<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
/ x / Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1995 or
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ______________________to
______________________.
Commission file number 1-8309.
PRICE COMMUNICATIONS CORPORATION
------------------------------------------------------------------
(Exact name of registrant as specified in its Charter)
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NEW YORK 13-2991700
- ----------------------------------------------------- -------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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45 Rockefeller Plaza, Suite 3201, New York, New York, 10020
-----------------------------------------------------------
(Address of Principal Executive Offices)
(Zip Code)
(212) 757-5600
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
------ ------
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years. Indicate by check mark whether the registrant has filed
all documents and reports required to be filed by sections 12, 13 or 15(d) of
the Securities Exchange Act subsequent to the distribution of securities under
the plan confirmed by the court.
Yes x No
------ ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
9,821,594 shares of Common Stock, par value $.01 per share, outstanding as of
October 30, 1995.
Page 1 of 12 Pages
There are Exhibits.
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PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 1995
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PART I - FINANCIAL INFORMATION
---------------------
Page
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Number
--------------------------------- ------
Consolidated Balance Sheets at September 30, 1995
and December 31, 1994.................................................................. 3
Consolidated Statements of Operations for the
Three and Nine Months ended September 30, 1995 and 1994................................ 4
Condensed Consolidated Statements of Cash Flows
for the Nine Months ended September 30, 1995 and 1994.................................. 5
Notes to Consolidated Financial Statements..................................................... 6-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
----------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.......................................... 8-10
---------------------------------------------
PART II - OTHER INFORMATION............................................................................ 11
-----------------
ITEM 1. LEGAL PROCEEDINGS...................................................................... 11
-----------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K....................................................... 11
--------------------------------
SIGNATURES..................................................................................... 12
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Price Communications Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
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<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
-------------------------------------------
(Unaudited)
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ASSETS
Current assets:
Cash and cash equivalents $ 2,645,270 $ 1,136,010
Marketable equity securities (see Note 3) 1,039,500 -
Accounts receivable, net 5,366,025 5,073,450
Film broadcast rights 2,468,088 1,990,874
Prepaid expenses and other current assets 771,065 892,303
-------------------------------------------
Total current assets 12,289,948 9,092,637
Property and equipment, at cost, less
accumulated depreciation 11,262,323 11,499,936
Broadcast licenses and other intangibles,
less accumulated amortization 66,101,374 67,528,870
Film broadcast rights 2,678,412 1,867,096
Notes receivable 540,000 817,500
Other assets 199,687 46,091
-------------------------------------------
Total assets $ 93,071,744 $ 90,852,130
===========================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 3,132,180 $ 3,602,734
Current portion of long-term debt 9,624 1,209,493
Other current liabilities 5,464,241 4,264,326
-------------------------------------------
Total current liabilities 8,606,045 9,076,553
-------------------------------------------
Long-term debt 22,003,160 21,310,356
Deferred tax effect on basis difference arising
on acquisition 18,187,578 18,435,308
Other liabilities 2,969,067 2,950,585
Shareholders' equity:
Preferred Stock, par value $.01 per share;
authorized 20,000,000, no shares outstanding - -
Common Stock, par value $.01 per share;
authorized 40,000,000 shares; outstanding
9,816,594 in 1995 and 11,213,605 in 1994 98,166 112,136
(see Note 2)
Additional paid-in capital 18,902,901 26,248,234
Retained earnings 22,304,827 12,718,958
-------------------------------------------
Total shareholders' equity 41,305,894 39,079,328
-------------------------------------------
Total liabilities and shareholders' equity $ 93,071,744 $ 90,852,130
===========================================
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE> 4
Price Communications Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------- -------------------------------
1995 1994 1995 1994
---- ---- ---- ----
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Revenue $ 7,887,917 $ 6,413,942 $ 24,553,534 $ 18,681,053
Agency and representatives' commissions 1,231,532 871,177 3,883,483 2,487,223
--------------------------------- -------------------------------
Net revenue 6,656,385 5,542,765 20,670,051 16,193,830
--------------------------------- -------------------------------
Operating expenses 3,588,962 3,450,118 11,346,185 10,773,162
Corporate expenses 877,755 868,404 2,013,718 2,918,640
Other (income) expense, net (403,832) (89,115) (6,876,459) (2,543,000)
Interest expense 511,481 156,498 1,572,454 214,987
Amortization of deferred debt expense - 142,420 360,000 176,361
Depreciation and amortization 977,742 755,955 2,710,271 1,803,397
Unrealized noncash loss on marketable
securities 110,629 - 110,629 -
--------------------------------- -------------------------------
5,662,737 5,284,280 11,236,798 13,343,547
--------------------------------- -------------------------------
Income before income taxes 993,648 258,485 9,433,253 2,850,283
Income tax expense (benefit) 5,080 38,000 (152,616) 43,000
--------------------------------- -------------------------------
Net income $ 988,568 $ 220,485 $ 9,585,869 $ 2,807,283
================================= ===============================
Income per share $ 0.10 $ 0.02 $ 0.91 $ $0.22
================================= ===============================
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See accompanying notes to consolidated financial statements
4
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Price Communications Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------
1995 1994
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NET CASH PROVIDED BY OPERATING ACTIVITIES $ 5,489,163 $ 2,422,390
CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Sale of business and equipment , net 5,713,352
Investment in businesses, net of cash acquired (50,365,979)
Recovery on notes receivable, net 7,593,802 -
Capital expenditures (1,100,958) (357,673)
Purchase of marketable securities (1,867,882) -
Proceeds from sale of marketable securities 825,703 -
Other (28,300) -
--------------------------------------
Net cash provided by (used in) investing activities 5,422,365 (45,010,300)
--------------------------------------
CASH FLOWS (USED IN) PROVIDED BY FINANCING
ACTIVITIES:
Payment of line of credit origination fee (360,000) -
Borrowings under line of credit agreements 360,000 41,800,000
Payments under line of credit agreements (860,000) -
Repurchase of common stock (8,664,219) -
Proceeds from stock options exercised 121,951 216,470
--------------------------------------
Net cash (used in) provided by financing activities (9,402,268) 42,016,470
--------------------------------------
Net increase in cash and cash equivalents 1,509,260 (571,440)
Cash and cash equivalents at beginning of period 1,136,010 1,395,102
--------------------------------------
Cash and cash equivalents at end of period $ 2,645,270 $ $823,662
======================================
Supplemental information:
Income taxes paid, net of refunds $ 180,718 $ 151,133
======================================
Interest paid $ 1,572,454 $ 86,219
======================================
</TABLE>
See accompanying notes to consolidated financial statements
5
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PRICE COMMUNICATIONS CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Price
Communications Corporation (the "Company" or "Price") and its subsidiaries.
All significant intercompany items and transactions have been eliminated.
The consolidated financial statements have been prepared by the Company without
audit, in accordance with rules and regulations of the Securities and Exchange
Commission. In the opinion of management, the statements reflect all
adjustments necessary for a fair presentation of the results for the interim
periods. The results of operations for any interim period are not necessarily
indicative of the results for a full year.
2. PER SHARE DATA
Primary income per common share is based on net income for the period divided
by the weighted average number of shares of common stock and common stock
equivalents outstanding, which was approximately 10,392,000 and 10,528,00 for
the three and nine months ended September 30, 1995 and 12,667,000 and
12,515,000 for three and nine months ended September 30, 1994. All
presentations of common shares outstanding and income per common share have
been retroactively restated to reflect the April 1995 stock split.
3. MARKETABLE SECURITIES
Marketable securities, consisting of equity securities, are stated at the lower
of cost or market based on quoted market prices. Unrealized losses on
marketable securities are charged to income. Realized gains and losses are
determined by a specific identification method and are reflected in income.
4. RECENT DEVELOPMENTS
On August 8, 1995, the Company agreed to sell, subject to FCC approval,
substantially all of the assets, together with certain liabilities, of its
three NBC affiliates, KJAC-TV, Beaumont/Port Arthur, TX; KFDX-TV, Wichita Falls,
TX/Lawton, OK and KSNF-TV, Joplin, MO/Pittsburg, KS for approximately $40
million in cash. The stations were sold to USA Broadcasting Group, a newly
organized acquirer of television properties. The Company expects a pre-tax gain
of approximately $29 million from this transaction.
6
<PAGE> 7
PRICE COMMUNICATIONS CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. RECENT DEVELOPMENTS (CONTINUED)
On October 18, 1995, the Company agreed to sell, subject to FCC approval,
substantially all of the assets, together with certain liabilities of its ABC
affiliate serving the Harrisburg-York-Lebanon-Lancaster, PA television market
for $113 million in cash to Allbritton Communications Corporation. The Company
expects a pre-tax gain of approximately $66 million from this transaction.
[ The remainder of this page is left blank intentionally ]
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
References to the "Company" or "Price" in this report include Price
Communications Corporation and its subsidiaries, unless the context otherwise
indicates.
RESULTS OF OPERATIONS
The Company's net revenue, operating expenses, depreciation,
amortization and interest expense for the nine and three months ended September
30, 1995 are not comparable to the three and nine months ended September 30,
1994, due to the September 1994 acquisition of WHTM-TV, the borrowings to
effect such acquisition, and the 1994 dispositions of the Company's radio
properties and other assets.
THREE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1994
Net revenue increased by 20% to $6.7 million. The increase was due
primarily to the acquisition of WHTM-TV in September 1994 (and its results not
being included for the full third quarter of 1994) and the strong performance
of all the television stations during the three months ended September 30,
1995 partially offset by a decline in revenue due to the sale of Price's radio
stations in 1994. Related operating expenses increased by only 4%, as a result
of the increase in revenue and relatively higher operating margin of the new
television station as compared to the properties the Company sold. Interest
expense increased by $.4 million over the prior year's quarter since the
Company had little or no long-term debt outstanding for most of the three
months ended September 30, 1994. Depreciation and amortization expense rose
$.2 million primarily as a result of amortization of intangibles associated
with the acquisition of WHTM-TV.
The Company recognized approximately $1.0 million and $.2 million of
net income for the three months ended September 30, 1995 and 1994,
respectively. This increase in net income for the three months ended September
30, 1995 was primarily the result of increased income from operations, as
noted above, and other income of $.4 million resulting primarily from the
Company's negotiation and signing of a new national sales representation
agreement for WHTM-TV and new network-affiliation agreements for its three NBC
affiliates.
The Company's per share income was $.10 and $.02 for the three months
ended September 30, 1995 and 1994, respectively.
8
<PAGE> 9
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1994
Net revenue increased by 28% primarily due to the acquisition of
WHTM-TV in 1994 (and therefore not being included for most of the first nine
months of 1994) and the strong performance of all the television stations
during the nine months ended September 30, 1995, but was partially offset by a
decline in revenue due to the sale of Price's radio stations in 1994. Related
operating expenses increased only 5% as a direct result of the increase in
revenue and the relatively higher operating margin of WHTM-TV as compared to
the properties the Company sold. Corporate expense decreased approximately $.9
million as compared to the same period last year due to the absence of any
legal and advisory expenses in 1995 related to the 1992 restructuring and a
related lawsuit. Depreciation and amortization expense increased $.9 million
primarily as a result of amortization of intangibles associated with the
acquisition of WHTM-TV.
The Company recognized approximately $9.6 million and $2.8 million of
net income for the nine months ended September 30, 1995 and 1994, respectively.
This increase in 1995 is primarily due to increased income from operations and
the realization of $7.3 million in other income from the liquidation of
Fairmont offset by a $1.2 million loss incurred in repurchasing the Company's
own stock. Net income for nine months ended September 30, 1994 was primarily
the result of a pretax gain of approximately $3.0 million realized by the
Company on the sale of its Buffalo radio stations. Additionally, interest
expense increased by $1.4 million over the prior year's nine months since the
Company had little or no long-term debt outstanding during most of the nine
months ended September 30, 1994.
The Company's per share income was $.91 and $.22 for the nine months
ended September 30, 1995 and 1994, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company had approximately $2.7 million and $1.1 million in cash
and cash equivalents at September 30, 1995, and December 31, 1994,
respectively. The Company had net working capital of approximately $3.7
million at September 30, 1995. The Company had long term debt of approximately
$22 million as of September 30, 1995.
Although the Company has incurred substantial depreciation and
amortization expenses as a result of the purchase of its properties, it does
not anticipate the need to make major capital expenditures for its existing
media properties during 1996 and the Company does not believe that such a lack
of major capital expenditures will affect its competitive position. Capital
expenditures for the nine months ended September 30, 1995 were approximately
$1.1 million.
9
<PAGE> 10
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Company's sources of funds to serve its debt and meet its other obligations
have been provided historically by its liquid assets, cash flow from operations
and investment activities, proceeds from the sale of properties and from loans
and financings. The Company expects to have $100 million of cash available
after consummation of the sale of its four television stations after receiving
the benefit of its net capital and operating losses, payment of taxes and
repayment of the Company's outstanding debt. The Company anticipates using
such funds to seek acquisitions primarily in the media field, for repurchase of
the Company's common stock pursuant to prior Board of Directors approval and
possibly other media and related investments.
In March 1995, the Company's Board of Directors authorized the
purchase of up to 1,000,000 shares of its Common Stock in the open market or in
privately negotiated transactions when it is legally permissible to do so or
believed to be in the best interests of Price's shareholders, in addition to
previous authorizations. Approximately 1.5 million shares were purchased in
1995 under this new authorization and previous authorizations.
[The remainder of the page is left blank intentionally.]
10
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
(10)(gg) Asset purchase agreement dated as of August
8, 1995 by and between USA Broadcasting Group
L.L.C. and Price Communications Corporation,
Texoma Broadcasting Corp., Southeast Texas
Broadcasting Corp. and Tri-State Broadcasting
Corp.
(10)(hh) Asset purchase agreement dated as of October
18, 1995 by and between WHTM-TV, Inc. and
Allbritton Communications Company.
(27) Financial Data Schedule
(b) Reports on Form 8-K.
None
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PRICE COMMUNICATIONS CORPORATION
Dated: November 8, 1995 By /s/Robert Price
------------------------------
Robert Price
President and Chief Financial Officer
12
<PAGE> 13
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
(10)(gg) Asset purchase agreement dated as of August
8, 1995 by and between USA Broadcasting Group
L.L.C. and Price Communications Corporation,
Texoma Broadcasting Corp., Southeast Texas
Broadcasting Corp. and Tri-State Broadcasting
Corp.
(10)(hh) Asset purchase agreement dated as of October
18, 1995 by and between WHTM-TV, Inc. and
Allbritton Communications Company.
27 Financial Data Schedule
<PAGE> 1
EXHIBIT (10)(gg)
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of August 8, 1995, by and
between USA Broadcast Group, L.L.C., a Delaware limited liability company
("Buyer"), and Price Communications Corporation, a New York corporation
("Price), Texoma Broadcasting Corp., a Texas corporation ("Texoma"), Southeast
Texas Broadcasting Corp., a Texas corporation ("Southeast") and Tri-State
Broadcasting Corp., a Delaware corporation ("Tri-State") (Price, Texoma,
Southeast and Tri-State, collectively "Seller").
RECITALS
A. Price is the parent company of Texoma, Southeast and
Tri-State.
B. Texoma is the licensee of and owns and operates Television
Station KFDX-TV, Channel 3, Wichita Falls, Texas ("KFDX-TV" or the "Station")
pursuant to authorizations issued by the Federal Communications Commission.
C. Southeast is the licensee of and owns and operates Television
Station KJAC-TV, Channel 4, Port Arthur, Texas ("KJAC-TV" or the "Station")
pursuant to authorizations issued by the Federal Communications Commission.
D. Tri-State is the licensee of and owns and operates Television
Station KSNF(TV), Channel 16, Joplin, Missouri ("KSNF(TV)" or the "Station")
pursuant to authorizations issued by the Federal Communications Commission
(KFDX-TV, KJAC-TV and KSNF(TV) collectively the "Stations").
E. Seller desires to sell, and Buyer wishes to buy, substantially
all the assets that are used or useful in the business or operations of the
Stations, 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 accounts held by Seller as of the
Closing Date for advertising and programming aired on the Stations prior to the
Closing Date and for production and other services provided by Seller prior to
the Closing Date.
<PAGE> 2
"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 listed in Schedule 3.7
that are designated to indicate that they will be assumed by Buyer upon its
purchase of the Stations, (ii) Contracts with advertisers for the sale of
advertising time on the Stations for cash at prevailing rates and which may be
canceled by the Stations without penalty on not more than thirty days' notice,
and (iii) any Contracts entered into by Seller between the date of this
Agreement and the Closing Date in accordance with the terms hereof.
"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.
"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 and
employment 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 Stations, 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 Closing Date.
"FCC" means the Federal Communications Commission.
"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 Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
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<PAGE> 3
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data (but excluding any technical
information and data located at Seller's New York corporate headquarters),
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 useful in the business and operations of the
Stations, together with any additions thereto between the date of this
Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, including the call letters, the Federal Aviation
Administration, or any other federal, state, or local governmental authorities
to Seller in connection with the conduct of the business or operations of the
Stations, together with any additions thereto between the date of this
Agreement and the Closing Date.
"Permitted Liens" means (i) liens for current taxes not yet due and
payable, (ii) any easement, right-of-way or encumbrance on the real property
included in the Assets that does not materially impair the value or interfere
with the use and enjoyment thereof in the operation of the Stations, and (iii)
any matter disclosed in Schedule 3.5 hereto.
"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 useful in the business or operations of the Stations,
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
useful in the conduct of the business or operations of the Stations, together
with any additions thereto between the date of this Agreement and the Closing
Date.
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, and
deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of the
tangible and intangible assets used or useful in connection with the conduct of
the business or operations of the Stations, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding the
assets described in Section 2.2, free and clear of any claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges, or
encumbrances of any nature whatsoever (except for Permitted Liens),
-3-
<PAGE> 4
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 Stations that are not specifically included within the
Intangibles, including the goodwill of the Stations.
(f) All of Seller's proprietary information, technical
information and data, maps, computer discs and tapes, plans, diagrams
blueprints, and schematics, including filings with the FCC relating to the
business and operations of the Stations;
(g) All choses in action of Seller relating to the
Stations; and
(h) All books and records relating to the business or
operations of the Stations, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Stations.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all other
cash in any of Seller's bank accounts;
(b) Any notes receivable, insurance policies, bonds,
letters of credit, or other similar items, and any cash surrender value in
regard thereto;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements;
(d) All books and records that Seller is required by law
to retain;
(e) Any interest in and to any refunds of federal, state,
or local franchise, income, or other taxes for periods prior to the Closing
Date; and
(f) All Accounts Receivable of the Stations.
2.3 Purchase Price. The Purchase Price for the Assets shall be
calculated on the basis of the multiple of 9.2 times the combined twelve-month
trailing Cash Flow (as hereinafter
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<PAGE> 5
defined) for all of the Stations, as determined as of the last day of the month
preceding the Closing Date. As used herein, the term "Cash Flow" shall mean
net operating revenues less all operating expenses, including actual cash
payments for programming, but not including depreciation, amortization
(including programming amortization), trade revenues and expenses, income
taxes, interest expenses, environmental remediation expenses, if any, legal and
other transactional costs and management fees, and as that term is used in the
broadcast industry; provided, however, that operating revenues shall not
include the "mutual growth grant" (or equivalent payment) payable to Seller
under the NBC term sheet referenced below. Seller covenants and agrees to pay
in a timely manner all accounts payable, expenses and other obligations which
are due and payable at or prior to Closing and arising out of the operation of
the Stations between the date hereof and Closing, subject to good faith
disputes. The Purchase Price shall be adjusted at closing as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Stations, 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 for taxes arising from the
transfer of the Assets under this Agreement), and similar prepaid and deferred
items shall be prorated between Buyer and Seller in accordance with the
principle that Seller shall be responsible for all expenses, costs, and
liabilities allocable to the period prior to the Closing Date, and Buyer shall
be responsible for all expenses, costs, and obligations allocable to the period
on and after the Closing 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.
(b) Manner of Determining Adjustments. The Purchase
Price, taking into account the adjustments and prorations pursuant to Section
2.3(a), will be determined finally in accordance with the following procedures:
(1) Seller shall prepare and deliver to Buyer not
later than five days before the Closing Date a preliminary settlement statement
which shall set forth Seller's good faith estimate of the Purchase Price and
any adjustments to the Purchase Price under Section 2.3(a). The preliminary
settlement statement (A) shall contain all information reasonably necessary to
determine the adjustments to the Purchase Price under Section 2.3(a), to the
extent such adjustments can be determined or estimated as of the date of the
preliminary settlement statement, and such other information as may be
reasonably requested by Buyer, and (B) shall be certified by Seller to be true
and complete as of the date thereof.
(2) No later than 90 days after the Closing Date,
Buyer will deliver to Seller a statement setting forth Buyer's determination of
the Purchase Price and the calculation thereof pursuant to Section 2.3(a). If
Seller disputes the amount of the Purchase Price determined by Buyer, it shall
deliver to Buyer within 30 days after its receipt of Buyer's
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statement a statement setting forth its 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 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
30-day period.
(3) Buyer and Seller shall use good faith efforts
to resolve any dispute involving the determination of the Purchase Price and
any adjustments thereto. If the parties are unable to resolve the dispute
within 15 days following the delivery of Seller's statement or Buyer's
statement, as the case may be, Buyer and Seller shall jointly designate an
independent certified public accountant, who shall be knowledgeable and
experienced in the operation of television broadcasting stations, to resolve
the dispute. The accountant's resolution of the dispute shall be final and
binding on the parties, and a judgment may be entered thereon in any court of
competent jurisdiction. Any fees of this accountant shall be split equally
between the parties.
2.4 Payment of Purchase Price. The Purchase Price shall be paid by
Buyer to Seller as follows:
(a) Payment of Estimated Purchase Price. At the Closing,
Buyer shall pay or cause to be paid to or for the account of Seller the
Purchase Price as adjusted by the estimated adjustments set forth in Seller's
preliminary settlement statement (the "Estimated Purchase Price") by federal
wire transfer of same-day funds pursuant to wire instructions which shall be
delivered by Seller to Buyer at least two business days prior to the Closing
Date.
