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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
SMITH ACQUISITION COMPANY,
SMITH ACQUISITION LICENSE COMPANY
AND
COX BROADCASTING, INC.
FOR
TELEVISION STATION WTOV-TV
STEUBENVILLE, OHIO
* * *
JULY 6, 2000
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TABLE OF CONTENTS
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SECTION 1 DEFINITIONS.................................................................................. 1
SECTION 2 PURCHASE AND SALE OF ASSETS.................................................................. 4
2.1 Agreement to Sell and Buy.................................................................... 4
2.2 Excluded Assets.............................................................................. 4
2.3 Purchase Price and Escrow.................................................................... 5
2.4 Payment of Purchase Price.................................................................... 7
2.5 Assumption of Liabilities and Obligations.................................................... 7
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER..................................................... 8
3.1 Organization, Standing and Authority......................................................... 8
3.2 Authorization and Binding Obligation......................................................... 8
3.3 Absence of Conflicting Agreements............................................................ 8
3.4 Governmental Licenses........................................................................ 9
3.5 Title to and Condition of Real Property...................................................... 9
3.6 Title to and Condition of Tangible Personal Property......................................... 10
3.7 Contracts.................................................................................... 10
3.8 Consents..................................................................................... 11
3.9 Intangibles.................................................................................. 11
3.10 Insurance.................................................................................... 11
3.11 Reports...................................................................................... 11
3.12 Employee Plans and Matters................................................................... 11
3.13 Taxes........................................................................................ 13
3.14 Claims and Legal Actions..................................................................... 13
3.15 Environmental Matters........................................................................ 13
3.16 Compliance with Laws......................................................................... 15
3.17 Conduct of Business in Ordinary Course....................................................... 15
3.18 Financial Statements......................................................................... 15
3.19 Transactions with Affiliates................................................................. 16
3.20 Broker....................................................................................... 16
3.21 Labor Relations.............................................................................. 16
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER...................................................... 16
4.1 Organization, Standing and Authority......................................................... 16
4.2 Authorization and Binding Obligation......................................................... 17
4.3 Absence of Conflicting Agreements............................................................ 17
4.4 Broker....................................................................................... 17
4.5 Buyer's Qualifications....................................................................... 17
4.6 Interpretation of Certain Provisions......................................................... 17
4.7 No Outside Reliance.......................................................................... 17
4.8 Availability of Funds........................................................................ 17
SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING................................................... 17
5.1 Generally.................................................................................... 18
5.2 Compensation................................................................................. 18
5.3 Contracts.................................................................................... 18
5.4 Disposition of Assets........................................................................ 18
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5.5 Encumbrances................................................................................. 18
5.6 Licenses..................................................................................... 18
5.7 Rights....................................................................................... 18
5.8 No Inconsistent Action....................................................................... 19
5.9 Access to Information........................................................................ 19
5.10 Maintenance of Assets........................................................................ 19
5.11 Insurance.................................................................................... 19
5.12 Consents..................................................................................... 19
5.13 Books and Records............................................................................ 19
5.14 Notification................................................................................. 20
5.15 Financial Information........................................................................ 20
5.16 Compliance with Laws......................................................................... 20
5.17 Programming.................................................................................. 20
5.18 Capital Expenditures......................................................................... 20
5.19 Collection of Accounts Receivable............................................................ 20
5.20 Operation During Term of TBA................................................................. 20
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS............................................................. 20
6.1 FCC Consent.................................................................................. 20
6.2 Control of the Station....................................................................... 21
6.3 Risk of Loss................................................................................. 21
6.4 Confidentiality.............................................................................. 21
6.5 Cooperation.................................................................................. 21
6.6 Bulk Sales Law............................................................................... 22
6.7 Sales Tax Filing............................................................................. 22
6.8 Access to Books and Records.................................................................. 22
6.9 Appraisal.................................................................................... 22
6.10 HSR Act Filing............................................................................... 22
6.11 Collection of Accounts Receivable............................................................ 22
6.12 Nonsolicitation Agreement.................................................................... 23
6.13 Title Insurance and Surveys.................................................................. 23
6.14 Employee Matters............................................................................. 24
6.15 Time Brokerage Agreement..................................................................... 26
6.16 Insurance.................................................................................... 26
6.17 No Inconsistent Action by Buyer.............................................................. 27
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING..................................... 27
7.1 Conditions to Obligations of Buyer........................................................... 27
7.2 Conditions to Obligations of Seller.......................................................... 28
SECTION 8 CLOSING AND CLOSING DELIVERIES............................................................... 28
8.1 TBA and Closing.............................................................................. 28
8.2 Deliveries by Seller......................................................................... 29
8.3 Deliveries by Buyer.......................................................................... 30
SECTION 9 TERMINATION.................................................................................. 30
9.1 Termination by Seller........................................................................ 30
9.2 Termination by Buyer......................................................................... 31
9.3 Rights on Termination........................................................................ 31
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SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN REMEDIES.................32
10.1 Representations and Warranties............................................................... 32
10.2 Indemnification by Seller.................................................................... 32
10.3 Indemnification by Buyer..................................................................... 33
10.4 Procedure for Indemnification................................................................ 33
10.5 Specific Performance......................................................................... 34
10.6 Attorneys' Fees...............................................................................35
10.7 Limitations on Indemnification............................................................... 35
10.8 Assignment of Indemnification and Other Rights............................................... 35
SECTION 11 MISCELLANEOUS................................................................................ 35
11.1 Fees and Expenses............................................................................ 36
11.2 Notices...................................................................................... 36
11.3 Benefit and Binding Effect................................................................... 37
11.4 Further Assurances........................................................................... 37
11.5 Governing Law................................................................................ 37
11.6 Headings..................................................................................... 37
11.7 Gender and Number............................................................................ 37
11.8 Entire Agreement............................................................................. 37
11.9 Waiver of Compliance; Consents............................................................... 38
11.10 Press Release................................................................................ 38
11.11 Counterparts................................................................................. 38
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EXHIBITS
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Exhibit A Time Brokerage Agreement
Exhibit B - Indemnification Escrow Agreement
Exhibit C Deed
Exhibit D Form of Legal Opinion
LIST OF SCHEDULES
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.5 - Real Property
Schedule 3.6 - Tangible Personal Property
Schedule 3.7 - Contracts
Schedule 3.9 - Intangibles
Schedule 3.10 - Insurance
Schedule 3.12 - Employee Matters
Schedule 3.14 - Claims and Legal Actions
Schedule 3.15 - Environmental Matters
Schedule 3.17(b) Conduct of Business in Ordinary Course
Schedule 3.18 Financial Statements
Schedule 3.19 - Transactions with Affiliates
Schedule 3.21 - Labor Relations
Schedule 5.10 - Maintenance of Assets
Schedule 7.1(c) Seller's Required Consents
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of the
6th day of July, 2000, by and among Smith Acquisition Company, a Delaware
corporation ("SAC"); its subsidiary, Smith Acquisition License Company, a
Delaware corporation (collectively with SAC, the "Seller"); and Cox
Broadcasting, Inc., a Delaware corporation (the "Buyer").
RECITALS
A. Seller is the licensee of and owns and operates television
station WTOV-TV, Steubenville, Ohio (the "Station"), pursuant to licenses
issued by the Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer desires to buy,
substantially all of the assets used or held for use in the business or
operations of the Station, for the price and on the terms and conditions set
forth in this Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have
the meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment
for (i) the sale of advertising time run on the Station by Seller prior to the
TBA Date, (ii) the rent of tower space prior to the TBA Date, (iii)
compensation payable by NBC to Seller for the period prior to the TBA Date and
(iv) production work performed by Seller prior to the TBA Date.
"Assets" means the assets to be sold, transferred, or
otherwise conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts which are in
effect on the date of this Agreement and (ii) any Contracts entered into by
Seller between the date of this Agreement and the TBA Date in compliance with
the provisions of Section 5.3 hereof or that Buyer agrees in writing to assume.
"Closing" means the consummation of the purchase and sale of
the Assets pursuant to this Agreement in accordance with the provisions of
Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
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"Consents" means the consents, permits, or approvals of
government authorities and other third parties necessary to transfer the Assets
to Buyer or otherwise to consummate the transactions contemplated by this
Agreement.
"Contracts" means all contracts, leases, non-governmental
licenses, and other agreements (including leases for personal or real property,
employment agreements, talent contracts, collective bargaining agreements,
union contracts, network affiliation agreements and national advertising
representation agreements), written or oral (including any amendments and other
modifications thereto), to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the TBA Date.
"Encumbrances" has the meaning set forth in Section 2.1.
"Escrow Agreement" has the meaning set forth in Section
2.3(b).
"FCC Consent" means action by the FCC granting its consent to
the assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller
in connection with the business or operations of the Station.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Indemnification Escrow Agreement" has the meaning set forth
in Section 2.4(a).
"Intangibles" means all copyrights, trademarks, trade names,
service marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
held for use in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"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.
"Licenses" means all licenses, permits, and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental
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authorities to Seller in connection with the conduct of the business or
operations of the Station, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Material Adverse Effect" means a material adverse effect on
the business, assets or financial condition of the Station and WJAC taken as a
whole (except for any material adverse effect primarily attributable to (a)
general economic factors affecting the television industry, (b) general,
national, regional or local economic or financial conditions, or (c) new
governmental or legislative laws, rules or regulations).
"Permitted Encumbrances" means (a) liens for taxes not yet
due and payable; (b) landlord's liens and liens for property taxes not
delinquent; (c) statutory liens that were created in the ordinary course of
business and which are not delinquent; (d) liens or security interests securing
conditional sale, rental or purchase money obligations which relate to the
Contracts disclosed on Schedule 3.7 hereto, but only in the property which is
the subject of such obligations; (e) restrictions or rights granted to
governmental authorities under applicable law to the extent not arising
pursuant to any defaults thereunder; (f) zoning, building, or similar
restrictions relating to or affecting property which do not arise in connection
with a violation of applicable law; (g) all matters of record disclosed on
Schedule 3.5; and (h) Encumbrances on the Real Property that do not materially
affect the current use and enjoyment thereof in the operation of the Assets or
the value of such Real Property.
"Purchase Price" means the purchase price specified in
Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or held for use in the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Tangible Personal Property" means all machinery, equipment,
tools, vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
held for use in the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Tax" means any federal, state, local or foreign income,
gross receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, capital, transfer, employment, withholding or other
tax or governmental assessment, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties.
"TBA" means that certain Time Brokerage Agreement with
respect to the Station, executed by Buyer and Seller, in substantially the form
attached hereto as Exhibit A.
"TBA Date" means the date on which the transactions
contemplated by the TBA commence.
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"To Seller's knowledge" means the actual knowledge of Sandy
DiPasquale, David A. Fitz, Tim McCoy, the Station's General Manager, Leonard
Smith, the Station's Chief Engineer, and Michael Cunningham, the Station's
Business Manager.
"WJAC" means television station WJAC(TV), Johnstown,
Pennsylvania.
