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
May 25, 1994
----------------------------
Date of Report
(Date of earliest event reported)
LIN BROADCASTING CORPORATION
---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-2481 62-0673800
- - ---------------- -------------------- ---------------
(State or other (Commission File No.) I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
5295 Carillon Point
Kirkland, Washington 98033
---------------------------------------------------------------
(Address of principal executive offices, including zip code)
(206) 828-1902
---------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
<PAGE> 1
Item 5. Other Events.
On June 8, 1994, LIN Broadcasting Corporation (the
"Company") announced that it intends to distribute the common
stock of its indirect subsidiary, LIN Television Corporation
("LIN Television"), to the Company's stockholders on a tax-free
basis pursuant to Section 355 of the Internal Revenue Code of
1986, as amended (the "Distribution"). The Company also
announced that the Company and LIN Television entered into an
Asset Purchase Agreement (the "Asset Purchase Agreement") with
Cook Inlet Communications, Inc., an Alaska corporation, and Cook
Inlet Communications Corp., a Delaware corporation ("CICC"),
pursuant to which LIN Television would acquire substantially all
the assets and assume certain liabilities of WTNH-TV, Hartford-
New Haven, Connecticut ("WTNH-TV") from CICC in exchange for
$120,170,000 in cash, subject to adjustment as set forth in the
Asset Purchase Agreement, and approximately 11.5% of the common
stock of LIN Television (the "Acquisition" and, together with the
Distribution, the "Transaction").
As a result of the Transaction, approximately 42.1% of LIN
Television's shares will be publicly traded; approximately 11.5%
will be owned by CICC; and approximately 46.4% will be owned by
McCaw Cellular Communications, Inc., a Delaware corporation
("McCaw"). LIN Television intends to apply for listing of its
shares on the Nasdaq National Market. The closing of the
Transaction is expected to occur by year-end. The record date
for the Distribution will be announced at a later date.
Following the Transaction, LIN Television will own WTNH-TV,
an American Broadcasting Companies ("ABC") affiliate, in addition
to KXAS-TV, a National Broadcasting Company ("NBC") affiliate in
Dallas-Fort Worth, Texas; WISH-TV, a Columbia Broadcasting System
("CBS") affiliate in Indianapolis, Indiana; WAVY-TV, an NBC
affiliate in Hampton Roads-Norfolk, Virginia; KXAN-TV, an NBC
affiliate in Austin, Texas; WAND-TV, an ABC affiliate in Decatur-
Champaign-Springfield-Danville, Illinois; and WANE-TV, a CBS
affiliate in Fort Wayne, Indiana. The Company will retain
ownership of WOOD-TV, an NBC affiliate in Grand Rapids-Kalamazoo-
Battle Creek, Michigan, in addition to its cellular business.
The Transaction is subject to approval by the Federal
Communications Commission and to obtaining a private letter
ruling from the Internal Revenue Service to the effect that
neither the Company nor any of its stockholders will be required
to recognize gain or loss, or include any amount in income, as a
<PAGE>
<PAGE> 2
result of the Distribution. The Transaction is also subject to
other conditions, including the filing by both the Company and
CICC of notifications, and the expiration of the applicable
waiting period, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
LIN Television also expects to enter into a Television
Private Market Value Guarantee with McCaw (the "Television
Guarantee") at the time of the Distribution, providing that three
of LIN Television's directors shall be independent directors
initially designated by the Company's independent directors.
Pursuant to the Television Guarantee, McCaw would agree to
certain continuing protections for the stockholders of LIN
Television (other than McCaw and its affiliates) and would be
required either to commence a specified process for acquiring all
publicly held shares of LIN Television on January 1, 1998, or put
the entire company up for sale under the direction of the
independent directors of LIN Television. The Asset Purchase
Agreement also provides that LIN Television will enter into a
Registration Rights Agreement with CICC (the "Registration Rights
Agreement") and a Stockholders Agreement with McCaw and CICC (the
"Stockholders Agreement"). Pursuant to the Stockholders
Agreement, McCaw and CICC will agree to vote their shares of
Common Stock and take all action necessary to cause LIN
Television's board of directors to consist of ten members, six of
whom shall be designated by McCaw, one of whom shall be
designated by CICC and three of whom shall be independent
directors under the Television Guarantee. LIN Television also
expects to refinance its existing credit facility to fund the
Acquisition and provide working capital for its operations.
The Company also entered into a first amendment dated
June 7, 1994 (the "First Amendment") to that certain Private
Market Value Guarantee, dated as of December 11, 1989, between
the Company and McCaw. The First Amendment provides that the
Transaction may be undertaken if the Company's independent
directors determine in their good-faith judgment that both the
Transaction and the consideration to be paid in the Acquisition
are fair, from a financial point of view, to the Company's
stockholders (other than McCaw and its affiliates). The
independent directors have made such determination and the LIN
Board, including the independent directors, has approved the
Acquisition and approved in principle the Distribution.
<PAGE>
<PAGE> 3
The foregoing descriptions are qualified in their entirety
by reference to the full text of the Asset Purchase Agreement,
the Registration Rights Agreement, the Stockholders Agreement and
the First Amendment, which are attached hereto as Exhibits 2.1,
2.2, 2.3 and 99.1, respectively, and are incorporated herein by
reference.
Separately, on May 31, 1994, the Company completed the
acquisition of an additional 5.2% indirect interest in the New
York City cellular licensee for approximately $145 million cash,
bringing the Company's total interests in the New York licensee
to 98.3%. On May 25, 1994, the Company completed the acquisition
of 100% of the Connecticut-1 RSA near the New York market for
approximately $30 million cash. The Company utilized additional
borrowings under its existing cellular bank credit facility to
fund these acquisitions.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(b) Pro Forma Financial Information
It is impracticable to provide the pro forma financial
information required hereunder at the present time. Such
information shall be filed within 60 days from the date of this
filing.
<PAGE>
<PAGE> 4
(c) Exhibits
Exhibit Number Description
2.1 Asset Purchase Agreement, dated as of June 7,
1994, among LIN Broadcasting Corporation, LIN
Television Corporation, Cook Inlet
Communications, Inc. and Cook Inlet
Communications Corp.
2.2 Form of Registration Rights Agreement between
LIN Television Corporation and Cook Inlet
Communications Corp.
2.3 Form of Stockholders Agreement among LIN
Television Corporation, McCaw Cellular
Communications, Inc. and Cook Inlet
Communications Corp.
99.1 First Amendment to Private Market Value
Guarantee, dated June 7, 1994, between McCaw
Cellular Communications, Inc. and LIN
Broadcasting Corporation
99.2 Press Release issued June 8, 1994
<PAGE>
<PAGE>
SIGNATURE
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.
LIN BROADCASTING CORPORATION
By DONALD GUTHRIE
---------------------------
Donald Guthrie, Senior Vice
President and Chief Financial
Officer
Dated: June 7, 1994
<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
2.1 Asset Purchase Agreement, dated as of June 7,
1994, among LIN Broadcasting Corporation, LIN
Television Corporation, Cook Inlet Communications,
Inc. and Cook Inlet Communications Corp.
2.2 Form of Registration Rights Agreement between LIN
Television Corporation and Cook Inlet
Communications Corp.
2.3 Form of Stockholders Agreement among LIN
Television Corporation, McCaw Cellular
Communications, Inc. and Cook Inlet Communications
Corp.
99.1 First Amendment to Private Market Value Guarantee,
dated June 7, 1994, between McCaw Cellular
Communications, Inc. and LIN Broadcasting
Corporation
99.2 Press Release issued June 8, 1994
ASSET PURCHASE AGREEMENT
among
LIN BROADCASTING CORPORATION,
LIN TELEVISION CORPORATION,
COOK INLET COMMUNICATIONS, INC.
and
COOK INLET COMMUNICATIONS CORP.
Dated as of June 7, 1994
<PAGE>
<PAGE> i
CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . .1
1.1 Defined Terms. . . . . . . . . . . . . . . . . .1
1.2 Other Definitional Matters . . . . . . . . . . 12
ARTICLE II PURCHASE OF ASSETS AND ASSUMPTION OF
LIABILITIES . . . . . . . . . . . . . . . . . 13
2.1 Purchase of Assets . . . . . . . . . . . . . . 13
2.1.1 Equipment and Other Personal
Property . . . . . . . . . . . . . . . 13
2.1.2 Licenses . . . . . . . . . . . . . . . 13
2.1.3 Equipment and Other Personal
Property Leases. . . . . . . . . . . . 13
2.1.4 Accounts Receivable. . . . . . . . . . 13
2.1.5 Intellectual Property. . . . . . . . . 14
2.1.6 Programming Materials. . . . . . . . . 14
2.1.7 Contract Rights and Other
Intangible Assets. . . . . . . . . . . 14
2.1.8 Real Property. . . . . . . . . . . . . 14
2.1.9 Claims . . . . . . . . . . . . . . . . 14
2.1.10 Customer Relationships . . . . . . . . 15
2.1.11 Files and Records. . . . . . . . . . . 15
2.2 Excluded Assets. . . . . . . . . . . . . . . . 15
2.3 Assumption of Liabilities. . . . . . . . . . . 16
2.4 Excluded Liabilities . . . . . . . . . . . . . 16
2.5 Transfer Taxes . . . . . . . . . . . . . . . . 17
2.6 Purchase Price . . . . . . . . . . . . . . . . 17
2.7 Instruments of Sale and Transfer; Further
Assurances . . . . . . . . . . . . . . . . . 18
2.8 Allocation of Purchase Price . . . . . . . . . 18
2.9 Assignment of Contracts and Rights . . . . . . 18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER AND STATION. . . . . . . . . . . . 19
3.1 Organization and Good Standing . . . . . . . . 19
3.2 Power and Authority. . . . . . . . . . . . . . 19
3.3 Capitalization; Subsidiaries; Equity
Interest . . . . . . . . . . . . . . . . . 20
3.4 No Approvals or Notices Required; No
Conflicts With Instruments . . . . . . . . . . 20
3.5 Relationship With Stockholder. . . . . . . . . 21
3.6 Financial Statements . . . . . . . . . . . . . 21
3.7 Licenses; Governmental Authorizations. . . . . 21
3.8 Compliance With FCC Licenses . . . . . . . . . 22
3.9 Absence of Certain Changes or Events . . . . . 22
3.10 Taxes . . . . . . . . . . . . . . . . . 23
<PAGE>
<PAGE> ii
3.11 Contracts . . . . . . . . . . . . . . . . . 23
3.12 Property . . . . . . . . . . . . . . . . . 24
3.13 Compliance With Environmental Laws . . . . . . 26
3.14 Claims and Legal Proceedings . . . . . . . . . 26
3.15 Labor Matters. . . . . . . . . . . . . . . . . 27
3.16 Patents, Trademarks, Etc.. . . . . . . . . . . 28
3.17 Accounts Receivable. . . . . . . . . . . . . . 28
3.18 Applicable Laws. . . . . . . . . . . . . . . . 28
3.19 Insurance . . . . . . . . . . . . . . . . . 29
3.20 Employee Benefit Plans . . . . . . . . . . . . 29
3.21 Brokerage . . . . . . . . . . . . . . . . . 32
3.22 Absence of Questionable Payments . . . . . . . 32
3.23 Chapter 11 Representations . . . . . . . . . . 33
3.24 Full Disclosure. . . . . . . . . . . . . . . . 33
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT
AND ACQUIROR . . . . . . . . . . . . . . . . . 33
4.1 Organization and Good Standing . . . . . . . . 33
4.2 Power and Authority. . . . . . . . . . . . . . 34
4.3 Capitalization; Subsidiaries; Equity
Interests . . . . . . . . . . . . . . . . . 34
4.4 No Approvals or Notices Required; No
Conflicts With Instruments . . . . . . . . . . 35
4.5 Relationship With Parent . . . . . . . . . . . 36
4.6 Financial Statements . . . . . . . . . . . . . 36
4.7 Licenses; Governmental Authorizations. . . . . 37
4.8 Compliance With FCC Licenses . . . . . . . . . 37
4.9 Absence of Certain Changes or Events . . . . . 37
4.10 Taxes . . . . . . . . . . . . . . . . . 39
4.11 Contracts . . . . . . . . . . . . . . . . . 39
4.12 Property . . . . . . . . . . . . . . . . . 40
4.13 Compliance With Environmental Laws . . . . . . 42
4.14 Claims and Legal Proceedings . . . . . . . . . 42
4.15 Labor Matters. . . . . . . . . . . . . . . . . 43
4.16 Patents, Trademarks, Etc.. . . . . . . . . . . 44
4.17 Accounts Receivable. . . . . . . . . . . . . . 44
4.18 Applicable Laws. . . . . . . . . . . . . . . . 44
4.19 Insurance . . . . . . . . . . . . . . . . . 45
4.20 Employee Benefit Plans . . . . . . . . . . . . 45
4.21 Reports . 49
4.22 Brokerage . . . . . . . . . . . . . . . . . 49
4.23 Absence of Questionable Payments . . . . . . . 49
4.24 Full Disclosure. . . . . . . . . . . . . . . . 50
ARTICLE V GOVERNMENTAL CONSENTS. . . . . . . . . . . . . 50
5.1 FCC Consent . . . . . . . . . . . . . . . . . 50
5.2 HSR Act . . . . . . . . . . . . . . . . . . . 51
<PAGE>
<PAGE> iii
ARTICLE VI FURTHER AGREEMENTS. . . . . . . . . . . . . . 51
6.1 Further Agreements of Stockholder
and Station . . . . . . . . . . . . . . . . . 51
6.1.1 Schedules, Exhibits, Etc.. . . . . . . 52
6.1.2 Conduct Prior to the Closing Date. . . 52
6.1.3 No Solicitation of Transactions. . . . 55
6.1.4 Insurance and Loss of or Damage to . . .
Assets . . . . . . . . . . . . . . . . 56
6.1.5 Tax Representations. . . . . . . . . . 56
6.1.6 Confidentiality. . . . . . . . . . . . 56
6.1.7 Securities Agreement . . . . . . . . . 56
6.1.8 Consents . . . . . . . . . . . . . . . 57
6.2 Further Agreements of Acquiror and Parent. . . 57
6.2.1 Schedules, Exhibits, Etc.. . . . . . . 57
6.2.2 Conduct Prior to the Closing Date. . . 57
6.2.3 Letter Ruling. . . . . . . . . . . . . 60
6.2.4 Distribution . . . . . . . . . . . . . 60
6.2.5 Registration of Acquiror Common
Stock. . . . . . . . . . . . . . . . . 61
6.2.6 Listing. . . . . . . . . . . . . . . . 61
6.2.7 Consents . . . . . . . . . . . . . . . 61
6.2.8 Compliance With Securities Laws. . . . 61
6.2.9 Parent Undertakings. . . . . . . . . . 61
6.3 Further Agreements . . . . . . . . . . . . . . 62
6.3.1 Access; Information. . . . . . . . . . 62
6.3.2 Advice of Claims . . . . . . . . . . . 62
6.3.3 Other Cooperation Prior to Closing
Date . . . . . . . . . . . . . . . . . 63
6.3.4 Other Cooperation After Closing
Date . . . . . . . . . . . . . . . . . 63
6.3.5 Post-Closing Adjustment. . . . . . . . 63
6.3.6 Accounts Receivable. . . . . . . . . . 64
6.3.7 Film Payables. . . . . . . . . . . . . 65
6.3.8 Employee Matters . . . . . . . . . . . 65
6.3.9 Financial Information. . . . . . . . . 67
6.3.10 Prorations; Trade Agreements . . . . . 68
6.3.11 Oxford Property. . . . . . . . . . . . 68
ARTICLE VII CONDITIONS PRECEDENT TO CLOSING. . . . 69
7.1 General Conditions . . . . . . . . . . . . . . 69
7.1.1 Legal Proceedings. . . . . . . . . . . 69
7.1.2 HSR Act. . . . . . . . . . . . . . . . 69
7.1.3 FCC Approval . . . . . . . . . . . . . 69
<PAGE>
<PAGE> iv
7.2 Conditions to Obligations of Parent and
Acquiror . . . . . . . . . . . . . . . . . 70
7.2.1 Accuracy of Representations and
Warranties. . . . . . . . . . . . . . 70
7.2.2 Letter Ruling. . . . . . . . . . . . . 70
7.2.3 Performance of Agreement . . . . . . . 70
7.2.4 Consents . . . . . . . . . . . . . . . 70
7.2.5 No Material Change . . . . . . . . . . 70
7.2.6 WTHN-TV License Renewal. . . . . . . . 71
7.3 Conditions to Obligations of Stockholder
and Station . . . . . . . . . . . . . . . . . 71
7.3.1 Accuracy of Representations and
Warranties . . . . . . . . . . . . . . 71
7.3.2 Performance of Agreement . . . . . . . 71
7.3.3 Effectiveness of Form S-4. . . . . . . 72
7.3.4 Distribution . . . . . . . . . . . . . 72
7.3.5 Listing. . . . . . . . . . . . . . . . 72
7.3.6 No Material Change . . . . . . . . . . 72
ARTICLE VIII THE CLOSING . . . . . . . . . . . . . . . . 72
8.1 Closing Date . . . . . . . . . . . . . . . . . 72
8.2 Documents to Be Delivered by Parent and
Acquiror . . . . . . . . . . . . . . . . . 72
8.3 Documents to Be Delivered by Stockholder
and Station . . . . . . . . . . . . . . . . . 73
ARTICLE IX TERMINATION . . . . . . . . . . . . . . . . . 74
ARTICLE X GENERAL . . . . . . . . . . . . . . . . . 74
10.1 Expenses . . . . . . . . . . . . . . . . . 74
10.2 Amendment . . . . . . . . . . . . . . . . . 75
10.3 Indemnification and Survival of Warranties . . 75
10.3.1 Generally. . . . . . . . . . . . . . . 75
10.3.2 Notice . . . . . . . . . . . . . . . . 78
10.3.3 Procedure for Third-Party Claims . . . 78
10.3.4 Survival . . . . . . . . . . . . . . . 79
10.3.5 Certain Limitations. . . . . . . . . . 80
10.3.6 Effectiveness. . . . . . . . . . . . . 80
10.4 Tax Indemnification and Tax Matters. . . . . . 80
10.4.1 Stockholder and Station
Indemnification. . . . . . . . . . . . 80
10.4.2 Additional Stockholder and Station
Indemnification. . . . . . . . . . . . 81
10.4.3 Additional Parent Indemnification. . . 81
10.4.4 Separate Obligations . . . . . . . . . 82
10.4.5 Procedure as to Judicial
Proceedings Relating to
Section 10.4.2 Indemnification . . . . 82
10.4.6 Limitation . . . . . . . . . . . . . . 82
<PAGE>
<PAGE> v
10.4.7 Assistance and Cooperation . . . . . . 83
10.4.8 Parent Indemnification of Acquiror . . 83
10.5 Waivers . 84
10.6 Counterparts . . . . . . . . . . . . . . . . . 84
10.7 Headings . . . . . . . . . . . . . . . . . 84
10.8 Applicable Law . . . . . . . . . . . . . . . . 84
10.9 Parties in Interest. . . . . . . . . . . . . . 84
10.10 Notices . 85
10.11 Bulk Sales Laws. . . . . . . . . . . . . . . . 86
10.12 Entire Understanding . . . . . . . . . . . . . 86
<PAGE>
<PAGE> vi
EXHIBITS
Exhibit A: Registration Rights Agreement
Exhibit B: Stockholders Agreement
Exhibit C: Form of Station and Stockholder Tax
Representations
Exhibit D: Solvency Letter Agreement
Exhibit E: Opinion of Parent and Acquiror Counsel
Exhibit F: Opinion of Stockholder and Station Counsel
SCHEDULES
Schedule 2.2 Excluded Assets
Schedule 3.3 Capitalization; Subsidiaries; Equity Interest
Schedule 3.4 Consents
Schedule 3.5 Relationship With Stockholder
Schedule 3.6 Financial Statements
Schedule 3.7 Licenses; Governmental Authorizations
Schedule 3.8 Compliance With FCC Licenses
Schedule 3.9 Absence of Certain Changes or Events
Schedule 3.11 Material Contracts
Schedule 3.12(a) Station Real Property
Schedule 3.12(b) Station Personal Property
Schedule 3.12(c) Encumbrances
Schedule 3.12(g) Defects in Station Real Property
Schedule 3.13 Compliance With Environmental Laws
Schedule 3.14 Claims and Legal Proceedings
Schedule 3.15 Labor Matters
Schedule 3.16 Patents, Trademarks, Etc.
