other
fiduciary under the Employee Benefit Plans identified in Section 5.2 of the
Disclosure Schedule, the books and records of such Employee Benefit Plan
and the books and records of the Business relating thereto.
(b) Effective as of the Closing, Purchaser shall offer employment to all
then employees of the Business, on such terms and conditions as Purchaser shall
establish (except that base cash compensation shall be comparable to their
existing base cash compensation), subject to the terms of any collective
bargaining agreement assumed by Purchaser under Section 5.2(e) and any
employment agreements with specific Business Employees, and shall assume
responsibility for all inactive employees of the Business, subject to the terms
of this Section 5.2 and the collective bargaining agreements assumed by
Purchaser under Section 5.2(e); provided, however, that any employee of the
Business who is not actively employed on the day of the Closing shall be offered
employment by Purchaser following the end of any inactive period (whether on
account of leave, layoff, injury or disability) but only to the extent that the
Company would have been obligated to offer active employment to such person upon
the end of such inactive period under the Gannett Purchase Agreement.
Notwithstanding the foregoing, Purchaser shall not have any obligation to offer
employment to any employees of the Corporate Office ("Corporate Office
Employees"), as described in Section 5.2(b) of the Disclosure Schedule. Nothing
in this Section 5.2(b) is intended to limit the ability of Purchaser to
terminate the employment of any employee after the Closing.
(c) Subject to applicable law and the terms of any collective bargaining
agreement assumed pursuant to this Agreement, if any, Purchaser shall establish
and maintain for a period of one year after the Closing Date or the term of
their employment by Purchaser, whichever is less, for employees of the Business
as of the Closing Date, benefits that, in the aggregate, are no less favorable
than the benefits maintained by the Purchaser for similarly situated employees
of Purchaser, provided that the foregoing will not prohibit or in any manner
restrict Purchaser from terminating or changing the individual terms of
employment of any Business Employee or require Purchaser to maintain any
specific benefits or Employee Benefit Plans. Purchaser shall give employees of
the Business as of the Closing Date and former and inactive Business Employees
credit for their service with the Company and Gannett or any of their
Subsidiaries prior to the Closing, to the same extent that such service would
have been credited by Purchaser (if they had been employed by Purchaser for such
period of service), for all
23
purposes under all employee benefit plans or arrangements maintained by
Purchaser for current, former and inactive Business Employees (including any
waiting periods). In addition, Purchaser shall, if applicable, (i) cause any
pre-existing condition limitation to be waived and (ii) give effect, in
determining any deductible and maximum out-of-pocket limitations, to claims
incurred and amounts paid by, and amounts reimbursed to current, former and
inactive Business Employees with respect to similar plans maintained by the
Company or Gannett prior to the Closing.
(d) Purchaser will assume and indemnify and hold harmless the Company
Indemnified Parties against all Liabilities with respect to severance benefits
arising in connection with or following the Closing pursuant to the agreements
set forth in Sections 3.14.1 and 3.14.2 of the Disclosure Schedule (subject to
the right of recovery set forth in Section 5.8(a)), or pursuant to any
collective bargaining agreement or other agreements with Business Employees
assumed either pursuant to this Agreement or by operation of law. With respect
to all current and inactive Business Employees immediately prior to the Closing
not covered by the agreements referenced in the immediately preceding sentence,
(x) for a period ending not less than one year after the Closing, Purchaser will
provide such Business Employees with the same severance benefits as Purchaser
provides for similarly situated employees of Purchaser (which benefits, as of
the date hereof, are described in Section 5.2(d) of the Disclosure Schedule) and
(y) Purchaser will assume and indemnify and hold harmless the Company
Indemnified Parties against all Liabilities with respect to severance benefits
arising in connection with or following the Closing.
(e) From and after the Closing, Purchaser shall assume all of the
collective bargaining agreements (including, without limitation, pursuant to the
specified provisions of the collective bargaining agreements set forth in
Section 5.2 of the Disclosure Schedule) and other labor contracts with respect
to any Business Employees existing immediately prior to the Closing.
(f) From and after the Closing, Purchaser shall assume sponsorship of the
WOKR-TV Partners 401(k) Plan, and assume responsibilities of all Employee
Benefits Plans that provide post-retirement life insurance or health, or
short-term or long-term disability benefits and be responsible for any benefits
under such Employee Benefit Plans (i) to which any current, former or inactive
Business Employee, or a beneficiary or dependent of any current, former or
inactive Business Employee ("Beneficiary"), has already become entitled, (ii)
which commenced or (iii) to which any current, former or inactive Business
Employee has already become qualified by reason of age and years of service as
of the Closing, to the extent such persons are identified in Section 5.2(f) of
the Disclosure Schedule (which section shall be updated, if necessary, at
Closing). From and after the Closing, Purchaser shall also pay to the Business
Employees and Corporate Office Employees listed in Section 5.2(f) of the
Disclosure Schedule the supplemental retirement benefits provided under the
applicable Gannett supplemental retirement plan.
(g) From and after the Closing, Purchaser shall assume and be responsible
for any workers' compensation benefits payable to a Business Employee,
Beneficiary or dependent of a Business Employee on or after the Closing,
including any such benefits that are attributable to any injury or illness that
occurred or existed prior to the Closing to the extent not covered by the
Company's workers' compensation insurance policy.
24
(h) For a period of 90 days after the Closing, Purchaser shall not
implement any employment terminations, layoffs or hours reductions or take any
other action which could result in a "plant closing" or "mass layoff," as those
terms are defined in the Worker Adjustment and Retraining Notification Act of
1988 ("WARN") or similar events under applicable state law, affecting in whole
or in part any facility, site of employment or operating unit, or any employee
employed by the Business, or which could require either Purchaser or the Company
to give notice or take any other action required by WARN or applicable state
law.
(i) From and after the Closing, Purchaser shall assume the Company's and
Gannett's obligations and liabilities with respect to COBRA continuation
coverage under Section 4980B of the Code and Section 601 of ERISA ("Continuation
Coverage") with respect to Business Employees and shall provide Continuation
Coverage to the Business Employees under Purchaser's health and medical plans
(x) with respect to any Business Employees who remain employed with either the
Company or Gannett through the Closing Date, for a period of eighteen months
after the Closing or, if earlier, until becoming eligible for comparable
coverage from another employer and (y) with respect to any Business Employees
whose employment shall have terminated prior to the Closing, for remainder of
the period with respect to which Continuation Coverage would otherwise have been
available to them had the Company or Gannett, as the case may be, continued to
maintain a group health plan.
5.3 Cooperation. Following the execution of this Agreement, Purchaser and
the Company agree as follows:
(a) The parties and their Affiliates shall each use their reasonable
efforts, and shall cooperate fully with each other in preparing, filing,
prosecuting, and taking any other actions with respect to, any filings
(other than filings with the FCC, which are provided for in clause (b)
below), applications, requests, or actions which are or may be necessary to
obtain the consents, approvals, authorizations or other orders of any
Governmental Authority which are or may be necessary in order to accomplish
the transactions contemplated by this Agreement; and, without limiting the
generality of the foregoing, the parties and their Affiliates shall use
their respective reasonable efforts to prepare and file as promptly as
practicable, but in any event no later than 15 Business Days after the date
hereof, all of the information called for in the Notification and Report
Form required under the HSR Act and to prepare and file any supplemental
information, also in a timely fashion, which may be required by the United
States Department of Justice or the Federal Trade Commission pursuant to
such Notification and Report Form Filings, and otherwise to use their
respective reasonable efforts to obtain the requisite clearances.
(b) The parties and their Affiliates shall cooperate fully with each
other in preparing, filing, prosecuting, and taking any other actions with
respect to filings with the FCC related to the transactions contemplated by
this Agreement, including, without limitation, preparation of an
application for the assignment of all of the FCC Licenses to Purchaser and
any filings by Purchaser requesting temporary waivers for no more than nine
months of the FCC's applicable ownership rules necessary to permit the
parties to consummate the transactions contemplated by this Agreement. As
promptly as practicable, but in any event not later than September 25,
1998, the Company and Purchaser shall jointly file the application with the
FCC requesting the FCC Consent,
25
including, without limitation, requesting, consenting to, and taking and
otherwise seeking any action in connection with a conditional waiver of the
FCC's Duopoly Rule. The Company and Purchaser shall use their respective
reasonable best efforts, diligently take all necessary and proper actions
and provide any additional information requested by the FCC in order to
obtain promptly the FCC Consent. Notwithstanding the foregoing or any other
provision of this Agreement, neither Purchaser nor its officers, directors
or Affiliates shall request a permanent waiver of the FCC's applicable
ownership rules or request, consent to, take or otherwise seek or pursue
any action that is inconsistent with the transactions contemplated by this
Agreement or that reasonably could be expected to materially impede or
materially delay the FCC Consent or otherwise materially impede or
materially delay the consummation of the transactions contemplated by this
Agreement; and the receipt of any permanent waiver of the foregoing FCC
rules shall not be a condition to the obligation of Purchaser to consummate
the transactions contemplated hereby. Neither Purchaser nor any of its
officers, directors or Affiliates will take any action that would result in
any change in the matters set forth in Section 4.7 hereof that would
reasonably be expected to materially delay or otherwise materially impair
Purchaser's ability to consummate the transactions contemplated hereby.
After the date hereof, Purchaser or its Affiliates may enter into
transactions that implicate the FCC multiple ownership rules so long as
such transactions would not reasonably be expected to materially impede or
materially delay the Closing
(c) (i) If Purchaser (or its Affiliates) or the Company receives an
administrative or other order or notification relating to any violation or
claimed violation of the rules and regulations of the FCC, or of any
Governmental Authority, that could affect Purchaser's or the Company's
ability to consummate the transactions contemplated hereby, or (ii) should
Purchaser (or its Affiliates) become aware of any fact (including any
change in law or regulations (or any interpretation thereof by the FCC))
relating to the qualifications of Purchaser (and its controlling persons)
that reasonably could be expected to cause the FCC to withhold the FCC
Consent, Purchaser (in the case of clauses (i) and (ii)) or the Company (in
the case of clause (i)) shall promptly notify the other party or parties
thereof and shall use its reasonable best efforts to take such steps as may
be necessary to remove any such impediment to the transactions contemplated
by this Agreement; and no such notification shall affect the
representations or warranties of the parties or the conditions to their
respective obligations hereunder.
(d) The parties shall each use their reasonable best efforts to obtain
as promptly as reasonably practical all consents that may be required in
connection with the assignment to the Purchaser at Closing of all the
Company's right, title and interest in and to all Material Contracts as
such are acquired by the Company pursuant to the Gannett Purchase Agreement
and all other agreements of the Business to which the Company is a party,
provided that neither the Company nor Purchaser shall be required to make
any payment to any party to any such Material Contract or other agreement
in order to obtain any such consent.
(e) To the extent that there are third-party insurance policies
maintained by the Company covering any Claims or Damages relating to the
assets, business, operations, conduct and employees (including, without
limitation, former employees) of the Business arising out of or relating to
occurrences prior to the Closing, the Company shall use all
26
reasonable efforts to cause Purchaser to be named as an additional insured
with respect to such policies.
(f) Subject to the terms and conditions of this Agreement, each of the
parties agrees to use its reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the Closing and the other
transactions contemplated hereby as soon as practicable.
5.4 Confidentiality.
(a) Prior to the Closing. The terms of the Confidentiality Agreement by and
between Purchaser and Gannett are herewith incorporated by reference and shall
continue in full force and effect as between Purchaser and Gannett until the
Closing and shall remain in effect as between Purchaser and Gannett in
accordance with its terms even if this Agreement is terminated.
(b) Financial and Tax Information. Before and after the Closing, each of
the parties shall maintain the confidentiality of the financial and tax
information of the Persons other than the Company in the possession of the
Company under terms similar to those set forth in the Confidentiality Agreement
by and between Purchaser and Gannett with respect to "Evaluation Material" as
though such terms continued after the Closing.
5.5 Public Announcements. Except as otherwise required by law or the rules
of any stock exchange, the form and substance of the initial public announcement
of this Agreement and the transactions contemplated hereby, and the time of such
announcement, shall be approved in advance by the parties and the parties shall
not issue any other report, statement or press release or otherwise make any
public announcement with respect to this Agreement and the transactions
contemplated hereby without prior consultation in good faith with the other
party hereto.
5.6 No Solicitation. The Company shall not, and shall cause its officers,
directors, representatives, affiliates and associates not to, (a) initiate
contact with, solicit, encourage or respond to any inquiries or proposals by, or
(b) enter into any discussions or negotiations with, or disclose, directly or
indirectly, any information concerning the Business to, or afford any access to
the Company's properties, books and records to, any Person in connection with
any possible proposal for the acquisition (directly or indirectly, whether by
purchase, merger, consolidation or otherwise) of all or substantially all of the
Business. The Company agrees to terminate immediately any such discussions or
negotiations.
5.7 No Additional Representations. Purchaser acknowledges that it and its
representatives have been permitted access to books and records, facilities,
equipment, tax returns, contracts and agreements, insurance policies (or
summaries thereof), and other properties and assets of the Station and that they
and their representatives have had an opportunity to meet with the officers and
employees of the Company and Gannett to discuss the Station and the Business,
properties and assets. PURCHASER ACKNOWLEDGES THAT NEITHER THE COMPANY NOR ANY
OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AS
TO THE ACCURACY OR COMPLETENESS
27
OF ANY INFORMATION REGARDING THE STATION OR THE BUSINESS FURNISHED OR MADE
AVAILABLE TO PURCHASER AND ITS REPRESENTATIVES EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT.
5.8. Certain Payments. (a) Pursuant to the terms of the Gannett Purchase
Agreement, the Company has certain rights and obligations with respect to the
Severance Agreements listed in Sections 3.14.1 and 3.14.2 of the Disclosure
Schedule of the Gannett Purchase Agreement, which Severance Agreements include
those listed in Sections 3.14.1 and 3.14.2 of the Disclosure Schedule hereto
(the "WOKR Scheduled Severance Agreements"). Promptly, but in no event later
than five Business Days prior to any payment due under the WOKR Scheduled
Severance Agreements to any employee of the Station terminated by Purchaser
prior to 90 days after the Closing Date under the Gannett Purchase Agreement,
Purchaser shall notify the Company of the amount to be paid to such employee,
and the Company shall make the payment to such terminated employee as provided
by the WOKR Scheduled Severance Agreements (a "WOKR Severance Payment");
provided that the maximum amount that the Company shall be required to pay
pursuant to this Section 5.8(a) shall be $342,720, in the aggregate, for all
Business Employees as defined hereunder. Within five (5) Business Days after the
Company makes a WOKR Severance Payment, Purchaser shall reimburse the Company
for 50% of the amount of such payment. In addition to any reimbursement by
Purchaser under this Section 5.8(a), to the extent provided by Section 5.8(a) of
the Gannett Purchase Agreement, the Company will be entitled to reimbursement as
provided by the Gannett Purchase Agreement, and nothing in this Agreement or the
Gannett Purchase Agreement shall be construed to give Purchaser any right of
recovery to Purchaser pursuant to Section 5.8(a) of the Gannett Purchase
Agreement.
(a) Pursuant to Section 5.8(b) of the Gannett Purchase Agreement, Gannett
will cease operations and vacate the Gannett Corporate Offices, and the Company
has agreed that it will pay, indemnify, and hold harmless the Company
Indemnified Parties from and against 50% of all Claims and Damages (including,
without limitation, all rent or other payments made under the Corporate Office
Lease arising out of or relating to the Corporate Office Lease) to the extent
such Claims and Damages arise out of or relate to (x) the termination of the
Corporate Office Lease or (y) the post-closing period after the date in which
the Corporate Office Employees cease using the Corporate Office, provided that
the maximum amount that Purchaser shall be liable for under this Section 5.8(b)
is $80,640. Such payments by the Company thereunder shall be made as the related
Claims and Damages are incurred. To the extent the Company is required to make
such payment, Purchaser shall reimburse and pay over to the Company 40.32% of
all such payments made by the Company. Purchaser acknowledges and agrees that
the Company may terminate the Corporate Office Lease on such terms as the
Company shall determine and otherwise take such action as the Company determines
in connection with its vacating the Corporate Office.
5.9 Bulk Sales Laws. The parties agree to waive compliance with the
provisions of the bulk sales law of any jurisdiction. The Company will indemnify
and hold harmless Purchaser from and against any and all Liabilities which may
be asserted by third parties against Purchaser as a result of such
noncompliance.
5.10 Control of the Stations. Prior to the Closing, control of the Station
(including, without limitation, control over their finances, personnel and
programming) shall
28
remain with the Company or Gannett, as the case may be. The Company and
Purchaser acknowledge and agree that neither Purchaser nor any of its employees,
agents or representatives, directly or indirectly, shall, or shall have any
right to, control, direct or otherwise supervise the Station, it being
understood that supervision of all programs, equipment, operations and other
activities of the Station shall be the sole responsibility of, and at all times
prior to the Closing remain under the complete control and direction of, the
Company or, if prior to the Closing under the Gannett Purchase Agreement,
Gannett.
5.11 Use of Certain Names. After the Closing, neither Purchaser nor any of
its Affiliates shall use "Xxxxxxxx," "Xxxxxxxx Broadcast," "Xxxxxxxx
Television," "Xxxxxxxx Communications," "Guy Gannett," "Gannett," or any name or
term confusingly similar to the "Xxxxxxxx" names in any corporate name or in
connection with the operation of any business.
Article 6. Conditions to Obligations of Purchaser.
The obligations of Purchaser to consummate the transactions contemplated by
this Agreement to occur at the Closing are, at their option, subject to
satisfaction of each of the following conditions:
6.1 Representations and Warranties. The representations and warranties of
the Company contained herein shall be true and correct at and as of the Closing
Date as though each such representation and warranty were made at and as of such
time, other than such representations and warranties as are made as of a
specific date, in each case except for changes that are expressly contemplated
by this Agreement and except for such failures to be true and correct that would
not reasonably be expected to have a Material Adverse Effect.
6.2 Performance by the Company. All of the covenants and agreements to be
complied with and performed by the Company on or before the Closing Date shall
have been complied with or performed, except for such failures to comply with or
perform that would not reasonably be expected to have a Material Adverse Effect.
6.3 Certificate. The Company shall have delivered to Purchaser a
certificate, dated as of the Closing Date, executed on behalf of the Company by
its duly authorized officers or representatives to the effect of Sections 6.1
and 6.2.
6.4 Consents; No Objections. (i) The applicable waiting periods under the
HSR Act shall have expired or been terminated; and
(ii) The parties shall have received all the authorizations, consents,
orders and approvals from Governmental Authorities and consents from third
parties, in each case listed or described in Section 6.4 of the Disclosure
Schedule.
(iii) The parties shall have received all authorizations, consents, orders
and approvals from Governmental Authorities necessary to transfer the material
Permits relating to the operation of the Station's tower, transmitter and
television broadcasting studio as such facilities are operating on the date
hereof, except in each case where the failure to receive such authorizations,
consents, orders or approvals would not reasonably be expected to materially
29
adversely affect the operations of such facilities, or where such
authorizations, consents, orders or approvals are customarily obtained after the
Closing of a transaction of this nature.
6.5 No Proceedings or Litigation. No preliminary or permanent injunction or
other order or decree issued by any United States federal or state Governmental
Authority, nor any Law promulgated or enacted by any United States federal or
state Governmental Authority, that restrains, enjoins or otherwise prohibits the
transactions contemplated hereby or limits the ability in any material respect
of the rights of the Company to hold the Assets (excluding the FCC Licenses) and
conduct the Business as it is being conducted as of the Closing Date, or imposes
civil or criminal penalties on any stockholder, director or officer of Purchaser
if such transactions are consummated, shall be in effect.
6.6 [Intentionally omitted]
6.7 FCC Consent. The FCC Consent shall have been issued with respect to the
Station without any conditions that are materially adverse to Purchaser
notwithstanding that it may not have yet become a Final Order, provided that, if
one or more pre-grant objections shall have been filed with respect to the
applications required by Section 5.3(b) hereof, it shall be a condition
precedent that the FCC Consent shall have become a Final Order.
6.8 No Material Adverse Change. Since the date of this Agreement through
the Closing Date, there shall not have occurred any Material Adverse Effect.
6.9 Opinions of Counsel. Purchaser shall have received (a) an opinion of
Xxxxxx & Xxxxxxxx, P.A., dated the Closing Date, substantially in the form of
Exhibit E-1 hereto, and (b) an opinion of Xxxxxx, Xxxxxxx, Xxxxxx, Leader &
Xxxxxxxx L.L.P., dated the Closing Date, substantially in the form of Exhibit
E-2 hereto.
6.10 Good Standing Certificate. Purchaser shall have received a certificate
as to the formation and good standing of the Company issued by the Secretary of
State of Maryland, dated not more than five days before the Closing Date.
6.11 No Transmission Defects. There shall not exist any loss or damage at
the Station which has resulted in the regular broadcast transmission of the
Station (including its effective radiated power) to be diminished in any
material respect; provided, that if any such loss or damage does exist, then
either or both of the Company and Purchaser shall be entitled, by written notice
to the other, to postpone the Closing Date for a period of up to 60 days to
resume the Station's broadcast transmission.
6.12 Closing on the Gannett Purchase Agreement. The closing, as defined in
the Gannett Purchase Agreement, shall have occurred or occur simultaneously with
the Closing hereunder.
Article 7. Conditions to Obligations of the Company.
30
The obligations of the Company to consummate the transactions contemplated
by this Agreement to occur at the Closing are, at its option, subject to
satisfaction of each of the following conditions:
7.1 Representations and Warranties. The representations and warranties of
Purchaser contained herein shall be true and correct in all material respects at
and as of the Closing Date as though each such representation and warranty were
made at and as of such time, other than such representations and warranties as
are made as of a specific date, in each case except for changes that are
expressly contemplated by this Agreement.
7.2 Performance by Purchaser. All of the covenants and agreements to be
complied with and performed by Purchaser on or prior to the Closing Date shall
have been complied with or performed, in all material respects, except for such
failures to comply with or perform that would not, individually or in the
aggregate, reasonably be expected to be materially adverse to the Company.
7.3 Certificate. Purchaser shall have delivered to the Company a
certificate, dated as of the Closing Date, executed on behalf of Purchaser by
its duly authorized officers or representatives to the effect of Sections 7.1
and 7.2.
7.4 Consents; No Objections. (i) The applicable waiting periods under the
HSR Act shall have expired or been terminated; and
(ii) The parties shall have received all the authorizations, consents,
orders and approvals from Governmental Authorities and consents from third
parties, in each case listed or described on Section 7.4 to the Disclosure
Schedule.
7.5 No Proceedings or Litigation. No preliminary or permanent injunction or
other order or decree issued by any United States federal or state Governmental
Authority, nor any Law promulgated or enacted by any United States federal or
state Governmental Authority, that restrains, enjoins or otherwise prohibits the
transactions contemplated hereby, or imposes civil or criminal penalties on any
stockholder, director or officer of the Company if such transactions are
consummated, shall be in effect.
7.6 FCC Consent. The FCC Consent shall have been issued with respect to the
Stations, notwithstanding that it may not have yet become a Final Order,
provided that, if one or more pre-grant objections shall have been filed with
respect to the applications required by Section 5.3(b) hereof, it shall be a
condition precedent that the FCC Consent shall have become a Final Order.