"WJAC Agreement" shall mean that certain Stock Purchase
Agreement by and among WJAC Seller, WJAC, Incorporated and Buyer, dated as of
the date hereof.
"WJAC Seller" means STC Broadcasting, Inc., a Delaware
corporation.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1. Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
deliver and assign to Buyer on the Closing Date, and Buyer agrees to purchase
and accept from Seller all of Seller's right, title and interest in and to the
tangible and intangible assets used or held for use in connection with the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date, but
excluding the assets described in Section 2.2, free and clear of any security
interests, mortgages, liens, pledges, or encumbrances of any nature whatsoever
(collectively, "Encumbrances"), except for Permitted Encumbrances, including
the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Seller
relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station; and
(g) All choses in action of Seller relating to the
Assumed Liabilities; and
(h) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station.
2.2. Excluded Assets. The Assets shall exclude the following
assets:
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(a) Seller's cash on hand as of the Closing and all
other cash in any of Seller's bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) Accounts Receivable;
(c) All books and records that Seller is required by law
to retain and that pertain to Seller's corporate organization;
(d) Any pension, profit-sharing, or other employee
benefit plans;
(e) All insurance contracts of STC Broadcasting, Inc.,
Seller, and their affiliates;
(f) All rights to the name "STC", "STC Broadcasting" or
"Sunrise Television" and any logo or variation thereof and the goodwill
associated therewith;
(g) Any and all claims of Seller with respect to any
refunds for Taxes relating to the period prior to the TBA Date;
(h) All deposits and prepaid expenses of the Station and
Seller as of the TBA Date; provided, however, that such deposits and prepaid
expenses shall be included in the Assets conveyed pursuant hereto to the extent
that Seller receives a credit therefor in the calculation of the Purchase Price
pursuant to Section 2.3(c); and
(i) All property disposed of or consumed in the ordinary
course of business as permitted by this Agreement.
2.3. Purchase Price and Escrow.
(a) Purchase Price. The Purchase Price for the Assets
shall be Fifty-Eight Million Dollars ($58,000,000), adjusted and paid as
provided below.
(b) Escrow Agreement. Concurrently with the execution of
this Agreement the parties and WJAC Seller shall enter into an Escrow Agreement
pursuant to which Buyer shall deposit the amount of Seven Million Dollars
($7,000,000) (the "Escrow Deposit") as earnest money to secure Buyer's
performance of its obligations hereunder and under the WJAC Agreement. At the
Closing, the parties and WJAC Seller shall instruct the Escrow Agent named in
the Escrow Agreement to transfer the Escrow Deposit (plus any income earned
thereon) to Buyer.
(c) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of revenues and expenses. All
revenues and expenses arising from the operation of the Station, including
business and license fees, utility charges, real and personal property taxes
and assessments levied against the Assets, property and equipment rentals,
applicable copyright or other fees, sales and service charges, taxes (except
both Seller and Buyer shall be equally responsible for all state and local
sales or transfer taxes arising from the transfer
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of the Assets to Buyer under this Agreement), FCC annual regulatory fees,
accrued vacation leave for Hired Employees and similar prepaid and deferred
items, shall be prorated between Buyer and Seller in accordance with the
principle that Seller receives all revenues and all refunds to Seller and
deposits of Seller held by third parties, and shall be responsible for all
expenses, costs, and liabilities, allocable to the period prior to the TBA
Date, and Buyer shall receive all revenues and be responsible for all expenses,
costs, and obligations allocable to the period on and after the TBA Date.
Notwithstanding the preceding sentence, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts not included
in the Assumed Contracts and any other obligation or liability not being
assumed by Buyer in accordance with Section 2.5. Accounts Receivable shall not
be prorated hereunder but shall be collected by Buyer and remitted to Seller as
provided for in Section 6.11. Seller does not accrue sick leave and no
adjustment will be made for any accrued sick leave in the prorations.
(d) Manner of Determining Adjustments. The Purchase
Price, taking into account the Escrow Deposit and the adjustments and
prorations pursuant to Section 2.3(c), will be determined finally in accordance
with the following procedures:
(i) Not later than five (5) days before the TBA
Date, (A) Seller shall prepare and deliver to Buyer a preliminary statement
which shall set forth Seller's good faith estimate of the prorations for the
Station as of the TBA Date (the "Prorations Statement"). The Prorations
Statement (A) shall contain all information reasonably necessary to determine
the adjustments to the Purchase Price under Section 2.3(c), to the extent such
adjustments can be determined or estimated as of the date of such statement,
and such other information as may be reasonably requested by Buyer, and (B)
shall be certified by Seller as Seller's good faith estimate.
(ii) Not later than sixty (60) days after the
TBA Date, Buyer will deliver to Seller a statement setting forth Buyer's
determination of the Purchase Price, all information reasonably necessary to
determine the adjustments, and the calculation thereof pursuant to Section
2.3(c). If Seller disputes the amount of the Purchase Price determined by
Buyer, Seller shall deliver to Buyer within thirty (30) days after its receipt
of Buyer's statement a statement setting forth Seller's determination of the
amount of the Purchase Price. If Seller notifies Buyer of its acceptance of
Buyer's statement, or if Seller fails to deliver its statement within the
thirty (30) day period specified in the preceding sentence, Buyer's
determination of the Purchase Price shall be conclusive and binding on the
parties as of the last day of the thirty (30) day period. If Buyer fails to
deliver the statement setting forth Buyer's determination of the Purchase Price
within sixty (60) days after the TBA Date, Seller's Prorations Statement shall
be conclusive and binding on the parties.
(iii) Buyer and Seller shall use good faith
efforts to resolve any dispute involving the determination of the Purchase
Price. If the parties are unable to resolve the dispute within thirty (30) days
following the delivery of Seller's statement, Buyer and Seller shall jointly
designate an independent certified public accountant, who shall be
knowledgeable and experienced in the operation of television broadcasting
stations, and who has not performed services for Buyer or Seller or any of
their respective affiliates, to resolve the dispute. The accountant's
resolution of the dispute shall be final and binding on the parties, and a
judgment
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may be entered thereon in any court of competent jurisdiction. Any fees of this
accountant shall be split equally between Seller on the one hand and Buyer on
the other hand.
(iv) Amounts payable to the Station from the
United States Copyright Office or such arbitration panels as may be appointed
by the United States Copyright Office that relate to the period prior to the
Closing Date may not be determinable or paid within the period provided in this
Section 2.3 for final determination of adjustments. In that event,
notwithstanding the provisions of this Section 2.3, Buyer and Seller agree to
cooperate fully in future copyright filings and to allocate any future
copyright proceeds in accordance with Section 2.3 until such time as all such
proceeds with respect to the period prior to the TBA Date are paid.
2.4 Payment of Purchase Price.
(a) At the Closing, Buyer shall deliver an amount equal
to One Million Five Hundred Thousand Dollars ($1,500,000) (the "WTOV Indemnity
Escrow Amount") of the Purchase Price, as adjusted by the prorations adjustment
set forth in Section 2.3 (the "Adjusted Purchase Price") to the Indemnification
Escrow Agent by wire transfer of same-day funds pursuant to wire instructions
which shall be delivered by the Indemnification Escrow Agent to Buyer, at least
two (2) days prior to the Closing Date. The WTOV Indemnity Escrow Amount,
together with the WJAC Indemnity Escrow Amount of One Million Five Hundred
Thousand Dollars ($1,500,000) delivered pursuant to the WJAC Agreement
(collectively, the "Indemnity Escrow Amount") shall be held by the
Indemnification Escrow Agent in accordance with the terms and conditions of the
Indemnification Escrow Agreement to be entered into at the Closing in
substantially the form attached hereto as Exhibit B (the "Indemnification
Escrow Agreement").
(b) The Adjusted Purchase Price less the WTOV Indemnity
Escrow Amount shall be paid by Buyer to Seller at Closing by wire transfer of
same-day funds pursuant to wire instructions which shall be delivered by Seller
to Buyer at least two (2) days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations.
(a) As of the TBA Date, Buyer shall assume and undertake
to pay, discharge, and perform (i) all Liabilities with respect to employees of
the Station as contemplated by Section 6.14 including all obligations under all
employment agreements and union contracts and (ii) all Liabilities which Buyer
assumes or otherwise agrees to perform pursuant to the terms of the TBA.
(b) Upon the terms and subject to the conditions set
forth herein, at the Closing the Buyer shall assume and undertake to pay,
discharge and perform all of the Assumed Liabilities (as defined below).
(c) For all purposes of and under this Agreement, the
term "Assumed Liabilities" shall mean, refer to, and include all Liabilities of
Seller arising out of or relating to the Assets or the business or operation of
the Station (whether such Liabilities are incurred or
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arise prior to, on or after the Closing Date), including all Liabilities with
respect to the Licenses and the Assumed Contracts.
(d) Without limiting the generality of Section 2.5(b),
and notwithstanding any other provision hereof, the Buyer shall not assume any
of the following Liabilities of the Seller (collectively, the "Excluded
Liabilities"): (i) any Liabilities arising under long-term financing
agreements; (ii) any Liabilities of Seller under any employee pension,
retirement, health and welfare or other benefit plans; (iii) any Liability for
federal, state or local income Taxes of the Seller, its stockholders and any
other Person; (iv) any Liability for which Seller has received a credit
pursuant to Section 2.3(c), (v) any Liability relating to the employees of
Seller which is not assumed by Buyer pursuant to the terms of Section 6.14, and
(vi) any Liability with respect to any amounts owed or payable to STC
Broadcasting, Inc. or Seller or any affiliates of STC Broadcasting, Inc. or
Seller, including any shareholder, director or officer (who is not an employee
of the Station) of any such entities.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1. Organization, Standing and Authority. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. SAC is duly qualified to conduct business as a
foreign corporation under the laws of the State of Ohio. Seller has all
requisite power and authority (i) to own, lease, and use the Assets as now
owned, leased, and used; (ii) to conduct the business and operations of the
Station as now conducted; and (iii) to execute and deliver this Agreement and
the documents contemplated hereby and thereby, and to perform and comply with
all of the terms, covenants, and conditions to be performed and complied with by
Seller hereunder and thereunder. Seller is not a participant in any joint
venture or partnership with any other person or entity with respect to any part
of the operations of the Station or any of the Assets.
3.2. Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller have been duly authorized
by all necessary actions on the part of Seller and its shareholders. This
Agreement has been duly executed and delivered by Seller and constitutes the
legal, valid, and binding obligations of Seller, enforceable against it in
accordance with its terms except as the enforceability of this Agreement may be
affected by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
3.3. Absence of Conflicting Agreements. Subject to
obtaining the FCC Consent, the Consents listed on Schedule 3.3, and making any
filing required under the HSR Act, the execution, delivery, and performance of
this Agreement and the documents contemplated hereby and thereby (with or
without the giving of notice, the lapse of time, or both): (i) do not require
the consent of any third party; (ii) will not conflict with any provision of the
organizational documents of Seller; (iii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; (iv) will not conflict with, constitute grounds for termination
of, result in a breach of, constitute a default under, or
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accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Seller is a party or
by which Seller may be bound; and (v) will not create any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon any of the Assets, except for Permitted Encumbrances.
