<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): FEBRUARY 1, 1995
A. H. BELO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8598 75-0135890
(State or other jurisdiction (Commission (I. R. S. Employer
of incorporation) File Number) Identification No.)
P. O. Box 655237
Dallas, Texas 75265-5237
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (214) 977-6606
<PAGE> 2
Item 2 Other Events.
On February 1, 1995, A. H. Belo Corporation (the "Registrant"), consummated the
acquisition from KIRO, Inc. ("KIRO") of its subsidiary, Third Avenue
Television, Inc. ("Third Avenue") which holds substantially all assets relating
to television station KIRO-TV in Seattle, Washington. On the same date, the
Registrant acquired the FCC license to operate KIRO-TV and certain other
related assets from Bonneville Holding Company ("BHC"). The purchase price
paid for the acquisition was $162,500,000 in cash.
Third Avenue was acquired from KIRO pursuant to the terms of the Stock Sale
Agreement dated as of November 29, 1994 between the Registrant and KIRO, and
the FCC license and certain related assets were acquired pursuant to the terms
of the Asset Sale Agreement dated as of November 29, 1994 between the
Registrant and BHC. The funds for the acquisition were obtained by the
Registrant from borrowings under its credit agreement with various lenders,
including The First National Bank of Chicago as managing agent. The Registrant
presently intends to continue the existing operations of KIRO-TV, except that,
as of March 13, 1995, KIRO-TV's affiliation with the CBS television network
will end and KIRO-TV will become an affiliate of the United Paramount Network.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
7(a). Financial Statements of Business Acquired.
It is impracticable to file the financial statements required
by Item 7(a) with the initial filing of this Report on Form
8-K. Such financial statements will be filed by amendment to
this Report as soon as practicable and within 60 days after
the required filing date for this Report.
7(b). Pro Forma Financial Information.
It is impracticable to file the pro forma financial
information required by Item 7(a) with the initial filing of
this Report on Form 8-K. Such pro forma financial information
will be filed by amendment to this Report as soon as
practicable and within 60 days after the required filing date
for this Report.
7(c). Exhibits.
The following exhibits are included as part of this Report:
2.1 Stock Sale Agreement dated as of November 29, 1994
between KIRO and the Registrant.
2
<PAGE> 3
2.2 Asset Sale Agreement dated as of November 29, 1994
between BHC and the Registrant.
99.1 Press release of the Registrant dated January 31, 1995.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
A. H. BELO CORPORATION
(Registrant)
By: /s/ Michael D. Perry
Michael D. Perry
Senior Vice President and
Chief Financial Officer
Date: February 10, 1995
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------
<S> <C>
2.1 Stock Sale Agreement dated as of November 29, 1995 between
KIRO and A. H. Belo Corporation (the "Company")
2.2 Asset Sale Agreement dated as of November 29, 1995 between
BHC and the Company.
99.1 Press Release of the Company dated January 31, 1995.
</TABLE>
4
<PAGE> 1
EXHIBIT 2.1
STOCK SALE AGREEMENT
BETWEEN
KIRO, INC.
AND
A. H. BELO CORPORATION
DATED NOVEMBER 29, 1994
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGES
-----
<S> <C> <C>
ARTICLE I.
STOCK SALE AND TERMS OF PAYMENT
1.1 SALE AND PURCHASE OF STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 EXCLUDED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.5 MANNER OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.6 ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II.
THE CLOSING
2.1 TIME AND PLACE OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 DELIVERIES BY SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 DELIVERIES BY BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 ORGANIZATION OF SELLER AND SUBSIDIARY; AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 CAPITALIZATION OF SUBSIDIARY; OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.3 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4 BUSINESS SINCE THE BALANCE SHEET DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 NO DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.6 UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.7 CONDITION AND ADEQUACY OF THE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 CONTRACTS AND ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.9 TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.10 INTANGIBLE PERSONAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.11 LITIGATION AND COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.12 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.13 INSTRUMENTS OF CONVEYANCE TO SUBSIDIARY; GOOD TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.14 REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.15 ENVIRONMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.16 COMPLIANCE WITH FCC REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.17 CHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.18 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.19 LABOR RELATIONS, OSHA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.20 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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<TABLE>
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
<S> <C> <C>
4.1 ORGANIZATION OF BUYER; AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.2 NO DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.3 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.4 QUALIFICATIONS AS A BROADCAST LICENSEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.5 ACQUISITION OF SHARES FOR INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.6 DISCLOSURE OF INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE V.
COVENANTS OF SELLER PENDING THE CLOSING DATE
5.1 MAINTENANCE OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.2 GOODWILL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.3 ACCESS TO THE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.5 CORPORATE ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.6 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.7 CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.8 CONSUMMATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.9 NOTICE OF PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.10 HSR FILING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.11 CERTIFICATE OF LAND USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VI.
COVENANTS OF BUYER PENDING THE CLOSING DATE
6.1 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.2 CORPORATE ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.3 CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.4 CONSUMMATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.5 NOTICE OF PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.6 HSR FILING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.7 TAX RULING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII.
CONDITIONS TO THE OBLIGATIONS OF SELLER
7.1 REPRESENTATIONS, WARRANTIES, COVENANTS, RELATED AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2 PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.3 HSR APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.4 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
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<PAGE> 4
<TABLE>
ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS OF BUYER
<S> <C> <C>
8.1 REPRESENTATIONS, WARRANTIES, COVENANTS, RELATED AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.3 DAMAGE TO THE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.4 HSR APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.5 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.6 RETRANSMISSION CONSENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IX.
INDEMNIFICATION
9.1 SURVIVAL; LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.2 INDEMNIFICATION OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.3 INDEMNIFICATION OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.4 NOTICE OF CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.5 DEFENSE OF THIRD PARTY CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE X.
MISCELLANEOUS PROVISIONS
10.1 RISK OF LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.2 ENVIRONMENTAL REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.3 ABANDONMENT OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.4 LIABILITIES UPON TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.5 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.6 EMPLOYEE MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.7 TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.8 LEASE AND EASEMENT AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.9 COLLECTION OF SELLER'S ACCOUNTS RECEIVABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.10 PROMOTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.11 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.12 WAIVER OF COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.13 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.14 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.15 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.16 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.17 ENTIRE AGREEMENT; AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.18 SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
</TABLE>
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<PAGE> 5
SCHEDULES
<TABLE>
<S> <C> <C>
SCHEDULE 1.1(A) - TANGIBLE PERSONAL PROPERTY
SCHEDULE 1.1(B) - REAL PROPERTY
SCHEDULE 1.1(C) - CONTRACTS
SCHEDULE 1.1(D) - INTANGIBLE PERSONAL PROPERTY
SCHEDULE 10.6 - ACTIVE EMPLOYEES
SCHEDULE 10.10 - PROMOTIONAL TIME
</TABLE>
EXHIBITS
<TABLE>
<S> <C> <C>
EXHIBIT 2.2(B) - WARRANTY DEED
EXHIBIT 2.2(H) - CROSS RECEIPT
EXHIBIT 2.2(I) - CERTIFICATE OF SECRETARY OF SELLER
EXHIBIT 2.2(J) - BRING DOWN CERTIFICATE OF SELLER
EXHIBIT 2.3(B) - CERTIFICATE OF SECRETARY OF BUYER
EXHIBIT 2.3(C) - BRING DOWN CERTIFICATE OF BUYER
</TABLE>
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<PAGE> 6
KIRO, INC.
STOCK SALE AGREEMENT
THIS STOCK SALE AGREEMENT ("Agreement") is dated as of November 29,
1994, and is between KIRO, Inc., a Washington corporation having its principal
office in Seattle, Washington ("Seller"), and A. H. Belo Corporation, a
Delaware corporation having its principal office in Dallas, Texas ("Buyer").
1. Bonneville Holding Company ("BHC") is the licensee of
television station KIRO-TV (the "Station") in Seattle, Washington. The
licenses, permits and other authorizations issued to BHC by the Federal
Communications Commission (the "FCC") relating to the Station set forth on
Schedule 3.5 to the BHC Asset Sale Agreement, as defined below, hereinafter
shall be referred to as the "FCC Authorizations."
2. Pursuant to an operating agreement with BHC, Seller operates
the Station. Seller owns substantially all of the assets of the Station other
than the FCC Authorizations and the CBS Agreement, as defined in the BHC Asset
Sale Agreement. Seller also operates a programming production business under
the name of "Third Avenue Productions" and a direct mail business under the
name of "KIRO Direct" and owns the assets used in such businesses.
3. BHC is also the licensee of radio stations KIRO(AM) and
KIRO-FM in Seattle, Washington (KIRO(AM) and KIRO-FM are collectively referred
to herein as the "KIRO Radio Stations"). The KIRO Radio Stations are also
operated by Seller. The studios and offices of the KIRO Radio Stations are
co-located with the studios and offices of the Station.
4. On or prior to the Closing Date referred to herein, Seller
will form a corporation under the laws of the State of Delaware ("Subsidiary")
of which Seller will own all of the issued and outstanding shares of capital
stock (the "Shares") and into which Seller will contribute certain assets of
the Station and of Third Avenue Productions and KIRO Direct (all further
references to the "Station" herein shall be deemed to include Third Avenue
Productions and KIRO Direct).
<PAGE> 7
5. Seller desires to sell and Buyer desires to purchase all of
the Shares.
6. Pursuant to that certain Bonneville Holding Company Asset Sale
Agreement of even date herewith (the "BHC Asset Sale Agreement"), BHC has
agreed to sell to Buyer or its designee the FCC Authorizations and the CBS
Agreement (the "BHC Assets").
7. In connection with the execution of this Agreement, each of
Buyer and Seller are simultaneously delivering a disclosure schedule ("Buyer's
Disclosure Schedule" and "Seller's Disclosure Schedule," respectively) which
sets forth certain information with respect to their respective
representations, warranties and agreements contained herein. Such Disclosure
Schedules are incorporated herein by this reference and are hereby deemed a
part of this Agreement.
8. Based upon the representations and warranties made by each
party to the other in this Agreement, the parties have agreed to consummate the
sale of the Shares in accordance with the terms contained herein.
ARTICLE I. STOCK SALE AND TERMS OF PAYMENT
SALE AND PURCHASE OF STOCK. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as defined in Section 2.1 below)
Seller will sell and Buyer will purchase the Shares, which will constitute on
the Closing Date 100 percent of the issued and outstanding capital stock of
Subsidiary. On or prior to the Closing Date, Seller will assign, transfer and
convey to Subsidiary the following assets used by Seller in connection with the
business of the Station as a going concern (all such assets being referred to
herein as the "KIRO Assets"):
(a) TANGIBLE PERSONAL PROPERTY. The equipment, antennae,
furniture, fixtures, spare parts and other tangible personal property shown on
Schedule 1.1(a) to this Agreement, and any improvements, replacements and
alterations thereto made between the date of this Agreement and the Closing
Date, provided that the KIRO Assets shall not include such items of tangible
personal property as are disposed of or consumed in the ordinary course of the
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<PAGE> 8
business of the Station in accordance with Section 5.1 below or with the
consent of Buyer between the date of this Agreement and the Closing Date.
(b) REAL PROPERTY. The real property, including
buildings, towers and improvements thereon, shown on Schedule 1.1(b) to this
Agreement (the "Real Property"), together with all mineral, oil, gas,
hydrocarbon substances, development, air and water rights owned by Seller
relating thereto, all easements and rights of way owned by Seller that are
appurtenant thereto or to the operation, use or enjoyment thereof, and all
rights of Seller in and to streets, sidewalks, alleys, driveways, parking areas
and areas adjacent thereto or used in connection therewith and in and to any
land lying in the bed of any existing or proposed street adjacent to such Real
Property.
(c) CONTRACTS. To the extent assignable, (i) the
contracts, or portions thereof, shown on Schedule 1.1(c) to this Agreement,
(ii) contracts for the performance of services or the sale of broadcast time on
the Station that are to be in effect on the Closing Date, (iii) contracts with
respect to the Station entered into by Seller between the date of this
Agreement and the Closing Date in the ordinary course of business and not in
violation of the prohibitions contained in Section 5.1 hereof, (iv) all
employment agreements of the Active Employees (as defined in Section 10.6) and
(v) contracts which Buyer and Seller mutually agree in writing to have assigned
to Subsidiary ((i), (ii), (iii), (iv) and (v) together, the "Contracts").
(d) INTANGIBLE PROPERTY. Seller's rights in and to the
trademarks, tradenames, service marks, patents, copyrights, including
registrations and applications for registration of any of them, non-FCC
licenses, proprietary information, technical information and data and other
similar intangible property rights and interests used in the business of the
Station specifically shown on Schedule 1.1(d) to this Agreement.
(e) FILES AND RECORDS. Originals or, if unavailable,
photocopies of all files, records, studies, data, lists, filings, general
accounting records, books of account, computer programs and software and logs,
of every kind, relating solely to the business of the Station, other than those
specified in Section 1.2 below (the "Records").
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(f) MANUFACTURERS' AND VENDORS' WARRANTIES. All of
Seller's rights under manufacturers' and vendors' warranties relating to items
included in the KIRO Assets as of the date hereof, and those acquired between
the date hereof and the Closing Date.
1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary in
this Agreement, the following assets relating to the business of the Station
prior to the Closing Date shall be retained by Seller (or otherwise disposed of
as indicated) and shall not be assigned, transferred or conveyed to Subsidiary
(the "Excluded Assets"):
(a) CORPORATE, TAX AND ACCOUNTING RECORDS. Seller's
corporate and tax records and originals of Seller's accounting records.
(b) CASH. All cash, cash equivalents or similar type
investments of Seller.
(c) INSURANCE. All contracts of insurance, insurance
proceeds and insurance claims made by Seller relating to property or equipment
repaired, replaced or restored by Seller prior to the Closing.
(d) EMPLOYEE BENEFIT PLANS. Any employee benefit plans
of Seller.
(e) ACCOUNTS RECEIVABLE. All accounts receivable of
Seller relating to or arising out of the operation of the Station prior to the
Closing Date ("Seller's Accounts Receivable").
(f) CONTRACTS. Any contract used in the operation of the
Station other than the Contracts described in Section 1.1(c). Any and all
rights and obligations of Seller under the Sale of Abandoned Pipeline dated
February 10, 1989 between Washington Natural Gas Company and Seller.
1.3 LIABILITIES. The KIRO Assets shall be assigned, transferred
and conveyed to Subsidiary free and clear of all liabilities, obligations,
claims, liens, security interests and encumbrances, except for (i) liens for
property taxes not yet due and payable, (ii) liabilities and obligations
expressly assumed elsewhere in this Agreement, (iii) liabilities and
obligations arising after the Closing Date under the Contracts and (iv)
encumbrances on or affecting the Real Property shown on Schedule 1.1(b) ((i),
(ii), (iii) and (iv) together, the "Assumed Liabilities").
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Subsidiary shall assume and pay each of the Assumed Liabilities. Seller shall
pay, discharge and satisfy all liabilities and obligations arising in
connection with Seller's operation of the Station prior to the Closing Date
which are not specifically assumed by Subsidiary as and when such liabilities
and obligations become due; provided, however, nothing in this Agreement shall
prevent Seller from contesting any liability or obligation in good faith or
seeking a discount thereof.
1.4 CONSIDERATION.
(a) PURCHASE PRICE. Subject to the conditions contained
in this Agreement and in consideration of the sale of the Shares and the BHC
Assets, Buyer will pay to Seller on the Closing Date the sum of One Hundred
Sixty-Two Million Five Hundred Thousand Dollars ($162,500,000) (the "Purchase
Price"), as may be adjusted pursuant to Section 1.6 below, in the manner
described in Section 1.5 below.
(b) ALLOCATION. The parties agree to allocate the
Purchase Price between the BHC Assets and the Shares. The portion of the
Purchase Price so allocated to the Shares in turn shall be allocated among the
KIRO Assets. Within 30 days of the date of this Agreement, Seller and Buyer
shall each provide the other with a written appraisal of the KIRO Assets and
the BHC Assets for use in the allocation of the Purchase Price. Such
appraisals shall be prepared by reputable appraisers in the broadcasting
industry, one appraiser selected by each party. Upon completion of the
appraisals, the average of the two appraisals, or such other method as agreed
by the parties, shall be used to arrive at the Purchase Price allocations.
Each party shall bear the cost of its appraiser. The agreed allocations shall
be evidenced by a letter agreement between the parties. Upon arriving at the
Purchase Price allocations, the parties agree to use such allocations in
completing and filing Internal Revenue Code Form 8594 for federal income tax
purposes. Each party shall furnish the other with a copy of its Form 8594
prior to filing it with the Internal Revenue Service.