7.7 Opinion of Counsel. The Company shall have received an opinion of
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P., dated the Closing Date,
covering the same matters covered by the opinions delivered by the Company to
Gannett under the Gannett Purchase Agreement and in form and substance
reasonably satisfactory to the Company.
7.8 Good Standing Certificate. The Company shall have received a
certificate as to the formation and good standing of Purchaser issued by the
Secretary of State of Delaware,
31
dated not more than five days before the Closing Date.
7.9. Closing on Gannett Purchase Agreement. The closing, as defined in the
Gannett Purchase Agreement, shall have occurred or occur simultaneously with the
Closing hereunder.
Article 8. Indemnification.
8.1 Indemnification by the Company. Subject in all respects to the
provisions of this Article 8, the Company hereby agrees to indemnify and hold
harmless on and after the Closing Date, Purchaser and its stockholders and
Affiliates and their respective officers, directors, employees and agents, and
their respective and successors and permitted assigns (the "Purchaser
Indemnified Parties") from and against any Claims and Damages asserted against
or incurred by them, directly or indirectly, in connection with, arising out of
or relating to (i) any breach on the part of the Company of any representation
or warranty made by the Company in Article 3 hereof or in any certificate
delivered pursuant to Section 6.3 of this Agreement, and (ii) any breach on the
part of the Company of any covenant or agreement made by the Company in this
Agreement.
8.2 Indemnification by Purchaser. Subject in all respects to the provisions
of this Article 8, Purchaser hereby agrees to indemnify and hold harmless on and
after the Closing Date the Company and its stockholders and Affiliates and their
respective officers, directors, employees and agents, and their respective
successors and permitted assigns (collectively the "Company Indemnified
Parties"), from and against any Claims and Damages asserted against or incurred
by them, directly or indirectly, in connection with, arising out of or relating
to (i) any breach on the part of Purchaser of any representation or warranty
made by Purchaser in Article 4 hereof or in any certificate delivered pursuant
to Section 7.3 of this Agreement, (ii) any breach on the part of Purchaser of
any covenant or agreement made by the Purchaser in this Agreement or (iii) any
Assumed Liabilities.
8.3 Limitations on Indemnification Claims and Liability; Termination of
Indemnification. (a) The obligations to indemnify and hold harmless a Person
pursuant to Sections 8.1(i) or 8.1(ii) shall terminate when the applicable
representation, warranty, covenant or agreement terminates pursuant to Section
10.12, and the obligations to indemnify and hold harmless a Person pursuant to
Section 8.2(iii) shall not terminate; provided, however, that as to clause (i)
above the obligation to indemnify and hold harmless shall not terminate with
respect to any claim as to which the Person to be indemnified shall have, before
the termination of the applicable representation, warranty, covenant or
agreement, previously made a claim for indemnification by delivering a notice to
the indemnifying party in accordance with Section 8.5.
(b) The Company shall not be obligated to indemnify or hold harmless any
Purchaser Indemnified Party under Sections 8.1(i) or 8.1(ii), unless and until
all Claims and Damages when aggregated with the Claims and Damages under the
Gannet Purchase Agreement, exceed in the aggregate $550,000, in which case the
Company will (subject to the other provisions of this Article 8) only be
obligated to indemnify and hold harmless the Purchaser Indemnified Parties for
all of such Claims or Damages under Sections 8.1(i) or 8.1(ii) in the aggregate
in excess of $275,000 (or such pro rata portion of $275,000 as is applicable
when the
32
Claims and Damages of the Company under the Gannett Purchase Agreement are taken
into account), provided that the provisions of this Section 8.3(b) will not
apply to any breach of any Post-Closing Agreements.
(c) Notwithstanding anything to the contrary in this Agreement and except
for fraud, the sole and exclusive recourse, remedy and source of funds available
to satisfy any claims for indemnification by the Purchaser Indemnified Parties
pursuant to Sections 8.1(i) or 8.1(ii) shall be the amount of the Security
Escrow then held on deposit with the Security Escrow Agent subject to the terms
and conditions of the Security Escrow Agreement, and the Purchaser Indemnified
Parties will have no recourse against the assets of the Company (other than the
Security Escrow then held on deposit with the Security Escrow Agent) in respect
of any such claim. Without limiting the foregoing, the maximum aggregate
liability of the Company with respect to all claims for indemnification under
Sections 8.1(i) or 8.1(ii) will be limited to the amount of the Security Escrow
held on deposit from time to time with the Security Escrow Agent.
(d) Notwithstanding anything to the contrary in this Agreement, the
indemnifications in Sections 8.1 and 8.2 hereof will be the sole and exclusive
remedies available to Purchaser and the Company and their respective
stockholders and Affiliates and all of their respective officers, directors,
employees, agents, successors and assigns, after the Closing for any claims
arising out of or relating to any breaches of any representations or warranties
or any covenants or agreements contained in this Agreement, or any certificate
delivered pursuant to this Agreement or otherwise in connection with this
Agreement. Any claim for indemnification must be made as provided in Sections
8.5 and 8.6 hereof.
8.4 Computation of Claims and Damages. Whenever the Indemnitor is required
to indemnify and hold harmless the Indemnitee from and against and hold the
Indemnitee harmless from, or to reimburse the Indemnitee for, any item of Claim
or Damage, the Indemnitor will, subject to the provisions of this Article 8, pay
the Indemnitee the amount of the Claim or Damage (i) reduced by any amounts to
which the Indemnitee is entitled from third parties in connection with such
Claim or Damage ("Reimbursements"), (ii) reduced by the Net Proceeds of any
insurance policy payable to the Indemnitee with respect to such Claim or Damage
and (iii) reduced appropriately to take into account any Tax Benefit to the
Indemnitee with respect to such Claim or Damage through and including the tax
year in which the indemnification payment is made, net of all income Taxes
resulting or that will result from the indemnification payment. For purposes of
this Section 8.4, (x) "Net Proceeds" shall mean the insurance proceeds payable,
less any deductibles, co-payments, premium increases, retroactive premiums or
other payment obligations (including attorneys' fees and other costs of
collection) that relates to or arises from the making of the claim for
indemnification and (y) "Tax Benefit" shall mean any benefit to be recognized by
the Indemnitee in connection with the Claim or Damage based upon the highest
blended (federal, state, local and foreign) marginal income Tax rate applicable
to the Indemnitee during the taxable year for which a return was most recently
filed with the Internal Revenue Service (based on the date of the claim for
indemnification). The Indemnitor shall use commercially reasonable efforts (the
expenses of which shall be considered Claims and Damages for purposes of the
relevant indemnity claim) to pursue Reimbursements or Net Proceeds that may
reduce or eliminate Claims and Damages. If any Indemnitee receives any
Reimbursement, Tax Benefit or Net Proceeds after an indemnification payment is
made which relates thereto or if any Indemnitee receives a Tax Benefit arising
after the tax year in which an indemnification
33
payment is made which relates thereto, the Indemnitee shall promptly repay to
the Indemnitor (or to the Security Escrow if such repayment is made by a
Purchaser Indemnified Party prior to the termination of the Security Escrow)
such amount of the indemnification payment as would not have been paid had the
Reimbursement, Tax Benefit or Net Proceeds reduced the original payment (any
such repayment shall be a credit against any applicable indemnification
threshold or limitation set forth in Section 8.3(b) hereof) at such time or
times as and to the extent that such Reimbursement, Tax Benefit or Net Proceeds
is actually received.
8.5 Notice of Claims. Upon obtaining knowledge of any Claim or Damage which
has given rise to, or could reasonably give rise to, a claim for indemnification
hereunder, the Person seeking indemnification (the "Indemnitee") shall, as
promptly as reasonably practicable (but in no event later than 30 days)
following the date the Indemnitee has obtained such knowledge, give written
notice (a "Notice of Claim") of such claim to the other party (the
"Indemnitor"). The Indemnitee shall furnish to the Indemnitor in good faith and
in reasonable detail such information as the Indemnitee may have with respect to
such indemnification claim (including copies of any summons, complaint or other
pleading which may have been served on it and any written claim, demand,
invoice, billing or other document evidencing or asserting the same). No failure
or delay by the Indemnitee in the performance of the foregoing shall reduce or
otherwise affect the obligation of the Indemnitor to indemnify and hold the
Indemnitee harmless, except to the extent that such failure or delay shall have
adversely affected the Indemnitor's ability to defend against, settle or satisfy
any liability, damage, loss, claim or demand for which such Indemnitee is
entitled to indemnification hereunder. For purposes of this Section 8.5, a
Notice of Claim given in good faith must include a good faith estimate of the
amount of the claim to the extent it is reasonably practicable to determine such
estimate (and, if it is not practicable to determine such estimate and the claim
is made by a Purchaser Indemnified Party, the amount of the Security Escrow
proposed in good faith to be reserved with respect to such claim).
8.6 Defense of Third Party Claims. If any claim set forth in the Notice of
Claim given by an Indemnitee pursuant to Section 8.5 hereof is a claim asserted
by a third party, the Indemnitor shall have 30 days after the date that the
Notice of Claim is given by the Indemnitee to notify the Indemnitee in writing
of the Indemnitor's election to defend such third party claim on behalf of the
Indemnitee. If the Indemnitor elects to defend such third party claim, the
Indemnitee shall make available to the Indemnitor and its agents and
representatives all witnesses, pertinent records, materials and information in
the Indemnitee's possession or under the Indemnitee's control as is reasonably
required by the Indemnitor and shall otherwise cooperate with and assist the
Indemnitor in the defense of such third party claim, and so long as the
Indemnitor is defending such third party claim in good faith, the Indemnitee
shall not pay, settle or compromise such third party claim. If the Indemnitor
elects to defend such third party claim, the Indemnitee shall have the right to
participate in the defense of such third party claim, at the Indemnitee's own
expense. In the event, however, that the Indemnitee reasonably determines that
representation by counsel to the Indemnitor of both the Indemnitor and the
Indemnitee may present such counsel with a conflict of interest, then such
Indemnitee may employ separate counsel to represent or defend it in any such
action or proceeding and the Indemnitor will, subject to the provisions of this
Article 8, pay the reasonable fees and disbursements of such counsel. If the
Indemnitor does not elect to defend such third party claim or does not defend
such third party claim in good faith, the Indemnitee shall have the right, in
addition to any other right or remedy it may have hereunder, at the Indemnitor's
expense, to
34
defend such third party claim; provided, however, that such Indemnitee's defense
of or its participation in the defense of any such third party claim shall not
in any way diminish or lessen the indemnification obligations of the Indemnitor
under this Article 8. If the Indemnitor shall assume the defense of a third
party claim, it shall not settle such claim without the prior written consent of
the Indemnitee (i) unless such settlement includes as an unconditional term
thereof the giving by the claimant of a release of the Indemnitee from all
Liability with respect to such claim or (ii) if such settlement involves the
imposition of equitable remedies or the imposition of any obligations on such
Indemnitee other than financial obligations for which such Indemnitee will be
indemnified hereunder. If the Indemnitee is defending a third party claim it
will not settle such claim without prior written consent of the Indemnitor,
which will not be unreasonably withheld or delayed.
8.7 Third Party Beneficiaries.
(a) Each of the Purchaser Indemnified Parties and the Company Indemnified
Parties shall be third party beneficiaries, and entitled to enforce the
provisions of, this Article 8.
Article 9. Definitions.
Unless otherwise stated in this Agreement, the following capitalized terms
have the following meanings:
Accounting Firm Determination has the meaning set forth in Section 2.2
of the Gannett Purchase Agreement.
Action means any action, suit, claim, arbitration, or proceeding or
investigation (of which the Company has knowledge) commenced by or pending
before any Governmental Authority.
Actual Net Financial Assets has the meaning set forth in Section 2.3.
Adjustment has the meaning set forth in Section 2.3 hereof.
Adjustment Escrow has the meaning set forth in Section 2.2(ii) hereof.
Adjustment Escrow Agent has the meaning set forth in Section 2.3
hereof.
Adjustment Escrow Agreement has the meaning set forth in Section 2.3
hereof.
Adjustment Agreement has the meaning set forth in Section 2.3 hereof.
Affiliate means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with such specified
Person.
Agreement or this Agreement means this Purchase Agreement dated as of
the date first above written (including the Exhibits hereto and the
Disclosure Schedule) and all
35
amendments hereto made in accordance with the provisions of Section 10.8
hereof.
Allocation has the meaning set forth in Section 2.5 hereof.
Assets has the meaning set forth in Section 1.1 hereof.
Assumed Liabilities has the meaning set forth in Section 1.3 hereof.
Audited Financial Statements has the meaning set forth in Section 3.5
hereof.
Beneficiary has the meaning set forth in Section 5.2 hereof.
Xxxx of Sale, Assignment and Assumption Agreement has the meaning set
forth in Section 1.7 hereof.
Business means all of the Company's business, operations and
activities of television broadcast station WOKR-TV, Channel 13, Rochester,
New York, acquired by the Company from Gannett pursuant to the Gannett
Purchase Agreement.
Business Employees means all current, former and inactive employees of
the Business. For the avoidance of doubt, Corporate Office Employees will
not be considered Business Employees.
Business Day means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in the
City of New York.
Call Letters has the meaning set forth in Section 3.16 hereof.
CERCLA means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended.
Claims and Damages means any and all losses, claims, demands,
liabilities, obligations, actions, suits, orders, statutory or regulatory
compliance requirements, or proceedings asserted by any Person (including,
without limitation, Governmental Authorities), and all damages, costs,
expenses, assessments, judgments, recoveries and deficiencies, including
interest, penalties, investigatory expenses, consultants' fees, and
reasonable attorneys' fees and costs (including, without limitation, costs
incurred in enforcing the applicable indemnity), of every kind and
description, contingent or otherwise, incurred by or awarded against a
party, provided that "Claims and Damages" shall not include any indirect,
consequential, incidental, exemplary or punitive damages or other special
damages or lost profits (except to the extent payable to a third party as a
result of a third party claim).
Closing has the meaning set forth in Section 1.6 hereof.
Closing Date has the meaning set forth in Section 1.6 hereof.
Closing Statement has the meaning set forth in Section 2.2 hereof.
36
Code means the Internal Revenue Code of 1986, as amended.
Communications Act means the Communications Act of 1934, as amended.
Company has the meaning specified in the introductory paragraph to
this Agreement.
Company Indemnified Parties shall have the meaning set forth in
Section 8.2.
Continuation Coverage has the meaning set forth in Section 5.2 hereof.
Control (including the terms "controlled by" and "under common control
with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly, of the power to
direct or to cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, by contract or
otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board
of directors or similar body governing the affairs of such Person.
Corporate Office Employees has the meaning set forth in Section 5.2.
Corporate Office Lease means the Lease dated as of February 16, 1989
between the Company and One City Center Associates, and all addenda and
amendments thereto and memoranda relating thereto.
Defined Contribution Plan has the meaning set forth in Section 5.2
hereof.
Disclosure Schedule means the Disclosure Schedule, dated as of the
date hereof, delivered to Purchaser by the Company in connection with this
Agreement.
Employee Benefit Plans means all "employee benefit plans" within the
meaning of Section 3(3) of ERISA, all bonus, stock option, stock purchase,
incentive, deferred compensation, supplemental retirement, severance and
other employee benefit plans, programs, policies or arrangements,
employment agreements, severance agreements, severance pay policies, plant
closing benefits, executive compensation arrangements, sick leave, vacation
pay, salary continuation for disability, consulting, or other compensation
arrangements, worker's compensation, hospitalization, medical insurance,
life insurance, tuition reimbursement or scholarship programs, employee
discounts, employee loans, employee banking privileges, any plans subject
to Section 125 of the Code, and any plans providing benefits or payments in
the event of a change of control, change in ownership, or sale of a
substantial portion (including all or substantially all) of the assets of
any business or portion thereof, in each case with respect to any present
or former employees, directors, or agents and without regard to whether the
plan or arrangement was previously terminated (if potential liabilities
remain) or compensation agreements, in each case for the benefit of, or
relating to, any current employee or former employee of the Business.
Encumbrance means any security interest, pledge, mortgage, lien
(including,
37
without limitation, tax liens), charge, encumbrance, easement, adverse
claim, preferential arrangement, restriction or defect in title.
Environmental Claims means any and all actions, suits, demands, demand
letters, claims, liens, notices of non-compliance or violation,
investigations, proceedings, consent orders or consent agreements relating
in any way to any Environmental Law, any Environmental Permit, Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment, including, without limitation (a) by
Governmental Authorities for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any Person for damages,
contributions, indemnification, cost recovery, compensation or injunctive
relief.
Environmental Law means any Law relating to the environment, health,
safety or Hazardous Materials, in force and effect on the date hereof or,
in the case of the Company's certificate to be delivered in accordance with
the provisions of Section 6.3 hereof, on the Closing Date (exclusive of any
amendments or changes to such Law or any regulations promulgated thereunder
or orders, decrees or judgments issued pursuant thereto which are enacted,
promulgated or issued after the date hereof, or in the case of such
certificate, on or after the Closing Date), including but not limited to
CERCLA; the Resource Conservation and Recovery Act of 1986 and Hazardous
and Solid Waste Amendments of 1984, 42 U.S.C. ss.ss.6901 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. ss.ss.6901 et seq.; the
Clean Water Act, 33 U.S.C. ss.ss.1251 et seq.; the Toxic Substances Control
Act of 1976, 15 U.S.C. ss.ss.2601 et seq.; the Clean Air Act of 1966, as
amended, 42 U.S.C. ss.ss.7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss.ss.300f et seq.; the Atomic Energy Act, 42 U.S.C. ss.ss.2011 et
seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
ss.ss.136 et seq.; and the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. ss.ss.1101 et seq.
Environmental Permits means all permits, approvals, identification
numbers, licenses and other authorizations required under any applicable
Environmental Law.
Equipment means all of the tangible personal property, machinery,
equipment, vehicles, rolling stock, furniture, and fixtures of every kind
and description in which the Company has an interest or which the Company
acquires from Gannett pursuant to the Gannett Purchase Agreement by
ownership or lease, and used or useful in connection with the Business,
together with any replacements thereof or additions thereto, made in the
ordinary course of business between the date of the Gannett Purchase
Agreement and the Closing Date.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
Estimated Net Financial Assets has the meaning set forth in Section
2.2(b).
Excluded Assets has the meaning set forth in Section 1.2 hereof.
Excluded Names has the meaning set forth in Section 5.11 hereof.
38
FCC means the Federal Communications Commission.
FCC Consent means a public notice of the FCC, or of the Chief, Mass
Media Bureau or Video Services Division, acting under delegated authority,
consenting to the assignment of the FCC Licenses to Purchaser.
FCC Licenses means all licenses, permits and other authorizations
issued by the FCC to the Company used for or in connection with the
Station, and all applications therefor, together with any renewals,
extensions or modifications thereof and additions thereto between the date
of the Gannett Purchase Agreement and the Closing.
Final Order means the FCC Consent as to which the time for filing a
request for administrative or judicial review, or for instituting
administrative review sua sponte, shall have expired without any such
filing having been made or notice of such review having been issued; or, in
the event of such filing or review sua sponte, as to which such filing or
review shall have been disposed of favorably to the grantee and the time
for seeking further relief with respect thereto shall have expired without
any request for such further relief having been filed.
Financial Statements has the meaning set forth in Section 3.5 hereof.
GAAP means United States generally accepted accounting principles and
practices as in effect from time to time and applied consistently
throughout the periods involved.
Gannett Corporate Office means the corporate office of Gannett located
at Xxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxx, that provides certain support to
Gannett and its business.
Gannett FCC Licenses means all licenses, permits and other
authorizations issued by the FCC to Gannett used for or in connection with
the Gannett Television Stations and all applications therefor, together
with any renewals, extensions, or modifications thereof and additions
thereto between the date of the Gannett Purchase Agreement and the Closing.
Gannett Maine Media Business means the newspaper publishing business
which publishes the Portland Press Herald and Maine Sunday Telegram, the
Kennebec Journal and the Central Maine Morning Sentinel, and certain
related businesses in Maine (including, without limitation, the "New Media
Development Group," an Internet-based media business; "Voice Information
Services," a telephone information and marketing service; "Guy Gannett
Direct," a direct marketing operation; a telephone directory business; an
integrated marketing group; and the Coastal Journal, a controlled
circulation weekly), and all assets, liabilities, operations and activities
of, and all rights of, the Company in the operations of such businesses
that are to be contributed to, or assumed by, Newco, all as more
particularly described in the Contribution Agreement. Notwithstanding
anything to the contrary in this Agreement, the Maine Media Business does
not include the WGME-TV television broadcasting station licensed to
Portland, Maine ("WGME") or rights to WGME's news and information content
provided via online or audiotext applications of the New Media Development
Group or Voice
39
Information Services.
Gannett Purchase Agreement shall have the meaning set forth in the
Recitals.
Gannett Television Stations means the following television
broadcasting station properties of the Company: WOKR TV, Rochester, New
York; WICS TV, Springfield, Illinois; WICD TV, Champaign, Illinois; WGGB
TV, Springfield, Massachusetts; WGME TV, Portland, Maine, KGAN TV, Cedar
Rapids, Iowa; and WTWC TV, Portland, Maine; KGAN TV, Cedar Rapids, Iowa;
and WTWC TV, Tallahassee, Florida.
Governmental Authority means any United States federal, state or local
government or any foreign government, any governmental, regulatory,
legislative, executive or administrative authority, agency or commission or
any court, tribunal, or judicial body.
Governmental Order means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any
Governmental Authority. Governmental Orders shall not include Permits.
Hazardous Materials means wastes, substances, materials (whether
solids, liquids or gases), petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, and any other chemicals that are
deemed hazardous, toxic, pollutants or contaminants, or substances
designated, classified or regulated as being "hazardous" or "toxic," or
words of similar import, under any Environmental Law.
HSR Act means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
Indebtedness means obligations with regard to borrowed money and shall
expressly not include either accounts payable or accrued liabilities that
are incurred in the ordinary course of business or obligations under
operating leases regardless of how such leases may be classified or
accounted for on financial statements.
Indemnitee has the meaning set forth in Section 8.5 hereof.
Indemnitor has the meaning set forth in Section 8.5 hereof.
Initial Transfer Amount has the meaning set forth in Section 5.2
hereof.
Initial Transfer Date has the meaning set forth in Section 5.2 hereof.
Intellectual Property means all patents, trademarks, trade names,
service marks, copyrights and other similar intangible assets, and
applications, registrations, extensions and renewals for any of the
foregoing, and other intellectual property owned, leased or used by the
Company in the operation of the Station or acquired by the Company from
Gannett under the Gannett Purchase Agreement and used in the Business,
including, without limitation, Call Letters, computer software and
programs, of the Company used in the Business or acquired by the Company
from Gannett under the Gannett Purchase
40
Agreement and used in the Business, whether owned or used by, or licensed
to, the Company or acquired by the Company from Gannett under the Gannett
Purchase Agreement.
Knowledge with respect to the Company means the actual knowledge of
the officers and employees of the Company regarding information relating to
the Station disclosed by Gannett to the Company in the Gannett Purchase
Agreement or any Schedule, Exhibit or documents delivered to the Company in
connection therewith.
Law means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order or other requirement or rule of
law including, without limitation zoning laws and housing, building, safety
or fire ordinances or codes.