3.4. Governmental Licenses. Schedule 3.4 includes a true
and complete list of all material Licenses including all FCC Licenses. Seller
has made available to Buyer true and complete copies of the Licenses listed on
Schedule 3.4 (including any amendments and other modifications thereto). The FCC
Licenses have been validly issued, and Smith Acquisition License Company is the
authorized legal holder thereof. The Licenses listed on Schedule 3.4 comprise
all of the material licenses, permits, and other authorizations required from
any governmental or regulatory authority for the lawful conduct of the business
and operations of the Station in the manner and to the full extent they are now
conducted, and none of the Licenses is subject to any restriction or condition
that would limit the full operation of the Station as now operated. The Licenses
are in full force and effect, and the conduct of the business and operations of
the Station is in accordance therewith in all material respects. Seller has no
reason to believe that any of the Licenses would not be renewed by the FCC or
other granting authority in the ordinary course. Smith Acquisition License
Company has timely filed with the FCC its application for authority to operate
the Station's digital television facilities on Channel 57. Except as described
in Schedule 3.4, no cable system has advised Seller of any signal quality or
copyright indemnity or other prerequisite to cable carriage of the signal of the
Station, and, except as described in Schedule 3.4, no cable system has declined
or threatened to decline such carriage or failed to respond to a request for
carriage or sought any form of relief from carriage of the Station's signal from
the FCC.
3.5. Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Seller's interests therein (including street address, legal description, owner,
and use and the location of all improvements thereon). The Real Property listed
on Schedule 3.5 comprises all real property interests necessary to conduct the
business and operations of the Station as now conducted. Seller has good and
marketable fee simple title, insurable at standard rates, to all fee estates
(including the improvements thereon) included in the Real Property, free and
clear of all Encumbrances, and without reservation or exclusion of any mineral,
timber, or other similar rights or interests, except for (a) Permitted
Encumbrances, and (b) such Encumbrances which shall be released at Closing. With
respect to each leasehold or subleasehold interest included in the Real Property
being conveyed under this Agreement, as of the TBA Date, the lease or sublease
creating such interest is in full force and effect and the Seller knows of no
defaults under such lease or the existence of any event which, after the passage
of time and applicable notice or cure periods, would constitute a default under
such lease or sublease. All towers, guy anchors, and buildings and other
improvements included in the Assets are located entirely on the Real Property
listed in Schedule 3.5. Seller has delivered to Buyer true and complete copies
of all deeds pertaining to the Real Property. As of the TBA Date, all Real
Property (including the improvements thereon) (i) is in good condition and
repair consistent with its present use (reasonable wear and tear excepted), (ii)
is available for immediate use in the conduct of the business and operations of
the Station, and (iii) complies in all material respects with all applicable
building or zoning codes and the regulations of any
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governmental authority having jurisdiction. Seller has full legal and practical
access to the Real Property.
3.6. Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property necessary to conduct the business and operations
of the Station as now conducted. Except as described in Schedule 3.6, Seller
owns and has good title to each item of Tangible Personal Property, and none of
the Tangible Personal Property owned by Seller is subject to any Encumbrance,
except for Permitted Encumbrances and Encumbrances which will be released at the
Closing. As of the TBA Date, each item of Tangible Personal Property is in good
operating condition and repair (normal wear and tear excepted), and is available
for immediate use in the business and operations of the Station. As of the TBA
Date, all items of transmitting and studio equipment included in the Tangible
Personal Property (i) have been maintained in a manner consistent with good
engineering practice, and (ii) will permit the Station to operate in accordance
with the terms of the FCC Licenses and the rules and regulations of the FCC, and
with all other applicable federal, state, and local statutes, ordinances, rules,
and regulations.
3.7. Contracts. Schedule 3.7 is a true and complete list
of all Contracts as of the date hereof, except (a) contracts with advertisers
for the sale of advertising time on the Station for cash at rates consistent
with past practices, and (b) Contracts entered into in the ordinary course of
business that do not involve liabilities to be assumed by Buyer at Closing in
excess of Fifteen Thousand Dollars ($15,000) individually and One Hundred
Thousand Dollars ($100,000) in the aggregate for all such Contracts. Seller has
delivered to Buyer true and complete copies of all Contracts listed on Schedule
3.7 (including any amendments and other modifications to such Contracts), and a
schedule summarizing Seller's obligations under trade and barter agreements
relating to the Station as of May 31, 2000. Schedule 3.7 also includes certain
schedules related to program obligations of the Station as of May 31, 2000 for
all of the Station's programming and film Contracts prepared in accordance with
Seller's normal practices and accounting procedures. Other than the Contracts
listed on Schedule 3.7 or described in clauses (a) or (b) of this Section 3.7
and cash programming Contracts, Seller requires no contract, lease, or other
agreement to enable it to carry on its business as now conducted. To Seller's
knowledge, all of the Assumed Contracts are in full force and effect, and are
valid, binding, and enforceable in accordance with their terms. Seller has and,
to Seller's knowledge, each other party to the Assumed Contracts has complied in
all material respects with all of the terms and conditions of the Assumed
Contracts and there is not under any Assumed Contract any material default by
Seller, or to Seller's knowledge, by any party thereto or any event that, after
notice or lapse of time or both, could constitute a material default. Other than
in the ordinary course of business, Seller has no knowledge of any intention by
any party to any Assumed Contract (i) to terminate such Contract or amend the
terms thereof, (ii) to refuse to renew the Assumed Contract upon expiration of
its term, or (iii) to renew the Assumed Contract upon expiration only on terms
and conditions which are more onerous than those now existing. Except for the
need to obtain the Consents listed in Schedule 3.3, Seller has full legal power
and authority to assign its rights under the Assumed Contracts to Buyer in
accordance with this Agreement, and such assignment will not affect the
validity, enforceability, or continuation of any of the Assumed Contracts.
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3.8. Consents. Except for the FCC Consent provided for in Section
6.1 and the other Consents described in Schedule 3.3, and any filing required
under the HSR Act, to Seller's knowledge, no consent, approval, permit, or
authorization of, or declaration to or filing with any governmental or
regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby, or (ii) to permit
Seller to assign or transfer the Assets to Buyer.
3.9. Intangibles. Schedule 3.9 is a true and complete list of all
material Intangibles (exclusive of those listed in Schedule 3.4), all of which
are valid and in good standing and uncontested. Seller has delivered to Buyer
copies of all documents establishing or evidencing all Intangibles listed on
Schedule 3.9. To Seller's knowledge, Seller is not infringing upon or otherwise
acting adversely to any trademarks, trade names, service marks, service names,
copyrights, patents, patent applications, know-how, methods, or processes owned
by any other person or persons, and there is no claim or action pending, or to
the knowledge of Seller threatened, with respect thereto. To Seller's
knowledge, the Intangibles listed on Schedule 3.9 comprise all material
intangible property interests necessary to conduct the business and operations
of the Station as now conducted.
3.10. Insurance. Schedule 3.10 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.10 (i) are
customary in amount with respect to the value of the Assets, subject to a
deductible, (ii) are in full force and effect and (iii) insure the Assets and
the business of the Station against all customary risks.
3.11. Reports. All material returns, reports, and statements that
the Station is currently required to file with the FCC or with any other
governmental agency have been filed, and all reporting requirements of the FCC
and other governmental authorities having jurisdiction over Seller and the
Station have been complied with in all material respects. All of such returns,
reports, and statements are complete and correct in all material respects as
filed. Seller has timely paid to the FCC all annual regulatory fees payable
with respect to the FCC Licenses. All tower registration applications that
Seller is required to file with the FCC with respect to the Assets have been
filed and the FCC has issued registrations with respect to such towers.
3.12. Employee Plans and Matters.
(a) Schedule 3.12 includes a complete and accurate list
of all employees of the Station, their job descriptions, current compensation
levels, dates of hire and amounts and dates of last salary or wage increase as
of the date of this Agreement.
(b) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.12, and complete and accurate copies of
(including any amendments to) any such written Employee Plans and Compensation
Arrangements (or related insurance policies) have been furnished or otherwise
made available to Buyer, along with copies of any employee handbooks or similar
documents describing such Employee Plans and Compensation Arrangements. Any
unwritten Employee Plans or Compensation Arrangements also are listed in
Schedule 3.12, and complete descriptions have been furnished to Buyer. Except
as disclosed in Schedule 3.12, Seller is not a party to and does not have in
effect or to become effective after the
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<PAGE> 17
date of this Agreement any plan arrangement or other scheme which will become
an Employee Plan or Compensation Arrangement or any amendment to an Employee
Plan or Compensation Arrangement. Seller does not accrue sick leave for
employees of the Station.
(c) Seller has furnished or made available to Buyer the
Forms 5500 filed for each of the Seller's Employee Plans (including all
attachments and schedules), actuarial reports, summaries of material
modifications, summary annual reports, and any other employer notices
(including, governmental filings and descriptions of material changes to
Employee Plans) relating to the Employee Plans for the last two plan years, and
the current summary plan descriptions.
(d) Each Employee Plan and Compensation Arrangement has
been properly administered in all material respects with its own terms and with
the provisions of ERISA, the Code, the Age Discrimination in Employment Act and
any other applicable Federal or state laws.
(e) Neither Seller nor any ERISA Affiliate is
contributing to, is required to contribute to, or has contributed within the
last six (6) years to, any Multiemployer Plan, and neither Seller nor any ERISA
Affiliate has incurred within the last six (6) years, or reasonably expects to
incur, any "withdrawal liability," as defined under Section 4201 et seq. of
ERISA.
(f) To the knowledge of Seller, there is no governmental
inspection, investigation, audit or examination of any Employee Plan or
Compensation Arrangement listed on Schedule 3.12, and neither are there any
facts which would lead Seller to believe that any such governmental inspection,
investigation, audit or examination is pending or threatened. There exists no
action, suit or claim (other than routine claims for benefits) with respect to
any Employee Plan or Compensation Arrangement pending or, to the knowledge of
Seller, threatened against any of such Employee Plan or Compensation
Arrangement.
(g) Neither Seller nor any ERISA Affiliate sponsors,
maintains or contributes to any Employee Plan or Compensation Arrangement that
provides retiree medical or retiree life insurance coverage to former employees
of the Station, except to the extent required by Section 4980B of the Code or
similar state law, and except to the extent any contributions are made at the
expense of the participant or the beneficiary of a participant.
(h) Neither Seller nor any ERISA Affiliate maintains,
has maintained or been obligated to maintain any Employee Plan subject to
Section 412 of the Code or Title IV of ERISA.
(i) Except as described in Schedule 3.12, with respect
to each Employee Plan and, to the extent applicable, each Compensation
Arrangement, no material liabilities have been incurred, other than the payment
of benefits in the ordinary course, and, in addition: (i) each Employee Plan
that is intended to be tax-qualified, and each amendment thereto, is the
subject of a favorable determination letter, and no plan amendment that is not
the subject of a favorable determination letter would likely affect the
validity of an Employee Plan's letter and (ii) all contributions, premiums or
payments that are required to be made under each
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<PAGE> 18
Employee Plan or Compensation Arrangement or with respect thereto as of the
Closing Date will be paid or accrued by Seller or the applicable ERISA
Affiliate in accordance with the appropriate plan document, actuarial report,
insurance contract or other funding arrangement or as required by ERISA or the
Code.