(b) Payments to Reflect Adjustments.
(1) If the Purchase Price as finally determined pursuant
to Section 2.3(b) exceeds the Estimated Purchase Price, Buyer shall pay to
Seller, in immediately available funds within five days after the date on which
the Purchase Price is determined pursuant to Section 2.3(b), the difference
between the Purchase Price and the Estimated Purchase Price.
(2) If the Purchase Price as finally determined pursuant
to Section 2.3(b) is less than the Estimated Purchase Price, Seller shall pay
to Buyer, in immediately available funds within five days after the date on
which the Purchase Price is determined pursuant to Section 2.3(b), the
difference between the Purchase Price and the Estimated Purchase Price.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Stations on or after the Closing Date, together with any other
obligation of Seller which has been prorated in favor of Buyer under Section
2.3(a) above. Buyer shall not assume any other obligations or liabilities of
Seller, including (i) any obligations or liabilities under any
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Contract not included in the Assumed Contracts, (ii) any obligations or
liabilities under the Assumed Contracts relating to the period prior to the
Closing Date, (iii) any Claims or pending litigation or proceedings relating to
the operation of the Stations prior to the Closing, (iv) any obligations or
liabilities of Seller under any employee pension, retirement, health and
welfare or other benefit plans or collective bargaining agreements, (v) any
obligation to any employee of the Stations for severance benefits, vacation
time, or sick leave accrued prior to the Closing Date (except to the extent
such items are prorated in Buyer's favor at Closing, and except to extent
provided for in an employment contract assumed by Buyer at Closing), or (vi)
any obligations or liabilities caused by, arising out of, or resulting from any
negligent action or omission of Seller or other intentional breach or wilful
misconduct of Seller prior to the Closing, and all such obligations and
liabilities shall remain and be the obligations and liabilities solely of
Seller. Except in connection with Buyer's agreement to assume certain
employment contracts at Closing, Buyer shall be under no obligation to hire the
Stations' employees.
2.6 Escrow Deposit. The parties acknowledge and agree that Buyer
has deposited One Hundred Fifty Thousand Dollars ($150,000) (the "Escrow
Deposit") with Seller on the date hereof. Unless Buyer cancels this Agreement
in accordance with Section 9.2(g) hereof, within fourteen (14) days after the
date hereof (or such later date if Buyer's cancellation right is extended
under Section 9.2(g) (such date hereinafter being referred to as the "Escrow
Date")), Buyer agrees to place an additional Three Hundred and Fifty Thousand
Dollars ($350,000) in escrow to be held by Fleet National Bank (the "Escrow
Agent") and disbursed pursuant to Section 9.3 hereof and in accordance with
the terms of the Escrow Agreement which is attached hereto as Exhibit A. Upon
Buyer's deposit of the additional $350,000 into escrow, Seller agrees to
deposit into escrow with the Escrow Agent the $150,000 deposit previously
delivered by Buyer, at which time the aggregate sum of $500,000 shall be deemed
the Escrow Deposit hereunder to be applied toward the Purchase Price at Closing
or held and disbursed in accordance with Section 9.3 and the Escrow Agreement.
If Buyer cancels this Agreement pursuant to Section 9.2(g) hereof,
Seller shall be entitled to retain the $150,000 deposit for its own account.
The parties acknowledge that Seller has not yet provided Disclosure Schedules
and certain deliveries of documents as required hereunder.
2.7 Collection of Accounts Receivable.
(a) At the Closing, Seller shall designate Buyer as its
agent solely for purposes of collecting the Accounts Receivable existing on the
Closing Date and provide Buyer with an accurate and up to date list of the
Accounts Receivable. Buyer shall make reasonable efforts to collect the
Accounts Receivable during the "Collection Period," which shall be the period
beginning on the Closing Date and ending on the last day of the fourth calendar
month following the Closing Date. All amounts received from accounts with
respect to which Buyer continues to sell advertising time on the Stations, or
otherwise maintains a business relationship, on and after the Closing Date
shall be applied first to the payment in full of any outstanding Account
Receivable balance for such account. Buyer shall not be obligated to use any
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extraordinary efforts to collect any of the Accounts Receivable or to refer any
of the Accounts Receivable to a collection agency or to an attorney for
collection. Buyer shall incur no liability to Seller for any uncollected
Accounts Receivable. During the Collection Period, neither Seller nor its
agents shall make any direct solicitation of any of the Accounts Receivable for
collection purposes. Following the expiration of the Collection Period, Seller
may pursue collections of all Accounts Receivable.
(b) On or before the fifth day following the end of each
calendar month in the Collection Period, Buyer shall furnish Seller with a list
of, and pay over to Seller without set-off or deduction, the amounts collected
during such calendar month with respect to the Accounts Receivable, less any
amounts for commissions due (which Buyer will then pay) and any amounts finally
determined to be payable to Buyer pursuant to Section 2.4(b)(2).
(c) Following the expiration of the Collection Period,
Buyer shall have no further obligations under this Section 2.7, except that
Buyer shall immediately pay over to Seller any amounts subsequently paid to it
with respect to any Accounts Receivable.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization. Standing. and Authority. Each of the Sellers is
a corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction in which it is organized. Tri-State is duly qualified
to conduct business as foreign corporation in the State of Missouri. 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
Stations as now conducted, and (iii) to execute and deliver this Agreement and
the documents contemplated hereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by 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
business or operations of the Stations or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by Seller have been (or will prior to Closing
be) 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 obligation of Seller, enforceable
against Seller in accordance within 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
Consents listed on Schedule 3.3 and satisfaction of the requirements of the HSR
Act, if applicable, the execution, delivery, and performance by Seller of this
Agreement and the documents contemplated hereby
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(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 Articles of Incorporation or Bylaws 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 accelerate or permit the acceleration of any performance
required by the terms of, any material 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.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued pursuant to Final Orders, and
Seller is the authorized legal holder thereof. The Licenses 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 Stations 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 materially limit the full operation of the Stations as now operated.
The Licenses are in full force and effect, and the conduct of the business and
operations of the Stations is in accordance therewith in all material respects.
Seller has no reason to believe that any of the Licenses would not be renewed
for a full term with no materially adverse conditions by the FCC or other
granting authority in the ordinary course. Schedule 3.7 includes a true and
complete list of all agreements with operators of cable television systems
pursuant to which Seller has granted to such operators the right to retransmit
the Stations' signals (the "Retransmission Agreements"). Except with respect
to the cable television systems that are parties to the Retransmission
Agreements, on or before June 17, 1993, Seller made a valid election of must
carry with respect to each cable system located within each Station's Area of
Dominant Influence (as defined in Section 76.55(e)(1) of the Commission's
rules). Except as set forth on Schedule 3.4, no cable system has advised
Seller of any signal quality deficiency or copyright indemnity or other
prerequisite to cable carriage of any Station's signal, and 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 from the FCC.
With respect to KJAC-TV, the parties acknowledge that the Station's
1993 application for renewal of licenses ("Renewal Application") is pending
before the FCC. Seller represents that neither a petition to deny nor a
competing application has been filed against the Renewal Application and the
deadline for filing either a petition to deny or competing application against
the Renewal Application was July 1, 1993. Seller further represents that the
only reason the KJAC-TV renewal has not been granted is the fact that the FCC
has not resolved an indecency complaint against the Station involving an
episode of The Phil Donahue Show. Seller covenants to use its best efforts to
obtain an expeditious grant of the Renewal Application without any conditions
materially adverse to Buyer's ownership or operations of KJAC-TV. Seller shall
hold Buyer harmless and indemnify Buyer in connection with the complaint and
the FCC's disposition of the renewal application. With respect to KSNF-TV, the
parties further
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<PAGE> 10
acknowledge that there is pending against the Station a complaint alleging EEO
violation(s). Seller covenants to use its best efforts to have the matter
resolved expeditiously without any conditions materially adverse to Buyer's
ownership or operations of the Station. Seller shall hold Buyer harmless and
indemnify Buyer in connection with that EEO complaint and the FCC's disposition
of it.
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 the street address and legal description of owned
Real Property). The Real Property listed on Schedule 3.5 comprises all real
property interests necessary to conduct the business and operations of the
Stations as now conducted. Seller has good and insurable fee simple title, to
all fee estates (including the improvements thereon) included in the Real
Property, free and clear of all liens, mortgages, pledges, covenants,
easements, restrictions, encroachments, leases, charges, and other claims and
encumbrances of any nature whatsoever, and without reservation or exclusion of
any mineral, timber, or other rights or interests, except for liens for real
estate taxes not yet due and payable and liens disclosed on Schedule 3.5 and
Permitted Liens. 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 or, in the case of guy wires or anchors, Seller otherwise has
legal and valid rights for the placement thereof on adjoining properties.
Seller has delivered to Buyer true and complete copies of all deeds pertaining
to the Real Property. Except as set forth on Schedule 3.5, all Real Property
(including the improvements thereon) (i) is in good condition and repair
consistent with its present use, (ii) is available for immediate use in the
conduct of the business and operations of the Stations, and (iii) complies in
all material respects with all applicable building or zoning codes and the
regulations of any 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 Stations 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 security interest,
mortgage, pledge, conditional sales agreement, or other lien or encumbrance,
except for liens for current taxes not yet due and payable. Each item of
Tangible Personal Property is available for immediate use in the business and
operations of the Stations. Except as set forth on Schedule 3.6, all items of
transmitting and studio equipment included in the Tangible Personal Property
(i) have been maintained in a manner consistent with generally accepted
standards of good engineering practice, and (ii) will permit the Stations and
any of its auxiliary broadcast stations to operate in all material respects in
accordance with the terms of the FCC Licenses and the rules and regulations of
the FCC, and in all material respects with all other applicable federal, state,
and local statutes, ordinances, rules, and regulations.
3.7 Contracts. Schedule 3.7 is a true and complete (i) list of all
material Contracts, except contracts with advertisers for the sale of
advertising time on the Stations for cash at prevailing rates and which have
not been prepaid and which may be canceled by the Stations
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without penalty on not more than thirty days' notice, and (ii) summary of
Seller's rights and obligations as of the date hereof under trade and barter
agreements relating to the Stations. Seller has delivered to Buyer true and
complete copies of all written Contracts which are required to listed on
Schedule 3.7, and true and complete memoranda of all oral Contracts (including
any amendments and other modifications to such Contracts). Other than the
Contracts listed on Schedule 3.7 and those that are not required to be listed
thereon, Seller requires no material contract, lease, or other agreement to
enable it to carry on its business as now conducted. Except as set forth on
Schedule 3.7, all of the Assumed Contracts are in full force and effect, and
are valid, binding, and enforceable in accordance with their terms. To
Seller's knowledge, there is not under any Assumed Contract any material
default by any party thereto. 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.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1, the other Consents described in Schedule 3.3 and satisfaction of the
requirements under the HSR Act, if applicable, no material 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, (ii) to permit Seller
to assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct
the business and operations of the Stations in essentially the same manner as
such business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are, to
Seller's knowledge, valid and in good standing and uncontested. Seller has
delivered to Buyer copies of all documents in its possession establishing or
evidencing all Intangibles. 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. The Intangibles listed on Schedule 3.9 comprise all intangible
property interests necessary to conduct the business and operations of the
Stations as now conducted.
3.10 Financial Statements. Seller has furnished Buyer with true
and complete copies of balance sheets and a profit and loss statements for the
periods ended December 31, 1993 and 1994, and unaudited balance sheet and
profit and loss statement for the six months ended June 30, 1995 (collectively,
the "Financial Statements). The Financial Statements have been prepared from
the books and records of Seller, have been prepared in accordance with
generally accepted accounting principles consistently applied and maintained
throughout the periods indicated, accurately reflect the books, records, and
accounts of the Stations (which books, records, and accounts are complete and
correct), are complete and correct in all material respects, and present fairly
the financial condition of the Stations as at their respective dates and the
results of operations for the periods then ended. None of the Financial
Statements materially understates the true direct (excluding indirect overhead
and headquarters expense) costs and expenses of
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conducting the business or operations of the Stations or inflates the revenues
of the Stations.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Stations. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate
in amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Stations against all customary and foreseeable risks. During the past three
years, no insurance policy of Seller on the Assets or the Stations has been
canceled by the insurer and no application of Seller for insurance has been
rejected by any insurer.
3.12 Reports. All material returns, reports, and statements which
the Stations are 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
Stations have been complied with in all material respects. All of such returns,
reports, and statements are substantially complete and correct as filed. Seller
has timely paid to the FCC all annual regulatory fees payable with respect to
the FCC Licenses.
3.13 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and Seller has paid or caused to be
paid all taxes shown on those returns or on any tax assessment received by
Seller 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. There are no governmental
investigations or other legal, administrative, or tax proceedings pursuant to
which Seller is or could be made liable for any taxes, penalties, interest, or
other charges, the liability for which could extend to Buyer as transferee of
the business of the Stations, and no event has occurred that could impose on
Buyer any material transferee liability for any taxes, penalties, or interest
due or to become due from Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings affecting the television broadcasting industry generally or except
as set forth in Schedule 3.14, 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 Seller with respect to its
ownership or operations of the Stations or otherwise relating to the Assets or
the business or operations of the Stations. In particular, but without
limiting the generality of the foregoing, except as set forth in Schedule 3.14,
there are no applications, complaints or proceedings pending or, to the best of
its knowledge, threatened (i) before the FCC relating to the business or
operations of the Stations other than rule making proceedings which affect the
television industry generally, (ii) before any federal or state agency relating
to the business or operations of the Stations involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Stations involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.15 Environmental Matters.
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(a) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge 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 its ownership or operation of the Stations
alleging any failure to comply with any such law, rule, or regulation. For
purposes of this Section 3.15, Buyer acknowledges that Seller purchased the
stock of Texoma and Southeast and that the term "Seller" as used herein does
not include Texoma and Southeast prior to such stock purchase.
(b) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge, Seller has no liability relating to its ownership and
operations of the Stations (and there is no reasonable basis related to the
past or present operations, properties, or facilities of Seller for the
creation of any such material future 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) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge, Seller has no material liability relating to its ownership
and operation of the Stations (and there is no reasonable basis for the
creation of any such material future 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) Except as set forth on Schedule 3.15, in connection
with its ownership and operation of the Stations, Seller has obtained and been
in material compliance with the terms and conditions of all material permits,
licenses, and other authorizations which are required under, and has complied
in all material respects with all other 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) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge, all properties and equipment used in the business and
operations of the Stations are and have been free of friable asbestos and
asbestos- related products, PCB's, methylerle chloride, trichloroethylene, 1,
2-transdichloroethylene, dioxins, dibenzofurans, and Extremely Hazardous
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<PAGE> 14
Substances (as defined in Section 302 of the Emergency Planning and Community
Right-to-Know Act), where the existence thereof would be a material violation
of applicable environmental laws.
(f) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge, no pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Stations where the existence
thereof would be a material violation of applicable environmental laws. Seller
did not discover the existence of any of the foregoing when it acquired the
Real Property.
3.16 Compliance with Laws. Seller has complied in all material
respects with (i) the Licenses, and (ii) all federal, state, and local laws,
rules, regulations, and ordinances applicable or relating to the ownership and
operation of the Stations. To the best of Seller's knowledge, neither the
ownership or use of the properties of the Stations nor the conduct of the
business or operations of the Stations conflicts in any material respect with
the rights of any other person or entity. Buyer acknowledges that Seller's
representations and warranties regarding compliance with environmental laws are
governed by Section 3.15.
3.17 Conduct of Business in Ordinary Course. Since June 30, 1995,
Seller has conducted the business and operations of the Stations only in the
ordinary course and has not:
(a) Suffered any significant material adverse change in
the business, assets, or properties of the Stations, including any damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Stations which would have a material adverse effect on the
operations of the Stations;
(b) Made any material sale, assignment, lease, or other
transfer of any Station's properties other than in the normal and usual course
of business where no longer needed in the operation of the business of the
Stations or with suitable replacements being obtained therefor (for purposes of
this subparagraph (b), the term "material" shall mean in excess of $10,000 per
Station);
(c) Canceled any material debts owed to or claims held by
Seller with respect to any Station, except in the normal and usual course of
business;
(d) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
any Station; or
(e) Transferred or granted any right under, or entered
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to any Station.
3.18 Transactions with Affiliates. Other than Price Communications
and its subsidiaries, Seller has not been involved in any business arrangement
or relationship relating to
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the Stations 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
Stations. As used in this paragraph, "affiliate'' has the meaning set forth in
Rule 12b-2 promulgated under the Securities and Exchange Act of 1934.
3.19 Broker. Neither Seller nor any person or entity 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.
3.20 Personnel.
(a) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.20, and complete and accurate copies of
any such written Employee Plans and Compensation Arrangements (or related
insurance policies) have been furnished to Buyer, along with copies of any
employee handbooks or similar documents describing such Employee Plans and
Compensation Arrangements. Schedule 3.20 also includes a description of any
unwritten Employee Plans or Compensation Arrangements. Schedule 3.20 also
contains a true and complete list of all employees of the Stations, their job
descriptions, dates of hire and amounts and dates of last salary increase.
(b) Each Employee Plan and Compensation Arrangement has
been administered in material compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, the Age Discrimination in
Employment Act and any other applicable Federal or state laws. Seller is not
aware of any pending governmental audit or examination of any Employee Plan or
Compensation Arrangement or of any facts which would lead it to believe that
any such audit or examination is 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 best knowledge of Seller,
threatened against any of such plans or arrangements, and Seller possesses no
knowledge of any facts which could give rise to any such action, suit or claim.
(c) Seller does not contribute to and is not required to
contribute to any Multi-employer Plan with respect to the employees of the
Stations, and neither Seller nor any other trade or business under common
control with Seller (within the meaning of Sections 414(b), (c), (m) or (o) of
the Code) has incurred or reasonably expects to incur any "withdrawal
liability," as defined under Section 4201 et seq. of ERISA.
(d) Except as described in Schedule 3.20, neither Seller
nor any other trade or business under common control with Seller (within the
meaning of Sections 414(b), (c), (m) or (o) of the Code) sponsors, maintains or
contributes to any Employee Plan or Compensation Arrangement that provides
retiree medical or retiree life insurance coverage to employees of Seller at
the Stations upon their retirement.
(e) Except as described in Schedule 3.20, with respect to
each Employee Plan and, to the extent applicable, each Compensation
Arrangement: (i) each Employee Plan that is
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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 affect the validity of an Employee
Plan's letter; (ii) no prohibited transaction, within the definition of section
4975 of the Code or Title 1, Part 4 of ERISA, has occurred which would subject
Seller to any liability that could become a liability of Buyer; and (iii) all
contributions, premiums or payments accrued, in whole or in part, under each
Employee Plan or Compensation Arrangement or with respect thereto as of the
Closing will be paid by the Seller prior to the Closing.
(f) For purposes of this Agreement, the following terms
shall have the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan
as defined in Section 3(3) of ERISA to which Seller or any entity related to
Seller (under the terms of Section 414(b), (c), (m) or (o) of the Code)
contributes or to which Seller or any entity related to Seller (under the terms
of Section 414(b), (c), (m) or (o) of the Code) sponsors, maintains or
otherwise is bound which provides benefits to persons employed or previously
employed at the Stations; (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, which provides to persons employed or previously employed at the
Stations 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; and (v) "Multi-employer Plan" means a plan, as defined in ERISA
Section 3(37), to which Seller or any entity related to Seller (under the terms
of Section 414(b) or (c) of the Code) contributes or is required to contribute.
3.21 Labor Relations. Seller is not a party to or subject to any
collective bargaining agreements with respect to any Station. Seller has no
written or oral contracts of employment with any employee of any 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 it has not received any written notice alleging that it has
failed to comply in any material respect with any such laws, rules, or
regulations. No material controversies, disputes, or proceedings are pending
or, to the best of Seller's knowledge, threatened, between it and any employee
(singly or collectively) of any Station. No labor union or other collective
bargaining unit represents or claims to represent any of the employees of any
Station. There is no union campaign being conducted to represent employees of
any 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 any Station.
3.22 Full Disclosure. No representation or warranty made by Seller
in this Agreement
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or in any schedule hereto or any certificate furnished or to be furnished by
Seller pursuant hereto contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact and required to
make any statement made herein or therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization. Standing. and Authority. Buyer is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Delaware and on or before the Closing Date will be
duly qualified to conduct business as a foreign corporation in the States of
Texas and Missouri. Buyer has all requisite power and authority to execute and
deliver this Agreement and the documents contemplated hereby, and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by Buyer hereunder and thereunder.
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 obligation
of Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by judicial discretion
in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents and satisfaction of the requirements of the HSR Act, if applicable,
the execution, delivery, and performance by Buyer of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (i) do not require the consent of any third party; (ii) will
not conflict with the Certificate of Incorporation or Bylaws 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 or entity 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 FCC Qualifications. To the best of Buyer's knowledge, (i)
Buyer is qualified under the rules and regulations of the FCC to enter into
this Agreement and consummate the transactions contemplated herein and (ii)
Buyer requires no waivers of such rules or regulations in order for the FCC to
grant the FCC Consent.
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4.6 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document or other instrument furnished
or to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
and required to make any statement made herein or therein not misleading.
SECTION 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Stations only in
accordance with the covenants in this Section 5.
5.2 Contracts. Seller will not enter into any contract or
commitment relating to the Stations 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, in the case of any of the foregoing, will be binding on
Buyer after Closing and will require the payment of consideration of more than
$500 without Buyer's prior written consent. Prior to the Closing Date, Seller
shall deliver to Buyer a list of all Contracts entered into between the date of
this Agreement and the Closing Date, together with copies of such Contracts.
Notwithstanding the foregoing, Seller will not enter into any programming
agreement which will be binding on Buyer after the Closing without Buyer's
prior written consent.