Leased Property means all real property of every kind and description
leased by the Company or rights to such leases or leased property acquired
by the Company from Gannett pursuant to the Gannett Purchase Agreement and
used in connection with the Business, together (to the extent leased by the
Company or obtained from Gannett pursuant to the Gannett Purchase
Agreement) with all buildings and other structures, towers, antennae,
facilities or improvements currently or hereafter located thereon, all
fixtures, systems, equipment and items of personal property of the Company
or acquired by the Company from Gannett pursuant to the Gannett Purchase
Agreement attached or appurtenant thereto and all easements, licenses,
rights and appurtenances relating to the foregoing, including, without
limitation, the leased property referred to in Section 1.1(c) of the
Disclosure Schedule.
Liabilities means as to any Person all debts, adverse claims,
liabilities and obligations, whether accrued or fixed, absolute or
contingent, matured or unmatured, determined or determinable, known or
unknown, including, without limitation, those arising under any federal,
state, local or foreign statute, law, ordinance, regulation, rule, code,
order, writ, stipulation or other governmental requirement (including,
without limitation, any environmental law), action, suit, arbitration,
proceeding or investigation or governmental permit, license, authorization,
certificate or approval and those arising under any contract, agreement,
arrangement, commitment or undertaking.
Material Adverse Effect means any circumstance, change in, or effect
on the Company that has a material adverse effect on the business, results
of operations or financial condition of the Station; provided, however,
that Material Adverse Effect shall not include adverse effects resulting
from (or, in the case of effects that have not yet occurred, reasonably
likely to result from) (i) general economic or industry conditions that
have a similar effect on other participants in the industry, (ii) regional
economic or industry conditions that have a similar effect on other
participants in the industry in such region, (iii) the failure of Purchaser
to give any requested consent pursuant to Section 5.1(a) or (iv) any act of
Purchaser.
Material Contracts means the written agreements (including, without
limitation, amendments thereto), contracts, policies, plans, mortgages,
understandings, arrangements or commitments relating to the Business, to
which Gannett is a party or by which its assets are bound as described
below:
41
(i) any agreement or contract providing for payments to any
Person in excess of $50,000 per year or $250,000 in the aggregate over
the five-year period commencing on the date hereof;
(ii) all time brokerage agreements and affiliation agreements
with television networks;
(iii) any license or contract pursuant to which Gannett is
authorized to broadcast film or taped programming supplied by others
in excess of $10,000 or having a term of more than one year;
(iv) any employment agreement, consulting agreement or similar
contract providing for payments to any individual in excess of $50,000
per year or $100,000 in the aggregate over the five-year period
commencing on the date hereof;
(v) any retention or severance agreement or contract with respect
to any Person who is to be employed by Purchaser following the
Closing;
(vi) all collective bargaining agreements or other union
contracts;
(vii) (A) any lease of Real Property or (B) any lease of
Equipment or license with respect to Intellectual Property (other than
licenses granted in connection with the purchase of equipment or other
assets) by the Company from another Person providing for payments to
another Person in excess of $25,000 per year or $75,000 in the
aggregate over the five-year period commencing on the date hereof;
(viii) any lease of Equipment or Real Property or license with
respect to Intellectual Property (other than licenses granted in
connection with the purchase of equipment or other assets) by Gannett
to another Person providing for payments to Gannett in excess of
$20,000 per year or $50,000 in the aggregate over the five-year period
commencing on the date hereof;
(ix) any joint venture, partnership or similar agreement or
contract;
(x) any agreement or contract under which Gannett has loaned any
money in excess of $1,000,000 or issued or received any note, bond,
indenture or other evidence of indebtedness in excess of $1,000,000 or
directly or indirectly guaranteed indebtedness, liabilities or
obligations of others in an amount in excess of $1,000,000;
(xi) any covenant not to compete or contract or agreement,
understanding, arrangement or any restriction whatsoever limiting in
any respect the ability of the Company to compete in any line of
business or with any Person
42
or in any area; and
(xii) any agreement or contract between the Company and any
officer, director, stockholder or employee of the Business or any of
their family members providing for payments in excess of $5,000 (other
than agreements covered in clause (iv) (or that would have been
covered in clause (iv) but for the monetary limits thereunder) or
agreements or contracts containing terms substantially similar to
terms available to employees generally).
Material Contracts shall not include any and all (w) contracts, purchase
orders, purchase commitments, leases and agreements entered into in the
ordinary course of business and relating to the Company (other than those
described in clauses (v), (vii), (viii) or (ix) above) that (A) are
terminable at will without payment of premium or penalty by the Company or
(B) are terminable on not more than 60 days' written notice without payment
of premium or penalty and do not involve the obligation of the Company to
make payments in excess of $10,000 during the 60-day period commencing on
the Closing; (x) contracts with respect to time sales (or other promotion
or sponsorship sales) to advertisers or advertising agencies (including,
without limitation, "trade" or "barter" agreements), sales agency or
advertising representation contracts, and barter obligations or commitments
to suppliers of programming; and (y) contracts with respect to the sale of
production time and/or production services relating to advertising or with
respect to other services.
Net Financial Assets means the result of (i) the aggregate amount of
current assets of the Business to be assigned to Purchaser under this
Agreement, excluding for purposes of this calculation, the current portion
of program rights, less (ii) the aggregate amount of current liabilities of
the Business to be assumed by Purchaser under this Agreement, excluding for
purposes of this calculation the current portion of program obligations,
less (iii) the aggregate amount of the Company's liability for supplemental
retirement and deferred compensation under the Employee Benefit Plans
relating to the Business Employees set forth in Section 9 of the Disclosure
Schedule to the extent not paid by Gannett prior to the Closing and
excluding the current portion of such liability, if any, to the extent such
portion is included as a current liability in clause (ii), in each case as
of the relevant date of calculation and calculated (except as otherwise
provided in Section 9 of the Disclosure Schedule) in conformity with GAAP
and on a basis consistent with the basis used in preparing the Unaudited
Financial Statements as of, and for the year ended, December 27, 1997
referred to in Section 3.5 of the Gannett Purchase Agreement. Net Financial
Assets expressly shall not include television program and film contract
rights of the Business as either assets or liabilities; provided, however,
that notwithstanding any prior practice or lack thereof relating thereto,
the programming downpayments related to certain television programs made in
advance of customary payment terms under television program rights
contracts shall be expressly included in prepaid assets to the extent not
amortized as of the relevant date of calculation as more fully described in
the example set forth in Section 9 of the Disclosure Schedule of the
Gannett Purchase Agreement. Without limiting the generality of the
foregoing and subject to the immediately preceding sentence, for purposes
of determining the amount of Net Financial Assets, all revenues and all
expenses arising from the operation of the Station, including, without
limitation, tower rental, business and license fees, utility charges, real
and
43
personal property taxes and assessments levied against the Assets, property
and equipment rentals, applicable copyright or other fees, sales and
service charges, Taxes (except for taxes arising from the transfer of the
Assets under this Agreement), employee compensation, including wages,
salaries, commissions, music license fees and similar prepaid and deferred
items, shall be prorated as of the relevant date of calculation in
accordance with GAAP.
Net Proceeds has the meaning set forth in Section 8.4 hereof.
Notice of Claim has the meaning set forth in Section 8.5 hereof.
Permits has the meaning set forth in Section 3.11 hereof.
Permitted Exceptions means each of the following:
(i) mortgages, security interests or other Encumbrances described
in Section 4.10 of the Disclosure Schedule;
(ii) liens for taxes, assessments and governmental charges or
levies not yet due and payable or the validity of which is being
contested in good faith by appropriate proceedings;
(iii) Encumbrances imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's liens and other
similar liens, arising in the ordinary course of business;
(iv) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or
statutory obligations;
(v) survey exceptions, rights of way, easements, reciprocal
easement agreements and other Encumbrances on title to real property
shown in the title insurance commitment dated May 21, 1998 (for the
property referred to as parcels 90 and 91 in Section 1.1(d) of the
Disclosure Schedule) or that do not, individually or in the aggregate,
materially adversely affect the use of such property in the conduct of
the Company's business as it is being conducted prior to the Closing;
(vi) zoning laws and other land use restrictions that do not in
any material respect (a) detract from or impair the value or the use
of the property subject thereto, or (b) impair the operation of the
Station as it is being conducted prior to the Closing in accordance
with the provisions of the Gannett Purchase Agreement;
(vii) security interests in favor of suppliers of goods for which
payment has not been made in the ordinary course of business
consistent with past practice;
44
(viii) Encumbrances on the interests of the lessors of properties
used by the Station in which the Company or Gannett holds a leasehold
interest; and
(ix) any and all other Encumbrances that do not materially
detract from or materially impair the value or the use of the property
subject thereto for the purposes currently utilized in the operation
of the Station.
Person means any individual, partnership, firm, corporation, limited
liability company, association, trust, unincorporated organization or other
entity, as well as any syndicate or group that would be deemed to be a
person under Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
Post-Closing Agreements means those covenants and agreements required
by this Agreement to be performed after the Closing.
Program Contracts has the meaning set forth in Section 1.1 hereof.
Proposed NFA Adjustment has the meaning set forth in Section 2.2
hereof.
Purchaser has the meaning specified in the introductory paragraph to
this Agreement.
Purchaser Indemnified Parties has the meaning set forth in Section 8.1
hereof.
Purchase Price has the meaning set forth in Section 2.2.
Purchaser Savings Plan has the meaning set forth in Section 5.2
hereof.
Real Property means all real property of every kind and description
and related mineral rights owned by the Company or acquired by the Company
from Gannett pursuant to the Gannett Purchase Agreement and used in
connection with the Business, together with all buildings and other
structures, towers, antennae, facilities or improvements currently or
hereafter located thereon, all fixtures, systems, equipment and items of
personal property of the Company or acquired by the Company from Gannett
pursuant to the Gannett Purchase Agreement attached or appurtenant thereto
and all easements, licenses, rights and appurtenances relating to the
foregoing, including, without limitation, the owned property set forth in
Section 1.1(d) of the Disclosure Schedule.
Regulations means the Treasury Regulations (including Temporary
Regulations) promulgated by the United States Department of Treasury with
respect to the Code or other federal tax statutes.
Reimbursements has the meaning set forth in Section 8.4 hereof.
Release means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, emitting, escaping, emptying, seeping, placing and the
like into or upon any land or water or air or otherwise entering into the
environment.
45
Resolution has the meaning set forth in Section 2.3(a) hereof.
Security Escrow has the meaning set forth in Section 2.4 hereof.
Security Escrow Agent has the meaning set forth in Section 2.4 hereof.
Security Escrow Agreement has the meaning set forth in Section 2.4
hereof.
Station shall have the meaning set forth in the Recitals.
Subsidiary of any Person means (i) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation is
owned by such Person directly or indirectly, through Subsidiaries and (ii)
any partnership, limited partnership, limited liability company,
associates, joint venture or other entity in which such Person directly or
indirectly through Subsidiaries has more than a 50% equity interest.
Survival Date shall have the meaning set forth in Section 10.12.
Tax or Taxes means any and all taxes, fees, withholdings, levies,
duties, tariffs, imposts, and other charges of any kind (together with any
and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any government or taxing
authority, including, without limitation, taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth, taxes or
other charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value added or gains taxes, license, registration and
documentation fees, and customs duties, tariffs and similar charges.
Tax Benefit has the meaning set forth in Section 8.4 hereof.
Tax Return means any report, return, document, declaration or other
information or filing required to be supplied to any Tax authority or
jurisdiction (foreign or domestic) with respect to Taxes, including,
without limitation, information returns, any documents with respect to or
accompanying payments of estimated Taxes, or with respect to or
accompanying requests for the extension of time in which to file any such
report, return, document, declaration or other information.
Termination Date has the meaning set forth in Section 10.1 hereof.
True-Up Amount has the meaning set forth in Section 5.2 hereof.
True-Up Date has the meaning set forth in Section 5.2 hereof.
Trust has the meaning set forth in Section 5.2 hereof.
Unaudited Financial Statements has the meaning set forth in Section
3.5 hereof.
46
WOKR Dispute has the meaning set forth in Section 2.3(a).
WOKR Severance Payment has the meaning set forth in Section 5.8(a).
WOKR Scheduled Severance Agreement has the meaning set forth in
Section 5.8(a).
Article 10. Miscellaneous Provisions.
10.1 Termination Rights. (a) Grounds for Termination. This Agreement
may be terminated:
(i) by mutual consent of the parties;
(ii) by either the Company or Purchaser, provided such party is
not then in material default hereunder, upon written notice to the
other party, if the Closing hereunder has not occurred on or before
September 4, 1999 (the "Termination Date"), provided that if the FCC
Consent is obtained during the 15 days prior to September 4, 1999, the
Termination Date will not occur until the 15th day after receipt of
the FCC Consent, provided further that if either or both of the
Company and Purchaser shall have postponed the Closing Date pursuant
to Section 6.11 hereof, the Termination Date will occur no earlier
than the end of the period of such postponement, and provided further
that if the Closing hereunder has not occurred on or before September
4, 1999 due to a publicly announced federal governmental shutdown
affecting, or any other publicly announced freeze on the processing of
applications to transfer station licenses by, the FCC (collectively, a
"FCC Shutdown"), the Termination Date will be extended by a period of
time equal to the duration of the FCC Shutdown, but in no event shall
the Termination Date be extended to a date any later than the earlier
of (x) 60 days after the end of the FCC Shutdown or (y) December 4,
1999.
(iii) by either the Company or Purchaser, upon written notice to
the other party, if any Governmental Authority shall have issued a
statute, rule, regulation, order, decree or injunction or taken any
other action permanently restraining, enjoining or otherwise
prohibiting the Closing hereunder or the closing under the Gannett
Purchase Agreement and such statute, rule, regulation, order, decree
or injunction or other action shall have become final and
nonappealable, provided that this clause (iii) will not be applicable
to actions of the FCC subject to clause (iv) below;
(iv) by either the Company or Purchaser, upon written notice to
the other party, if (i) the FCC, or the Chief, Mass Media Bureau of
the FCC, acting under delegated authority, shall have denied the
application for assignment of the Gannett FCC Licenses to the Company,
(ii) the FCC, or the Chief, Mass Media Bureau of the FCC, acting under
delegated authority, shall have denied the application for assignment
of the FCC Licenses to Purchaser, (iii) the parties' request for
administrative or judicial review, or the FCC's administrative review
sua sponte, shall not have been disposed of favorably
47
to the parties and (iv) the parties have no further relief available
to them;
(v) by Purchaser, by written notice to the Company, if there has
been a material breach by the Company of any representation, warranty,
covenant or agreement set forth in this Agreement such that the
condition precedent set forth in Section 6.1 or 6.2 hereof would not
be satisfied, which breach has not been cured within 20 Business Days
following receipt by the breaching party of written notice of such
breach; or
(vi) by the Company by written notice to Purchaser if there has
been a material breach by Purchaser of any representation, warranty,
covenant or agreement set forth in this Agreement such that the
condition precedent set forth in Section 7.1 or 7.2 hereof would not
be satisfied, which breach has not been cured within 20 Business Days
following receipt by the breaching party of written notice of such
breach;
(vii) by Purchaser by written notice to the Company, if the FCC
has revoked the Company's or Gannett's FCC License for the Station; or
(viii) automatically without further action by the parties upon
the termination of the Gannett Purchase Agreement in accordance with
its terms.
(b) Post-Termination Liability. If this Agreement is terminated pursuant to
Subsection 10.1(a)(i), (ii), (iii), (iv), (v), (vii) or (viii) hereof, Purchaser
shall receive the immediate return of the Escrow Deposit, and this Agreement
shall thereupon become void and of no further effect whatsoever, and the parties
shall be released and discharged of all obligations under this Agreement, except
(i) to the extent of a party's liability for willful material breaches of this
Agreement prior to the time of such termination, and (ii) the obligations of
each party for its own expenses incurred in connection with the transactions
contemplated by this Agreement as provided herein.
(c) If this Agreement is terminated pursuant to Subsection 10.1(a)(vi)
hereof, the Company's sole and exclusive remedy under this Agreement shall be to
receive, and the Purchaser shall pay to the Company, the Escrow Deposit (without
setoff deduction or counterclaim) as liquidated damages, and upon such payment,
Purchaser shall be discharged from all further liability under this Agreement.
10.2 Litigation Costs. If any litigation with respect to the obligations of
the parties under this Agreement results in a final nonappealable order of a
court of competent jurisdiction that results in a final disposition of such
litigation, the prevailing party, as determined by the court ordering such
disposition, shall be entitled to reasonable attorneys' fees as shall be
determined by such court. Contingent or other percentage compensation
arrangements shall not be considered reasonable attorneys' fees.
10.3 Expenses. Except as otherwise specifically provided in this Agreement,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred, provided that the Company and Purchaser shall each be responsible and
pay 50% of the HSR Act filing fee and the filing fees payable to the FCC in
48
connection with the filing of the application for assignment of the FCC
Licenses.
10.4 Notices. Any notice, demand, claim, notice of claim, request or
communication required or permitted to be given under the provisions of this
Agreement shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered in person, (ii) on the next Business Day after the
date of mailing if mailed by registered or certified mail, postage prepaid and
return receipt requested, (iii) on the next Business Day after the date of
delivery to a national overnight courier service, or (iv) upon transmission by
facsimile (if such transmission is confirmed by the addressee) if delivered
through such services to the following addresses, or to such other address as
any party may request by notifying in writing all of the other parties to this
Agreement in accordance with this Section 10.4.
If to Purchaser:
The Xxxxxxxx Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx,
Co-President and CFO
Fax: (000) 000-0000
with a copy to:
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X., 00xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Xxxxx, Esquire
Fax: (000) 000-0000
If to Company:
Xxxxxxxx Communications, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: President
Fax: (000) 000-0000
with copy to:
Xxxxxxxx Communications, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
and
49
Xxxxxx & Xxxxxxxx, P.A.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esquire
Fax: (000) 000-0000
Any such notice shall be deemed to have been received on the date of
personal delivery, the date set forth on the Postal Service return receipt, or
the date of delivery shown on the records of the overnight courier, as
applicable.
10.5 Benefit and Assignment. This Agreement will be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Except as provided in Section 8.7, there shall be no
assignment of any interest under this Agreement by any party except that
Purchaser may assign its rights hereunder to any wholly owned subsidiary of
Purchaser; provided, however, that no such assignment shall relieve the assignor
of its obligations under this Agreement. Except as expressly otherwise provided
in Article 8 hereof, nothing herein, express or implied, is intended to or shall
confer upon any other Person any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
10.6 Waiver. Any party to this Agreement may (a) extend the time for the
performance of any of the obligations or other acts of any other party, (b)
waive any inaccuracies in the representations and warranties of any other party
contained herein or in any document delivered by any other party pursuant hereto
or (c) waive compliance with any of the agreements or conditions of any other
party contained herein. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party to be bound thereby. Any
waiver of any term or condition shall not be construed as a waiver of any
subsequent breach or a subsequent waiver of the same term or condition, or a
waiver of any other term or condition, of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of any
such rights.
10.7 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
10.8 Amendment. This Agreement may not be amended or modified except (a) by
an instrument in writing signed by, or on behalf of, the Company and Purchaser
or (b) by a waiver in accordance with Section 10.6 hereof.
10.9 Effect and Construction of this Agreement. This Agreement embodies the
entire agreement and understanding of the parties with respect to the subject
matter hereof and
50
supersedes any and all prior agreements, arrangements and understandings,
whether written or oral, relating to matters provided for herein. The language
used in this Agreement shall be deemed to be the language chosen by the parties
hereto to express their mutual agreement, and this Agreement shall not be deemed
to have been prepared by any single party hereto. Disclosure of any fact or item
in the Disclosure Schedule referenced by a particular paragraph or section in
this Agreement shall, should the existence of the fact or item or its contents
be relevant to any other paragraph or section, be deemed to be disclosed with
respect to that other paragraph or section whether or not a specific cross
reference appears, if the disclosure in respect of the one paragraph or section
is reasonably sufficient to inform the reader of the information required to be
disclosed in respect such other paragraph or section. Disclosure of any fact or
item in the Disclosure Schedule shall not necessarily mean that such item or
fact, individually or in the aggregate, is material to the business, results of
operations or financial condition of the Station. Time shall be of the essence
in enforcing and applying the covenants and conditions set forth in this
Agreement. The headings of the sections and subsections of this Agreement are
inserted as a matter of convenience and for reference purposes only and in no
respect define, limit or describe the scope of this Agreement or the intent of
any section or subsection. This Agreement may be executed in one or more
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. This Agreement and the
rights and duties of the parties hereunder shall be governed by, and construed
in accordance with, the laws of the State of New York.
10.10 Transfer and Conveyance Taxes. Purchaser and the Company shall each
be liable for and shall pay one-half of all applicable sales, transfer,
recording, deed, stamp and other similar non-income taxes, imposed in connection
with transfers and conveyances of the Assets, including, without limitation, any
real property transfer or gains taxes (if any), resulting from the consummation
of the transactions contemplated by this Agreement.
10.11 Specific Performance. Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto (i) waive, in
any action for specific performance, the defense of adequacy of a remedy at law
and (ii) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement
in any action instituted in any state or federal court having jurisdiction
thereover.
10.12 Survival of Representations, Warranties and Covenants. The respective
representations and warranties of the Company and Purchaser contained herein or
in any certificate and any and all covenants and agreements herein or therein
(other than those covenants and agreements required by this Agreement to be
performed after the Closing) shall expire with, and be terminated and
extinguished one (1) calendar year after the Closing Date (the "Survival Date");
; provided, however, that unless Purchaser shall notify the Company of any Claim
or Damages ten (10) days prior to the Survival Date, the Company shall have no
obligation to indemnify Purchaser hereunder.
Article 11. No Personal Liability for Representatives, Stockholders,
Directors or Officers. Purchaser understands, acknowledges and agrees that the
directors and officers and
51
consultants of the Company and Gannett and the trustees under the Employee
Benefit Plans have performed, or may perform, certain acts required or permitted
under this Agreement on behalf of the Company or Gannett to facilitate the
transactions among the parties to this Agreement contemplated herein.
Notwithstanding anything to the contrary contained herein, no stockholder,
director or officer of the Company, any such consultant, or any such trustee (or
any Affiliate of the foregoing) shall, under any circumstances, have, and the
Purchaser hereby absolves all such Persons from, any personal liability to the
Purchaser (and each of their its Affiliates) for such acts to the extent deemed
to be actions by or on behalf of the Company.
[REST OF PAGE LEFT INTENTIONALLY BLANK]
52
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXXXX COMMUNICATIONS, INC.
By:_______________________________
Name:__________________________
Title:_________________________
THE XXXXXXXX GROUP, INC.
By:_______________________________
Name:__________________________
Title:_________________________
Exhibit A to
Purchase Agreement
------------------
XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------------
THIS XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement")
made as of _______________, 1998, by and between THE XXXXXXXX GROUP, INC., a
Delaware corporation (the "Purchaser"), and XXXXXXXX COMMUNICATIONS, INC., a
Maryland corporation ("the Company").