(j) For purposes of this Agreement, the following terms
shall have the meaning indicated: (i) "Employee Plan" shall mean any retirement
or welfare plan or arrangement or any other employee benefit plan as defined in
Section 3(3) of ERISA sponsored, maintained or contributed to by Seller or any
ERISA Affiliate covering current or former employees of the Station or their
dependents or survivors; (ii) "Code" shall mean the Internal Revenue Code of
1986, as amended, any successor thereto and any regulations promulgated
thereunder; (iii) "Compensation Arrangement" shall mean any plan or
compensation arrangement other than an Employee Plan, whether written or
unwritten, maintained, sponsored or contributed to by Seller or any ERISA
Affiliate providing current employees, former employees or officers of the
Station with any compensation or other benefits, whether deferred or not, in
excess of base salary or wages, including, but not limited to, any bonus or
incentive plan, stock rights plan, deferred compensation arrangement, life
insurance, stock purchase plan, severance pay plan and any other employee
fringe benefit plan; (iv) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, any successor thereto and any regulations
promulgated thereunder; (v) "Multiemployer Plan" means a plan, as defined in
ERISA Section 3(37), to which Seller or any ERISA Affiliate has contributed, is
contributing or is required to contribute; and (vi) "ERISA Affiliate" shall
mean any trade or business related to Seller under the terms of Sections
414(b), (c), (m) or (o) of the Code.
3.13. Taxes. Seller has (or, in the case of returns becoming due
after the date hereof and on or before the Closing Date, will have prior to the
Closing Date) filed or caused to be filed all federal income Tax returns and
all other material federal, state, county, local, or city Tax returns which are
required to be filed, and it has paid or caused to be paid all Taxes shown on
those returns or on any Tax assessment received by it to the extent that such
Taxes have become due, or has set aside on its books adequate reserves
(segregated to the extent required by generally accepted accounting principles)
with respect thereto. To Seller's knowledge, there are no governmental
investigations, and there are no other legal, administrative, or Tax
proceedings pursuant to which Seller is or could be made liable for any Taxes,
the liability for which could extend to Buyer as transferee of the Assets and
the business of the Station, and, to Seller's knowledge, no event has occurred
that could impose on Buyer any transferee liability for any Taxes due or to
become due from Seller.
3.14. Claims and Legal Actions. Except as disclosed on Schedule
3.14 and except for any FCC rulemaking proceedings generally affecting the
broadcasting industry, there is no claim, legal action, counterclaim, suit,
arbitration, governmental investigation or other legal, administrative, or tax
proceeding, nor any order, decree or judgment, in progress or pending, or to
the knowledge of Seller threatened, against or relating to Seller with respect
to its ownership or operation of the Station or otherwise relating to the
Assets or the business or operations of the Station.
3.15. Environmental Matters. To Seller's knowledge and except as
set forth in Schedule 3.15:
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(a) Seller has complied in all material respects with
all laws, rules, and regulations of all federal, state, and local governments
(and all agencies thereof) concerning the environment, public health and
safety, and employee health and safety, and no charge, complaint, action, suit,
proceeding, hearing, investigation, claim, demand, or notice has been filed or
commenced against Seller in connection with Seller's ownership or operation of
the Station alleging any material failure to comply with any such law, rule, or
regulation.
(b) Seller has no liability relating to Seller's
ownership and operation of the Station (and there is no basis related to the
past or present operations, properties, or facilities of Seller for any present
or future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand against Seller giving rise to any such liability) under the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Federal Water Pollution Control
Act, the Clean Air Act, the Safe Drinking Water Act, the Toxic Substances
Control Act, the Refuse Act, or the Emergency Planning and Community
Right-to-Know Act (each as amended) or any other law, rule, or regulation of
any federal, state, or local government (or agency thereof) concerning release
or threatened release of hazardous substances, public health and safety, or
pollution or protection of the environment.
(c) Seller has no material liability relating to
Seller's ownership and operation of the Station (and there is no basis for any
present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand against Seller giving rise to any such
liability) under the Occupational Safety and Health Act, as amended, or under
any other law, rule, or regulation of any federal, state, or local government
(or agency thereof) concerning employee health and safety.
(d) In connection with its ownership and operation of
the Station, Seller has obtained and been in compliance with all of the terms
and conditions of all material permits, licenses, and other authorizations
which are required under, and has complied with all other material limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables which are contained in, all federal, state, and local
laws, rules, and regulations (including all codes, plans, judgments, orders,
decrees, stipulations, injunctions, and charges thereunder) relating to public
health and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
(e) All properties and equipment used in the business of
the Station are and have been free of PCB's, methylene chloride,
trichloroethylene, 1, 2-trans-dichloroethylene, dioxins, dibenzofurans, and
Extremely Hazardous Substances (as defined in Section 302 of the Emergency
Planning and Community Right-to-Know Act).
(f) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged,
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<PAGE> 20
emitted, or released by Seller in connection with its ownership and operation
of the Station, or by any other party on any Real Property.
3.16. Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. To Seller's knowledge, neither the ownership or use
of the properties of the Station by Seller nor the conduct of the business or
operations of the Station conflicts in any material respect with any legally
enforceable property rights of any other person or entity.
3.17. Conduct of Business in Ordinary Course.
(a) Between May 31, 2000 and the TBA Date, Seller shall
have conducted the business and operations of the Station only in the ordinary
course and shall not have suffered any Material Adverse Effect;
(b) Between December 31, 1999 and the TBA Date except as
set forth in the Financial Statements for the five (5) month period ending May
31, 2000, Seller has not:
(i) Except as set forth in Schedule 3.12 or
Schedule 3.17(b), made any material increase in compensation payable or to
become payable to any of the employees of the Station, or any bonus payment
made or promised to any employee of the Station, or any material change in
personnel policies, employee benefits, or other compensation arrangements
affecting the employees of the Station;
(ii) Made any sale, assignment, lease, or other
transfer of any of the Station's properties other than in the normal and usual
course of business with suitable replacements being obtained therefor;
(iii) Canceled any debts owed to or claims held
by Seller with respect to the Station, except in the normal and usual course of
business;
(iv) Suffered any material write-down of the
value of any Assets or any material write-off as uncollectible of any accounts
receivable of the Station; or
(v) Transferred or granted any right under, or
entered into any settlement regarding the breach or infringement of, any
license, patent, copyright, trademark, trade name, franchise, or similar right,
or modified any existing right relating to the Station.
3.18. Financial Statements. Seller has furnished Buyer with true
and complete copies of unaudited financial statements of the Station for the
two-year period ended December 31, 1999, and unaudited financial statements of
the Station for the five (5) month period ended May 31, 2000 ("Financial
Statements") which are attached hereto as Schedule 3.18. The Financial
Statements have been prepared from the books and records of Seller, have been
prepared in accordance with generally accepted accounting principles ("GAAP")
consistently applied and maintained throughout the periods indicated (except
that such Financial Statements do not contain all footnotes required under GAAP
and do not include statements of cash flows), accurately reflect in all
material respects the books, records, and accounts of the Station (which
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<PAGE> 21
books, records, and accounts are complete and correct in all material
respects), are complete and correct in all material respects, and present
fairly the financial condition of the Station as at their respective dates and
the results of operations for the periods then ended. Except for obligations
and liabilities (a) set forth on Schedule 3.7 with respect to Contracts, (b)
set forth in the Financial Statements or (c) incurred in the ordinary course
since the date of the most recent balance sheet included in the Financial
Statements through the TBA Date, the Station has no liabilities or obligations
whatsoever (whether accrued, absolute, contingent or otherwise). The Seller has
not manipulated the Financial Statements to allocate in a disproportionate
manner any operating costs or operating expenses of the Station as compared to
the allocation of operating costs and operating expenses for other television
broadcast stations of the Seller.
3.19. Transactions with Affiliates. Except as disclosed in Schedule
3.19, Seller has not been involved in any business arrangement or relationship
relating to the Station with any affiliate of Seller, and no affiliate of
Seller owns any property or right, tangible or intangible, which is used in the
business of the Station. As used in this paragraph, "affiliate" has the meaning
set forth in Rule 12b-2 promulgated under the Securities and Exchange Act of
1934.
3.20. Broker. Neither Seller nor any person acting on Seller's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.21. Labor Relations. Except as set forth on Schedule 3.21, Seller
is not a party to or subject to any collective bargaining agreements with
respect to the Station. Seller has no written or oral contracts of employment
with any employee of the Station, other than those listed in Schedule 3.7.
Seller has complied in all material respects with all laws, rules, and
regulations relating to the employment of labor, including those related to
wages, hours, collective bargaining, occupational safety, discrimination, and
the payment of social security and other payroll related taxes, and Seller has
not received any written notice alleging that it has failed to comply with any
such laws, rules, or regulations. No controversies, disputes, or proceedings
are pending or, to Seller's knowledge, threatened, between Seller and any
employee (singly or collectively) of the Station. No labor union or other
collective bargaining unit represents or claims to represent any of the
employees of the Station. There is no union campaign being conducted to
represent employees of the Station or to solicit cards from employees to
authorize a union to request a National Labor Relations Board certification
election with respect to any employees at the Station.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1. Organization, Standing and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and at Closing will be duly qualified to conduct business as
a foreign corporation under the laws of the State of Ohio. Buyer has all
requisite power and authority to execute and deliver this Agreement and the
documents contemplated hereby and thereby, and to perform and comply with all
of the terms, covenants, and conditions to be performed and complied with by
Buyer hereunder and thereunder.
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<PAGE> 22
4.2. Authorization and Binding Obligation The execution, delivery,
and performance of this Agreement by Buyer have been duly authorized by all
necessary actions on the part of Buyer. This Agreement has been duly executed
and delivered by Buyer and constitutes the legal, valid, and binding obligations
of Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by judicial discretion in
the enforcement of equitable remedies.
4.3. Absence of Conflicting Agreements. Subject to obtaining the
FCC Consent, and making any filing required under the HSR Act, the execution,
delivery, and performance by Buyer of this Agreement and the documents
contemplated hereby and thereby (with or without the giving of notice, the lapse
of time, or both): (i) do not require the consent of any third party; (ii) will
not conflict with the organizational documents of Buyer; (iii) will not conflict
with, result in a breach of, or constitute a default under, any law, judgment,
order, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; or (iv) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4. Broker. Neither Buyer nor any person acting on Buyer's behalf
has incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5. Buyer's Qualifications. Buyer is in all material respects
legally, financially and otherwise qualified to acquire the Station under the
Communications Act of 1934, as amended (the "Act"), and the rules, regulations
and policies of the FCC. Buyer knows of no facts that would under the Act and
the rules, regulations and written policies of the FCC (a) disqualify Buyer as
an assignee of the FCC Licenses or as the owner and operator of the Station, or
(b) cause the FCC to fail to grant in a timely fashion without material delay
the FCC Consent. No waiver of any FCC rule or policy is necessary to be obtained
for the grant of the consent of the FCC to the applications for the assignment
of the FCC Licenses to Buyer.