5.3 Disposition of Assets. Seller shall not sell, assign, lease, or
otherwise transfer or dispose of any of the material Assets without Buyer's
prior written consent, except where no longer used or useful in the business or
operations of the Stations or in connection with the acquisition of replacement
property of equivalent kind and value.
5.4 Encumbrances. Seller shall not create, assume or permit to exist
any claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance
of any nature whatsoever upon the Assets, except for (i) liens and encumbrances
disclosed on Schedule 3.5 and Schedule 3.6, and (ii) liens for current taxes
not yet due and payable, (iii) mechanics' liens and other similar liens, and
(iv) Permitted Liens, all of which liens and encumbrances in clauses (i) and
(iii) shall be removed prior to the Closing Date, unless in the case of the
liens and encumbrances specified in clause (i) either: (A) the existence of
such liens and encumbrances does not materially impair the value or interfere
with the use and enjoyment of the Stations; or (B) such liens and encumbrances
are reasonably and adequately described (with respect to possible material
impairment of or interference with value or use as aforesaid) in the Disclosure
Schedules or other written material received by Buyer on or before August 22,
1995; provided, however, that Buyer shall, within thirty (30) days after the
date hereof, inform Sellers in writing of those liens and encumbrances
specified in clause (i) above which it believes Sellers are required to remove
as aforesaid.
5.5 Licenses. Seller shall not cause or permit, by any act or failure
to act, any of the Licenses to expire or to be revoked, suspended, or modified,
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 Licenses. Seller shall not fail to prosecute with
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due diligence any applications to any governmental authority in connection with
the operation of the Stations.
5.6 Rights. Seller shall not waive any right relating to the Stations
or any of the Assets. Seller shall not cause or permit, by any act or failure
to act, any cable system located within any Station's Area of Dominant
Influence to refuse to carry such Station's signal.
5.7 No Inconsistent Action. Seller shall not take any action that is
inconsistent with its obligations under this Agreement or that could hinder or
delay the consummation of the transactions contemplated by this Agreement.
5.8 Access to Information. Seller shall give Buyer and its counsel,
accountants, engineers, advisors and other authorized representatives
reasonable access to the Assets, including each of the Station's studios and
tower site locations and to all other properties, equipment, books, records,
Contracts, and documents relating to the Stations for the purpose of audit and
inspection, including inspections incident to the environmental survey
described in Section 6.5 and the engineering report described in Section 6.6,
and will furnish or cause to be furnished to Buyer or its authorized
representatives all information with respect to the affairs and business of the
Stations that Buyer may reasonably request (including any financial reports and
operations reports produced with respect to the affairs and business of the
Stations). 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 as Buyer determines, in its judgment, are
required or advisable to comply with federal or state securities laws and the
rules and regulations of securities markets as a result of the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
5.9 Maintenance of Assets. Seller shall 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. Seller shall maintain
inventories of spare parts and expendable supplies at levels consistent with
past practices. If any loss, damage, impairment, confiscation, or condemnation
of or to any of the Assets occurs, Seller shall repair, replace, or restore the
Assets to their prior condition as represented in this Agreement as soon
thereafter as possible, and Seller shall use the proceeds of any claim under
any insurance policy solely to repair, replace, or restore any of the Assets
that are lost, damaged, impaired, or destroyed.
5.10 Insurance. Seller shall maintain the existing insurance
policies on the Stations and the Assets.
5.11 Consents. Seller shall use reasonable efforts to obtain the
Consents and the estoppel certificates described in Section 8.2(b), without any
change in the terms or conditions of any Contract or License that could be less
advantageous to the Stations than those pertaining under the Contract or
License 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
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proposed, considered, or requested for any of the Consents.
5.12 Books and Records. Seller shall maintain its books and records
relating to the Stations in accordance with past practices.
5.13 Notification. Seller shall promptly notify Buyer in writing of
any unusual or material developments with respect to the business or operations
of the Stations, and of any material change in any of the information contained
in Seller's representations and warranties contained in Section 3 of this
Agreement.
5.14 Financial Information. Seller shall furnish to Buyer within
twenty days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense of the
Stations for the month just ended and such other financial information
(including information on payables and receivables) relating to the Stations as
Buyer may reasonably request. All financial information delivered by Seller to
Buyer pursuant to this Section shall be prepared from the books and records of
Seller in accordance with generally accepted accounting principles consistently
applied, shall accurately reflect the books, records, and accounts of the
Stations shall be complete and correct in all material respects, and shall
present fairly the financial condition of the Stations as at their respective
dates and the results of operations for the periods then ended. Seller shall
also furnish to Buyer weekly pacing reports for the Stations.
5.15 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 Stations.
5.16 Preservation of Business. Seller shall use its reasonable
efforts to (i) preserve the business and organization of the Stations and keep
available to the Stations its present employees (subject to Seller's right to
control normal personnel decisions), (ii) maintain its level of promotional
efforts in accordance with past practice and current budgets, (iii) preserve
the Station's present relationships with material suppliers, advertisers, and
others having business relations with it.
5.17 Collection of Accounts Receivable. Prior to the Closing, Seller
shall collect the Accounts Receivable only in the ordinary course consistent
with its past practices.
5.18 Personnel Recommendations. Seller shall promptly notify Buyer as
personnel vacancies occur at the Stations and consider for employment all
personnel recommended by Buyer for such vacant positions.
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
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FCC.
(b) Seller and Buyer shall promptly prepare (an) appropriate
application(s) for the FCC Consent and shall jointly file the application(s)
with the FCC within five business days of the Escrow Date. The parties shall
prosecute the application(s) with all reasonable diligence and otherwise use
their best efforts to obtain a grant of the application(s) 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 (1) the condition was 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 (2) compliance with the condition would have a material adverse effect upon
it Buyer and Seller shall oppose any petitions and objections filed in
opposition to the application(s) and 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 Stations. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Stations, and all such operations,
including complete control and supervision of all of each Station's programs,
employees, and policies, shall be the sole responsibility of Seller until the
Closing.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement and except as and to the extent
required by law, including disclosure requirements of federal and state
securities laws and 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 upon request
all information obtained by the such party from the other party in connection
with the transactions contemplated by this Agreement.
6.5 Environmental Assessment. Buyer shall have the option, at its
sole expense and cost, to undertake an Environmental Assessment of the real
properties of the Stations in accordance with the terms and conditions set
forth herein. Said Environmental Assessment shall be performed by Dames and
Moore or such other environmental consulting firm acceptable to Seller (the
"Approved Consultant"). The Environmental Assessment shall consist of a Phase
I environmental assessment and Phase I report (the "Phase I") and, only if and
to the extent expressly recommended by the Approved Consultant in its Phase I,
a Phase II environmental assessment and Phase II report (the "Phase II"), which
Phase II environmental assessment may
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include intrusive sampling and testing of the soil and groundwater, integrity
testing of any underground storage tanks and/or an asbestos survey. (The Phase
I and Phase II reports are referred to collectively as the "Environmental
Assessment"). Each of the Phase I and, if necessary, the Phase II shall be
undertaken by the Approved Consultant in accordance with a scope (or scopes) of
work furnished to and approved by Seller prior to the Approved Consultant's
undertaking of the work. If the Buyer undertakes a Phase II environmental
assessment, as provided herein, Buyer shall require that the Approved
Consultant maintains, in full force and effect, general liability insurance
coverage covering claims for bodily injury and property damage that might occur
in the minimum amount of $1 million single limit per occurrence and shall
require that the Approved Consultant cause Seller to be named as an additional
insured under said Policy. A copy of each of the Phase I and Phase II reports
shall be provided to the Seller within three (3) business days of receipt
thereof by the Buyer. The Phase I work shall be completed and a copy of the
Phase I report shall be provided to Seller by no later than September 11, 1995.
Any Phase II work shall be completed and a copy of the Phase II report shall be
provided to Seller by no later than October 6, 1995. In the event that the
Environmental Assessment discloses environmental conditions requiring or
reasonably likely to require remediation or clean-up or further investigation
and the Approved Consultant recommends in the Phase I or Phase II remedial or
further investigatory activities required to cause Seller to be in compliance
with applicable Environmental Laws or, if appropriate, that are reasonably
likely to be required by an environmental regulatory agency with jurisdiction
over the environmental conditions identified in the Environmental Assessments
(collectively, "Remedial Activities"), Buyer and Seller shall share equally
(50% each) all the costs and expenses associated with undertaking said Remedial
Activities; provided, however, that Seller's share of said costs and expenses
shall not exceed $125,000 and provided further that in the event that the costs
and expenses of said Remedial Activities, based upon a written Estimate
prepared by the Approved Consultant and provided to Seller and Buyer, exceeds
$250,000, Buyer shall have the right to terminate this Agreement, upon written
notice to Seller, unless Seller shall agree to bear the costs and expenses of
said Remedial Activities in excess of $250,000.
6.6 Engineering Report. Buyer may, at its option and expense,
retain an engineering firm to conduct a proof of performance study of the
Stations and to prepare a report on each Station's compliance with customary
engineering practices and all applicable FCC rules, regulations, prescribed
practices, and technical standards. If the report discloses any material
deficiencies in the operations or equipment of the Stations, Buyer shall so
notify Seller within ten (10) days of Buyer's receipt of such report.
6.7 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 best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds or deliver any other consideration to obtain any of the Consents or (ii)
to agree to any adverse change in any License or Assumed Contract to obtain a
Consent required with respect thereto.
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6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Texas shall be complied with by Seller. Any loss, liability,
obligation, or cost suffered by Seller or Buyer as the result of the failure of
Seller or Buyer to comply 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.
6.9 Noncompetition Agreement. At Closing, Buyer and Seller shall
enter into a Noncompetition Agreement in the form of Schedule 6. 9 Buyer and
Seller shall endeavor in good faith to agree upon the amount of the Purchase
Price to be allocated to Seller's performance of its obligations under the
Noncompetition Agreement within thirty (30) days after the date hereof.
6.10 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to each
parcel of Real Property that Seller owns, Seller acknowledges that Buyer will
obtain, at Buyer's expense, at or prior to Closing, an ALTA Owner's Policy of
Title Insurance Form B-1987 (or equivalent policy acceptable to Buyer), issued
by a title insurer satisfactory to Buyer, in an amount equal to the fair market
value of the property and any improvements thereon (as reasonably determined by
Buyer), insuring title to such parcel in the name of Buyer as of the Closing,
subject only to liens or encumbrances expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained by Buyer pursuant to this Agreement shall
(1) insure title to the Real Property described in the policy and all recorded
easements benefitting such Real Property. (2) contain an "extended coverage
endorsement" insuring over the general exceptions customarily contained in
title policies (if reasonably available in the jurisdiction in which the
property is located), (3) contain an endorsement insuring that the Real
Property described in the policy is the same real estate shown in the survey
delivered with respect to such property, and (4) contain a "contiguity"
endorsement with respect to any Real Property consisting of more than one
record parcel.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Buyer will be entitled to procure 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.
6.11 Sales Tax Filings. Prior to Closing, Seller shall continue to
file Texas and Missouri sales tax returns with respect to the pertinent
Stations in accordance with Seller's past practices and shall concurrently
deliver copies of all such returns to Buyer.
6.12 Access to Books and Records. Seller shall provide Buyer access
and the right to copy for a period of three years from the Closing Date any
books and records relating to the Assets but not included in the Assets. Buyer
shall provide Seller access and the right to copy for
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a period of three years from the Closing Date any books and records relating to
the Assets that are included in the Assets.
6.13 [Intentionally Omitted]
6.14 Compliance with HSR Act. If the transactions contemplated by
this Agreement are subject to the filing requirements of the HSR Act, or the
approval by the U.S. Federal Trade Commission (the "FTC") and the Antitrust
Division of the U.S. Department of Justice (the "DOJ"), Buyer and Seller will
(i) each make such filings as are required under Title II of the HSR Act as
soon as practicable but in no event later than ten (10) days following the date
hereof, (ii) otherwise promptly comply with the applicable requirements under
the HSR Act, including furnishing all information and filing all documents
required thereunder, (iii) furnish to each other copies of those portions of
the documents filed which are not confidential, and (iv) cooperate fully and
use their best efforts to expedite compliance with the HSR Act.
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. The representations
and warranties of Seller 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. Seller shall have
performed and complied in all material respects with the 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 to the assignment of the
Contracts designated as "material contracts" on Schedule 3.7 shall have been
obtained and delivered to Buyer without any adverse change in the terms or
conditions of any agreement or any governmental license, permit, or other
authorization.
(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, Seller shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all Licenses and there shall not have been any modification of any
License that could have an adverse effect on the Stations or the conduct of its
business and operations. No proceeding shall be pending the effect of which
could be to revoke, cancel, fail to renew, suspend, or modify adversely any
License.
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(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing Date, there shall have been no significant material adverse
change in the assets, properties or business of the Stations, including any
damage, destruction, or loss affecting any assets used or useful in the conduct
of the business or operations of the Stations which would have a material
adverse effect on the operations of the Stations.
(h) HSR Act. If legally required, all filings with the
FTC and the DOJ pursuant to the HSR Act shall have been made and all applicable
waiting periods with respect to such filings (including any extensions thereof)
shall have expired or been terminated and no actions shall have been instituted
which are pending on the Closing Date by the FTC or the DOJ challenging or
seeking to enjoin the consummation of this transaction.
(i) NBC Affiliation. Seller and NBC shall have executed
an amendment to, or renewal agreement with respect to, each of the Stations'
affiliation agreements on terms at least as favorable to Buyer in the aggregate
as those set forth in the term sheet attached hereto as Schedule 7.1(i), and
the network compensation payable thereunder for prime time broadcasts shall be
at least $100,000 (approximately) per Station per year higher than the network
compensation paid to Seller in 1994, as calculated on the basis of (and based
on the assumptions and other matters contained in) the model attached hereto as
Schedule 7.1(i).
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. If legally required, all filings
with the FTC and the DOJ pursuant to the HSR Act shall have been made and all
applicable waiting periods with respect to
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such filings (including any extensions thereof) shall have expired or been
terminated and no actions shall have been instituted which are pending on the
Closing Date by the FTC or the DOJ challenging or seeking to enjoin the
consummation of this transaction.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date not earlier than the first business day after the FCC Consent is
granted and not later than five days following the date upon which the FCC
Consent has become a Final Order, to be set by Buyer on at least three days'
written notice to Seller. If Buyer fails to specify the date for Closing
pursuant to the preceding sentence prior to the third day after the date upon
which the FCC Consent becomes a Final Order, the Closing shall take place on
the fifth day after the date upon which the FCC Consent becomes a Final Order.
If the date of Closing determined in accordance with the requirements of this
Section 8.1(a) falls on a date that is not a business day, the Closing shall
occur on the next business day.
(b) Closing Place. The Closing shall be held at the
offices of Fisher Wayland Cooper Leader & Zaragoza L.L.P., 2001 Pennsylvania
Avenue, N.W., Suite 400, Washington, D.C. 20006, 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,
Bargain and Sale deeds with covenants against Grantor's Acts, motor vehicle
titles, assignments, and other transfer documents which shall be sufficient to
vest good and, with respect to owned Real Property, insurable, title to the
Assets in the name of Buyer, free and clear of all claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges and
encumbrances, except for Permitted Liens;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property upon which the Stations' studios or towers (excluding translators) are
situated;
(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 its President or any Vice
President, certifying (1) that the representations and warranties of Seller
contained in this Agreement are true and complete in all material respects as
of the Closing Date as though made on and as of that date; and (2) that Seller
has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the
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Closing Date;
(e) Title Insurance and Surveys. The title insurance and
surveys described in Section 6.10, provided that Buyer must obtain these items
within thirty (30) days after the date hereof and notify Seller within that
time period if this condition is not fulfilled;
(f) Tax. Lien. and Judgment Searches. Results of a
search for tax lien, and judgment filings in the Secretary of State's records
of the States of Texas and Missouri and in the records of Orange and Wichita
Counties, Texas and of Jasper County, Missouri. Such searches having been made
no earlier than ten days prior to the Closing Date;
(g) Licenses. Contracts. Business Records. Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its operations and in its possession;
(h) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6. 9 duly executed Seller;
(i) Opinion of Counsel. Opinions of Proskauer, Rose,
Goetz & Mendelsohn and Roberts & Eckard dated as of the Closing Date,
substantially in the form of Schedule 8.2(i) hereto; and
(j) Authorizing Resolutions. Certified copies of the
resolutions of Seller's board of directors approving the transactions
contemplated by this Agreement.
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) Purchase Price. The Estimated Purchase Price as
provided in Section 2.4(a);
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts in accordance
with Section 2.5;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by its President or any Vice
President, certifying (1) 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 (2) 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) Noncompetition Agreement. The Noncompetition
Agreement in the form
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of Schedule 6.9, duly executed by Buyer;
(e) Opinion of Counsel. An opinion of Fisher Wayland
Cooper Leader & Zaragoza L.L.P. dated as of the Closing Date, substantially in
the form of Schedule 8.3(e) hereto; and
(f) Authorizing Resolutions. Certified copies of the
resolutions of Buyer's board of directors approving the transactions
contemplated by this Agreement.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Stations abandoned, if Seller is not
then in material breach, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Material Breach. If Buyer shall be in material
breach of any applicable provision of this Agreement, which breach would
prevent consummation of the transactions contemplated hereby and which Buyer is
not diligently seeking to cure in an expeditious manner.
(b) 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.
(c) 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.
(d) Upset Date. If the Closing shall not have occurred
by the date that is 270 days after the date the application(s) for FCC Consent
is (are) filed.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Stations abandoned, if Buyer is not then
in material breach, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Material Breach. If Seller shall be in material
breach of any applicable provision of this Agreement, which breach would
prevent consummation of the transactions contemplated hereby and which Seller
is not diligently seeking to cure in an expeditious manner.
(b) 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.
(c) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
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(d) Upset Date. If the Closing shall not have occurred
by the date that is 270 days after the date the application(s) for FCC Consent
is (are) filed.
(e) Interruption of Service. If any event shall have
occurred that prevented signal transmission by any Station in substantially the
normal and usual manner for a continuous period of three days, provided that
Buyer shall give Seller notice of any termination as a result thereof within
twenty (20) days after it receives notice of such interruption.
(f) [Intentionally Omitted]
(g) Due Diligence Cancellation Right. Buyer shall have
notified Seller within fourteen (14) days after the date of this Agreement that
it desires to cancel this Agreement for any reason in Buyer's sole discretion;
provided that this 14-day period shall be extended if Seller has not furnished
Buyer with full and complete schedules to this Agreement within 7 days after
the date hereof, and in that event, this cancellation date shall be extended
for a period of 7 days following Seller's delivery of full and complete
schedules. Seller agrees to use all reasonable efforts to deliver full and
complete copies of the schedules to Buyer within 7 days after the date hereof.
9.3 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 (excluding Section 9.1(g) which shall be solely
governed by Section 2.6 and not by this Section 9.3) or Section 9.2 and neither
party is in material breach of any provision 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 the Escrow Deposit shall be returned to
Buyer. If this Agreement is terminated by Seller due to Buyer's material
breach of this Agreement, then the payment of the $500,000 Escrow Deposit by
Buyer to Seller shall be liquidated damages and shall constitute full payment
and the exclusive remedy for any damages suffered by Seller by reason of
Buyer's material breach of this Agreement (including absence of financing).
Seller and Buyer agree in advance that actual damages would be difficult to
ascertain and that the amount of Five Hundred Thousand Dollars ($500,000) is a
fair and equitable amount to reimburse Seller for damages sustained due to
Buyer's material breach of this Agreement. If this Agreement is terminated by
Buyer due to Seller's material breach of any provision of this Agreement, the
Escrow Deposit shall be returned to Buyer and Buyer shall have all rights and
remedies available at law or in equity.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
eighteen months and all indemnity claims must be made within such 18-month
period. 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, and no notice or information delivered by
Seller shall affect Buyer's right to rely on any representation or warranty
made by Seller or relieve Seller of any obligations under this
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Agreement as the result of a breach of any of its representations and
warranties; provided, however, that Buyer shall be deemed to have waived any
misrepresentation or breach of warranty with respect to which Buyer has actual
knowledge at Closing based upon written disclosure thereof by Seller and Buyer
proceeds to Closing notwithstanding such disclosure by Seller.
10.2 Indemnification by Seller. 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.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(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 Stations prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to breaches of Seller (or events that would constitute a breach after
notice, the passage of time or both) occurring prior the Closing Date.
(e) 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. 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.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
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(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Stations on and after the Closing.
(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
(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 days
after written notice of such action, suit, or proceeding was given to Claimant.
(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 days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/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-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, 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
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall
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<PAGE> 32
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) Notwithstanding anything in this Agreement to the
contrary, after the Closing neither party shall indemnify or otherwise be
liable to the other party under Sections 10.2(a) or 10.3(b) hereof, except to
the extent that the liabilities exceeds $100,000 and indemnification shall be
made by the indemnifying party only to the extent of such excess over $100,000;
provided, however, that the foregoing limitation shall not be applicable to the
obligations of Seller to indemnify Buyer against the matters addressed in
Section 3.4 hereof or to the obligation of Seller to pay and discharge any
liabilities to third parties not assumed by Buyer hereunder or to the
obligation of Buyer to pay and discharge any obligation assumed hereunder.
10.5 Specific Performance. The parties recognize that if Seller
breaches its obligation to consummate the transactions contemplated by this
Agreement 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 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.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Seller and Buyer shall each pay one-half
of any transfer taxes, recordation taxes, sales taxes, document stamps, or
other charges levied by any governmental entity on account of the transfer of
the Assets from Seller to Buyer, including the filing fees payable upon filing
of the application for FCC Consent. Buyer shall pay the fee imposed by the FTC
in connection with filings made pursuant to the HSR Act, if applicable. 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.
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, (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, and (d) addressed
as follows:
If to Seller: Mr. Robert Price
President
Price Communications Corporation
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<PAGE> 33
45 Rockefeller Plaza, Suite 3201
New York, NY 10020
With a copy to: Peter G. Samuels, Esq.