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1.5 MANNER OF PAYMENT. That portion of the Purchase Price
allocated to the Shares shall be paid to Seller by Buyer in immediately
available funds by wire transfer on the Closing Date.
1.6 ADJUSTMENTS.
(a) ADJUSTMENT FOR TRADE ACCOUNTS RECEIVABLE. As of the
Closing Date, Buyer and Seller shall identify each trade agreement of the
Station and determine both the contracted balance of the airtime necessary to
broadcast any remaining advertising provided for therein and the contracted
balance of the remaining services, merchandise and other non-cash consideration
to be collected pursuant thereto, net of any services, merchandise or other
non-cash consideration that has no ongoing business value to Buyer. If the
balance of such airtime exceeds the balance of such net non-cash consideration,
then the difference in such balances shall be paid by Seller to Buyer. If the
balance of such net non-cash consideration exceeds the balance of such airtime,
then the difference in such balances shall be paid by Buyer to Seller.
(b) CLOSING DATE AND PRIOR ISSUES. Seller shall be
entitled to all income earned and be responsible for all expenses incurred,
including prepaid, accrued and deferred items (but excluding accrued and unpaid
vacation of all Active Employees), in connection with the business of the
Station prior to the Closing Date. Subsidiary shall be entitled to all income
earned and be responsible for all (i) expenses incurred in connection with the
business of the Station as of 12:01 a.m. on and after the Closing Date and (ii)
unused accumulated sick leave and accrued unpaid vacation of all Active
Employees. Buyer shall be entitled to a credit (the "Vacation Credit") against
the Purchase Price for all accrued unpaid vacation of all Active Employees.
Pro rata allocations of income and expense, to the extent practicable, shall be
calculated as of the close of business on the day preceding the Closing Date.
(c) TIME FOR PAYMENT. The proration and adjustments
(including the Vacation Credit) provided for in this Section 1.6, to the extent
practicable, shall be made on the
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Closing Date. As to those prorations and adjustments not capable of being
ascertained on the Closing Date, an adjustment and proration shall be made
within 90 days of the Closing Date.
(d) DISPUTE RESOLUTIONS. In the event of any disputes
between the parties as to such adjustments, the amounts not in dispute shall
nonetheless be paid at the times provided in subsection (c) above, and such
disputes shall be determined by an independent certified public accountant (the
"Disputes Auditor") mutually acceptable to the parties whose determination
shall be final. Before referring a matter to the Disputes Auditor, the parties
shall agree on procedures to be followed by the Disputes Auditor (including
procedures for presentation of evidence). If the parties are unable to agree
upon procedures before the end of 30 days after receipt of a dispute notice,
the Disputes Auditor shall establish the procedures. The Disputes Auditor's
procedures may be, but need not be, those proposed by either party. The
parties shall, as promptly as practicable, submit evidence in accordance with
the procedures agreed upon or established by the Disputes Auditor, and the
Disputes Auditor shall decide the dispute in accordance therewith as promptly
as practicable. The parties agree that they will require the Disputes Auditor
to render his or her decision within 30 days after referral of the dispute to
the Disputes Auditor for decision. The fees and expenses of such Disputes
Auditor shall be borne equally by Seller and Buyer.
ARTICLE II. THE CLOSING
2.1 TIME AND PLACE OF CLOSING. The closing (the "Closing") of the
sale and purchase of the Shares shall be held in the offices of Seller at 2807
Third Avenue, Seattle, Washington 98121 at 10:00 a.m. on a mutually agreed upon
day within 30 days after the FCC consent to the assignment of the FCC
Authorizations contemplated in the BHC Asset Sale Agreement shall have become
final, as defined in Section 7.3 of such Agreement, or such other time and
place as shall be mutually agreed upon by the parties (the "Closing Date").
2.2 DELIVERIES BY SELLER. At the Closing, Seller will deliver or
cause to be delivered to Buyer the following, each of which shall be in form
and substance reasonably satisfactory to Buyer:
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(a) One or more stock certificates evidencing the Shares,
in each case endorsed in blank or with executed blank
stock powers attached;
(b) An originally executed copy of an Assignment and
Assumption Agreement between Seller and Subsidiary
with a Warranty Deed in a form substantially similar
to the form attached hereto as Exhibit 2.2(b);
(c) Resignations of each of the directors and officers of
Subsidiary;
(d) A copy of the Certificate of Incorporation of
Subsidiary, certified by the Secretary of State of
Delaware as of a date as near as practicable to the
Closing Date;
(e) A copy of the bylaws of Subsidiary as in effect on
the Closing Date, certified by an officer of
Subsidiary;
(f) The original minute and stock books of Subsidiary;
(g) To the extent assignable and to the extent required
to be obtained pursuant to Section 8.5, consents to
assignment from third parties relating to the
assignment of the Contracts to Subsidiary;
(h) Cross-Receipt in a form substantially similar to the
form attached hereto as Exhibit 2.2(h);
(i) Certificate of Secretary of Seller in a form
substantially similar to the form attached hereto as
Exhibit 2.2(i);
(j) Bring Down Certificate of Seller in a form
substantially similar to the form attached hereto as
Exhibit 2.2(j);
(k) Lease and Easement Agreements referred to in Section
10.8;
(l) Letter Agreement referred to in Section 10.10;
(m) Evidence satisfactory to Buyer that no financing
statements are outstanding relating to the KIRO
Assets in Washington;
(n) Certificate of Seller's good standing in Washington
and certificates of Subsidiary's good standing in
Delaware and Washington;
(o) Letter Agreement referred to in Section 1.4(b); and
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(p) Such other instruments of conveyance and transfer, in
form and substance reasonably satisfactory to Buyer
and its counsel, as shall be reasonably necessary or
appropriate to comply with the purpose and intent of
this Agreement.
2.3 DELIVERIES BY BUYER. At the Closing, Buyer will deliver to
Seller the following, each of which shall be in form and substance reasonably
satisfactory to Seller:
(a) That portion of the Purchase Price allocated to the
Shares in immediately available funds;
(b) Certificate of Secretary of Buyer in a form
substantially similar to the form attached hereto as
Exhibit 2.3(b);
(c) Bring Down Certificate of Buyer in a form
substantially similar to the form attached hereto as
Exhibit 2.3(c);
(d) Certificate of Buyer's good standing in Delaware;
(e) Cross-Receipt in a form substantially similar to the
form attached hereto as Exhibit 2.2(h);
(f) Letter Agreement referred to in Section 1.4(b); and
(g) Such other instruments of conveyance and transfer, in
form and substance reasonably satisfactory to Seller
and its counsel, as shall be reasonably necessary or
appropriate to comply with the purpose and intent of
this Agreement.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER
Except to the extent set forth in Seller's Disclosure Schedule, Seller
represents and warrants to Buyer as follows:
3.1 ORGANIZATION OF SELLER AND SUBSIDIARY; AUTHORITY. Seller is
and at the Closing Subsidiary will be a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Seller has the corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all requisite corporate action on the part of
Seller. This Agreement has been duly
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executed and delivered by Seller and constitutes the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and general equitable principles.
Seller has and at the Closing Subsidiary will have the full corporate power and
authority to own and operate the KIRO Assets and to carry on the business of
the Station as such business is now being conducted.
3.2 CAPITALIZATION OF SUBSIDIARY; OWNERSHIP. At the Closing: (i)
the Shares will be owned beneficially and of record by Seller and will
constitute all of the issued and outstanding shares of capital stock of
Subsidiary; (ii) the Shares will be duly authorized, validly issued, fully paid
and nonassessable; (iii) there will be no outstanding options, warrants or
other rights of any kind to acquire any capital stock of Subsidiary or
securities convertible into or exchangeable for, or which otherwise confer on
the holder thereof any right to acquire, any such capital stock, nor will
Subsidiary be committed to issue any such option, warrant, right or security;
(iv) Seller will have valid title to the Shares, free and clear of any and all
liens, claims, security interests or options; and (v) Seller will have full
legal right, power and authority to sell, transfer and convey the Shares to
Buyer.
3.3 FINANCIAL STATEMENTS. Seller has furnished to Buyer copies of
the Station's income statements for the fiscal years ended December 31, 1992,
December 31, 1993 and for the nine-month period ended September 30, 1994, along
with balance sheets relating to the Station and the KIRO Radio Stations for
these same periods (the "Financial Schedules"). September 30, 1994 is the
"Balance Sheet Date." The Financial Schedules have been prepared in accordance
with the books and records regularly maintained by Seller with respect to the
Station and, except for customary year-end footnotes and balance sheet
adjustments consisting of reclassification and tax accrual entries relating to
the period ended September 30, 1994, (i) present fairly in all material
respects the operating income and financial condition of the Station as of the
dates and
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periods indicated and (ii) are prepared in accordance with generally accepted
accounting principles consistently applied.
3.4 BUSINESS SINCE THE BALANCE SHEET DATE. Other than the
formation of the Subsidiary and all transactions incident thereto
(collectively, the "Subsidiary Transactions"), since the Balance Sheet Date,
the business of the Station has been conducted in the ordinary course and in
substantially the same manner as it was before the Balance Sheet Date. Since
the Balance Sheet Date, there have been no material adverse changes in the
business, condition (financial or otherwise) or results of the Station's
operations. For purposes of this Agreement, notice of termination or the
actual termination by CBS of the CBS Agreement shall not be deemed such a
material adverse change.
3.5 NO DEFAULTS. The execution, delivery and performance of this
Agreement by Seller will not (a) conflict with any provision of the charter
documents or bylaws of Seller or Subsidiary, (b) result in a default (or give
rise to any right of termination, cancellation or acceleration) under or
conflict with any of the terms, conditions or provisions, other than
assignability, of any material contract, note, bond, mortgage or other material
instrument or obligation by which Seller or Subsidiary may be bound, (c) in any
material respect violate any law, statute, rule, regulation, order, injunction
or decree of any federal, state or local governmental authority or agency
applicable to Subsidiary or to Seller which would adversely affect Subsidiary,
the Subsidiary Transactions or this Agreement, or (d) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever on
Subsidiary or any of the KIRO Assets.
3.6 UNDISCLOSED LIABILITIES.
(a) This Agreement including the schedules and exhibits
hereto does not contain any untrue statement of a material fact or omit any
statement of a material fact necessary in order to make the statements
contained herein or therein not misleading.
(b) Notwithstanding anything to the contrary contained in
this Agreement or the schedules and exhibits hereto, any information disclosed
in one such document shall be
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deemed to be disclosed in each of the other such documents. The disclosure of
any information shall not be deemed to constitute an acknowledgment that such
information is required to be disclosed in connection with the representations
and warranties made by Seller in this Agreement or that it is material, nor
shall such information be deemed to establish a standard of materiality.
3.7 CONDITION AND ADEQUACY OF THE ASSETS. The tangible assets to
be transferred to Subsidiary shown on Schedule 1.1(a) and Schedule 1.1(b) are
in good operating condition and repair, ordinary wear and tear excepted and are
available for immediate use in the business of the Station. All material items
of transmitting and studio equipment included in such tangible assets (i) have
been maintained in a manner consistent with generally accepted television
industry engineering practices and (ii) will permit the Station to operate the
main transmitter and, in all respects material to the business of the Station,
the Station's auxiliary facilities in accordance with the terms of the FCC
Authorizations, the rules and regulations of the FCC and all other applicable
federal, state and local statutes, ordinances, rules and regulations. Subject
to the retention of certain tangible assets of Seller that have been used in
the business of the Station and the business of the KIRO Radio Stations, the
tangible assets included in the KIRO Assets are all such tangible assets
necessary to conduct the business of the Station as now conducted by Seller.
3.8 CONTRACTS AND ARRANGEMENTS. Except as set forth on Schedule
1.1(c): (i) at the date of this Agreement, all of the Contracts are valid,
binding and enforceable by Seller in accordance with their respective terms in
all material respects; (ii) at the Closing, and to the extent the Contracts are
assigned to Subsidiary, such Contracts will be valid, binding and enforceable
by Subsidiary in accordance with their respective terms in all materials
respects; (iii) to the best of Seller's knowledge, there is no existing
default, event of default or other event under such Contracts which, with or
without notice or lapse of time or both, would constitute a material default or
a material event of default under any such Contracts; (iv) Seller has provided
Buyer with complete copies of all material Contracts; and (v) Seller has full
legal power and authority to assign its rights under the Contracts to
Subsidiary in accordance with this Agreement, and such assignment will not
materially affect the validity, enforceability and
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continuity of the Contracts for Subsidiary on or after the Closing. Seller has
set forth descriptions of all material oral contracts with employees of the
Station (other than benefit plans and compensation arrangements available to
employees generally) in Schedule 1.1(c). Other than the Contracts and the CBS
Agreement, Seller requires no contract or agreement to carry on the business of
the Station in all material respects as presently conducted.
3.9 TITLE.
(a) Schedule 1.1(b) lists all of the Real Property. At
the date of this Agreement, Seller owns and has good and valid marketable fee
simple title to the Real Property, and at the Closing, Subsidiary will own and
have good and valid marketable fee simple title to the Real Property, which
Real Property is free and clear of all security interests, mortgages, pledges,
conditional sales agreements, charges, liens and encumbrances, and reservations
and restrictions of record, except those set forth on Schedule 1.1(b), liens
for property taxes not yet due and payable and those contemplated by this
Agreement.
(b) Schedule 1.1(a) lists all tangible personal property
included in the KIRO Assets. At the date of this Agreement, Seller owns and
has good and valid title to such property, and at the Closing, Subsidiary will
own and have good and valid title to such property, which personal property is
free and clear of all security interests, mortgages, pledges, conditional sales
agreements, charges, liens and encumbrances, except as set forth on Schedule
1.1(a) and liens for property taxes not yet due and payable.
3.10 INTANGIBLE PERSONAL PROPERTY. Schedule 1.1(d) to this
Agreement sets forth a correct and complete list of all trademarks, tradenames,
service marks, patents, and copyrights, including registrations and
applications for registration of any of them, used in and material to the
business of the Station, other than the BHC Assets and the call sign for the
Station. Seller has not received any notice with respect to any alleged
infringement or unlawful or improper use of any such property or any other
intangible personal property in connection with the business of the Station and
is not aware that it is infringing upon or is otherwise acting adversely to any
intangible personal property owned by any other person. All of such property
and any other
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intangible personal property owned by Seller and used in and material to the
business of the Station is valid and in good standing and uncontested. Seller
will use its reasonable best efforts to convey to Subsidiary its rights in all
intangible personal property used by Seller and material to the business of the
Station as it is currently conducted.
3.11 LITIGATION AND COMPLIANCE WITH LAWS.
(a) To the best of Seller's knowledge, each of Seller and
Subsidiary, with respect to the Station or the KIRO Assets, has not been
operating under or subject to, or in default with respect to, any order, writ,
injunction or decree of any court or federal, state, municipal or other
governmental department, commission, board, agency or instrumentality, foreign
or domestic. Neither Seller, any of its officers nor, to the best of its
knowledge, any of its agents has received any inquiry, written or oral, from
any federal, state or local agency concerning the business of the Station or
the KIRO Assets during the 12-month period prior to the date of this Agreement
which could be expected to have a material adverse effect on such business.
There is no litigation pending by or against or, to the best of Seller's
knowledge, threatened against Seller or Subsidiary which materially affects the
business of the Station or any of the KIRO Assets or Seller's ability to
perform in accordance with the terms of this Agreement.
(b) Except for the FCC Authorizations, Seller has all
licenses, franchises, permits and other governmental authorizations that are
legally required to enable it to operate the Station in accordance with
applicable laws and in all material respects as conducted on the date hereof.
Between the date hereof and the Closing, Seller will use all reasonable efforts
to maintain all such governmental authorizations. Seller is in compliance in
all material respects with all such governmental authorizations and all
applicable federal, state and local laws, rules and regulations, including
without limitation those imposing taxes. None of such governmental
authorizations are subject to any restriction or condition which would limit
the business of the Station as presently conducted in any material respect.
Seller shall use its reasonable best efforts to transfer all such governmental
authorizations to Subsidiary or, if such are nontransferable, to cooperate with
Subsidiary in its obtaining the same.
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3.12 TAXES. Seller has filed, or caused to be filed, all federal,
state and local tax returns required to be filed by Seller with respect to the
Station and the KIRO Assets. Seller has paid, or made provisions for the
payment of, all taxes due for periods covered by such returns. To Seller's
knowledge, no events have occurred which could impose on Subsidiary any
transferee liability for any taxes, penalties or interest due or to become due
from Seller.