WHEREAS, the Company and Purchaser are parties to an Asset Purchase
Agreement, dated as of September 25, 1998 (the "Purchase Agreement");
WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to
sell, assign, transfer and deliver to Purchaser all of the Company's right,
title and interest in and to all of the real, personal or mixed properties,
assets and other rights, both tangible and intangible (other than the Excluded
Assets as defined in the Purchase Agreement), owned or leased by, or licensed to
or used or useful by, the Company on the Closing Date (as defined in the
Purchase Agreement) in connection with the Company's broadcast television
station WOKR-TV, Channel 13, Rochester, New York (the "Station"), including all
business, operations and activities of the Station (as defined in the Purchase
Agreement) (collectively, the "Assets" and the "Business," respectively), and
Purchaser has agreed to purchase, acquire, accept and pay for the Assets and
assume and agree to perform and fully discharge when due all Liabilities (as
defined in the Purchase Agreement) and obligations of the Company related to or
arising from or in connection with the Assets or the Business, other than
Retained Liabilities (as defined in the Purchase Agreement) (collectively, the
"Assumed Liabilities");
WHEREAS, the parties wish to effect the sale, assignment, transfer and
delivery of the Assets and assumption of the Assumed Liabilities by entering
into this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
Capitalized terms used herein and not otherwise defined are used as defined
in the Purchase Agreement.
1. ASSIGNMENT OF ASSETS. The Company hereby sells, conveys, assigns,
transfers and delivers to Purchaser, its successors and assigns, forever, all of
the Company's right, title and interest in and to all of the Assets. Without
limiting the generality of the foregoing, the Company is not selling, conveying,
assigning, transferring or delivering any of the Excluded Assets.
2. ACCEPTANCE OF ASSIGNMENT; ASSUMPTION OF LIABILITIES.
(a) Purchaser hereby purchases, acquires, accepts and agrees to pay
for all of the Assets, and assumes and agrees to perform and fully
discharge when due all Assumed Liabilities.
(b) Purchaser is not assuming, nor shall Purchaser be deemed to have
assumed, any Liability or obligation whatsoever, except as expressly
provided for in this Agreement and the Purchase Agreement.
3. PURCHASE AGREEMENT. The provisions of this Agreement are subject to the
provisions of the Purchase Agreement. To the extent that such provisions and the
provisions of this Agreement are inconsistent with one another or in conflict,
the provisions of the Purchase Agreement shall take precedence. This Agreement
shall in no event enlarge, reduce or otherwise affect the rights, warranties or
covenants of the parties as set forth in the Purchase Agreement. The Purchase
Agreement shall survive the execution and delivery of this Agreement.
4. COOPERATION. The parties shall, from time to time, execute, acknowledge,
deliver and perform, or cause to be executed, acknowledged, delivered and
performed, all such further instruments, acts, assignments, transfers,
conveyances, powers of attorney and assurances as Purchaser may reasonably
request to more effectively convey, transfer and vest in Purchaser, and to put
Purchaser in possession and operating control of the Assets and the Business in
accordance with the Purchase Agreement.
5. BENEFIT AND ASSIGNMENT. This Agreement will be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
6. CONSTRUCTION OF THIS AGREEMENT. The headings of the sections of this
Agreement are inserted as a matter of convenience and for reference purposes
only and in no respect define, limit or describe the scope of this Agreement or
the intent of any section or subsection. This Agreement may be executed in one
or more counterparts and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement. This
Agreement and the rights and duties of the parties hereunder shall be governed
by, and construed in accordance with, the laws of the State of Maryland.
7. AMENDMENT. This Agreement may not be amended or modified except by an
instrument in writing signed by, or on behalf of, the Company and Purchaser.
[REST OF PAGE LEFT INTENTIONALLY BLANK]
2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
THE XXXXXXX GROUP, INC.
By: ___________________________________
Name:
Title:
XXXXXXXX COMMUNICATIONS, INC.
By: ___________________________________
Name:
Title:
3
Exhibit B to
Purchase Agreement
------------------
DEPOSIT ESCROW AGREEMENT
------------------------
This Deposit Escrow Agreement (this "Deposit Agreement") is dated September
25, 1998, by and between Xxxxxxxx Communications, Inc., a Maryland corporation
("Seller"), The Xxxxxxxx Group, Inc., a Delaware corporation ("Purchaser"), and
First Union National Bank, a national banking association ("Escrow Agent").
RECITALS:
--------
WHEREAS, Purchaser has entered into an Asset Purchase Agreement (the
"Purchase Agreement") dated as of September 25, 1998 with the Seller to purchase
substantially all of the Assets (as defined in the Purchase Agreement) of
television broadcast station WOKR-TV, Channel 13, Rochester, New York; and
WHEREAS, pursuant to Section 2.4 of the Purchase Agreement, Seller and
Purchaser wish to establish an escrow account with a portion of the Purchase
Price to secure the obligations of the Purchaser under the Purchase Agreement;
and
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound, the parties
hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.1. TERMS. Unless otherwise defined herein, capitalized terms used in this
Deposit Agreement have the definitions set forth in the Purchase Agreement.
ARTICLE II
THE FUND
--------
2.1. DELIVERY. Simultaneously with the execution hereof, the Purchaser is
depositing by wire transfer of immediately available funds Twelve Million Five
Hundred Thousand Dollars ($12,500,000.00) with the Escrow Agent which represents
the deposit in accordance with Section 2.4 of the Agreement. The said
$12,500,000.00 is to be held by the Escrow Agent pursuant to the terms of this
Deposit Agreement.
2.2. RECEIPT. The Escrow Agent hereby acknowledges receipt of
$12,500,000.00 from the Purchaser and agrees to hold and disburse said amount
(the "Fund") and any interest and other income thereon (collectively with the
Fund, the "Escrowed Funds") in accordance with the terms and conditions of this
Deposit Agreement and for the uses and purposes stated herein. If the Escrow
Agent does not receive a Purchaser's Notice pursuant to Section 3.2(b) hereof,
or a Seller's Notice pursuant to Section 3.2(a) hereof, it shall deliver the
Escrowed Funds at the Closing to be dealt with in accordance with Section 3.1 of
this Agreement.
2.3. INVESTMENT. Escrow Agent shall, pending the disbursement of the
Escrowed Funds pursuant to this Deposit Agreement, invest the Escrowed Funds in
accordance with the Purchaser's instructions from time to time in:
(a) certificates of deposit or interest bearing savings accounts (the
terms of which have no restrictions as to the date of withdrawal) in a
federally insured banking or thrift institution (including, without
limitation, Escrow Agent or any affiliate), but only if, at the time of
Escrow Agent's investment therein, either (i) the commercial paper of such
institution is rated A-1
2
or A-1+ by Standard & Poor's or P-1 by Moody's; or (ii) such deposits are
fully insured by the FDIC;
(b) commercial paper having, at the time of Escrow Agent's investment,
a rating of A-1 or A-1+ by Standard & Poor's or P-1 by Moody's;
(c) any money market fund which is both (i) issued by an investment
company registered under the Investment Company Act of 1940, and (ii) rated
not lower than the highest rating category by Standard & Poor's or Moody's;
and/or
(d) securities issued or insured by the United States Government or an
agency or instrumentality thereof with a remaining term to maturity of no
more than one year.
ARTICLE III
PROCEDURES FOR DISBURSEMENT OF THE FUND
---------------------------------------
The following procedures shall govern the distribution of the Escrowed
Funds by the Escrow Agent, and Escrow Agent shall release the Escrowed Funds
only in accordance with this Article III.
3.1. PAYMENT OF ESCROWED FUNDS TO SELLERS AT CLOSING. At the Closing, and
simultaneously with the performance of Purchaser and Seller of their respective
obligations under the Purchase Agreement, Purchaser and Seller shall send to the
Escrow Agent telecopied joint written instructions executed by Purchaser and
Seller authorizing the Escrow Agent to deliver the Escrowed Funds, or any part
thereof, to Seller as a credit against the Purchase Price payable under the
Purchase Agreement by Purchaser in accordance with Section 2.5 thereof. The
Escrow Agent shall promptly comply with such joint instructions.
3
3.2. FAILURE TO CLOSE. At any time prior to the Closing, the following
procedure shall apply:
(a) Seller may deliver written notice to the Purchaser and the Escrow
Agent that the Seller is entitled to the Fund (the "Seller's Notice")
pursuant to the terms and conditions of the Agreement. The Seller's Notice
shall specify the basis upon which the Seller claims entitlement to the
Fund. If the Purchaser does not deliver to Seller and the Escrow Agent a
written objection to the Seller's claim to entitlement to the Fund
specifying the basis upon which it objects to the Seller's entitlement to
the Fund within five (5) Business Days after delivery of the Seller's
Notice, then the Escrow Agent shall deliver the Fund to Seller on the sixth
Business Day after delivery of the Seller's Notice as liquidated damages as
a consequence of Purchaser's default (which liquidated damages shall not
constitute a penalty). If the Purchaser delivers to Seller and the Escrow
Agent a written objection to Seller's claim to entitlement to the Fund
within five (5) Business Days after delivery of the Seller's Notice, then
the matter shall be resolved as provided in Section 3.3 hereof, and the
Escrow Agent shall continue to hold the Escrowed Funds until it receives
(i) a nonappealable court order from a court of competent jurisdiction
directing disposition of such property, (ii) a signed arbitration award in
accordance with Section 3.3(c), or (iii) appropriate written instructions
signed by both Seller and Purchaser.
(b) The Purchaser may deliver written notice to Seller and the Escrow
Agent that the Purchaser is entitled to the Escrowed Funds or any portion
thereof pursuant to the terms and conditions of the Purchase Agreement (the
"Purchaser's Notice"). The Purchaser's Notice shall specify the basis upon
which the Purchaser claims entitlement to the Escrowed Funds. If Seller
does not deliver to the Purchaser and the Escrow Agent a written objection
to the
4
Purchaser's claim to entitlement to the Escrowed Funds specifying the basis
upon which the Seller objects to the Purchaser's entitlement to the
Escrowed Funds within five (5) Business Days after delivery of the
Purchaser's Notice, then the Escrow Agent shall deliver the Escrowed Funds
to the Purchaser on the sixth Business Day after delivery of the
Purchaser's Notice. If Seller delivers to the Purchaser and the Escrow
Agent a written objection to the Purchaser's claim to entitlement to the
Escrowed Funds within five (5) Business Days after delivery of the
Purchaser's Notice, then the matter shall be resolved as provided in
Section 3.3 hereof, and the Escrow Agent shall continue to hold the
Escrowed Funds until it receives (i) a nonappealable court order from a
court of competent jurisdiction directing disposition of such property,
(ii) a signed arbitration award in accordance with Section 3.3(c), or (iii)
appropriate written instructions signed by both Seller and Purchaser.
(c) In the event that the Escrow Agent receives both a Seller's Notice
and a Purchaser's Notice prior to the first date that the Escrow Agent is
obligated hereunder to deliver the Escrowed Funds to the Purchaser or the
Fund to Seller pursuant to Section 3.2(a) or 3.2(b) hereof, then the Escrow
Agent shall continue to hold the Escrowed Funds until it receives (i) a
nonappealable court order from a court of competent jurisdiction directing
disposition of such property, (ii) a signed arbitration award in accordance
with Section 3.3(c), or, (iii) appropriate written instructions signed by
both Seller and Purchaser.
3.3. ARBITRATION OF DISPUTES.
(a) Any dispute between the parties relating hereto shall first be
negotiated by the parties, and if a mutually acceptable resolution does not
result, shall be resolved by means of an arbitration to be held in
Baltimore, Maryland, in accordance with the Commercial Arbitration
5
Rules of the American Arbitration Association then in effect (the
"Arbitration Rules"). In order to commence an arbitration, Purchaser or the
Seller's Agents shall deliver to the Seller's Agents or Purchaser, as the
case may be, a request for arbitration. Any such request shall include a
reasonably detailed description of the facts forming the basis of such
request and shall list the provisions of the Purchase Agreements that the
party sending such request reasonably believes are implicated by such facts
and the relief or remedy sought.
(b) Any such arbitration shall be held before a panel of three
arbitrators who shall be chosen by the American Arbitration Association in
accordance with the Arbitration Rules.
(c) The arbitrators shall make their award (which in all cases shall
include a statement of the bases and reasons for such award) with respect
to any particular request for arbitration within thirty (30) days from the
date of closing of the oral hearings or, if oral hearings have been waived,
within thirty (30) days from the date the final statements and proofs are
transmitted to the arbitrators with respect to such request. Any such award
shall be final and binding upon the parties and the Escrow Agent shall rely
thereon.
(d) The party or parties against whom the arbitration award is made
shall bear all fees and expenses of the arbitrators. If the award does not
favor one party in its entirety, the arbitrators shall have the authority
to charge such costs against the parties in such proportions as they may
determine. If no such determination is made, such costs shall be borne
one-half by Purchaser and one-half by the Seller. All other expenses
incurred by any party shall be borne by such party.
3.4. TIME OF ESSENCE. The parties agree that time is of the essence with
respect to all deliveries referred to in this Article III.
6
ARTICLE IV
ESCROW AGENT
------------
4.1. APPOINTMENT. The Purchaser and Seller hereby appoint Escrow Agent to
serve hereunder and the Escrow Agent hereby accepts such appointment and agrees
to perform all duties which are expressly set forth in this Deposit Agreement.
4.2. COMPENSATION. Escrow Agent shall be entitled to compensation for its
services hereunder in accordance with Schedule A attached hereto, the payment of
which shall be split equally by Seller and Purchaser.
4.3. RESIGNATION. The Escrow Agent may resign at any time upon giving the
other parties hereto thirty (30) days' prior written notice. In such event, the
Escrow Agent shall deliver the Escrowed Funds and any and all documents relating
thereto then in its possession to a successor Escrow Agent; the successor Escrow
Agent shall be such person, firm or corporation as shall be mutually agreed upon
by the Purchaser and Seller. Such resignation shall not be effective until a
successor agrees to act hereunder; provided, however, that if no successor is
appointed and acting hereunder within thirty (30) days after such notice is
given, Escrow Agent may pay and deliver the Escrowed Funds into a court of
competent jurisdiction and shall have no further responsibility hereunder.
ARTICLE V
LIABILITIES AND INDEMNIFICATION OF ESCROW AGENT
-----------------------------------------------
5.1. LIMITATIONS. Escrow Agent shall not be liable for any damages, or have
any obligations other than the duties prescribed herein in carrying out or
executing the purposes and intent of this Escrow Agreement; provided, however,
that nothing herein contained shall relieve
7
Escrow Agent from liability arising out of its own willful misconduct or gross
negligence. Escrow Agent's duties and obligations under this Escrow Agreement
shall be entirely administrative and not discretionary. Escrow Agent shall not
be liable to any party hereto or to any third party as a result of any action or
omission taken or made by Escrow Agent in good faith. The parties to this Escrow
Agreement shall at their joint expense (one-half by Purchaser and one-half by
Seller) indemnify Escrow Agent, hold Escrow Agent harmless, and reimburse Escrow
Agent from, against and for, any and all liabilities, costs, fees and expenses
(including reasonable attorneys' fees) Escrow Agent may suffer or incur by
reason of its execution and performance of this Escrow Agreement. In the event
any legal questions arise concerning Escrow Agent's duties and obligations
hereunder, Escrow Agent may consult its counsel and rely without liability upon
written opinions given to it by such counsel.
Escrow Agent shall be protected in acting upon any written notice, request,
waiver, consent, authorizations, or other paper or document which Escrow Agent,
in good faith, believes to be genuine and what it purports to be.
5.2. COLLATERAL AGREEMENTS. The Escrow Agent shall not be bound in any way
by any contract or agreement between the other parties hereto, whether or not it
has knowledge of any such contract or agreement or of its terms or conditions.
ARTICLE VI
TERMINATION
-----------
6.1. This Deposit Agreement shall be terminated (i) upon disbursement or
release of the Escrowed Funds by the Escrow Agent in accordance with the terms
hereof, (ii) by written mutual consent signed by Purchaser and Seller, or (iii)
payment of the Escrowed Funds into a court of
8
competent jurisdiction in accordance with Section 4.3 hereof. This Deposit
Agreement shall not be otherwise terminated.
ARTICLE VII
OTHER PROVISIONS
----------------
7.1. NOTICES. All notices, requests, consents, payments, demands, and other
communications required or contemplated under this Deposit Agreement shall be in
writing and (a) personally delivered or sent via telecopy (receipt confirmed and
followed promptly by delivery of the original), or (b) sent by Federal Express
or other reputable overnight delivery service (for next Business Day delivery),
shipping prepaid, as follows:
(a) If to Seller to:
Xx. Xxxxx X. Xxxxx
President
Xxxxxxxx Communications, Inc.
0000 X. 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxxxx Communications, Inc.
0000 X. 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
Telephone: (000) 000-0000
9
and to:
Xxxxxx & Xxxxxxxx, P.A.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esquire
Fax: (000) 000-0000
Telephone: (000) 000-0000
(b) If to Purchaser:
The Xxxxxxxx Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Fax: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx
0000 Xxx Xxxxxxxxx Xxxxxx, X.X., 00xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx Xxxxx, Esquire
Fax: (000) 000-0000
Telephone: (000) 000-0000
(c) If to Escrow Agent:
First Union National Bank
000 Xxxx Xxxx Xxxxxx, Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
Telephone: (000) 000-0000
To be effective hereunder, all notices to Escrow Agent from Purchaser must be
accompanied by evidence that such notice has been delivered to Seller and all
notices to Escrow Agent from Seller
10
must be accompanied by evidence that such notice has been delivered to Purchaser
and its counsel.
7.2. BENEFIT AND ASSIGNMENT. The rights and obligations of each party under
this Deposit Agreement may not be assigned without the prior written consent of
all parties, except to the same extent assignment of the rights and obligations
of the parties under the Purchase Agreement are permitted without consent of the
other parties. This Deposit Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
7.3. ENTIRE AGREEMENT; AMENDMENT. This Deposit Agreement contains all the
terms agreed upon by the parties with respect to the subject matter hereof. This
Deposit Agreement may be amended or modified only by written agreement, executed
by the Seller and the Purchaser and, if the amendment in any way affects the
compensation, duties and/or responsibilities of the Escrow Agent, by a duly
authorized representative of the Escrow Agent. No waiver of any provision hereof
or rights hereunder shall be binding upon a party unless evidenced by a writing
signed by such party.
7.4. HEADINGS. The headings of the sections and subsections of this Deposit
Agreement are for ease of reference only and do not evidence the intentions of
the parties.
7.5. GOVERNING LAW. This Deposit Agreement shall be governed by, and
construed according to, the laws of the State of Maryland.
7.6. COUNTERPARTS. This Deposit Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
11
7.7. EARNINGS. All income and earnings upon the Fund or the Escrowed Funds
shall be paid to the Purchaser. All income and earnings upon the Fund or the
Escrowed Funds not distributed as of the end of any taxable period shall be
deemed for tax reporting purposes to have accrued for the account of Purchaser.
[SIGNATURES ON NEXT PAGE--
REST OF PAGE LEFT INTENTIONALLY BLANK]
12
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of _______________, 1998.
WITNESS/ATTEST: SELLER
XXXXXXXX COMMUNICATIONS, INC.
_____________________________ By:_________________________________
Title: ___________________________
PURCHASER
THE XXXXXXXX GROUP, INC.
_____________________________ By: ___________________________
Title: ___________________________
ESCROW AGENT
FIRST UNION NATIONAL BANK
_____________________________ By: ___________________________
Title: ___________________________
13
Exhibit C to
Purchase Agreement
------------------
ADJUSTMENT ESCROW AGREEMENT
This ADJUSTMENT ESCROW AGREEMENT (this "Agreement") made as of
____________________, 1998, by and among XXXXXXXX COMMUNICATIONS, INC., a
Maryland corporation (the "Company"), THE XXXXXXXX GROUP, INC., a Delaware
corporation ("Purchaser"), and ____________________, a __________________ bank,
as Adjustment Escrow Agent (the "Adjustment Escrow Agent").
WHEREAS, the Company and Purchaser are parties to a Purchase Agreement
dated as of September 25, 1998 (the "Purchase Agreement");
WHEREAS, pursuant to the Purchase Agreement, the Company shall sell,
assign, transfer and deliver to Purchaser the assets and business of the
Business (as defined in the Purchase Agreement), and Purchaser shall purchase
and acquire such assets and business;
WHEREAS, pursuant to Section 2.2(c)(ii) of the Purchase Agreement,
Purchaser shall deliver to the Adjustment Escrow Agent on the Closing Date (as
defined in the Purchase Agreement), the sum of (x) $1,209,600 plus (y) the
Proposed Earnings Adjustment (as defined in the Purchase Agreement), if any,
(the "Adjustment Escrow Amount");
WHEREAS, as contemplated by the Purchase Agreement, the Adjustment Escrow
Agent shall hold the Adjustment Escrow Amount in escrow until the Actual Net
Financial Assets and the Earnings Adjustment (in each case as defined in the
Purchase Agreement) are determined, following which the Adjustment Escrow Amount
is to be distributed in accordance with the Section 2.3(c) of the Purchase
Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
Capitalized terms used herein and not otherwise defined are used as defined
in the Purchase Agreement.
1. Appointment of Adjustment Escrow Agent. The Company and Purchaser hereby
appoint ___________________ [Bank] to act as Adjustment Escrow Agent hereunder,
and ___________________ [Bank] hereby accepts such appointment and agrees to act
as Adjustment Escrow Agent on the terms and conditions set forth hereinafter.
2. Adjustment Escrow Amount. (a) On the Closing Date, Purchaser shall
deliver to the Adjustment Escrow Agent by wire transfer of immediately available
funds (to account number [______________] of the Adjustment Escrow Agent (the
"Adjustment Escrow Account")) the Adjustment Escrow Amount, accompanied by
written notice from Purchaser identifying such amount as an amount being
delivered for deposit into the Adjustment Escrow Account. The Adjustment Escrow
Agent shall acknowledge to Purchaser the Adjustment Escrow
Agent's receipt of said amount.
(b) The Adjustment Escrow Amount, not including the interest and other
investment income earned thereon, shall only serve to pay the amounts set forth
in Section 4 hereof.
(c) The Adjustment Escrow Agent shall hold the balance of the Adjustment
Escrow Amount (the "Adjustment Escrowed Funds") in escrow and shall not withdraw
the Adjustment Escrowed Funds from the Adjustment Escrow Account or use the
Adjustment Escrowed Funds for any other purpose, except as provided in this
Agreement.
3. Investments of Adjustment Escrowed Funds. (a) The Adjustment Escrow
Agent shall invest and reinvest the Adjustment Escrowed Funds from time to time,
upon receipt of the written instructions thereto issued by the Company or the
Fund Holder (as defined in Section 6 hereof), as the case may be, in:
(i) Commercial paper of any corporation rated at least A-1 by S&P and
P-1 by Moody's;
(ii) Negotiable certificates of deposit of United States banks having
(A) a long-term senior debt rating of at least A by S&P and Moody's, (B)
deposits in excess of $2,000,000,000 and (C) commercial paper rating
designations of at least A-1 by S&P and P-1 by Moody's;
(iii) Repurchase agreements with any United States bank which are
fully collateralized by direct obligations of the United States or
obligations of agencies or sponsored agencies of the United States
government, excluding in all cases collateralized mortgage obligations of
any kind; and
(iv) Money market instruments rated at least A-1 by S&P and P-1 by
Moody's that are restricted to investments described in clause (iii);
provided that in no event shall any investment of the types described in clause
(i), (ii) or (iv) exceed ten percent of the net assets of the issuer thereof and
provided further that all investments shall have maturity dates on or before the
anticipated dates of the relevant payments hereunder.
(b) To the extent the Adjustment Escrow Agent invests any funds in the
manner provided for in this Section 3 and in accordance with the written
instructions from the Company or the Fund Holder, as the case may be, no party
hereto shall be liable for any loss which may be incurred by reason of any such
investment. No investment shall exceed the term of this Agreement.