Proskauer, Rose, Goetz & Mendelsohn
1585 Broadway
New York, NY 10036
If to Buyer: Mr. Raymond J. Schonbak
USA Broadcast Group, L.L.C.
308 Paradise Drive
Tiburon, CA 94920
and
Mr. Robert Fish
USA Broadcast Group, L.L.C.
158 Sherman Road
Wakefield, RI 02879
With a copy to: Richard R. Zaragoza, Esq.
Robert C. Fisher, Esq.
Fisher Wayland Cooper
Leader & Zaragoza, L.L.P.
2001 Pennsylvania Avenue, N.W.
Suite 400
Washington, D.C. 20006
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,
except that Buyer may assign its rights and obligations under this Agreement
(including by operation of a transfer of control) without Seller's consent to
any entity controlled by or under common control with Buyer so long as the
assignment or transfer of control is pro forma in nature, does not materially
affect the qualifications of the Buyer and does not materially affect either
the FCC processing or the Closing. Buyer's assignment of its rights and
obligations under this Agreement shall not relieve Buyer of any of its
obligations under this Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
11.4 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
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
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<PAGE> 34
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 New York (without
regard to any choice of law or conflict of law provisions (whether of the State
of New York or any other jurisdiction) that would cause the application of laws
of any jurisdiction other than the State of New York).
11.6 CONSENT TO JURISDICTION. THE PARTIES AGREE THAT NONEXCLUSIVE
JURISDICTION AND VENUE IN ANY ACTION BROUGHT BY ANY PARTY PURSUANT TO THIS
AGREEMENT WILL PROPERLY LIE IN ANY FEDERAL OR STATE COURT LOCATED IN NEW YORK,
NEW YORK. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY WITH RESPECT TO SUCH ACTION. THE PARTIES IRREVOCABLY AGREE THAT VENUE
WOULD BE PROPER IN SUCH COURT, AND HEREBY WAIVE ANY OBJECTION THAT SUCH COURT
IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH ACTION. EACH
PARTY FURTHER AGREES THAT DELIVERY IN ACCORDANCE WITH SECTION 11.2 OF ANY
PROCESS REQUIRED BY ANY SUCH COURT WILL CONSTITUTE VALID AND LAWFUL SERVICE OF
PROCESS AGAINST SUCH PARTY, WITHOUT NECESSITY FOR SERVICE BY ANY OTHER MEANS
PROVIDED BY STATUTE OR RULE OF COURT.
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent. In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties,
and no presumption or burden of proof will arise favoring or disfavoring any
person or entity by virtue of the authorship of any of the provisions of this
Agreement.
11.10 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and 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.
11.11 Waiver of Compliance; Consents. Except as otherwise provided
in this
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<PAGE> 35
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 11.11.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.13 Press Releases. Except as otherwise required by law, 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 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, in which case the other party shall be first notified in writing.
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<PAGE> 36
IN WITNESS WHEREOF, this Agreement has been executed by Seller and
Buyer as of the date first written above.
PRICE COMMUNICATIONS CORPORATION
By:
-------------------------------
Name:
Title:
TEXOMA BROADCASTING CORP.
By:
-------------------------------
Name:
Title:
SOUTHEAST TEXAS BROADCASTING CORP.
By:
-------------------------------
Name:
Title:
TRI-STATE BROADCASTING CORP.
By:
-------------------------------
Name:
Title:
USA BROADCAST GROUP, L.L.C.
By:
-------------------------------
Name:
Title:
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<PAGE> 1
EXHIBIT (10)(hh)
ALLBRITTON COMMUNICATIONS COMPANY
----------------------------------------------------------
ACQUISITION OF ASSETS OF
TELEVISION STATION
WHTM-TV, CHANNEL 27, HARRISBURG, PENNSYLVANIA
-----------------------------------------------------------
OCTOBER 12, 1995
<PAGE> 2
<TABLE>
<CAPTION>
DOCUMENTS TAB
- --------- ---
<S> <C>
Asset Purchase Agreement between
WHTM-TV, Inc. ("Seller") and
Allbritton Communications Company ("Buyer") . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Exhibit A Assignment of Leases
Exhibit B Bill of Sale
Exhibit C Assignment of Licenses
Exhibit D Assignment of Contracts
Exhibit E Special Warranty Deed
Exhibit F Opinion of Seller's Corporate Counsel and
Opinion of Seller s FCC Counsel
Exhibit G Assumption Agreement
Exhibit H Opinion of Buyer's Counsel
Exhibit I Deposit Escrow Agreement
Schedules to Asset Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Deposit Escrow Agreement between Buyer,
Seller and State Street Bank and Trust Company . . . . . . . . . . . . . . . . . . . . . . . . . 3
Letter Agreement between Buyer and Seller
(regarding approval by Seller s Board of Directors) . . . . . . . . . . . . . . . . . . . . . . . 4
</TABLE>
<PAGE> 3
EXECUTION COPY
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of this 12th day of
October, 1995 by and between WHTM-TV, INC., a Pennsylvania corporation
("Seller"), and ALLBRITTON COMMUNICATIONS COMPANY, a Delaware corporation, or
its permitted assignee ("Buyer").
WHEREAS, Seller owns and operates Television Station WHTM-TV, Channel
27, Harrisburg/Lancaster/Lebanon/York, Pennsylvania, together with certain
auxiliary facilities (collectively, the "Station"); and
WHEREAS, Buyer desires to purchase from Seller all the Assets (as
hereinafter defined), and Seller desires to sell all the Assets to Buyer, all
in accordance with and subject to the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, and intending to be legally
bound, the parties hereto hereby agree as follows:
1. DEFINITIONS AND REFERENCES. As used herein, the following terms
shall have the meanings set forth below, unless the context otherwise requires:
"Accounts Receivable" means all accounts receivable with respect to
the Station as of the end of the broadcast day immediately preceding the
Closing Date.
"Additional Agreements" shall have the meaning set forth in Section
7.01(e).
"Adjustment Closing" means the post-closing adjustment session
scheduled to be held on the thirtieth (30th) day following the Closing Date.
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<PAGE> 4
"Applications" shall have the meaning set forth in Section 5.
"Assets" means the Station and all real, personal and mixed assets,
both tangible and intangible (including the business of the Station as a "going
concern"), wherever located, owned or held by Seller and which are used or
useful in the business and operation of the Station, but not including any
cash, cash equivalents, Accounts Receivable, inter-company receivables or the
claim by Seller referenced in paragraph 1 of Schedule 3.03. Subject to the
provisions of Section 7, Assets shall include all such assets existing on the
date of this Agreement and all such assets acquired between that date and the
Closing Date, and shall include, without limitation, all of Seller's right,
title and interest in and to the following assets:
(a) In that certain real property set forth and described in
Schedule 1(a).
(b) In the leasehold interests in that certain real property
described in Schedule 1(b).
(c) In all buildings, structures, fixtures, and other
improvements now or hereafter actually or constructively attached to the
Property, and all modifications, additions, restorations, or replacements of
the whole or any part thereof, including, without limitation, those described
in Schedules 1(a) and 1(b) (the "Improvements").
(d) As landlord (whether named as such therein or by assignment
or otherwise) in all leases and subleases, if any, of the Property and the
Improvements now existing or at any time hereafter made, and any and all
amendments, modifications, supplements, renewals and extensions thereof,
together with all rents, royalties, security deposits, revenues, issues,
earnings, profits, income and other benefits of the Property or
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the Improvements now due or hereafter to become due with respect to the
Property or the Improvements or any part thereof.
(e) In and to all streets, roads and public places, opened or
proposed, and all easements and rights of way, public and private, rights and
appurtenances, now or hereafter used in connection with, or belonging, incident
or appertaining to, the Property or the Improvements.
(f) In all furniture, fixtures, furnishings, machinery,
equipment, inventory, supplies, antenna installations, towers and other
property, including, without limitation, those described in Schedule 1(f).
(g) In all of the Licenses (as hereinafter defined) for the
Station as more fully described in Schedule 1(g).
(h) In all of the copyrights, trademarks and trade names
(including any and all applications, registrations, extensions and renewals
relating thereto), and all of the rights associated therewith, including,
without limitation, those described in Schedule 1(h) and Seller's rights to the
call letters for the Station.
(i) In all contracts, agreements, leases and other intangible
assets, including, without limitation, those trade-out agreements and other
contracts, agreements and leases described in Schedule 1(i).
(j) In all deposits and prepaid expenses, including, without
limitation, those described in Schedule 1(j).
(k) In all automotive equipment and motor vehicles, including,
without limitation, those described in Schedule 1(k).
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(l) In all engineering, business and other books, papers, files
and records, but not the articles of incorporation, by-laws, minute books,
stock transfer records, or other corporate records of Seller.
(m) In all translators, earth stations, business radio licenses
and other auxiliary facilities, and all applications therefor.
"Assignment of Contracts" means that certain Assignment of Contracts,
dated as of the Closing Date and executed by Seller, substantially in the form
attached hereto as Exhibit D.
"Assignment of Leases" means that certain Assignment of Leases, dated
as of the Closing Date and executed by Seller, substantially in the form
attached hereto as Exhibit A.
"Assignment of Licenses" means that certain Assignment of Licenses,
dated as of the Closing Date and executed by Seller, substantially in the form
attached hereto as Exhibit C.
"Assumption Agreement" means that certain Assumption Agreement dated
the Closing Date and executed by Buyer and Seller, substantially in the form
attached hereto as Exhibit G.
"Bill of Sale" means that certain Bill of Sale and Assignment of
Assets, dated as of the Closing Date and executed by Seller, substantially in
the form attached hereto as Exhibit B.
"Claims" shall have the meaning specified in Section 17.05.
"Closing" means the closing of the purchase, assignment and sale of
the
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<PAGE> 7
Assets contemplated hereunder.
"Closing Date" means the time and date on which the Closing takes
place, as established by Section 11.01.
"Commission" means the Federal Communications Commission.
"Deed" means the special warranty deed of Seller, substantially in the
form attached hereto as Exhibit E.
"Deposit" shall have the meaning specified in Section 2.02.
"Deposit Escrow Agent" means State Street Bank and Trust Company.
"Deposit Escrow Agreement" means that certain Escrow Agreement dated
as of the date hereof among Buyer, Seller and the Deposit Escrow Agent, in the
form of Exhibit I attached hereto.
"Encumbrances" mean any mortgages, pledges, liens, claims, security
interests, agreements, restrictions, defects in title, easements, encumbrances,
or charges.
"FCC Order" means an order or orders of the Commission, or of the
Commission staff, acting under delegated authority, consenting to the
assignment to Buyer of the Licenses for the Station, as proposed in the
Applications therefor, without conditions which are materially adverse to Buyer
or Seller or which in any way diminish the operating rights with respect to the
Assets and the Station, except any such conditions expressly accepted by Buyer
or Seller, as the case may be, in writing.
"Final Order" means the FCC Order(s) as to which the time for filing a
request for administrative or judicial review, or for instituting
administrative review sua sponte, shall have expired without any such filing
having been made or notice of such
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<PAGE> 8
review having been issued; or, in the event of such filing or review sua
sponte, as to which such filing or review shall have been disposed of favorably
to the grant and the time for seeking further relief with respect thereto shall
have expired without any request for such further relief having been timely
filed.
"Indemnified Party" and "Indemnifying Party" shall have the respective
meanings specified in Section 17.05.
"Letter Agreement" means that certain Letter Agreement dated October
2, 1995, between Buyer and Price Communications Corporation, the sole
shareholder of Seller.
"Licenses" means all of the licenses and other authorizations issued
by the Commission for the operation of the Station, as set forth in Schedule
1(g).
"Property" means, collectively, that certain real property described
in Schedule 1(a) and the leasehold interests in that certain real property
described in Schedule 1(b).
"Purchase Price" shall have the meaning specified in Section 2.02.
"Station Contracts" shall have the meaning set forth in Section 3.10.
"Survey" means the surveys for all parcels of real property described
on Schedule 1(a), each of which shall be prepared by a registered land surveyor
licensed in the Commonwealth of Pennsylvania (the "Surveyor"), certified by the
Surveyor to Buyer and Buyer's lender, and showing (a) the location of all lot
and street lines, (b) the location of encroachments, overhangs or projections
by buildings or improvements erected on adjacent lands or on such real
property, (c) means of ingress and egress to
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public roads, (d) the location of all utility and other easements, rights of
way, set-back lines and other matters of record affecting such real property;
(e) a description and the location of all existing improvements (including
parking areas), and (f) such other facts and information as Buyer may
reasonably require.
"Title Insurance Commitment" means an irrevocable title insurance
commitment issued by a reputable title insurance company acceptable to Buyer
and licensed in the Commonwealth of Pennsylvania with respect to the real
property described in Schedule 1(a) for (i) an owner's policy of title
insurance (on ALTA Form B 1970), showing fee simple title to the real property
described in Schedule 1(a) in Buyer, subject to the Encumbrances set forth in
Schedule 3.05(b)(ii), with no general survey exception, and (ii) a
full-coverage mortgagee policy of title insurance (on the ALTA 1970 form),
naming Buyer's lender as the insured party, with no general survey exception,
insuring that the mortgage of Buyer's lender constitutes a valid and recorded
first lien on a good and marketable fee simple interest in the real property
described in Schedule 1(a), subject to the Encumbrances set forth in Schedule
3.05(b)(ii) and providing full protection against filed and unfiled mechanics'
and materialmen's liens. The dollar amount of each policy shall be equal to
the amount of consideration allocated to the real property pursuant to Section
12.
All references to Sections, Exhibits and Schedules are to Sections of
and Exhibits and Schedules to this Agreement.
2. SALE AND PURCHASE OF ASSETS; PURCHASE PRICE; PAYMENT OF PURCHASE
PRICE; ASSUMPTION OF LIABILITIES.
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<PAGE> 10
2.01 ASSET SALE. On the basis of the representations, warranties
and agreements contained herein, and subject to the terms and conditions
hereof, Seller agrees to sell, assign, transfer, convey and deliver to Buyer,
and Buyer agrees to purchase from Seller, the Assets at the Closing.
2.02 ESCROW DEPOSIT. For and in partial consideration of the
execution and delivery of this Agreement, simultaneously with the execution and
delivery of this Agreement, Buyer is delivering to the Deposit Escrow Agent an
irrevocable stand-by letter of credit in the amount of One Million Dollars
($1,000,000), to be held and disbursed by the Deposit Escrow Agent as an
earnest money deposit (the "Deposit"), subject to the terms and conditions of
the Deposit Escrow Agreement.
2.03 PURCHASE PRICE. For and in consideration of the conveyances
and assignments described herein and in addition to the assumption of
liabilities as set forth in Section 2.05, Buyer agrees to pay to Seller, and
Seller agrees to accept from Buyer, a purchase price (the "Purchase Price")
equal to ONE HUNDRED THIRTEEN MILLION DOLLARS ($113,000,000), as adjusted by
the net amount of the adjustments provided in Section 14. The Purchase Price
shall be payable as described in Section 2.04. The Purchase Price shall be
allocated among the Assets in accordance with Section 12.
2.04 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be
payable by Buyer to Seller at the Closing by wire transfer of federal funds to
an account in the United States which will be identified by Seller not less
than three (3) days prior to the Closing Date.
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<PAGE> 11
2.05 ASSUMPTION OF LIABILITIES. At the Closing, Buyer shall
assume only the following liabilities and obligations of Seller (the "Assumed
Liabilities"): (a) the liabilities and obligations of Seller to be performed
after the Closing Date under the contracts, agreements and leases set forth and
described in Schedules 1(b) and 1(i) (or not required to be disclosed on such
Schedules under the first sentence of Section 3.10), (b) the liabilities and
obligations of Seller to be performed after the Closing Date under any
contracts, agreements and leases which are entered into after the date hereof
(in compliance with Section 7) and which are identified in the certificate
referred to in Section 11.02(c), and (c) the items for which Buyer receives an
adjustment credit under Section 14 below. Buyer shall not assume or be deemed
to assume any debts, liabilities or obligations of Seller except as specified
in this Section 2.05.
2.06 401(k) ACCOUNTS. Prior to the Closing Date, Buyer and
Seller shall agree upon a mutually acceptable arrangement with respect to the
transfer of the 401(k) accounts of those employees of the Stations who will be
employed with Buyer after the Closing Date to accounts under Buyer's 401(k)
plan. Notwithstanding anything to the contrary contained herein, none of the
employees of Seller shall have any third party beneficiary or other rights or
benefits under or in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller represents and
warrants to Buyer as follows:
3.01 ORGANIZATION AND STANDING. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Neither the nature of the business conducted by
Seller, nor the character
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<PAGE> 12
of the properties owned, leased or otherwise held by Seller makes any such
qualification necessary in any other state, country, territory or jurisdiction.
Seller has the full and unrestricted power and authority, corporate and
otherwise, to own, lease and operate the Assets, to carry on its business as
now conducted, and to enter into and perform the terms of this Agreement, the
agreements, and instruments referred to herein, and the transactions
contemplated hereby and thereby.
3.02 AUTHORIZATION. The execution, delivery and performance of
this Agreement and of the agreements and instruments called for hereunder, and
the consummation of the transactions contemplated hereby and by such agreements
and instruments have been duly and validly authorized by all necessary actions
of Seller (none of which actions has been modified or rescinded and all of
which actions are in full force and effect). This Agreement constitutes, and
upon execution and delivery each other agreement and instrument will
constitute, a valid and binding agreement and obligation of Seller, enforceable
in accordance with its respective terms. Except as specified in Section 3.05,
the execution, delivery and performance by Seller of this Agreement and the
agreements and instruments called for hereunder will not require the consent,
approval or authorization of any person, entity or governmental authority.
3.03 LITIGATION; COMPLIANCE WITH LAW. There is no action, suit,
investigation, claim, arbitration or litigation pending or, so far as Seller
knows, threatened against or involving either Seller, the Assets, the Station
or the Station s business and operations, at law or in equity, or before or by
any court, arbitrator or governmental authority, and neither Seller nor the
Station is operating under or subject
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<PAGE> 13
to any order, judgment, decree or injunction of any court, arbitrator or
governmental authority, except for those listed in Schedule 3.03. Seller has
complied and is in compliance in all material respects with all laws,
ordinances, regulations, awards, orders, judgments, decrees and injunctions
applicable to Seller, to the Assets, to the Station and to its business and
operations, including all federal, state and local laws, ordinances,
regulations and orders pertaining to employment or labor, safety, health,
environmental protection, zoning and other matters. Seller has obtained all
material permits, licenses and approvals (none of which has been modified or
rescinded and all of which are in full force and effect) from all governmental
authorities necessary in order to conduct the operation of the Station as
presently conducted and to own, use and maintain the Assets.
3.04 FINANCIAL STATEMENTS AND CONDITION; LIABILITIES.
3.04(a) Seller has prepared and/or furnished to Buyer the
balance sheets of Seller as of the dates specified on Schedule 3.04(a), and the
statements of income, stockholders' equity and changes in financial position
for the periods specified on Schedule 3.04(a). All of the financial
statements, including, without limitation, the notes thereto, referred to in
Schedule 3.04(a) or furnished to Buyer after the date hereof pursuant to this
Agreement: (i) are in accordance with the books and records of the Seller,
(ii) are true, correct and complete in all material respects and present fairly
the financial position of Seller as of the respective dates and the results of
operations and changes in cash flow for the respective periods indicated, and
(iii) except for the absence of footnotes, have been prepared in accordance
with generally accepted accounting principles applied on a basis consistent
with prior accounting periods. All
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deposits and prepaid expenses, if any, included as assets of Seller represent
bona fide deposits or payments theretofore made by Seller, the benefit and
advantage of which will be obtained and enjoyed by Seller and, after the
Closing Date, by Buyer.
3.04(b) Except as reflected in the balance sheets as of
August 31, 1995, including the notes thereto or otherwise disclosed in this
Agreement or the Schedules hereto, and except for the current liabilities
incurred in the ordinary course of business of the Station since August 31,
1995, there exist no liabilities of Seller, contingent or absolute, matured or
unmatured, known or unknown. Since August 31, 1995, (i) Seller has not made
any contract, agreement or commitment or incurred any obligation or liability
(contingent or otherwise), except in the ordinary course of business and
consistent with past business practices, (ii) there has not been any discharge
or satisfaction of any obligation or liability owed to Seller, which is not in
the ordinary course of business or which is inconsistent with past business
practices, or (iii) there has not occurred any loss or material injury to the
Assets as the result of any fire, accident, act of God or the public enemy, or
other casualty, or any adverse material change in the Assets or in the
condition (financial or otherwise) of the Station.
3.05 ASSETS; CONSENTS.
3.05(a) The Assets to be acquired at the Closing constitute
all of the real, personal, and mixed assets, both tangible and intangible, that
are used, held for use or necessary for the business and operations of the
Station as presently conducted.
3.05(b) Seller is the sole and exclusive legal and
equitable
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<PAGE> 15
owner of all right, title and interest in and has good and marketable, and (in
the case of owned real property) insurable title to the Assets, free and clear
of any Encumbrances, except for and subject only to (i) liens for real estate
taxes and water and sewer rents not yet due and payable, (ii) existing
easements and other Encumbrances of record on real property set forth on
Schedule 3.05(b)(ii), and (iii) those encumbrances set forth in Schedule
3.05(b)(iii), which shall be removed prior to or contemporaneously with the
Closing Date.
3.05(c) On the Closing Date, Buyer shall acquire good and
marketable and (in the case of owned real property) insurable title to, and all
right, title and interest in, the Assets. The Assets shall be acquired free
and clear of all Encumbrances, except for and subject only to liens for real
estate taxes and water and sewer rents not yet due and payable and existing
easements and other Encumbrances of record on real property set forth on
Schedule 3.05(b)(ii).