3.13 INSTRUMENTS OF CONVEYANCE TO SUBSIDIARY; GOOD TITLE. The
instruments to be executed by Seller in favor of Subsidiary conveying the KIRO
Assets to Subsidiary will be in a form sufficient to transfer good and
marketable title to the KIRO Assets to Subsidiary free and clear of all
liabilities, obligations and encumbrances, except as provided elsewhere in this
Agreement.
3.14 REAL PROPERTY. The present use by the Station of the Real
Property conforms in all material respects with applicable zoning ordinances
and other governmental regulations. The Real Property is all the Real Property
that Seller owns and that is used in connection with the business of the
Station other than the real property on Vashon Island covered by an Easement
Agreement referred to in Section 10.8. With respect to the Real Property:
(a) there are no pending or, to the knowledge of Seller
(and employees with responsibility for real estate matters), threatened
condemnation proceedings, lawsuits, claims, investigations or administrative
actions relating to the Real Property or other matters affecting adversely the
current use, occupancy or value thereof;
(b) except as set forth on Schedule 1.1(b) and as
contemplated by this Agreement, there are no leases, subleases, licenses,
concessions or other agreements, written or oral, granting to any party or
parties the right of use or occupancy of any portion of the Real Property;
(c) there are no outstanding options or rights of first
refusal to purchase or lease the Real Property or any portion thereof or
interest therein;
(d) there are no parties (other than Seller, Subsidiary
or their lessees) in possession of the Real Property;
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(e) to the best of Seller's knowledge, all facilities or
structures located on the Real Property are supplied with utilities and other
services necessary for the operation of such facilities as currently being
used, including, where applicable, electricity and telephone, which services
are adequate and in accordance with all applicable laws, ordinances, rules and
regulations and are provided via public roads or via permanent, irrevocable,
appurtenant easements benefiting the Real Property;
(f) the Real Property has vehicular access to a road;
(g) without material exception, except as shown on
Schedule 1.1(b), all tower, guy anchors, buildings and other improvements on
the Real Property are located entirely thereon;
(h) to the best of Seller's knowledge, there is no plan,
study or effort by any governmental authority or agency which could in any way
have a material adverse effect on the value, use or zoning of the Real Property
or increase the cost of the operation thereof;
(i) there are no assessments for public improvements
levied or, to the best of Seller's knowledge, threatened or proposed with
respect to the Real Property except as disclosed on Schedule 1.1(b);
(j) to the best of Seller's knowledge, there are no
latent defects in the Real Property; and
(k) the Real Property is in compliance with the Americans
With Disabilities Act of 1990 and, to the best of Seller's knowledge, the
regulations for Barrier Free Access adopted by the State of Washington and all
other regulations, ordinances, codes and rules relating to access to and use of
the Real Property by the physically impaired.
3.15 ENVIRONMENT.
(a) Seller and its Affiliates (as defined below) have
complied in all material respects with all Environmental, Health and Safety
Laws (as defined below) relating to the Real Property, and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand or notice
has been filed or commenced or, to the best of Seller's knowledge, threatened
against Seller or any Affiliate alleging any failure so to comply. Without
limiting the generality
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of the preceding sentence, Seller and its Affiliates have obtained and are in
material compliance with all of the terms and conditions of all permits,
licenses and other authorizations which are required under, and have complied
in all material respects with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
which are contained in, all Environmental, Health and Safety Laws applicable to
the Real Property and to the KIRO Assets.
For purposes of this Agreement, the following terms shall have the
meanings set forth below. "Affiliate" means, with respect to any Person, any
other Person directly or indirectly Controlling, Controlled by, or under common
Control with such other Person. "Control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through ownership of voting securities, by contract or
otherwise. "Person" means an individual, corporation, partnership, trust or
unincorporated organization or a government or agency or political subdivision
thereof.
(b) To the best of Seller's knowledge, Seller and its
Affiliates have no liability (whether absolute or contingent)(and Seller and
its Affiliates have not handled or disposed of any substance or condition, or
owned or operated any property or facility pertaining to the Real Property in
any manner that could form the basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
Seller and its Affiliates giving rise to any liability) for damage to the Real
Property, for any illness of or personal injury to any employee or other
individual, or for any reason under any Environmental, Health and Safety Law
applicable to the Real Property and to the KIRO Assets.
(c) To the best of Seller's knowledge, all properties and
equipment used in the business of the Station at or on the Real Property have
been free of asbestos, PCBs, methylene chloride, trichloroethylene, 1,2,-
transdichloroethylene, dioxins, dibenzofurons and Extremely
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Hazardous Substances (as defined in Sec. 302 of the Emergency and Planning and
Community Right-to-Know Act of 1986, as amended).
(d) "Environmental, Health and Safety Laws" means the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Resource Conservation and Recovery Act of 1976, the Occupational Safety and
Health Act of 1970 and the Washington Model Toxics Control Act, each as
amended, together with all other laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local and foreign governments (and all agencies
thereof) concerning pollution or protection of the environment, public health
and safety, or employee health and safety, 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) If Seller learns between the date of this Agreement
and the Closing Date that Seller is in breach of the representation and
warranty set forth in this Section 3.15, Seller shall begin, or cause
Subsidiary to begin, remedial action promptly and use reasonable efforts to
complete such remedial action before the Closing Date. If such remedial action
is likely to cost Seller and/or Subsidiary in excess of an aggregate of
$100,000, Seller may elect not to take or cause Subsidiary to take such
remedial action. However, in such event Buyer may require Seller to proceed to
the Closing and Buyer shall receive a credit of $100,000 towards the Purchase
Price. If Buyer does not require Seller to close, this Agreement shall be
terminated and neither party shall have any liability to the other as a result
of such termination.
3.16 COMPLIANCE WITH FCC REGULATIONS. The main transmitter of the
Station is operated in compliance with, and all remaining BHC Assets and the
KIRO Assets are operated, in all material respects, in compliance with (i) the
FCC Authorizations, (ii) the Communications Act of 1934, as amended, (iii) all
applicable engineering standards required to be met under
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applicable FCC rules and (iv) all other applicable rules, regulations,
requirements and policies of the FCC, including but not limited to ANSI
Radiation Standards to the extent required to be met under applicable FCC rules
and regulations; and there are no existing claims known to Seller to the
contrary.
3.17 CHANGES. Since the Balance Sheet Date, other than the
Subsidiary Transactions, neither Seller nor Subsidiary has, with respect to the
business of the Station: (a) mortgaged, pledged or subjected to a lien or any
other encumbrance any of the KIRO Assets; (b) sold or transferred any material
asset used or useful in the business of the Station except as permitted under
Section 5.1 below; (c) increased the compensation payable or to become payable
to any Active Employee or consultant, except for regularly scheduled increases
in accordance with historical practices or as required by any of the Contracts
included in Schedule 1.1(c); or (d) revalued any of the KIRO Assets or changed
any of the Station's accounting records (except for the application of
customary year-end adjustments) or practices or changed its depreciation or
amortization policies or rates.
3.18 BROKERS. There is no broker or finder or other person who
would have any valid claim against Buyer for a commission or brokerage fee in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Seller or Subsidiary.
3.19 LABOR RELATIONS, OSHA.
(a) Neither Seller nor Subsidiary is a party or subject
to any collective bargaining agreements with respect to the Station, except as
described in Schedule 1.1(c). Neither Seller nor Subsidiary has material
written or oral contracts of employment with any employees of the Station,
other than oral employment agreements terminable without penalty or those
listed in Schedule 1.1(c). Each of Seller and Subsidiary, in the operation of
the Station, has complied in all material respects with all applicable 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
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neither has received any notice alleging that it has failed to comply in any
material respect with any such laws, rules or regulations. Each of Seller and
Subsidiary has complied in all material respects with the terms of the existing
union agreements, and no controversies, union disputes or proceedings are
pending or, to the knowledge of Seller, threatened between it or Subsidiary and
employees (singly or collectively) of the Station. Except as set forth in
Schedule 1.1(c), no labor union or other collective bargaining representative
represents or, to the best of the knowledge of Seller, claims to represent any
of the employees of the Station. To the knowledge of Seller there is no union
campaign being conducted to solicit cards from employees to authorize a union
to request a National Labor Relations Board certification election with respect
to any of Seller's or Subsidiary's employees at the Station.
(b) Each of Seller and Subsidiary is in compliance in all
material respects with the requirements of the Occupational Safety and Health
Act and any similar laws of any state or local jurisdiction ("OSHA"). Neither
Seller nor Subsidiary has received any OSHA citations as a result of on-site
inspections or employee complaints that have not been cured or corrected.
3.20 INSURANCE. All of the tangible property included in the KIRO
Assets is insured against loss or damage, and Seller has liability and other
insurance in amounts generally customary in the broadcast industry.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth in Buyer's Disclosure Schedule, Buyer represents
and warrants to Seller as follows:
4.1 ORGANIZATION OF BUYER; AUTHORITY. Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, with the corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all requisite corporate action 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,
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except as enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and general equitable principles.
Buyer has the full corporate power and authority to own and operate its
business as now being conducted.
4.2 NO DEFAULTS. The execution, delivery and performance of this
Agreement by Buyer will not (a) conflict with any provision of the Certificate
of Incorporation or bylaws of Buyer, (b) result in a default (or give rise to
any right of termination, cancellation or acceleration) under or conflict with
any of the terms, conditions or provisions, other than assignability, of any
material contract, note, bond, mortgage or other material instrument or
obligation to which Buyer is a party or by which Buyer may be bound, or (c) in
any material respect violate any law, statute, rule, regulation, order,
injunction or decree of any federal, state or local governmental authority or
agency applicable to Buyer.
4.3 BROKERS. There is no broker or finder or other person who
would have any valid claim against Seller, or Subsidiary prior to Closing, for
a commission or brokerage fee in connection with this Agreement or the
transactions contemplated hereby as a result of any agreement, understanding or
action by Buyer.
4.4 QUALIFICATIONS AS A BROADCAST LICENSEE. Buyer knows of no
fact that would, under existing law and the existing rules, regulations and
practices of the FCC, disqualify Buyer as the owner of the Shares and
Subsidiary or the owner and operator of the KIRO Assets. Buyer will take no
action which it knows or has reason to know would cause such disqualification.
4.5 ACQUISITION OF SHARES FOR INVESTMENT. Buyer has such
knowledge and experience in financial and business matters that it is capable
of evaluating the merits and risks of its purchase of the Shares. Buyer is
acquiring the Shares for its own account for investment purposes and not with a
view to or for sale in connection with any distribution thereof or with any
present intention of selling or distributing the Shares. Buyer agrees that the
Shares may not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without
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registration under the Securities Act of 1933, as amended, except pursuant to
an exemption from such registration available under such Act.
4.6 DISCLOSURE OF INFORMATION. Upon acceptance of the Shares,
Buyer shall be deemed to have represented for purposes of the federal and state
securities laws as of the Closing Date that: (i) it has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Shares and (ii) it has had an opportunity to ask questions and
receive answers from Seller regarding the terms and conditions of the offering
of the Shares. The foregoing, however, does not limit or modify the
representations and warranties of Seller in Article III of this Agreement or
the right of Buyer to rely thereon.
ARTICLE V. COVENANTS OF SELLER PENDING THE CLOSING DATE
Seller covenants and agrees that from the date hereof to and including
the Closing Date:
5.1 MAINTENANCE OF BUSINESS. Seller shall continue or cause
Subsidiary to continue to conduct the business of the Station in substantially
the same manner as heretofore conducted. Seller shall continue or cause
Subsidiary to continue to operate the Station in accordance with the terms of
the FCC Authorizations and in compliance with all applicable laws and FCC rules
and regulations.
Seller shall, at Seller's expense, maintain or cause Subsidiary to
maintain all machinery and equipment used in the business of the Station in a
normal state of repair and efficiency and maintain the Real Property in good
order, repair and condition. Seller will fully perform or cause Subsidiary to
fully perform its respective obligations under all Contracts to be assigned to
and assumed by Subsidiary.
Seller will maintain or cause Subsidiary to maintain in full force and
effect through the Closing Date adequate property damage, liability and other
insurance with respect to the KIRO Assets, and Seller or Subsidiary shall have
complete control of the programming and operation of the Station up to the
Closing Date.
For a period of 18 months following the Closing Date, Seller shall
maintain insurance adequate to cover claims arising from its operation of the
Station through the Closing Date.
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Seller, in all material respects, shall implement its 1995 capital
budget for the Station through the Closing.
Prior to the Closing Date, other than the Subsidiary Transactions,
Seller will not, and will cause Subsidiary to not, in each case, without the
prior written consent of Buyer:
(a) Sell, lease or transfer or agree to sell, lease or
transfer any of the KIRO Assets without replacement thereof with an asset of
substantially equivalent kind, condition and value;
(b) Enter into any contract of employment or collective
bargaining agreement that will affect Subsidiary's operation of the Station
after the Closing Date, or permit any increase or changes in the compensation
(including bonus) of any of the Station's Active Employees, except for
regularly scheduled increases in accordance with historical practices or as
required by any Contract listed on Schedule 1.1(c);
(c) Enter into or amend any contract or commitment with
respect to the Station involving annual consideration of more than $200,000;
(d) Apply to the FCC for any construction permit with
respect to the Station or make any material change in the Station's buildings,
leasehold improvements or fixtures; or
(e) Create, assume or permit to exist any claim,
liability, mortgage, lien, pledge, condition, charge or encumbrance of any
nature whatsoever on the KIRO Assets, except for those in existence on the date
of this Agreement and disclosed to Buyer, or any mechanics' liens and other
similar liens which shall be removed by Seller prior to the Closing Date.
5.2 GOODWILL. Seller shall use reasonable best efforts to
preserve the goodwill of the Station's suppliers, customers and others having
business relations with the Station.
5.3 ACCESS TO THE ASSETS. At the reasonable request of and upon
reasonable notice from Buyer, and subject to the provisions of Section 6.3,
Seller shall from time to time give or cause to be given to the officers,
employees, accountants, counsel and accredited representatives of Buyer (i)
full access during normal business hours to all of the KIRO Assets and (ii) all
such
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other information solely concerning the KIRO Assets and the business of the
Station as Buyer may reasonably request.
5.4 REPRESENTATIONS AND WARRANTIES. Seller shall render accurate
at and as of the Closing Date the representations and warranties made by it in
this Agreement. Seller shall give detailed written notice to Buyer promptly
upon the occurrence of or becoming aware of the impending or threatened
occurrence of any event which would cause or constitute a breach, or would have
caused a breach had such event occurred or been known to Seller prior to the
date hereof, of any of the representations or warranties of Seller contained in
this Agreement or in any schedule hereto.
5.5 CORPORATE ACTION. Subject to the provisions of this
Agreement, Seller will take and cause Subsidiary to take all necessary
corporate and other action required of them to carry out the transactions
contemplated by this Agreement.
5.6 CONSENTS. Seller will use its reasonable best efforts to
obtain or cause to be obtained prior to the Closing Date consents to the
assignment to or assumption by Subsidiary of all Contracts which require the
consent of any third party by reason of the transactions provided for in this
Agreement; provided, however, that Seller shall not be required to make any
payments or to incur any obligations to third parties in connection with
obtaining of any such consent.
5.7 CONFIDENTIAL INFORMATION. Seller shall not disclose to third
parties any information regarding Buyer designated as confidential and received
from Buyer or its agents in the course of investigating, negotiating and
completing the transactions contemplated by this Agreement. Nothing shall be
deemed to be confidential information which: (i) is known to Seller at the
time of its disclosure to it; (ii) becomes publicly known or available other
than through disclosure by Seller; (iii) is rightfully received by Seller from
a third party; or (iv) is independently developed by Seller.
5.8 CONSUMMATION OF AGREEMENT. Subject to the provisions of
Section 10.3 of this Agreement, Seller shall use its reasonable best efforts to
fulfill and perform all conditions and
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obligations on its part to be fulfilled and performed under this Agreement and
to cause the transactions contemplated by this Agreement to be fully carried
out.
5.9 NOTICE OF PROCEEDINGS. As promptly as is practicable, Seller
will notify Buyer in writing upon becoming aware of any order or decree or any
complaint praying for an order or decree restraining or enjoining the
consummation of this Agreement or the transactions contemplated hereunder, or
upon receiving any notice from any governmental department, court, agency or
commission or any nongovernmental entity of its intention to institute an
investigation into, or institute a suit or proceeding to restrain or enjoin the
consummation of this Agreement or such transactions, or to nullify or render
ineffective this Agreement or such transactions if consummated.