4.6. Interpretation of Certain Provisions. Buyer has not relied and
is not relying on the specification of any dollar amount in any representation
or warranty made in this Agreement or any Schedule hereto to indicate that such
amounts, or higher or lower amounts, are or are not material.
4.7. No Outside Reliance. Buyer has not relied and is not relying
on any statement, representation or warranty made by Seller with respect to the
Station, except that Buyer is relying on the statements, representations and
warranties made or to be made by Seller in this Agreement, any schedule hereto
or any certificate to be delivered to Buyer at the Closing.
4.8. Availability of Funds. Buyer will have available on the
Closing Date sufficient funds to enable Buyer to consummate the transactions
contemplated hereby.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
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5.1. Generally. Except to the extent contemplated by the TBA,
Seller agrees that, between the date of this Agreement and the Closing Date,
Seller shall operate the Station in the ordinary course of business in
accordance with its past practices (except where such conduct would conflict
with the following covenants or with Seller's other obligations under this
Agreement), and in accordance with the other covenants in this Section 5.
5.2. Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed by
Seller in connection with the conduct of the business or operations of the
Station, except in accordance with past practices. Between the date of this
Agreement and the TBA Date, Seller shall not hire any replacement for any
management employee or talent of the Station whose employment is terminated
except with the prior consent of Buyer which shall not be unreasonably withheld,
conditioned or delayed. Seller shall provide Buyer with an opportunity to
interview and meet with any such replacement employees.
5.3. Contracts. Without the written consent of Buyer (which consent
shall not be unreasonably withheld, delayed or conditioned), Seller will not
enter into any contract or commitment relating to the Station or the Assets, or
amend or terminate any Contract (or waive any material right thereunder), or
incur any obligation (including obligations relating to the borrowing of money
or the guaranteeing of indebtedness) that will be binding on Buyer after the TBA
Date or the Closing Date, except for (a) until the TBA Date, cash time sales
agreements made in the ordinary course of business or (b) until the TBA Date,
Contracts entered into in the ordinary course of business and having a cost or
value of Twenty-Five Thousand Dollars ($25,000) or less individually or One
Hundred Thousand Dollars ($100,000) in the aggregate. Prior to the TBA Date,
Seller shall deliver to Buyer a list of all Contracts entered into between the
date of this Agreement and the TBA Date, together with copies of such Contracts.
5.4. Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except where no longer
used or held for use in the business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.5. Encumbrances. Seller shall not create, assume or permit to
exist any Encumbrances upon the Assets, except for (i) Encumbrances, which shall
be removed on or prior to the Closing Date, and (ii) Permitted Encumbrances.
5.6. Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the FCC Licenses to expire or to be revoked, suspended,
or modified adversely, or take any action that could cause the FCC or any other
governmental authority to institute proceedings for the suspension, revocation,
or adverse modification of any of the FCC Licenses. Seller shall not fail to
prosecute with due diligence any applications to any governmental authority in
connection with the operation of the Station.
5.7. Rights. Seller shall not waive any material right relating to
the Station or any of the Assets. Seller shall not cause, by any act or failure
to act, any cable system located within the Station's Designated Market Area to
refuse to carry the Station's signal.
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5.8. No Inconsistent Action. Seller shall not take any action that
could hinder or delay in any material respect the consummation of the
transactions contemplated by this Agreement.
5.9. Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives reasonable
access to the Assets and to all other properties, equipment, books, records,
Contracts, and documents relating to the Station for the purpose of audit and
inspection, and will furnish or cause to be furnished to Buyer or its authorized
representatives all information with respect to the affairs and business of the
Station that Buyer may reasonably request (including any financial reports and
operations reports produced with respect to the affairs and business of the
Station). Without limiting the generality of the foregoing, Seller shall give
Buyer and its counsel, accountants and other authorized representatives
reasonable access to Seller's financial records and Seller's employees, counsel,
accountants and other representatives for the purpose of preparing and auditing
such financial statements (at Buyer's sole cost and expense) as Buyer
determines, in its reasonable judgment, (i) are required or advisable to comply
with federal or state securities laws and the rules and regulations of
securities markets as a result of the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby or (ii) are required
to verify the Financial Statements and any financial statement provided by
Seller to Buyer pursuant to Section 5.15.
5.10. Maintenance of Assets. Seller shall use commercially
reasonable efforts and take all reasonable actions to maintain all of the Assets
in good condition (ordinary wear and tear excepted), and use, operate, and
maintain all of the Assets in a reasonable manner and in accordance with the
terms of the FCC Licenses, all rules and regulations of the FCC and good
engineering practice and undertake the actions set forth in Schedule 5.10. Prior
to the TBA Date, Seller shall maintain inventories of spare parts and expendable
supplies at levels consistent with past practices.
5.11. Insurance. Seller shall continue to maintain the current
insurance policies on the Station and the Assets.
5.12. Consents. Subject to Section 6.7, Seller shall use its
commercially reasonable efforts to obtain the Consents, without any change in
the terms or conditions of any Contract that could be less advantageous to the
Station than those under such Contract as in effect on the date of this
Agreement. Seller shall promptly advise Buyer of any difficulties experienced in
obtaining any of the Consents and of any conditions proposed, considered, or
requested for any of the Consents. Upon Buyer's written request, Seller shall
cooperate with Buyer and use its commercially reasonable efforts to obtain from
the lessors under each Real Property lease such estoppel certificates as Buyer
may request; provided, however, that Seller shall not have the obligation to
expend any funds in connection with obtaining such estoppel certificates except
for customary administrative and legal expenses involved in obtaining such
estoppel certificates. Upon Seller's written request, Buyer shall cooperate with
Seller and use its commercially reasonable efforts to assist Seller in obtaining
any Consent.
5.13. Books and Records. Seller shall maintain its books and records
relating to the Station in accordance with past practices.
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5.14. Notification. Seller shall promptly notify Buyer in writing of
any unusual or material developments with respect to the business or operations
of the Station by Seller, and of any material change in any of the information
contained in Seller's representations and warranties contained in Section 3 of
this Agreement.
5.15. Financial Information. Prior to the TBA Date, Seller shall
furnish to Buyer (i) monthly financial statements, (ii) weekly pacing reports,
(iii) financial estimates of operating income, and (iv) a monthly closing packet
with respect to the Station within thirty (30) days after the end of each month.
All financial information delivered by Seller to Buyer pursuant to this Section
shall accurately reflect the books, records, and accounts of the Station, shall
be complete and correct in all material respects, and shall present fairly the
financial condition of the Station as at their respective dates and the results
of operations for the periods then ended.
5.16. Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.17. Programming. Prior to the TBA Date, Seller shall not make any
material changes in the broadcast hours or in the percentages of types of
programming broadcast by the Station, or make any other material change in the
Station's programming policies, except such changes as in the good faith
judgment of the Seller are required by the public interest.
5.18. Capital Expenditures. Prior to the TBA Date, Seller will make
any capital expenditures necessary to keep the Station operating in a manner
consistent with past practice.
5.19. Collection of Accounts Receivable. Prior to the TBA Date,
Seller shall collect the accounts receivable of the Station only in the ordinary
course of business consistent with the Station's credit policies and procedures.
5.20. Operation During Term of TBA. From and after the TBA Date,
Seller shall only be required to operate the Station in a manner consistent with
the terms and conditions of the TBA.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1. FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their best efforts to obtain a grant of the application as
expeditiously as practicable. Each party agrees to comply with any condition
imposed on it by the FCC Consent, except that no party shall be required to
comply with a condition if (i) the condition was
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imposed on it as the result of a circumstance the existence of which does not
constitute a breach by the party of any of its representations, warranties, or
covenants under this Agreement, and (ii) compliance with the condition would
have a material adverse effect upon such party. Buyer and Seller shall oppose
any requests for reconsideration or judicial review of the FCC Consent. If the
Closing shall not have occurred for any reason within the original effective
period of the FCC Consent, and neither party shall have terminated this
Agreement under Section 9, the parties shall jointly request an extension of the
effective period of the FCC Consent. No extension of the FCC Consent shall limit
the exercise by either party of its rights under Section 9.
6.2. Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing subject
to the terms of the TBA.
6.3. Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
(the "Risk of Loss") shall be borne by Seller at all times prior to the TBA
Date. After the TBA Date, the Risk of Loss shall be borne by Seller at all times
through the Closing, to the extent of, but solely to the extent of, Seller's
receipt of insurance proceeds in respect thereof and in no event shall Seller
have any liability or obligation to Buyer in respect of any such loss, damage,
impairment, confiscation or condemnation. The Risk of Loss beyond that
specifically borne by Seller in accordance with the immediately preceding
sentence shall be borne by Buyer. Seller shall use commercially reasonable
efforts to process any insurance claim to which Seller is entitled with respect
to any loss, damage, impairment, confiscation or condemnation of any of the
Assets. Seller shall use such proceeds of insurance to repair or replace any
such equipment or property of Seller to the extent of such proceeds. At Seller's
request and subject to Seller's supervision and direction, Buyer shall effect in
a timely fashion any repairs to or replacement of any of Seller's damaged
equipment or property.
6.4. Confidentiality. Except as necessary for the consummation of
the transactions contemplated by this Agreement, and except as and to the extent
required by law, including, without limitation, disclosure requirements of
federal or state securities laws and the rules and regulations of securities
markets, each party will keep confidential any information obtained from the
other party in connection with the transactions contemplated by this Agreement.
If this Agreement is terminated, each party will return to the other party all
information obtained by such party from the other party in connection with the
transactions contemplated by this Agreement.
6.5. Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their commercially reasonable efforts to consummate
the transactions contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, neither Buyer nor Seller shall have
any obligation
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(i) to expend funds to obtain any of the Consents or (ii) to agree to any
material adverse change in any Assumed Contract to obtain a Consent required
with respect thereto.
6.6. Bulk Sales Law. If applicable, the bulk sales law of the State
of Ohio shall be complied with by Seller. Any loss, liability, obligation, or
cost suffered by Seller or Buyer as the result of non-compliance with the
provisions of any bulk sales law applicable to the transfer of the Assets as
contemplated by this Agreement shall be borne by Seller.
6.7. Sales Tax Filings. Seller shall continue to file Ohio sales
tax returns with respect to the Station in accordance with Seller's past
practices and shall concurrently deliver copies of all such returns to Buyer.
6.8. Access to Books and Records. Seller shall provide Buyer access
and the right to copy for a period of seven (7) years from the Closing Date any
books and records relating to the Assets that are not included in the Assets.
Buyer shall provide Seller access and the right to copy for a period of seven
(7) years from the Closing Date any books and records relating to the Assets.
6.9. Appraisal. Buyer and Seller agree to allocate the Purchase
Price for tax and recording purposes in accordance with an appraisal to be
conducted by Bond & Pecaro, which appraisal shall be consistent with the
appraisal methodology used by Bond & Pecaro in connection with Bond & Pecaro's
most recent appraisal of the Station. If Buyer and Seller are unable to
reasonably agree on such appraisal, neither party shall be bound by such
appraisal. The cost of such appraisal shall be paid one-half by Buyer and
one-half by Seller.