3.05(d) All of the Assets to be transferred hereunder are
transferable by Seller by Seller's sole act and deed, and no consent on the
part of any other person is necessary to validate the transfer to Buyer, except
(i) the Licenses described in Schedule 1(g) are not assignable without the
consent of the Commission as provided by law, (ii) certain of the Station
Contracts described in Schedules 1(b) and 1(i), as specified in Schedule
3.05(d), may be assigned only with the consent of third parties, and (iii) the
pre-merger notification clearance required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
3.05(e) The Property and all of the Improvements have
direct
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and unobstructed access to all public utilities necessary for the uses to which
the Property and all of the Improvements are presently devoted by Seller and to
a public street. No portion of the Property or any Improvements is the subject
of, or affected by, any condemnation or eminent domain proceedings currently
instituted or pending, and so far as Seller knows, no such proceedings are
threatened. The Property and the Improvements are not subject to any covenant
or other restriction preventing or limiting Seller's right to convey Seller's
right, title and interest in the Property and the Improvements or, except as
set forth in the Encumbrances set forth in Schedule 3.05(b)(ii), to use the
Property and the Improvements for the various purposes for which the Property
and the Improvements are being used.
3.06 CONDITION OF TANGIBLE ASSETS. All tangible Assets are in
good operating condition and repair(reasonable wear and tear excepted), and are
suitable, adequate and fit for the uses for which they are intended or are
being used; and (except as set forth on Schedule 3.06) the present use of such
Assets do not violate in any material respect any applicable licenses,
statutes, or building, fire, zoning, health and safety or any other laws or
regulations. Without limiting the foregoing, such tangible assets and
operations thereof do not result in exposure of workers or the general public
to levels of radio frequency radiation in excess of the "Radio Frequency
Protection Guides" recommended in "American National Standard Safety Levels
With Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 300
KHz to 100 GHz," issued by the American National Standards Institute.
3.07 TRADEMARKS; LICENSES. Schedule 1(h) contains a true and
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complete listing of all franchises, licenses, trademarks, trade names,
copyrights and applications therefor owned or licensed by or registered in the
name of Seller and used or held for use in the business and operations of the
Station, other than the Licenses, all of which are transferable to Buyer by the
sole act and deed of Seller; and no consent on the part of any other person is
necessary to validate the transfer to Buyer. Seller pays no royalty to anyone
under any of the foregoing. Seller owns or possesses all rights to use all
franchises, licenses, service marks, trademarks, trade names, copyrights,
patents and applications therefor necessary to the conduct of the business of
the Station. Seller does not have any knowledge nor has Seller received any
notice to the effect that any service rendered by Seller relating to the
business of the Station may infringe on any trademark, service mark, trade
name, copyright, patent, trade secret or legally protectable right of another.
3.08 LICENSES. The Licenses for the Station are valid through
the dates set forth on Schedule 1(g), and there are no orders, complaints,
proceedings or investigations, pending or, so far as Seller knows, threatened,
which would affect the validity of the Licenses.
3.09 REPORTS AND RECORDS. All returns, reports and statements
relating to the Station currently required to be filed by Seller with the
Commission or any other governmental instrumentality have been filed and
complied with and are true, correct and complete in all material respects
except as
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set forth on Schedule 3.09. All such reports, returns and statements shall
continue to be filed on a current basis until the Closing Date, and will be
true, correct, and complete in all material respects except as set forth on
Schedule 3.09. All documents required by the Commission's rules to be placed
in the Station s public files have been placed and are being held in such
files. All logs and business records of every type and nature relating to the
business and operations of the Station, including but not limited to political
and public record files, program, operating and maintenance logs, equipment
performance measurements, policies or evidence of insurance, licenses, payroll,
social security and withholding tax returns, operator agreements and other
records pertaining to the business and operations of the Station have been
maintained in all material respects in accordance with good business practices
and the rules of the Commission and are at the Station.
3.10 CONTRACTS. The contracts, agreements and leases set forth
and described in Schedules 1(b), and 1(i) are all of the contracts, agreements,
leases and commitments (both written and oral) relating to the Assets, to the
Station or to the business and operations thereof, other than (i) contracts for
the sale of advertising for cash, incurred in the ordinary course of the
Station's business for a term less than thirty (30) days, and (ii) other
contracts or commitments which do not require payments of more than $10,000
each or $100,000 in the aggregate. Seller has delivered to Buyer prior to the
execution of this Agreement true and complete copies or descriptions of all
contracts, agreements, leases and commitments (and all amendments and
modifications thereto) relating to the Assets, the Station or to the business
and operations thereof (collectively, the "Station Contracts"), except for the
contracts described above in clause (i) of this Section 3.10. The unperformed
obligations ascertainable from the terms on the face of the Station Contracts
are the existing unperformed obligations thereunder. Each
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Station Contract (including, without limitation, the ABC Network Affiliation
agreement) is in full force and effect, and constitutes a valid and binding
obligation of, and is legally enforceable in accordance with its terms against,
the parties thereto. Seller (and to the best of Seller's knowledge) the other
parties thereto have complied in all material respects with all of the
provisions of the Station Contracts and are not in material default thereunder,
and there has not occurred any event which (whether with or without notice,
lapse of time, or the happening or occurrence of any other event) would
constitute such a default. There has not been (to the best of Seller's
knowledge with respect to the performance by parties other than Seller) (i) any
material failure of any party to any Station Contract to comply with all
provisions thereof, (ii) any material default by any party thereunder, (iii)
any threatened cancellation thereof, (iv) any material outstanding dispute
thereunder, or (v) any reasonable basis for any material claim of breach or
default thereunder. Seller has no reason to believe that the ABC Network
Affiliation Agreement described in Schedule 1(i) will not continue to be
renewed by the network as customary in the past.
3.11 CONFLICTS. Except as set forth in Schedule 3.11, the
execution and delivery of this Agreement and the agreements and instruments
called for hereunder, the fulfillment of and the compliance with the respective
terms and provisions of each, and the consummation of the transactions
described in each, do not and will not conflict with or violate any law,
ordinance, regulation, order, award, judgment, injunction or decree applicable
to Seller, to the Assets or to the Station, or conflict with or result in a
breach of or constitute a default under any of the terms, conditions or
provisions of
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Seller's articles of incorporation or bylaws, or any material contract,
agreement, lease, commitment, or understanding to which Seller is a party or by
which Seller is bound or to which any of the Assets or the Station is subject,
or result in the acceleration of any indebtedness or in the creation of any
Encumbrance upon the Assets.
3.12 RELATED PARTIES. Neither Seller nor any shareholder,
officer or director of Seller has any interest whatsoever in any corporation,
firm, partnership or other business enterprise which has had any business
transactions with Seller relating to the Assets or the Station, and no
shareholders of Seller has entered into any transactions with Seller relating
to the Assets or the Station, except for those set forth in Schedule 3.12.
3.13 TAXES. The Seller has timely filed with all appropriate
governmental agencies all federal, state, commonwealth, local, and other tax or
information returns and tax reports (including, but not limited to, all income
tax, unemployment compensation, social security, payroll, sales and use,
profit, excise, privilege, occupation, property, ad valorem, franchise,
license, school and any other tax under the laws of the United States or of any
state or any commonwealth or any municipal entity or of any political
subdivision with valid taxing authority) due for all periods ended on or before
the date hereof. Seller has paid in full all federal, state, commonwealth,
foreign, local and other governmental taxes, estimated taxes, interest,
penalties, assessments and deficiencies (collectively, "Taxes") which have
become due pursuant to such returns or without returns or pursuant to any
assessments received by Seller. Such returns and forms are true, correct and
complete in all material respects,
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and Seller has no liability for any Taxes in excess of the Taxes shown on such
returns. Seller is not a party to any pending action or proceeding, and ,to
Seller's knowledge, there is no action or proceeding threatened by any
government or authority against Seller for assessment or collection of any
Taxes, and no unresolved claim for assessment or collection of any Taxes has
been asserted against Seller.
3.14 EMPLOYEE BENEFIT PLANS.
3.14(a) Except as described in Schedule 3.14(a), neither
Seller nor any Affiliates (as defined below) have at any time established,
sponsored, maintained, or made any contributions to, or been parties to any
contract or other arrangement or been subject to any statute or rule requiring
them to establish, maintain, sponsor, or make any contribution to, (1) any
"employee pension benefit plan" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended, and regulations thereunder
("ERISA")) ("Pension Plan"); (ii) any "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA) ("Welfare Plan"); or (iii) any deferred
compensation, bonus, stock option, stock purchase, or other employee benefit
plan, agreement, commitment, or arrangement ("Other Plan"). Seller and the
Affiliates have no obligations or liabilities (whether accrued, absolute,
contingent, or unliquidated, whether or not known, and whether due or to become
due) with respect to any "employee benefit plan" (as defined in Section 3(3) of
ERISA) or Other Plan that is not listed in Schedule 3.14(a). For purposes of
this Section 3.14, the term "Affiliate" shall include all persons under common
control with Seller within the meaning of Sections 4001(a)(14) or (b)(1) of
ERISA or any regulations promulgated thereunder, or
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Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended (the "Code").
3.14(b) Each plan or arrangement listed in Schedule 3.14(a)
(and any related trust or insurance contract pursuant to which benefits under
such plans or arrangements are funded or paid) has been administered in all
material respects in compliance with its terms and in both form and operation
is in compliance with applicable provisions of ERISA, the Code, the
Consolidated Omnibus Budget Reconciliation Act of 1986 and regulations
thereunder, and other applicable law. Each Pension Plan listed in Schedule
3.14(a) has been determined by the Internal Revenue Service to be qualified
under Section 401(a) and, if applicable, Section 401(k) of the Code, and
nothing has occurred or been omitted since the date of the last such
determination that resulted or could result in the revocation of such
determination. Seller and the Affiliates have made all required contributions
or payments to or under each plan or arrangement listed in Schedule 3.14(a) on
a timely basis and have made adequate provision for reserves to meet
contributions and payments under such plans or arrangements that have not been
made because they are not yet due.
3.14(c) The consummation of this Agreement (and the
employment by Buyer of former employees of Seller or any employees of an
Affiliate) will not result in any carryover liability to Buyer for taxes,
penalties, interest or any other claims resulting form any employee benefit
plan (as defined in Section 3(3) of ERISA) or Other Plan. In addition, Seller
and each Affiliate make the following representations (i) as to all of their
Pension Plans: (A) neither Seller nor any Affiliate has become liable
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to the PBGC under ERISA under which a lien could attach to the assets of Seller
or an Affiliate; (B) Seller and each Affiliate has not ceased operations at a
facility so as to become subject to the provisions of Section 4062(e) of ERISA;
and (C) Seller and each Affiliate has not made a complete or partial withdrawal
from a multiemployer plan (as defined in Section 3(37) of ERISA) so as to incur
withdrawal liability as defined in Section 4201 of ERISA, and (ii) all group
health plans maintained by the Seller and each Affiliate have been operated in
material compliance with Section 4980B(f) of the Code.
3.14(d) The parties agree that Buyer does not and will not
assume the sponsorship of, or the responsibility for contributions to, or any
liability in connection with, any Pension Plan, any Welfare Plan, or Other Plan
maintained by Seller or an Affiliate for its employees, former employees,
retirees, their beneficiaries or any other person. In addition and not as a
limitation of the foregoing covenant, the parties agree that Seller and such
Affiliate shall be liable for any continuation coverage (including any
penalties, excise taxes or interest resulting from the failure to provide
continuation coverage) required by Section 4980B of the Code due to qualifying
events which occur on or before Closing Date. Buyer shall be liable for any
continuation coverage required by Section 4980B of the Code due to qualifying
events that occur after the Closing Date resulting from the transaction
contemplated by this Agreement.
3.15 ENVIRONMENTAL MATTERS.
3.15(a) For purposes of this section, "Hazardous Materials"
means any wastes, substances, or materials, whether solids, liquids or gases,
that are deemed hazardous, toxic, pollutants, or contaminants, including but
not limited to
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substances defined as "hazardous wastes," "hazardous substances," "toxic
substances," "radioactive materials," or other similar designations in, or
otherwise subject to regulation under, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, ("CERCLA") as amended by the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C.
Section 2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1802 et seq.; the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 9601 et seq.; the Clean Water Act ("CWA"), 33 U.S.C. Section
1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq.; or other applicable
federal, state, or local laws, including any rules, regulations, orders, or
ordinances adopted, or other criteria and guidelines promulgated pursuant to
the preceding laws or other similar laws, regulations, rules, orders, or
ordinances in effect as of the date of this Agreement relating to the
protection of human health and the environment (collectively "Environmental
Laws"). "Hazardous Materials" includes but is not limited to polychlorinated
biphenyls (PCBs), asbestos and lead-based paints.
3.15(b) Seller's Environmental Representations and
Warranties. Seller hereby represents and warrants that except as set forth on
Schedule 3.15(b):
(i) There are no pending or, to Seller's knowledge
threatened, actions, suits, claims, legal proceedings or any other proceedings
based on Hazardous Materials or the Environmental Laws at the Property, or any
part thereof, or otherwise arising from Seller's activities at the Property
involving Hazardous Materials;
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(ii) To the best of Seller's knowledge, there are no
conditions, facilities, procedures or any other facts or circumstances which
could reasonably give rise to claims, expenses, losses, liabilities, or
governmental action against Buyer in connection with any Hazardous Materials
present at or disposed of from the Property, including without limitation the
following conditions arising out of, resulting from, or attributable to, the
assets, business, or operations of Seller at the Property: (A) the presence of
any Hazardous Materials on the Property or the release or threatened release of
any Hazardous Materials into the environment from the Property; (B) the off-
site disposal of Hazardous Materials originating on or from the Property or the
business or operations of Seller; (C) the release or threatened release of any
Hazardous Materials into any storm drain, sewer, septic system or publicly
owned treatment works; (D) any noncompliance with federal, state or local
requirements governing occupational safety and health, or presence or release
in the air and water supply systems of the Property of any substances that pose
a hazard to human health or an impediment to working conditions; or (E) any
facility operations, procedures or designs, which do not conform to the
statutory or regulatory requirements of any Environmental Laws.
(iii) To the best of Seller's knowledge, neither
polychlorinated biphenyls nor asbestos- containing materials are present on or
in the Property.
(iv) The property contains no underground storage
tanks, or underground piping associated with tanks, used currently or, to the
best of Seller's knowledge, in the past for the management of Hazardous
Materials.
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3.16 LABOR RELATIONS. There are no strikes, work stoppages,
grievance proceedings, union organization efforts, or other controversies
pending or threatened between Seller and any of its employees or agents or any
union or collective bargaining unit. Seller has complied and is in compliance
in all material respects with all laws and regulations relating to the
employment of labor, including without limitation provisions relating to wages,
hours, collective bargaining, occupational safety and health, equal employment
opportunity, and the withholding of income taxes and social security
contributions. Except as set forth in Schedule 3.16 hereto, there are no
collective bargaining agreements or employment agreements between Seller and
any of its employees. The consummation of the transactions contemplated hereby
will not cause Buyer to incur or suffer any liability relating to, or
obligation to pay, severance, termination, or other payments to any person or
entity. Except as set forth in Schedule 3.16 hereto, no employee of Seller has
any contractual right to continued employment by Seller following consummation
of the transactions contemplated by this Agreement. Seller has previously
delivered to Buyer an accurate and complete list, dated as of September 30,
1995, of all employees of Seller and the rate of compensation (including
salary, bonuses and commissions) of each such employee.
3.17 BROADCAST OF PROGRAMMING. The motion pictures, feature
films, and syndicated programs for which Seller has obtained broadcast rights
have been scheduled and broadcast in the ordinary course of business,
consistent with Seller's past business practices and with customary practices
in the television broadcast industry.
3.18 INSURANCE. Schedule 3.18 contains a list and brief
description
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of all policies of title, property, fire, casualty, liability, life, workmen's
compensation, business interruption and other forms of insurance of any kind
relating to the Assets or the business and operations of the Station and owned
or held by Seller. All such policies: (i) are in full force and effect; (ii)
are sufficient for compliance in all material respects by Seller with all
requirements of law and of all agreements to which Seller is a party; (iii) are
valid, outstanding, and enforceable policies; and (iv) insure against risks of
the kind customarily insured against and in amounts customarily carried by
corporations similarly situated and provide adequate insurance coverage for the
Assets and the Station (including the business and operations thereof).
3.19 DISCLOSURE. All facts known to Seller of material
importance to the Assets, to the Station and to the business of Seller have
been fully and truthfully disclosed to Buyer in this Agreement. No
representation or warranty by Seller and no certificate, Schedule or Exhibit to
be furnished or delivered to Buyer pursuant to or in connection with this
Agreement contains or will contain any material untrue or misleading statement
of fact or omits or will omit any fact necessary to make the statements
contained herein or therein not materially misleading.
4. REPRESENTATIONS AND WARRANTIES BY BUYER. Buyer represents,
warrants and covenants to Seller as follows:
4.01 ORGANIZATION AND STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and by the Closing Date will be duly qualified to do business as a
foreign corporation in Pennsylvania. Buyer has the full and unrestricted power
and authority, corporate and
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otherwise, to enter into and perform the terms of this Agreement, the
agreements and instruments referred to herein, and the transactions
contemplated hereby and thereby.
4.02 AUTHORIZATION. The execution, delivery and performance of
this Agreement and of the agreements and instruments called for hereunder, and
the consummation of the transactions contemplated hereby and thereby, have been
duly and validly authorized by all necessary actions of Buyer (none of which
actions has been modified or rescinded and all of which actions are in full
force and effect). This Agreement consititutes, and upon execution and
delivery each other agreement and instrument will consititute, a valid and
binding agreement and obligation of Buyer, enforceable in accordance with its
respective terms. Except for the consent of the Commission to the assignment
to Buyer of the licenses described in Schedule 1(g), the pre-merger
notification clearance required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and any consents which may be required
from certain lenders of Buyer as described in Schedule 4.02, the execution,
delivery and performance by Buyer of this Agreement and the agreements and
instruments called for hereunder will not require the consent, approval or
authorization of any person, entity or governmental authority.
4.03 QUALIFICATION AS LICENSEE. Buyer is legally and financially
qualified to acquire the Station. Buyer knows of no reason why it should not
be found by the Commission to be qualified under the Communications Act of
1934, as amended, and the Commission's rules and regulations to become the
licensee of the Station, other than the requirement that Buyer obtain a waiver
from the Commission of Section
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73.3555 of the Rules to permit common ownership of Television Station WJLA-TV,
Washington, D.C. and the Station. All information contained in Buyer's portion
of the assignment of license application to be filed with the Commission will
be true, correct and accurate in all material respects.
4.04 LITIGATION; COMPLIANCE WITH LAW. There is no action, suit,
investigation, claim, arbitration or litigation pending or, so far as Buyer
knows, threatened against or involving Buyer, at law or in equity, or before or
by any court, arbitrator or governmental authority, and Buyer is not operating
under or subject to any order, judgment, decree or injunction of any court,
arbitrator or governmental authority. Buyer has complied and is in compliance
in all material respects with all laws, ordinances, regulations, awards,
orders, judgments, decrees and injunctions applicable to Buyer and to its
business and operations, including all federal, state and local laws,
ordinances, regulations and orders pertaining to employment or labor, safety,
health, environmental protection, zoning and other matters.
4.05 CONFLICTS. Except as set forth in Section 4.02, the
execution and delivery of this Agreement and the agreements and instruments
called for hereunder, the fulfillment of and the compliance with the respective
terms and provisions of each, and the consummation of the transactions
described in each, do not and will not conflict with or violate any law,
ordinance, regulation, order, award, judgment, injunction or decree applicable
to Buyer or conflict with or result in a breach of or constitute a default
under any of the terms, conditions or provisions of Buyer's articles of
incorporation or bylaws, or any material contract, agreement, lease,
commitment, or understanding to
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which Buyer is a party or by which Buyer is bound.
4.06 DISCLOSURE. All facts known to Buyer of material importance
to Buyer and its business have been fully and truthfully disclosed to Seller in
this Agreement. No representation or warranty by Buyer and no certificate,
Schedule or Exhibit to be furnished or delivered to Seller pursuant to or in
connection with this Agreement contains or will contain any material untrue or
misleading statement of fact or omits or will omit any fact necessary to make
the statements contained herein or therein not materially misleading.
5. APPLICATION FOR COMMISSION CONSENT. As promptly as practicable
and no later than ten (10) business days following the execution of this
Agreement, Seller and Buyer shall take all steps reasonably necessary to file
and shall participate in the filing of applications with the Commission (the
"Applications") requesting (i) its written consent to the assignment of the
Licenses for the Station (and any extensions and renewals thereof) from Seller
to Buyer and (ii) a request for a permanent waiver of Section 73.3555 of the
Commission s rules (such waiver request to be prosecuted at Buyer's sole
expense). Seller and Buyer will diligently take all necessary and proper
steps, provide any additional information reasonably requested, and otherwise
use their best efforts in order to obtain promptly the requested consent and
approval of the Applications by the Commission, including defending the
Applications against any petition to deny or informal objection; provided that
neither of the parties hereto shall have any obligation to take any
unreasonable steps to satisfy complainants, or to participate in any
evidentiary hearing.
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6. HART-SCOTT-RODINO. As promptly as practicable and no later than
thirty (30) days following the execution of this Agreement, Seller and Buyer
shall complete any filing that may be required pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or shall
mutually agree that no such filing is required. Seller and Buyer shall
diligently take all necessary and proper steps and provide any additional
information reasonably requested in order to comply with the requirements of
such Act.
7. COVENANTS AND AGREEMENTS OF SELLER. Seller covenants and agrees
with Buyer as follows:
7.01 NEGATIVE COVENANTS. Pending and prior to the Closing,
Seller will not, without the prior written approval of Buyer, do or agree to do
any of the following:
7.01(a) Dispositions; Mergers. Sell, assign, lease or
otherwise transfer or dispose of any of the Assets or merge or consolidate with
or into any other entity or enter into any negotiations or agreements relating
thereto; provided, however, Seller may sell, assign, lease or otherwise
transfer or dispose of any asset described in Schedule 1(f) if such asset is
expended in the ordinary course of business, consistent with Seller's past
business practices and with customary practices in the television broadcast
industry, and property or equipment of like kind and equivalent value is
substituted therefor.