5.10 HSR FILING. As promptly as practicable after the date of this
Agreement, and in no event later than 20 days after the execution of this
Agreement, Seller will file a premerger notification and report form ("HSR
Filing") with the Federal Trade Commission (the "FTC") and the Department of
Justice (the "DOJ") pursuant to the Hart-Scott- Rodino Antitrust Improvements
Act of 1976, as amended. Seller will diligently take, or cooperate in the
taking of, all steps that are necessary, proper or desirable to expedite the
preparation of such HSR Filing and its prosecution to a favorable conclusion.
5.11 CERTIFICATE OF LAND USE. Seller shall promptly provide Buyer
with a Certificate of Land Use and local assessments from the City of Seattle
as to the Real Property and shall use its best efforts not to permit any change
in the status of the Real Property as reflected therein prior to the Closing.
ARTICLE VI. COVENANTS OF BUYER PENDING THE CLOSING DATE
Buyer covenants and agrees that from the date hereof to and including
the Closing Date:
6.1 REPRESENTATIONS AND WARRANTIES. Buyer shall render accurate
at and as of the Closing Date the representations and warranties of Buyer
contained in this Agreement or in any schedule hereto. Buyer shall give
detailed written notice to Seller promptly upon the occurrence of or becoming
aware of the impending or threatened occurrence of any event which would cause
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or constitute a breach, or would have caused a breach had such event occurred
or been known to Buyer prior to the date hereof, of any of the representations
and warranties of Buyer contained in this Agreement or in any schedule hereto.
6.2 CORPORATE ACTION. Subject to the provisions of this
Agreement, Buyer will take all necessary corporate and other action required of
it to carry out the transactions contemplated by this Agreement.
6.3 CONFIDENTIAL INFORMATION. Buyer shall not disclose to third
parties any information regarding Seller designated as confidential and
received from Seller or its agents in the course of investigating, negotiating
and completing the transactions contemplated by this Agreement. Nothing shall
be deemed to be confidential information which: (i) is known to Buyer at the
time of its disclosure to it; (ii) becomes publicly known or available other
than through disclosure by Buyer; (iii) is rightfully received by Buyer from a
third party; (iv) is independently developed by Buyer; or (v) relates to the
KIRO Assets or the Station provided that the transactions contemplated by this
Agreement are consummated.
6.4 CONSUMMATION OF AGREEMENT. Subject to the provisions of
Section 10.3 of this Agreement, Buyer shall use its reasonable best efforts to
fulfill and perform all conditions and obligations on its part, and on the part
of Subsidiary after the Closing, to be fulfilled and performed under this
Agreement and to cause the transactions contemplated by this Agreement to be
fully carried out.
6.5 NOTICE OF PROCEEDINGS. As promptly as is practicable, Buyer
will notify Seller in writing upon becoming aware of any order or decree or any
complaint praying for an order or decree restraining or enjoining the
consummation of this Agreement or the transactions contemplated hereunder, or
upon receiving any notice from any governmental department, court, agency or
commission or any nongovernmental entity of its intention to institute an
investigation into, or institute a suit or proceeding to restrain or enjoin the
consummation of this Agreement or such transactions, or to nullify or render
ineffective this Agreement or such transactions if consummated.
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6.6 HSR FILING. As promptly as practicable after the date of this
Agreement, and in no event later than 20 days after the execution of this
Agreement, Buyer will file an HSR Filing with the FTC and the DOJ. Buyer will
diligently take, or cooperate in the taking of, all steps that are necessary,
proper or desirable to expedite the preparation of such HSR Filing and its
prosecution to a favorable conclusion.
6.7 TAX RULING. As promptly as practicable after the date of this
Agreement, and in no event later than 20 days after the execution of this
Agreement, Buyer will file a request for a ruling (the "Tax Ruling") from the
Department of Revenue of the State of Washington confirming that the Subsidiary
Transactions and sale of the Shares hereunder are exempt from the Washington
retail sales tax, use tax and business and occupation tax.
ARTICLE VII. CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to or at the
Closing Date:
7.1 REPRESENTATIONS, WARRANTIES, COVENANTS, RELATED AGREEMENT.
(a) Each of the representations and warranties of Buyer
contained in this Agreement and in any schedule hereto shall have been true and
accurate as of the date when made and shall be deemed to be made again on and
as of the Closing Date and shall then be true and accurate;
(b) Buyer shall have performed and complied with each and
every covenant and agreement required by this Agreement to be performed or
complied with by it prior to or at the Closing Date;
(c) All obligations of Buyer to complete the transactions
contemplated by the BHC Asset Sale Agreement shall have been fulfilled or
waived, and Buyer shall be prepared to complete such transactions immediately
after the Closing; and
(d) Buyer shall have delivered to Seller a certificate of
an officer of Buyer, dated the Closing Date, certifying to the fulfillment of
the conditions set forth in Sections 7.1(a) and 7.1(b) above.
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7.2 PROCEEDINGS.
(a) No action or proceeding shall have been instituted
before any court or governmental body (i) to restrain or prohibit, or to obtain
substantial damages in respect of, the consummation of this Agreement, or to
revoke, cancel, fail to renew, suspend or adversely modify the main transmitter
FCC license of the Station, and (ii) which, in the reasonable opinion of
Seller, may reasonably be expected to result in a permanent injunction against
such consummation, an award of such substantial damages or a forfeiture of the
main transmitter FCC license; and
(b) Neither of the parties to this Agreement shall have
received written notice from any federal governmental body of (i) its intention
to institute any action or proceeding to restrain or enjoin or nullify this
Agreement or the transactions contemplated hereby, or the BHC Asset Sale
Agreement or the transactions contemplated thereby, or to commence any
investigation (other than a routine letter of inquiry, including a routine
Civil Investigative Demand) into the consummation of this Agreement or the BHC
Asset Purchase Agreement, or (ii) the actual commencement of such an
investigation.
In the event such a notice of intention is received or such an
investigation is commenced, this Agreement may not be abandoned by Seller for a
period of 90 days from the date of such notice of intention or notice of
commencement, but the Closing shall be delayed during such period. This
Agreement may be abandoned after this 90 day period if, in the reasonable
opinion of Seller, there is a likely probability that an investigation will
result in an action or proceeding of the type described in clause (a) of this
Section 7.2.
7.3 HSR APPROVAL. The waiting period relating to the HSR Filing
shall have expired or shall have been terminated.
7.4 CONSENTS. Seller and Buyer shall have received consents to
assignment to Subsidiary of each Contract designated with an asterisk next to
its number on Schedule 1.1(c).
ARTICLE VIII. CONDITIONS TO THE OBLIGATIONS OF BUYER
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The obligations of Buyer under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to or at the
Closing Date.
8.1 REPRESENTATIONS, WARRANTIES, COVENANTS, RELATED AGREEMENT.
(a) Each of the representations and warranties of Seller
contained in this Agreement and in any schedule hereto shall have been true and
accurate as of the date when made and shall be deemed to be made again on and
as of the Closing Date and shall then be true and accurate;
(b) Seller shall have performed and complied with each
and every covenant and agreement required by this Agreement to be performed or
complied with by it prior to or at the Closing Date;
(c) All obligations of BHC to complete the transactions
contemplated by the BHC Asset Sale Agreement shall have been fulfilled or
waived, and BHC shall be prepared to complete such transactions immediately
after the Closing; and
(d) Seller shall have delivered to Buyer a certificate of
an officer of Seller, dated the Closing Date, certifying to the fulfillment of
the conditions set forth in Sections 8.1(a) and 8.1(b) above.
8.2 PROCEEDINGS.
(a) No action or proceeding shall have been instituted
before any court or governmental body (i) to restrain or prohibit, or to obtain
substantial damages in respect of, the consummation of this Agreement, or to
revoke, cancel, fail to renew, suspend or adversely modify the main transmitter
FCC license of the Station, and (ii) which, in the reasonable opinion of Buyer,
may reasonably be expected to result in a permanent injunction against such
consummation, an award of such substantial damages or a forfeiture of the main
transmitter FCC license; and
(b) Neither of the parties to this Agreement shall have
received written notice from any federal governmental body of (i) its intention
to institute any action or proceeding to restrain or enjoin or nullify this
Agreement or the transactions contemplated hereby or the BHC
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Asset Sale Agreement or the transactions contemplated thereby, or to commence
any investigation (other than a routine letter of inquiry, including a routine
Civil Investigative Demand) into the consummation of this Agreement or the BHC
Asset Purchase Agreement, or (ii) the actual commencement of such an
investigation.
In the event such a notice of intention is received or such an
investigation is commenced, this Agreement may not be abandoned by Buyer for a
period of 90 days from the date of such notice of intention or notice of
commencement, but the Closing shall be delayed during such period. This
Agreement may be abandoned after the 90 day period if, in the reasonable
opinion of Buyer, there is a likely probability that an investigation will
result in an action or proceeding of the type described in clause (a) of this
Section 8.2.
8.3 DAMAGE TO THE ASSETS. The Station shall not have on the
Closing Date, or any time between the date of this Agreement and the Closing
Date, suspended broadcasting at authorized power by reason of any cause or
event. In such event, Buyer shall have the right to postpone the Closing Date
until the Station is broadcasting at authorized power. Seller shall use, or
cause Subsidiary to use, all reasonable efforts to effect the resumption of
such broadcasting. In any event, if the Station has suspended broadcasting and
does not resume broadcasting at authorized power within 168 hours, Buyer at any
time thereafter shall have the right, in its complete discretion, to terminate
this Agreement, as its sole remedy, upon written notice to Seller. For
purposes of this Section 8.3, suspending broadcasting at authorized power shall
mean failure to broadcast regularly with the presently authorized power in
accordance with established past practice and schedules, except for ordinary
maintenance and other temporary suspension.
8.4 HSR APPROVAL. The waiting period relating to the HSR Filing
shall have expired or shall have been terminated.
8.5 CONSENTS. Seller and Buyer shall have received consents to
assignment to Subsidiary of each Contract designated with an asterisk next to
its number on Schedule 1.1(c).
8.6 RETRANSMISSION CONSENT. Seller shall cause Subsidiary to have
in place at the Closing retransmission consent agreements providing for the
signal carriage of the Station by
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cable television systems covering 95 percent of the current cable customers in
the Seattle-Tacoma Area of Dominant Influence. Said agreements shall provide,
at a minimum, for must carry status or its equivalent (including carriage on
Channel 7) for the Station and shall be for terms ending no earlier than
December 31, 1996.
ARTICLE IX. INDEMNIFICATION
9.1 SURVIVAL; LIMITATIONS.
(a) The several representations, warranties, covenants
and agreements of Seller and Buyer contained in or made pursuant to this
Agreement shall be deemed to have been made on the Closing Date, shall survive
the Closing Date and shall remain operative and in full force and effect for a
period of one year after the Closing Date, except that the representations,
warranties, covenants and agreements contained in Sections 3.1, 3.2, 3.5, 3.7,
3.10, 3.15, 3.16, 3.17, 4.1, 4.2, 4.4, 4.5, 9.2(c), 9.2(d), 9.3(c), and 9.3(d)
shall survive for a period of three years and the covenants and agreements
contained in Sections 5.7, 6.3, 10.5, 10.6,10.7, and 10.8 shall survive without
time limit.
(b) Neither Buyer nor Seller shall be entitled to recover
under this Agreement for any indemnification claims or for any breach of this
Agreement until the aggregate losses, damages or expenses suffered by it exceed
$500,000 (the "Threshold"), whereupon Buyer or Seller shall be entitled to
indemnification hereunder for indemnification claims from the other party for
any losses, damages or expenses suffered by Buyer or Seller in excess of the
Threshold; provided, however, that the Threshold shall not apply to any claims
arising under or breach of Section 10.6 by either Seller or Buyer.
(c) The combined maximum aggregate liability of Seller
and BHC and the maximum aggregate liability of Buyer for indemnification claims
under this Agreement and the BHC Asset Sale Agreement shall be the Purchase
Price.
9.2 INDEMNIFICATION OF BUYER. Subject to Section 9.1, Seller
agrees that it shall indemnify and hold Buyer and its successors and assigns
harmless from and against any and all damages, claims, losses, expenses, costs,
obligations and liabilities, including without limitation
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liabilities for reasonable attorney's fees, accounting fees, consulting fees
and engineering fees and disbursements ("Loss and Expense") suffered directly
or indirectly by Buyer by reason of, or arising out of:
(a) any breach of representation or warranty made by
Seller pursuant to this Agreement,
(b) any failure by Seller to perform or fulfill any of
its covenants or agreements set forth in this Agreement or the documents
specified in Section 2.2 above,
(c) any failure by Seller to pay or perform or cause
Subsidiary to pay or perform when due any of its liabilities or obligations
(including without limitation any liability for taxes) arising out of or
related to the KIRO Assets or the business of the Station prior to the Closing
which has not been assumed by Buyer or Subsidiary hereunder,
(d) any litigation, proceeding or claim by any third
party relating to Subsidiary, the KIRO Assets or the business of the Station
prior to the Closing but only to the extent such Loss and Expenses relates to
the business of the Station prior to the Closing Date, and
(e) any litigation pending by or against or threatened
against Seller, as specifically set forth on Seller's Disclosure Schedule.
9.3 INDEMNIFICATION OF SELLER. Subject to Section 9.1, Buyer
agrees that it shall indemnify and hold Seller and its successors and assigns
harmless from and against any and all Loss and Expense suffered directly or
indirectly by Seller by reason of, or arising out of:
(a) any breach of representation or warranty made by
Buyer pursuant to this Agreement,
(b) any failure by Buyer to perform or fulfill any of its
covenants or agreements set forth in this Agreement or the documents described
in Section 2.3 above,
(c) any failure by Buyer to pay or discharge or cause
Subsidiary to pay or discharge subsequent to the Closing any liabilities or
obligations assumed by Buyer or
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Subsidiary hereunder or incurred or first required to be performed by Buyer or
Subsidiary subsequent to the Closing, and
(d) any litigation, proceeding or claim by any third
party relating to Subsidiary, the KIRO Assets or the business of the Station
after the Closing but only to the extent such Loss and Expense relates to the
business of the Station on or after the Closing.
9.4 NOTICE OF CLAIMS. If Seller or Buyer believes that it has
suffered or incurred any Loss and Expense, it shall notify the other party
promptly in writing and within the applicable time period specified in Section
9.1 above, describing such Loss and Expense, the amount thereof, if known, and
the method of computation of such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred.
9.5 DEFENSE OF THIRD PARTY CLAIMS.
(a) If any action at law or suit in equity is instituted
by a third party (a "Claim") with respect to which any of the parties intends
to claim a Loss and Expense under this Article IX, such party shall promptly
notify the indemnifying party of such action or suit. The indemnifying party
shall have the right to conduct and control any Claim through counsel of its
own choosing, but the indemnified party may, at its election, participate in
the defense of any such Claim at its sole cost and expense. If the
indemnifying party does not notify the indemnified party within 10 days after
receipt of the notice specified in this Section 9.5 that it is defending any
such Claim, then the indemnified party may defend such Claim and settle such
Claim, through counsel of its own choosing, and recover from the indemnifying
party the amount of such reasonable settlement or of any judgment and the
reasonable costs and expenses of such defense, including, but not limited to,
reasonable attorneys' fees and disbursements. In the event that the
indemnifying party makes any payment to the indemnified party for
indemnification for which the indemnified party could have collected on a claim
against a third party, the indemnifying party shall be entitled to pursue
claims and conduct litigation on behalf of the indemnified party and any of its
successors, to pursue and collect on any indemnification or other
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remedy available to the indemnified party thereunder with respect to such claim
and generally to be subrogated to the rights of the indemnified party with
respect to those claims.
(b) Notwithstanding the foregoing, the failure by a party to abide
by these terms and conditions shall not affect the other party's obligations to
indemnify such party against Loss and Expense under this Article IX, except to
the extent that such failure shall have materially adversely affected the
indemnifying party's ability to defend against or satisfy, or shall have
prevented the settlement of, any liability, damage, loss, claim or demand for
which the indemnified party is entitled to indemnification under this
Agreement.