(c) The Adjustment Escrow Agent shall have the power to reduce, sell or
liquidate the foregoing investments whenever it shall be required to release all
or any portion of the Adjustment Escrowed Funds pursuant to Section 4 hereof.
2
(d) The Adjustment Escrow Agent is authorized to register securities held
by it in its name or in the name of a nominee or in bearer form and may deposit
any securities or other property in a depository or a clearing corporation.
(e) Any interest or other investment income earned for the period from the
time that any portion of the Purchase Price is delivered to the Adjustment
Escrow Agent pursuant to the Purchase Agreement until all amounts held in the
Adjustment Escrow Account have been distributed in accordance with Section 4
hereof shall be paid to the Company or the Fund Holder, as the case may be, in
addition to, and at the same time as, payment of the Adjustment Escrowed Funds;
provided, however, that, to the extent that any portion of the Adjustment
Escrowed Funds is paid to Purchaser pursuant to of Section 4 hereof, a pro rata
portion of such interest or other investment income (determined on the basis of
the relative portions of the Adjustment Escrowed Funds to be paid to Purchaser
and the Company or the Fund Holder, as the case may be, respectively) shall be
instead paid to Purchaser. Any such interest or other investment income shall be
deemed not to constitute Adjustment Escrowed Funds.
4. Adjustment Escrowed Funds. (a) As soon as practicable after the earlier
of an Adjustment Agreement or an Accounting Firm Determination (but in any event
within two Business Days after the Adjustment Agreement or the Accounting Firm
Determination), (x) Purchaser and (y) the Company or the Fund Holder, as the
case may be, shall give the Adjustment Escrow Agent joint written instructions
(an "Instruction") to distribute amounts from the Adjustment Escrowed Funds and
the interest and other investment income earned to the Company or the Fund
Holder, as the case may be, and (if applicable) Purchaser respectively, in
accordance with Sections 2.3(c) and 2.3(d) of the Purchase Agreement.
(b) Each Instruction given by Purchaser and the Company or the Fund Holder,
as the case may be, to the Adjustment Escrow Agent shall be signed by an
authorized representative of Purchaser and the Company or the Fund Holder, as
the case may be.
(c) Promptly upon receipt of the Instruction from (x) Purchaser and (y) the
Company or the Fund Holder, as the case may be, the Adjustment Escrow Agent
shall distribute the Adjustment Escrowed Funds and the interest and other
investment income earned in accordance with the Instruction.
(d) The Adjustment Escrow Agent shall make no payment or delivery to
Purchaser and/or the Company or the Fund Holder, as the case may be, except
pursuant to (i) an Instruction signed by the authorized representatives of both
Purchaser and the Company or the Fund Holder, as the case may be or (ii) a final
nonappealable order, judgment, writ, decree of any Federal or State court of
competent jurisdiction.
(e) All payments to be made pursuant to this Section 4 shall be made by
wire transfer in immediately available funds to the Person or Persons entitled
thereto.
5. Purchase Agreement. The provisions of this Agreement are subject to the
provisions of the Purchase Agreement, including, without limitation, Article 2
thereof. To the extent that such provisions and the provisions of this Agreement
are inconsistent with one
3
another or in conflict, the provisions of the Purchase Agreement shall take
precedence.
6. Fund Holder. The parties hereto expressly acknowledge that the Company
may assign all of its rights and obligations under this Agreement and to and in
the Adjustment Escrowed Funds to the stockholders of the Company or to any
person or entity or any persons or entities acting directly or indirectly on
behalf of the Company or such stockholders. Upon such assignment and upon the
Company's delivery to the parties hereto of a notice thereof, the Company shall
be released from all of its obligations under this Agreement. As used herein,
the term "Fund Holder" means the person, persons, entity and/or entities to whom
the Company's rights and obligations hereunder have been assigned.
7. Settlement of Disputes. Any dispute which may arise under this Agreement
with respect to the delivery and/or ownership or right of possession of the
Adjustment Escrowed Funds (or other funds held by the Adjustment Escrow Agent
pursuant hereto) or any part thereof, or the duties of the Adjustment Escrow
Agent hereunder, shall be settled either by mutual agreement of the Company or
the Fund Holder, as the case may be, and Purchaser (evidenced by appropriate
instructions in writing to the Adjustment Escrow Agent, signed by such parties)
or, failing such agreement, either the Company or the Fund Holder, as the case
may be, or Purchaser shall have the right to submit the dispute to any federal
or state court located in Portland, Maine. Each party waives any objection which
it may now or hereafter have to the laying of venue of any such proceeding, and
irrevocably submits to the jurisdiction of such courts in any such suit, action
or proceeding. The Adjustment Escrow Agent shall be under no duty whatsoever to
institute or defend any such proceedings. Prior to the settlement of any such
dispute, the Adjustment Escrow Agent is authorized and directed to retain in its
possession, without liability to anyone, that portion of the Adjustment Escrowed
Funds and the interest and other investment income earned thereon which is the
subject of such dispute.
8. Concerning the Adjustment Escrow Agent. (a) The Adjustment Escrow Agent
shall have no duties or responsibilities except those expressly set forth
herein. The Adjustment Escrow Agent may consult with counsel and shall have no
liability hereunder except for its own bad faith, gross negligence or willful
misconduct. It may rely on any notice, instruction, certificate, statement,
request, consent, confirmation, agreement or other instrument which it
reasonably believes to be genuine and to have been signed or presented by a
proper Person or Persons.
(b) The Adjustment Escrow Agent shall have no duties with respect to any
agreement or agreements with respect to any or all of the Adjustment Escrowed
Funds and the interest and other investment income earned thereon other than as
provided in this Agreement. In the event that any of the terms and provisions of
any other agreement between any of the parties hereto (other than the Purchase
Agreement) conflict or is inconsistent with any of the terms and provisions of
this Agreement, the terms and provisions of this Agreement shall govern and
control in all respects. Notwithstanding any provision to the contrary contained
in any other agreement (including without limitation, the Purchase Agreement),
the Adjustment Escrow Agent shall have no interest in the Adjustment Escrowed
Funds or the interest and other investment income earned thereon except as
provided in this Agreement.
4
(c) So long as the Adjustment Escrow Agent shall have any obligation to pay
any amount to the Company or the Fund Holder, as the case may be, and/or
Purchaser from the Adjustment Escrowed Funds hereunder, the Adjustment Escrow
Agent shall keep proper books of record and account, in which full and correct
entries shall be made of all receipts, disbursements and investment activity in
the Adjustment Escrow Account.
(d) The Adjustment Escrow Agent shall furnish to the Company or the Fund
Holder, as the case may be, and Purchaser monthly statements of account with
respect to the Adjustment Escrowed Funds showing the dates and amounts of all
deposits, disbursements, interest and other investment income and the balance
remaining on deposit.
(e) The Adjustment Escrow Agent shall not be bound by any modification of
this Agreement affecting the rights, duties and obligations of the Adjustment
Escrow Agent, unless such modification shall be in writing and signed by the
other parties hereto, and the Adjustment Escrow Agent shall have given its prior
or contemporaneous written consent thereto. The Adjustment Escrow Agent shall
not be bound by any other modification of this Agreement unless the Adjustment
Escrow Agent shall have received written notice thereof.
(f) The Adjustment Escrow Agent may resign as escrow agent at any time by
giving 60 days written notice by registered or certified mail to the Company or
the Fund Holder, as the case may be, and Purchaser, and such resignation shall
take effect at the end of such 60 days or upon earlier appointment of a
successor Adjustment Escrow Agent. The Company or the Fund Holder, as the case
may be, and Purchaser may remove the Adjustment Escrow Agent at any time upon
written notice by the Company and Purchaser jointly to the Adjustment Escrow
Agent with immediate effect. The resignation or removal shall not be effective
unless and until a successor Adjustment Escrow Agent is appointed by the Company
or the Fund Holder, as the case may be, and Purchaser. The Company or the Fund
Holder, as the case may be, and Purchaser shall undertake to utilize their best
efforts to arrange for the appointment of a successor Adjustment Escrow Agent.
If any instrument of acceptance by a successor Adjustment Escrow Agent shall not
have been delivered to the Adjustment Escrow Agent within 60 days after the
delivery of its notice of resignation by the Adjustment Escrow Agent or its
receipt of the notice of removal, the resigning or removed Adjustment Escrow
Agent may, at the expense of the Company or the Fund Holder, as the case may be,
and Purchaser, petition any court of competent jurisdiction for the appointment
of a successor Adjustment Escrow Agent.
(g) If at any time hereafter the Adjustment Escrow Agent shall be dissolved
or otherwise become incapable of acting, or the bank or trust company acting as
the Adjustment Escrow Agent shall be taken over by any government official,
agency, department or board, or the position of the Adjustment Escrow Agent
shall become vacant for any of the foregoing reasons or for any other reason,
the Company or the Fund Holder, as the case may be, and Purchaser shall jointly
appoint a successor Adjustment Escrow Agent to fill such vacancy.
(h) Every successor Adjustment Escrow Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor, and also to the Company or
the Fund Holder, as the case may be, and Purchaser an instrument in writing
accepting such appointment hereunder, and thereupon such successor Adjustment
Escrow Agent, without any further act,
5
shall become fully vested with all the rights, immunities and powers and shall
be subject to all of the duties and obligations, of its predecessor Adjustment
Escrow Agent as if originally named herein; and every predecessor Adjustment
Escrow Agent shall deliver to its successor, all property and moneys held by it
hereunder and all information required to properly perform the obligations of
the Adjustment Escrow Agent set forth in this Agreement.
(i) The Adjustment Escrow Agent's fees shall be in the amounts set forth on
Exhibit A hereto. In addition, the Adjustment Escrow Agent shall be reimbursed
for its reasonable out of pocket costs incurred in performing its obligations
under this Agreement upon presentation of any invoices thereof.
(j) The Company and Purchaser shall each be responsible for one-half of the
fees and expenses of the Adjustment Escrow Agent.
(k) The Company or the Fund Holder, as the case may be, and Purchaser shall
jointly but not severally indemnify and hold the Adjustment Escrow Agent
harmless from and against any and all expenses (including reasonable attorneys'
fees), liabilities, claims, damages, actions, suits or other charges incurred by
or assessed against the Adjustment Escrow Agent for anything done or omitted by
the Adjustment Escrow Agent in the performance of the Adjustment Escrow Agent's
duties hereunder, except such which result from the Adjustment Escrow Agent's
bad faith, gross negligence or willful misconduct.
(1) Insofar as required by any Governmental Authority, the Adjustment
Escrow Agent shall provide all information and file all forms or returns and
withhold all Taxes required to be withheld with regard to the payments made
pursuant to this Agreement, including, without limitation, information and forms
and returns relating to income Taxes.
9. Termination of the Adjustment Escrow Agreement. This Agreement shall
terminate upon the distribution of all of the Adjustment Escrowed Funds and the
interest and other investment income earned thereon by the Adjustment Escrow
Agent, or its successor, if any.
10. Miscellaneous. (a) This Agreement and the rights and duties of the
parties hereunder shall be governed by, and construed in accordance with, the
laws of the State of New York.
(b) This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
(c) This Agreement may be executed in one or more counterparts and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
(d) Section headings contained herein have been inserted for reference
purposes only and shall not be construed as part of this Agreement.
6
(e) This Agreement may be modified or amended only by a written instrument
duly executed by all parties hereto or their respective successors or assigns.
(f) Any notice, demand, claim, notice of claim, request or communication
required or permitted to be given under the provisions of this Agreement shall
be in writing and shall be deemed to have been duly given (i) upon delivery if
delivered in person, (ii) on the next Business Day after the date of mailing if
mailed by registered or certified mail, postage prepaid and return receipt
requested, (iii) on the next Business Day after the date of delivery to a
national overnight courier service, or (iv) upon transmission by facsimile (if
such transmission is confirmed by the addressee) if delivered through such
services to the following addresses, or to such other address as any party may
request by notifying in writing all of the other parties to this Agreement in
accordance with this Section l0(f):
If to the Company:
Xxxxxxxx Communications, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: President
Fax: (000) 000-0000
with copy to:
Xxxxxxxx Communications, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
and
Xxxxxx & Xxxxxxxx, P.A.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esquire
Fax: (000) 000-0000
If to Purchaser:
The Xxxxxxxx Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx,
Co-President and CFO
Fax: (000) 000-0000
7
with a copy to:
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx,
L.L.P.
10th Floor
0000 Xxx Xxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Esquire
Fax: (000) 000-0000
Any such notice shall be deemed to have been received on the date of
personal delivery, the date set forth on the Postal Service return receipt, or
the date of delivery shown on the records of the overnight courier, as
applicable.
(g) The Adjustment Escrow Agent shall not be liable to pay any Tax, if any,
on any interest or other investment income earned on the Adjustment Escrowed
Funds, it being the understanding of the parties that any such Tax shall be the
responsibility of the party or parties entitled to receive the Adjustment
Escrowed Funds and any such interest or other investment income, allocated
between parties on the basis of the relative portions of the Adjustment Escrow
Account to be paid to Purchaser and the Company or the Fund Holder, as the case
may be, respectively, pursuant to Section 4(a) hereof
(h) If any party hereto refuses to comply with, or at any time violates or
attempts to violate, any term, covenant or agreement contained in this
Agreement, any other party hereto may, by injunctive action, compel the
defaulting party to comply with, or refrain from violating, such term, covenant
or agreement, and may, by injunctive action, compel specific performance of the
obligations of the defaulting party.
(i) Except as provided herein, the rights and obligations of the parties
under this Agreement shall not be assigned to any Person, without the written
consent of the other parties. This Agreement shall not confer any benefits on
any Persons other than the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE TO FOLLOW]
8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on the date first above written.
------------------------------------
[BANK],
as Adjustment Escrow Agent
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
XXXXXXXX COMMUNICATIONS, INC.
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
THE XXXXXXXX GROUP, INC.
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
9
Exhibit A to
Adjustment Escrow Agreement
---------------------------
ADJUSTMENT ESCROW AGENT'S FEES
------------------------------
10
Exhibit D to
Purchase Agreement
------------------
SECURITY ESCROW AGREEMENT
-------------------------
This SECURITY ESCROW AGREEMENT (this "Agreement") made as of
______________________, 1998, by and among XXXXXXXX COMMUNICATIONS, INC., a
Maryland corporation (the "Company"), THE XXXXXXXX GROUP, INC., a Delaware
Corporation (the "Purchaser"), and _____________________, a _________________
[Bank], as Security Escrow Agent (the "Security Escrow Agent").
WHEREAS, the Company and Purchaser are parties to a Purchase Agreement
dated as of September 25, 1998 (the "Purchase Agreement");
WHEREAS, pursuant to the Purchase Agreement, the Company shall sell,
assign, transfer and deliver to Purchaser the assets and business of the
Business (as defined in the Purchase Agreement), and Purchaser shall purchase
and acquire such assets and business;
WHEREAS, pursuant to Section 2.2(c)(iii) of the Purchase Agreement,
Purchaser shall deliver on the Closing Date (as defined in the Purchase
Agreement) an amount of $3,225,600 of the Purchase Price (as defined in the
Purchase Agreement) to the Security Escrow Agent as security for the payment of
certain amounts (i) as to which Purchaser may become entitled to indemnification
pursuant to Article 8 of the Purchase Agreement, (ii) as to which Purchaser may
become entitled to pursuant to Section 5.8(a) of the Purchase Agreement and
(iii) that may be payable to Purchaser pursuant to Section 2.3(c)(iii)(B) of the
Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
Capitalized terms used herein and not otherwise defined are used as defined
in the Purchase Agreement.
1. Appointment of Security Escrow Agent. The Company and Purchaser hereby
appoint _________________ [Bank] to act as Security Escrow Agent hereunder, and
____________________ [Bank] hereby accepts such appointment and agrees to act as
Security Escrow Agent on the terms and conditions set forth hereinafter.
2. Security Escrow Amount. (a) On the Closing Date, Purchaser shall deliver
to the Security Escrow Agent by wire transfer of immediately available funds (to
account number ____________________ of the Security Escrow Agent (the "Security
Escrow Account")) the amount of $3,225,600 (the "Security Escrow Amount"),
accompanied by written notice from Purchaser identifying such amount as an
amount being delivered for deposit into the Security Escrow Account. The
Security Escrow Agent shall acknowledge to Purchaser the Security Escrow Agent's
receipt of said amount.
(b) The Security Escrow Amount, not including the interest and other
investment
income earned thereon, shall only serve to secure the performance of (i) the
indemnification obligations of the Company as set forth in Article 8 of the
Purchase Agreement, (ii) the obligations of the Company as set forth in Section
5.8(a) of the Purchase Agreement and (iii) certain of the obligations set forth
in Section 2.3(c)(iii)(B) of the Purchase Agreement.
(c) The Security Escrow Agent shall hold the balance of the Security Escrow
Amount (the "Security Escrowed Funds") in escrow and shall not withdraw the
Security Escrowed Funds from the Security Escrow Account or use the Security
Escrowed Funds for any other purpose, except as provided in this Agreement.
3. Investments of Security Escrowed Funds. (a) The Security Escrow Agent
shall invest and reinvest the Security Escrowed Funds from time to time, upon
receipt of the written instructions thereto issued by the Company or the Fund
Holder (as defined in Section 7 hereof), in:
(i) Commercial paper of any corporation rated at least A-1 by S&P and
P-1 by Moody's;
(ii) Negotiable certificates of deposit of United States banks having
(A) a long-term senior debt rating of at least A by S&P and Moody's, (B)
deposits in excess of $2,000,000,000 and (C) commercial paper rating
designations of at least A-1 by S&P and P-1 by Moody's;
(iii) Repurchase agreements with any United States bank which are
fully collateralized by direct obligations of the United States or
obligations of agencies or sponsored agencies of the United States
government, excluding in all cases collateralized mortgage obligations of
any kind; and
(iv) Money market instruments rated at least A-1 by S&P and P-1 by
Moody's that are restricted to investments described in clause (iii);
provided that in no event shall any investment of the types described in clause
(i), (ii) or (iv) exceed ten percent of the net assets of the issuer thereof and
provided further that all investments shall have maturity dates on or before the
anticipated dates of the relevant payments hereunder.
(b) To the extent the Security Escrow Agent invests any funds in the manner
provided for in this Section 3 and in accordance with the written instructions
from the Company or the Fund Holder, as the case may be, no party hereto shall
be liable for any loss which may be incurred by reason of any such investment.
No investment shall exceed the term of this Agreement.
(c) The Security Escrow Agent shall have the power to reduce, sell or
liquidate the foregoing investments whenever it shall be required to release all
or any portion of the Security Escrowed Funds pursuant to Section 4 or 5 hereof.
(d) The Security Escrow Agent is authorized to register securities held by
it in its
2
name or in the name of a nominee or in bearer form and may deposit any
securities or other property in a depository or a clearing corporation.
(e) Any interest or other investment income earned for the period from the
time that the Security Escrow Amount is delivered to the Security Escrow Agent
until all the Security Escrowed Funds have been distributed in accordance with
Section 5 hereof, shall be paid monthly to the Company or the Fund Holder, as
the case may be, provided that no such payments shall be made until (i) a
determination of whether any payment out of the Security Escrow Account pursuant
to Section 2.3(c)(iii)(B) of the Purchase Agreement is required and (ii) if so
required, such payment has been made; provided further, that to the extent that
any portion of the Security Escrowed Funds is paid to Purchaser pursuant to
Section 2.3(c)(iii)(B) of the Purchase Agreement, a pro rata portion of such
interest or other investment income earned through the date of such payment
(determined on the basis of the relative portions of the Security Escrowed Funds
so paid and that not so paid) shall be instead paid to Purchaser at the time
such portion of the Security Escrowed Funds is paid to Purchaser; and provided
further that the Security Escrow Agent shall retain interest or investment
income to the extent necessary to replenish previous losses incurred by reason
of any investment under Section 3(a) that resulted in a reduction in the
principal amount of the Security Escrow Amount. Any such interest or other
investment income shall be deemed not to constitute Security Escrowed Funds.
4. Claim Notices. (a) During the period from the Closing Date until the
Scheduled Escrow Expiration Date (as defined in Section 10 hereof), Purchaser
acting on its own or, in the event set forth under (i) hereof, on behalf of any
other Purchaser Indemnified Party (together for the purposes of this Section 4,
"Purchaser") shall be entitled to give the Security Escrow Agent written notice
(a "Claim Notice") of (i) any Claims and Damages incurred by it or a Purchaser
Indemnified Party for which Purchaser claims that the Company is obligated to
indemnify Purchaser pursuant to Article 8 of the Purchase Agreement, (ii) 50% of
any payment made by Purchaser to any Business Employee pursuant to the terms of
the Severance Agreements listed in Sections 3.14.1 and 3.14.2 of the Disclosure
Schedule to the Purchase Agreement, which Purchaser is entitled to recover
pursuant to Section 5.8(a) of the Purchase Agreement or (iii) the amount that is
to be delivered to Purchaser pursuant to Section 2.3(c)(iii)(B) of the Purchase
Agreement.
(b) Each Claim Notice given by Purchaser to the Security Escrow Agent shall
be signed by an authorized representative of Purchaser and (i) shall include the
information required under Section 8.5 of the Purchase Agreement, including, for
as far as its concerns a Claim Notice for Claims and Damages, the nature and
details of such Claims and Damages, the section of the Purchase Agreement
pursuant to which the Claim Notice is made, the amount of Claims and Damages, if
reasonably ascertainable by Purchaser (or a statement that the amount thereof is
not then reasonably ascertainable by Purchaser and the basis for such statement)
and whether or not such Claims and Damages arise from the assertion of liability
by a third party or (ii) set forth Purchaser's claim pursuant to Section 5.8(a)
or 2.3(c)(iii)(B) of the Purchase Agreement.
(c) Promptly upon receipt of the Claim Notice, the Security Escrow Agent
shall give notice thereof to the Company or the Fund Holder, as the case may be,
by transmitting a copy of such Claim Notice to the Company or the Fund Holder,
as the case may be, in the
3
manner and to the address specified in Section 1l(f) hereof.
(d) The Security Escrow Agent shall make no payment or delivery to
Purchaser or any Purchaser Indemnified Party for which a Claim Notice has been
given to the Security Escrow Agent pursuant to this Section 4, or for the first
payment of interest or other investment income pursuant to Section 3(e), except
pursuant to (i) written instructions to the Security Escrow Agent signed by the
authorized representatives of Purchaser and of the Company or the Fund Holder,
as the case may be (the "Joint Order"), or (ii) a final nonappealable order,
judgment, writ, decree of any Federal or State court of competent jurisdiction
(the "Court Order"). Claims and Damages, or such portion of Claims and Damages,
that have not been paid to Purchaser or otherwise resolved by a Joint Order or a
Court Order, together with all unresolved claims with respect to Sections 5.8(a)
and 2.3(c)(iii)(B), are herein referred to collectively as "Pending Claims".
5. Distribution of the Security Escrowed Funds. All cash held in the
Security Escrow Account on the Scheduled Escrow Expiration Date shall be
distributed as follows:
(a) The Security Escrow Agent shall deliver to the Company or the Fund
Holder, as the case may be, by wire transfer to a bank account designated by the
Company or the Fund Holder, as the case may be, the amount by which the balance
in the Security Escrow Account as of the Scheduled Escrow Expiration Date
exceeds the aggregate amount for all indemnification or other payments claimed
under Pending Claims described in all Claim Notices with respect thereto (the
"Reserves") as of the Scheduled Escrow Expiration Date.