7.01(b) Accounting Principles and Practices. Change or
modify any of Seller's accounting principles or practices or any method of
applying such
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principles or practices.
7.01(c) Trade-Outs. Enter into any trade-out agreement, or
similar contract, commitment or understanding to provide broadcast time, except
those which are in the ordinary course of business and consistent with Seller's
past business practices (unless approved in writing by Buyer, which approval
shall not be unreasonably withheld) and which can be and are performed
completely prior to the Closing Date.
7.01(d) Broadcast Time Agreements. Enter into any
broadcast time sales agreement, contract, commitment or understanding except
those that are in the ordinary course of business and consistent with customary
practices in the television broadcast industry.
7.01(e) Additional Agreements. Materially modify or amend
any of the agreements listed in Schedule 3.05(d) (unless approved in writing by
Buyer, which approval shall not be unreasonably withheld) which are marked by
an asterisk or enter into any other agreements, contracts, leases, commitments,
understandings, or licenses (collectively, "Additional Agreements"), or
voluntarily incur (not in the ordinary course of business) any material
obligation or liability (contingent or absolute); provided, however, that
Seller may enter into such Additional Agreements in the ordinary course of
business consistent with Seller's past business practices and with customary
practices in the television broadcast industry, so long as such Additional
Agreements (i) are approved in writing by Buyer (which approval shall not be
unreasonably withheld) or (ii) do not involve payments or obligations in excess
of Ten Thousand Dollars ($10,000) for each
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such Additional Agreement or One Hundred Thousand Dollars ($100,000) for all
such Additional Agreements in the aggregate.
7.01(f) Breaches; Employment Contracts. Do or omit to do
any act (or permit such action or omission) which will cause a material breach
of any Station Contract; enter into or become subject to any employment (other
than employment agreements for replacement employees, which agreements are
approved in writing by Buyer, which approval shall not be unreasonably
withheld), labor or union contract, any professional service contract not
terminable at will, or any bonus, pension, insurance, profit sharing, deferred
compensation, severance pay, retirement, hospitalization, employee benefit, or
other similar plan; increase the compensation payable or to become payable to
any employee other than as contractually required or consistent with the
Station's past practice; or pay or arrange to pay any bonus payment to any
employee other than as contractually required or consistent with the Station's
past practice.
7.01(g) Actions Affecting Licenses or Contracts. Take any
action which may reasonably be expected to jeopardize the validity or
enforceability of or material rights under the Licenses, the ABC Network
Affiliation Agreement or any other material lease or contract.
7.01(h) Programming. Program or broadcast any motion
picture, feature film or syndicated program, except in the ordinary course of
business and consistent with Seller's past business practices.
7.01(i) Accounts. Accelerate the collection of or sell or
assign
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any accounts receivable, or decelerate the payment of accounts payable, except
in order to conform with Seller's past business practices.
7.02 AFFIRMATIVE COVENANTS. Pending and prior to the Closing
Date, Seller will:
7.02(a) Preserve Existence. Preserve its corporate
existence and business organization intact, maintain its existing franchises
and licenses, use its reasonable best efforts (without making additional
payments not otherwise required) to preserve for Buyer its relationships with
suppliers, customers, employees and others having business relations with
Seller, and keep all Assets in their present condition, ordinary wear and tear
excepted.
7.02(b) Normal Operations. Subject to the terms and
conditions of this Agreement (including, without limitation, Section 7.01):
(i) carry on the business and activities of the Station, including without
limitation, the sale of advertising time, entering into trade or barter
arrangements, entering into other agreements, leases, commitments or
understandings, or purchasing and scheduling of programming, in the usual and
ordinary course of business consistent with Seller's past business practices
and with customary practices in the television broadcast industry; (ii) pay or
otherwise satisfy all obligations (cash and barter) of the Station as they come
due and payable consistent with Seller's past practice; (iii) maintain all of
its properties in customary repair, order and condition; and (iv) maintain its
books of account, records, and files in substantially the same manner as
heretofore.
7.02(c) Maintain Licenses. Maintain the validity of the
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Licenses, and comply in all material respects with all rules and regulations of
the Commission.
7.02(d) Network Affiliation. Use its reasonable best
efforts (without making additional payments not otherwise required) to maintain
in full force and effect Seller's present ABC Network Affiliation Agreement as
to the Station (and any and all renewals thereof).
7.02(e) Payables. Pay all of its obligations, including,
without limitation, obligations under the Station Contracts and under any such
contracts that shall be entered into between the date hereof and the Closing
pursuant to Section 7.01, as and when they become due and payable consistent
with Seller's past practice.
7.02(f) Corporate Action. Take all corporate action under
the law of the Commonwealth of Pennsylvania necessary to effectuate the
transactions contemplated by this Agreement and by the agreements and
instruments called for hereunder.
7.02(g) Bulk Sales. Comply with all applicable bulk
transfer and similar laws in connection with the transactions contemplated by
this Agreement and the agreements and instruments called for hereunder.
7.02(h) Access; Environmental Audit. Give to Buyer and
Buyer's authorized representatives full and complete access upon reasonable
notice during normal business hours to Seller's properties, books, records,
contracts, commitments, facilities, premises, and equipment and to Seller's
officers and employees; provided, however, with respect to access to the
properties for the purpose of
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environmental inspection or due diligence the following procedures shall be
followed. Buyer shall have the option at its expense to retain an
environmental consultant reasonably acceptable to Seller to undertake a Phase I
environmental assessment of the Station and the Assets (in accordance with a
Phase I scope of work generally followed by nationally recognized environmental
consulting firms or in accordance with the protocol established by the American
Society for Testing and Materials ("ASTM"), Standard Practice for Environmental
Site Assessments: Phase I Environmental Site Assessment Process, E 1527-93),
and, if recommended by the environmental consultant in the Phase I assessment
report, a Phase II assessment. A copy of the Phase I report shall be provided
immediately upon receipt thereof by Buyer to Seller, but in no event not later
than 35 days from the date hereof. The Phase II assessment (if recommended)
may involve, among other things, intrusive sampling and testing of the soil and
ground water, integrity testing of any underground storage tanks and/or an
asbestos survey. The Phase II assessment, if any, shall be undertaken in
accordance with a scope of work generally followed by nationally recognized
environmental consulting firms or in accordance with the protocol established
by ASTM, to be prepared by the environmental consultant and which shall be
reasonably acceptable to Seller, a copy of which shall be furnished to Seller
prior to undertaking the work. At the conclusion of the Phase II assessment
scope of work, the environmental consultant shall prepare a Phase II assessment
report, a copy of which shall be provided immediately upon receipt thereof by
Buyer to Seller, but in no event not later than 65 days from the date hereof.
Buyer shall complete its environmental assessment contemplated by this Section
7.02(h) no later than thirty (30)
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days from the date hereof (if only a Phase I report is obtained by Buyer) and
no later than sixty (60) days from the date hereof (if a Phase II report is
required by Buyer).
7.02(i) Other Information. Provide to Buyer all such other
information and copies of documents concerning Seller, the operation of the
Station, the Assets, and Seller's customers and suppliers as Buyer reasonably
may request.
7.02(j) Insurance. Maintain in full force and effect all
of its existing casualty, liability, and other insurance through the day
following the Closing Date in amounts not less than those in effect on the date
hereof.
7.02(k) Financial Statements. Provide Buyer with (i)
unaudited monthly balance sheets, and statements of revenues and expenses
reflecting the results of business and operations of the Station and of Seller
for September 30,1995 and for each month thereafter, within twenty (20) days of
the end of each such month and (ii) with unaudited statements of assets and
liabilities and statements of revenues and expenses reflecting the results of
the business and operations of the Station for the preceding twelve (12)
months, within thirty (30) days of the end of the fiscal year. All of the
foregoing financial statements shall comply with the requirements concerning
financial statements set forth in Section 3.04.
7.02(l) Interruption in Broadcast Operations. Promptly
notify Buyer in writing if the Station ceases to broadcast at its authorized
power for more than 48 consecutive hours.
7.02(m) Consents. Use its reasonable best efforts (without
the making of additional payments not otherwise required) (i) to obtain third
party consents
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which are necessary to assign to Buyer those agreements on Schedule 3.05(d)
which are marked with an asterisk and (ii) to obtain third party consents which
are necessary for assignment of all other agreements listed on Schedule
3.05(d).; provided, however, this Section 7.02(m) shall not be construed to
limit in any way the provisions of Section 9.02.
7.03 CONFIDENTIALITY. Seller will use its best efforts to
maintain strict confidentiality with respect to all documents and information
furnished to Seller by or on behalf of Buyer; provided, however, that Seller
shall have no such obligations with respect to confidential information that
(i) is a matter of public knowledge or (ii) has been or is hereafter publicly
disclosed other than by or through Seller. In the event this Agreement is
terminated, Seller will return to Buyer all documents, drafts, work papers, and
other material prepared or furnished by Buyer relating to the transactions
contemplated hereunder, whether obtained before or after the execution of this
Agreement.
7.04 EMPLOYEES. For a period commencing upon the execution of
this Agreement and ending twelve (12) months following the Closing Date, Seller
and its affiliates will not offer employment elsewhere than at the Station to
any employee of Seller currently employed at the Station without the prior
written approval of Buyer.
8. COVENANTS AND AGREEMENTS OF BUYER. Buyer covenants and agrees
with Seller as follows:
8.01 CONFIDENTIALITY. Buyer will maintain strict confidentiality
with respect to all documents and information furnished to Buyer by or on
behalf of Seller;
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provided, however, that Buyer shall have no such obligations with respect to
confidential information that (i) is a matter of public knowledge or (ii) has
been or is hereafter publicly disclosed other than by or through Buyer. In the
event this Agreement is terminated, Buyer will return to Seller all copies in
its possession of documents, drafts, work papers, and other material prepared
or furnished by Seller relating to the transactions contemplated hereunder,
whether obtained before or after the execution of this Agreement and the
agreements and instruments called for hereunder.
8.02 CORPORATE ACTION. Prior to the Closing, Buyer shall take
all corporate action under the law of the State of Delaware necessary to
effectuate the transactions contemplated by this Agreement and by the
agreements and instruments called for hereunder.
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. The
obligations of Buyer to purchase the Assets and to proceed with the Closing are
subject to the satisfaction (or waiver by Buyer) at or prior to the Closing of
each of the following conditions:
9.01 REPRESENTATIONS AND COVENANTS. The representations and
warranties of Seller made herein or in any certificate, Schedule or Exhibit
called for hereunder shall have been true and correct in all material respects
when made and shall be true and correct in all material respects on the Closing
Date as though such representations and warranties were made on and as of the
Closing Date, and Seller shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by Seller prior to the
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Closing Date.
9.02 CONSENTS. Seller shall have obtained prior to the Closing
Date all consents necessary to effect valid assignments to Buyer of those
contracts on Schedule 3.05(d) which are marked with an asterisk and all other
non-contractual consents necessary to consummate the transactions contemplated
hereby (except for the FCC Order which shall be governed by Section 9.04).
9.03 DELIVERY OF DOCUMENTS. Seller shall have delivered to Buyer
all agreements, instruments and documents required to be delivered by Seller to
Buyer pursuant to Section 11.02.
9.04 FCC ORDER. The FCC Order shall have become a Final Order
with respect to the Station.
9.05 TITLE INSURANCE COMMITMENT AND SURVEY. Buyer shall have
received the Title Insurance Commitment and Survey referred to in Section 1 for
the real property described in Schedule 1(a), in form and substance reasonably
satisfactory to Buyer; provided, however, Buyer shall determine whether the
Title Insurance Commitment and Survey are satisfactory within thirty (30) days
from the date hereof. In the event Buyer does not notify Seller within such
thirty (30) day period that the Title Insurance Commitment and Survey are not
satisfactory, this Section 9.05 shall be deemed to have been satisfied.
9.06 LEGAL PROCEEDINGS. No action or proceeding by or before any
governmental authority shall have been instituted or threatened (and not
subsequently dismissed, settled or otherwise terminated) which might restrain,
prohibit or invalidate
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the transactions contemplated by this Agreement (but not including an action or
proceeding instituted or threatened by Buyer).
9.07 HART-SCOTT-RODINO. All applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired.
9.08 ABSENCE OF MATERIAL CHANGE. Neither the Station nor the
Assets shall have suffered a material adverse change since August 31, 1995, and
there shall have been no changes since August 31, 1995 in the business,
operations, condition (financial or otherwise), properties, assets or
liabilities of Seller, of the Station or of the Assets, except changes
contemplated by this Agreement and changes which are not (either individually
or in the aggregate) materially adverse to the Station.
10. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE. The
obligation of Seller to sell, transfer, convey and deliver the Assets and to
proceed with the Closing are subject to the satisfaction (or waiver by Seller)
at or prior to the Closing of each of the following conditions:
10.01 REPRESENTATIONS AND COVENANTS. The representations and
warranties of Buyer made in this Agreement or in any certificate, Schedule or
Exhibit called for hereunder shall have been true and correct in all material
respects when made and shall be true and correct in all material respects on
the Closing Date as though such representations and warranties were made on and
as of the Closing Date, and Buyer shall have performed and complied in all
material respects with all covenants and agreements required to be performed or
complied with by Buyer prior to the Closing Date.
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10.02 DELIVERY OF DOCUMENTS. Buyer shall have delivered to
Seller the Purchase Price and all agreements, instruments and documents
required to be delivered by Buyer to Seller pursuant to Section 11.03.
10.03 FCC ORDER. The FCC Order shall have been issued with
respect to the Station.
10.04 LEGAL PROCEEDINGS. No action or proceeding by or before
any governmental authority shall have been instituted or threatened (and not
subsequently dismissed, settled, or otherwise terminated) that might restrain,
prohibit or invalidate the transactions contemplated by this Agreement, other
than an action or proceeding instituted or threatened by Seller.
10.05 HART-SCOTT-RODINO. All applicable waiting periods under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall
have expired.
11. THE CLOSING.
11.01 CLOSING. Unless otherwise agreed by the parties hereto,
the Closing hereunder shall be held on a date specified by Buyer within ten
(10) days following the date that the FCC Order becomes a Final Order. The
Closing shall be held at 10:00 A.M. local time at the offices of Hogan &
Hartson in Washington, D.C. or at such other time and place as the parties may
agree.
11.02 DELIVERY BY SELLER. At or before the Closing, Seller shall
deliver to Buyer the following:
11.02(a) Agreements and Instruments. The following bills
of sale, statements, assignments and other instruments of transfer, dated as of
the Closing
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Date, in form sufficient to transfer and convey to Buyer title (of the quality
provided for in this Agreement) to the Assets:
(i) the Assignment of Leases;
(ii) the Bill of Sale;
(iii) the Assignment of Licenses;
(iv) the Assignment of Contracts;
(v) the Deed; and
(vi) such other instruments or documents of transfer
as Buyer may reasonably request.
11.02(b) Consents. Copies of all consents obtained by
Seller necessary to effect valid assignments to Buyer of all of the agreements
listed on Schedule 3.05(d) which are marked with an asterisk and any other
consents Seller has been able to obtain.
11.02(c) Certificate Concerning Interim Agreements. A
certificate of Seller describing all broadcast time sales agreements made, all
trade-out agreements entered into, and all other contracts, agreements and
leases entered into by Seller between the date hereof and the Closing Date, and
which in any event contain unperformed obligations on the Closing Date, and
certifying that such agreements, contracts and leases were entered into in
accordance with Section 7.01.
11.02(d) Corporate Resolutions. Copies of the resolutions
of directors and shareholders of Seller, certified as being correct and
complete and then in full force and effect, authorizing the execution, delivery
and performance of this
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Agreement and the agreements and instruments called for hereunder, and the
consummation of the transactions contemplated hereby and by such agreements and
instruments.
11.02(e) Officers' Certificate. A certificate of Seller
signed by the President and the Secretary of Seller certifying that the
representations and warranties of Seller made herein were true and correct in
all material respects as of the date of this Agreement and are true and correct
in all material respects as of the Closing Date, and that Seller has performed
and complied in all material respects with all covenants and agreements
required to be performed or complied with by Seller on or prior to the Closing
Date.
11.02(f) Opinion of Counsel. An opinion of counsel for
Seller, dated the Closing Date, addressed to Buyer and to Buyer's lender,
substantially in the form attached hereto as Exhibit F.
11.02(g) Escrow Instructions. Provide the Escrow Agent
with escrow instructions in accordance with the Escrow Agreement instructing
the Escrow Agent to release the Deposit to Buyer at the Closing.
11.02(h) Seller's IRS Form 8594. Internal Revenue Service
Form 8594 completed by Seller in connection with the acquisition of the Assets
by Buyer.
11.03 DELIVERY BY BUYER. At or before the Closing, Buyer shall
deliver to Seller the following:
11.03(a) Purchase Price. The Purchase Price in the amount
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and manner set forth in Section 2.
11.03(b) Assumption Agreement. The Assumption Agreement.
11.03(c) Corporate Resolutions. Copies of the resolutions
of the directors of Buyer, certified as being correct and complete and then in
full force and effect, authorizing the execution, delivery and performance of
this Agreement and the agreements and instruments called for hereunder, and the
consummation of the transactions contemplated by this Agreement and by such
agreements and instruments.
11.03(d) Officers' Certificate. A certificate of Buyer
signed by the President and the Secretary of Buyer certifying that the
representations and warranties of Buyer made herein were true and correct in
all material respects as of the date of this Agreement and are true and correct
in all material respects as of the Closing Date, and that Buyer has performed
and complied in all material respects with all covenants and agreements
required to be performed or complied with by Buyer prior to the Closing Date.
11.03(e) Opinion. An opinion of counsel for Buyer, dated
the Closing Date and addressed to Seller, substantially in the form attached
hereto as Exhibit H.
11.03(f) Buyer's IRS Form 8594. Internal Revenue Service
Form 8594 completed by Buyer in connection with the acquisition of the Assets
by Buyer.
12. ALLOCATION OF PURCHASE PRICE AMONG ASSETS. Seller and Buyer each
represent, warrant, covenant, and agree with each other that the Purchase Price
shall be
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allocated among the Assets, as set forth in an appraisal of the tangible assets
to be performed prior to the Closing (at Buyer's sole expense) by Bond &
Pecaro, for purposes of all federal, state and other income tax returns filed
by it or other tax payments made by it. Notwithstanding any other provision of
this Agreement, the provisions of this Section 12 shall survive the Closing
Date without limitation.
13. ACCOUNTS RECEIVABLE. At Buyer's option, exercisable at the
Closing, Buyer may purchase the Accounts Receivable at a purchase price equal
to the face value thereof less a discount which shall be mutually acceptable to
Buyer and Seller. In the event that Buyer does not exercise the aforementioned
option, at the Closing Seller shall assign to Buyer, for purposes of collection
only, all Accounts Receivable. Within five (5) business days after the Closing
Date, Seller shall deliver to Buyer a complete statement of each Account
Receivable, showing the name of the account debtor and the amount and age
thereof. Buyer agrees to collect such Accounts Receivable for a period of one
hundred twenty (120) days after the Closing Date (the "Collection Period"). On
each of the 95th and 125th days following the Closing Date, Buyer shall furnish
Seller with a list of and shall pay over to Seller the amounts collected during
such portion of the Collection Period with respect to each Account Receivable,
less agency, sales and representative commissions paid by Buyer. Any payment
received by Buyer during the Collection Period from any customer with an
account which is an Account Receivable shall be first applied in reduction of
the Account Receivable unless the account debtor specifies that the amounts
paid are to be used to satisfy an account which is not an Account Receivable.
Promptly following the expiration of such 120-day period (and no
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later than the 125th day after the Closing), Buyer shall furnish Seller with a
list of and shall reassign to Seller each Account Receivable which is
uncollected. Buyer shall immediately pay over to Seller any amounts thereafter
paid to Buyer with respect to each reassigned Account Receivable. Buyer shall
use reasonable efforts to collect the Accounts Receivable but nothing herein
contained shall obligate Buyer to bring suit or take any other legal action for
the collection of any Account Receivable or to employ a collection agency in
connection therewith. Buyer shall not have the right to compromise, settle or
adjust the amount of any Account Receivable without the written consent of
Seller. Upon the expiration of such 120-day period, reassignment of such
Accounts Receivable and delivery of all payments due to Seller as described
above, Buyer shall have no further obligation to Seller with respect to the
Accounts Receivable.
14. ADJUSTMENTS.
14(a) The Purchase Price shall be subject to adjustment on
account of expenses of the Station that apply to periods both before and after
the Closing Date. All income and expenses arising from the business and
operations of the Station shall be prorated or allocated in cash between Buyer
and Seller as of the end of the broadcast day immediately preceding the Closing
Date at the Adjustment Closing. Such income and expenses shall include,
without limitation, all assessments, taxes and other similar charges, general
and special, ordinary and extraordinary, whether the same are then due or are
payable thereafter (in installments or otherwise), or which have been confirmed
by any public authority at the Closing Date; and all business and license fees,
wages, salaries and other compensation paid to employees, prepaid expenses,
taxes and utility
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expenses arising from the business and operations of the Assets,
lease rental agreements, insurance, rents payable or receivable,
prorations to the extent that Net Trade Liabilities of the
Station at the Closing Date exceed Net Trade Liabilities of the
Station at September 30, 1995, and all other items normally
prorated in the sale of the assets of a business and of a
television broadcast station in particular. Net Trade
Liabilities shall mean the extent, if any, that liabilities of
the Station exceed the benefits due the Station under trade out
agreements. In addition, Buyer shall receive credit at the
Adjustment Closing for the amount equal to the amount of any and
all liabilities for advertising time to be provided after the
Closing Date for which payment has been, is or will be made to
Seller. For purposes of calculating any proration of ad valorem
taxes, assessments, and similar taxes, (i) Seller s pro rata
portion shall be determined by multiplying the total amount of
such Taxes imposed for the entire taxable period that includes
the Closing Date or the total amount of such Taxes paid in the
entire taxable period immediately preceding such taxable period
that includes the Closing Date, as the case may be, by a fraction
the numerator of which is the number of days in that portion of
the taxable period that includes the Closing Date which ends on
the day before the Closing Date, and the denominator of which is
the number of days in the entire taxable period that includes the
Closing Date; and (ii) Buyer's pro rata portion shall be
determined by subtracting Seller s pro rata portion (as
determined in accordance with clause (i) of this sentence) from
the total amount of such Taxes imposed for the entire taxable
period that includes the Closing Date or the total amount of such
Taxes paid in the entire taxable period immediately preceding
such taxable period that includes the Closing Date, as the
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case may be.