ARTICLE X. MISCELLANEOUS PROVISIONS
10.1 RISK OF LOSS. The risk of any loss, damage or destruction to
any of the KIRO Assets from fire or other force majeure shall be borne by
Seller at all times prior to the Closing Date hereunder. Upon the occurrence
of any loss or damage to any of the KIRO Assets as a result of fire or other
force majeure prior to the Closing Date, Seller shall notify Buyer of the same
in writing immediately stating with particularity the extent of the loss or
damage incurred, the cause thereof, if known, and the extent to which
restoration, replacement and repair of the KIRO Assets lost or destroyed will
be reimbursed under any insurance policy with respect thereto. In the event
the loss exceeds $100,000 and the KIRO Assets cannot be substantially repaired
or restored within 15 days after such loss, Buyer shall have the option to:
(a) Terminate this Agreement;
(b) Postpone the Closing until such time as the KIRO Assets
have been completely repaired, replaced or restored by Seller; or
(c) Elect to consummate the Closing and purchase the Shares
accepting the KIRO Assets in their then condition, in which event Seller shall
assign to Subsidiary and/or Buyer all rights under any insurance claim covering
the loss and pay over to Buyer or Subsidiary any proceeds under any such
insurance policy received by Seller with respect thereto (and Seller shall
otherwise not have any responsibility to Buyer or Subsidiary with respect to
the lost or destroyed KIRO Assets).
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10.2 ENVIRONMENTAL REPORTS. Buyer has, at its election and cost,
conducted Phase I and Phase II audits of the Real Property. Seller and Buyer
agree that the results of the Phase I and Phase II audits shall not, prior to
the Closing, be disclosed to any third parties, unless such disclosure is
required to be made by Buyer's insurance carriers or by law.
10.3 ABANDONMENT OF AGREEMENT. This Agreement may be terminated by
Seller or Buyer at any time prior to the Closing Date by the mutual consent of
both parties hereto or upon the occurrence of one of the following events:
(a) by Seller if any of the conditions provided in Article
VII hereof have not been met by the time required and have not been waived; or
(b) by Buyer if any of the conditions provided in Article
VIII hereof have not been met by the time required and have not been waived; or
(c) by any non-defaulting party hereto if the Closing of the
transactions contemplated by this Agreement have not been fully completed by
the earlier of (a) September 30, 1995; or (b) 45 days after the FCC has
consented to the assignment of the FCC Authorizations contemplated by the BHC
Asset Sale Agreement and all such consents shall have become a Final Order, as
defined in Section 7.3 of the BHC Asset Sale Agreement; or
(d) by Seller if the BHC Asset Sale Agreement is terminated
as a result of Buyer's breach of that Agreement; or
(e) by Buyer if the BHC Asset Sale Agreement is terminated as
a result of BHC's breach of that Agreement.
No termination pursuant to this Section 10.3 shall relieve any party
of liability it would otherwise have for breach of this Agreement.
10.4 LIABILITIES UPON TERMINATION. In the event this Agreement is
terminated pursuant to Section 10.3 above, no party hereto shall have any
liability to any other for costs, expenses, damages, loss of anticipated
profits or otherwise, unless the termination occurs because of any
misrepresentation or breach of warranty by a party hereto or the failure of
performance of, or compliance with, any covenant or agreement contained in this
Agreement.
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10.5 EXPENSES. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby will be paid by the party incurring such costs and
expenses. Buyer and Seller will share equally any FCC filing or grant fees and
any filing fees related to the HSR Filing. Seller shall purchase for
Subsidiary a standard form owner's policy of title insurance relating to
Subsidiary's interest in the Real Property. The additional cost for extended
coverage for such title insurance policy shall be at Buyer's expense. Buyer
shall bear the cost of any environmental audits of the KIRO Assets and the cost
of any engineering assessment of the KIRO Assets.
10.6 EMPLOYEE MATTERS.
(a) Buyer shall ensure that all Active Employees will be
employed by Subsidiary immediately after the Closing. Buyer shall not, at any
time prior to 60 days after the Closing Date, effect or cause Subsidiary to
effect a "plant closing" or "mass layoff" as those terms are defined in the
Worker Adjustment and Retraining Notification Act of 1988 ("WARN") affecting in
whole or in part any facility, site of employment, operating unit or employee
of Subsidiary without complying fully with the requirements of WARN. "Active
Employees" shall mean employees who, as of the date of this Agreement, are
actively employed by Seller in connection with the business of the Station or
their replacements, and who, on or prior to the Closing, will become employees
of Subsidiary. There shall not be more than 227 full time employees (inclusive
of 198 KIRO-TV employees) and 16 part time employees or their replacements to
be employed by Subsidiary in the positions set forth in Schedule 10.6 as of the
Closing, including those on vacation and leave of absence (including maternity
leave) and their replacements. Within 60 days from the date hereof, Seller
agrees to provide Buyer with a schedule specifying the individuals along with
their respective positions, which employees or their replacements will
constitute the Active Employees. "Company Employees" shall mean all current
and former employees of Seller, including Active Employees and all retired and
terminated vested employees of Seller. Buyer shall make available to the
Active Employees benefits plans and programs (including welfare plans) that,
considered as a whole, shall be similar to the current
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plans and programs maintained for Company Employees by Seller and which exceed
the average benefit plans and programs offered by companies engaged in the
broadcast industry.
(b) All Active Employees shall receive credit for
eligibility and vesting purposes (but not for the purpose of benefit accrual)
for years of service with Seller under all employee benefit plans and programs
maintained for employees of Buyer; provided, however, that any Active Employee
who is subsequently terminated by Buyer shall receive credit for prior service
with Seller in determining any severance benefits due such employee under
Buyer's severance policy. Buyer will offer health plan coverage to all Active
Employees who are afforded health plan coverage by Seller as of the Closing.
Buyer will waive any health plan coverage waiting period and pre-existing
condition restrictions contained in Buyer's health plans for all Active
Employees to the extent such restrictions have been satisfied under Seller's
health plans. Buyer shall cause credit to be given to Active Employees and
their covered dependents for payments made by such individuals toward
out-of-pocket maximums and deductibles for the year in which the Closing Date
occurs. At Buyer's election and at its sole expense, Seller shall arrange with
its medical insurance carrier for coverage of the Active Employees for a period
beginning on the Closing Date and not exceeding 90 days.
(c) Except as provided in subparagraph (b) above, Seller
shall be responsible for the payment of all compensation, employee benefits and
severance obligations for Company Employees for periods prior to the Closing
Date. Seller shall continue to be responsible for all Company Employees, other
than the Active Employees, for periods on and after the Closing Date.
(d) Buyer and Seller acknowledge and agree that the
transactions contemplated by this Agreement shall not constitute a termination
of employment of any Active Employee by Seller or Subsidiary.
(e) Buyer shall be responsible for any legally mandated
continuation of health care coverage for the Active Employees and/or their
dependents who have a loss of health care coverage due to a qualifying event on
or after the Closing Date.
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(f) No provision of this Section 10.6 shall create any
third-party beneficiary rights in any person or organization, including without
limitation employees or former employees (including any beneficiary or
dependent thereof) of Seller or Buyer or any of their respective Affiliates,
unions or other representatives of such employees or former employees, or
trustees, administrators, participants or beneficiaries of any employee benefit
plan, and no provision of this Section 10.6 shall create such third-party
beneficiary rights in any such person or organization in respect of any
benefits that may be provided, directly or indirectly, under any employee
benefit plan, arrangement or policy, including the current existing benefit
plans of Seller or Buyer.
10.7 TAX MATTERS.
(a) Seller shall cause Subsidiary to be included in the
consolidated federal Income Tax Returns (as defined below) that include Seller
for all periods for which it is required to be so included, including but not
limited to the period from and including January 1, 1994 to the Closing Date,
and in any other required state, local and foreign consolidated, affiliated,
combined, unitary or other similar group Income Tax Returns that include Seller
or any Affiliate of Seller, for all Pre-Closing Periods for which Subsidiary is
required to be so included. Seller shall timely prepare and file, or cause to
be prepared and filed, all Income Tax Returns of Subsidiary for all taxable
periods of Subsidiary ending on or before the Closing Date and pay, or cause to
be paid, when due all Income Taxes relating to such Returns. Seller shall be
entitled to all refunds (including but not limited to interest with respect
thereto) of Income Taxes received by or on behalf of Subsidiary relating to any
Pre-Closing Period, and Buyer shall pay, or cause Subsidiary to pay, to Seller
any such refund promptly after receipt thereof. At the request of Seller,
Buyer shall file, or shall cause Subsidiary to file, any claims for such
refunds, and Seller shall reimburse Buyer or Subsidiary for out-of-pocket
expenses associated with such filing made at the request of Seller.
(b) Any Income Taxes with respect to Subsidiary that
relate to a tax period beginning before the Closing Date and ending after the
Closing Date (an "Overlap Period") shall
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be apportioned between Seller and Buyer (i) as determined from the books and
records of Subsidiary during the portion of such period ending on the day
before the Closing Date and the portion of such period beginning on the Closing
Date, and (ii) based on accounting methods, elections and conventions that do
not have the effect of distorting income or expenses. Buyer shall cause
Subsidiary to file any Income Tax Returns for any Overlap Period and pay, or
cause to be paid, when due, any Income Taxes shown as due on any such Returns.
At least forty-five (45) business days prior to the due date for filing of any
Overlap Period Income Tax Return, Buyer shall provide Seller with a
substantially final draft of such Return and a notice setting forth in
reasonable detail the calculations regarding Seller's share of Income Taxes
shown as due on such Return (calculated as described in this Section 10.7(b)),
and Seller shall have the right to review such Return and such notice. Seller
shall notify Buyer of any objections Seller may have to any items set forth in
such Return and to Buyer's calculations regarding Seller's share of Income
Taxes, and Seller and Buyer agree to consult and resolve in good faith any such
objection and to mutually consent to the filing of such Returns. In the event
Seller and Buyer are unable to resolve in good faith any such objections, Buyer
and Seller agree to submit such objection to a Disputes Auditor in accordance
with the provisions of Section 1.6. Seller shall pay Buyer its share of any
Income Taxes (to the extent Seller is liable therefor in accordance with this
Section 10.7(b) and to the extent not already paid by Seller or Subsidiary) due
pursuant to the filing of any such Returns under the provisions of this Section
10.7(b). Buyer shall pay to Seller, at the time of providing the notice
described in this Section 10.7(b) (or such other time as is mutually agreed by
the parties), the amount, if any, by which Seller's calculated share of Overlap
Period Income Taxes is less than the amounts already paid by Seller or
Subsidiary on or before the Closing Date.
(c) Notwithstanding anything in this Agreement to the
contrary, Seller shall have the right but not the obligation to represent the
interests of Subsidiary in (i) any Income Tax audit or administrative or court
proceeding relating to Income Tax Returns and (ii) any Tax audit or
administrative or court proceeding relating to Tax Returns filed on a
consolidated basis by
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Seller or any Affiliate of Seller (including without limitation any such
proceedings relating to the income, the Station, the KIRO Assets or operations
of Subsidiary for Pre-Closing Periods). Buyer agrees that it will cooperate
fully with Seller and its counsel in the defense against or compromise of any
claim in any such audit or proceeding. Seller (and Seller's Affiliates) shall
not settle any such audit or proceeding in a manner which would have a
materially adverse affect on Subsidiary or Buyer after the Closing Date without
the prior written consent of Buyer, which consent shall not unreasonably be
withheld.
(d) Buyer shall promptly notify Seller in writing upon
receipt by Buyer or any Affiliate of Buyer of notice of (i) any pending or
threatened federal, state, local or foreign Tax (as defined below) audits or
assessments of Subsidiary, so long as any taxes may be assessed by any taxing
authority for any Pre-Closing Period or Overlap Period, and (ii) any pending or
threatened federal, state, local or foreign Tax audits or assessments of Buyer
or any Affiliate of Buyer which may affect the Tax liabilities of Subsidiary,
in each case for any Pre-Closing Period and Overlap Period only. Seller shall
promptly notify Buyer in writing upon receipt by Seller or any Affiliate of
Seller of notice of (x) any pending or threatened federal, state, local or
foreign Tax audits or assessments of Subsidiary, so long as any taxes may be
assessed by any taxing authority for any Pre-Closing Period or Overlap Period,
and (y) any pending or threatened federal, state, local or foreign Tax audits
or assessments of Seller or any Affiliate of Seller which may affect the Tax
liabilities of Subsidiary, in each case for Pre-Closing or Overlap Periods.
(e) After the Closing Date, Buyer and Seller shall
provide each other, and the Buyer shall cause Subsidiary to provide Seller,
with such cooperation and information relating to Subsidiary as either party
reasonably may request in filing any Return (or amended Return) or refund
claim, determining any Tax liability or a right to a refund, conducting or
defending any audit or other proceeding in respect of Taxes or effectuating the
terms of this Agreement. The parties shall retain, and Buyer shall cause
Subsidiary to retain, all Returns, schedules, work papers and other material
documents relating thereto, until the expiration of any relevant statute of
limitations (and, to the extent notified by any party, any extensions thereof)
and, unless such
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Returns and other documents are offered and delivered to Seller or Buyer, as
applicable, until the final determination of any Tax in respect of such years.
Any information obtained under this Section 10.7 shall be kept confidential,
except as may be otherwise necessary in connection with filing any Return (or
amended Return) or refund claim, determining any Tax liability or a right to a
refund, conducting or defending any audit or other proceeding in respect of
Taxes or otherwise effectuating the terms of this Agreement. Notwithstanding
the foregoing, neither Seller nor Buyer, nor any of their Affiliates, shall be
required unreasonably to prepare any document, or determine any information not
then in its possession, in response to a request under this Section 10.7(e).
(f) All transfer, gains, documentary, sales, use, excise,
registration, stamp, value added or other similar Taxes payable by reason of
the transactions contemplated by this Agreement or attributable to the sale,
transfer or delivery of the Shares or the Subsidiary Transactions (including
the State of Washington Real Estate Excise Tax) hereunder shall be borne 60
percent by Buyer and 40 percent Seller (other than any such Taxes that relate
to the Section 338(h)(10) Election (as described below)), and Seller and Buyer
shall file, or shall cause Subsidiary to file, all necessary Returns and other
documentation with respect to all such Taxes. The filing party shall provide
copies of such Returns to the other party.
(g) Seller will join with Buyer in making an election
under Code Sections 338(g) and 338(h)(10) (and any corresponding elections
under state, local or foreign income tax law) (collectively, a "Section
338(h)(10) Election") with respect to the purchase and sale of the Shares of
Subsidiary hereunder, and Seller and Buyer agree to take all actions necessary
to effectuate any such election. Buyer and Seller agree that the Purchase
Price (together with liabilities assumed hereunder and other relevant items)
will be allocated to the assets of Subsidiary, for all federal income tax
purposes as provided in Section 1.4(b). Buyer, Seller and Subsidiary will file
all Tax Returns (including amended returns and claims for refund) and
information reports in a manner consistent with such allocation.
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(h) For purposes of this Section 10.7, the following
terms shall have the meanings set forth below. "Code" means the Internal
Revenue Code of 1986, as amended or, if appropriate, any predecessor statute.
"Income Tax" or "Income Taxes" means any Taxes measured, in whole or in part,
by net or gross income or profits. "Returns" means all returns, reports,
estimates, information returns and statements of nature with respect to Taxes.
"Tax" or "Taxes" means any federal, state, local or foreign income, gross
receipts, gross income, profits, franchise, intangibles, transfer, sales, use,
payroll, occupation, property (real or personal), excise and similar taxes
(including interest, penalties or additions to such taxes).
10.8 LEASE AND EASEMENT AGREEMENTS. The studios and offices of the
KIRO Radio Stations are currently co- located with the studios and offices of
the Station on the Real Property. It is contemplated that the studios and
offices of the KIRO Radio Stations will be relocated from the Real Property.
The parties do not contemplate, however, that such relocation will occur on or
before the Closing Date. At or prior to the Closing, Seller and Subsidiary
shall enter into a Lease wherein Subsidiary will agree to lease to Seller the
space currently occupied by the studios and offices of the KIRO Radio Stations
(including parking spaces) and to grant to Seller a right to use certain areas
commonly shared by the KIRO Radio Stations and the Station (such as lobbies,
conference rooms, hallways, restrooms and break areas) (collectively the "KIRO
Radio Studio Space") for a term of nine months and for a monthly payment equal
to (i) Ten Dollars ($10) and (ii) the utility charges, real estate taxes and
maintenance expenses related to the KIRO Radio Studio Space. Further, the FM
antenna system and certain other technical equipment of the KIRO Radio Stations
are currently located on the Real Property. It is contemplated that such
equipment will not be relocated from the Real Property. At or prior to the
Closing, Seller and Subsidiary shall enter into an Easement Agreement wherein
Subsidiary will agree to grant to Seller an easement in gross to use the space
currently occupied by such equipment (the "KIRO Radio Technical Space") for a
term of 10 years and for a monthly payment equal to (i) Ten Dollars ($10) in
the initial year and at fair market value thereof in subsequent periods and
(ii) the utility charges and maintenance expenses related to the KIRO Radio
Technical Space. Such
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Easement Agreement shall be terminable by Seller as of any anniversary of the
commencement of the Easement Agreement after the end of the first year thereof
by delivery to Buyer 30 days prior written notice of such termination.