Schedule 3.18 Compliance With Laws
Schedule 3.19 Insurance
Schedule 3.20 Employee Benefit Plans
Schedule 3.21 Brokers and Finders
Schedule 4.3 Subsidiaries; Etc.
Schedule 4.4 No Approvals or Notices Required; No
Conflicts With Instruments
Schedule 4.5 Relationship With Parent and Affiliates
Schedule 4.6 Financial Statements
Schedule 4.7 FCC Authorizations for Major LIN Stations
Schedule 4.8 Compliance With FCC Licenses
Schedule 4.9 Absence of Certain Changes or Events
Schedule 4.10 Taxes
Schedule 4.11 Contracts
Schedule 4.12 Property
Schedule 4.13 Compliance With Environmental Laws
Schedule 4.14 Claims and Legal Proceedings
Schedule 4.15 Labor Matters
Schedule 4.16 Patents, Trademarks, Etc.
Schedule 4.18 Applicable Laws
<PAGE>
<PAGE> vii
Schedule 4.19 Insurance
Schedule 4.20 Employee Benefit Plans
Schedule 4.22 Brokerage
Schedule 6.2.2 Conduct Prior to the Closing Date
Schedule 6.3.8 Station Employees
Schedule 7.2.4 Consents Required for Closing
<PAGE>
<PAGE> 1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is dated
as of June 7, 1994 by and among LIN Broadcasting Corporation,
a Delaware corporation ("Parent"), LIN Television Corporation,
a Delaware corporation and indirect wholly owned subsidiary of
Parent ("Acquiror"), Cook Inlet Communications, Inc., an
Alaska corporation ("Stockholder"), and Cook Inlet
Communications Corp., a Delaware corporation and subsidiary of
Stockholder ("Station").
RECITALS
A. Station desires and intends to sell to Acquiror
substantially all of Station's operating assets and to assign,
without limitation, the licenses for WTNH-TV and associated
auxiliary stations and contractual rights at the price and on
the terms and conditions hereinafter set forth.
B. Acquiror desires and intends to purchase from
Station substantially all of Station's operating assets and
contractual rights, and to assume substantially all of
Station's operating liabilities, at the price and on the terms
and conditions hereinafter set forth.
C. The parties hereto desire to make certain
representations, warranties, covenants and agreements in
connection with the sale and purchase of Station's assets.
D. Parent intends to acquire all the outstanding shares
of common stock, par value $.01 per share, of Acquiror (the
"Acquiror Common Stock") and to effect a distribution of all
such shares to Parent's stockholders (the "Distribution").
AGREEMENT
In consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
1.1 Defined Terms
As used in this Agreement, the following terms shall have
the following meanings:
"Accounts Receivable" shall mean all accounts receivable,
billed and unbilled, net of a reasonable allowance for
doubtful accounts.
<PAGE>
<PAGE> 2
"Acquiror Accounts Payable" shall mean all of Acquiror's
accounts payable in accordance with generally accepted
accounting principles on a basis consistent with the
December 31, 1993 audited financial statements of Acquiror,
including an accrual equal to the amount of all unpaid fees
and expenses payable by Acquiror in connection with this
Agreement and the transactions contemplated hereby.
"Acquiror Accrued Expenses" shall mean all of Acquiror's
film contract obligations and other accruals, including all
other liabilities that are classified as current under
generally accepted accounting principles, but excluding
Acquiror Accounts Payable, Acquiror Accrued Income Taxes and
the current portion of Acquiror Debt.
"Acquiror Accrued Income Taxes" shall mean all income
taxes accrued and classified as a current liability,
including, as a minimum, (i) a federal tax accrual of
$5.1 million, plus (ii) a state tax accrual with respect to
Indiana Broadcasting Corporation of $1.8 million, plus
(iii) accrued 1994 income taxes (net of any related payments
and charges), in each case on a basis consistent with the
December 31, 1993 audited financial statements of Acquiror.
"Acquiror Balance Sheet" is defined in Section 4.6.
"Acquiror Cash" shall mean all of Acquiror's cash and
cash equivalents in accordance with generally accepted
accounting principles on a basis consistent with the
December 31, 1993 audited financial statements of Acquiror.
"Acquiror Closing Balance Sheet" shall mean the
consolidated balance sheet of Acquiror immediately preceding
the Closing and determined in accordance with Section 6.3.5
setting forth, among other things, the amounts of Acquiror
Debt, Acquiror's Accounts Receivable, Acquiror Accrued
Expenses, Acquiror Accounts Payable, Acquiror Cash, Acquiror
Other Current Assets and Acquiror Accrued Income Taxes.
"Acquiror Closing Liabilities" shall mean the total of
(a) Acquiror Debt, plus (b) Acquiror Accounts Payable, plus
(c) Acquiror Accrued Income Taxes, plus (d) Acquiror Accrued
Expenses, plus (e) Acquiror Other Current Liabilities, minus
(f) Acquiror Cash, minus (g) Acquiror's Accounts Receivable,
minus (h) Acquiror Other Current Assets, minus (i) Acquiror
Cost of Acquisitions, plus (j) Acquiror Proceeds From Asset
Dispositions, all determined with reference to the Acquiror
Closing Balance Sheet.
"Acquiror Common Stock" is defined in Recital D.
<PAGE>
<PAGE> 3
"Acquiror Cost of Acquisitions" shall mean the actual
cost expended after March 31, 1994 but before the Closing Date
and capitalized in the Acquiror Closing Balance Sheet for
local marketing agreements (including, but not limited to, the
Dallas Agreements), equity investments in programming and
television station acquisitions acquired solely with cash
and/or debt.
"Acquiror Debt" shall mean all of Acquiror's long-term
debt, including the current portion thereof (and all accrued
interest thereon).
"Acquiror Disclosure Document" shall mean any document
filed with the SEC in connection with this Agreement
(including the Form S-4) or distributed to Acquiror's
stockholders in connection with the Distribution.
"Acquiror Employee Benefit Plan" is defined in
Section 4.20(a).
"Acquiror Financial Information" is defined in
Section 6.3.9.
"Acquiror Financial Statements" is defined in
Section 4.6.
"Acquiror Loss" is defined in Section 10.3.1(b).
"Acquiror Other Current Assets" shall mean all of
Acquiror's film contract rights and other current assets,
including all other assets that are classified as current
under generally accepted accounting principles and on a basis
consistent with the December 31, 1993 audited financial
statements of Acquiror, but excluding Acquiror Cash and
Acquiror's Accounts Receivable.
"Acquiror Other Current Liabilities" shall mean all
liabilities that are classified as current liabilities in
accordance with generally accepted accounting principles,
except for Acquiror Accounts Payable, Acquiror Accrued
Expenses, Acquiror Accrued Income Taxes and the current
portion of Acquiror Debt.
"Acquiror Proceeds From Asset Dispositions" shall mean
the fair market value of all consideration received as a
result of the sale, transfer, exchange or other disposition of
any and all assets of Acquiror after the execution date of
this Agreement and prior to the Closing other than immaterial
transactions (individually or in the aggregate) in the
ordinary course of business consistent with past practice.
<PAGE>
<PAGE> 4
"Actual Cash Consideration" shall mean (a) $120,170,000,
plus (b) the amount, if any, by which the Station Closing
Accounts Receivable are greater than $8,250,000, minus (c) the
amount, if any, by which the Station Closing Accounts
Receivable are less than $8,250,000, plus (d) the product of
(i) .1151 and (ii) the amount, if any, by which the Acquiror
Closing Liabilities are greater than $172,881,000, minus
(e) the product of (i) .1151 and (ii) the amount, if any, by
which the Acquiror Closing Liabilities are less than
$172,881,000, minus (f) the amount of Station Film Payables
Outstanding, minus (g) the amount, if any, by which Station
Accounts Payable exceed $2,000,000, plus (h) the amount, if
any, by which Station Accounts Payable are less than
$2,000,000, plus (i) the Stock Option Adjustment Amount.
"Affiliate" of any Person (the "Subject") shall mean any
other Person that, directly or indirectly, controls or is
controlled by or is under common control with the Subject and,
without limiting the generality of the foregoing, shall in any
event include (a) any Person that beneficially owns or holds
25% or more of any class of voting securities of the Subject
or 25% or more of the legal or beneficial interest in the
Subject and (b) any Person of which the Subject beneficially
owns or holds 25% or more of any class of voting securities or
25% or more of the legal or beneficial interest.
"Affiliated Group" shall mean any "affiliated group" (as
defined in Section 1504(a) of the Code without regard to the
limitations contained in Section 1504(b) of the Code) and any
consolidated, combined or unitary group under state, local or
foreign law that includes (a) in the case of Station and
Stockholder, Station and (b) in the case of Parent and
Acquiror, Acquiror or any of the LIN Stations; provided,
however, that the term "Affiliated Group" shall in no event
include any stockholder (or any person that owns, directly or
indirectly, any interest in any such stockholder) of Parent or
Cook Inlet Region, Inc. that owns less than 80% of the
outstanding common stock of Parent or Cook Inlet Region, Inc.,
respectively.
"Aggregate Option Exercise Price" shall mean the
aggregate exercise price for all employee options to purchase
Acquiror Common Stock that are outstanding or that Acquiror is
obligated to issue at the time of the Distribution that have
an exercise price of less than the Open Market Share Value.
"Aggregate Option Market Price" shall mean the product of
(a) the total number of shares of Acquiror Common Stock
subject to employee options that are outstanding at the time
of the Distribution that have an exercise price of less than
<PAGE>
<PAGE> 5
the Open Market Share Value and (b) the Open Market Share
Value.
"ASCAP Litigation" shall mean the lawsuit entitled
Buffalo Broadcasting Co. v. ASCAP, 546 F. Supp. 274 (S.D.N.Y.
1982), rev'd, 744 F.2d 917 (2d Cir. 1984), cert. denied, 469
U.S. 1211 (1985), and all liabilities attributable to ASCAP,
BMI and local music license fees, including, but not limited
to, administration fees, attorneys' fees and all other
liabilities and expenses relating thereto.
"Assets" is defined in Section 2.1.
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement of Acquiror to be
delivered by Acquiror to Station at the Closing, which shall
be in a form mutually acceptable to Station and Acquiror.
"Assumed Liabilities" is defined in Section 2.3.
"Balance Sheet Items" is defined in Section 6.3.9.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of
1978, as amended, Title 11, United States Code.
"Bill of Sale" shall mean the Bill of Sale of Station to
be delivered by Station to Acquiror at the Closing, which
shall be in a form mutually acceptable to Acquiror and
Station.
"Buyer Indemnified Damages" is defined in
Section 10.3.1(c).
"Closing" shall mean the closing of the sale and purchase
of the Assets and the assumption by Acquiror of the Assumed
Liabilities on the Closing Date, all in accordance with this
Agreement.
"Closing Date" is defined in Section 8.1.
"Closing Shares Outstanding" shall mean the quotient of
(a) the number of shares of Acquiror Common Stock distributed
to Parent's stockholders in the Distribution, divided by
(b) .8849.
"COBRA" is defined in Section 6.3.8(c).
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
<PAGE>
<PAGE> 6
"Communications Act" shall mean the Communications Act of
1934, as amended, and the rules, regulations and policies of
the FCC promulgated thereunder.
"Confidentiality Agreement" shall mean the letter
agreement dated March 23, 1994, between Stockholder and
Parent.
"Control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or
by contract or otherwise.
"Dallas Agreements" shall mean the agreements that
Acquiror and Parent have entered into with respect to KXTX,
Inc., including, without limitation, agreements regarding the
purchase of assets and the purchase of capital stock, an
option to purchase capital stock and a local marketing
agreement.
"Deemed Loss" is defined in Section 10.3.1(b).
"Distribution" is defined in Recital D.
"DOJ" shall mean the Antitrust Division of the United
States Department of Justice.
"DOL" shall mean the United States Department of Labor.
"Encumbrance" shall mean any lien, mortgage, pledge, deed
of trust, security interest, conditional sales agreement,
charge, encumbrance or other adverse claim or interest of any
kind (including, without limitation, Tax liens), excluding, in
the case of real property, utility easements.
"Environmental Laws" shall mean all federal, state,
county or local statutes, laws, regulations, guidelines,
rules, ordinances, codes, licenses, permits, judgments, writs,
decrees, injunctions or orders of any Governmental Entity
relating to the protection of human health and the environment
(air, water, groundwater, soil, noise, odor, wastes and toxic
materials), including, by way of illustration and not
limitation, the Clean Air Act, the Federal Water Pollution
Control Act (as amended by the Clean Water Act of 1977 and the
Water Quality Act of 1987), the Resource Conservation and
Recovery Act of 1976 (as amended by the Hazardous and Solid
Waste Amendments of 1984), the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (as amended
<PAGE>
<PAGE> 7
by the Superfund Amendments and Reauthorization Act of 1986),
the Hazardous Materials Transportation Act, the Toxic
Substances Control Act and any rules and regulations
implementing these statutes and laws, as well as all other
applicable federal, state, county, local and foreign
environmental requirements.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"Estimated Cash Consideration" is defined in
Section 2.6(a).
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
"Excluded Assets" is defined in Section 2.2.
"Excluded Liabilities" is defined in Section 2.4.
"Exclusivity Agreement" shall mean the exclusivity letter
agreement dated April 5, 1994, and amended May 13, 1994,
between Acquiror and Stockholder.
"FCC" shall mean the Federal Communications Commission.
"FCC Applications" is defined in Section 5.1(a).
"FCC Approval" shall mean the FCC's approval of the FCC
Applications.
"FCC Licenses" shall mean all licenses and permits issued
or granted by, and any authorizations of, the FCC for the
operation of the relevant station(s), including, but not
limited to, the licenses, permits and authorizations set forth
in Schedules 3.7 and 4.7.
"FCC Order" shall mean an order of the FCC, or of the
Mass Media Bureau of the FCC, acting under delegated
authority.
"Form S-4" shall mean the registration statement on
Form S-4 or any successor form to be prepared and filed with
the SEC by Acquiror pursuant to Section 6.2.5.
"FTC" shall mean the Federal Trade Commission.
"Governmental Entity" shall mean the United States, any
state of the United States or any federal, state, local or
<PAGE>
<PAGE> 8
foreign government, court, administrative agency or commission
or other governmental authority or instrumentality.
"Hazardous Materials" shall mean any hazardous or toxic
substance, material or waste, including, but not limited to,
those substances, materials and wastes listed in the United
States Department of Transportation Hazardous Materials Table
(49 C.F.R. Section 172.101) or by the United States Environmental
Protection Agency as hazardous substances (40 C.F.R. Part 302
and amendments thereto), petroleum products and their
derivatives, and such other substances, materials and wastes
as become regulated or subject to cleanup authority under any
Environmental Laws.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Indemnifying Party" is defined in Section 10.3.2.
"Indemnitee" is defined in Section 10.3.2.
"Interest" shall mean 8% per annum calculated based on a
365-day year and the actual number of days elapsed.
"IRS" shall mean the Internal Revenue Service.
"Letter Ruling" is defined in Section 6.2.3.
"Letter Ruling Notice" is defined in Section 6.2.3.
"LIN Personal Property" is defined in Section 4.12(c).
"LIN Real Property" is defined in Section 4.12(a).
"LIN Stations" shall mean all subsidiaries of Acquiror
listed on Schedule 4.3, including, without limitation, the
Major LIN Stations and KXAN, Inc. (KXAN-TV (Austin, Texas)),
WAND Television, Inc. (WAND-TV (Decatur-Champaign-Springfield-
Danville, Illinois)) and Indiana Broadcasting Corporation
(WISH-TV (Indianapolis, Indiana) and WANE-TV (Fort Wayne,
Indiana)).