6.10. HSR Act Filing. Seller and Buyer agree to (a) file, or cause
to be filed, with the U.S. Department of Justice ("DOJ") and Federal Trade
Commission ("FTC") all filings, if any, which are required in connection with
the transactions contemplated hereby under the HSR Act within five (5) business
days of the date of this Agreement; (b) submit to the other party, prior to
filing, their respective HSR Act filings to be made hereunder, and to discuss
with the other any comments the reviewing party may have; (c) cooperate with
each other in connection with such HSR Act filings, which cooperation shall
include furnishing the other with any information or documents in such party's
possession that may be reasonably required in connection with such filings; (d)
promptly file, after any request by the FTC or DOJ, any information or documents
requested by the FTC or DOJ; and (e) furnish each other with any correspondence
from or to, and notify each other of any other communications with, the FTC or
DOJ which relates to the transactions contemplated hereunder, and to the extent
practicable, to permit each other to participate in any conferences with the FTC
or DOJ. Buyer and Seller shall share equally all necessary HSR filing fees.
6.11. Collection of Accounts Receivable. Seller shall deliver to
Buyer not later than five (5) business days after the TBA Date a complete and
detailed statement of all Accounts Receivable as of the TBA Date, showing the
name, amount and age of each account. During the period from the TBA Date
through the end of the sixth successive calendar month (excluding the calendar
month during which the TBA Date occurs) (the "Collection Period"), with respect
to the Accounts Receivable, (i) Buyer will use reasonable best efforts, in
accordance with Buyer's customary business practices, to collect the Accounts
Receivable, but Buyer shall not be
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obligated to use any efforts to collect any of the Accounts Receivable that are
more extensive than the efforts that Buyer uses to collect its own accounts
receivable, (ii) Buyer shall not make any referral or compromise of any of the
Accounts Receivable to any collection agency or attorney for collections and
shall not settle or adjust the amount of any of such Accounts Receivable without
the prior written authorization of Seller, (iii) on or before the fifth business
day following the end of each calendar month in the Collection Period Buyer
shall furnish Seller with a list of the amounts collected during such calendar
month with respect to the Accounts Receivable, and (iv) Buyer shall remit to
Seller, on or before the fifth business day after the end of each successive
calendar month during the Collection Period, all amounts collected by Buyer with
respect to the Accounts Receivable that have not previously been remitted to
Seller, net of any commissions paid or payable with respect thereto. Seller
shall be entitled to inspect and/or audit the records maintained by Buyer
pursuant to this Section 6.11 from time to time, upon reasonable advance notice.
If Buyer receives any payment from an account debtor that is liable under any of
the Accounts Receivable and with whom Buyer continues to sell advertising time
on the Station, or otherwise maintains a business relationship, Buyer shall
first credit the payment in full to any outstanding Account Receivable balance
for such account unless Seller directs otherwise or unless the account debtor
indicates that there is a dispute in which case the payment shall be applied
first to undisputed items. Following the expiration of the Collection Period,
Buyer shall have no further obligations under this Section 6.11, except that
Buyer shall immediately pay over to Seller any amounts subsequently paid to it
with respect to any Accounts Receivable. Following the Collection Period, Seller
may pursue collection of all Accounts Receivable. Buyer shall have no right to
set-off any amounts collected for Accounts Receivable for any amounts owed to
Buyer by Seller. If Buyer remits to Seller hereunder any Accounts Receivable
paid by NBC which are based on estimates and it is subsequently determined that
Seller was not entitled to the entire amount of such payment, Seller shall
immediately return to Buyer for payment to NBC the excess amount. The obligation
of Seller in the previous sentence shall not be subject to the Basket.
6.12. Nonsolicitation Agreement. From and after the date hereof to
the first anniversary of the Closing Date, neither Seller nor any affiliates of
Seller shall solicit for employment any employee of the Station; provided,
however, that the foregoing shall not apply to any employee of the Station who
is terminated by Buyer after the TBA Date.
6.13. Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to each
parcel of Real Property that Seller owns, Buyer may obtain at its expense at or
prior to Closing an ALTA Owner's Policy of Title Insurance issued by a title
insurer, insuring title to such parcel in the name of Buyer as of the Closing.
(b) Surveys. With respect to each parcel of Real Property
as to which a title policy is obtained, Buyer may obtain at its expense a
current survey of the parcel, prepared by a licensed surveyor and conforming to
current ALTA Minimum Detail Requirements for Land Title Surveys, disclosing the
location of all improvements, easements, party walls, sidewalks, roadways,
utility lines, and other matters customarily shown on such surveys, and showing
access affirmatively to public streets and roads.
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(c) Seller has delivered to Buyer copies of all of its
title policies and surveys with respect to the Real Property.
6.14. Employee Matters.
(a) On the TBA Date, Buyer shall offer employment to all
employees of the Station; provided, however, that any employee of the Station
who is not actively employed on the TBA Date shall be offered employment by
Buyer following the end of any inactive period (whether on account of leave,
layoff, injury or disability) but only to the extent that the Seller would have
been obligated to offer active employment to such person upon the end of such
inactive period; provided, however that the two (2) employees designated in the
TBA shall continue as employees of Seller and shall be offered employment by
Buyer on the Closing Date subject to the terms and conditions set forth in this
Section 6.14 (except that any references to the TBA Date shall be to the Closing
Date). All employees of Seller employed under an Assumed Contract and all other
employees who accept the Buyer's offers of employment and become employees of
the Buyer (collectively, "Hired Employees") shall be employed at substantially
the same salary as paid to such employee on the date immediately prior to their
employment with Buyer and on such other terms and conditions (including
benefits) as those provided by Buyer and Buyer's affiliates to their similarly
situated employees. Effective as of the date of hire, Buyer shall grant the
Hired Employees past service credit for such employees' service with the
Station, Seller or any ERISA Affiliate for all employee benefit purposes, other
than for purposes of benefit accrual under any defined benefit retirement plan
and for purposes of determining eligibility for post-employment retiree health
and life insurance coverage. Except to the extent otherwise expressly set forth
in this Agreement, nothing in this Agreement shall be deemed or construed to
require Buyer to continue to employ any of the Station's employees for any
period after they have become Hired Employees.
(b) As of the TBA Date, Buyer shall offer group health
plan coverage to all Hired Employees (and to the spouse and dependents of such
employees) on terms and conditions generally applicable to all of Buyer's
similarly situated employees. For purposes of providing such coverage, Buyer
shall waive all preexisting condition waiting periods for all such employees
covered by the group health care plan of Seller as of the TBA Date and shall
provide such health care coverage effective as of the TBA Date without the
application of any eligibility period for coverage. In addition, Buyer shall
credit all payments toward deductible, out-of-pocket and co-payment obligation
limits under Seller's health care plans for the plan year which includes the TBA
Date as if such payments had been made for similar purposes under Buyer's health
care plans during the plan year which includes the TBA Date, with respect to
Hired Employees (and the spouse and any dependents of such employees).
(c) Seller shall satisfy and discharge any obligations to
provide health care continuation coverage as required by the Consolidated
Omnibus Budget Reconciliation Act of 1985 and as described in Section 4980B of
the Code and Sections 601 through 608 of ERISA and as required by any applicable
state continuation of health coverage provisions (collectively, "COBRA
Obligations") to any employee of the Station whose employment is terminated
prior to or on the TBA Date to whom Seller has on-going COBRA Obligations (and
such employee's covered dependents), including to all employees who do not
become Hired Employees. Buyer shall satisfy and discharge all other COBRA
Obligations with respect to Hired Employees (and
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such employees' covered dependents). Seller and Buyer shall reasonably cooperate
in good faith to comply with their respective COBRA Obligations hereunder.
(d) Seller shall furnish to Buyer, as soon as reasonably
practicable after the TBA Date, but not later than thirty (30) days after the
TBA Date, a list, calculated as of the TBA Date, estimating (i) the amounts of
compensation deferred by each employee of the Station under Seller's 401(k) Plan
during the calendar year in which the consummation of the TBA occurs; and (ii)
those employees who, as of the TBA Date, have outstanding participant loans from
Seller's 401(k) Plan, including the amount and term of such loans. As soon as
reasonably practicable following the TBA Date, Seller will cause the account
balances of all Hired Employees in the Seller's 401(k) Plan to be distributed to
the Hired Employees in accordance with the terms of Seller's 401(k) Plan.
(e) In furtherance of and not in limitation of the
obligations and liabilities of Buyer set forth in Section 6.14(a) on the TBA
Date, Buyer shall: (i) recognize the unions and labor organizations which are
parties to the collective bargaining agreements set forth in Schedule 3.21; (ii)
offer to employ all employees of the Station represented by any such union or
labor organization (collectively, "Represented Employees"); (iii) adopt employee
benefit and compensation plans, policies and arrangements covering such
Represented Employees as required by such collective bargaining agreements; and
(iv) negotiate in good faith with the collective bargaining representatives of
the employees of the Station solely with respect to the substitution of Buyer's
employee benefit plans for Seller's employee benefit plans.
(f) On the TBA Date, Seller shall assign to Buyer, and
Buyer shall assume the collective bargaining agreements listed in Schedule 3.21,
including, without limitation, all obligations, if any, to provide severance
benefits in connection with the termination after the TBA Date of any
Represented Employee. Without limiting the generality of Section 6.14(e)(iii),
such assignment and assumption shall not obligate Buyer to assume any Employee
Plans or Compensation Arrangements of Seller. Except for any Excluded
Liabilities, Buyer shall be responsible for any liabilities of Seller under any
collective bargaining agreement listed in Schedule 3.21, including, without
limitation, any liabilities for wages and any Employee Plans or Compensation
Arrangements of Seller.
(g) Seller agrees to cooperate with Buyer in arranging
for such meetings as Buyer may reasonably request with the collective bargaining
representatives of the employees of Seller to discuss the implementation of
employee benefit and compensation plans, policies and arrangements of Buyer;
provided, however, that any such meeting (i) shall be subject to the prior
written approval of Seller upon reasonable notice to Seller, and (ii) shall not
unreasonably disrupt the personnel or operations of Seller or the Station.
(h) In furtherance of and not in limitation of the
obligations and liabilities of Buyer set forth in Section 6.14(a) and Buyer's
obligations under the collective bargaining and employment agreements that are
Assumed Contracts, with respect to each Hired Employee, Buyer shall provide
severance benefits no less favorable than those provided by Buyer and Buyer's
affiliates to their similarly situated employees, except for Hired Employees
covered by collective bargaining agreements, which Hired Employees shall receive
severance benefits as provided for in such collective bargaining agreement.
Hired Employees shall be
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credited under Buyer's severance benefit plan with their service at the Station
for purposes of determining the amount of severance benefits to which they may
be entitled under such plan; provided, however, that any service at the Station
for which severance had previously been paid shall be disregarded.