Finally, certain technical equipment of the Station is currently located on
real property owned by Seller other than the Real Property. It is contemplated
that such equipment will not be relocated from such real property. At or prior
to the Closing, Seller and Subsidiary shall enter into an Easement Agreement
wherein Seller will agree to grant to Subsidiary an easement in gross to use
the space currently occupied by such equipment (the "Station Technical Space")
for a term of 10 years and for a monthly payment equal to (i) Ten Dollars ($10)
in the initial year and at fair market value thereof in subsequent periods and
(ii) the utility charges and maintenance expenses related to the Station
Technical Space. Such Easement Agreement shall be terminable by Subsidiary as
of any anniversary of the commencement of the Easement Agreement after the end
of the first year thereof by delivery to Seller 30 days prior written notice of
such termination.
10.9 COLLECTION OF SELLER'S ACCOUNTS RECEIVABLE. During the
four-month period commencing on the Closing Date (the "Collection Period"),
Buyer shall cause Subsidiary to collect and receive payment in the ordinary
course of business with respect to Seller's Accounts Receivable and to pursue
collection thereof in accordance with Buyer's normal practices, provided
however that Buyer and Subsidiary shall not have the right to compromise,
settle or adjust the amounts of any of Seller's Accounts Receivable without
Seller's prior written consent. On the fifteenth and the last day of each of
the first two months and on the last day of each of the remaining two months
during the Collection Period and on the fifth day following the termination
thereof, Buyer shall cause Subsidiary to remit to Seller all Seller's Accounts
Receivable collected hereunder. All payments received by Subsidiary or Buyer
from any person obligated with respect to any of Seller's Accounts Receivable
shall be applied first to Seller's account and only after full satisfaction
thereof to Subsidiary's or Buyer's account, unless the account debtor contests
the amount owed to Seller or gives contrary remittance instructions or advice
to Subsidiary or Buyer. Upon the expiration of the Collection Period, all
rights and
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obligations related to collecting Seller's Accounts Receivable will revert back
to Seller and Subsidiary and Buyer will cease to have any further
responsibilities related to the uncollected Seller's Accounts Receivable
(except that Buyer shall cause Subsidiary to promptly remit to Seller any
amounts subsequently received by Subsidiary or Buyer on account of Seller's
Accounts Receivable). Thereafter, Seller may collect any Seller's Accounts
Receivable in any manner Seller chooses.
10.10 PROMOTIONS. Seller has entered into certain agreements (the
"Radio Agreements") for the benefit of the KIRO Radio Stations which contain
obligations to be performed by the Station, including the obligation to air
promotional material on KIRO-TV without direct compensation to be paid to
KIRO-TV. Seller has also entered into certain agreements (the "TV Agreements")
for the benefit of the Station which contain obligations to be performed by the
KIRO Radio Stations, including the obligation to air promotional material on
the KIRO Radio Stations without direct compensation to be paid to the KIRO
Radio Stations. Such agreements are shown on Schedule 10.10. At or prior to
the Closing, Seller and Subsidiary shall enter into a Letter Agreement wherein
(i) Subsidiary will agree to honor Seller's obligations to be performed by the
Station contained in the Radio Agreements, (ii) Seller will agree to pay to
Subsidiary the fair value of the performances required of Subsidiary, including
the fair market value of the TV airtime used in airing promotional material
under the Radio Agreements, (iii) Seller will agree to honor Subsidiary's
obligations to be performed by the KIRO Radio Stations contained in the TV
Agreements and (iv) Subsidiary will agree to pay to Seller the fair value of
the performances required of Seller, including the fair market value of the
radio airtime used in airing promotional material under the TV Agreements.
10.11 FURTHER ASSURANCES. From time to time after the Closing Date,
Seller and Buyer will execute all such instruments and take all such actions as
the other shall reasonably request in connection with carrying out and
effectuating the intent and purpose hereof and all transactions and things
contemplated by this Agreement, including, without limitation, the execution
and delivery of any and all confirmatory and other instruments in addition to
those to be delivered on
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the Closing Date and any and all actions which may reasonably be necessary or
desirable to complete the transactions contemplated hereby including causing
any necessary action by Subsidiary.
10.12 WAIVER OF COMPLIANCE. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement or condition herein may be waived
by the other party only by a written instrument signed by the party granting
the waiver. Any such waiver or failure to insist upon strict compliance with a
term of this Agreement shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure to comply.
10.13 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given when delivered by hand or by facsimile
transmission or mailed by registered or certified mail (return receipt
requested), postage prepaid, or by a reputable overnight delivery service to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Seller, to:
KIRO, Inc. c/o
Bonneville International Corporation
Broadcast House
55 North 300 West
Salt Lake City, Utah 84180
Attention: Bruce T. Reese
Fax No.: (801) 575-5652
With a copy to (which shall not constitute notice):
Bonneville International Corporation
Broadcast House
55 North 300 West
Salt Lake City, Utah 84180
Attention: Robert A. Johnson, Esq.
Fax No.: (801) 575-7548
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(b) If to Buyer, to:
A.H. Belo Corporation
400 South Record Street
Dallas, Texas 75202
Attention: Ward L. Huey, Jr.
Fax No.: (214) 977-8209
With a copy to (which shall not constitute notice):
A.H. Belo Corporation
400 South Record Street
Dallas, Texas 75202
Attention: Michael McCarthy, Esq.
Fax No.: (214) 977-8209
10.14 ASSIGNMENT. This Agreement and all of its terms shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. This Agreement shall not be assigned by any
party hereto without the written consent of the other party.
10.15 GOVERNING LAW. This Agreement shall be governed by, construed
and enforced in accordance with the internal laws of the State of Washington
(and not the laws pertaining to conflicts or choice of law).
10.16 COUNTERPARTS. This Agreement may be executed in several
counterparts, and all counterparts so executed shall constitute one agreement,
binding on the parties hereto, notwithstanding that all parties are not
signatory to the original or same counterpart.
10.17 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, including the
exhibits and schedules hereto and the documents delivered by Seller and Buyer
pursuant to Article II above embody the entire agreement and understanding of
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings between the parties. This Agreement may not be
amended except in writing signed by both parties.
10.18 SPECIFIC PERFORMANCE. Each of Buyer and Seller acknowledges
and agrees that the other party would be damaged irreparably in the event any
of the provisions of this
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Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of Buyer and Seller agrees that the
other party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any other remedy to which it may be
entitled at law or in equity.
xxxxxxxxxxxxxxxxxxxxxxxx
Seller and Buyer have caused this Agreement to be signed by their
respective duly authorized officers as of the date first above written.
KIRO, INC.
By: /s/ Kenneth Hatch
-------------------------------------
Title: President
----------------------------------
A.H. BELO CORPORATION
By: /s/ Robert W. Decherd
-------------------------------------
Title: Chairman of the Board, President
----------------------------------
and Chief Executive Officer
----------------------------------
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<PAGE> 1
EXHIBIT 2.2
ASSET SALE AGREEMENT
BETWEEN
BONNEVILLE HOLDING COMPANY
AND
A.H. BELO CORPORATION
DATED NOVEMBER 29, 1994
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I.
TRANSFER OF ASSETS AND TERMS OF PAYMENT
1.1 Transfer of Assets . . . . . . . . . . . . . . . . . . . . 2
1.2 Liabilities . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Consideration . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Manner of Payment . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II.
THE CLOSING
2.1 Time and Place of Closing . . . . . . . . . . . . . . . . 3
2.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . 3
2.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . 4
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Organization of Seller; Authority . . . . . . . . . . . . 5
3.2 No Defaults . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Undisclosed Liabilities . . . . . . . . . . . . . . . . . 6
3.4 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 CBS Agreement . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Instruments of Conveyance; Good Title . . . . . . . . . . 7
3.8 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Organization of Buyer; Authority . . . . . . . . . . . . . 7
4.2 No Defaults . . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4 Qualification as a Broadcast Licensee . . . . . . . . . . 8
ARTICLE V.
COVENANTS OF SELLER PENDING THE CLOSING DATE
5.1 Maintenance of FCC Authorizations . . . . . . . . . . . . 8
5.2 Representations and Warranties . . . . . . . . . . . . . . 9
5.3 Corporate Action . . . . . . . . . . . . . . . . . . . . . 9
5.4 CBS Consent . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
5.5 Applications for Commission Consent . . . . . . . . . . 9
5.6 Confidential Information . . . . . . . . . . . . . . . . 9
5.7 Consummation of Agreement . . . . . . . . . . . . . . . 10
5.8 Notice of Proceedings . . . . . . . . . . . . . . . . . 10
5.9 HSR Filing . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VI.
COVENANTS OF BUYER PENDING THE CLOSING DATE
6.1 Representations and Warranties . . . . . . . . . . . . . 10
6.2 Corporate Action . . . . . . . . . . . . . . . . . . . . 11
6.3 Applications for Commission Consent . . . . . . . . . . 11
6.4 Confidential Information . . . . . . . . . . . . . . . . 11
6.5 Consummation of Agreement . . . . . . . . . . . . . . . 11
6.6 Notice of Proceedings . . . . . . . . . . . . . . . . . 11
6.7 HSR Filing . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VII.
CONDITIONS TO THE OBLIGATIONS OF SELLER
7.1 Representations, Warranties, Covenants, Related
Agreement . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . 13
7.3 FCC Authorization . . . . . . . . . . . . . . . . . . . 13
7.4 HSR Approval . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS OF BUYER
8.1 Representations, Warranties, Covenants, Related
Agreement . . . . . . . . . . . . . . . . . . . . . . . 14
8.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . 15
8.3 FCC Authorization . . . . . . . . . . . . . . . . . . . 16
8.4 HSR Approval . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IX.
INDEMNIFICATION
9.1 Survival; Limitations . . . . . . . . . . . . . . . . . 16
9.2 Indemnification of Buyer . . . . . . . . . . . . . . . . 16
9.3 Indemnification of Seller . . . . . . . . . . . . . . . 17
9.4 Notice of Claims . . . . . . . . . . . . . . . . . . . . 17
9.5 Defense of Third Party Claims . . . . . . . . . . . . . 17
ARTICLE X.
MISCELLANEOUS PROVISIONS
10.1 Call Letters . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
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<TABLE>
<S> <C>
10.2 Abandonment of Agreement . . . . . . . . . . . . . . . . 19
10.3 Liabilities Upon Termination . . . . . . . . . . . . . . 19
10.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 19
10.5 Further Assurances . . . . . . . . . . . . . . . . . . . 20
10.6 Waiver of Compliance . . . . . . . . . . . . . . . . . . 20
10.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . 20
10.8 Assignment . . . . . . . . . . . . . . . . . . . . . . . 21
10.9 Governing Law . . . . . . . . . . . . . . . . . . . . . 21
10.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . 21
10.11 Entire Agreement; Amendments . . . . . . . . . . . . . . 22
10.12 Specific Performance . . . . . . . . . . . . . . . . . . 22
</TABLE>
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit 2.2(a) - Assignment of Assets
Exhibit 2.2(c) - Cross Receipt
Exhibit 2.2(d) - Certificate of Secretary of Seller
Exhibit 2.2(e) - Bring Down Certificate of Seller
Exhibit 2.3(b) - Assumption Agreement
Exhibit 2.3(c) - Certificate of Secretary of Buyer
Exhibit 2.3(d) - Bring Down Certificate of Buyer
Schedule 3.4 - FCC Authorizations
</TABLE>
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<PAGE> 5
BONNEVILLE HOLDING COMPANY
ASSET SALE AGREEMENT
THIS ASSET SALE AGREEMENT ("Agreement") is dated as of November 29,
1994, and is between Bonneville Holding Company, a Utah corporation having its
principal office in Salt Lake City, Utah ("Seller"), and A.H. Belo Corporation,
a Delaware corporation having its principal office in Dallas, Texas ("Buyer").
1. Seller is the licensee of television station KIRO-TV (the
"Station") in Seattle, Washington. The licenses, permits and other
authorizations issued to Seller by the Federal Communications Commission (the
"FCC") relating to the Station set forth on Schedule 3.4 hereto hereinafter
shall be referred to as the "FCC Authorizations."
2. Seller is a party to a CBS Television Network Affiliation
Agreement between CBS Inc. ("CBS") and KIRO, Inc. ("KIRO") dated April 29,
1993, as amended June 11, 1993 (the "CBS Agreement"). KIRO acted as the
nominee of Seller in executing the CBS Agreement.
3. CBS has given to Seller written notice of the intent of CBS to
terminate the CBS Agreement. Seller has delivered a photocopy of such notice
to Buyer.
4. Pursuant to an operating agreement with Seller, KIRO operates
the Station. KIRO owns substantially all of the assets of the Station other
than the FCC Authorizations and the CBS Agreement.
5. Seller is also the licensee of radio stations KIRO(AM) and
KIRO-FM in Seattle, Washington (KIRO(AM) and KIRO-FM are collectively referred
to herein as the "KIRO Radio Stations"). The KIRO Radio Stations are also
operated by KIRO.
6. Seller desires to transfer and Buyer desires to purchase the
FCC Authorizations and the CBS Agreement.
7. Pursuant to that certain KIRO, Inc. Stock Sale Agreement of
even date herewith (the "KIRO Stock Sale Agreement"), KIRO has agreed to sell
to Buyer all of the outstanding capital stock (the "Shares") of a wholly-owned
subsidiary ("Subsidiary") of KIRO, Inc., which
<PAGE> 6
will at the Closing (as defined in Section 2.1 below) own certain assets
related to the operation of the Station (the "KIRO Assets").
8. In connection with the execution of this Agreement, each of
Buyer and Seller are simultaneously delivering a disclosure schedule ("Buyer's
Disclosure Schedule" and "Seller's Disclosure Schedule," respectively) which
sets forth certain information with respect to their respective
representations, warranties and agreements contained herein. Such Disclosure
Schedules are incorporated herein by this reference and are hereby deemed a
part of this Agreement.
9. Based upon the representations and warranties made by each
party to the other in this Agreement, the parties have agreed to consummate the
sale of the FCC Authorizations and the CBS Agreement in accordance with the
terms contained herein.
ARTICLE I. TRANSFER OF ASSETS AND TERMS OF PAYMENT
1.1 TRANSFER OF ASSETS. Upon the terms and subject to the
conditions of this Agreement, on the Closing Date (as defined in Section 2.1
below) Seller will grant, sell, assign, transfer, convey or cause to be
conveyed, and deliver to Buyer, and Buyer will purchase and accept from Seller,
all of Seller's right, title and interest (i) in and to the FCC Authorizations,
and all applications therefor, together with any renewals, extensions or
modifications thereof made between the date of this Agreement and the Closing
Date and, to the extent assignable, (ii) in and to the CBS Agreement (the "BHC
Assets").
1.2 LIABILITIES. The BHC Assets shall be transferred and conveyed
to Buyer free and clear of all liabilities, obligations, claims, liens,
security interests and encumbrances, except for liabilities and obligations
arising after the Closing Date under the CBS Agreement (the "Assumed
Liabilities"). Buyer shall assume and pay each of the Assumed Liabilities.
1.3 CONSIDERATION.
(a) PURCHASE PRICE. Subject to the conditions contained
in this Agreement and in consideration of the sale of the BHC Assets and the
Shares, Buyer will pay to Seller on the Closing Date the sum of One Hundred
Sixty-Two Million Five Hundred Thousand Dollars
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<PAGE> 7
($162,500,000) (the "Purchase Price"), as may be adjusted pursuant to the KIRO
Stock Sale Agreement, in the manner described in Section 1.4 below.
(b) ALLOCATION. The parties agree to allocate the
Purchase Price between the BHC Assets and the Shares. The portion of the
Purchase Price so allocated to the Shares in turn shall be allocated among the
KIRO Assets. Within 30 days of the date of this Agreement, Seller and Buyer
shall each provide the other with a written appraisal of the BHC Assets and the
KIRO Assets for use in the allocation of the Purchase Price. Such appraisals
shall be prepared by reputable appraisers in the broadcasting industry, one
appraiser selected by each party. Upon the completion of the appraisals, the
average of the two appraisals, or such other method as agreed by the parties,
shall be used to arrive at the Purchase Price allocations. Each party shall
bear the cost of its appraiser. Upon arriving at the Purchase Price
allocations, the parties agree to use such allocations in completing and filing
Internal Revenue Code Form 8594 for federal income tax purposes. Each party
shall furnish the other with a copy of its Form 8594 prior to filing it with
the Internal Revenue Service.