"Major LIN Stations" shall mean North Texas Broadcasting
Corporation (KXAS-TV (Dallas-Fort Worth, Texas)), the WISH-TV
division of Indiana Broadcasting Corporation (WISH-TV
(Indianapolis, Indiana)) and WAVY Television, Inc. (WAVY-TV
(Hampton Roads, Virginia)).
"Material Adverse Effect" with respect to any entity or
to any assets shall mean any change or effect that, when taken
together with all other adverse changes and effects
<PAGE>
<PAGE> 9
(including, without limitation, such changes and effects that
are within the scope of the representations and warranties
made by such entity or as to such assets, but are not
individually or in the aggregate deemed to have a Material
Adverse Effect on such entity or such assets), is, or is
reasonably likely to be, materially adverse to the business,
operations, properties, condition (financial or otherwise),
assets, liabilities or prospects of such entity or such
assets, as applicable; provided, however, that economic and
regulatory conditions generally affecting the television
broadcasting industry shall not be deemed alone, or in
combination with other factors, to have a Material Adverse
Effect; provided further, that any Tax liability for which
Acquiror is or may be liable solely as a result of being a
member of an Affiliated Group (and not as a result of its own
operations) shall not be deemed to have a Material Adverse
Effect on Acquiror to the extent that Parent agrees to
indemnify Acquiror for such Tax liability.
"McCaw" shall mean McCaw Cellular Communications, Inc., a
Delaware corporation.
"Net Book Value" shall mean the net book value of the
personal property of any party as determined in accordance
with generally accepted accounting principles and as reflected
in the books and records relied upon by such party in the
preparation of audited financial statements.
"Open Market Share Value" shall mean the average of the
high and low sales prices of the Acquiror Common Stock on the
Nasdaq National Market, the American Stock Exchange, Inc. or
the New York Stock Exchange, Inc., as the case may be, for
each of the 20 trading days commencing on the sixth trading
day following the Distribution.
"Parent Threshold Amount" shall have the meaning assigned
to that term in the Solvency Letter Agreement.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation.
"Person" shall mean any individual, partnership,
joint-stock company, firm, corporation, association,
unincorporated organization, joint venture, trust or other
entity.
"Profit Sharing Plan" shall mean the Profit Sharing Plan
for Employees of Station WTNH-TV.
"Registration Rights Agreement" shall mean the
Registration Rights Agreement to be entered into by Acquiror
<PAGE>
<PAGE> 10
and Station at the Closing, a form of which is attached as
Exhibit A hereto.
"Related Agreements" shall mean the Stockholders
Agreement, the Registration Rights Agreement, the Assignment
and Assumption Agreement and the Bill of Sale.
"Reorganization Plan" shall mean the Cook Inlet
Communications Corp. Chapter 11 Plan dated July 8, 1993 as
confirmed by the United States Bankruptcy Court for the
District of Delaware on August 12, 1993.
"Revenue Procedure" is defined in Section 6.2.3.
"SEC" shall mean the Securities and Exchange Commission.
"Section 355 Representation" is described in
Section 10.4.2.
"Securities Act" shall mean the Securities Act of 1933,
as amended, and the rules and regulations promulgated
thereunder.
"Seller Indemnified Damages" is defined in
Section 10.3.1(a).
"Share Consideration" is defined in Section 2.6(b).
"Solvency Letter Agreement" shall mean that certain
Letter Agreement between McCaw and Cook Inlet Region, Inc., a
form of which is attached as Exhibit D hereto.
"Station Accounts Payable" shall mean all accounts
payable of Station in accordance with generally accepted
accounting principles determined as of the Closing Date and
adjusted in accordance with Section 6.3.10, but excluding
(a) Station Film Payables Outstanding and (b) all liabilities
relating to employee accrued vacation and sick leave.
"Station Balance Sheet" is defined in Section 3.6.
"Station Closing Accounts Receivable" shall mean the
Accounts Receivable of Station as of the Closing Date
determined with reference to the Station Closing Balance Sheet
and adjusted in accordance with Section 6.3.10.
"Station Closing Balance Sheet" shall mean the balance
sheet of Station immediately preceding the Closing and
determined in accordance with Section 6.3.5 setting forth,
among other things, the amount of Station Closing Accounts
Receivable.
<PAGE>
<PAGE> 11
"Station Employee Benefit Plan" is defined in
Section 3.20(a).
"Station Film Payables Outstanding" shall mean the
aggregate amount of all film contract payment obligations owed
by Station, other than payment obligations that are not more
than 60 days past their respective contractual due date.
"Station Financial Information" is defined in Section
6.3.9.
"Station Financial Statements" is defined in Section 3.6.
"Station Personal Property" is defined in
Section 3.12(b).
"Station Real Property" is defined in Section 3.12(a).
"Station Tax Indemnitees" is defined in Section 10.4.3.
"Station Union Contracts" shall mean Station's Collective
Bargaining Agreement with the American Federation of
Television and Radio Artists effective for the period May 1,
1993 to April 30, 1996 and Collective Bargaining Agreement
with the National Association of Broadcast Employees and
Technicians (AFL-CIO) effective for the period February 11,
1994 to February 10, 1998.
"Stockholders Agreement" shall mean the Stockholders
Agreement to be entered into by Parent, Acquiror and Station
at the Closing, a form of which is attached as Exhibit B
hereto.
"Stock Option Adjustment Amount" shall mean the product
of (a) .1151 and (b) the Aggregate Option Market Price minus
the Aggregate Option Exercise Price.
"Tax" or "Taxes" shall mean all federal, state, local or
foreign income, gross receipts, windfall profits, severance,
property, production, sales, use, license, excise, franchise,
employment, withholding or similar taxes imposed on the
income, properties or operations of, in the case of Station,
Station or its Affiliated Group or, in the case of Acquiror,
Acquiror or its Affiliated Group, together with any interest,
additions or penalties with respect thereto and any interest
in respect of such additions or penalties, and all reasonable
fees associated with resolving any related disputes,
including, but not limited to, accounting, legal and
consulting fees; provided, however, that such terms shall not
include real property transfer taxes or sales taxes imposed in
<PAGE>
<PAGE> 12
connection with the transactions contemplated by this
Agreement.
"Tax Returns" shall mean all reports and returns required
to be filed on or before the Closing Date with respect to the
Taxes of, in the case of Station, Station and its Affiliated
Group and, in the case of Acquiror, Acquiror and its
Affiliated Group, including, without limitation, consolidated
federal income tax returns of the relevant Affiliated Group.
"Tradeout Agreements" shall mean all contracts,
agreements or commitments, oral or written, pursuant to which
a party has sold or traded commercial airtime in consideration
for any property or services in lieu of or in addition to
cash, including, without limitation, agreements under which
commercial airtime availabilities within a particular program
are exchanged for the provision of such program.
"WARN Act" shall mean the Worker Adjustment and
Retraining Notification Act.
1.2 Other Definitional Matters
(a) The words "this Agreement," "hereby," "herein,"
"hereof" and "hereunder" and words of similar import shall
refer to this Agreement as a whole and not to any particular
provision of this Agreement, and the words "Article,"
"Section," "Schedule," "Exhibit" and like references are to
this Agreement, unless otherwise specified.
(b) Singular and plural forms, as the case may be, of
terms defined herein shall have correlative meanings.
(c) Any defined term that relates to a document shall
include within its definition any amendments, modifications,
renewals, restatements, extensions, supplements or
substitutions that may heretofore have been or that may
hereafter be executed in accordance with the terms thereof and
as may be permitted by this Agreement.
(d) The phrases "after due inquiry of the management of
the LIN Stations" and "after due inquiry of the management of
the Major LIN Stations" shall mean that a representative of
Acquiror or Parent has inquired of the General Managers of the
LIN Stations or the Major LIN Stations, respectively.
(e) The phrase "to the knowledge of Parent" and phrases
of like import shall include the knowledge of Parent's direct
wholly owned subsidiary, LTC Holdings, Inc. The phrase "to
the knowledge of Acquiror" and phrases of like import shall
<PAGE>
<PAGE> 13
include the knowledge of Acquiror's direct wholly owned
subsidiary, LWWI Broadcasting, Inc.
ARTICLE II PURCHASE OF ASSETS AND ASSUMPTION OF
LIABILITIES
2.1 Purchase of Assets
At the Closing and subject to the terms and conditions of
this Agreement, Station hereby agrees to sell, assign,
transfer, convey and deliver to Acquiror, and Acquiror hereby
agrees to purchase, acquire and accept from Station, all the
tangible and intangible assets owned or held by Station,
including all such assets acquired by Station between the date
hereof and the Closing Date, except for the Excluded Assets
(collectively, the "Assets"). The Assets shall include,
without limitation, all of Station's right, title and interest
in, to and under the following:
2.1.1 Equipment and Other Personal Property
All machinery, equipment, office furniture, fixtures,
office materials and supplies, motor vehicles, tools, spare
parts, leasehold improvements and other tangible personal
property, including, without limitation, the equipment
described in Schedule 3.12(b).
2.1.2 Licenses
Station's FCC Licenses and all other licenses, approvals,
authorizations, consents, orders, registrations and permits
(including renewals or modifications thereof and applications
therefor), including, without limitation, the licenses
described in Schedule 3.7 and the call sign WTNH-TV.
2.1.3 Equipment and Other Personal Property Leases
All leases and rental agreements in respect of equipment
or other tangible personal property, including, without
limitation, the leases and agreements described in
Schedule 3.12(b).
2.1.4 Accounts Receivable
All Accounts Receivable earned by Station on or prior to
the Closing Date.
<PAGE>
<PAGE> 14
2.1.5 Intellectual Property
All intellectual property rights, and all licenses,
sublicenses or like agreements providing Station any right or
concession to use any such intellectual property, including
all trade names, trademarks, service marks, patents,
copyrights and their registrations and applications and all
goodwill associated therewith, and all technology, know-how,
trade secrets, jingles, logotypes, slogans, promotional
materials, manufacturing processes, formulae, drawings,
designs, computer programs and all documentary evidence
thereof, including, without limitation, the intellectual
property rights described in Schedule 3.16.
2.1.6 Programming Materials
All rights of Station in and to programs and programming
material of whatever form or nature (whether recorded on film,
tape or any other substance or intended for live performance,
whether intended for television broadcast or any other medium,
and whether completed or in production).
2.1.7 Contract Rights and Other Intangible Assets
All network affiliation agreements, film contracts,
advertising contracts, Tradeout Agreements, and other
contracts and agreements, intangible assets, and goodwill
associated with Station and Station's name (including
Station's call letters), including, without limitation, the
contracts, agreements and other assets described in
Schedule 3.11.
2.1.8 Real Property
All Station Real Property, and rights thereto, including
all buildings, structures and improvements of every nature
located thereon, owned or leased by Station, as described in
Schedule 3.12(a).
2.1.9 Claims
Other than the assets included in Excluded Assets, all
rights and claims of Station, whether mature, contingent or
otherwise, against third parties relating to the Assets,
whether in tort, contract or otherwise, including, without
limitation, causes of action, unliquidated rights or claims
under or pursuant to all warranties, representations and
guarantees made by manufacturers, suppliers or vendors.
<PAGE>
<PAGE> 15
2.1.10 Customer Relationships
All relationships with customers, including, but not
limited to, all files containing information and knowledge
about existing and prior customers of Station.
2.1.11 Files and Records
All files and records, including schematics, technical
information and engineering data, programming information,
books of account, employment records and personnel files,
purchase and sale records and correspondence, advertising
records, files and literature, and FCC logs, files and records
(including, without limitation, the files referred to in
Section 2.1.10).
2.2 Excluded Assets
Station shall not transfer to Acquiror and Acquiror shall
not acquire from Station the assets that are listed below or
described in Schedule 2.2 (collectively, the "Excluded
Assets"), which assets are specifically excluded from the
Assets and shall remain the property of Station:
(a) Station's corporate seal, minute books, charter
documents, corporate stock record books and such other books
and records as pertain to Station's organization, existence or
share capitalization or as are necessary to enable Station to
file its Tax Returns and reports; provided, however, that such
books and records shall be maintained in existence for a
period of five years following the Closing Date and shall be
made available for inspection and duplication by Acquiror upon
request for good cause, at its expense and during normal
business hours;
(b) All cash and cash equivalents such as certificates
of deposit, Treasury bills and other marketable securities;
(c) All claims, judgments, settlements, insurance
proceeds, refunds or other recoveries in respect of any
action, suit or proceeding that relate to any liability
retained by Station pursuant to Section 2.4(c);
(d) The names "Cook Inlet Communications" and "Cook
Inlet" and derivations thereof; and
(e) Any claim with respect to, and all benefits of,
property tax appeals with respect to such taxes applicable to
periods prior to the Closing.
<PAGE>
<PAGE> 16
2.3 Assumption of Liabilities
Subject to the terms and conditions of this Agreement,
Acquiror shall assume and agree to pay, perform and fully
discharge the following liabilities and obligations
(collectively, the "Assumed Liabilities"):
(a) All liabilities and obligations of Station that are
reflected on the Station Balance Sheet or that arise between
the date of the Station Balance Sheet and the Closing Date, to
the extent that the same remain unpaid at the Closing Date,
except for the Excluded Liabilities;
(b) Liabilities and obligations of Station that arise
out of or relate to the Assets, including, without limitation,
all liabilities and obligations of Station under any contract,
license, permit, agreement, arrangement or undertaking
included among the Assets;
(c) Liabilities and obligations arising out of or
relating to the existence of Hazardous Materials upon, about,
beneath or migrating or threatening to migrate to or from any
of the Assets or the existence of any violation of any
Environmental Laws pertaining to any of the Assets or the
business operated in connection therewith;
(d) Liabilities and obligations of Station in respect of
the Profit Sharing Plan and the severance, health, vacation
and sick leave policies and programs listed in Schedule 3.20,
other than any liability or obligation to the General Manager
of Station resulting from the transactions contemplated by
this Agreement; and
(e) Liabilities relating to or arising out of the ASCAP
Litigation.
2.4 Excluded Liabilities
Acquiror shall not assume any liabilities other than the
Assumed Liabilities nor shall it assume any of the following
liabilities and obligations (collectively, the "Excluded
Liabilities"), which liabilities and obligations shall remain
liabilities and obligations of Station:
(a) Any liabilities or obligations incurred by Station
pursuant to the express terms of this Agreement;
(b) Other than as provided in Section 2.5, any
liabilities for Taxes, either accruing with respect to or
relating to the period prior to and through the end of the
Closing Date;
<PAGE>
<PAGE> 17
(c) Any claim, judgment, penalty, settlement agreement
or other obligation to pay damages in respect of any action,
suit or proceeding that is pending or threatened prior to the
Closing Date and, other than as provided in Section 2.3(c) and
other than the ASCAP Litigation, any claim or liability for
any injury incurred prior to the Closing Date, whether based
on any act or omission of Station or others, including,
without limitation, those listed in Schedule 3.14;
(d) Except to the extent accrued in Station Accounts
Payable or paid by Station prior to the Closing, all severance
obligations and other costs of termination of employees
wherever located resulting from any termination or cessation
of employment occurring prior to the Closing Date, from
whatever source such obligations and costs arise, including,
without limitation, contractual obligations, notices to
employees, employment manuals, course of dealings, past
practices or otherwise; and
(e) All long-term debt (to both related and unrelated
parties) of Station, including the current portion thereof
(including interest thereon).
Notwithstanding any other provision of this Agreement,
Acquiror shall be obligated to assume Station's obligations
under the Station Union Contracts only to the extent required
by law.
2.5 Transfer Taxes
Station and Acquiror shall each pay one-half of all sales
and use taxes arising out of the transfer of the Assets,
including real estate transfer and conveyance taxes.
2.6 Purchase Price
At the Closing and subject to the terms and conditions
hereof, in full consideration for the Assets and in addition
to Acquiror's assumption of the Assumed Liabilities, Acquiror
shall deliver to Station:
(a) $120,170,000 in immediately available funds (the
"Estimated Cash Consideration") and
(b) a number of shares of Acquiror Common Stock equal to
the product of (i) .1151 and (ii) the Closing Shares
Outstanding (the "Share Consideration").
Upon determination of the Actual Cash Consideration in
accordance with Section 6.3.5, any difference between the
<PAGE>
<PAGE> 18
Estimated Cash Consideration and the Actual Cash Consideration
shall be settled in accordance with Section 6.3.5.
2.7 Instruments of Sale and Transfer; Further Assurances
On or prior to the Closing Date, Station shall deliver to
Acquiror such instruments of sale and assignment as shall be
effective to vest in Acquiror, on the Closing Date, all of
Station's right, title and interest in and to the Assets. At
the Closing, Acquiror shall deliver to Station such additional
instruments of assumption as shall be effective to impose on
Acquiror, as of the Closing Date, the obligation to assume,
pay, perform and discharge the Assumed Liabilities. Station
shall take all reasonable additional steps as may be necessary
to put Acquiror in possession and operating control of the
Assets on the Closing Date, and Acquiror shall take all
reasonable additional steps as may be necessary for it to
assume the Assumed Liabilities on the Closing Date.
2.8 Allocation of Purchase Price
Acquiror and Station shall deliver to each other upon
final determination of the Actual Cash Consideration, and
shall thereafter timely and properly file, IRS Form 8594 based
on an allocation of the aggregate Actual Cash Consideration
and Share Consideration as mutually agreed upon by Acquiror
and Station.