(b) An amount equal to the aggregate amount of the Reserves shall continue
to be held by the Security Escrow Agent as Security Escrowed Funds as long as,
and to the extent that, such Pending Claims have not been resolved by a Joint
Order or a Court Order.
(c) Whenever any Pending Claim is resolved by a Joint Order or a Court
Order, the amount of such Pending Claim shall be disposed of in accordance with
such Joint Order or Court Order.
(d) Upon a Joint Order or a Court Order, money may be distributed at any
time to Purchaser and the Company or the Fund Holder, as the case may be, or
both of them.
6. Purchase Agreement. The provisions of this Agreement are subject to the
provisions of the Purchase Agreement, including, without limitation, Sections
2.3(c), 2.4, 2.5 and 5.8(a) and Article 8 thereof. To the extent that such
provisions and the provisions of this Agreement are inconsistent with one
another or in conflict, the provisions of the Purchase Agreement shall take
precedence.
7. Fund Holder. The parties hereto expressly acknowledge that the Company
may assign all of its rights and obligations under this Agreement and to and in
the Security Escrowed Funds to the stockholders of the Company or to any person
or entity or any persons or entities acting directly or indirectly on behalf of
the Company or such stockholders. Upon such assignment and upon the Company's
delivery to the parties hereto of a notice thereof, the
4
Company shall be released from all of its obligations under this Agreement. As
used herein, the term "Fund Holder" means the person, persons, entity and/or
entities to whom the Company's rights and obligations hereunder have been
assigned.
8. Settlement of Disputes. Any dispute which may arise under this Agreement
with respect to the delivery and/or ownership or right of possession of the
Security Escrowed Funds or any part thereof, or the duties of the Security
Escrow Agent hereunder, shall be settled either by mutual agreement of the
Company or the Fund Holder, as the case may be, and Purchaser (evidenced by
appropriate instructions in writing to the Security Escrow Agent, signed by such
parties) or, failing such agreement, either the Company or the Fund Holder, as
the case may be, or Purchaser shall have the right to submit the dispute to any
federal or state court located in Portland, Maine. Each party waives any
objection which it may now or hereafter have to the laying of venue of any such
proceeding, and irrevocably submits to the jurisdiction of such courts in any
such suit, action or proceeding. The Security Escrow Agent shall be under no
duty whatsoever to institute or defend any such proceedings. Prior to the
settlement of any such dispute, the Security Escrow Agent is authorized and
directed to retain in its possession, without liability to anyone, that portion
of the Security Escrowed Funds and the interest and other investment income
earned thereon which is the subject of such dispute.
9. Concerning the Security Escrow Agent. (a) The Security Escrow Agent
shall have no duties or responsibilities except those expressly set forth
herein. The Security Escrow Agent may consult with counsel and shall have no
liability hereunder except for its own bad faith, gross negligence or willful
misconduct. It may rely on any notice, instruction, certificate, statement,
request, consent, confirmation, agreement or other instrument which it
reasonably believes to be genuine and to have been signed or presented by a
proper Person or Persons.
(b) The Security Escrow Agent shall have no duties with respect to any
agreement or agreements with respect to any or all of the Security Escrowed
Funds and the interest and investment income earned thereon other than as
provided in this Agreement. In the event that any of the terms and provisions of
any other agreement between any of the parties hereto (other than the Purchase
Agreement) conflict or is inconsistent with any of the terms and provisions of
this Agreement, the terms and provisions of this Agreement shall govern and
control in all respects. Notwithstanding any provision to the contrary contained
in any other agreement (including, without limitation, the Purchase Agreement),
the Security Escrow Agent shall have no interest in the Security Escrowed Funds
or the interest and other investment income earned thereon except as provided in
this Agreement.
(c) So long as the Security Escrow Agent shall have any obligation to pay
any amount to the Company or the Fund Holder, as the case may be, and/or
Purchaser from the Security Escrowed Funds hereunder, the Security Escrow Agent
shall keep proper books of record and account, in which full and correct entries
shall be made of all receipts, disbursements and investment activity in the
Security Escrow Account.
(d) The Security Escrow Agent shall finish to the Company or the Fund
Holder, as the case may be, and Purchaser monthly statements of account with
respect to the Security Escrowed Funds showing the dates and amounts of all
deposits, disbursements, interest and other
5
investment income and the balance remaining on deposit.
(e) The Security Escrow Agent shall not be bound by any modification of
this Agreement affecting the rights, duties and obligations of the Security
Escrow Agent, unless such modification shall be in writing and signed by the
other parties hereto, and the Security Escrow Agent shall have given its prior
or contemporaneous written consent thereto. The Security Escrow Agent shall not
be bound by any other modification of this Agreement unless the Security Escrow
Agent shall have received written notice thereof.
(f) The Security Escrow Agent may resign as escrow agent at any time by
giving 60 days written notice by registered or certified mail to the Company or
the Fund Holder, as the case may be, and Purchaser, and such resignation shall
take effect at the end of such 60 days or upon earlier appointment of a
successor Security Escrow Agent. The Company or the Fund Holder, as the case may
be, and Purchaser may remove the Security Escrow Agent at any time upon written
notice by the Company or the Fund Holder, as the case may be, and Purchaser
jointly to the Security Escrow Agent with immediate effect. The resignation or
removal shall not be effective unless and until a successor Security Escrow
Agent is appointed by the Company or the Fund Holder, as the case may be, and
Purchaser. The Company or the Fund Holder, as the case may be, and Purchaser
shall undertake to utilize their best efforts to arrange for the appointment of
a successor Security Escrow Agent. If any instrument of acceptance by a
successor Security Escrow Agent shall not have been delivered to the Security
Escrow Agent within 60 days after the delivery of its notice of resignation by
the Security Escrow Agent or its receipt of the notice of removal, the resigning
or removed Security Escrow Agent may, at the expense of the Company or the Fund
Holder, as the case may be, and Purchaser, petition any court of competent
jurisdiction for the appointment of a successor Security Escrow Agent.
(g) If at any time hereafter the Security Escrow Agent shall be dissolved
or otherwise become incapable of acting, or the bank or trust company acting as
the Security Escrow Agent shall be taken over by any government official,
agency, department or board, or the position of the Security Escrow Agent shall
become vacant for any of the foregoing reasons or for any other reason, the
Company or the Fund Holder, as the case may be, and Purchaser shall jointly
appoint a successor Security Escrow Agent to fill such vacancy.
(h) Every successor Security Escrow Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor, and also to the Company or
the Fund Holder, as the case may be, and Purchaser an instrument in writing
accepting such appointment hereunder, and thereupon such successor Security
Escrow Agent, without any further act, shall become fully vested with all the
rights, immunities and powers and shall be subject to all of the duties and
obligations, of its predecessor Security Escrow Agent as if originally named
herein; and every predecessor Security Escrow Agent shall deliver to its
successor, all property and moneys held by it hereunder and all information
required to properly perform the obligations of the Security Escrow Agent set
forth in this Agreement.
(i) The Security Escrow Agent's fees shall be in the amounts set forth on
Exhibit A hereto. In addition, the Security Escrow Agent shall be reimbursed on
demand for its reasonable out of pocket costs incurred in performing its
obligations under this Agreement upon
6
its presentation of any invoices thereof.
(j) The Company and Purchaser shall each be responsible for payment of one
half of the fees and expenses of the Security Escrow Agent, including the
expenses set forth in Section 9(i) hereof
(k) The Company or the Fund Holder, as the case may be, and Purchaser shall
indemnify and hold the Security Escrow Agent harmless from and against any and
all expenses (including reasonable attorneys' fees), liabilities, claims,
damages, actions, suits or other charges incurred by or assessed against the
Security Escrow Agent for anything done or omitted by the Security Escrow Agent
in the performance of the Security Escrow Agent's duties hereunder, except such
which result from the Security Escrow Agent's bad faith, gross negligence or
willful misconduct.
(1) Insofar as required by any governmental agency or authority, the
Security Escrow Agent shall provide all information and file all forms or
returns and withhold all Taxes required to be withheld with regard to the
payments made pursuant to this Agreement, including, without limitation,
information and forms and returns relating to income Taxes.
10. Termination of the Security Escrow Agreement. This Agreement shall
terminate upon the earlier to occur of: (i) the first anniversary of the Closing
Date (the "Scheduled Escrow Expiration Date") and (ii) the distribution of all
of the Security Escrowed Funds and the interest and other investment income
earned thereon by the Security Escrow Agent pursuant to this Agreement;
provided, however, that if there are any unresolved or unsettled Claims and
Damages outstanding on the Scheduled Escrow Expiration Date, this Agreement will
not terminate until the resolution of all such Claims and Damages and the
distribution of all of the Security Escrowed Funds pursuant to Section 5 hereof.
11. Miscellaneous. (a) This Agreement and the rights and duties of the
parties hereunder shall be governed by, and construed in accordance with, the
laws of the State of New York.
(b) This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their representative successors and assigns.
(c) This Agreement may be executed in one or more counterparts and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
(d) Section headings contained herein have been inserted for reference
purposes only and shall not be construed as part of this Agreement.
(e) This Agreement may be modified or amended only by a written instrument
duly executed by all parties hereto or their respective successors or assigns.
(f) Any notice, demand, claim, notice of claim, request or communication
7
required or permitted to be given under the provisions of this Agreement shall
be in writing and shall be deemed to have been duly given (i) upon delivery if
delivered in person, (ii) on the next Business Day after the date of mailing if
mailed by registered or certified mail, postage prepaid and return receipt
requested, (iii) on the next Business Day after the date of delivery to a
national overnight courier service, or (iv) upon transmission by facsimile (if
such transmission is confirmed by the addressee) if delivered through such
services to the following addresses, or to such other address as any party may
request by notifying in writing all of the other parties to this Agreement in
accordance with this Section l1(f):
If to the Company:
Xxxxxxxx Communications, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: President
Fax: (000) 000-0000
with copy to:
Xxxxxxxx Communications, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
and
Xxxxxx & Xxxxxxxx, P.A.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esquire
Fax: (000) 000-0000
If to Purchaser:
The Xxxxxxxx Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx,
Co-President and CFO
Fax: (000) 000-0000
8
with a copy to:
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx,
L.L.P.
10th Floor
0000 Xxx Xxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Esquire
Fax: (000) 000-0000
Any such notice shall be deemed to have been received on the date of
personal delivery, the date set forth on the Postal Service return receipt, or
the date of delivery shown on the records of the overnight courier, as
applicable.
(g) The Security Escrow Agent shall not be liable to pay any Tax, if any,
on any interest or other investment income earned on the Security Escrowed
Funds, it being the understanding of the parties that any such Tax shall be the
responsibility of the Company or the Fund Holder, as the case may be.
(h) If any party hereto refuses to comply with, or at any time violates or
attempts to violate, any term, covenant or agreement contained in this
Agreement, any other party hereto may, by injunctive action, compel the
defaulting party to comply with, or refrain from violating, such term, covenant
or agreement, and may, by injunctive action, compel specific performance of the
obligations of the defaulting party.
(i) Except as provided herein, the rights and obligations of the parties
under this Agreement shall not be assigned to any Person, without the written
consent of the other parties. This Agreement shall not confer any benefits on
any Persons other than the parties hereto and the Fund Holder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE TO FOLLOW]
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on the date first above written.
__________________________________ [BANK],
as Adjustment Escrow Agent
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
XXXXXXXX COMMUNICATIONS, INC.
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
THE XXXXXXXX GROUP, INC.
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
10
Exhibit A to
Security Escrow Agreement
-------------------------
SECURITY ESCROW AGENT'S FEES
----------------------------
Exhibit E-1 to
Purchase Agreement
------------------
[Date of Closing]
The Xxxxxxxx Group
Suite 4000
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
---------
RE: ASSET PURCHASE AGREEMENT, ENTERED INTO ON SEPTEMBER ____, 1998
BY AND BETWEEN THE XXXXXXXX GROUP ("XXXXXXXX")
AND XXXXXXXX COMMUNICATIONS, INC. (THE "PURCHASE AGREEMENT")
Ladies and Gentlemen:
We have acted as counsel to Xxxxxxxx Communications, Inc., a Maryland
corporation ("SCI") in connection with the transactions contemplated by the
Purchase Agreement. This opinion is being delivered to you pursuant to Section
10.2.6 of the Purchase Agreement. All capitalized terms used herein but not
otherwise defined in this opinion shall have the meanings ascribed thereto in
the Purchase Agreement.
We have reviewed the Purchase Agreement and such other corporate records of
SCI, certificates of public officials, certificates of officers of SCI and other
documents and have made such examinations of law and fact as we have deemed
necessary or relevant in connection with the opinions set forth below. In
rendering the following opinions, we have assumed, without investigation, the
authenticity of any document or other instrument submitted to us as an original,
the conformity of the originals of any document or other instruments submitted
to us as a copy, the legal capacity of natural persons, and the genuineness of
all signatures on such originals or copies. We have also assumed, but have not
independently verified, that all documents executed by a party other than
officers and agents of SCI, were duly and validly executed and delivered by such
party and are legal, valid and binding obligations of such party enforceable
against the party in accordance with their respective terms.
With respect to questions of fact, we have relied, without independent
inquiry or verification by us, solely upon (a) the representations and
warranties set forth in the Purchase Agreement, (b) written and oral
representations of officers of SCI, and (c) certificates of public officials,
and we do not opine in any respect as to the accuracy of any such facts. We have
conducted no independent investigation whatsoever of any factual matter. Certain
of the opinions given herein are qualified by
The Xxxxxxxx Group
______________ ___, 1998
Page 2 of 3
the phrases "best of our knowledge," "to our knowledge," "known to us" or
similar phrases. In each such case, such knowledge refers only to the actual
existing knowledge of attorneys in our firm involved in representing SCI in the
preparation of this opinion with only such investigation as is specifically
referred to in this opinion, without any further investigation or inquiry. Such
terms do not include any knowledge of other attorneys within our firm or any
constructive or imputed notice of any matters or items of information. When a
statement in this opinion is made "to our knowledge," it means that none of the
attorneys in our firm involved in representing SCI in the preparation of this
opinion has actual existing knowledge that the statement is false; it does not
mean that any of such attorneys necessarily has actual existing knowledge of
facts that would suggest the statement as true.
This opinion is limited to the laws of the State of Maryland and the
federal law of the United States of America (collectively, "Applicable Law"),
except that Applicable Law includes only laws and regulations that a lawyer
exercising customary professional diligence would reasonably recognize as being
directly applicable to the transactions contemplated by the Purchase Agreement.
We note that the Purchase Agreement is governed by the laws of the State of New
York. We are not admitted to practice in the State of New York, and we have
assumed with your consent, without independent investigation, that the relevant
laws of the State of New York are identical in all respects to the laws of the
State of Maryland. We express no opinion as to choice of law or conflicts of law
rules or the laws of any states or jurisdictions other than as specified above.
Statements in this opinion as to the legality, validity, binding effect and
enforceability of the Purchase Agreement are subject to limitations imposed by
bankruptcy, insolvency, reorganization, moratorium or similar laws and related
court decisions of general applicability relating to or affecting creditors'
rights generally and to the application of general equitable principles.
In addition, without limitation of any of the foregoing, we express no
opinion herein as to (i) any provision of the Purchase Agreement that provides
for indemnification to the extent such provision may be limited by Applicable
Law, (ii) any consents of third parties that may be required in connection with
the transfer and assignment of any of the Assets or the effects of the failure
to have obtained any such consents that may be required, (iii) federal or state
securities or "Blue Sky" laws, (iv) bulk transfer or sales laws, (v) matters
arising under the Communications Act of 1934, as amended, or the laws, rules,
regulations or policies of the Federal Communications Commission, or (vi)
antitrust laws.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, we are of the opinion that:
1. SCI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland.
The Xxxxxxxx Group
______________ ___, 1998
Page 3 of 3
2. SCI has the requisite corporate power and authority to execute,
deliver and perform its obligations under the Purchase Agreement and
the Amendment.
3. The Purchase Agreement has been duly executed and delivered by SCI and
constitutes the valid and binding obligation of SCI, enforceable
against SCI in accordance with its respective terms.
4. The execution, delivery and performance by SCI of the Purchase
Agreement and the consummation by SCI of the transactions contemplated
thereby do not and will not conflict with or result in a breach of
SCI's certificate or articles of incorporation or its bylaws, each as
in effect immediately prior to the Closing.
We express no opinion as to the effect of the violation of any law or
regulation that may be applicable to SCI as a result of the involvement of
parties other than SCI in the transactions contemplated by the Purchase
Agreement because of the legal or regulatory status of such other parties or
because of any other facts specifically pertaining to any of them.
The information set forth herein is as of the date hereof. We assume no
obligation to advise you of changes that may thereafter be brought to our
attention. Our opinions are based on statutory provisions and judicial decisions
in effect at the date hereof, and we do not opine with respect to any law,
regulation, rule or governmental policy that may be enacted or adopted after the
date hereof nor assume any responsibility to advise you of future changes in our
opinions.
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Purchase Agreement and is
not to be reproduced, quoted, in whole or in part, or otherwise referred to in
any of your financial statements or public releases, nor is it to be filed with
any governmental agency or relied upon by any other person or for any purposes
whatsoever without the prior written consent of a member of this firm.
Very truly yours,
XXXXXX & XXXXXXXX, P.A.
Exhibit E-2
FORM OF FCC OPINION
-------------------
1. The FCC has issued to the Company the licenses, permits and
authorizations specified on Attachment I hereto (the "FCC Licenses"). The FCC
Licenses are in full force and effect in that they are held by the Company and
are in effect in accordance with their terms.
2. The FCC Consent has been granted to permit the assignment of the FCC
Licenses by the Company to Purchaser and has not been reversed, stayed,
enjoined, set aside, annulled or suspended; [provided, however, that the time
under applicable FCC rules within which any formal request for reconsideration,
review or other regulatory or judicial action has not lapsed, but, to our
knowledge, no action or petition for such reconsideration or review has been
filed or is pending.]
3. There is no FCC order, judgment, decree, notice of apparent liability or
order of forfeiture outstanding, and to our knowledge, no action, suit of
apparent liability, order of forfeiture, investigation or other proceeding
pending, by or before the FCC against the Company that might result in a
revocation, cancellation, suspension, non-renewal, short-term renewal or
materially adverse modification of the FCC Licenses, except FCC proceedings
generally affecting the television industry (including but not limited to the
proceedings which will require modification of all television licenses to
accommodate the transition to digital television).
THE XXXXXXXX GROUP, INC.
PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 1.1(D) (REAL PROPERTY)
-----------------------------
See attached Section 1.1(d) of the Disclosure Schedule.
THE XXXXXXXX GROUP, INC.
PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 1.1(D) (REAL PROPERTY)
-----------------------------
------------------------------------------------------------------------------------------------------------------------------------
IDENTIFIER/
TITLE COMMITMENT DOCUMENTATION OF
OWNED/LEASED PARCEL # OWNERSHIP ENTITY ID
------------------------------------------------------------------------------------------------------------------------------------
OWNED 0000 X. Xxxxxxxxx Xxxx BARGAIN AND SALE DEED from WOKR-TV Partners, WOKR-TV
Rochester, NY G.P. to Guy Gannett Communications, dated July
(90, 91) 10, 1998 and recorded in the Monroe County
Clerk's Office at Book 9036, page 71
WOKR-TV Channel 13 studio and office, Inc., and Xxxxxxxx
Xxxx, Xxxxx Xxxxx 00 (Brighton) transmitter and tower site
------------------------------------------------------------------------------------------------------------------------------------
LEASED One Chase Square LEASE between Lincoln First Bank, NA and
Chase Manhattan Bank WOKR-Inc., dated 01/10/80; also;
Rochester, NY
(92-L) Extension Agreement between Chase
Lincoln First Bank, NA and WOKR
Tower and receiver site Partners, dated 09/12/89;
and;
Second Extension Agreement between The Chase
Manhattan Bank and WOKR Partners, dated
11/14/94, through 12/31/99;
NOTE: Xxxxxxx ABT, Inc. is now responsible for
this lease administration for billing and
collections
------------------------------------------------------------------------------------------------------------------------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 1.2 - EXCLUDED ASSETS
-----------------------------
The Excluded Assets include all of the Excluded Assets as listed in Section
1.2(a)-(j) of the Asset Purchase Agreement dated September 4, 1998 by and
between Guy Gannett Communications and Xxxxxxxx Communications, Inc.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.3 (ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS)
-------------------------------------------------------------------
3.3(a): None.
3.3(b): None.
3.3(c): None.
3.3(d):
1. See Section 3.3.1 of the Disclosure Schedule for list of
contracts that require consent to the transactions.
2. Gannett's Revolving Loan Agreement with BankBoston and others
and Note Purchase Agreement with its noteholders prohibit the
transfer of the Assets without the lenders' consent. Gannett
expects to repay these obligations at or prior to Closing.
3. See Section 3.14 of the Disclosure Schedule concerning certain
retention and severance agreements with various employees
requiring certain payments to be accelerated at Closing.
4. See Section 3.14 of the Disclosure Schedule concerning certain
agreements with various retired employees that may be
accelerated upon Closing.
5. The annual management bonuses for WOKR-TV will be accelerated
at Closing. If the Closing is before the end of 1998, the
portion of the
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.3 (ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS)
-------------------------------------------------------------------
payment relating to the period from the Closing Date through
year end will be accounted for as a prepaid expense.
6. Pursuant to the terms of Gannett's Directors' Deferred
Compensation Plan, deferred directors fees are payable upon
the sale of substantially all of the assets of Gannett, and
will be due upon Closing.
7. Most, if not all, of Gannett's insurance policies are not
assignable.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.3.1 (CONSENTS REQUIRED)
--------------------------------
------------------------------------------------------------------------------------------------------------------------------------
DIVISION COMPANY NAME DOCUMENT PURPOSE CONTRACT EFFECTIVE
NUMBER DATE DATE
------------------------------------------------------------------------------------------------------------------------------------
Corp. U.S. Fleet Leasing 100090.00 Master Lease Vehicle Leases 07/19/91
------------------------------------------------------------------------------------------------------------------------------------
Corp. various credit card providers 100900.00 Divisions' Credit Card Agreements
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxx ABR, Inc. 1681100.00 Roof Lease 11/14/94 01/01/95
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV GMAC 1680600.00 1997 Cadillac Lease (Alhart) 01/01/97
d/b/a The Valley Cadillac Corp.
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV GMAC 1681010.00 Buick Park Avenue Lease 1997 08/01/94 01/14/97
d/b/a Xxxxxxx Buick, Inc.