(i) In furtherance of and not in limitation of the
obligations and liabilities of Buyer set forth in Section 6.14(a), Buyer shall
assume, without duplication of benefits, the liabilities of Seller to Hired
Employees as of the TBA Date for unused and unpaid vacation subject to Buyer
receiving an adjustment therefor under Section 2.3(c), but only to the extent
reflected in the employee personnel records of Seller, a certified copy of which
shall be delivered to Buyer prior to the TBA Date. Except as otherwise required
by applicable law, Buyer shall provide, without duplication of benefits, all
Hired Employees with vacation time, as the case may be, rather than cash in lieu
thereof, for such unused and unpaid vacation in accordance with Buyer's
policies. Buyer shall be liable for, and shall indemnify, defend and hold
harmless Seller from and against, all liabilities of Seller to Hired Employees
with respect to unused vacation leave.
(j) For a period of ninety (90) days after the TBA Date,
Buyer will not take any action that could result in a filing under the Worker
Adjustment and Retraining Notification Act of 1988.
(k) Buyer acknowledges and agrees that from and after the
TBA Date until ninety (90) days after the Closing Date, Michael Cunningham (the
"Business Manager") shall be available to Seller, at the sole cost and expense
of Seller, to coordinate additional financial matters related to the business
and operations of the Station for the period prior to the Closing Date;
provided, that any such services that the Business Manager provides to Seller
shall not interfere with the Business Manager's duties and responsibilities to
Buyer.
(l) Notwithstanding any provisions of Section 6.14 to the
contrary, Seller shall retain all Liabilities and payment obligations under the
terms of certain retention agreements set forth or referenced in Schedule 3.7.
6.15. Time Brokerage Agreement. Notwithstanding anything to the
contrary contained in this Agreement or otherwise, the Seller shall not be
deemed to have breached or failed to comply with any representations,
warranties, covenants, or agreements with respect to the Station or the Assets
if such breach or failure is due or caused by any act, omission or instruction
of the Buyer under or in connection with the TBA or any activities or
transactions by Buyer in furtherance thereof or in connection therewith or any
actions of Seller in accordance with the terms of the TBA.
6.16. Insurance. To the extent that there are insurance policies
maintained by Seller or any affiliate of Seller covering any claims or damages
relating to the assets, business operations, conduct and employees (including,
without limitation, former employees) of the Station arising out of or relating
to occurrences prior to the Closing, the Seller shall use best efforts to cause
Buyer to be named as an additional insured or loss payee with respect to such
policies and to maintain such policies in effect until the Closing. Upon the
written request of Buyer, at Buyer's sole cost and expense, Seller will use best
efforts to maintain in place
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insurance policies maintained by Seller or any affiliate of Seller covering any
claims or damages relating to the assets, business operations, conduct and
employees (including, without limitation, former employees) of the Station
arising out of or relating to occurrences prior to the Closing after the Closing
Date and to the extent permitted by the terms of such insurance policies, Seller
shall use best efforts to cause Buyer to be named as an additional insured or
loss payee with respect to such policies.
6.17. No Inconsistent Action by Buyer. Buyer shall not take any
action that could hinder or delay in any material respect the consummation of
the transactions contemplated by this Agreement.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING
7.1. Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all respects at and as of the Closing Date (except for representations and
warranties that speak as of a specific date or time (which need only be true and
complete in all respects as of such date or time)), except in all cases (i)
where the failure of such representations and warranties to be true and complete
would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect (regardless of whether made on a specific date, the TBA
Date or the Closing Date) and (ii) to the extent that the failure of the
representations and warranties to be true and complete is a result of an
occurrence as to which Buyer bears the Risk of Loss pursuant to Section 6.3.
(b) Covenants and Conditions. Seller shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Consents. All Consents set forth on Schedule 7.1(c)
shall have been obtained.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied with
by Buyer under Section 6.1 hereof and Seller shall have complied with any
conditions imposed on it by the FCC Consent.
(e) Governmental Authorizations. Seller shall be the
holder of all FCC Licenses and there shall not have been any modification of any
FCC License that could reasonably likely have a Material Adverse Effect on the
conduct of the Station's business and operations. No proceeding shall be pending
the effect of which could be reasonably expected to revoke, cancel, fail to
renew, suspend, or modify adversely in any material respect any FCC License.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
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(g) Material Adverse Effect. Between the date of this
Agreement and the TBA Date, there shall have been no Material Adverse Effect
which is continuing.
(h) HSR Act. The waiting period under the HSR Act shall
have expired or terminated without unresolved action by the DOJ or the FTC to
prevent the Closing.
(i) WJAC Purchase Agreement. The closing under the WJAC
Agreement shall be consummated simultaneously with the Closing under this
Agreement.
7.2. Conditions to Obligations of Seller. All obligations of Seller
at the Closing are subject at Seller's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to
make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
(e) HSR Act. The waiting period under the HSR Act shall
have expired or terminated without unresolved action by the DOJ or the FTC to
prevent the Closing.
(f) WJAC Purchase Agreement. The closing under the WJAC
Agreement shall be consummated simultaneously with the Closing under this
Agreement.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1. TBA and Closing.
(a) TBA Date. No later than five (5) business days after
the waiting period under the HSR Act shall have expired or terminated without
unresolved action by the DOJ or the FTC, the parties shall enter into the TBA
and all employees of the Station shall be transferred from the Seller to the
Buyer as contemplated by Section 6.14, except for any such employees who remain
with the Seller pursuant to the terms of the TBA; provided, that, if the waiting
period under the HSR Act shall have expired or terminated without unresolved
action by the DOJ or FTC before July 25, 2000, the parties shall enter into the
TBA effective as of August 1, 2000.
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(b) Closing Date. Subject to the satisfaction or waiver
of all of the conditions precedent to the Closing, the Closing shall take place
at 10:00 a.m. on the date which is the last business day of the month during
which the FCC Consent is issued.
(c) TBA and Closing Place. The Closing and the
consummation of the TBA shall be held at the law offices of Dow, Lohnes &
Albertson, PLLC, 1200 New Hampshire Avenue, N.W., Washington, D.C. 20036, or any
other place that is agreed upon by Buyer and Seller.
8.2. Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed bills of sale,
special warranty deeds in substantially the same form attached hereto as Exhibit
C, motor vehicle titles, assignments, and other transfer documents which shall
be sufficient to vest good and marketable title to the Assets in the name of
Buyer, free and clear of all Encumbrances, except for Permitted Encumbrances;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property that may have been obtained pursuant to Section 5.12;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Seller by an officer of Seller, certifying
the matters set forth in Section 7.1(a) and Section 7.1(b);
(e) Licenses, Contracts, Business Records, Etc. Copies of
all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its operations (all of which may be delivered at the
Station);
(f) Authorizing Resolutions. Certified copies of the
resolutions of Seller's board of directors and shareholders approving the
transactions contemplated by this Agreement;
(g) UCC, Tax, Lien and Judgment Searches. Results of a
search for UCC, tax, lien and judgment filings in the Secretary of State's
records of the State of Ohio and in the records of the county or counties in
which the Station's main studio and transmission plant are located, such
searches having been made no earlier than twenty-five (25) days prior to the
Closing Date;
(h) Indemnification Escrow Agreement. The Indemnification
Escrow Agreement executed by Seller;
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(i) Title Insurance, Transfer Tax and Related Documents.
An owner's affidavit in form and substance reasonably acceptable to Seller and
Buyer's title insurance company executed by Seller, transfer tax forms executed
by Seller (where required) and a FIRPTA affidavit executed by Seller; and
(j) Opinion of Counsel. An opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Exhibit D hereto.
8.3. Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Adjusted Purchase Price. The Adjusted Purchase Price
as provided in Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform the
Assumed Liabilities;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by an officer of Buyer, certifying (i)
that the representations and warranties of Buyer contained in this Agreement are
true and complete in all material respects as of the Closing Date as though made
on and as of that date, and (ii) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to the
Closing Date;
(d) Authorizing Resolutions. Certified copies of the
resolutions of the board of directors of Buyer approving the transactions
contemplated by this Agreement; and
(e) Indemnification Escrow Agreement. The Indemnification
Escrow Agreement executed by Buyer.
SECTION 9. TERMINATION
9.1. Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not then
in material default of the terms hereof, upon written notice to Buyer, upon the
occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
prior to the date which is twelve months after the date hereof.
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(d) Breach. Without limiting Seller's rights under the
other provisions of this Section 9.1, if Buyer shall have breached any of its
representations, warranties or covenants under this Agreement, which breach (i)
would give rise to the failure of a condition set forth in Section 7.2(a) or
Section 7.2(b), and (ii) has not been cured by Buyer within thirty (30) days
after Buyer receives written notice of such breach from Seller; provided,
however, Buyer shall not have such thirty (30) day cure period with respect to
the failure of Buyer to consummate the transactions hereunder if all of the
conditions set forth in Section 7.1 have been fulfilled.
(e) Cross-Default. The termination of the WJAC Agreement.
9.2. Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default of the terms hereof, upon written notice to Seller, upon the
occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement have not been satisfied or waived in writing by Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
prior to the date which is twelve months after the date hereof.
(d) Interruption of Service. If any event shall have
occurred prior to the TBA Date that prevented signal transmission of the Station
at less than fifty percent (50%) of authorized power for a continuous period of
seven (7) days (provided that Buyer shall have no right to terminate if another
television station in the Designated Market Area of the Station has also
suffered a similar loss of signal transmission).
(e) Breach. Without limiting Buyer's rights under the
other provisions of this Section 9.2, if Seller shall have breached any of its
representations, warranties or covenants under this Agreement, which breach (i)
would give rise to the failure of a condition set forth in Section 7.1(a) or
Section 7.1(b), and (ii) has not been cured by Seller within thirty (30) days
after Seller receives written notice of such breach from Buyer; provided,
however, Seller shall not have such thirty (30) day cure period with respect to
the failure of the Seller to consummate the transactions hereunder if all of the
conditions set forth in Section 7.2 have been fulfilled.
(f) Cross-Default. The termination of the WJAC Agreement.
9.3. Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1(a), 9.1(b), 9.1(c) or 9.1(e) or Section 9.2 and neither
party is in material breach of this Agreement, the parties hereto shall not have
any further liability to each other with respect to the purchase and sale of the
Assets and Buyer shall be entitled to the return of the Escrow Deposit. If this
Agreement is terminated by Buyer pursuant to Section 9.2(e), Buyer shall have
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all rights and remedies available at law or equity. If Seller terminates this
Agreement pursuant to Section 9.1(d), Seller shall receive from the Escrow Agent
the Escrow Deposit as liquidated damages and the sole and exclusive remedy to
Seller for Buyer's breach. Seller and Buyer agree that actual damages would be
difficult to ascertain and that the Escrow Deposit is a fair and equitable
amount to pay to Seller for damages sustained due to Buyer's material breach of
this Agreement. If this Agreement is terminated for any reason other than as a
result of a breach by Buyer, Buyer shall be entitled to the return of the Escrow
Deposit.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN
REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall continue until the Closing and
thereafter shall survive the Closing solely for purposes of indemnification for
a period of twelve (12) months after the Closing Date. Any investigations by or
on behalf of any party hereto shall not constitute a waiver as to enforcement of
any representation, warranty, or covenant contained in this Agreement. No notice
or information delivered by either party shall affect the other party's right to
rely on any representation or warranty made by such party or relieve such party
of any obligations under this Agreement as the result of a breach of any of its
representations and warranties.