2.9 Assignment of Contracts and Rights
Notwithstanding anything in this Agreement to the
contrary, this Agreement shall not constitute an agreement to
assign any claim, contract, license, lease, commitment, sales
order or purchase order or any claim, right or benefit arising
thereunder or resulting therefrom if the agreement to assign
or attempt to assign, without the consent of a third party,
would constitute a breach thereof or in any way adversely
affect the rights of Acquiror thereunder. Until such consent
is obtained, or if an attempted assignment thereof would be
ineffective or would adversely affect the rights of Station or
Acquiror thereunder so that Acquiror would not, in fact,
receive all such rights, Acquiror and Station will cooperate
with each other in any arrangement designed to provide for
Acquiror the benefits of, and to permit Acquiror to assume all
liabilities under, any such claim, contract, license, lease,
commitment, sales order or purchase order; provided, however,
that such arrangements will be for the benefit and protection
of Station, to the extent provided in Section 2.3. Any
transfer or assignment to Acquiror by Station of any contract
or agreement that shall require the consent or approval of any
third party shall, without reducing or adversely affecting
<PAGE>
<PAGE> 19
Station's obligations to transfer or assign such contract or
agreement set forth in this Article II or the representations
and warranties of Stockholder and Station set forth in
Article III, be made subject to such consent or approval being
obtained.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER AND STATION
To induce Parent and Acquiror to enter into and perform
their obligations under this Agreement, except as otherwise
noted below, Stockholder and Station jointly represent and
warrant to Parent and Acquiror (which representations and
warranties shall survive the Closing as provided in Article X)
all as follows in this Article III:
3.1 Organization and Good Standing
Each of Stockholder and Station is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. Each of
Stockholder and Station has all requisite corporate power and
authority to own, operate and lease its properties and assets
and to carry on its business as now conducted and as currently
proposed to be conducted, and is duly qualified to do business
as a foreign corporation, and is in good standing, in each
jurisdiction in which the property owned, leased or occupied
by it or the nature of the business conducted by it makes such
qualification necessary.
3.2 Power and Authority
Each of Stockholder and Station has all requisite
corporate power and authority to execute, deliver and perform
this Agreement and the Related Agreements to which it is a
party and to consummate the transactions contemplated hereby
and thereby. This Agreement and the Related Agreements to
which it is a party have been duly authorized by each of
Stockholder and Station, including approval by the
stockholders of Station in accordance with applicable law.
This Agreement has been duly executed and delivered by
Stockholder and Station and is, and the Related Agreements to
which either is a party, when executed and delivered by
Stockholder or Station, will be, legal, valid and binding
obligations of Stockholder or Station, enforceable against
Stockholder or Station in accordance with their respective
terms, except that (a) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally, (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
<PAGE>
<PAGE> 20
to certain equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought, and
(c) indemnification provisions may be subject to the effect of
public policy.
3.3 Capitalization; Subsidiaries; Equity Interest
Except as set forth in Schedule 3.3, Stockholder owns all
the outstanding shares of Station's voting stock, free and
clear of all Encumbrances, options, rights of first refusal
and limitations on Stockholder's voting rights. Station does
not own, directly or indirectly, any equity or similar
interest in, or any interest convertible into or exchangeable
for any equity or similar interest in, any corporation,
partnership, joint venture or other business association or
entity.
3.4 No Approvals or Notices Required; No Conflicts With
Instruments
The execution, delivery and performance of this Agreement
and the Related Agreements by Stockholder and Station and the
consummation of the transactions contemplated hereby and
thereby will not (a) constitute a violation (with or without
the giving of notice or lapse of time, or both) of any
provision of law or any judgment, decree, order, regulation or
rule of any court or other Governmental Entity applicable to
Stockholder or Station, (b) require any consent, approval or
authorization of, or declaration, filing or registration with,
any Person, except as contemplated in Article V or set forth
in Schedule 3.4, (c) except as set forth in Schedule 3.4,
result in a material default (with or without the giving of
notice or lapse of time, or both) under, an acceleration or
termination of, or the creation in any party of the right to
accelerate, terminate, modify or cancel, or in any other way
materially affect the rights of Acquiror (as assignee or
transferee of Station) under, any material agreement
(including, without limitation, Station's network affiliation
contract), lease, note or other restriction, Encumbrance,
obligation or liability to which Station is a party or by
which it is bound or to which the Assets are subject,
(d) except as set forth in Schedule 3.4, result in the
creation of any material lien or Encumbrance upon the Assets,
(e) conflict with or result in a breach of or constitute a
default under any provision of the articles of incorporation
or bylaws of Stockholder or Station, or (f) invalidate or
materially adversely affect any material permit, license,
authorization or status used in or necessary for the conduct
of Station's business.
<PAGE>
<PAGE> 21
3.5 Relationship With Stockholder
Except as set forth in Schedule 3.5, neither Stockholder
nor any Affiliate of Stockholder is a party to any contract,
oral or written, with Station. Except as set forth in
Schedule 3.5, Station is not indebted to Stockholder or any
Affiliate of Stockholder for any amount, and neither
Stockholder nor any Affiliate of Stockholder has any claim
against Station for any liability, damage, loss, advance,
compensation or other obligation. Neither Stockholder nor any
Affiliate of Stockholder other than Station owns or asserts
any rights, licenses or any other interests in any of the
Assets.
3.6 Financial Statements
Stockholder has delivered to Acquiror (a) balance sheets
and statements of income, stockholders' equity and cash flows
of Station as of and for the fiscal years ended December 31,
1991, 1992 and 1993, and accompanying notes, audited by KPMG
Peat Marwick, independent certified public accountants, and
(b) unaudited balance sheets and statements of income,
stockholders' equity and cash flows of Station as of and for
the fiscal quarter ended March 31, 1994 (the balance sheet for
the fiscal quarter ended March 31, 1994 being herein referred
to as the "Station Balance Sheet"). All the foregoing
financial statements are herein referred to as the "Station
Financial Statements." The Station Financial Statements have
been prepared in conformity with generally accepted accounting
principles on a basis consistent with prior accounting periods
and present fairly the financial position, results of
operations and changes in financial position of Station as of
the dates and for the periods indicated, subject, in the case
of the quarterly financial statements, to normal year-end
adjustments. Station has no liability or obligation of any
nature (absolute, contingent or otherwise) that would have
been required to be reserved against in the Station Financial
Statements in accordance with generally accepted accounting
principles and that was not fully reflected or reserved
against therein, except for liability reserves or obligations
incurred since the date of the Station Balance Sheet (i) in
the ordinary course of business consistent with past practice
or (ii) specifically set forth in Schedule 3.6.
3.7 Licenses; Governmental Authorizations
Set forth in Schedule 3.7 is a true and complete list of
all of Station's FCC Licenses and other licenses, approvals,
authorizations, consents, orders, registrations and permits
from Governmental Entities (including renewals or
modifications thereof and applications therefor). No material
<PAGE>
<PAGE> 22
licenses, approvals, authorizations, consents, orders,
registrations or permits other than those set forth in
Schedule 3.7 are required for Station to operate in the manner
in which it is operating on the date hereof and as it is
currently contemplated to be operated. Except for matters set
forth in Schedule 3.7, no investigation, notice of
investigation, violation, order, complaint, action or other
proceeding is pending or, to Stockholder's or Station's
knowledge, threatened before the FCC or any other Governmental
Entity to revoke, refuse to renew or modify Station's FCC
Licenses or any other authorizations of Station that could in
any manner threaten or adversely affect Station's FCC Licenses
or the operations of Station as now conducted. To
Stockholder's or Station's knowledge, no event has occurred
that permits, or after notice or lapse of time, or both, would
permit, the revocation or termination of Station's FCC
Licenses or the imposition of any restriction thereon of such
a nature as may materially limit the operations of Station as
now conducted.
3.8 Compliance With FCC Licenses
Except as set forth in Schedule 3.8, Station, its
physical facilities, electrical and mechanical systems, and
transmitting and studio equipment are being and have been
operated in all material respects (a) in accordance with the
specifications of the applicable FCC License and in accordance
with each document submitted in support of such FCC License
and (b) in compliance with all requirements of the
Communications Act.
3.9 Absence of Certain Changes or Events
Except as set forth in Schedule 3.9, since the date of
the Station Balance Sheet, Station has not:
(a) taken any action or entered into or agreed to enter
into any transaction, agreement or commitment (other than this
Agreement and matters relating hereto), except in the ordinary
course of business consistent with past practice;
(b) created or incurred any new debt or reduced any
outstanding debt, except (i) in the ordinary course of
business consistent with past practice and (ii) in connection
with the redemption of Station's 10.75% Series A and Series B
Senior Secured Notes due 1998;
(c) encumbered or disposed of any Asset or made any
capital expenditure, except in the ordinary course of business
consistent with past practice;
<PAGE>
<PAGE> 23
(d) entered into or agreed to enter into any film
contract, except for film contracts entered into after the
date of this Agreement in the ordinary course of business
consistent with past practice;
(e) taken any action resulting in the reduction or
increase of its working capital (current assets, including
cash, less current liabilities, excluding short-term, or the
current portion of long-term, debt), except for such customary
changes as may be required in the ordinary course of business
consistent with past practice;
(f) changed in any material way other than in the
ordinary course of business consistent with past practice the
compensation and terms of employment provided to officers and
principal employees; or
(g) entered into or agreed to enter into any
transaction, agreement or commitment, suffered the occurrence
of any event or experienced any change in financial condition,
business, results of operations or otherwise that, in the
aggregate, has resulted, or could reasonably be expected to
result, in a Material Adverse Effect on the Assets or Station.
3.10 Taxes
No tax is required to be withheld pursuant to
Section 1445 of the Code as a result of the transfer
contemplated by this Agreement.
3.11 Contracts
Schedule 3.11 contains a true and complete list of all
material contracts, oral or written, to which Station is a
party or that relate to the business or operations of Station,
including, without limitation, network affiliation agreements,
national representation agreements, any agreements with
Stockholder, management agreements, local marketing
agreements, film contracts, advertising contracts that are not
terminable without penalty within 180 days after the date of
the Station Balance Sheet, Tradeout Agreements that are not
terminable without penalty within 180 days after the date of
the Station Balance Sheet, security agreements, conditional
sale agreements, instruments relating to the borrowing of
money, broker or distributorship agreements and all other
contracts that by their terms contemplate aggregate payments
by any party thereto of $500,000 or more, true and complete
copies of which have been delivered to Acquiror. Each such
contract is valid and in full force and effect, Station has
performed all material obligations imposed upon it thereunder
and there is not under such contract any default or event of
<PAGE>
<PAGE> 24
default on the part of Station or, to Stockholder's or
Station's knowledge, any other party thereto that would, or
could reasonably be expected to, result in a Material Adverse
Effect on the Assets or Station. Station has not received
notice, nor is Stockholder or Station otherwise aware, that
any party to any such contract intends to cancel, terminate or
refuse to renew the same or to exercise or decline to exercise
any option or right thereunder.
3.12 Property
(a) Attached as Schedule 3.12(a) is a true and complete
list of all real property owned, leased or rented by Station,
including all easements, rights-of-way, servitudes, leases,
permits, licenses, options and other real property rights (the
"Station Real Property"), other than the Oxford property
referenced in Section 6.3.11. Schedule 3.12(a) contains a
true and complete list of all leases, subleases, rental
agreements, contracts of sale, tenancies or licenses of any
portion of the Station Real Property, true and complete copies
of which have been delivered to Acquiror.
(b) Station has provided to Acquiror a true and complete
list of all personal property having a Net Book Value in
excess of $25,000 that is owned, leased or rented by Station
or used in its operations (the "Station Personal Property").
Schedule 3.12(b) contains a true and complete list of all
leases, subleases, rental agreements, service contracts,
contracts of sale, tenancies or licenses of any portion of the
Station Personal Property, true and complete copies of which
have been delivered to Acquiror. The Station Real Property
and the Station Personal Property include all tangible
properties and assets (whether real, personal or mixed, other
than, in the case of the Station Personal Property, property
rights with an individual Net Book Value of less than $25,000)
used in the conduct of the business and operations of Station
as now conducted and as currently proposed to be conducted.
(c) With respect to the Station Real Property that is
owned by Station in fee simple, Station has good and
marketable title to such Station Real Property free and clear
of all Encumbrances, except as set forth in Schedule 3.12(c).
With respect to the Station Real Property in which Station
holds a leasehold interest, the leasehold interest is free and
clear of all Encumbrances, except as set forth in
Schedule 3.12(c). The Encumbrances set forth in
Schedule 3.12(c) do not in any material respect impair or
reduce the value or utility of the Station Real Property for
use in the business and operations of Station as now conducted
and as currently proposed to be conducted.
<PAGE>
<PAGE> 25
(d) There are no applicable adverse zoning, building or
land use codes or rules, ordinances, regulations or other
restrictions relating to zoning or land use that currently or,
to Stockholder's or Station's knowledge after due inquiry with
applicable authorities, may prospectively prevent or cause the
imposition of material fines or penalties as the result of the
use of all or any portion of the Station Real Property for the
conduct thereon of the business of Station as now conducted
and as currently proposed to be conducted. Except as set
forth in Schedule 3.12(g), Station has received all necessary
approvals with regard to occupancy and maintenance of the
Station Real Property.
(e) Each lease of any portion of the Station Real
Property, and each lease, license, rental agreement, contract
of sale or other agreement to which the Station Personal
Property is subject, is valid and in good standing, Station
has performed all material obligations imposed upon it
thereunder and neither Station nor, to Stockholder's or
Station's knowledge, any other party thereto is in material
default thereunder in any material respect, nor is there any
event that with notice or lapse of time, or both, would
constitute a default thereunder by Station or, to
Stockholder's or Station's knowledge, any other party thereto
that would, or could reasonably be expected to, result in a
Material Adverse Effect on the Assets or Station. Station has
not received notice, nor is Stockholder or Station otherwise
aware, that any party to any such contract intends to cancel,
terminate or refuse to renew the same or to exercise or
decline to exercise any option or other right thereunder. No
Station Real Property or Station Personal Property is subject
to any lease, license, contract of sale or other agreement
that could reasonably be expected to have a Material Adverse
Effect on the Assets or Station.
(f) Except as set forth in Schedule 3.12(b) and for
(i) assessments with respect to Taxes not yet due and payable
and (ii) mechanics', materialmen's, carriers' and other
similar liens securing indebtedness that is in the aggregate
less than $25,000, is not yet due and payable, and was
incurred in the ordinary course of business, the Station
Personal Property is free and clear of all Encumbrances, and,
other than Station Personal Property leased by Station and so
noted on the list supplied pursuant to Section 3.12(b),
Station has good and marketable title thereto.
(g) Except as specifically set forth in
Schedule 3.12(g), Station has no knowledge of any material
physical defect in the Station Real Property. Station is not
in default under any covenant, condition, restriction,
easement, right-of-way or governmental approval relating to
<PAGE>
<PAGE> 26
the Station Real Property, the failure to comply with which
would, or could reasonably be expected to, result in a
Material Adverse Effect on the Assets or Station.
(h) None of (i) the Station Real Property, (ii) the
operations or activities of the Station, or (iii) any of the
other Assets constitutes, severally or in the aggregate, an
"establishment," as that term is defined in Connecticut
General Statutes Section 22a-134, and the transactions contemplated
by this Agreement do not constitute the transfer of an
establishment as defined in such section.
3.13 Compliance With Environmental Laws
To Stockholder's or Station's knowledge, except as
specifically set forth in Schedule 3.13:
(a) neither Station nor any other Person (including,
without limitation, any previous owner, lessee or sublessee)
has treated, stored or disposed of Hazardous Materials on the
Station Real Property, or any real property previously owned,
leased, subleased or used by Station, in violation of any
applicable Environmental Law or common law, in each case as in
existence on or prior to the Closing Date;
(b) there have been no releases of Hazardous Materials,
pollutants or contaminants by any Person (including, without
limitation, any previous owner, lessee or sublessee) on, at or
from any assets or properties, including, without limitation,
the Station Real Property, or any real property previously
owned, leased, subleased or used by Station that could subject
Acquiror to liability under any Environmental Law or common
law, in each case as in existence on or prior to the Closing
Date;
(c) there has been no generation or transportation of
Hazardous Materials, pollutants or contaminants by Station
that could subject Acquiror to liability under any
Environmental Law or common law, in each case as in existence
on or prior to the Closing Date; and
(d) there are no Hazardous Materials present at adjacent
properties that could migrate to, through, over or under the
Station Real Property.
3.14 Claims and Legal Proceedings
Except as specifically set forth in Schedule 3.14, there
are no claims (including, without limitation, Tax claims),
actions, suits, arbitrations, proceedings or investigations
pending or, to Stockholder's or Station's knowledge,
<PAGE>
<PAGE> 27
threatened against Station before or by any Governmental
Entity or any other Person relating to the Assets or the
business or operations of Station or that question the
validity of this Agreement or any Related Agreement or any
action taken or to be taken by Stockholder or Station pursuant
hereto or thereto or in connection with the transactions
contemplated hereby or thereby. To Stockholder's or Station's
knowledge, there is no valid basis for any such claim, action,
suit, arbitration, proceeding or investigation, other than as
specifically set forth in Schedule 3.14. There are no
outstanding or unsatisfied judgments, orders, decrees or
stipulations to which Stockholder or Station is a party that
involve the transactions contemplated hereby or that would, or
could reasonably be expected to, alone or in the aggregate,
have a Material Adverse Effect on the Assets or Station.
3.15 Labor Matters
There are no disputes, material employee grievances or
material disciplinary actions pending or, to Stockholder's or
Station's knowledge, threatened between Station and any of its
present or former employees. Station has complied in all
material respects with all provisions of all laws relating to
the employment of labor and has no liability for any arrears
of wages or Taxes or penalties for failure to comply with any
such laws. Stockholder and Station have no knowledge of any
organizational efforts presently being made or threatened by
or on behalf of any labor union with respect to any of
Station's employees. From the date of the Station Balance
Sheet to and including the Closing Date, Station has not made
any loans in the aggregate greater than $5,000 to any of its
directors, officers or employees or those of Stockholder.
Except as specifically set forth in Schedule 3.15,
Station is not a party to any:
(a) management, employment or other contract providing
for the employment or rendition of executive services;
(b) employment contract with any current or former
employee that is not terminable without penalty by Station on
30 days' notice;
(c) Station Employee Benefit Plan in which any current
or former employee may participate, except as set forth in
Schedule 3.20; or
(d) collective bargaining agreement or other agreement
with any labor union or other employee organization (and no
such agreement is currently being requested by, or is under
<PAGE>
<PAGE> 28
discussion by management with, any group of employees or
others).