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Volvo Car Finance (Best Motors) 1681020.00 1996 Volvo Lease 04/18/96
(Xxxxxxx)
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Toshiba/Rochester Copier 1681050.00 Office Equipment Lease 02/19/98
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV SportsTicker 1670110.00 Sports Information Service 05/15/98 05/15/98
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Associated Press 1670120.00 NewsPower & GraphicsBank Services 07/27/94 07/01/94
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV FirstCom/Music House 1670290.00 Music Library License 11/30/97
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Rochester Copier 1670690.00 Main Office Fax Maintenance 12/23/97 01/15/98
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Rochester Copier, Inc. 1670693.00 GM Fax Maintenance 01/28/98 02/01/98
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Dun & Bradstreet 1670760.00 Business Information Services 05/06/98
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Associated Press 1670830.00 Radio Simulcast Services 09/15/97
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Weatherline Inc. 1670970.00 Weather Service 05/11/95
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Frontier Communications 1671000.00 Long Distance/T-1/Cellular 08/06/97 10/31/97
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV WSI Corp. 1670130.00 Weather Services SWL & Subscription 04/01/94
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxx Xxxxxx & Assoc., Inc. 1670250.00 S.W.L. Program & Accounting Manager 06/09/94 07/01/97
Software
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Data Center Management, Inc. 1670750.00 Software License & Support 01/01/98
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV Columbine JDS Systems, Inc. 1670800.00 License - DP System 11/13/97 11/13/97
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV ABC Inc. Capital Cities 1670010.00 Affiliation Agreement 01/24/91 01/02/95
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV ABC Inc. Capital Cities 1670020.00 NewOne Service 07/08/88 09/14/88
------------------------------------------------------------------------------------------------------------------------------------
WOKR-TV ABC Television Network 1670030.00 Satellite Earth Station 07/31/87
------------------------------------------------------------------------------------------------------------------------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.3.1 (CONSENTS REQUIRED
--------------------------------
EMPLOYMENT AGREEMENT)
--------------------
---------------------------------------------------------------------------------------------------------------------------
DIVISION EMPLOYEE NAME TITLE CONTRACT EFFECTIVE EXPIRATION
DATE DATE DATE
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxx, Xxxxxx X. Anchor/Assoc. News Director 08/01/98 08/01/98 07/31/01
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxxxxx, Reporter/Anchor 12/30/96 01/01/97 12/31/98
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxx, Xxxxxxx Sports Anchor/Reporter 12/30/96 01/01/97 12/31/98
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Bilone, Xxxxxxx X. Staff Meteorologist 12/11/96 08/26/96 11/30/98
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxxx, Xxxxxxx Sports Director 06/29/98 07/01/98 06/30/01
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxx, Virginia Anchor/Reporter 06/01/94 06/01/94 12/31/98
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxxx, Xxxxxxx X. Anchor/Reporter 10/27/94 01/01/95 12/31/99
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxx, Xxxxx Staff Meteorologist 06/26/95 07/01/95 06/30/99
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxxxx, Xxxxx Anchor/Reporter 09/15/95 09/15/95 10/05/99
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV XxXxxxx, Xxxx Anchor/Reporter 12/08/94 12/08/94 08/31/98
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV X'Xxxxxx, Xxxxxxx News Producer 10/31/96 09/15/96 04/26/00
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxxx, Xxxxxxx Weathercaster/Chief Meteorologist 12/22/94 01/01/95 12/31/00
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxx, Xxxxxxxx Xxx Producer 11/03/97 12/01/97 11/30/99
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxx, Xxxxx News Director 12/17/96 10/14/96 10/13/98
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Simentkosky-Rocktasch Producer 10/21/97 10/27/97 10/26/99
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxx, Xxxxxx Producer 07/11/97 07/08/97 07/07/99
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxxx, Xxxxxx Sports Producer 03/22/94 03/22/94 12/31/98
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxx, Xxxxxxx Producer 11/13/97 01/01/98 12/31/99
---------------------------------------------------------------------------------------------------------------------------
WOKR-TV Xxxxxxxxxx, Xxxxx Reporter 11/06/97 12/10/97 12/09/99
---------------------------------------------------------------------------------------------------------------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.3.1 (CONSENTS REQUIRED
--------------------------
BARTER PROGRAMMING)
------------------
------------------------------------------ --------------------------------------- -------------------------------------------------
CONTRACT TERM
DISTRIBUTOR PACKAGE START END
------------------------------------------ --------------------------------------- -------------------------------------------------
Buena Vista Television Xxxx Xxx the Science Guy Sept. 1997 Sept. 2000
------------------------------------------ --------------------------------------- -------------------------------------------------
Hearst Entertainment, Inc. Popular Mechanics: For Kids Sept. 1997 Sept. 1999
------------------------------------------ --------------------------------------- -------------------------------------------------
New World/Genesis Access: Hollywood Sept. 1996 Sept. 1998
------------------------------------------ --------------------------------------- -------------------------------------------------
Paramount Hard Copy 98 Sept. 1998 Sept. 1999
------------------------------------------ --------------------------------------- -------------------------------------------------
Paramount Xxxxx Xxxxxx Sept. 1997 Sept. 1998
------------------------------------------ --------------------------------------- -------------------------------------------------
Paramount Wild Things Sept. 1997 Sept. 1998
------------------------------------------ --------------------------------------- -------------------------------------------------
Worldvision Enterprises Pictionary Sept. 1997 Sept. 1998
------------------------------------------ --------------------------------------- -------------------------------------------------
New York State Lottery Lottery Drawings May 1998 April 2001
------------------------------------------ --------------------------------------- -------------------------------------------------
Dr. Xxx Xxxxxx 60 Second Housecall - OPEN
News Insert
------------------------------------------ --------------------------------------- -------------------------------------------------
WRMM DJs Family Weekend - OPEN
News Insert
------------------------------------------ --------------------------------------- -------------------------------------------------
Xxxxxx Xxxxx Concepts, Inc. Assorted 1/2 hour programs June 1998 June 1999
a subsidiary of Grey Advertising
------------------------------------------ --------------------------------------- -------------------------------------------------
------------------------------------------- -----------------------------
WRITTEN
CONSENT
DISTRIBUTOR REQUIRED TO
ASSOGM
------------------------------------------ -----------------------------
Buena Vista Television YES
------------------------------------------ -----------------------------
Hearst Entertainment, Inc. YES
------------------------------------------ -----------------------------
New World/Genesis YES
------------------------------------------ -----------------------------
Paramount YES
------------------------------------------ -----------------------------
Paramount YES
------------------------------------------ -----------------------------
Paramount YES
------------------------------------------ -----------------------------
Worldvision Enterprises YES
------------------------------------------ -----------------------------
New York State Lottery YES
------------------------------------------ -----------------------------
Dr. Xxx Xxxxxx
------------------------------------------ -----------------------------
WRMM DJs NL
------------------------------------------ -----------------------------
Xxxxxx Xxxxx Concepts, Inc. YES
a subsidiary of Grey Advertising
------------------------------------------ -----------------------------
NL - No specific assignment language in agreement.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.5 (FINANCIAL STATEMENTS)
----------------------------------
3.5(a): None.
3.5(b) & (c):
1. The Unaudited Financial Statements as defined in the Gannett
Purchase Agreement (the "Gannett Unaudited Financial
Statements") do not include all financial statements (e.g.,
cash flow), financial elements (e.g., income taxes and net
income) or footnotes required under GAAP. Net Financial
Assets will not include any accruals for any severance for
employees terminated after the Closing. The Gannett
Unaudited Financial Statements were prepared on a pro forma
basis to reflect Gannett's expectations as to how certain
accounting matters related to the sales of Gannett and the
Maine Media Business would be handled, including without
limitation: estimates of how post-retirement liabilities
would be allocated between Newco (as defined in Section 3.7
of the Disclosure Schedule to the Gannett Purchase
Agreement) and Gannett; none of the prepaid pension cost
included in "other assets" in the corporate balance sheet
was allocated to Newco; certain long-term incentive plans
and supplemental retirement benefits were not reflected on
the balance sheet because it is anticipated that they will
be paid prior to Closing. Some monthly financial statements
may not include all accrued vacation benefits. The treatment
of downpayments on program rights as described in Section
9.1 is not consistent with prior periods or in accordance
with GAAP. The consolidated statement of operations is
intended to display EBITDA and EBIT rather than net income.
The Guy Gannett Broadcast Group balance sheet shows no
allocation or apportionment of the post-retirement liability
or of the prepaid pension (except that the June 30, 1998
balance sheet does show the post-retirement liability). As
described above, the Gannett Unaudited Financial Statements
are not in conformance with GAAP nor are they consistent
with prior periods.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.5 (FINANCIAL STATEMENTS)
----------------------------------
2. The Gannett Unaudited Financial Statements do not include any
assets or liabilities that may result from a settlement in the
future with ASCAP regarding the dispute with the TV Music
License Committee on new fees and the license agreement.
3.5(c):
3. There are certain liabilities related to the sale of Gannett
and its properties that are not recorded and have not been
incurred in the ordinary course including but not limited to
(a) fees for: attorneys, investment bankers, accountants,
consultants, etc.; (b) certain agreements with key employees
for severance, retention and closing benefits, and former
employees for supplemental retirement and deferred
compensation benefits.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.6 (TITLE TO ASSETS; RELATED MATTERS)
----------------------------------------------
3.6(i):
1. Gannett has possession of various assets owned by others,
including but not limited to personal items of employees and
officers. Gannett also has possession of records, but does
not have any ownership interest in, the following groups or
organizations: Guy P. Gannett Foundation, The Portland
Newspapers Xxxxx Xxxxxxx Fund; Xxx Xxxxxxx Employees Credit
Union; the Xxxx X. Xxxxxxx Trust and the Gannett Family
Forum.
2. The New York State Department of Transportation ("NYSDOT")
has taken, by eminent domain,: (1) a fee simple interest in
a 0.136 acre parcel located at 0000 Xxxx Xxxxxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxx, along the property fronting Xxxx
Xxxxxxxxx Road and crossing the driveway accessing that
property, and (2) a permanent easement for traffic control
devices on the driveway where the driveway meets Xxxx
Xxxxxxxxx Road. In return, NYSDOT has paid Gannett $12,400.
3. See Section 3.16 of the Disclosure Schedule for Intellectual
Property matters.
3.6(i) and (iii):
4. See Section 3.7 of the Disclosure Schedule for detail with
respect to sharing of certain assets between the broadcast
and Maine Media Business divisions pursuant to the terms of
an Amended and Restated Contribution Agreement dated August
14, 1998. In addition, upon consummation of the sale of the
Maine Media Business, Gannett will lose access to certain
expertise in areas such as marketing and research provided
by personnel of the Maine Media Business, and other
relationships with these divisions will be terminated.
3.6(iv): None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.6 (TITLE TO ASSETS; RELATED MATTERS)
----------------------------------------------
3.6(v): None.
3.6(vi): None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.7 (ABSENCE OF CERTAIN CHANGES, EVENTS AND CONDITIONS)
---------------------------------------------------------------
3.7(a):
1. The Contribution Agreement also provides that Gannett will
allocate the pension plan assets in its defined benefit plan
between Gannett and Newco as further described in the
Contribution Agreement. The assets and liabilities of the
Guy Gannett Retirement Plan that relate to employees of the
Maine Media Business shall be transferred, post-closing, to
a trust that will be established to hold assets of a new
plan to be established for the Maine Media Business
3.7(b): None.
2. Gannett has entered into a new employment agreement with Xxx
Xxxxxx. See Section 3.10.4 for date of agreement.
3. Gannett has agreed to accelerate at Closing WOKR-TV annual
management bonuses. If the Closing is before year end, the
portion of the payment relating to the period from the Closing
Date through the end of 1998 will be accounted for as a
prepaid expense.
4. Gannett has increased its Directors and Officers insurance
coverage (other than the employment practices coverage) to $5
million, and has increased its fiduciary insurance coverage to
$25 million prior to Closing.
3.7(c): None.
3.7(d): None
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.7 (ABSENCE OF CERTAIN CHANGES, EVENTS AND CONDITIONS)
---------------------------------------------------------------
3.7(e): Gannett may be below budget for 1998 by as much as $1,469,000
for all of the television stations other than WOKR-TV.
Assuming a cash flow reduction of $1,469,000, EBITDA for
fiscal year 1998 would be $12,700,000.
3.7(f): None.
3.7(g): None.
3.7(h): None.
3.7(i): None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.8 (LITIGATION)
------------------------
3.8(i):
1. An on-air reporter has threatened to xxx WOKR in connection
with her recent discharge for reasons relating to work
performance, insubordination and violations of station policy.
No suit has been filed to date. This matter is insured.
3.8(ii): None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.9 (INSURANCE)
-----------------------
See Section 3.9.1 of the Disclosure Schedule for a list of insurance
policies relating to Gannett as a whole.
3.9(i): None.
3.9(ii): None.
3.9(iii): None.
THE XXXXXXXX GROUP, INC.
PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SCHEDULE 3.9.1 (INSURANCE POLICIES)
-----------------------------------
--------------------------------- ---------------------------------- ---------------------- ----------------------
TYPE INSURER LIABILITY LIMIT POLICY PERIOD
--------------------------------- ---------------------------------- ---------------------- ----------------------
Package Commercial Union 19,491,552 05/01/98 - 05/01/99
--------------------------------- ---------------------------------- ---------------------- ----------------------
Comm'l. Gen'l. Liability Commercial Union 2,000,000 05/01/98 - 05/01/99
[incl. w/Package Policy]
--------------------------------- ---------------------------------- ---------------------- ----------------------
Communication Eqpt. Commercial Union 58,615,300 05/01/98 - 05/01/99
--------------------------------- ---------------------------------- ---------------------- ----------------------
Broadcasting Loss of Income Commercial Union 13,487,696 05/01/98 - 05/01/99
[incl. w/Comm. Eqpt. Policy]
--------------------------------- ---------------------------------- ---------------------- ----------------------
Automobile Commercial Union 1,000,000 05/01/98 - 05/01/99
--------------------------------- ---------------------------------- ---------------------- ----------------------
Energy Systems Federal Insurance Co. 25,000,000 05/01/98 - 05/01/99
--------------------------------- ---------------------------------- ---------------------- ----------------------
Libel/Slander Employers Reinsurance 15,000,000 10/09/97 - 10/09/98
--------------------------------- ---------------------------------- ---------------------- ----------------------
Umbrella Federal Insurance Co. 25,000,000 05/01/98 - 05/01/99
--------------------------------- ---------------------------------- ---------------------- ----------------------
Non-Owned Aircraft National Union Fire 20,000,000 10/24/97 - 10/24/98
--------------------------------- ---------------------------------- ---------------------- ----------------------
Crime Bond Federal Insurance Co. 1,000,000 05/01/98 - 05/01/99
--------------------------------- ---------------------------------- ---------------------- ----------------------
Fiduciary Responsibility Federal Insurance Co. 25,000,000 11/10/97 - 11/10/98
--------------------------------- ---------------------------------- ---------------------- ----------------------
Directors & Officers Federal Insurance Co. 5,000,000 02/06/98 - 02/06/99
Includes:
Outside Directors 5,000,000 02/06/98 - 02/06/99
Employment Practices 5,000,000 02/06/98 - 02/06/99
Liability
--------------------------------- ---------------------------------- ---------------------- ----------------------
Workers Compensation 100,000 12/31/97 - 12/31/98
Maine MEMIC
Illinois Iowa Commercial Union
Florida Commercial Union
Massachusetts Commercial Union
New York Commercial Union
--------------------------------- ---------------------------------- ---------------------- ----------------------
Travel/Accident Reliance Standard Life 10,000 10/01/97 - 10/01/98
--------------------------------- ---------------------------------- ---------------------- ----------------------
Foreign Policy CIGNA Ins. Co. 1,000,000 05/20/98 - 05/20/99
--------------------------------- ---------------------------------- ---------------------- ----------------------
Special (K&R) Aetna Life & Casualty 3,000,000 09/12/95 - 09/12/98
--------------------------------- ---------------------------------- ---------------------- ----------------------
Maine Turnpike Bond Travelers Casualty & Surety 5,000 09/16/97 - 09/16/98
--------------------------------- ---------------------------------- ---------------------- ----------------------
THE XXXXXXXX GROUP, INC.
PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10 (MATERIAL CONTRACTS)
---------------------------------
1. See Section 3.10.1 of the Disclosure Schedule for agreements or contracts
relating to the Station and providing for payments in excess of $50,000 per
year or $250,000 over the five-year period commencing on the date hereof.
Please note that detail on various insurance policies and employee benefit
plans insurance coverage has not been provided.
2. See Section 3.10.2 of the Disclosure Schedule for all time brokerage
agreements and affiliation agreements with television networks which relate
to the Station.
3. See Section 3.10.3 of the Disclosure Schedule for any license or contract
pursuant to which Gannett is authorized to broadcast film or taped
programming on the Station supplied by others in excess of $10,000 per year
or having a term of more than one year .
4. See Section 3.10.4 of the Disclosure Schedule for any employment agreement,
consulting agreement or similar contract relating to the Station and
providing for payments to any Person in excess of $50,000 per year or
$100,000 in the aggregate over the five-year period commencing on the date
hereof.
5. See Section 3.14 of the Disclosure Schedule for any retention or severance
agreement or contract relating to the Station and with respect to any
Person who is to be employed post-sale.
6. See Section 3.10.6 of the Disclosure Schedule for all collective bargaining
agreements or other union contracts relating to the Station.
THE XXXXXXXX GROUP, INC.
PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10 (MATERIAL CONTRACTS)
---------------------------------
7. See Section 3.10.7 of the Disclosure Schedule for (a) any lease of real
property or (b) any lease of equipment or license with respect to
Intellectual Property (other than licenses granted in connection with the
purchase of equipment or other assets) by Gannett to another party
providing for payments to any Person in excess of $25,000 per year or
$75,000 in the aggregate over the five-year period commencing on the date
hereof and relating to the Station.
8. See Section 3.10.8 of the Disclosure Schedule for any lease of equipment or
real property or license with respect to Intellectual Property (other than
licenses granted in connection with the purchase of equipment or other
assets) by Gannett to another party providing for payments to Gannett in
excess of $20,000 per year or $50,000 in the aggregate over the five-year
period commencing on the date hereof and which relate to the Station.
9. Any joint venture, partnership or similar agreement or contract. NONE.
10. See Section 3.10.10 for any agreement or contract under, with respect to
the Station, which Gannett has borrowed or loaned any money in excess of
$1,000,000 or issued or received any note, bond, indenture or other
evidence of indebtedness in excess of $1,000,000 or directly or indirectly
guaranteed indebtedness, liabilities or obligations of others in an amount
in excess of $1,000,000.
11. Any covenant not to compete or contract or agreement, understanding,
arrangement or any restriction whatsoever limiting in any respect the
ability of Gannett to compete in any line of business or with any Person in
the Station's DMA. NONE.
*Executed copies of certain contracts may not be available.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10.1 (MATERIAL CONTRACTS - BROADCASTING)
--------------------------------------------------
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
DIVISION DOCUMENT COMPANY NAME PURPOSE CONTRACT EFFECTIVE COPY
NUMBER DATE DATE IMPERFECTIONS
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
Corp. 100400.00 BMI Group Television Blanket 04/17/97 04/03/97
License
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
Corp. 100500.00 Xxxx & Seltel Master Representation Agreement 04/27/98 01/01/98 original
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
Corp. 100500.01 Xxxx & Seltel Interpretive Letter 08/17/98
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
Corp. 100500.02 Xxxx & Seltel Amendment to Master 08/28/98
Representation Letter
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
Corp. 109999.99 Employee Benefit Plans (See Section 3.14.3)
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
WOKR 1670080.00 X.X. Xxxxxxx Company Index Service 04/04/91 06/01/98 not fully executed
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
WOKR 1670140.00 Audience Research & News Consulting/Audience 01/01/98
Development C. Research
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
WOKR 1670260.00 ASCAP Music License 04/01/98 under negotiation
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
WOKR 1670770.00 Xxx Xxxxxx & Assoc. Inc. Customized Newspaper Production 04/17/96
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
WOKR 1671000.00 Frontier Communications Long Distance/T-1/Cellular 08/06/97 10/31/97
----------- -------------- -------------------------- -------------------------------- ---------- -------------- -------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10.2 (AFFILIATION AGREEMENT)
--------------------------------------
--------- ------------ ------------------------ ----------------------------- ---------- ---------------- -----------------------
DIVISION DOCUMENT COMPANY NAME PURPOSE CONTRACT EFFECTIVE COPY
NUMBER DATE DATE IMPERFECTIONS
--------- ------------ ------------------------ ----------------------------- ---------- ---------------- -----------------------
WOKR 1670010.00 ABC Inc. Capital Cities Affiliation Agreement 01/24/91 01/02/95
--------- ------------ ------------------------ ----------------------------- ---------- ----------------- -----------------------
WOKR 1670010.01 ABC Inc. Capital Cities Consent to Assignment to GGC 04/20/98 04/26/98
--------- ------------ ------------------------ ----------------------------- ---------- ----------------- -----------------------
WOKR 1670020.00 ABC Inc. Capital Cities NewOne Service 07/08/88 09/14/88
--------- ------------ ------------------------ ----------------------------- ---------- ----------------- -----------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10.4 (EMPLOYMENT AGREEMENTS)
--------------------------------------
---------- ------------------ ---------------------------------------- -------------- -----------------
DIVISION EMPLOYEE NAME TITLE CONTRACT DATE EFFECTIVE DATE
---------- ------------------ ---------------------------------------- -------------- -----------------
WOKR Xxxxxx, Xxxxxx X. Anchor/Assoc. News Director 08/01/98 08/01/98
---------- ------------------ ---------------------------------------- -------------- -----------------
WOKR Xxxxxxxx, Xxxxxxx Sports Director 06/29/98 07/01/98
---------- ------------------ ---------------------------------------- -------------- -----------------
WOKR Xxxxxx, Virginia Anchor/Reporter 06/01/94 06/01/94
---------- ------------------ ---------------------------------------- -------------- -----------------
WOKR Xxxxxxxx, Xxxxxxx Anchor/Reporter 10/27/94 01/01/95
---------- ------------------ ---------------------------------------- -------------- -----------------
WOKR Xxxxxxx, Xxxxx Staff Meteorologist/Weathercaster/Chief 06/26/95 07/01/95
---------- ------------------ ---------------------------------------- -------------- -----------------
WOKR Xxxxxxxx, Xxxxxxx Meteorologist 12/22/94 01/01/95
---------- ------------------ ---------------------------------------- -------------- -----------------
WOKR Xxxxxxx, Xxxxx News Director 12/17/96 10/14/96
---------- ------------------ ---------------------------------------- -------------- -----------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10.6 (COLLECTIVE BARGAINING AGREEMENT)
------------------------------------------------
DIVISION COLLECTIVE BARGAINING UNIT EFFECTIVE DATES
-------- -------------------------- ---------------
WOKR International Brotherhood of Teamsters Local #791 06/15/97 - 06/14/00
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10.7.A. (REAL PROPERTY LEASES)
----------------------------------------
--------- ---------------- --------------------- --------------------------- -------------- -------------- -----------------------
DIVISION DOCUMENT NUMBER COMPANY NAME PURPOSE CONTRACT DATE EFFECTIVE DATE COPY IMPERFECTIONS
--------- ---------------- --------------------- --------------------------- -------------- -------------- -----------------------
--------- ---------------- --------------------- --------------------------- -------------- -------------- -----------------------
--------- ---------------- --------------------- --------------------------- -------------- -------------- -----------------------
WOKR 1681100.00 Xxxxxxx ABR, Inc. Roof Lease 11/14/94 01/01/95
--------- ---------------- --------------------- --------------------------- -------------- -------------- -----------------------
WOKR 1681130.00 Intermedia Video Service/Tower Lease 03/26/98 03/26/98
(EMI Communications)
--------- ---------------- --------------------- --------------------------- -------------- -------------- -----------------------
See also Section 1.1(d) of the Disclosure Schedules.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10.7.B. (EQUIPMENT LEASES AND INTELLECTUAL PROPERTY)
--------------------------------------------------------------
--------- ---------------- ---------------------------- ---------------------------- ------------- -------------- ------------------
DIVISION DOCUMENT NUMBER COMPANY NAME PURPOSE CONTRACT DATE EFFECTIVE DATE COPY IMPERFECTIONS
--------- ---------------- ---------------------------- ---------------------------- ------------- -------------- ------------------
--------- ---------------- ---------------------------- ---------------------------- ------------- -------------- ------------------
--------- ---------------- ---------------------------- ---------------------------- ------------- -------------- ------------------
Corp. 100090.00 U.S. Fleet Leasing Master Lease Vehicle Leases 07/19/91
--------- ---------------- ---------------------------- ---------------------------- ------------- -------------- ------------------
WORK 1670800.00 Columbine JDS Systems, Inc. License - DP System 11/13/97 11/13/97
--------- ---------------- ---------------------------- ---------------------------- ------------- -------------- ------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10.8 (INCOME LEASES)
------------------------------
-------- --------------- ------------------------------- ------------------------ ---------------- -------------- ------------------
DIVISION DOCUMENT NUMBER COMPANY NAME PURPOSE CONTRACT DATE EFFECTIVE DATE COPY IMPERFECTIONS
-------- --------------- ------------------------------- ------------------------ ---------------- -------------- ------------------
-------- --------------- ------------------------------- ------------------------ ---------------- -------------- ------------------
-------- --------------- ------------------------------- ------------------------ ---------------- -------------- ------------------
WOKR 1681090.00 WXXI - Rochester Area Ed. TV Brighton Lane Lease 10/23/79 10/24/79
Assoc.