14(b) Notwithstanding the foregoing, (i) other than any
adjustment necessary to prorate between Buyer and Seller any monthly license
fees due and payable in the month during which the Closing takes place under
any programming agreements assumed by Buyer, there shall be no adjustment
between the parties with respect to Seller's rights to broadcast motion
pictures, feature films and syndicated programs and (ii) there shall be an
adjustment and Seller shall be liable for any vacation pay for unused vacation
time due to any employees of Seller as of the Closing Date (it being understood
that Seller may take such steps as it reasonably deems appropriate to cause
employees to use vacation time prior to the Closing).
14(c) On the Closing Date Seller shall deliver to Buyer an
estimated Schedule of adjustments (the "Estimated Schedule of Adjustments").
To the extent that Buyer and Seller agree on the Estimated Schedule of
Adjustments, any payment required thereunder by Buyer or Seller, as the case
may be, shall be made on the Closing Date. Within thirty (30) days following
the Closing Date, Buyer shall deliver to Seller a final Schedule of adjustments
(the "Final Schedule of Adjustments") that shall set forth the adjustments
contemplated by Section 14, taking into effect any payment made pursuant to the
Estimated Schedule of Adjustments. Seller shall have thirty (30) days
following receipt of the Final Schedule of Adjustments to notify Buyer either
that it accepts or rejects the Final Schedule of Adjustments. If Seller
provides notice of objection to the Final Schedule of Adjustments, the parties
shall endeavor for a period of sixty (60) days to resolve such dispute in a
mutually satisfactory manner. If Buyer and Seller are unable
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to reach agreement within such sixty (60)-day period, Buyer and Seller shall
request a mutually acceptable nationally recognized independent public
accounting firm to resolve the dispute and determine the Final Schedule of
Adjustments. Such accounting firm shall, within thirty (30) days of such
submission, deliver to Seller and Buyer a written report resolving the disputed
matters, and its determination shall be final, conclusive and binding upon
Buyer and Seller. Any payment required under the Final Schedule of Adjustments
shall be made by interbank wire transfer in immediately available funds to the
bank account designated by Buyer or Seller, as the case may be, within 3 days
of the final determination of the Final Schedule of Adjustments. The parties
shall cooperate with each other and such public accounting firm in order to
facilitate the determination of the Final Schedule of Adjustments.
15. POSSESSION AND CONTROL. Between the date hereof and the Closing
Date, Buyer shall not directly or indirectly control, supervise or direct, or
attempt to control, supervise or direct, the business and operations of the
Station, and such operation, including complete control and supervision of all
programs, shall be the sole responsibility of Seller; provided, however, Buyer
shall be entitled to inspect the Assets as provided in Section 7.02(h) so that
an uninterrupted and efficient transfer of ownership may be effected. On and
after the Closing Date, Seller shall have no control over, or right to
intervene or participate in, the business and operations of the Station.
16. RISK OF LOSS. The risk of loss or damage by fire or other
casualty or cause to the Assets until the Closing Date shall be upon Seller.
In the event of such loss or damage prior to the Closing Date, Seller shall
promptly restore, replace or repair the
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damaged Assets to their previous condition at Seller's sole cost and expense.
In the event such loss or damage shall not be restored, replaced, or repaired
as of the Closing Date, Buyer shall, at its option, either (a) proceed with the
Closing and receive all insurance proceeds to which Seller would be entitled as
a result of such loss or damage (provided, however, if such proceeds do not
equal the loss, Seller shall pay the deficiency to Buyer), or (b) defer the
Closing Date until such restorations, replacements or repairs are made, and if
necessary Seller shall join Buyer in requesting from the Commission any
extensions of time in which to consummate that may be required to complete
repairs (provided that no such deferral shall affect the right of Buyer to
terminate this Agreement pursuant to the provisions of Section 18).
17. SURVIVAL; INDEMNIFICATION.
17.01 SURVIVAL OF SELLER'S REPRESENTATIONS. Except as otherwise
specified, the representations and warranties made by Seller in this Agreement
or in any certificate, Schedule or Exhibit delivered pursuant hereto shall
survive the Closing Date for a period of one (1) year, provided that Sections
3.13 and 3.15 shall survive the Closing Date for a period of three (3) years
and the first sentence of Section 3.05(b) shall survive without limitation as
to time, and the representations and warranties made by Seller shall also be
unaffected by (and shall not be deemed waived by) any investigation, audit,
appraisal, or inspection at any time made by or on behalf of Buyer, except that
if Seller gives Buyer no later than fifteen (15) days before the Closing
hereunder written notice disclosing in reasonable detail that any
representation or warranty is untrue or incorrect, such untrue or incorrect
representation or warranty shall not give rise to any
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claim for indemnification under this Section 17 (provided, Buyer shall have the
rights and remedies specified under Sections 9.01 and 19.02).
17.02 INDEMNIFICATION BY SELLER.
17.02(a) Subject to the conditions and provisions of
Section 17.05, Seller agrees to indemnify, defend and hold harmless Buyer from
and against any and all demands, claims, complaints, actions or causes of
action, suits, proceedings, investigations, arbitrations, assessments, losses,
damages, liabilities, costs and expenses, including, but not limited to,
interest, penalties and attorneys' fees and disbursements ("Losses"), asserted
against, imposed upon or incurred by Buyer, directly or indirectly, by reason
of or resulting from (a) any liability, obligation, or claim (whether absolute,
accrued, contingent or otherwise and whether a contractual, tax or any other
type of liability or obligation or claim) not expressly assumed by Buyer
pursuant to Section 2.05, arising out of, relating to or resulting from the
business of Seller, or relating to or resulting from the Assets or the business
and operations of the Station during the period prior to the Closing Date
(including, without limitation, the liabilities, obligations or claims
specified on Schedules 3.03 and 3.15(b)); (b) any misrepresentation or breach
of the representations and warranties of Seller contained in or made pursuant
to this Agreement; or (c) any noncompliance by Seller with any covenants,
agreements or undertakings of Seller contained in or made pursuant to this
Agreement. In the event of any indemnification of Buyer pursuant to this
Section 17.02(a), Buyer shall be entitled, in addition to its rights and
remedies pursuant to this Agreement, or otherwise at law or in equity, to
deduct the amount of such indemnification from any payment otherwise due
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or made to Buyer in connection with the transactions contemplated hereby.
17.02(b) Notwithstanding anything in this Agreement to the
contrary, payments for Losses of the nature described in Section 17.02(a) above
need be made only if and to the extent that all such Losses aggregate more than
$200,000; provided, however, the matter described in item 1 of Schedule 3.03.
shall not be subject to the foregoing limitation.
17.03 SURVIVAL OF BUYER'S REPRESENTATIONS. The representations
and warranties made by Buyer in this Agreement or pursuant hereto shall survive
the Closing Date for a period of one (1) year, and shall also be unaffected by
(and shall not be deemed waived by) any investigation, audit, appraisal or
inspection at any time made by or on behalf of Seller.
17.04 INDEMNIFICATION BY BUYER.
17.04(a) Subject to the conditions and provisions of
Section 17.05, Buyer hereby agrees to indemnify, defend and hold harmless
Seller from and against all Losses, asserted against, imposed upon or incurred
by Seller, directly or indirectly, by reason of or resulting from (i) any
liability, obligation, or claims (whether absolute, accrued, contingent or
otherwise and whether contractual, tax or any other type of liability or
obligation or claim) expressly assumed by Buyer hereunder; (ii) any
misrepresentation or breach of the representations and warranties of Buyer
contained in or made pursuant to this Agreement; or (iii) any noncompliance by
Buyer with any covenants, agreements or undertakings of Buyer contained in or
made pursuant to this Agreement.
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17.04(b) Notwithstanding anything in this Agreement to the
contrary, payments for Losses of the nature described in Section 17.04(a)(ii)
and (iii) above need be made only if and to the extent that all such Losses
aggregate more than $200,000.
17.05 CONDITIONS OF INDEMNIFICATION. The obligations and
liabilities of Seller and of Buyer hereunder with respect to their respective
indemnities pursuant to this Section 17, resulting from any claim or other
assertion of liability by third parties (hereinafter called collectively,
"Claims"), shall be subject to the following terms and conditions:
17.05(a) The party seeking indemnification (the
"Indemnified Party") must give the other party or parties, as the case may be
(the "Indemnifying Party"), notice of any such Claim promptly after the
Indemnified Party receives notice thereof.
17.05(b) The Indemnifying Party shall have the right to
undertake, by counsel or other representatives of its own choosing, the defense
of such claim.
17.05(c) In the event that the Indemnifying Party shall
elect not to undertake such defense, or within a reasonable time after notice
of any such Claim from the Indemnified Party shall fail to defend, the
Indemnified Party (upon further written notice to the Indemnifying Party) shall
have the right to undertake the defense, compromise or settlement of such
Claim, by counsel or other representatives of its own choosing, on behalf of
and for the account and risk of the Indemnifying Party (subject to
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the right of the Indemnifying Party to assume defense of such Claim at any time
prior to settlement, compromise or final determination thereof).
17.05(d) Anything in this Section 17.05 to the contrary
notwithstanding, (i) if there is a reasonable probability that a Claim may
materially and adversely affect the Indemnified Party other than as a result of
money damages or other money payments, the Indemnified Party shall have the
right, at its own cost and expense, to participate in the defense, compromise
or settlement of the Claim, (ii) the Indemnifying Party shall not, without the
Indemnified Party's written consent, settle or compromise any Claim or consent
to entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party of
a release from all liability in respect of such Claim, and (iii) in the event
that the Indemnifying Party undertakes defense of any Claim, the Indemnified
Party, by counsel or other representative of its own choosing and at its sole
cost and expense, shall have the right to consult with the Indemnifying Party
and its counsel or other representatives concerning such Claim and the
Indemnifying Party and the Indemnified Party and their respective counsel or
other representatives shall cooperate with respect to such Claim.
17.05(e) The provisions of Sections 17.01, 17.02(b) and
17.03 shall apply to any claims (and not only to claims based on contract) made
by Buyer or Seller, as the case may be, in connection with the transactions
contemplated hereby.
18. TERMINATION. If (i) an FCC Order has not become a Final Order or
the Closing has not occurred on or before nine (9) months following the date
hereof,
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(ii) the Commission designates the application contemplated by Section 5 for an
evidentiary hearing, (iii) the Commission issues an order in connection with
such application with conditions which are adverse to Buyer or which in any way
diminish the operating rights with respect to the Assets and the Station
(except any such conditions expressly accepted by Buyer in writing), (iv) the
Commission issues an order in connection with such application with conditions
which are adverse to Seller (except any such conditions expressly accepted by
Seller in writing), or (v) there shall be a default as defined in Section 19,
then in the event of (i), (ii), (iii) or (v) Buyer or, in the event of (i),
(ii), (iv) or (v) above, Seller may, upon written notice to the other party
hereto, terminate this Agreement without any further obligation to the other
hereunder, provided, that such notice of termination is given prior to the date
of the Closing or the date on which such FCC Order shall have become a Final
Order; and provided, further, that the party seeking to terminate this
Agreement under this Section shall not be in default under this Agreement. In
addition, Buyer shall have the right to terminate this Agreement without
further obligation to Seller upon written notice to Seller in the event that
Buyer determines (in Buyer's sole discretion) that the Phase I report or the
Phase II report, if any, contemplated in Section 7.02(h) discloses materially
adverse environmental conditions; provided, however, Buyer must exercise such
right to terminate no later than thirty (30) days following the date hereof (if
only a Phase I assessment is performed) or no later than sixty (60) days
following the date hereof (if a Phase II assessment is performed). Upon
termination of this Agreement pursuant to this Section 18, this Agreement shall
be deemed null, void, and of no further force and effect
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(except for the provisions of Sections 7.04, 8.01, and 22, which shall survive
such termination) and except as provided in Section 19.
19. REMEDIES.
19.01 DEFAULT BY BUYER. If Buyer shall default in the
performance of its obligations under this Agreement in any material respect or
if, as a result of Buyer's action or failure to act, the conditions precedent
to Seller's obligation to close specified in Section 10 are not satisfied, and
for such reason or reasons this Agreement is not consummated, and provided that
Seller shall not then be in default in the performance of Seller's obligations
hereunder, Seller shall be entitled, by written notice to Buyer, to terminate
this Agreement and as Seller's sole remedy under this Agreement to receive as
liquidated damages the Deposit (and payment in full of the letter of credit
constituting the Deposit), and upon such payment Buyer shall be discharged from
all further liability under this Agreement.
19.02 DEFAULT BY SELLER. If Seller shall default in the
performance of Seller's obligations under this Agreement in any material
respect, or if, as a result of Seller's action or failure to act, the
conditions precedent to Buyer's obligation to close specified in Section 9 are
not satisfied and for such reason or reasons this Agreement is not consummated,
or if Seller fails to operate the Station at least seventy-five percent (75%)
of its authorized power for longer than four (4) consecutive days, and provided
that Buyer shall not then be in default in any material respect in the
performance of Buyer's obligations hereunder, Buyer shall be entitled, at
Buyer's sole option:
(a) To require Seller to consummate and specifically
perform
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the sale in accordance with the terms of this Agreement, if necessary through
injunction or other court order or process; or
(b) By written notice to Seller, to terminate this
Agreement, to receive the immediate return of the Deposit, and to pursue any
other remedies Buyer has at law or in equity or otherwise.
19.03 SPECIFIC PERFORMANCE. Seller acknowledges that the Assets
to be sold and delivered to Buyer pursuant to this Agreement are unique and
that Buyer has no adequate remedy at law if Seller shall fail to perform any of
their obligations hereunder, and Seller therefore confirms and agrees that
Buyer's right to specific performance is essential to protect the rights and
interests of Buyer. Accordingly, in addition to any other remedies which Buyer
may have hereunder or at law or in equity or otherwise, Seller hereby agrees
that Buyer shall have the right to have all obligations, undertakings,
agreements and other provisions of this Agreement specifically performed by
Seller and that Buyer shall have the right to obtain an order or decree of such
specific performance in any of the courts of the United States or of any state
or other political subdivision thereof.
19.04 CURE PERIOD. Unless otherwise provided herein, a default
shall not be deemed to have occurred until thirty (30) days after the
non-defaulting party has provided the defaulting party with written notice
specifying the event or events that if not cured would constitute an event of
default and specifying the actions necessary to cure within such period.
19.05 LIQUIDATED DAMAGES. Seller and Buyer have provided for
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liquidated damages as a remedy for Seller after having considered carefully the
anticipated and actual harms and losses that would be incurred if Buyer
defaults and thus fails to perform its obligations to close, the difficulty of
ascertaining at this time the actual amount of damages, special and general,
that Seller will suffer in such event, and the inconvenience or non-
feasibility of otherwise obtaining an adequate remedy in such event.
20. ADDITIONAL ACTIONS AND DOCUMENTS. Each of the parties hereto
agrees that it will, at any time, prior to, at or after the Closing Date, take
or cause to be taken such further actions, and execute, deliver and file or
cause to be executed, delivered and filed such further documents and
instruments, as may be necessary or reasonably requested in connection with the
consummation of the purchase and sale contemplated by this Agreement or in
order to fully effectuate the purposes, terms and conditions of this Agreement.
In addition, Seller will consult with and advise Buyer with respect to its
progress on obtaining the third party contractual consents listed as required
on Schedule 3.05(d). In the event that Seller is unable to obtain such
consents, Seller will take reasonable steps (at no material expense) to provide
Buyer with the benefits of such contracts through alternative sources.
21. BROKERS. Seller represents to Buyer that Seller has not engaged,
or incurred any unpaid liability (for any brokerage fees, finders' fees,
commissions or otherwise) to, any broker, finder or agent in connection with
the transactions contemplated by this Agreement; Buyer represents to Seller
that Buyer has not engaged, or incurred any unpaid liability (for any brokerage
fees, finders' fees, commissions or
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otherwise) to, any broker, finder or agent in connection with the transactions
contemplated by this Agreement; and Seller agrees to indemnify Buyer, and Buyer
agrees to indemnify Seller, against any claims asserted against the other
parties for any such fees or commissions by any person purporting to act or to
have acted for or on behalf of the indemnifying party. Notwithstanding any
other provision of this Agreement, this representation and warranty shall
survive the Closing Date without limitation as to time.
22. EXPENSES. Each party hereto shall pay its own expenses incurred
in connection with this Agreement and in the preparation for and consummation
of the transactions provided for herein. Notwithstanding the foregoing, (a)
Buyer and Seller shall share equally (i) all sales, stamp, documentary,
transfer, and recording taxes and fees applicable to the transactions
contemplated by this Agreement and the instruments and documents called for
hereunder, including, without limitation, any Pennsylvania sales, use, stamp,
documentary, transfer or similar taxes imposed with respect to the sale of any
motor vehicle or with respect to the transfer of any real property, (ii) the
filing fees to the Commission in connection with the Applications, and (iii)
all fees and expenses for the Survey and the Title Insurance Commitment, and
(b) Buyer shall pay all fees and expenses of the appraiser referred to in
Section 12 and all filing fees in connection with any filing under the
Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended. This
Section 22 shall not be subject to the provisions of Sections 17.02(b) and
17.04(b).
23. NOTICES. All notices, demands, requests, or other communications
which may be or are required to be given or made by any party to any other
party
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pursuant to this Agreement shall be in writing and shall be hand delivered
(including delivery by overnight courier), mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
telegram or telex addressed as follows:
(i) If to Buyer:
Allbritton Communications Company 800 17th Street, N.W.
Suite 301 Washington, D.C. 20006 Attn.: Jerald N. Fritz,
Esq.
with a copy (which shall not constitute notice) to:
Hogan & Hartson
555 Thirteenth Street, N.W.
Washington, D.C. 20004
Attn.: Marvin J. Diamond, Esq.
(ii) If to Seller:
WHTM-TV, Inc.
c/o Price Communications Corporation
45 Rockefeller Plaza
New York, New York 10020
Attn.: Mr. Robert Price
with a copy (which shall not constitute notice) to:
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, New York 10036
Attn.: Peter Samuels, Esq.
or such other address as the addressee may indicate by written notice.
Each notice, demand, request, or communication which shall be given or
made in the manner described above shall be deemed sufficiently given or made
for all
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purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, the affidavit of messenger or (with respect to a
telex) the answer back being deemed conclusive but not exclusive evidence of
such delivery) or at such time as delivery is refused by the addressee upon
presentation.
24. WAIVER. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any
other instrument or document given in connection with or pursuant to this
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial
exercise of any such right, power or privilege shall preclude the further
exercise of such right, power or privilege, or the exercise of any other right,
power or privilege. No waiver shall be valid against any party hereto unless
made in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent expressly specified therein.
25. BENEFIT AND ASSIGNMENT. Except as hereinafter specifically
provided in this Section 25, no party hereto shall assign this Agreement, in
whole or in part, whether by operation of law or otherwise without the prior
written consent of Seller (if the assignor is Buyer) or Buyer (if the assignor
is Seller), and any purported assignment contrary to the terms hereof shall be
null, void and of no force and effect. In no event shall any assignment by
Seller of its rights and obligations under this Agreement, whether before or
after the Closing, release Seller from its liabilities hereunder.
Notwithstanding the foregoing, Buyer or any permitted assignee of Buyer may
assign this Agreement and any and all rights hereunder, in whole or in part, to
any subsidiary of Buyer or to any
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<PAGE> 63
entity in which the controlling shareholders of Buyer maintain control;
provided that (i) such assignee assumes and agrees in writing with Seller to
perform all of Buyer's obligations hereunder under documentation reasonably
acceptable to Seller, (ii) the representations and warranties of Buyer shall be
true in all material respects with respect to the assignee, and (iii) no such
assignment shall delay the Closing. Subject to the foregoing, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. No person or entity other than the
parties hereto is or shall be entitled to bring any action to enforce any
provision of this Agreement against any of the parties hereto, and the
covenants and agreements set forth in this Agreement shall be solely for the
benefit of, and shall be enforceable only by, the parties hereto or their
respective successors and assigns as permitted hereunder.
26. REMEDIES CUMULATIVE. Except as specifically provided herein, the
remedies provided herein shall be cumulative and shall not preclude the
assertion by Seller or by Buyer of any other rights or the seeking of any other
remedies against the other.
27. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with all
Exhibits and Schedules hereto, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties (including without limitation the Letter Agreement).
No supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby.
28. SEVERABILITY. If any part of any provision of this Agreement or
any other agreement, document or writing given pursuant to or in connection
with this Agreement shall be invalid or unenforceable under applicable law,
such part shall be ineffective to the extent of such invalidity or
unenforceability only, without in any way affecting the remaining parts of such
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<PAGE> 64
provisions or the remaining provisions hereof or of said agreement, document or
writing.
29. PRESS RELEASES. All notices to third parties and other publicity
relating to the transactions contemplated by this Agreement shall be jointly
planned, coordinated and agreed to by Buyer and Seller. Prior to the Closing
Date neither of the parties hereto shall act unilaterally in this regard
without the prior written approval of the other, except as required by law
and/or the rules and regulations of the Commission.
30. HEADINGS. The headings of the sections and subsections contained
in this Agreement are inserted for convenience only and do not form a part or
affect the meaning, construction or scope thereof.
31. GOVERNING LAW. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed under and in accordance with the laws of the District of
Columbia, excluding the choice of law rules thereof.