Each such contract or other agreement or arrangement set
forth in Schedule 3.15 is valid and in full force and effect,
Station has performed all material obligations imposed upon it
thereunder and there are no defaults or events of default
under such contract, agreement or arrangement by Station or,
to Stockholder's or Station's knowledge, any other party
thereto that would, or could reasonably be expected to, have a
Material Adverse Effect on the Assets or Station or that would
materially adversely affect the relationship of Acquiror with
the employees of Station.
3.16 Patents, Trademarks, Etc.
Set forth in Schedule 3.16 is a true and complete list of
(a) all patents, patent applications, trademark registrations
and applications therefor, trade names, service marks, and
copyright registrations and applications therefor owned by
Station or that are used or useful in its operations and
(b) all interference actions or adverse claims made or
threatened in respect thereof and all claims made or
threatened for alleged infringement thereof. To Stockholder's
or Station's knowledge, Station does not infringe any valid
patent, trademark, trade name, service mark or copyright of
any other Person, and no other Person is infringing upon any
such rights of Station. Station has not entered into any
agreement to indemnify any Person against any claim or charge
of infringement of any patents, trademarks, trade names,
service marks, copyrights, technology, know-how, trade
secrets, processes or other intangible rights.
3.17 Accounts Receivable
All Accounts Receivable of Station are collectible within
180 days after the date incurred in the amounts at which they
are carried on Station's books on the Closing Date.
3.18 Applicable Laws
Except as set forth in Schedule 3.18, Station has
complied with all previously existing, and is in compliance
with all presently existing, federal, state, local and foreign
laws (including, without limitation, Tax laws), rules,
ordinances, decrees and orders applicable to the Assets or the
business or operations of Station, the failure to comply with
which might, alone or in the aggregate, have a Material
Adverse Effect on the Assets or Station.
<PAGE>
<PAGE> 29
3.19 Insurance
Set forth in Schedule 3.19 is a true and complete list of
all of Station's policies of insurance, including:
(a) the name, address and telephone number of the
insurer and broker;
(b) the policy number, amount, expiration date and a
brief description of coverage, including the amount of any
deductible; and
(c) material exceptions to each such policy.
3.20 Employee Benefit Plans
(a) Set forth in Schedule 3.20 is a true and complete
list of each employee benefit plan, fund, program, contract or
arrangement, whether formal or informal, covering or
benefiting current or former employees of Station and to which
Station has an obligation to contribute, including, but not
limited to, all "employee benefit plans" as defined in
Section 3(3) of ERISA, and specifically including all
retirement, pension, profit-sharing, stock bonus, savings,
thrift, bonus, cafeteria, medical, health, dental, vision,
hospitalization, welfare, life insurance, disability, accident
insurance, group insurance, sick pay, holiday and vacation
programs, executive or deferred compensation plans or
contracts, stock purchase, stock option or stock appreciation
rights plans or arrangements, employment and consulting
contracts, and severance agreements, policies or plans (each,
a "Station Employee Benefit Plan"). True and correct copies
of each Station Employee Benefit Plan have been delivered to
Acquiror, along with, to the extent applicable to the
particular Station Employee Benefit Plan, the following
information: copies of the annual reports (Form 5500 series)
filed for the last three years, copies of the summary plan
descriptions, summary annual reports, summaries of material
modifications and all material employee manuals or
communications filed or distributed with respect to the
Station Employee Benefit Plan during the last three years,
copies of all valuation and actuarial reports, accountants'
opinions and financial statements prepared with respect to the
Station Employee Benefit Plan for the last three years, copies
of any insurance contracts or trust agreements through which
the Station Employee Benefit Plan is funded, the most recent
IRS determination letter issued with respect to the Station
Employee Benefit Plan and notice of any material adverse
change occurring with respect to any Station Employee Benefit
Plan since the date of the most recently completed and filed
annual report.
<PAGE>
<PAGE> 30
(b) With respect to each Station Employee Benefit Plan
described in Section 3.20(a) or any other plan, fund or
program currently or previously maintained or contributed to
(or required to be contributed to) by Station or any member of
Station's controlled group (as defined in Section 4001(a)(14)
of ERISA) that is subject to Title IV of ERISA:
(i) no such plan has been terminated so as to
subject, directly or indirectly, any Asset to any liability,
contingent or otherwise, or the imposition of any lien under
Title IV of ERISA;
(ii) no proceeding has been initiated or threatened
by any Person (including the PBGC) to terminate any such plan;
(iii) no condition or event exists or is
threatened or expected to occur that has or could subject,
directly or indirectly, any Asset to any liability, contingent
or otherwise, or the imposition of any lien under Title IV of
ERISA or Section 412 of the Code, whether to the PBGC or to
any other Person or otherwise;
(iv) if any such plan were to be terminated as of
the Closing Date, no Asset would be subject, directly or
indirectly, to any liability, contingent or otherwise, or the
imposition of any lien under Title IV of ERISA, and all
benefits accrued to the Closing Date (whether or not vested)
would be fully funded in accordance with the actuarial
assumptions and methods utilized by such plan for valuation
purposes;
(v) no event has occurred since the inception of
any such plan or is threatened or expected to occur that would
constitute a "reportable event" within the meaning of
Section 4043 of ERISA;
(vi) the funding method used in connection with any
such plan is acceptable under ERISA, and the actuarial
assumptions used in connection therewith are, in the
aggregate, reasonable; and
(vii) no such plan is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA).
(c) Neither Station nor any Station Employee Benefit
Plan currently or previously maintained or contributed to by
Station provides or has any obligation to provide (or
contribute toward the cost of) postretirement welfare benefits
with respect to current or former employees of Station,
including, without limitation, postretirement medical, dental,
<PAGE>
<PAGE> 31
life insurance, severance or any other similar benefit,
whether provided on an insured or a self-insured basis, other
than medical payments under COBRA.
(d) With respect to each Station Employee Benefit Plan:
(i) all payments due from any such Station Employee Benefit
Plan (or from Station with respect to any such Station
Employee Benefit Plan) have been made, and all amounts
properly accrued to date as liabilities of Station that have
not been paid have been properly recorded on the books of
Station; (ii) Station has complied with, and each such Station
Employee Benefit Plan conforms in form and operation to, all
applicable laws and regulations, including, but not limited
to, ERISA and the Code in all respects, and all reports and
information relating to such Station Employee Benefit Plans
required to be filed with any Governmental Entity have been
timely filed; (iii) all reports and information required to be
disclosed or provided to participants or their beneficiaries
have been timely disclosed or provided; (iv) no such plan that
is subject to Section 302 of ERISA or Section 412 of the Code
has ever incurred an "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code),
whether or not such deficiency has been waived; (v) no event
has occurred or is threatened or expected to occur that would
constitute a "prohibited transaction" within the meaning of
Section 406 or 407 of ERISA or Section 4975 of the Code with
respect to any Station Employee Benefit Plan; (vi) no event or
omission has occurred or is threatened or expected to occur in
connection with any Station Employee Benefit Plan that would
subject Station or any Station Employee Benefit Plan to a
fine, penalty, tax or liability, whether pursuant to any
agreement, instrument, indemnification obligation, statute,
regulation or rule of law; (vii) each such Station Employee
Benefit Plan that is intended to be qualified under
Section 401 of the Code has been qualified, since its
inception, under such Code section, and any trust established
thereunder has been exempt, since its inception, from taxation
under Section 501 of the Code, and no facts exist that have
adversely affected (or could adversely affect) such
qualification or exemption; (viii) such Station Employee
Benefit Plan has been operated, since its inception, in
accordance with its terms; (ix) no such Station Employee
Benefit Plan is currently under investigation, audit or
review, directly or indirectly, by the IRS or the DOL, and, to
Station's best knowledge, no such action is contemplated or
under consideration by the IRS or the DOL; and (x) there are
no actions, suits or claims pending (other than routine claims
for benefits) or threatened with respect to any Station
Employee Benefit Plan or against the assets of such Station
Employee Benefit Plan.
<PAGE>
<PAGE> 32
(e) The transactions contemplated by this Agreement will
not result in the payment or a series of payments by Station
to any Person of a "parachute payment" within the meaning of
Section 280G of the Code.
(f) Station has complied with the continuation coverage
requirements of Sections 601 through 608 of ERISA,
Section 4980B of the Code and the requirements of any similar
state law regarding continued insurance coverage, and Station
has incurred no liability with respect to its failure to offer
or provide continued coverage in accordance with the foregoing
requirements, nor is there any suit or action pending or
threatened with respect to such requirements.
(g) If required under the WARN Act or any other
applicable state law regulating plant closings or mass
layoffs, Station has caused there to be filed or distributed,
as appropriate, all required filings and notices. Station has
provided Acquiror with a copy of all such filings and notices
and evidence acceptable to Acquiror of the date that such
filings and notices were filed or distributed.
(h) Other than as set forth in Schedule 3.20, the
consummation of the transactions contemplated by this
Agreement will not entitle any current or former employee of
Station to severance pay, unemployment compensation or any
other payment, or accelerate the time of payment or vesting,
or increase the amount of compensation due to any such current
or former employee. Further, Station has not announced any
type of plan or binding commitment to create any additional
Station Employee Benefit Plan or to amend or modify any
existing Station Employee Benefit Plan.
3.21 Brokerage
Except as set forth in Schedule 3.21, neither Stockholder
nor Station has retained any broker or finder in connection
with the transactions contemplated by this Agreement. Any
brokerage or finder's fee due to any broker or finder in
violation of the foregoing representation shall be paid by
Stockholder.
3.22 Absence of Questionable Payments
Neither Stockholder nor Station nor any director,
officer, agent, employee or other Person acting on behalf of
Stockholder or Station has used, to Stockholder's or Station's
knowledge, any funds of Station for unlawful contributions,
payments, gifts or entertainment or made any unlawful
expenditures relating to political activity to any government
official or other Person in connection with the business or
<PAGE>
<PAGE> 33
operations of Station. Neither Stockholder nor Station nor
any director, officer, agent, employee or other Person acting
on behalf of Stockholder or Station has accepted or received,
to Stockholder's or Station's knowledge, any unlawful
contributions, payments, gifts or expenditures in connection
with the business or operations of Station.
3.23 Chapter 11 Representations
In all material respects, Station and its Affiliates have
complied with all provisions of the Bankruptcy Code and have
performed all of their obligations under the Reorganization
Plan. There are no pending objections to Claims or Interests
(as such terms are defined in the Reorganization Plan) under
Section 15.02 of the Reorganization Plan.
3.24 Full Disclosure
No information furnished by Stockholder or Station to
Parent or Acquiror in connection with this Agreement
(including, but not limited to, the Station Financial
Statements and all information in the Schedules) is false or
misleading in any material respect. In connection with such
information and with this Agreement and the transactions
contemplated hereby, Stockholder and Station have not made any
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made
or information delivered, in light of the circumstances under
which they were made, not misleading.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT
AND ACQUIROR
To induce Stockholder and Station to enter into and
perform their obligations under this Agreement, Parent and
Acquiror jointly represent and warrant to Stockholder and
Station (which representations and warranties shall survive
the Closing as provided in Article X) all as follows in this
Article IV:
4.1 Organization and Good Standing
Each of Parent and Acquiror is a corporation duly
organized, validly existing and in good standing under the
laws of the state of Delaware. Each of Parent, Acquiror and
each of the LIN Stations has all requisite corporate power and
authority to own, operate and lease its properties and assets
and to carry on its business as now conducted and as currently
proposed to be conducted, and is duly qualified to do business
as a foreign corporation, and is in good standing, in each
jurisdiction in which the property owned, leased or occupied
<PAGE>
<PAGE> 34
by it or the nature of the business conducted by it makes such
qualification necessary.
4.2 Power and Authority
Each of Parent and Acquiror has all requisite corporate
power and authority to execute, deliver and perform this
Agreement and the Related Agreements to which it is a party
and to consummate the transactions contemplated hereby and
thereby. This Agreement and the Related Agreements to which
it is a party have been duly authorized by each of Parent and
Acquiror. This Agreement has been duly executed and delivered
by Parent and Acquiror and is, and the Related Agreements to
which either is a party, when executed and delivered by Parent
or Acquiror, will be, legal, valid and binding obligations of
Parent and Acquiror, enforceable against Parent or Acquiror in
accordance with their respective terms, except that (a) such
enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally,
(b) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought, and
(c) indemnification provisions may be subject to the effect of
public policy.
4.3 Capitalization; Subsidiaries; Equity Interests
(a) The authorized capital stock of Acquiror consists of
1,000 shares of Acquiror Common Stock, 200 shares of which are
issued and outstanding. All the issued and outstanding shares
of Acquiror Common Stock are held by Parent's direct wholly
owned subsidiary, LTC Holdings, Inc., free and clear, except
as set forth in Schedule 4.3, of all Encumbrances, options,
rights of first refusal and limitations on voting rights. All
outstanding shares of Acquiror Common Stock are duly
authorized, validly issued, fully paid and nonassessable, and
no class of Acquiror's capital stock is entitled to preemptive
rights. There are no options, warrants or other rights to
acquire capital stock or securities representing the right to
purchase or receive capital stock from Acquiror, except that
Acquiror intends to issue employee stock options immediately
following the Distribution in accordance with Schedule 4.3.
The shares of Acquiror Common Stock issuable pursuant to this
Agreement will be, when so issued, duly authorized, validly
issued, fully paid and nonassessable and free of any
preemptive or similar right.
(b) Acquiror owns, directly or indirectly, all the
outstanding capital stock of each subsidiary set forth in
<PAGE>
<PAGE> 35
Schedule 4.3, free and clear, except as set forth in
Schedule 4.3, of all Encumbrances, options, rights of first
refusal and limitations on voting rights. Attached to
Schedule 4.3 is an organizational chart illustrating the
ownership structure of Acquiror and each of the LIN Stations.
Each subsidiary set forth in Schedule 4.3 operates the
television station with the call letters set forth opposite
its name in Schedule 4.3. Except as set forth in Schedule 4.3
and except interests acquired after the date of this Agreement
in the ordinary course of business consistent with past
practice (as such term is used in Section 6.2.2), Acquiror
does not own, directly or indirectly, any equity or similar
interest in, or any interest convertible into or exchangeable
for any equity or similar interest in, any corporation,
partnership, joint venture or other business association or
entity.
4.4 No Approvals or Notices Required; No Conflicts With
Instruments
The execution, delivery and performance of this Agreement
and the Related Agreements by Parent and Acquiror, the
issuance of the shares of Acquiror Common Stock to Station and
the consummation of the transactions contemplated hereby and
by the Related Agreements will not (a) constitute a violation
(with or without the giving of notice or lapse of time, or
both) of any provision of law or any judgment, decree, order,
regulation or rule of any court or other Governmental Entity
applicable to Parent or Acquiror, (b) require any consent,
approval or authorization of, or declaration, filing or
registration with, any Person, except as contemplated in
Article V or set forth in Schedule 4.4, (c) except as set
forth in Schedule 4.4, result in a material default (with or
without the giving of notice or lapse of time, or both) under,
an acceleration or termination of, or the creation in any
party of the right to accelerate, terminate, modify or cancel,
any material agreement (including, without limitation, the LIN
Stations' network affiliation contracts), lease, note or other
restriction, Encumbrance, obligation or liability to which
Acquiror is a party or by which it is bound or to which its
assets are subject, (d) except as set forth in Schedule 4.4,
result in the creation of any material lien or Encumbrance
upon the assets of Acquiror or any of the LIN Stations or the
shares of Acquiror Common Stock being delivered in connection
herewith, (e) conflict with or result in a breach of or
constitute a default under any provision of the certificate of
incorporation or by-laws of Parent or Acquiror, or
(f) invalidate or materially adversely affect any material
permit, license, authorization or status used in or necessary
for the conduct of Acquiror's business.
<PAGE>
<PAGE> 36
4.5 Relationship With Parent
Except as set forth in Schedule 4.5, neither Parent nor
any Affiliate of Parent is a party to any contract, oral or
written, with Acquiror or any of the LIN Stations. Except as
set forth in Schedule 4.5, neither Acquiror nor any of the LIN
Stations is indebted to Parent or any Affiliate of Parent for
any amount, and neither Parent nor any Affiliate of Parent has
any claim against Acquiror or any of the LIN Stations for any
liability, damage, loss, advance, compensation or other
obligation. Neither Parent nor any Affiliate of Parent other
than Acquiror owns or asserts any rights, licenses or any
other interests in any of the assets of Acquiror or any of the
LIN Stations.
4.6 Financial Statements
Acquiror has delivered to Stockholder (a) consolidated
balance sheets and consolidated statements of income,
stockholders' equity and cash flows of Acquiror as of and for
the fiscal years ended December 31, 1991, 1992 and 1993, and
accompanying notes, audited by Ernst & Young, independent
certified public accountants, and (b) unaudited consolidated
balance sheets and consolidated statements of income,
stockholders' equity and cash flows of Acquiror as of and for
the fiscal quarter ended March 31, 1994 (the consolidated
balance sheet for the fiscal quarter ended March 31, 1994
being herein referred to as the "Acquiror Balance Sheet").
All the foregoing consolidated financial statements are herein
referred to as the "Acquiror Financial Statements." The
Acquiror Financial Statements have been prepared in conformity
with generally accepted accounting principles on a basis
consistent with prior accounting periods and present fairly
the financial position, results of operations and changes in
financial position of Acquiror and its subsidiaries on a
consolidated basis as of the dates and for the periods
indicated, subject, in the case of the quarterly financial
statements, to normal year-end adjustments. Acquiror has no
liability or obligation of any nature (absolute, contingent or
otherwise) that would have been required to be reserved
against in the Acquiror Financial Statements in accordance
with generally accepted accounting principles and that was not
fully reflected or reserved against therein, except for
liability reserves or obligations incurred since the date of
the Acquiror Balance Sheet (i) in the ordinary course of
business consistent with past practice or (ii) specifically
set forth in Schedule 4.6.