-------- --------------- ------------------------------- ------------------------ ---------------- -------------- ------------------
WOKR 1681090.01 WXXI - Rochester Area Ed. TV First Amendment of Lease 04/14/89
Assoc.
-------- --------------- ------------------------------- ------------------------ ---------------- -------------- ------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10.10 (LOAN AGREEMENT)
--------------------------------
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
DIVISION DOCUMENT NUMBER COMPANY NAME PURPOSE CONTRACT DATE EFFECTIVE DATE COPY IMPERFECTIONS
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
Corp. 100020.00 Northwestern Mutual Life Insurance Senior Notes N/A N/A N/A
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
Corp. 100021.00 UNUM Life Insurance Company Senior Notes N/A N/A N/A
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
Corp. 100022.00 Massachusetts Mutual Life Ins. Co. Senior Notes N/A N/A N/A
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
Corp. 100025.00 First National Bank of Boston (primary) Revolving Credit 08/18/81 08/18/81 N/A
Agreement
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
Corp. 100026.00 Bank of New York (participating) Revolving Credit 08/18/81 08/18/81 N/A
Agreement
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
Corp. 100027.00 Fleet Bank (participating) Revolving Credit 08/18/81 08/18/81 N/A
Agreement
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
Corp. 100028.00 Key Bank (participating) Revolving Credit 08/18/81 08/18/81 N/A
Agreement
-------- --------------- --------------------------------------- ------------------ ------------- -------------- -------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.10.3 (PROGRAM LICENSES)
------------------ --------------------------------- ------------------------- --------------------------
DISTRIBUTOR PACKAGE CONTRACT TERM WRITTEN CONSENT
START END REQUIRED TO ASSIGN
------------------ --------------------------------- ------------------------- --------------------------
Paramount Entertainment Tonight Sept. 1997 Aug. 1999 YES
Entertainment Tonight Amendment
letter dated 05/07/97
------------------ --------------------------------- ------------------------- --------------------------
Paramount Hard Copy Sept. 1997 Aug. 1998 YES
Hard Copy Amendment letter dated
08/06/96
------------------ --------------------------------- ------------------------- --------------------------
Paramount Xxxxxx Xxxxxxxx Sept. 1997 Aug. 1999 YES
Xxxxxx Xxxxxxxx Amendment letter
dated 10/15/97
------------------ --------------------------------- ------------------------- --------------------------
Warner Bros. Family Matters Sept. 1994 Feb. 1998 YES
------------------ --------------------------------- ------------------------- --------------------------
Warner Bros. Xxxxxx Xxxxx Sept. 1992 Feb. 1999 YES
Xxxxxx Xxxxx Extension(s)
------------------ --------------------------------- ------------------------- --------------------------
Warner Bros. Step By Step Sept. 1995 Feb. 2001 YES
------------------ --------------------------------- ------------------------- --------------------------
Warner Bros. Friends Sept. 1998 Feb. 2004 YES
------------------ --------------------------------- ------------------------- --------------------------
Warner Bros. Xxxxx Xxxxx Sept. 1997 Sept. 1998 YES
------------------ --------------------------------- ------------------------ ---------------------------
Studios USA Xxxxx Xxxxxx Sept. 1998 Sept. 2000 YES
------------------ --------------------------------- ------------------------- --------------------------
Columbia/Tristar Mad About You Jan. 1997 Sept. 2002 YES
Mad About You Extension(s)
------------------ --------------------------------- ------------------------- --------------------------
King World Xxxxxxxx (talk) Sept. 1998 Aug. 2000 YES
Xxxxxxxx (talk) - Extension(s)
------------------ --------------------------------- ------------------------- --------------------------
Viacom Xxxxxxxx Sept. 1993 Aug. 1998 YES
------------------ --------------------------------- ------------------------- --------------------------
WKBW-TV Buffalo Bills - Pre-season games Aug. 1998 Aug. 1998 NO
------------------ --------------------------------- ------------------------- --------------------------
CNN Newsource Headline News Schedule Feb. 1998 Jan. 2000 YES
------------------ --------------------------------- ------------------------- --------------------------
Columbia Movie Package July 1992 Aug. 2003 YES
------------------ --------------------------------- ------------------------- --------------------------
Columbia Movie Package July 1992 Dec. 2001 YES
------------------ --------------------------------- ------------------------- --------------------------
20th Television Movie Package Mar. 1994 Feb. 2004 YES
------------------ --------------------------------- ------------------------- --------------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.11 (PERMITS)
----------------------
PERMITS:
(i): None.
(ii): None.
(iii): None.
COMPLIANCE WITH LAW:
(i):
1. See Section 3.13 of the Disclosure Schedule concerning
environmental matters.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.12 (FCC)
------------------
3.12(i):
EXPIRATION
CALL SIGN TYPE -----------
--------- ---- DATE
----
WOKR-TV, Rochester, NY
---------------------- 06/0l/99
KR-9992 TV Pickup 06/0l/99
KR-7729 TV Pickup 06/01/99
KN-2237 TV Pickup 06/01/99
KP-2134 TV Pickup 06/01/99
WGI-226 TV Intercity Relay 06/01/99
WEF-58 TV STL 06/01/99
KGO-958 R/P Base Mobile System 06/01/99
KRG-613 R/P Base Mobile System 06/01/99
BLP-00293 Low Power Broadcast Auxiliary 06/01/99
E6537 Receive Only Earth Station 12/09/03
E860485 Receive Only Earth Station 05/16/06
KNBL-873 Weather Radar 02/13/01
ANTENNA STRUCTURE REGISTRATIONS
-------------------------- ---------------------- ---------------------------------------- ----------------------
MAIN STATION LOCATION TOWER OWNER REGISTRATION NO.
-------------------------- ---------------------- ---------------------------------------- ----------------------
-------------------------- ---------------------- ---------------------------------------- ----------------------
-------------------------- ---------------------- ---------------------------------------- ----------------------
WOKR-TV Rochester, NY Guy Gannett Communications 1011757
-------------------------- ---------------------- ---------------------------------------- ----------------------
3.12(ii): None.
3.12(iii): None.
3.12(iv): None.
3.12(v): None.
3.12(vi): None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.13 (ENVIRONMENTAL MATTERS)
-----------------------------------
WOKR-TV
-------
1. 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx. Various potential
environmental matters as described in the entire Phase I
Environmental Site Assessment-WOKR-TV Xxxxxx-0000 Xxxx Xxxxxxxxx
Xxxx, Xxxxxxxxx, Xxx Xxxx (Dames & Xxxxx, 5/28/98-ESA No. 20).
2. Pinnacle Hill-State Route 31), Brighton, New York. Various
potential environmental matters as described in the entire Phase
I Environmental Site Assessment- WOKR-TV Transmitter
Site-Pinnacle Hill ( Dames & Xxxxx, 5/28/98-ESA No. 21.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.14 (EMPLOYEE BENEFITS)
-------------------------------
1. Gannett has entered into certain agreements with key employees of the
Station for severance, retention and other closing benefits which include
new benefits, as well as acceleration of certain existing benefits.
Pursuant to these agreements, employees will be paid agreed amounts in lieu
of existing obligations under short-term incentive plans, individual TV
managers' long-term incentive plans, and Gannett's 1997-2000 Long-Term
Incentive Plan, thereby fixing and accelerating existing obligations. The
agreements also require payment of certain base retention bonuses and
severance payments for selected employees. See Section 3.14.1 of the
Disclosure Schedule for a list of division agreements (other than division
heads) and Section 3.14.2 of the Disclosure Schedule for a list of division
head agreements relating to employees of the Station.
2. Certain agreements with various retired employees may be accelerated upon
Closing: Xxxx XxXxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxxxx and Xxxxxxx Xxxxxxxxx.
3. Gannett has entered into several severance agreements in the normal course
of business which include periodic severance payments and payment of
medical and dental COBRA premiums.
4. Gannett has an arrangement to pay a former employee a monthly sum, until
May 1999, outside the terms of any supplemental retirement plan.
5. Gannett is in the process of amending certain summary plan descriptions for
its qualified plans and welfare benefit plans. Amendments to qualified
plans need to be written and filed prior to 12/31/99 to comply with Tax
Reform Act of 1997 and the Small Business Job Protection Act of 1996.
6. The Guy Gannett Voluntary Investment Plan (401(k)) has recently had several
small operational matters which have been corrected and documented
according to the provisions of the IRS self-correction program referred to
as "APRSC."
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.14 (EMPLOYEE BENEFITS)
-------------------------------
7. The Guy Gannett Voluntary Investment Plan is currently involved in a random
5500 audit by the IRS for the 1995 plan year. The results of that audit
cannot be predicted at this time.
8. Gannett has agreed, under the terms of a severance agreement with one
former employee, to pay to him 75% of an individual medical insurance
premium until March 2003.
9. See Section 3.14.3 for list of employee benefit plans, Section 3.10.4 for
list of material employment, consulting and similar agreements, Section
3.10.6 for collective bargaining agreements and Section 3.14.1, 3.14.2 and
3.3 for agreements providing for payments upon a change of control.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.14.1 (NON-CORPORATE EMPLOYEES (OTHER THAN DIVISION HEADS))
--------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
DATE OF
DIVISION PERSON AGREEMENT RETENTION SEVERANCE COMMENTS
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxxx Xxxxxx 04/28/98 X X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxx Xxxxxxxx 04/28/98 X X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxxx Xxxxx 04/28/98 X X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxxxx Xxxxx 05/18/98 X X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxxx Xxxxxxx 04/28/98 X X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxx Xxxxxxxx 04/29/98 X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxx Xxx 04/29/98 X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxxx Xxxxxx 04/29/98 X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxxx Xxxxxx 04/29/98 X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxxx Xxxxxx 04/29/98 X
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxxxxxxx Xxxxx 04/29/98 X
-----------------------------------------------------------------------------------------------------------------------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.14.2 (SEVERANCE AND RETENTION AGREEMENTS - DIVISION HEADS)
-------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
DATE OF
DIVISION PERSON AGREEMENT RETENTION SEVERANCE COMMENTS
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
WOKR Xxxx Xxxxxxx 06/19/98 X X
-----------------------------------------------------------------------------------------------------------------------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.14.3 (EMPLOYEE BENEFIT PLANS/CONTRACTS)
------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
PLAN TYPE FUNDING CONTRACT TYPE ERISA PLAN YEAR RENEWAL DATE
-----------------------------------------------------------------------------------------------------------------------------------
WOKR - TV Partners 401(k) Profit Sharing 401(k) trust Jan. 1 - Dec. 31
-----------------------------------------------------------------------------------------------------------------------------------
and Savings Plan - Plan #
-----------------------------------------------------------------------------------------------------------------------------------
Chase Bank full service plan
-----------------------------------------------------------------------------------------------------------------------------------
administration
-----------------------------------------------------------------------------------------------------------------------------------
WOKR - TV Benefits Plan (#502) welfare Jan. 1 - Dec. 31
-----------------------------------------------------------------------------------------------------------------------------------
Fingerlakes BlueCross BlueShield insurance medical and dental Jan. 1
-----------------------------------------------------------------------------------------------------------------------------------
Preferred Care insurance medical Jan. 1
-----------------------------------------------------------------------------------------------------------------------------------
Sun Life insurance life/ad&d and LTD Jul. 1
-----------------------------------------------------------------------------------------------------------------------------------
Zurich insurance STD (New York DBL) Jan. 1
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
WOKR - TV Pretax Premium Plan (#504) Section 125 Plan Jan. 1 - Dec. 31
-----------------------------------------------------------------------------------------------------------------------------------
Empire Professional Services TPA FSA administration Jan. 1
-----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
WORKERS COMPENSATION - WOKR
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
CARRIER FUNDING COVERED
PROPERTIES
------------------------------------------------------------------------------------------------------------------------------------
Commercial Union Insured KGAN (IA)
------------------------------------------------------------------------------------------------------------------------------------
WICS, WICD (IL)
-----------------------------------------------------------------------------------------------------------------------------------
WGGB (MA)
------------------------------------------------------------------------------------------------------------------------------------
WTWC (FL)
------------------------------------------------------------------------------------------------------------------------------------
WOKR (NY)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.15 (LABOR RELATIONS)
-----------------------------
See Section 3.10.6 for list of labor organizations representing employees.
3.15(i): None.
3.15(ii): None.
3.15(iii): None.
3.15(iv): None.
3.15(v) None.
3.15(vi) None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.16 (INTELLECTUAL PROPERTY)
-----------------------------------
See Section 3.16.1 for a list of call letters for the Station.
3.16(i): None.
3.16(ii):
1. The tradename for "Newssource 13" used by WOKR has not yet been
transferred of record in the U.S. Patent & Trademark Office.
3.16(iii): None.
3.16(iv): None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.16.1 (CALL LETTERS)
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WOKR - TV Rochester, New York
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.17 (TAXES)
-------------------
None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 3.19 (AFFILIATE TRANSACTIONS)
------------------------------------
See Section 3.7 of the Disclosure Schedule concerning the Contribution
Agreement with respect to Gannett's transfer of the Maine Media Business to
Newco.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 4.3 (ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS)
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None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 4.4 (LITIGATION)
-----------------------
None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 5.1 (COVENANTS AND AGREEMENTS)
-------------------------------------
5.1(a)(i): None.
5.1(a)(ii):
1. Gannett has the right, under a contract with KOZ inc, to
provide on-line community publishing services in all of its TV
markets. Gannett (as part of Maine Media Business) presently
provides this service only in Maine.
2. Some combined activities between and among Gannett and Newco
may be suspended at or after the date of the sale of the Maine
Media Business.
3. Gannett will modify the Guy Gannett Group Life and Health Plan
(#501) to vest those Business Employees and Corporate Office
Employees (1) who are currently retired and covered by the
plan ("Current Retirees") and (2) who are currently employed
and who meet the age and service requirements for
post-retirement coverage as of the Closing Date ("Qualified
Employees", with the Current Retirees and Qualified Employees
sometimes collectively referred to as "Retirees") in
post-retirement benefits substantially equivalent to those
offered by the plan as of the Closing Date. The Corporate
Office Employees eligible or deemed to be eligible for these
post-retirement benefits are listed on Schedule 5.1.1 and the
Business Employees eligible for these post-retirement benefits
are listed on Schedule 5.1.2.
The percentage of premium paid by Current Retirees will remain
the same as the percentage that they pay as of the Closing
Date. Current Retirees and Qualified Employees shall pay 100%
of the premium for post-retirement medical coverage and
Gannett shall pay 100% of the life insurance premium for such
Current Retirees and Qualified Employees.
Subject to the provisions of the existing plans concerning
premium sharing, the cost of such insurance coverages will be
deemed to be the same as the cost for active employees for so
long as the same benefit options are available to both active
employees and Retirees. At any time
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 5.1 (COVENANTS AND AGREEMENTS)
-------------------------------------
that active employees and Retirees are not covered by the same
health plan options, the cost to Retirees will be deemed to be
the community rate for the same or similar coverage as
determined by the insurance provider covering the largest
number of lives in the State of Maine. The Group Companion
Plan coverage will at all times be based upon the current
coverage option and at rates determined from time to time by
Blue Cross Blue Shield of Maine or its successor and approved
by the State of Maine, although the actual insurance carrier
may change.
See Section 3.7 of the Disclosure Schedule concerning
allocation of pension plan assets in Gannett's defined benefit
plan between Gannett and Newco, and the transfer of certain
plan assets related to the Maine Media Business to Newco's
plan.
4. Under a contract with Cigna (G-R200), Cigna provides
guaranteed payments to retirees under the Guy Gannett
Retirement Plan with respect to benefits accrued until
January, 1970. Gannett plans to cause the Cigna contract to be
modified to provide for the transfer to the New Pension Plan
that portion of the guaranteed payments that relate to current
and former Business Employees.
5.1(a)(iii): None.
5. Gannett plans to donate certain items relating to the Gannett
family to non-profit organizations.
6. See Section 3.7 of the Disclosure Schedule for a description
of the contribution of the Maine Media Business to Newco, and
the related agreement concerning certain shared assets, which
Gannett expects to enter into prior to Closing.
5.1(a)(iv):
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 5.1 (COVENANTS AND AGREEMENTS)
-------------------------------------
7. Trustees under the Guy Gannett Retirement Plan and the
Voluntary Investment Plan and Trusts will resign and will be
replaced by an institutional trustee.
8. Gannett expects to grant a premium holiday, and/or provide
employees a lump sum refund relating to prior year overpayment
of health care premiums.
5.1(a)(v): None.
5.1(a)(vi): None.
5.1(a)(vii): None.
5.1(a)(viii):No consent of the Purchaser will be required for modification,
change, renewal or extension of the following Material
Contracts, on terms consistent with past practices of the
Business:
o New Personal Service Contract with Xxx Bilone (WOKR)
5.1(a)(ix): None.
5.1(a)(x): None.
5.1(a)(xi): None.
5.1(a)(xii): None.
5.1(a)(xiii): None.
5.1(a)(xiv): None.
5.1(a)(xv): None.
5.1(a)(xvi): None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 5.2 (POST-CLOSING COVENANTS AND AGREEMENTS)
--------------------------------------------------
5.2(a): Employee Benefit Plans, books and records to be available for
inspection without limit as to time relate to:
o Guy Gannett Retirement Plan and Trust
o WOKR-TV 401(k) Profit Sharing and Savings Plan
5.2(b): Corporate Office Employees are those individuals listed on
Section 5.2.1 of the Disclosure Schedule or any persons who,
at or prior to Closing, have replaced any of the listed
individuals in their positions.
5.2(d): See Section 5.2.3 of the Disclosure Schedule.
5.2(e): Bargaining agreement between Guy Gannett Communications (the
"Company") and the Teamsters Local Union #791, affiliated with
the International Brotherhood of Teamsters (the "Union").
5.2(f): Xxx Xxxxxx (WOKR) has a supplemental retirement plan. The
accrued liability therefor will be included in the Net
Financial Assets calculation.
5.2(i) See Section 5.2.2 of the Disclosure Schedule.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 5.2.1 - LIST OF NAMES OF CURRENT CORPORATE OFFICE EMPLOYEES
-------------------------------------------------------------------
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NAME TITLE
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Xxxxx, Xxxxx Assistant to the CEO
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Xxxxxxx, Xxxx Corporate Accounting Manager
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Xxxxxx, XxXxx Accounting Assistant (Corporate Payroll)
--------------------------------------------------------------------------------------
Xxxxx, Xxxxx CFO
--------------------------------------------------------------------------------------
Xxxxxx, Xxxx VP Human Resources
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Xxxx, Xxxxxxx VP Television
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Xxxx, Xxxxxxx Corporate Accounting Manager
--------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx Receptionist
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Xxxxxxxx, Xxxxx VP Planning and Development
--------------------------------------------------------------------------------------
Xxxxx, Xxxxxxx Benefits Director
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Xxxxxx, Xxxxxxxxx Chairman of the Board
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Xxxxxx, Xxxxx Benefits Assistant
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Xxxxxxxx, Xxxxxxxx Assistant to CFO
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Xxxxxxx, Xxxx Vice President
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Xxxx, Xxxxxx Assistant to VP Television/VP Planning and Development
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Xxxxxx, Xxxxxxx Corporate Accountant
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Xxxxx, Xxxxxxx Director of Labor Relations
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Xxxxx, Xxxxx Assistant to VP Human Resources/Director of Labor
Relations/Communications Director
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Xxx, Xxxxx Assistant to CTO (resigned 09/04/98)
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Xxxxxxx, Xxxxxxx Benefits Manager
--------------------------------------------------------------------------------------
Normantas, Vitas Directors of Health and Safety
--------------------------------------------------------------------------------------
X'Xxxxx, Xxxxxx Communications Director
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Xxxx, Xxxxxxx Benefits Assistant
--------------------------------------------------------------------------------------
Xxxxxxx, Xxxx Corporate Controller
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Xxxxxxxx, Xxxxxxx Assistant to Heath and Safety Director
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Xxxxxxx, Xxxxx CEO
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THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 6.4 (MATERIAL CONSENTS REQUIRED AS A CONDITION
------------------------------------------------------
OF THE PURCHASER'S OBLIGATION TO CLOSE)
--------------------------------------
1. The Affiliation Agreements listed on Section 3.10.1 of the Disclosure
Schedule.
2. Obtaining of the following consent will not be a condition of Closing
if Gannett has obtained, prior to Closing, alternatives reasonably
acceptable to Purchaser and on terms not materially adverse to
Purchaser as reasonably determined by Purchaser:
A. Intermedia (EMI Communications) dated 03/26/98 for video
service/tower lease for WOKR.
None of the leases described in this Section 3 are for main studio, main
tower or main transmission sites.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 7.4 (MATERIAL CONSENTS REQUIRED AS A CONDITION
------------------------------------------------------
OF SELLER'S OBLIGATION TO CLOSE)
-------------------------------
None.
THE XXXXXXXX GROUP, INC.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
SECTION 9
---------
(CLOSING STATEMENT DIFFERENCES AND INCONSISTENCIES WITH GAAP)
-----------------------------------------------------------
1. The Closing Statement may not include any assets or liabilities that
may result from a settlement in the future with ASCAP regarding the
dispute with the TV Music License Committee on new fees and the
license agreement.
2. The Closing Statement will not be in accordance with GAAP and/or be
consistent with the basis used in preparing the Gannett Unaudited
Financial Statements as of, and for the year ended, December 27, 1997
in the following ways.
(a) The Closing Statement will not include any financial statements
or footnotes required under GAAP.
(b) The Closing Statement will not include any accruals for severance
for employees terminated after the Closing.
(c) See Section 3.5 of the Disclosure Schedule of the Gannett
Purchase Agreement for other non-conformities with GAAP and
inconsistencies with prior practices.