32. SIGNATURE IN COUNTERPARTS. This Agreement may be executed in
separate counterparts, neither of which need contain the signatures of both
parties, each of which shall be deemed to be an original, and both of which
taken together constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
the number of counterparts containing the respective signatures of, or on
behalf of, all of the parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or has caused this Agreement to be duly executed and delivered in
its name on its behalf, all as of the day and year first above written.
-62-
<PAGE> 65
SELLER
------
WHTM-TV, INC.
BY:
------------------------------
ROBERT PRICE
PRESIDENT
BUYER
-----
ALLBRITTON COMMUNICATIONS
COMPANY
BY:
------------------------------
ROBERT L. ALLBRITTON
EXECUTIVE VICE PRESIDENT
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<PAGE> 66
ACQUISITION OF WHTM-TV
LIST OF EXHIBITS
Exhibit A Assignment of Leases
Exhibit B Bill of Sale
Exhibit C Assignment of Licenses
Exhibit D Assignment of Contracts
Exhibit E Special Warranty Deed
Exhibit F Opinion of Seller's Counsel
Exhibit G Assumption Agreement
Exhibit H Opinion of Buyer's Counsel
Exhibit I Escrow Agreement
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<PAGE> 67
ACQUISITION OF WHTM-TV
LIST OF SCHEDULES
Schedule 1(a) Real Property
Schedule 1(b) Leasehold Interests
Schedule 1(f) Tangible Personal Property
Schedule 1(g) FCC Licenses
Schedule 1(h) Copyrights, Trademarks and Trade
Names
Schedule 1(i) Trade-out Agreements and other
Contracts, Agreements, and Leases
Schedule 1(j) Deposits and Prepaid Expenses
Schedule 1(k) Motor Vehicles
Schedule 3.03 Litigation
Schedule 3.04(a) Financial Statements
Schedule 3.05(b)(ii) Permitted Encumbrances
Schedule 3.05(b)(iii) Encumbrances
Schedule 3.05(d) Consents Required to Transfer
Assets
Schedule 3.06 Violations of Licenses, Statutes or
Laws
Schedule 3.09 Reports and Records
Schedule 3.11 Conflicts
Schedule 3.12 Transactions with Related Parties
Schedule 3.14(a) Employee Benefit Plans
Schedule 3.15(b) Environmental Matters
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<PAGE> 68
Schedule 3.16 Employment Agreements and Collective
Bargaining Agreements
Schedule 3.18 Insurance
Schedule 4.02 Consents Required from Buyer's Lenders
-66-
<PAGE> 69
EXHIBIT A
ASSIGNMENT OF LEASES
THIS ASSIGNMENT OF LEASES, dated as of _______ __, 1995, is by
WHTM-TV, INC., a Pennsylvania corporation ("Assignor").
WHEREAS, Assignor and ALLBRITTON COMMUNICATIONS COMPANY, a
Delaware corporation ("Assignee"), are parties to the Asset Purchase Agreement
dated as of October __, 1995 (the "Purchase Agreement"), providing, among other
things, for the assignment to Assignee by Assignor of Assignor's right, title
and interest in the Assets (as defined therein), including those assets
conveyed by this Assignment of Leases;
NOW, THEREFORE, in consideration of the payment by Assignee of
the purchase price pursuant to the Purchase Agreement, the receipt and
sufficiency of which is hereby acknowledged, and in further consideration of
the mutual covenants and agreements contained in the Purchase Agreement, and
pursuant to the terms of the Purchase Agreement, Assignor does hereby bargain,
sell, assign, transfer, convey and deliver to Assignee and its successors and
assigns the various leases listed in Appendix A attached hereto (the "Assigned
Leases") and all of Assignor's right, title and interest in and to the Assigned
Leases.
TO HAVE AND TO HOLD the same unto the Assignee, its successors
and assigns, for its exclusive use and benefit forever.
Assignor hereby agrees, from and after the date hereof upon the
request of Assignee, to execute such other documents as Assignee reasonably may
require in order to obtain the full benefit of this Assignment of Leases and
Assignor's obligations hereunder.
IN WITNESS WHEREOF, Assignor has caused this Assignment of
Leases to be executed as of the day and year first above written.
WHTM-TV, INC.
BY:
--------------------------------
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<PAGE> 70
EXHIBIT B
BILL OF SALE AND ASSIGNMENT OF ASSETS
THIS BILL OF SALE AND ASSIGNMENT OF ASSETS, dated as of
_____ __, 1995, is by WHTM-TV, INC., a Pennsylvania corporation ("Seller").
WHEREAS, Seller and ALLBRITTON COMMUNICATIONS COMPANY, a
Delaware corporation ("Buyer"), have entered into an Asset Purchase Agreement
dated as of October __, 1995 (the "Purchase Agreement"), pursuant to which
Seller has agreed to sell to Buyer, and Buyer has agreed to purchase from
Seller, the Assets (as defined therein) relating to television station WHTM-TV,
Harrisburg, Pennsylvania (the "Station"), all in accordance with and subject to
the terms and conditions set forth in the Purchase Agreement;
NOW, THEREFORE, for and in consideration of the payment by Buyer
of the purchase price pursuant to the Purchase Agreement, the receipt and
sufficiency of which is hereby acknowledged, and in further consideration of
the mutual covenants and agreements contained in the Purchase Agreement, and
pursuant to the terms of the Purchase Agreement, Seller does hereby bargain,
sell, assign, transfer, convey and deliver to Buyer, its successors and assigns
all of its right, title and interest in and to the following: all furniture,
fixtures, furnishings, machinery, equipment, inventory, supplies, antenna
installations, towers and other property, including, without limitation, those
described in Schedule 1(f) of the Agreement; all of the copyrights, trademarks
and trade names (including any and all applications, registrations, extensions
and renewals relating thereto), and all of the rights associated therewith,
including, without limitation, those described in Schedule 1(h) of the
Agreement, and Seller's rights to the call letters for the Station; all
deposits and prepaid expenses, including, without limitation, those described
in Schedule 1(j) of the Agreement; all engineering, business and other books,
papers, files and records, but not the articles of incorporation, by-laws,
minute books, stock transfer records, or other corporate records of Seller; all
translators, earth stations, business radio licenses and other auxiliary
facilities, and all applications therefor; and all other personal and mixed
assets, both tangible and intangible (including the business of the Station as
a "going concern"), wherever located, owned or held by Seller and which are
used or useful in connection with the business and operations of the Station.
The foregoing shall include, without limitation, those assets
set forth and described in Appendix A hereto.
TO HAVE AND TO HOLD the said described property to Buyer, its
successors and assigns, for its exclusive use and benefit forever.
Seller does hereby agree, from and after the date hereof upon
the request of Buyer, to execute such other documents as Buyer reasonably may
require in order to obtain the full benefit of this Bill of Sale and Assignment
of Assets and Seller's obligations hereunder.
IN WITNESS WHEREOF, the undersigned have caused this instrument
to be duly executed, and its corporate seal affixed, as of the date first
written above.
WHTM-TV, INC.
BY:
------------------------------
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<PAGE> 71
EXHIBIT C
ASSIGNMENT OF FEDERAL COMMUNICATIONS
COMMISSION LICENSES AND AUTHORIZATIONS
THIS ASSIGNMENT OF FEDERAL COMMUNICATIONS COMMISSION LICENSES
AND AUTHORIZATIONS, dated as of _____ __, 1995, is by WHTM-TV, INC., a
Pennsylvania corporation ("Seller").
WHEREAS, Seller and ALLBRITTON COMMUNICATIONS COMPANY, a
Delaware corporation ("Buyer"), entered into an Asset Purchase Agreement dated
as of October __, 1995 (the "Purchase Agreement"), providing, among other
things, for the sale, assignment, transfer, conveyance and delivery to Buyer of
the Assets (as defined therein); and
WHEREAS, in the Purchase Agreement it was agreed, subject to the
granting of the necessary consents by the Federal Communications Commission
(the "Commission"), that Seller would assign to Buyer the licenses and other
authorizations issued by the Commission for operation of television station
WHTM-TV, Harrisburg, Pennsylvania (the "Station"); and
WHEREAS, the Commission has authorized the assignment of such
licenses and other authorizations from Seller to Buyer;
NOW, THEREFORE, in consideration of the payment by Buyer of the
purchase price pursuant to the Purchase Agreement, the receipt and sufficiency
of which is hereby acknowledged, and in further consideration of the mutual
covenants and agreements contained in the Purchase Agreement, and pursuant to
the terms of the Purchase Agreement, Seller does hereby assign to Buyer and its
successors and assigns all of Seller's right, title and interest in and to the
licenses and other authorizations issued by the Commission with respect to the
Station and which are listed in Appendix A attached hereto and by reference
incorporated herein.
IN WITNESS WHEREOF, the undersigned have caused this instrument
to be duly executed, and its corporate seal affixed, as of the date first
written above.
WHTM-TV, INC.
BY:
------------------------------
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<PAGE> 72
EXHIBIT D
ASSIGNMENT OF CONTRACTS
THIS ASSIGNMENT OF CONTRACTS, dated as of _____ __, 1995, is by
WHTM-TV, INC., a Pennsylvania corporation ("Assignor").
WHEREAS, Seller and ALLBRITTON COMMUNICATIONS COMPANY, a
Delaware corporation ("Assignee"), entered into an Asset Purchase Agreement
dated as of October __, 1995 (the "Purchase Agreement"), providing, among other
things, for the assignment to Assignee by Assignor of Assignor's right, title
and interest in the Assets (as defined therein), including those assets
conveyed by this Assignment of Contracts;
NOW, THEREFORE, in consideration of the payment by Assignee of
the purchase price pursuant to the Purchase Agreement, the receipt and
sufficiency of which is hereby acknowledged, and in further consideration of
the mutual covenants and agreements contained in the Purchase Agreement, and
pursuant to the terms of the Purchase Agreement, Assignor does hereby bargain,
sell, assign, transfer, convey and deliver to Assignee and its successors and
assigns all of the contracts, agreements, leases and other intangible assets
owned or held by Assignor and used or useful in connection with the business
and operations of Television Station WHTM-TV, including, without limitation,
all contracts, agreements and leases set forth and described on Appendix A
attached hereto.
TO HAVE AND TO HOLD the same unto the Assignee, its successors
and assigns, for its exclusive use and benefit forever.
Assignor does hereby agree, from and after the date hereof upon
the request of Assignee, to execute such other documents as Assignee reasonably
may require in order to obtain the full benefit of this Assignment of Contracts
and Assignor's obligations hereunder.
IN WITNESS WHEREOF, Assignor has caused this Assignment of
Contracts to be executed as of the day and year first above written.
WHTM-TV, INC.
BY:
-------------------------------
-1-
<PAGE> 73
EXHIBIT G
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT, dated as of _____ __, 1995, is made
and entered into by and between ALLBRITTON COMMUNICATIONS COMPANY, a Delaware
corporation ("Buyer"), and WHTM-TV, INC., a Pennsylvania corporation
("Seller").
WHEREAS, pursuant to an Asset Purchase Agreement dated as of
October __, 1995 between Buyer and Seller (the "Purchase Agreement"), Seller is
obligated to transfer and assign to Buyer on this date the Assets (as defined
therein), for the consideration and upon the terms and conditions set forth in
the Purchase Agreement;
WHEREAS, the Purchase Agreement provides that Buyer shall assume
certain specified liabilities and obligations of Seller, but only such
specified liabilities and obligations;
NOW, THEREFORE, for and in consideration of the transfer of the
aforesaid assets, and in further consideration of the mutual covenants and
agreements contained herein and in the Purchase Agreement, and pursuant to the
Purchase Agreement, Buyer hereby assumes only the following liabilities and
obligations of Seller (the "Assumed Liabilities"): (a) the liabilities and
obligations of Seller to be performed after the date hereof under the
contracts, agreements and leases set forth and described in Schedules 1(b) and
1(i) of the Purchase Agreement (or not required to be disclosed on such
Schedules under the first sentence of Section 3.10 of the Purchase Agreement),
(b) the liabilities and obligations of Seller to be performed after the date
hereof under any contracts, agreements and leases which are entered into after
the date of the Purchase Agreement (in compliance with Section 7 of the
Purchase Agreement) and which are identified in the certificate referred to in
Section 11.02(c) of the Purchase Agreement, and (c) the items for which Buyer
receives an adjustment credit under Section 14 of the Purchase Agreement.
Buyer shall not assume or be deemed to assume any debts, liabilities or
obligations of Seller except as specified herein.
Buyer shall not assume or be deemed to assume any debts,
liabilities or obligations of Seller except as specified in this Assumption
Agreement.
Each of Seller and Buyer hereby agrees, from and after the date
hereof upon the request of the other party to execute such other documents as
such other party reasonably may require in order to obtain the full benefit of
this Assumption Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed on their behalf, on the day and year first above
written.
BUYER
ALLBRITTON COMMUNICATIONS COMPANY
BY:
-----------------------------------
SELLER
WHTM-TV, INC.
BY:
-----------------------------------
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<PAGE> 74
EXHIBIT H
OPINION OF BUYER S COUNSEL
[HOGAN & HARTSON LETTERHEAD]
___________________, 1996
WHTM-TV, Inc.
c/o Price Communications Corporation
45 Rockefeller Plaza
New York, New York 10020
Attn.: Mr. Robert Price
RE: ASSET PURCHASE AGREEMENT BETWEEN WHTM-TV, INC. AND
ALLBRITTON COMMUNICATIONS COMPANY
Ladies and Gentlemen:
This firm has acted as counsel to Allbritton Communications
Company, a Delaware corporation (the "Company"), in connection with that
certain Asset Purchase Agreement, dated as of October __, 1995 (the
"Agreement"), between the Company and WHTM-TV, Inc., a Pennsylvania company
(the "Seller"). The Agreement provides for the sale by the Seller to the
Company of the Assets (as defined therein) of television station WHTM-TV,
Harrisburg, Pennsylvania (the "Station"). This opinion letter is furnished to
you pursuant to the requirements set forth in Section 11.03(e) of the Agreement
in connection with the Closing thereunder on the date hereof. Capitalized
terms used herein which are defined in the Agreement shall have the meanings
assigned to such terms in the Agreement, unless otherwise defined herein.
For purposes of this opinion letter, we have examined the
following:
1. Executed copy of the Agreement.
2. Executed copy of the Deposit Escrow Agreement.
3. Executed copy of the Assumption Agreement.
4. The Certificate of Incorporation of the Company, as
certified by the Secretary of State of the State of
Delaware on ___________, and as certified by the
Secretary of the Company on the date hereof as being
complete, accurate and in effect.
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<PAGE> 75
5. The Bylaws of the Company, as certified by the Secretary
of the Company on the date hereof as being complete,
accurate and in effect.
6. A certificate of good standing of the Company issued by
the Secretary of State of the State of Delaware, dated
_________.
7. A certificate of good standing of the Company issued by
the Secretary of the Commonwealth of Pennsylvania, dated
___________.
8. Certain resolutions of the Board of Directors of the
Company adopted by unanimous written consent, dated as
of __________, 1995, all as certified by the Secretary
of the Company on the date hereof as being complete,
accurate and in effect, relating to, among other things,
authorization of the Transaction Documents, the purchase
of the Assets, and related matters.
9. A certificate of certain officers of the Company, dated
__________ as to certain facts relating to the Company.
10. A certificate of the Secretary of the Company, dated
_________, as to the incumbency and signatures of
certain officers of the Company.
11. Hogan & Hartson L.L.P. litigation docket.
We have not, except as specifically identified above, made any
independent review or investigation of factual or other matters for purposes of
rendering this opinion, including the organization, existence, good standing,
assets, business or affairs of the Company. In our examination of the
Transaction Documents and the aforesaid certificates, records, documents,
licenses, authorizations and files, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the accuracy,
completeness and authenticity of all documents submitted to us, the conformity
with the original documents of all documents submitted to us as certified,
telecopied, photostatic or reproduced copies, and the authenticity of all such
latter documents. We also have assumed the accuracy, completeness and
authenticity of the foregoing certifications (of public officials, governmental
agencies and departments, corporate officers and individuals) and statements of
fact, on which we are relying, and have made no independent investigations
thereof. This opinion letter is given, and all statements herein are made, in
the context of the foregoing.
As used in this opinion letter, the phrase "to our knowledge"
means the actual knowledge (that is, the conscious awareness of facts or other
information) of lawyers in the firm who have given substantive legal attention
to representation of the Company in connection with the Agreement.
For purposes of this opinion letter, we have assumed that (i)
the Seller has all requisite power an authority under all applicable laws,
regulations and governing documents to execute, deliver and perform its
obligations under the Agreement, (ii) Seller has duly authorized, executed and
delivered the Agreement, (iii) Seller is
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<PAGE> 76
validly existing and in good standing in all necessary jurisdictions, (iv) the
Agreement constitutes a valid, binding and enforceable obligation and (v) there
has been no material mutual mistake of fact or misunderstanding or fraud,
duress or undue influence, in connection with the negotiation, execution or
delivery of the Agreement.
This opinion letter is based as to matters of law solely on
applicable provisions of (i) the General Corporation Law of the State of
Delaware, as amended (the "Delaware Corporation Law"), (ii) the Communications
Act of 1934, as amended, 47 U.S.C. Section 1 et seq. (the "Act") and the rules
and regulations of the Federal Communications Commission (the "FCC"), and (iii)
the laws of the District of Columbia, and we express no opinion as to any other
laws, statutes, ordinances, rules or regulations (such as federal or state
securities laws or regulations, antitrust or unfair competition laws or
regulations or tax laws or regulations). We note that no opinion is expressed
herein with respect to matters relating to restricting or otherwise affecting
competition or with respect to the solvency of any person or entity.
Based upon, subject to and limited by the foregoing, we are of
the opinion that:
(a) The Company was incorporated, and is validly existing and
in good standing as of the date of the certificate attached hereto as Exhibit
A, under the laws of the State of Delaware, and the Company has the corporate
power and corporate authority under its Certificate of Incorporation and the
Delaware Corporation Law to own and operate its current properties and to
transact the business in which it is currently engaged.
(b) The Company is authorized to transact business as a
foreign corporation in the Commonwealth of Pennsylvania as of the date of the
certificate attached hereto as Exhibit B.
(c) The Company has the corporate power and corporate
authority under its Certificate of Incorporation and the Delaware Corporation
Law to execute and deliver the Transaction Documents and to perform its
obligations thereunder. The execution, delivery and performance as of the date
hereof by the Company of the Transaction Documents have been duly authorized by
all necessary corporate action of the Company.
(d) The Transaction Documents have been duly executed and
delivered on behalf of the Company and constitute valid and binding obligations
of the Company, enforceable in accordance with their respective terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights (including, without limitation, the
effect of statutory and other law regarding fraudulent conveyances, fraudulent
transfers and preferential transfers) and except as may be limited by the
exercise of judicial discretion and the application of principles of public
policy and equity including, without limitation, requirements of good faith,
fair dealing and conscionability (regardless of whether such documents are
considered in a proceeding in equity or at law).
-3-
<PAGE> 77
(e) The execution, delivery and performance as of the date
hereof by the Company of the Transaction Documents do not (i) require any
approval of its shareholders which has not been obtained, (ii) violate the
Delaware Corporation Law or the Certificate of Incorporation or Bylaws of the
Company, (iii) to our knowledge, violate any applicable law, rule, regulation,
order, judgment or decree, (iv) to our knowledge, violate the Act or the rules
and regulations of the FCC (the "Rules"), (v) cause any forfeiture of any of
the Licenses, or (vi) require any filing with or approval of the FCC which has
not been made or obtained.
Based solely upon the officers certificate identified in
Paragraph 14 above and a review of this firm s litigation docket, we hereby
confirm to you that, to our knowledge, there are no actions, suits or
proceedings pending or threatened against the Company, or in which the Company
is a party, before any court or governmental department, commission, board,
bureau, agency or instrumentality that question the validity of the Agreement
or any action taken or to be taken pursuant thereto, or that seek to enjoin or
otherwise prevent the consummation of the transactions contemplated by the
Agreement or to recover in damages or obtain other relief as a result thereof,
or that, if determined adversely to the Company, would result in any material
liability on the part of the Company or in any material adverse change in the
financial condition of the Company, other than proceedings generally affecting
the business in which the Company is engaged.
The opinion expressed in Paragraph (d) above shall be understood
to mean only that (i) if there is a default in the performance of an
obligation, (ii) if a failure to pay or other damage can be shown and (iii) if
the defaulting party can be brought into a court which will hear the case and
apply the governing law, then, subject to the availability of defenses, and to
the exceptions set forth in Paragraph (d) above, the court will provide a money
damage, injunctive or other remedy.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion letter. This opinion
letter has been prepared solely for your use in connection with the Closing
under the Agreement on the date hereof, and should not be quoted in whole or in
part or otherwise be referred to, nor be filed with or furnished to any
governmental agency or other person or entity, without the prior written
consent of this firm.
Very truly yours,
HOGAN & HARTSON L.L.P.
-4-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,645,270
<SECURITIES> 1,039,500
<RECEIVABLES> 5,781,355
<ALLOWANCES> 415,330
<INVENTORY> 0
<CURRENT-ASSETS> 12,289,948
<PP&E> 14,752,475
<DEPRECIATION> 3,471,119
<TOTAL-ASSETS> 93,071,744
<CURRENT-LIABILITIES> 8,612,045
<BONDS> 0
<COMMON> 98,166
0
0
<OTHER-SE> 41,201,728
<TOTAL-LIABILITY-AND-EQUITY> 93,071,744
<SALES> 24,553,534
<TOTAL-REVENUES> 20,670,051
<CGS> 11,346,185
<TOTAL-COSTS> 11,236,798
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,572,455
<INCOME-PRETAX> 9,433,253
<INCOME-TAX> (146,616)
<INCOME-CONTINUING> 9,579,869
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<NET-INCOME> 9,579,869
<EPS-PRIMARY> 0.91
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</TABLE>