<PAGE>
<PAGE> 37
4.7 Licenses; Governmental Authorizations
Set forth in Schedule 4.7 is a true and complete list of
all of the Major LIN Stations' FCC Licenses and other
licenses, approvals, authorizations, consents, orders,
registrations and permits from Governmental Entities
(including renewals or modifications thereof and applications
therefor). No material licenses, approvals, authorizations,
consents, orders, registrations or permits other than those
set forth in Schedule 4.7 are required for the Major LIN
Stations to operate in the manner in which they are operating
on the date hereof and as they are currently contemplated to
be operated. Except for matters set forth in Schedule 4.7, no
investigation, notice of investigation, violation, order,
complaint, action or other proceeding is pending or, to
Parent's or Acquiror's knowledge after due inquiry of the
management of the LIN Stations, threatened before the FCC or
any other Governmental Entity to revoke, refuse to renew or
modify the LIN Stations' FCC Licenses or any other
authorizations of the LIN Stations that could in any manner
threaten or adversely affect the LIN Station's FCC Licenses or
the operations of the LIN Stations as now conducted. To
Parent's or Acquiror's knowledge, after due inquiry of the
management of the LIN Stations, no event has occurred that
permits, or after notice or lapse of time, or both, would
permit, the revocation or termination of the LIN Station's FCC
Licenses or the imposition of any restriction thereon of such
a nature as may materially limit the operations of any of the
LIN Stations as now conducted.
4.8 Compliance With FCC Licenses
Except as set forth in Schedule 4.8, the LIN Stations,
their physical facilities, electrical and mechanical systems,
and transmitting and studio equipment are being and have been
operated in all material respects (a) in accordance with the
specifications of the applicable FCC License and in accordance
with each document submitted in support of such FCC License
and (b) in compliance with all requirements of the
Communications Act.
4.9 Absence of Certain Changes or Events
(a) Except as set forth in Schedule 4.9, since the date
of the Acquiror Balance Sheet, there has not been any:
(i) change in the business, business prospects,
operations or financial condition of Acquiror and its
subsidiaries that has resulted, or could reasonably be
expected to result, in a Material Adverse Effect on Acquiror
or any of the Major LIN Stations or
<PAGE>
<PAGE> 38
(ii) declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock,
property or any combination thereof) in respect of the
Acquiror Common Stock, or any redemption or other acquisition
by Acquiror of any shares of Acquiror Common Stock.
(b) Except as set forth in Schedule 4.9, since the date
of the Acquiror Balance Sheet, neither Acquiror nor any of the
LIN Stations have:
(i) taken any action or entered into or agreed to
enter into any transaction, agreement or commitment (other
than this Agreement and matters relating hereto), except in
the ordinary course of business consistent with past practice;
(ii) created or incurred any new debt or reduced any
outstanding debt, except in the ordinary course of business
consistent with past practice;
(iii) encumbered or disposed of any of their
properties or made any capital expenditure, except in the
ordinary course of business consistent with past practice; or
(iv) taken any action resulting in the reduction or
increase of their working capital (current assets, including
cash, less current liabilities, excluding short-term, or the
current portion of long-term, debt), except for such customary
changes as may be required in the ordinary course of business
consistent with past practice.
(c) Except as set forth in Schedule 4.9, since the date
of the Acquiror Balance Sheet, neither Acquiror nor any of the
Major LIN Stations have:
(i) entered into or agreed to enter into any film
contract, except for film contracts entered into after the
date of this Agreement in the ordinary course of business
consistent with past practice;
(ii) changed in any material way other than in the
ordinary course of business consistent with past practice the
compensation and terms of employment provided to officers and
principal employees; or
(iii) entered into or agreed to enter into any
transaction, agreement or commitment, suffered the occurrence
of any event or experienced any change in financial condition,
business, results of operations or otherwise that, in the
aggregate, has (A) interfered with the properties or the
normal and usual operation of the business or business
prospects of Acquiror or any of the Major LIN Stations or
<PAGE>
<PAGE> 39
(B) resulted, or could reasonably be expected to result, in a
Material Adverse Effect on Acquiror or any of the Major LIN
Stations.
For purposes of this Section 4.9, "ordinary course of
business consistent with past practice" shall have the meaning
used in Section 6.2.2.
4.10 Taxes
Except as set forth in Schedule 4.10, (a) all Tax Returns
that are required to be filed by or with respect to Acquiror's
and Parent's Affiliated Group, respectively, have been duly
filed, (b) all Taxes shown to be due on the Tax Returns
referred to in clause (a) have been paid in full, (c) the Tax
Returns referred to in clause (a) have been examined by the
IRS or the appropriate state, local or foreign taxing
authority or the period for assessment of the Taxes in respect
of which such Tax Returns were required to be filed has
expired, (d) all deficiencies asserted or assessments made as
a result of such examinations have been paid in full, (e) no
issues that have been raised by the relevant taxing authority
in connection with the examination of any of the Tax Returns
referred to in clause (a) are currently pending, and (f) no
waivers of statutes of limitations have been given by or
requested with respect to any Taxes of Acquiror or Parent's
Affiliated Group. For federal income tax purposes, Parent is
the common parent of an affiliated group that files a
consolidated federal income tax return. No Tax liability or
other liability will be imposed on Acquiror for any period up
to and including the Closing Date as a result of the
termination of the Tax Sharing Agreement, dated August 10,
1990, between Parent and Acquiror.
4.11 Contracts
Schedule 4.11 contains a true and complete list of
(a) all material contracts, oral or written, to which Acquiror
or any of the Major LIN Stations is a party or that relate to
the business or operations of Acquiror or any of the Major LIN
Stations, including, without limitation, all agreements with
Parent, Acquiror or any of their Affiliates, management
agreements relating to WOOD-TV, film contracts, advertising
contracts that are not terminable without penalty within 180
days after the date of the Acquiror Balance Sheet, Tradeout
Agreements that are not terminable without penalty within 180
days after the date of the Acquiror Balance Sheet, security
agreements, conditional sale agreements, instruments relating
to the borrowing of money and broker or distributorship
agreements, (b) all contracts, oral or written, to which any
LIN Station is a party relating to network affiliation or
<PAGE>
<PAGE> 40
national representation, as well as all local marketing
agreements and all agreements with Parent, Acquiror or any of
their Affiliates, and (c) all other contracts, oral or
written, to which any LIN Station is a party that by their
terms contemplate aggregate payments by any party thereto of
$500,000 or more. True and complete copies of each contract
identified in Schedule 4.11 have been delivered to Station.
Each such contract is valid and in full force and effect,
Acquiror or the relevant LIN Station has performed all
material obligations imposed upon it thereunder and there is
not under such contract any default or event of default on the
part of Acquiror or such LIN Station or, to Parent's or
Acquiror's knowledge after due inquiry of the management of
the LIN Stations, any other party thereto that would, or could
reasonably be expected to, result in a Material Adverse Effect
on Acquiror or any of the LIN Stations. Acquiror has not
received notice, nor is Parent or Acquiror otherwise aware
after due inquiry of the management of the LIN Stations, that
any party to any such contract intends to cancel, terminate or
refuse to renew the same or to exercise or decline to exercise
any option or right thereunder.
4.12 Property
(a) With respect to that real property owned, leased or
rented by Acquiror or any of the LIN Stations, including all
easements, rights-of-way, servitudes, leases, permits,
licenses, options and other real property rights (the "LIN
Real Property") that is owned by any of such entities in fee
simple, Acquiror or the relevant LIN Station has good and
marketable title to such LIN Real Property free and clear of
all Encumbrances, except as set forth in Schedule 4.12(a).
With respect to that LIN Real Property in which Acquiror or
any of the LIN Stations holds a leasehold interest, the
leasehold interest is free and clear of all Encumbrances,
except as set forth in Schedule 4.12(a). The Encumbrances set
forth in Schedule 4.12(a) do not in any material respect
impair or reduce the value or utility of the LIN Real Property
for use in the business and operations of the Acquiror or the
relevant LIN Station as now conducted and as currently
proposed to be conducted.
(b) Except as set forth in Schedule 4.12(b), there are
no applicable adverse zoning, building or land use codes or
rules, ordinances, regulations or other restrictions relating
to zoning or land use that currently or, to Parent's or
Acquiror's knowledge after due inquiry with applicable
authorities, may prospectively prevent or cause the imposition
of material fines or penalties as the result of the use of all
or any portion of the LIN Real Property for the conduct
thereon of the business now conducted and as currently
proposed to be conducted. Acquiror has received all necessary
<PAGE>
<PAGE> 41
approvals with regard to occupancy and maintenance of the LIN
Real Property.
(c) Each lease of any portion of the LIN Real Property,
and each lease, license, rental agreement, contract of sale or
other agreement to which the personal property having a Net
Book Value in excess of $100,000 that is owned, leased or
rented by Acquiror or any of the LIN Stations or used in their
operations (the "LIN Personal Property") is subject, is valid
and in good standing, Acquiror or the relevant LIN Station has
performed all material obligations imposed upon it thereunder
and neither Acquiror nor, to Parent's or Acquiror's knowledge
after due inquiry of the management of the LIN Stations, any
other party thereto is in material default thereunder in any
material respect, nor is there any event that with notice or
lapse of time, or both, would constitute a default thereunder
by Acquiror or, to Parent's or Acquiror's knowledge after due
inquiry of the management of the LIN Stations, any other party
thereto that would, or could reasonably be expected to, result
in a Material Adverse Effect on Acquiror or any of the LIN
Stations. Acquiror has not received notice, nor is Parent or
Acquiror otherwise aware after due inquiry of the management
of the LIN Stations, that any party to any such contract
intends to cancel, terminate or refuse to renew the same or to
exercise or decline to exercise any option or other right
thereunder. No LIN Real Property or LIN Personal Property is
subject to any lease, license, contract of sale or other
agreement that could reasonably be expected to have a Material
Adverse Effect on Acquiror or any of the LIN Stations.
(d) Except for (i) assessments with respect to Taxes not
yet due and payable and (ii) mechanics', materialmen's,
carriers' and other similar liens securing indebtedness that
is in the aggregate less than $100,000, is not yet due and
payable, and was incurred in the ordinary course of business,
the LIN Personal Property is free and clear of all
Encumbrances, and, other than LIN Personal Property leased by
Acquiror or any of the LIN Stations, Acquiror or the relevant
LIN Station has good and marketable title thereto.
(e) Except as specifically set forth in
Schedule 4.12(e), Acquiror has no knowledge after due inquiry
of the management of the LIN Stations of any material physical
defect in the LIN Real Property. Neither Acquiror nor any of
the LIN Stations is in default under any covenant, condition,
restriction, easement, right-of-way or governmental approval
relating to the LIN Real Property, the failure to comply with
which would, or could reasonably be expected to, result in a
Material Adverse Effect on Acquiror or any of the LIN
Stations.
<PAGE>
<PAGE> 42
4.13 Compliance With Environmental Laws
To Parent's or Acquiror's knowledge after due inquiry of
the management of the LIN Stations, except as specifically set
forth in Schedule 4.13:
(a) neither Acquiror nor any other Person (including,
without limitation, any previous owner, lessee or sublessee)
has treated, stored or disposed of Hazardous Materials on the
LIN Real Property, or any real property previously owned,
leased, subleased or used by Acquiror or any of the LIN
Stations in violation of any applicable Environmental Law or
common law, in each case as in existence on or prior to the
Closing Date;
(b) there have been no releases of Hazardous Materials,
pollutants or contaminants by any Person (including, without
limitation, any previous owner, lessee or sublessee) on, at or
from any assets or properties, including, without limitation,
the LIN Real Property, or any real property previously owned,
leased, subleased or used by Acquiror or any of the LIN
Stations that could subject Acquiror or any of the LIN
Stations to liability under any Environmental Law or common
law, in each case as in existence on or prior to the Closing
Date;
(c) there has been no generation or transportation of
Hazardous Materials, pollutants or contaminants by Acquiror
that could subject Acquiror or any of the LIN Stations to
liability under any Environmental Law or common law, in each
case as in existence on or prior to the Closing Date; and
(d) there are no Hazardous Materials present at adjacent
properties that could migrate to, through, over or under the
LIN Real Property.
4.14 Claims and Legal Proceedings
Except as specifically set forth in Schedule 4.14, there
are no claims (including, without limitation, Tax claims),
actions, suits, arbitrations, proceedings or investigations
pending or, to Parent's or Acquiror's knowledge after due
inquiry of the management of the LIN Stations, threatened
against Parent or Acquiror or any of the LIN Stations before
or by any Governmental Entity or any other Person relating to
the business or operations of Acquiror or any of the LIN
Stations or that question the validity of this Agreement or
any Related Agreement or any action taken or to be taken by
Parent or Acquiror pursuant hereto or thereto or in connection
with the transactions contemplated hereby or thereby. To
Parent's or Acquiror's knowledge, after due inquiry of the
<PAGE>
<PAGE> 43
management of the LIN Stations, there is no valid basis for
any such claim, action, suit, arbitration, proceeding or
investigation, other than as specifically set forth in
Schedule 4.14. There are no outstanding or unsatisfied
judgments, orders, decrees or stipulations to which Parent or
Acquiror or any of the LIN Stations is a party that involve
the transactions contemplated hereby or that would, or could
reasonably be expected to, alone or in the aggregate, have a
Material Adverse Effect on Acquiror or any of the LIN
Stations.
4.15 Labor Matters
There are no disputes, material employee grievances or
material disciplinary actions pending or, to Parent's or
Acquiror's knowledge after due inquiry of the management of
the LIN Stations, threatened between Acquiror or any of the
LIN Stations and any of its (or their) present or former
employees. Acquiror and each of the LIN Stations have
complied in all material respects with all provisions of all
laws relating to the employment of labor and have no liability
for any arrears of wages or Taxes or penalties for failure to
comply with any such laws. Parent and Acquiror have no
knowledge after due inquiry of the management of the LIN
Stations of any organizational efforts presently being made or
threatened by or on behalf of any labor union with respect to
any of Acquiror's or any of the LIN Stations' employees. From
the date of the Acquiror Balance Sheet to and including the
Closing Date, Acquiror and the LIN Stations have not made any
loans to any of their directors, officers or employees or
those of Parent.
Except as specifically set forth in Schedule 4.15
(provided, however, that talent contracts that by their terms
contemplate aggregate payments of less than $500,000 to which
the LIN Stations other than the Major LIN Stations are parties
are not required to be included in Schedule 4.15), neither
Acquiror nor any of the LIN Stations is a party to any:
(a) management, employment or other contract providing
for the employment or rendition of executive services;
(b) employment contract with any current or former
employee that is not terminable without penalty by Acquiror or
the relevant LIN Station on 30 days' notice;
(c) Acquiror Employee Benefit Plan in which any current
or former employee may participate, except as set forth in
Schedule 4.20; or
<PAGE>
<PAGE> 44
(d) collective bargaining agreement or other agreement
with any labor union or other employee organization (and no
such agreement is currently being requested by, or is under
discussion by management with, any group of employees or
others).
Each such contract or other agreement or arrangement set
forth in Schedule 4.15 is valid and in full force and effect,
Acquiror or the relevant LIN Station has performed all
material obligations imposed upon it thereunder and there are
no defaults or events of default under such contract,
agreement or arrangement by Acquiror or the relevant LIN
Station or, to Parent's or Acquiror's knowledge after due
inquiry of the management of the LIN Stations, any other party
thereto that would, or could reasonably be expected to, have a
Material Adverse Effect on Acquiror or any of the LIN Stations
or that would materially adversely affect the relationship of
Acquiror or any of the LIN Stations with their employees.
4.16 Patents, Trademarks, Etc.
Set forth in Schedule 4.16 is a true and complete list of
(a) all patents, patent applications, trademark registrations
and applications therefor, trade names, service marks, and
copyright registrations and applications therefor owned by the
LIN Stations or that are used or useful in their operations
and (b) all interference actions or adverse claims made or
threatened in respect thereof and all claims made or
threatened for alleged infringement thereof. To Parent's or
Acquiror's knowledge after due inquiry of the management of
the LIN Stations, none of the LIN Stations infringes any valid
patent, trademark, trade name, service mark or copyright of
any other Person, and no other Person is infringing upon any
such rights of a LIN Station. No LIN Station has entered into
any agreement to indemnify any Person against any claim or
charge of infringement of any patents, trademarks, trade
names, service marks, copyrights, technology, know-how, trade
secrets, processes or other intangible rights.
4.17 Accounts Receivable
All Accounts Receivable of Acquiror are collectible
within 180 days after the date incurred in the amounts at
which they are carried on Acquiror's books on the Closing
Date.
4.18 Applicable Laws
Except as set forth in Schedule 4.18, Acquiror and the
LIN Stations have complied with all previously existing, and
are in compliance with all presently existing, federal, state,
<PAGE>
<PAGE> 45
local and foreign laws (including, without limitation, Tax
laws), rules, ordinances, decrees and orders applicable to
their business or operations, the failure to comply with which
might, alone or in the aggregate, have a Material Adverse
Effect on Acquiror or any of the LIN Stations.
4.19 Insurance
Set forth in Schedule 4.19 is a true and complete list of
all of Acquiror's and the Major LIN Stations' policies of
insurance, including:
(a) the name, address and telephone number of the
insurer and broker;
(b) the policy number, amount, expiration date and a
brief description of coverage, including the amount of any
deductible; and
(c) material exceptions to each such policy.