1.4 MANNER OF PAYMENT. That portion of the Purchase Price
allocated to the BHC Assets shall be paid to Seller by Buyer in immediately
available funds by wire transfer on the Closing Date.
ARTICLE II. THE CLOSING
2.1 TIME AND PLACE OF CLOSING. The closing (the "Closing") of the
sale and purchase of the BHC Assets shall be held in the offices of KIRO at
2807 Third Avenue, Seattle, Washington 98121 at 1:00 p.m. on a mutually agreed
upon day within 30 days after the FCC consent to the assignment of the FCC
Authorizations contemplated herein shall have become final, as defined in
Section 7.3 below, or such other time and place as shall be mutually agreed
upon by the parties (the "Closing Date").
2.2 DELIVERIES BY SELLER. At the Closing, Seller will deliver to
Buyer the following, each of which shall be in form and substance reasonably
satisfactory to Buyer:
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<PAGE> 8
(a) Assignment of Assets in a form substantially similar
to the form attached hereto as Exhibit 2.2(a);
(b) To the extent assignable, consent to assignment from
CBS relating to the CBS Agreement;
(c) Cross-Receipt in a form substantially similar to the
form attached hereto as Exhibit 2.2(c);
(d) Certificate of Secretary of Seller in a form
substantially similar to the form attached hereto as
Exhibit 2.2(d);
(e) Bring Down Certificate of Seller in a form
substantially similar to the form attached hereto as
Exhibit 2.2(e);
(f) Certificate of Seller's good standing in Utah; and
(g) Such other instruments of conveyance and transfer, in
form and substance reasonably satisfactory to Buyer
and its counsel, as shall be reasonably necessary or
appropriate to comply with the purpose and intent of
this Agreement.
2.3 DELIVERIES BY BUYER. At the Closing, Buyer will deliver to
Seller the following, each of which shall be in form and substance reasonably
satisfactory to Seller:
(a) That portion of the Purchase Price allocated to the
BHC Assets in immediately available funds;
(b) Assumption Agreement in a form substantially similar
to the form attached hereto as Exhibit 2.3(b);
(c) Certificate of Secretary of Buyer in a form
substantially similar to the form attached hereto as
Exhibit 2.3(c);
(d) Bring Down Certificate of Buyer in a form
substantially similar to the form attached hereto as
Exhibit 2.3(d);
(e) Certificate of Buyer's good standing in Delaware;
(f) Cross-Receipt in a form substantially similar to the
form attached hereto as Exhibit 2.2(c); and
(g) Such other instruments of conveyance and transfer, in
form and substance reasonably satisfactory to Seller
and its counsel, as shall be reasonably
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<PAGE> 9
necessary or appropriate to comply with the purpose
and intent of this Agreement.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in Seller's Disclosure Schedule, Seller represents
and warrants to Buyer as follows:
3.1 ORGANIZATION OF SELLER; AUTHORITY. Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of
Utah. Seller has the corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all requisite corporate action on the part of
Seller. 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 with its terms, except as enforceability may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting creditors' rights generally from time to time in effect
and general equitable principles.
3.2 NO DEFAULTS. The execution, delivery and performance of this
Agreement by Seller will not (a) conflict with any provision of the Articles of
Incorporation or bylaws of Seller, (b) result in a default (or give rise to any
right of termination, cancellation or acceleration) under or conflict with any
of the terms, conditions or provisions, other than assignability, of any
material contract, note, bond, mortgage or other material instrument or
obligation to which Seller is a party or by which Seller may be bound, (c) in
any material respect violate any law, statute, rule, regulation, order,
injunction or decree of any federal, state or local governmental authority or
agency applicable to Seller, or (d) result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever on any of the BHC Assets.
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<PAGE> 10
3.3 UNDISCLOSED LIABILITIES.
(a) This Agreement including the schedules and exhibits
hereto does not contain any untrue statement of a material fact or omit any
statement of a material fact necessary in order to make the statements contains
herein or therein not misleading.
(b) Notwithstanding anything to the contrary contained in
this Agreement or the schedules and exhibits hereto, any information disclosed
in one such document shall be deemed to be disclosed in each of the other such
documents. The disclosure of any information shall not be deemed to constitute
an acknowledgment that such information is required to be disclosed in
connection with the representations and warranties made by Seller in this
Agreement or that it is material, nor shall such information be deemed to
establish a standard of materiality.
3.4 LICENSES. As of the date of this Agreement, and except as set
forth on Schedule 3.4, Seller is the holder of the FCC Authorizations. Seller
has delivered to Buyer true and complete copies of the FCC Authorizations.
Except as set forth on Schedule 3.4, the FCC Authorizations were validly
issued, are in full force and effect and are unimpaired by any act or omission
of Seller, or its officers, directors, stockholder, employees or agents. There
is not now pending or, to the best of Seller's knowledge, threatened any action
by or before the FCC to revoke, cancel, rescind, modify or refuse to renew any
of such FCC Authorizations, and there is not now pending or, to the best of
Seller's knowledge, threatened, issued or outstanding by or before the FCC, any
investigation, Order to Show Cause, Notice of Violation, Notice of Apparent
Liability or Notice of Forfeiture or complaint against Seller or any of its
Affiliates (as defined in Section 7.3) with respect to the FCC Authorizations.
In the event of any such action, or the filing or issuance of any such order,
notice or complaint against Seller, or Seller's learning of the threat thereof,
Seller shall promptly notify Buyer of the same in writing and shall take all
reasonable measures, at its expense, to contest in good faith or seek removal
or rescission of such action, order, notice or complaint. All reports, forms
and statements required to be filed by Seller with the FCC with respect to the
FCC Authorizations since the grant of the last renewal of the FCC
Authorizations have been filed and are complete and accurate. Seller has no
reason to
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<PAGE> 11
believe that the FCC Authorizations will not be renewed in the ordinary course.
Except as set forth on Schedule 3.4, the FCC Authorizations comprise all of the
licenses, permits and authorizations required from the FCC for the conduct of
the business of the Station as now conducted. The main transmitter FCC license
is not subject to any restriction or condition and the remaining FCC
Authorizations are not subject in any material respect to any restriction or
condition which would limit the conduct of the business of the Station as now
conducted.
3.5 CBS AGREEMENT. The CBS Agreement is valid, binding and
enforceable by Seller in accordance with its terms in all material respects.
There is no existing default, event of default or other event under such CBS
Agreement which, with or without notice or lapse of time or both, would
constitute a material default or a material event of default under the CBS
Agreement. Seller has provided Buyer with a complete copy of the CBS
Agreement.
3.6 LITIGATION. There is no litigation pending by or against or,
to the best of Seller's knowledge, threatened against Seller which materially
affects any of the BHC Assets or Seller's ability to perform in accordance with
the terms of this Agreement.
3.7 INSTRUMENTS OF CONVEYANCE; GOOD TITLE. The instruments to be
executed by Seller and delivered to Buyer at the Closing, conveying the BHC
Assets to Buyer, will be in a form sufficient to transfer all of Seller's
right, title and interest to the BHC Assets free and clear of all liabilities,
obligations and encumbrances, except as imposed by the FCC or provided
elsewhere in this Agreement.
3.8 BROKERS. There is no broker or finder or other person who
would have any valid claim against Buyer for a commission or brokerage fee in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Seller.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth in Buyer's Disclosure Schedule, Buyer represents
and warrants to Seller as follows:
4.1 ORGANIZATION OF BUYER; AUTHORITY. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with the corporate
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<PAGE> 12
power and authority to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
requisite corporate action 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 enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and general equitable principles.
4.2 NO DEFAULTS. The execution, delivery and performance of this
Agreement by Buyer will not (a) conflict with any provision of the Certificate
of Incorporation or bylaws of Buyer, (b) result in a default (or give rise to
any right of termination, cancellation or acceleration) under or conflict with
any of the terms, conditions or provisions, other than assignability, of any
material contract, note, bond, mortgage or other material instrument or
obligation to which Buyer is a party or by which Buyer may be bound, or (c) in
any material respect violate any law, statute, rule, regulation, order,
injunction or decree of any federal, state or local governmental authority or
agency applicable to Buyer.
4.3 BROKERS. There is no broker or finder or other person who
would have any valid claim against Seller for a commission or brokerage fee in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Buyer.
4.4 QUALIFICATION AS A BROADCAST LICENSEE. Buyer knows of no fact
that would, under existing law and the existing rules, regulations and
practices of the FCC, disqualify Buyer as an assignee of the FCC
Authorizations. Buyer will take no action which it knows or has reason to know
would cause such disqualification.
ARTICLE V. COVENANTS OF SELLER PENDING THE CLOSING DATE
Seller covenants and agrees that from the date hereof to and including
the Closing Date:
5.1 MAINTENANCE OF FCC AUTHORIZATIONS. Seller shall promptly
execute any necessary applications for renewal of the FCC Authorizations
without conditions adverse to
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<PAGE> 13
Buyer. Seller shall deliver to Buyer, promptly after filing, copies of any
reports, applications or communications with the FCC related to the Station
which are filed between the date of the Agreement and the Closing Date.
5.2 REPRESENTATIONS AND WARRANTIES. Seller shall render accurate
at and as of the Closing Date the representations and warranties made by it in
this Agreement. Seller shall give detailed written notice to Buyer promptly
upon the occurrence of or becoming aware of the impending or threatened
occurrence of any event which would cause or constitute a breach, or would have
caused a breach had such event occurred or been known to Seller prior to the
date hereof, of any of the representations or warranties of Seller contained in
this Agreement or in any schedule hereto.
5.3 CORPORATE ACTION. Subject to the provisions of this
Agreement, Seller will take all necessary corporate and other action required
of it to carry out the transactions contemplated by this Agreement.
5.4 CBS CONSENT. Seller shall use its reasonable best efforts to
obtain or cause to be obtained prior to the Closing Date consents to the
assignment to or assumption by Buyer of the CBS Agreement; provided, however,
that Seller shall not be required to make any payments or to incur any
obligations to CBS in connection with obtaining such consent.
5.5 APPLICATIONS FOR COMMISSION CONSENT. As promptly as
practicable after the date of this Agreement, and in no event later than ten
days after the execution of this Agreement, Seller will join with Buyer to file
applications with the FCC requesting its written consent to the assignment of
the FCC Authorizations (and any extensions or renewals thereof) to Buyer.
Seller will diligently take, or cooperate in the taking of, all steps that are
necessary, proper or desirable to expedite the preparation of such applications
and their prosecution to a favorable conclusion.
5.6 CONFIDENTIAL INFORMATION. Seller shall not disclose to third
parties any information regarding Buyer designated as confidential and received
from Buyer or its agents in the course of investigating, negotiating and
completing the transactions contemplated by this Agreement. Nothing shall be
deemed to be confidential information which: (i) is known to
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<PAGE> 14
Seller at the time of its disclosure to it; (ii) becomes publicly known or
available other than through disclosure by Seller; (iii) is rightfully received
by Seller from a third party; or (iv) is independently developed by Seller.
5.7 CONSUMMATION OF AGREEMENT. Subject to the provisions of
Section 10.2 of this Agreement, Seller shall use its reasonable best efforts to
fulfill and perform all conditions and obligations on its part to be fulfilled
and performed under this Agreement and to cause the transactions contemplated
by this Agreement to be fully carried out.
5.8 NOTICE OF PROCEEDINGS. As promptly as is practicable, Seller
will notify Buyer in writing upon becoming aware of any order or decree or any
complaint praying for an order or decree restraining or enjoining the
consummation of this Agreement or the transactions contemplated hereunder, or
upon receiving any notice from any governmental department, court, agency or
commission or any nongovernmental entity of its intention to institute an
investigation into, or institute a suit or proceeding to restrain or enjoin the
consummation of this Agreement or such transactions, or to nullify or render
ineffective this Agreement or such transactions if consummated.
5.9 HSR FILING. As promptly as practicable after the date of this
Agreement, and in no event later than 20 days after the execution of this
Agreement, Seller will file a premerger notification and report form ("HSR
Filing") with the Federal Trade Commission (the "FTC") and the Department of
Justice (the "DOJ") pursuant to the Hart-Scott- Rodino Antitrust Improvements
Act of 1976, as amended. Seller will diligently take, or cooperate in the
taking of, all steps that are necessary, proper or desirable to expedite the
preparation of such HSR Filing and its prosecution to a favorable conclusion.
ARTICLE VI. COVENANTS OF BUYER PENDING THE CLOSING DATE
Buyer covenants and agrees that from the date hereof to and including
the Closing Date:
6.1 REPRESENTATIONS AND WARRANTIES. Buyer shall render accurate
at and as of the Closing Date the representations or warranties of Buyer
contained in this Agreement or in any schedule hereto. Buyer shall give
detailed written notice to Seller promptly upon the occurrence
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<PAGE> 15
of or becoming aware of the impending or threatened occurrence of any event
which would cause or constitute a breach, or would have caused a breach had
such event occurred or been known to Buyer prior to the date hereof, of any of
the representations and warranties of Buyer contained in this Agreement or in
any schedule hereto.
6.2 CORPORATE ACTION. Subject to the provisions of this
Agreement, Buyer will take all necessary corporate and other action required of
it to carry out the transactions contemplated by this Agreement.
6.3 APPLICATIONS FOR COMMISSION CONSENT. As promptly as
practicable after the date of this Agreement, and in no event later than ten
days after the execution of this Agreement, Buyer will join with Seller to file
applications with the FCC requesting its written consent to the assignment of
the FCC Authorizations (and any extensions or renewals thereof) to Buyer.
Buyer will diligently take, or cooperate in the taking of, all steps that are
necessary, proper or desirable to expedite the preparation of such applications
and their prosecution to a favorable conclusion.
6.4 CONFIDENTIAL INFORMATION. Buyer shall not disclose to third
parties any information regarding Seller designated as confidential and
received from Seller or its agents in the course of investigating, negotiating
and completing the transactions contemplated by this Agreement. Nothing shall
be deemed to be confidential information which: (i) is known to Buyer at the
time of its disclosure to it; (ii) becomes publicly known or available other
than through disclosure by Buyer; (iii) is rightfully received by Buyer from a
third party; (iv) is independently developed by Buyer; or (v) relates to the
BHC Assets provided that the transactions contemplated by this Agreement are
consummated.
6.5 CONSUMMATION OF AGREEMENT. Subject to the provisions of
Section 10.2 of this Agreement, Buyer shall use its reasonable best efforts to
fulfill and perform all conditions and obligations on its part to be fulfilled
and performed under this Agreement and to cause the transactions contemplated
by this Agreement to be fully carried out.
6.6 NOTICE OF PROCEEDINGS. As promptly as is practicable, Buyer
will notify Seller in writing upon becoming aware of any order or decree or any
complaint praying for an order or
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<PAGE> 16
decree restraining or enjoining the consummation of this Agreement or the
transactions contemplated hereunder, or upon receiving any notice from any
governmental department, court, agency or commission or any nongovernmental
entity of its intention to institute an investigation into, or institute a suit
or proceeding to restrain or enjoin the consummation of this Agreement or such
transactions, or to nullify or render ineffective this Agreement or such
transactions if consummated.
6.7 HSR FILING. As promptly as practicable after the date of this
Agreement, and in no event later than 20 days after the execution of this
Agreement, Buyer will file an HSR Filing with the FTC and the DOJ. Buyer will
diligently take, or cooperate in the taking of, all steps that are necessary,
proper or desirable to expedite the preparation of such HSR Filing and its
prosecution to a favorable conclusion.
ARTICLE VII. CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to or at the
Closing Date:
7.1 REPRESENTATIONS, WARRANTIES, COVENANTS, RELATED AGREEMENT.
(a) Each of the representations and warranties of Buyer
contained in this Agreement and in any schedule hereto shall have been true and
accurate as of the date when made and shall be deemed to be made again on and
as of the Closing Date and shall then be true and accurate;
(b) Buyer shall have performed and complied with each and
every covenant and agreement required by this Agreement to be performed or
complied with by it prior to or at the Closing Date;
(c) All obligations of Buyer to complete the transactions
contemplated by the KIRO Stock Sale Agreement shall have been fulfilled or
waived, and Buyer shall have completed such transactions prior to the Closing;
and
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(d) Buyer shall have delivered to Seller a certificate of
an officer of Buyer, dated the Closing Date, certifying to the fulfillment of
the conditions set forth in Sections 7.1(a) and 7.1(b) above.