10.2 Indemnification by Seller. Subject to Section 6.15, after the
Closing and subject to the terms and conditions in Sections 10.4 and 10.7,
notwithstanding the Closing, and regardless of any investigation made at any
time by or on behalf of Buyer or any information Buyer may have, Seller hereby
agrees to indemnify and hold Buyer harmless against and with respect to, and
shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement at Closing.
(b) Any and all losses, liabilities or damages resulting
from any Excluded Liabilities.
(c) Any loss, liability, obligation, or cost resulting
from the failure of the parties to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets.
(d) Any and all losses, liabilities or damages resulting
from the operation or ownership of the Station prior to the TBA Date, including
any liabilities arising under the Licenses or the Assumed Contracts which relate
to events occurring prior to the TBA Date (but specifically excluding any matter
for which there is a proration adjustment which is a credit in favor of Buyer)
and any and all losses, liabilities or damages resulting from actions of Seller
not in accordance with the terms of the TBA and this Agreement between the TBA
Date and the Closing Date.
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(e) Any losses, liabilities or damages under Contracts
which (i) are not listed on Schedule 3.7 and (ii) are required to be listed on
Schedule 3.7 by the terms of Section 3.7.
(f) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in investigating
or attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3. Indemnification by Buyer. After the Closing and subject to the
terms and conditions in Sections 10.4 and 10.7, notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement at Closing or in
connection therewith.
(b) Any and all losses, liabilities or damages resulting
from any Assumed Liabilities (except to the extent that Buyer is entitled to
indemnification from Seller pursuant to Section 10.2(d) hereof up to the amount
of the Indemnity Escrow Amount).
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the TBA Date except
for losses, liabilities or damages resulting from actions of Seller during the
period between the TBA Date and the Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in investigating
or attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4. Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five (5)
days after written notice of such action, suit, or proceeding was given to
Claimant. Notice of claims by Buyer for indemnification also shall be given to
the Indemnification Escrow Agent as described in the Indemnification Escrow
Agreement.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty (30) days to
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make such investigation of the claim as the Indemnifying Party deems necessary
or desirable. For the purposes of such investigation, the Claimant agrees to
make available to the Indemnifying Party and/or its authorized representatives
the information relied upon by the Claimant to substantiate the claim. If the
Claimant and the Indemnifying Party agree at or prior to the expiration of the
thirty (30) day period (or any mutually agreed upon extension thereof) to the
validity and amount of such claim, the Indemnifying Party shall immediately pay
to the Claimant the full amount of the claim. If the Claimant and the
Indemnifying Party do not agree within the thirty (30) day period (or any
mutually agreed upon extension thereof), the Claimant may seek appropriate
remedy at law or equity subject to the limitations and qualifications set forth
in this Section 10.4 and Section 10.7.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
in good faith by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make commercially reasonable
efforts to reach a decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
(f) No party shall be entitled to indemnification
hereunder unless and until the amount for which indemnification under this
Agreement and the WJAC Agreement is owing exceeds One Hundred Fifty Thousand
Dollars ($150,000) (the "Basket") in the aggregate for all such matters;
provided, however, that if such amount exceeds One Hundred Fifty Thousand
Dollars ($150,000), the Indemnifying Party shall be liable to the Claimant for
the entirety of the amount and not just the portion in excess of One Hundred
Fifty Thousand Dollars ($150,000); provided, further, that the Basket shall not
apply to the proration adjustments set forth in Section 2.3; provided, further,
that the Basket shall not apply to material breaches of the representations and
warranties set forth in Section 3.15 solely to the extent that Buyer has made a
written claim hereunder with respect to any such material breach prior to the
date which is seventy-five (75) days after the TBA Date.
10.5. Specific Performance. The parties recognize that if Seller
breaches this Agreement prior to Closing and refuses to perform under the
provisions of this Agreement, monetary damages alone would not be adequate to
compensate Buyer for its injury. Buyer shall therefore be entitled, in addition
to any other remedies that may be available, including money
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damages, to obtain specific performance of the terms of this Agreement. If any
action is brought by Buyer to enforce this Agreement, Seller shall waive the
defense that there is an adequate remedy at law.
10.6. Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses.
10.7. Limitations on Indemnification.
(a) Notwithstanding any other provision of this Agreement
to the contrary, Buyer acknowledges and agrees as follows: (i) the maximum
aggregate liability of Seller and WJAC Seller pursuant to this Agreement and the
WJAC Agreement (taken as a whole) to Buyer for any and all losses, liabilities
or damages incurred or suffered by Buyer (including losses, liabilities or
damages with respect to claims of third parties) shall not exceed the Indemnity
Escrow Amount, regardless of whether the Buyer seeks indemnification pursuant to
this Section 10 or Section 10 of the WJAC Purchase Agreement, regardless of the
form of action, whether in contract or tort, including negligence, and
regardless of whether or not Seller and WJAC Seller are notified of the
possibility of damages to Buyer, and (ii) the sole and exclusive recourse,
remedy and source of funds available to satisfy any indemnification obligations
of Seller pursuant to this Section 10 shall be solely from the funds held by the
Indemnification Escrow Agent pursuant to the Indemnification Escrow Agreement;
provided, however, that nothing herein shall limit the remedies Buyer may have
for losses, liabilities or damages based on fraud by the Seller.
(b) Notwithstanding any other provision of this Agreement
to the contrary, (i) in no event shall Buyer or Seller be liable for any
punitive damages and (ii) in no event shall Seller be liable for any losses,
liabilities or damages related to asbestos located at the Real Property. Each
party hereto agrees to use reasonable efforts to mitigate any losses,
liabilities or damages which form the basis for any claim for indemnification
hereunder.
(c) Whenever an Indemnifying Party is required to
indemnify and hold harmless a Claimant from and against and hold a Claimant
harmless from, or to reimburse a Claimant for losses, liabilities or damages,
such Indemnifying Party will, subject to the provisions of this Section 10, pay
the Claimant the amount of such losses, liabilities or damages reduced by the
net proceeds of any insurance policy paid to the Claimant with respect to such
losses, liabilities or damages, including, without limitation, insurance
payments to Buyer under Seller's insurance policies as provided for in Section
6.16.
10.8. Assignment of Indemnification and Other Rights. The parties
hereto acknowledge that Seller may at any time after the Closing assign (by
contract, dividend, distribution or otherwise) to Seller's stockholders, or to
any other affiliate of Seller or Seller's stockholders, any or all of Seller's
rights in and to the Indemnity Escrow Amount and/or any or all of Seller's
contractual rights to indemnification by Buyer under this Agreement.
SECTION 11. MISCELLANEOUS
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11.1. Fees and Expenses. Any federal, state, or local sales or
transfer tax or recordation costs and expenses arising in connection with the
conveyance of the Assets by Seller to Buyer pursuant to this Agreement shall be
paid equally by Buyer and Seller. Except as otherwise provided in this
Agreement, each party shall pay its own expenses incurred in connection with the
authorization, preparation, execution, and performance of this Agreement,
including all fees and expenses of counsel, accountants, agents, and
representatives, except that Buyer and Seller shall each pay one-half of all
filing fees required by the FCC.
11.2. Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested or sent by
facsimile transmission, (c) deemed to have been given on the date of personal
delivery or the date set forth in the records of the delivery service or on the
return receipt or on the date of the confirmation if sent by facsimile, and (d)
addressed as follows:
If to Seller: Smith Acquisition Company
720 2nd Avenue South
St. Petersburg, Florida 33701
Attention: David A. Fitz
Fax: (727)821-8092
With a copy to: Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart, Jr., Esq.
Fax: (214)740-7355
and
Hogan & Hartson L.L.P.
8300 Greensboro Drive
McLean, VA 22102
Attention: Richard T. Horan, Jr., Esq.
Fax: (703)610-6200
If to Buyer: Andrew S. Fisher
Executive Vice President - TV Affiliates
Cox Broadcasting, Inc.
1400 Lake Hearn Drive, N.E.
Atlanta, GA 30319
Fax: (404)843-5398
With a copy to: Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
Attention: Kevin F. Reed, Esq.
Fax: (202)776-2222
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or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.2.
11.3. Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that (a) Buyer may assign its rights and obligations under
this Agreement, in whole or in part, to one or more subsidiaries or commonly
controlled affiliates of Buyer without seeking or obtaining Seller's prior
approval; provided, (i) Buyer provides Seller with written notice prior to the
time of such assignment and Buyer guarantees the performance of Buyer's
obligations hereunder by the assignee, and (ii) such assignment shall not delay
the FCC's grant of the FCC Consent, and (b) from and after the Closing, Seller
may assign certain of its rights as set forth in Section 10.8. Upon any
permitted assignment by Buyer or Seller in accordance with this Section 11.3,
all references to "Buyer" herein shall be deemed to be references to Buyer's
assignee and all references to "Seller" herein shall be deemed to be references
to Seller's assignee, as the case may be. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Except to the extent provided in Section 10.4(e), no
person or entity, other than the parties hereto and their respective successors
and permitted assigns, is or shall be entitled to bring any action to enforce
any provision of this Agreement against any of the parties hereto, and the
covenants and agreements set forth in this Agreement shall be solely for the
benefit of, and shall be enforceable only by, the parties hereto or their
respective successors and assigns as permitted hereunder. Without limiting the
foregoing, no employee of Seller and no other person or entity shall be a
third-party beneficiary under this Agreement or any other transaction document.
11.4. Further Assurances. The parties shall take any actions and
execute any other documents that may be reasonably necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to this
Agreement.
11.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.6. Headings. The headings in this Agreement are included for ease
of reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
11.7. Gender and Number. Words used in this Agreement, regardless of
the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.8. Entire Agreement. This Agreement, the schedules hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto,
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collectively represent the entire understanding and agreement between Buyer and
Seller with respect to the subject matter hereof. This Agreement supersedes all
prior negotiations between the parties and cannot be amended, supplemented, or
changed except by an agreement in writing that makes specific reference to this
Agreement and which is signed by the party against which enforcement of any such
amendment, supplement, or modification is sought.
11.9. Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation, warranty,
covenant, agreement, or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 11.9.
11.10. Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all disclosures
and/or filings with governmental authorities as may, in its judgment be required
or advisable in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
11.11. Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
SMITH ACQUISITION COMPANY
By: /s/ David A. Fitz
----------------------------------------
Name: David A. Fitz
Title: Chief Financial Officer
SMITH ACQUISITION LICENSE COMPANY
By: /s/ David A. Fitz
----------------------------------------
Name: David A. Fitz
Title: Chief Financial Officer
COX BROADCASTING, INC.
By: /s/ Andrew S. Fisher
----------------------------------------
Name: Andrew S. Fisher
Title: Executive Vice President