4.20 Employee Benefit Plans
(a) Set forth in Schedule 4.20 is a true and complete
list of each employee benefit plan, fund, program, contract or
arrangement, whether formal or informal, covering or
benefiting current or former employees of Acquiror or any of
the LIN Stations and to which Acquiror or any of the LIN
Stations have an obligation to contribute, including, but not
limited to, all "employee benefit plans" as defined in
Section 3(3) of ERISA, and specifically including all
retirement, pension, profit-sharing, stock bonus, savings,
thrift, bonus, cafeteria, medical, health, dental, vision,
hospitalization, welfare, life insurance, disability, accident
insurance, group insurance, sick pay, holiday and vacation
programs, executive or deferred compensation plans or
contracts, stock purchase, stock option or stock appreciation
rights plans or arrangements, employment and consulting
contracts, and severance agreements, policies or plans (each,
an "Acquiror Employee Benefit Plan"). True and correct copies
of each Acquiror Employee Benefit Plan have been delivered to
Station, along with, to the extent applicable to the
particular Acquiror Employee Benefit Plan, the following
information: copies of the annual reports (Form 5500 series)
filed for the last three years, copies of the summary plan
descriptions, summary annual reports, summaries of material
modifications and all material employee manuals or
communications filed or distributed with respect to the
Acquiror Employee Benefit Plan during the last three years,
copies of all valuation and actuarial reports, accountants'
opinions and financial statements prepared with respect to the
<PAGE>
<PAGE> 46
Acquiror Employee Benefit Plan for the last three years,
copies of any insurance contracts or trust agreements through
which the Acquiror Employee Benefit Plan is funded, the most
recent IRS determination letter issued with respect to the
Acquiror Employee Benefit Plan and notice of any material
adverse change occurring with respect to any Acquiror Employee
Benefit Plan since the date of the most recently completed and
filed annual report.
(b) With respect to each Acquiror Employee Benefit Plan
described in Section 4.20(a) or any other plan, fund or
program currently or previously maintained or contributed to
(or required to be contributed to) by Acquiror or any member
of Acquiror's controlled group (as defined in
Section 4001(a)(14) of ERISA) that is subject to Title IV of
ERISA:
(i) no such plan has been terminated so as to
subject, directly or indirectly, any property of Acquiror or
any of the LIN Stations to any liability, contingent or
otherwise, or the imposition of any lien under Title IV of
ERISA;
(ii) no proceeding has been initiated or threatened
by any Person (including the PBGC) to terminate any such plan;
(iii) no condition or event exists or is threatened
or expected to occur that could subject, directly or
indirectly, any property of Acquiror or any of the LIN
Stations to any liability, contingent or otherwise, or the
imposition of any lien under Title IV of ERISA or Section 412
of the Code, whether to the PBGC or to any other Person or
otherwise;
(iv) if any such plan were to be terminated as of
the Closing Date, no asset of Acquiror or any of the LIN
Stations would be subject, directly or indirectly, to any
liability, contingent or otherwise, or the imposition of any
lien under Title IV of ERISA, and all benefits accrued to the
Closing Date (whether or not vested) would be fully funded in
accordance with the actuarial assumptions and methods utilized
by such plan for valuation purposes;
(v) no event has occurred since the inception of
any such plan or is threatened or expected to occur that would
constitute a "reportable event" within the meaning of
Section 4043 of ERISA;
(vi) the funding method used in connection with any
such plan is acceptable under ERISA, and the actuarial
<PAGE>
<PAGE> 47
assumptions used in connection therewith are, in the
aggregate, reasonable; and
(vii) no such plan is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA).
(c) Neither Acquiror nor any of the LIN Stations nor any
Acquiror Employee Benefit Plan currently or previously
maintained or contributed to by Acquiror or any of the LIN
Stations provides or has any obligation to provide (or
contribute toward the cost of) postretirement welfare benefits
with respect to current or former employees of Acquiror or any
of the LIN Stations, including, without limitation,
postretirement medical, dental, life insurance, severance or
any other similar benefit, whether provided on an insured or
self-insured basis, other than medical payments under COBRA.
(d) With respect to each Acquiror Employee Benefit Plan:
(i) all payments due from any such Acquiror Employee Benefit
Plan (or from Acquiror or any of the LIN Stations with respect
to any such Acquiror Employee Benefit Plan) have been made,
and all amounts properly accrued to date as liabilities of
Acquiror or any of the LIN Stations that have not been paid
have been properly recorded on the books of Acquiror;
(ii) Acquiror has complied with, and each such Acquiror
Employee Benefit Plan conforms in form and operation to, all
applicable laws and regulations, including, but not limited
to, ERISA and the Code in all respects, and all reports and
information relating to such Acquiror Employee Benefit Plans
required to be filed with any Governmental Entity have been
timely filed; (iii) all reports and information required to be
disclosed or provided to participants or their beneficiaries
have been timely disclosed or provided; (iv) no such plan that
is subject to Section 302 of ERISA or Section 412 of the Code
has ever incurred an "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code),
whether or not such deficiency has been waived; (v) no event
has occurred or is threatened or expected to occur that would
constitute a "prohibited transaction" within the meaning of
Section 406 or 407 of ERISA or Section 4975 of the Code with
respect to any Acquiror Employee Benefit Plan; (vi) no event
or omission has occurred or is threatened or expected to occur
in connection with any Acquiror Employee Benefit Plan that
would subject Acquiror, any of the LIN Stations or any
Acquiror Employee Benefit Plan to a fine, penalty, tax or
liability, whether pursuant to any agreement, instrument,
indemnification obligation, statute, regulation or rule of
law; (vii) each such Acquiror Employee Benefit Plan that is
intended to be qualified under Section 401 of the Code has
been qualified, since its inception, under such Code section,
and any trust established thereunder has been exempt, since
<PAGE>
<PAGE> 48
its inception, from taxation under Section 501 of the Code,
and no facts exist that have adversely affected (or could
adversely affect) such qualification or exemption; (viii) such
Acquiror Employee Benefit Plan has been operated, since its
inception, in accordance with its terms; (ix) no such Acquiror
Employee Benefit Plan is currently under investigation, audit
or review, directly or indirectly, by the IRS or the DOL, and,
to Acquiror's best knowledge after due inquiry of the
management of the LIN Stations, no such action is contemplated
or under consideration by the IRS or the DOL; and (x) there
are no actions, suits or claims pending (other than routine
claims for benefits) or threatened with respect to any
Acquiror Employee Benefit Plan or against the assets of such
Acquiror Employee Benefit Plan.
(e) The transactions contemplated by this Agreement will
not result in the payment or a series of payments by Acquiror
or any of the LIN Stations to any Person of a "parachute
payment" within the meaning of Section 280G of the Code.
(f) Acquiror and each of the LIN Stations have complied
with the continuation coverage requirements of Sections 601
through 608 of ERISA, Section 4980B of the Code and the
requirements of any similar state law regarding continued
insurance coverage, and none of Acquiror nor any of the LIN
Stations have incurred any liability with respect to any
failure to offer or provide continued coverage in accordance
with the foregoing requirements, nor is there any suit or
action pending or threatened with respect to such
requirements.
(g) If required under the WARN Act or any other
applicable state law regulating plant closings or mass
layoffs, Acquiror and each of the LIN Stations have caused
there to be filed or distributed, as appropriate, all required
filings and notices. Acquiror has provided Station with a
copy of all such filings and notices and evidence acceptable
to Station of the date that such filings and notices were
filed or distributed.
(h) The consummation of the transactions contemplated by
this Agreement will not entitle any current or former employee
of Acquiror or any of the LIN Stations to severance pay,
unemployment compensation or any other payment, or accelerate
the time of payment or vesting, or increase the amount of
compensation due to any such current or former employee.
Further, neither Acquiror nor any of the LIN Stations has
announced any type of plan or binding commitment to create any
additional Acquiror Employee Benefit Plan or to amend or
modify any existing Acquiror Employee Benefit Plan.
<PAGE>
<PAGE> 49
4.21 Reports
All registration statements, prospectuses, reports, proxy
statements and other documents required to be filed with the
SEC by Parent since January 1, 1992 have been so filed.
Parent has furnished Station with a complete and correct copy
of Parent's annual reports on Form 10-K for the fiscal years
ended December 31, 1992 and 1993, and Parent's definitive
proxy statement for its annual meeting of stockholders held
May 25, 1993, and will furnish Station with any report or
proxy statement filed by Parent with the SEC between the date
of this Agreement and the Closing Date promptly after such
filing. Each of the Forms 10-K at the time it was filed did
not, and any other such report filed by Parent hereafter and
prior to the Closing Date at the time it is filed will not,
contain any untrue statement of a material fact relating to
Acquiror or omit to state a material fact relating to Acquiror
required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading.
4.22 Brokerage
Except as set forth in Schedule 4.22, neither Parent nor
Acquiror has retained any broker or finder in connection with
the transactions contemplated by this Agreement. Any
brokerage or finder's fee due to any broker or finder in
violation of the foregoing representation shall be paid by
Acquiror.
4.23 Absence of Questionable Payments
Neither Parent nor Acquiror nor any director, officer,
agent, employee or other Person acting on behalf of Parent or
Acquiror or any of the LIN Stations has used, to Parent's or
Acquiror's knowledge after due inquiry of the management of
the LIN Stations, any funds of Acquiror or any of the LIN
Stations for unlawful contributions, payments, gifts or
entertainment or made any unlawful expenditures relating to
political activity to any government official or other Person
in connection with the business or operations of Acquiror or
any of the LIN Stations. Neither Parent nor Acquiror nor any
director, officer, agent, employee or other Person acting on
behalf of Parent or Acquiror or any of the LIN Stations has
accepted or received, to Parent's or Acquiror's knowledge
after due inquiry of the management of the LIN Stations, any
unlawful contributions, payments, gifts or expenditures in
connection with the business or operations of Acquiror or any
of the LIN Stations.
<PAGE>
<PAGE> 50
4.24 Full Disclosure
No information furnished by Parent or Acquiror to
Stockholder or Station in connection with this Agreement
(including, but not limited to, the Acquiror Financial
Statements and all information in the Schedules) is false or
misleading in any material respect. In connection with such
information and with this Agreement and the transactions
contemplated hereby, Parent and Acquiror have not made any
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made
or information delivered, in light of the circumstances under
which they were made, not misleading.
ARTICLE V GOVERNMENTAL CONSENTS
5.1 FCC Consent
The Distribution and the assignment of Station's FCC
Licenses as contemplated by this Agreement are subject to the
prior consent and approval of the FCC.
(a) Promptly upon the execution of this Agreement,
(i) Acquiror shall prepare and file with the FCC applications
and any other necessary instruments or documents to effectuate
the Distribution and (ii) Acquiror and Station shall prepare
and file with the FCC applications and any other necessary
instruments or documents to request the FCC to approve the
assignment of Station's FCC Licenses to Acquiror (the
applications and instruments and documents referred to in
clauses (i) and (ii) being the "FCC Applications"). The
parties shall prosecute the FCC Applications with all
reasonable diligence and otherwise use their reasonable
efforts to obtain the FCC Approval as expeditiously as
practicable. In addition, each party shall notify the other
parties hereto in the event that it becomes aware of any other
facts, actions, communications or occurrences that might,
directly or indirectly, affect the parties' intent or ability
to obtain the FCC Approval.
(b) If the FCC Approval imposes any condition on any
party hereto, such party shall use its reasonable efforts to
comply with such condition; provided, however, that no party
shall be required to comply with any condition that would be
unduly burdensome or that would have a Material Adverse Effect
on it. If reconsideration or judicial review is sought with
respect to the FCC Approval, Acquiror and Station shall oppose
vigorously such efforts for reconsideration or judicial review
(but nothing herein shall be construed to limit any party's
right to terminate this Agreement pursuant to Article IX).
<PAGE>
<PAGE> 51
(c) Each party hereto shall pay its own expenses in
connection with the preparation and prosecution of the FCC
Applications, and Acquiror and Station shall each pay one-half
of the FCC filing fee for consent to assignment of the license
of WTNH-TV from Station to Acquiror.
(d) Between the date hereof and the Closing Date,
neither Acquiror or Parent nor any direct or indirect parent
or subsidiary of Acquiror or Parent shall directly or
indirectly control, supervise or direct, or attempt to
control, supervise or direct, the operations of Station.
Until the Closing, such operations, including complete control
and supervision of all programs, shall be the sole
responsibility of Station. Neither title nor right to
possession shall pass to Acquiror until the Closing.
5.2 HSR Act
As soon as reasonably practicable after the execution of
this Agreement, Parent, on behalf of Acquiror as Acquiror's
ultimate parent entity, and Stockholder, on behalf of Station
as Station's ultimate parent entity, shall prepare and file
with the DOJ and the FTC the premerger notification form
required pursuant to the HSR Act and a request for early
termination of the waiting period. Acquiror, Parent,
Stockholder and Station shall further (a) discuss with each
other any comments the reviewing party may have; (b) cooperate
with each other in connection with such filings, which
cooperation shall include, but not be limited to, furnishing
the other with such information or documents as may be
reasonably required in connection with such filings;
(c) promptly file after any request by the FTC or the DOJ any
appropriate information or documents so requested by the FTC
or the DOJ; and (d) notify each other of any other
communications with the FTC or the DOJ that relate to the
transactions contemplated hereby and, to the extent
appropriate, permit the other to participate in any
conferences with the FTC or the DOJ. Each party hereto shall
pay its own expenses and filing fees in connection with the
preparation and filing of the premerger notification form.
ARTICLE VI FURTHER AGREEMENTS
6.1 Further Agreements of Stockholder and Station
Stockholder and Station, as applicable, agree to perform
and observe the following agreements:
<PAGE>
<PAGE> 52
6.1.1 Schedules, Exhibits, Etc.
All representations and warranties contained herein shall
apply to any Exhibits, Schedules and certificates delivered by
Stockholder or Station, or any officer of Stockholder or
Station, to Acquiror, and each such Exhibit, Schedule or
certificate shall be deemed to be a representation by
Stockholder or Station, as applicable, as to the matters set
forth therein.
6.1.2 Conduct Prior to the Closing Date
From the date of this Agreement to and including the
Closing Date, except as permitted, required or specifically
contemplated by this Agreement or otherwise as approved in
writing by Acquiror, which approval shall not be unreasonably
withheld, Stockholder and Station shall:
(a) take no action that will cause any representation,
warranty, Exhibit or Schedule to this Agreement to be untrue
in any material respect on the Closing Date;
(b) use their reasonable efforts to preserve and protect
Station's FCC Licenses and the goodwill of Station, the
continuity of its business and its beneficial relationships
with employees, suppliers, creditors, distributors, customers
and others having business relationships with it;
(c) operate the business of Station in the ordinary
course of business consistent with past practice and maintain
the current business and legal organization of Station;
(d) not purchase, sell, lease, mortgage, pledge or
otherwise acquire or dispose of any Asset, except for Station
Personal Property sold or otherwise disposed of or purchased
or otherwise acquired in the ordinary course of business
consistent with past practice;
(e) (i) keep the equipment, machinery and systems used
in the operations of Station in accordance with FCC
requirements and licensing rules and (ii) except in the
ordinary course of business consistent with past practice,
maintain all of Station's properties in good working order and
repair and replace any thereof that shall be worn out, lost,
stolen or destroyed;
(f) except in the ordinary course of business consistent
with past practice, (i) not increase or otherwise change the
rate or nature of the compensation (including wages, salaries,
bonuses and benefits under any Station Employee Benefit Plan)
that is paid or payable to any employee of Station, except
<PAGE>
<PAGE> 53
pursuant to the current terms of existing collective
bargaining agreements and Station Employee Benefit Plans,
(ii) not enter into any employment, severance, consulting or
similar agreement with any past, present or proposed employee
of Station, (iii) not contribute or make any commitment to, or
representation that it will contribute any amounts to, any
Station Employee Benefit Plan or collective bargaining
agreement for employees of Station, or (iv) not otherwise
alter any such plan or the funding thereof, except as required
by law or by the current terms of any such plan as in effect
on the date of the Station Balance Sheet;
(g) maintain Station's files and records in the usual,
regular and ordinary manner consistent with past practice, and
not make any change in the accounting methods or practices or
make any changes in the depreciation or amortization policies
or rates applicable to the business and operations of Station;
(h) not merge or consolidate with any other Person;
(i) utilize the film rights and packages of Station only
in the ordinary course of business consistent with past
practice and not sell or otherwise dispose of any such rights
or packages or accelerate the usage of such rights and
packages;
(j) except as permitted by Section 6.3.7 and except in
the ordinary course of business consistent with past practice,
make all payments on such film rights and packages on a
current basis, except to the extent Station has a valid
dispute with respect to any such payments;
(k) not enter or agree to enter into any film contract
other than in the ordinary course of business consistent with
past practice and not enter into or agree to enter into any
cable retransmission or must-carry agreement purporting to
bind Station;
(l) not violate any law, statute, rule, governmental
regulation or order in connection with the operations of
Station, including, without limitation, the Communications Act
and the rules and regulations thereunder;
(m) promptly notify Acquiror of any event or occurrence
taking place or arising between the date hereof and the
Closing Date that would, or could reasonably be expected to,
result in a Material Adverse Effect on the Assets or Station;
(n) deliver to Acquiror within 30 days of the end of
each accounting month a balance sheet for Station as of the
<PAGE>
<PAGE> 54
end of such month, together with a statement of profit and
loss for Station;
(o) except in the ordinary course of business consistent
with past practice, cause the liabilities of Station to be
paid when the same become due;
(p) (i) not remove any fixtures, equipment or Station
Personal Property from Station premises other than in the
ordinary course of business consistent with past practice
unless the same are replaced prior to the Closing Date with
similar items of at least equal value and quality; (ii) not
sell, transfer, lease or otherwise dispose of any asset or
property included in the Assets other than in the ordinary
course of business consistent with past practice; (iii) not
sell, discount or otherwise dispose of any Accounts Receivable
(except by collection in the ordinary course of business);
(iv) except in the ordinary course of business consistent with
past practice, not incur any material obligation or liability
relating to Station, whether fixed or contingent; and
(v) except in the ordinary course of business consistent with
past practice, not cancel or compromise any debt or claim
relating to Station or waive or release any rights of material
value included in the Assets;
(q) except in the ordinary course of business consistent
with past practice, (i) not make any material change in the
character of the Assets or the business of Station or cause
Station to enter into any new business, relocate any of its
facilities or acquire any additional operations or businesses
and (ii) not terminate, discontinue, close or dispose of any
facility or business operation of Station;
(r) not acquire any assets or properties that involve
the making of any capital expenditures by Station, except in
the ordinary course of business consistent with past practice;
(s) except in the ordinary course of business consistent
with past practice, not transfer, grant, license, assign,
terminate or otherwise dispose of, modify, change or cancel
any right or obligation with respect to any intellectual
property rights included in the Assets;
(t) not cause Station to make any loan or extension of
credit or incur, assume or guarantee any indebtedness for
money borrowed (which for this purpose shall include
nonrecourse borrowings) or otherwise enter into any material
transaction, agreement, arrangement or understanding pursuant
to which any party agrees to provide or provides Station with
any funds, in each case other than in the ordinary course of
business consistent with past practice and other than as
<PAGE>
<PAGE> 55
necessary or desirable to effect the redemption of Station's
10.75% Series A and Series B Senior Secured Notes due 1998;
(u) not cause Station to (i) declare, pay or set aside
for payment any dividend or other distribution in respect of
its capital stock, except for dividends payable with respect
to Station's outstanding shares of preferred stock in
accordance with the terms of Station's Certificate of
Incorporation, (ii) directly or indirectly redeem, repurchase
or otherwise acquire any shares of its capital stock, or
(iii) transfer to Stockholder or any stockholder or Affiliate
of Stockholder any right, property or interest of Station;
(v) except as permitted by Section 6.3.7, not cause any
payment or collection to be made by Station or to it at an
earlier or later time than in accordance with its customary
business practices or otherwise materially modify its normal
methods of conducting its operations or managing its cash flow
other than as necessary or desirable to effect the redemption
of Station's 10.75% Series A and Series B Senior Secured Notes
due 1998;
(w) not enter into, amend or extend any Tradeout
Agreement with respect to the sale of advertising time that
would create any obligation of or liability to Station, except
in the ordinary course of business consistent with past
practice or except for advertising time that will have been
expended prior to the Closing Date; and not enter into, amend
or extend any order, contract or agreement after the date
hereof for the sale of advertising time on Station that will
not expire at or prior to the Closing Date or is not
terminable by Acquiror without penalty within 60 days after
the Closing Date other than in the ordinary course of business
consistent with past practice; and
(x) not agree to take any of the actions prohibited by
this Section 6.1.2, or engage in any action or conduct that
would violate this Section 6.1.2.