7.2 PROCEEDINGS.
(a) No action or proceeding shall have been instituted
before any court or governmental body (i) to restrain or prohibit, or to obtain
substantial damages in respect of, the consummation of this Agreement, or to
revoke, cancel, fail to renew, suspend or adversely modify the main transmitter
FCC license of the Station, and (ii) which, in the reasonable opinion of
Seller, may reasonably be expected to result in a permanent injunction against
such consummation, an award of such substantial damages or a forfeiture of the
main transmitter FCC license; and
(b) Neither of the parties to this Agreement shall have
received written notice from any federal governmental body of (i) its intention
to institute any action or proceeding to restrain or enjoin or nullify this
Agreement or the transactions contemplated hereby or the KIRO Stock Sale
Agreement or the transactions contemplated thereby, or to commence any
investigation (other than a routine letter of inquiry, including a routine
Civil Investigative Demand) into the consummation of this Agreement or the KIRO
Stock Sale Agreement, or (ii) the actual commencement of such an investigation.
In the event such a notice of intention is received or such an
investigation is commenced, this Agreement may not be abandoned by Seller for a
period of 90 days from the date of such notice of intention or notice of
commencement, but the Closing shall be delayed during such period. This
Agreement may be abandoned after this 90 day period if, in the reasonable
opinion of Seller, there is a likely probability that an investigation will
result in an action or proceeding of the type described in clause (a) of this
Section 7.2.
7.3 FCC AUTHORIZATION. The FCC shall have given its written
consent to the assignment of the FCC Authorizations, without any conditions
materially adverse to Seller or its Affiliates or shareholder, and such consent
shall have become a Final Order. For purposes of this
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Agreement, the following terms shall have the meanings set forth below.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by, or under common Control with such other
Person. "Control" (including, with correlative meanings, the terms "controlled
by" and "under common control with"), as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise,. "Person" means an
individual, corporation, partnership, trust or unincorporated organization or a
government or agency or political subdivision thereof. "Final Order" means any
action by the FCC which 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 shall have expired. The parties may mutually agree to
waive the requirement that said consent shall have become a Final Order.
7.4 HSR APPROVAL. The waiting period relating to the HSR Filing
shall have expired or shall have been terminated.
ARTICLE VIII. CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to or at the
Closing Date.
8.1 REPRESENTATIONS, WARRANTIES, COVENANTS, RELATED AGREEMENT.
(a) Each of the representations and warranties of Seller
contained in this Agreement and in any schedule hereto shall have been true and
accurate as of the date when made and shall be deemed to be made again on and
as of the Closing Date and shall then be true and accurate;
(b) Seller shall have performed and complied with each
and every covenant and agreement required by this Agreement to be performed or
complied with by it prior to or at the Closing Date;
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(c) All obligations of Seller to complete the
transactions contemplated by the KIRO Stock Sale Agreement shall have been
fulfilled or waived, and Seller shall have completed such transactions prior to
the Closing; and
(d) Seller shall have delivered to Buyer a certificate of
an officer of Seller, dated the Closing Date, certifying to the fulfillment of
the conditions set forth in Sections 8.1(a) and 8.1(b) above.
8.2 PROCEEDINGS.
(a) No action or proceeding shall have been instituted
before any court or governmental body (i) to restrain or prohibit, or to obtain
substantial damages in respect of, the consummation of this Agreement, or to
revoke, cancel, fail to renew, suspend or adversely modify the main transmitter
FCC license of the Station, and (ii) which, in the reasonable opinion of Buyer,
may reasonably be expected to result in a permanent injunction against such
consummation, an award of such substantial damages or a forfeiture of the main
transmitter FCC license; and
(b) Neither of the parties to this Agreement shall have
received written notice from any federal governmental body of (i) its intention
to institute any action or proceeding to restrain or enjoin or nullify this
Agreement or the transactions contemplated hereby or the KIRO Stock Sale
Agreement or the transactions contemplated thereby, or to commence any
investigation (other than a routine letter of inquiry, including a routine
Civil Investigative Demand) into the consummation of this Agreement or the KIRO
Stock Sale Agreement, or (ii) the actual commencement of such an investigation.
In the event such a notice of intention is received or such an
investigation is commenced, this Agreement may not be abandoned by Buyer for a
period of 90 days from the date of such notice of intention or notice of
commencement, but the Closing shall be delayed during such period. This
Agreement may be abandoned after this 90 day period if, in the reasonable
opinion of Buyer, there is a likely probability that an investigation will
result in an action or proceeding of the type described in clause (a) of this
Section 8.2.
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8.3 FCC AUTHORIZATION. The FCC shall have given its written
consent to the assignment of the FCC Authorizations, without any conditions
materially adverse to Buyer or its Affiliates or shareholders, and such consent
shall have become a Final Order as defined in Section 7.3 above.
8.4 HSR APPROVAL. The waiting period relating to the HSR Filing
shall have expired or shall have been terminated.
ARTICLE IX. INDEMNIFICATION
9.1 SURVIVAL; LIMITATIONS.
(a) The several representations, warranties, covenants
and agreements of Seller and Buyer contained in or made pursuant to this
Agreement shall be deemed to have been made on the Closing Date, shall survive
the Closing Date and shall remain operative and in full force and effect for a
period of one year after the Closing Date, except that the representations,
warranties, covenants and agreements contained in Sections 3.1, 3.2, 3.4, 4.1,
4.2, and 4.4 shall survive for a period of three years and the covenants and
agreements contained in Sections 5.5, 6.4 and 10.1 shall survive without time
limit.
(b) Neither Buyer nor Seller shall be entitled to recover
under this Agreement for any indemnification claims or for any breach of this
Agreement until the aggregate losses, damages, or expenses suffered by it
exceed $500,000 (the "Threshold"), whereupon Buyer or Seller shall be entitled
to indemnification hereunder for indemnification claims from the other party
for any losses, damages or expenses suffered by Buyer or Seller in excess of
the Threshold.
(c) The combined maximum aggregate liability of Seller
and KIRO and the maximum aggregate liability of Buyer for indemnification
claims under this Agreement and the KIRO Stock Sale Agreement shall be the
Purchase Price.
9.2 INDEMNIFICATION OF BUYER. Subject to Section 9.1, Seller
agrees that it shall indemnify and hold Buyer and its successors and assigns
harmless from and against any and all damages, claims, losses, expenses, costs,
obligations and liabilities, including without limitation liabilities for
reasonable attorney's fees, accounting fees, consulting fees and engineering
fees
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and disbursements ("Loss and Expense") suffered directly or indirectly by Buyer
by reason of, or arising out of:
(a) any breach of representation or warranty made by
Seller pursuant to this Agreement, and
(b) any failure by Seller to perform or fulfill any of
its covenants or agreements set forth in this Agreement or the documents
specified in Section 2.2 above.
9.3 INDEMNIFICATION OF SELLER. Subject to Section 9.1, Buyer
agrees that it shall indemnify and hold Seller and its successors and assigns
harmless from and against any and all Loss and Expense suffered directly or
indirectly by Seller by reason of, or arising out of:
(a) any breach of representation or warranty made by
Buyer pursuant to this Agreement, and
(b) any failure by Buyer to perform or fulfill any of its
covenants or agreements set forth in this Agreement or the documents described
in Section 2.3 above.
9.4 NOTICE OF CLAIMS. If Seller or Buyer believes that it has
suffered or incurred any Loss and Expense, it shall notify the other party
promptly in writing and within the applicable time period specified in Section
9.1 above, describing such Loss and Expense, the amount thereof, if known, and
the method of computation of such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred.
9.5 DEFENSE OF THIRD PARTY CLAIMS.
(a) If any action at law or suit in equity is instituted
by a third party (a "Claim") with respect to which any of the parties intends
to claim a Loss and Expense under this Article IX, such party shall promptly
notify the indemnifying party of such action or suit. The indemnifying party
shall have the right to conduct and control any Claim through counsel of its
own choosing, but the indemnified party may, at its election, participate in
the defense of any such Claim at its sole cost and expense. If the
indemnifying party does not notify the indemnified party within ten days after
receipt of the notice specified in this Section 9.5 that it is
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defending any such Claim, then the indemnified party may defend such Claim and
settle such Claim, through counsel of its own choosing, and recover from the
indemnifying party the amount of such reasonable settlement or of any judgment
and the reasonable costs and expenses of such defense, including, but not
limited to, reasonable attorneys' fees and disbursements. In the event that
the indemnifying party makes any payment to the indemnified party for
indemnification for which the indemnified party could have collected on a claim
against a third party, the indemnifying party shall be entitled to pursue
claims and conduct litigation on behalf of the indemnified party and any of its
successors, to pursue and collect on any indemnification or other remedy
available to the indemnified party thereunder with respect to such claim and
generally to be subrogated to the rights of the indemnified party with respect
to those claims.
(b) Notwithstanding the foregoing, the failure by a party
to abide by these terms and conditions shall not affect the other party's
obligations to indemnify such party against Loss and Expense under this Article
IX, except to the extent that such failure shall have materially adversely
affected the indemnifying party's ability to defend against or satisfy, or
shall have prevented the settlement of, any liability, damage, loss, claim or
demand for which the indemnified party is entitled to indemnification under
this Agreement.
ARTICLE X. MISCELLANEOUS PROVISIONS
10.1 CALL LETTERS. Seller hereby grants its consent for Buyer or
an Affiliate of Buyer to use the call letters "KIRO-TV" for the Station for so
long as the Station is licensed to Buyer or an Affiliate of Buyer. If there is
an assignment of license or a transfer of control of the Station to a person or
entity not affiliated with Buyer, the successor assignee or transferee shall
not be permitted to use the call letters "KIRO-TV" for the Station. Similarly,
Buyer agrees that the KIRO Radio Stations may continue to use their existing
call letters ("KIRO(AM)" and "KIRO-FM"). However, if there is an assignment of
license or transfer of control of either of the KIRO Radio Stations to a person
or entity not affiliated with Seller, the successor assignee or transferee
shall not be permitted to use the existing call letters for that station.
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10.2 ABANDONMENT OF AGREEMENT. This Agreement may be terminated by
Seller or Buyer at any time prior to the Closing Date by the mutual consent of
both parties hereto or upon the occurrence of one of the following events:
(a) by Seller if any of the conditions provided in
Article VII hereof have not been met by the time required and have not been
waived; or
(b) by Buyer if any of the conditions provided in Article
VIII hereof have not been met by the time required and have not been waived; or
(c) by any non-defaulting party hereto if the Closing of
the transactions contemplated by this Agreement have not been completed by the
earlier of (a) September 30, 1995 or (b) 45 days after the FCC has consented to
the assignment of FCC Authorizations contemplated by this Agreement and all
such consents shall have become a Final Order, as defined in Section 7.3 above;
or
(d) by Seller if the KIRO Stock Sale Agreement is
terminated as a result of Buyer's breach of that Agreement; or
(e) by Buyer if the KIRO Stock Sale Agreement is
terminated as a result of KIRO's breach of that Agreement.
No termination pursuant to this Section 10.2 shall relieve any party
of liability it would otherwise have for breach of this Agreement.
10.3 LIABILITIES UPON TERMINATION. In the event this Agreement is
terminated pursuant to Section 10.2 above, no party hereto shall have any
liability to any other for costs, expenses, damages, loss of anticipated
profits or otherwise, unless the termination occurs because of any
misrepresentation or breach of warranty by a party hereto or the failure of
performance of, or compliance with, any covenant or agreement contained in this
Agreement.
10.4 EXPENSES. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby will be paid by the party incurring such costs and
expenses. Buyer and KIRO will share equally any FCC filing or grant fees and
any filing fees related to the HSR Filing.
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10.5 FURTHER ASSURANCES. From time to time after the Closing Date,
Seller will execute all such instruments and take all such actions as Buyer
shall reasonably request in connection with carrying out and effectuating the
intent and purpose hereof and all transactions and things contemplated by this
Agreement, including, without limitation, the execution and delivery of any and
all confirmatory and other instruments in addition to those to be delivered on
the Closing Date and any and all actions which may reasonably be necessary or
desirable to complete the transactions contemplated hereby.
10.6 WAIVER OF COMPLIANCE. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement or condition herein may be waived
by the other party only by a written instrument signed by the party granting
the waiver. Any such waiver or failure to insist upon strict compliance with a
term of this Agreement shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure to comply.
10.7 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given when delivered by hand or by facsimile
transmission or mailed by registered or certified mail (return receipt
requested), postage prepaid, or by a reputable overnight delivery service to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Seller, to:
Bonneville International Corporation
Broadcast House
55 North 300 West
Salt Lake City, Utah 84180
Attention: Bruce T. Reese
Fax No.: (801) 575-5652
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With a copy to (which shall not constitute notice):
Bonneville International Corporation
Broadcast House
55 North 300 West
Salt Lake City, Utah 84180
Attention: Robert A. Johnson, Esq.
Fax No.: (801) 575-7548
(b) If to Buyer, to:
A.H. Belo Corporation
400 South Record Street
Dallas, Texas 75202
Attention: Ward L. Huey, Jr.
Fax No.: (214) 977-8209
With a copy to (which shall not constitute notice):
A.H. Belo Corporation
400 South Record Street
Dallas, Texas 75202
Attention: Michael J. McCarthy, Esq.
Fax No.: (214) 977-8209
10.8 ASSIGNMENT. This Agreement and all of its terms shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. This Agreement shall not be assigned by any
party hereto without the written consent of the other party; provided, however,
that Buyer may assign its rights under this Agreement to a wholly-owned
subsidiary of Buyer prior to the Closing. Buyer and such assignee shall be
jointly and severally liable under this Agreement.
10.9 GOVERNING LAW. This Agreement shall be governed by, construed
and enforced in accordance with the internal laws of the State of Washington
(and not the laws pertaining to conflicts or choice of law).
10.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, and all counterparts so executed shall constitute one agreement,
binding on the parties hereto, notwithstanding that all parties are not
signatory to the original or same counterpart.
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10.11 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, including the
exhibits and schedules hereto and the documents delivered by Seller and Buyer
pursuant to Article II above embody the entire agreement and understanding of
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings between the parties. This Agreement may not be
amended except in writing signed by both parties.
10.12 SPECIFIC PERFORMANCE. Each of Buyer and Seller acknowledges
and agrees that the other party would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of Buyer and
Seller agrees that the other party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter, in addition to any other remedy
to which it may be entitled at law or in equity.
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Seller and Buyer have caused this Agreement to be signed by their
respective duly authorized officers as of the date first above written.
BONNEVILLE HOLDING COMPANY
BY: /S/ BRUCE T. REECE
---------------------------------------
TITLE: EXECUTIVE VICE PRESIDENT AND CHIEF
------------------------------------
OPERATING OFFICER
------------------------------------
A.H. BELO CORPORATION
BY: /S/ ROBERT W. DECHERD
---------------------------------------
TITLE: CHAIRMAN OF THE BOARD, PRESIDENT
-------------------------------------
AND CHIEF EXECUTIVE OFFICER
-------------------------------------
<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact:
Tuesday, January 31, 1995 Michael Perry or Harold Gaar
1:30 P.M. CST 214/977-6622 214/977-7650
BELO ACQUIRES TELEVISION STATION
KIRO-TV IN SEATTLE
DALLAS -- A. H. Belo Corporation announced that, effective February 1,
it has acquired Third Avenue Television, Inc. from Bonneville International
Corporation for $162.5 million in cash. Third Avenue Television, Inc. operates
KIRO- TV in Seattle, Washington. An agreement to purchase the station was made
last September, and federal regulatory approvals were recently granted which
allowed for completion of the transaction.
In addition to KIRO-TV, Belo owns and operates network-affiliated
television stations WFAA-TV (ABC) in Dallas- Fort Worth; KHOU-TV (CBS) in
Houston, Texas; KXTV (CBS) in Sacramento, California; WVEC-TV (ABC) in
Hampton-Norfolk, Virginia; WWL-TV (CBS) in New Orleans, Louisiana; and KOTV
(CBS) in Tulsa, Oklahoma; as well as Belo Productions, Inc.; and is the
majority partner in Maxam Entertainment. Belo also owns The Dallas Morning
News; DFW Suburban Newspapers, Inc., publisher of eight community newspapers;
and DFW Printing Company, Inc.. Shares of Belo Series A Common Stock are
traded on the New York Stock Exchange under the symbol BLC.