6.1.3 No Solicitation of Transactions
Neither Stockholder nor Station shall directly or
indirectly, through any officer, director, agent or otherwise,
solicit, initiate or encourage the submission of any proposal
or offer from any Person relating to any acquisition or
purchase of all or (other than in the ordinary course of
business) any portion of the Assets or any direct or indirect
equity interest in Station or any business combination with
Station or participate in any negotiations regarding, or
furnish to any other Person any information with respect to,
or otherwise cooperate in any way with, or assist or
<PAGE>
<PAGE> 56
participate in, facilitate or encourage, any effort or attempt
by any other Person to do or seek any of the foregoing.
Stockholder immediately shall cease and cause to be terminated
any existing discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing.
Station agrees not to release any third party from, or waive
any provision of, any confidentiality or standstill agreement
to which Station is a party.
6.1.4 Insurance and Loss of or Damage to Assets
Station shall give Acquiror prompt written notice of
(a) any loss, damage or destruction to any of the tangible
Assets occurring on or after the date hereof and on or prior
to the Closing Date in excess of $25,000 individually or in
aggregate of $50,000, (b) the estimated value of the portion
of the tangible Assets so lost, damaged or destroyed, and
(c) the estimated cost of repair, replacement or
reconstruction thereof.
6.1.5 Tax Representations
Station and Stockholder shall deliver to Acquiror the
representations set forth in Exhibit C attached hereto, made
by officers of Station and Stockholder under penalties of
perjury, for delivery to the IRS in connection with Parent's
request for the Letter Ruling from the IRS.
6.1.6 Confidentiality
The Confidentiality Agreement shall remain in full force
and effect, except as modified by Section 6.1.3 and this
Section 6.1.6. In addition, after the Closing, Stockholder
agrees to maintain any operating or proprietary information
and material relating to Station in confidence pursuant to
this Section 6.1.6 and not use such information for any
purpose other than internal accounting and tax return
preparation purposes or in connection with this Agreement.
6.1.7 Securities Agreement
Stockholder will not sell, pledge, transfer or otherwise
dispose of any shares of Acquiror Common Stock issued to
Station as consideration for the transfer of the Assets,
except in compliance with the Securities Act, including
compliance with Rule 145 under the Securities Act, if
applicable, or pursuant to an effective registration
statement.
<PAGE>
<PAGE> 57
6.1.8 Consents
Stockholder and Station shall use their reasonable
efforts to obtain and deliver to Acquiror at the Closing
consents to the assignment of all agreements, contracts and
instruments assigned to Acquiror hereunder and requiring such
consent to assignment; provided, however, that Stockholder and
Station shall not be required to pay any amounts or incur any
obligations to any of the other parties under any of such
agreements, contracts or instruments to obtain such consents,
and that the failure to obtain such consents, other than those
specified in Schedule 7.2.4, shall not be a condition to
Parent's and Acquiror's obligations to consummate the
transactions contemplated by this Agreement or constitute a
breach of Stockholder's or Station's obligations under this
Agreement.
6.2 Further Agreements of Acquiror and Parent
Acquiror and Parent, as applicable, agree to perform and
observe the following agreements:
6.2.1 Schedules, Exhibits, Etc.
All representations and warranties contained herein shall
apply to any Exhibits, Schedules and certificates delivered by
Parent or Acquiror, or any officer of Parent or Acquiror, to
Station, and each such Exhibit, Schedule or certificate shall
be deemed to be a representation by Parent or Acquiror, as
applicable, as to the matters set forth therein.
6.2.2 Conduct Prior to the Closing Date
From the date of this Agreement to and including the
Closing Date, except as set forth in Schedule 6.2.2, and
except as permitted, required or specifically contemplated by
this Agreement or otherwise approved in writing by Station,
which approval shall not be unreasonably withheld, Acquiror
and Parent shall:
(a) take no action that will cause any representation,
warranty, Exhibit or Schedule to this Agreement to be untrue
in any material respect on the Closing Date;
(b) use their reasonable efforts to preserve and protect
the LIN Stations' FCC Licenses and the goodwill of Acquiror
and the LIN Stations, the continuity of their businesses and
their beneficial relationships with employees, suppliers,
creditors, distributors, customers and others having business
relationships with them;
<PAGE>
<PAGE> 58
(c) operate the businesses of Acquiror and the LIN
Stations in the ordinary course of business consistent with
past practice and maintain the current business and legal
organization of Acquiror other than to effect the
Distribution;
(d) (i) keep the equipment, machinery and systems used
in the operations of Acquiror and the LIN Stations in
accordance with FCC requirements and licensing rules and
(ii) except in the ordinary course of business consistent with
past practice, maintain all of the properties of Acquiror and
the LIN Stations in good working order and repair and replace
any thereof that shall be worn out, lost, stolen or destroyed;
(e) maintain the files and records of Acquiror and of
the LIN Stations in the usual, regular and ordinary manner
consistent with past practice, and not make any change in the
accounting methods or practices or make any changes in the
depreciation or amortization policies or rates applicable to
the business and operations of Acquiror or the LIN Stations;
(f) except in the ordinary course of business consistent
with past practice, make all payments on film rights and
packages on a current basis, except to the extent Acquiror has
a valid dispute with respect to any such payments;
(g) not violate any law, statute, rule, governmental
regulation or order in connection with the operations of
Acquiror or the LIN Stations, including, without limitation,
the Communications Act and the rules and regulations
thereunder;
(h) promptly notify Station of any event or occurrence
taking place or arising between the date hereof and the
Closing Date that would, or could reasonably be expected to,
result in a Material Adverse Effect on Acquiror or any of the
LIN Stations;
(i) deliver to Station within 30 days of the end of each
accounting month a balance sheet for Acquiror as of the end of
such month, together with a statement of profit and loss for
Acquiror;
(j) except in the ordinary course of business consistent
with past practice, cause the liabilities of Acquiror and the
LIN Stations to be paid when the same become due;
(k) not cause Parent to sell its shares of Acquiror
Common Stock or permit Acquiror to merge or consolidate with
any other Person, as a result of which sale, merger or
consolidation Parent would own less than 65% of the
<PAGE>
<PAGE> 59
outstanding capital stock of Acquiror, or permit Acquiror to
sell all or substantially all of its assets;
(l) not allow Acquiror to sell or otherwise transfer or
dispose of its interests in the Major LIN Stations;
(m) not allow Acquiror to incur any indebtedness for
money borrowed that would cause Acquiror's total indebtedness
to exceed 5.5 times its earnings before interest, taxes,
depreciation and amortization measured as of the end of the
most recently completed fiscal quarter for the four
consecutive fiscal quarters then ended;
(n) not allow any LIN Station to terminate its existing
network affiliation or replace its network affiliation
agreement with an agreement with terms that are materially
less favorable to such LIN Station than its existing network
affiliation agreement;
(o) cause Acquiror to permit a representative of Station
or Stockholder to attend all meetings of Acquiror's Board of
Directors and to receive copies of all materials presented to
Acquiror's Board of Directors in connection with such
meetings, except with respect to agenda items or materials
that involve Stockholder or Station;
(p) not permit Acquiror to (i) declare or pay any
dividend, or make any other distribution, on any class of
capital stock of Acquiror or (ii) redeem, repurchase or
otherwise acquire for consideration any shares of any class of
capital stock of Acquiror;
(q) not permit Acquiror to pay any amounts, or transfer
any funds, to Parent, or any Affiliate of Parent, for any
purpose, other than as set forth in Schedule 6.2.2;
(r) cause Acquiror to provide Station with advance
notice of any contemplated (i) change of the President of
Acquiror or of any of the General Managers of the Major LIN
Stations, (ii) acquisition or disposition of any television
station or license or of any other assets material to Acquiror
or any of the Major LIN Stations, (iii) fundamental change in
the business or business philosophy of Acquiror or of any of
the Major LIN Stations, and (iv) programming expenditures or
negotiation of film acquisition or programming contracts
material to Acquiror or any of the Major LIN Stations; and
(s) not agree to take any of the actions prohibited by
this Section 6.2.2, or engage in any action or conduct that
would violate this Section 6.2.2.
<PAGE>
<PAGE> 60
For purposes of this Section 6.2.2, action in the
"ordinary course of business consistent with past practice"
shall include, but not be limited to, entering into
transactions consistent with past practice involving
acquisitions or dispositions of properties or businesses,
including, without limitation, disposition of any of the LIN
Stations other than the Major LIN Stations, entering into
local marketing agreements and joint ventures, participating
in programming for cable channels and television stations
other than the LIN Stations and developing and entering into
arrangements for new broadcasting technologies, but shall not
be deemed to permit or contemplate a fundamental change in the
business or business philosophy of Acquiror or any of the
Major LIN Stations.
6.2.3 Letter Ruling
Parent shall use its reasonable efforts to obtain as soon
as practicable a private letter ruling (the "Letter Ruling")
from the IRS by providing to the IRS all information required
under Revenue Procedure 86-41, 1986-2 C.B. 716, as amended
through the date hereof (the "Revenue Procedure"), to the
effect that neither Parent nor any of its stockholders will be
required to recognize gain or loss, or include any amount in
income, as a result of the Distribution, pursuant to
Section 355 of the Code and any other applicable sections of
the Code.
Parent will not withdraw from the IRS its request for the
Letter Ruling unless either (a) the IRS requests any
information or action not required under the Revenue Procedure
or (b) the IRS indicates that it will not issue the Letter
Ruling, in either of which events Parent may, in its sole
discretion, withdraw from the IRS its request for the Letter
Ruling.
Acquiror and Parent shall keep Station informed on an
ongoing basis with respect to the status of Parent's efforts
to obtain the Letter Ruling. In the event that (a) Parent
withdraws from the IRS its request for the Letter Ruling or
(b) after December 31, 1994, Jones, Day, Reavis & Pogue (or
any successor counsel to Parent) indicates to Parent that it
is not likely that the IRS will issue the Letter Ruling,
Acquiror and Parent shall immediately, and in all such events
within three business days, provide Station with written
notice of same (the "Letter Ruling Notice").
6.2.4 Distribution
Following receipt of the Letter Ruling and immediately
prior to the Closing, Parent shall effect the Distribution;
<PAGE>
<PAGE> 61
provided, however, that Parent shall in no event be required
to effect the Distribution in the absence of the Letter
Ruling, the FCC Approval provided in Section 7.1.3 and
expiration of the applicable waiting period under the HSR Act.
6.2.5 Registration of Acquiror Common Stock
Promptly following the execution of this Agreement,
Acquiror shall prepare, at its expense, the Form S-4
registering the shares of Acquiror Common Stock for sale by
Acquiror to Station pursuant to the Securities Act, shall file
the Form S-4 with the SEC in accordance with the Securities
Act and shall use its reasonable efforts to cause the Form S-4
to be declared effective prior to the Closing. Acquiror shall
take any action reasonably required to be taken under the
Exchange Act, the Securities Act or state securities or other
blue sky laws in connection with the issuance of the shares of
Acquiror Common Stock pursuant to this Agreement.
6.2.6 Listing
Acquiror shall use its reasonable efforts to cause the
Acquiror Common Stock to be authorized for quotation on the
Nasdaq National Market or listed on the New York Stock
Exchange, Inc. or the American Stock Exchange, Inc.
6.2.7 Consents
Parent and Acquiror shall take any and all actions
necessary to ensure that the representations and warranties
contained in Section 4.4 will be true on the Closing Date as
though made on that date without reference to the exceptions
set forth in Schedule 4.4.
6.2.8 Compliance With Securities Laws
Parent and Acquiror shall comply in all material respects
with federal and state securities laws in effecting the
Distribution, provided that Parent and Acquiror may rely upon
any written information furnished by Stockholder or Station
expressly for use in connection with the Acquiror Disclosure
Documents.
6.2.9 Parent Undertakings
Parent shall cause any successor to the business or
assets of Parent to assume Parent's obligations under this
Agreement and the Related Agreements (including, without
limitation, under Section 10.3 and Section 10.4 hereof) and,
for so long as any obligations remain outstanding hereunder,
to (y) have assets sufficient to meet the Parent Threshold
<PAGE>
<PAGE> 62
Amount or (z) obtain a third-party guarantee or letter of
credit in an amount equal to the Parent Threshold Amount.
Parent shall also cause any Person (other than McCaw) that
alone or with its Affiliates owns 50% or more of the
outstanding voting shares of Parent or its successors to
assume McCaw's obligations under the Solvency Letter Agreement
and, for so long as the Solvency Letter Agreement shall remain
outstanding, to (y) have assets with a Net Market Value
sufficient to meet the Parent Threshold Amount or (z) obtain a
third-party guarantee or letter of credit in an amount equal
to the Parent Threshold Amount. Neither this Section 6.2.9
nor the transactions contemplated hereby shall be deemed in
any way to release (i) Parent from its obligations under the
terms of this Agreement or any of the Related Agreements or
(ii) McCaw from its obligations under the Solvency Letter
Agreement.
6.3 Further Agreements
Parent, Acquiror, Stockholder and Station agree to
perform and observe the following agreements:
6.3.1 Access; Information
From the date of this Agreement to and including the
Closing Date, (a) Stockholder and Station will grant Acquiror
and its agents, employees, accountants and attorneys
reasonable access during normal business hours to, and the
opportunity to examine and make copies of, all of their books,
records, documents, instruments and papers relating to the
Assets, and the business and operations of Station, and the
right to inspect all the facilities, properties and assets
relating to the business and operations of Station at any
reasonable time, including the right to meet with
Stockholder's and Station's agents, employees, accountants and
attorneys and (b) Parent and Acquiror will grant Stockholder
and its agents, employees, accountants and attorneys
reasonable access during normal business hours to, and the
opportunity to examine and make copies of, all of their books,
records, documents, instruments and papers relating to the
properties (tangible or intangible), business and operations
of Acquiror, and the right to inspect all the facilities,
properties and assets relating to the business and operations
of Acquiror at any reasonable time, including the right to
meet with Parent's and Acquiror's agents, employees,
accountants and attorneys.
6.3.2 Advice of Claims
From the date of this Agreement to and including the
Closing Date, Acquiror will promptly advise Stockholder in
<PAGE>
<PAGE> 63
writing, and Stockholder will promptly advise Acquiror in
writing, if either has notice or knowledge of the commencement
or threat of any claims, litigation or proceedings against or
affecting, in the case of Acquiror, any of its or any of the
LIN Station's properties (tangible or intangible), business or
operations and, in the case of Stockholder, the Assets, the
business or operations of Station or any rulings, decrees or
other material developments in any claim, action or suit set
forth in Schedule 3.14 or arising after the date hereof.
6.3.3 Other Cooperation Prior to Closing Date
Stockholder and Station will fully cooperate with
Acquiror and Acquiror's counsel and accountants in connection
with any steps required to be taken as part of the obligations
of Parent and Acquiror under this Agreement, and Parent and
Acquiror will fully cooperate with Stockholder and
Stockholder's counsel and accountants in connection with any
steps required to be taken as part of the obligations of
Stockholder and Station under this Agreement. None of Parent,
Acquiror, Stockholder or Station will undertake any course of
action inconsistent with this Agreement or that would make any
representation, warranty or agreement made by it in this
Agreement untrue.
6.3.4 Other Cooperation After Closing Date
Stockholder and Station will cooperate with Acquiror, at
Acquiror's reasonable request, to effect an orderly and prompt
transfer of title, possession and control of the Assets and
the Assumed Liabilities from Station to Acquiror on and after
the Closing Date. Stockholder and Station will also cooperate
with Acquiror after the date hereof in completing or filing
any documents or affidavits deemed necessary by Acquiror to
preserve or improve the rights of Acquiror in and to the
Assets transferred pursuant to Section 2.1.5.
Parent and Acquiror will (a) cooperate with Stockholder
and Station after the date hereof in completing or filing any
documents or affidavits deemed necessary by Station to further
evidence or document Acquiror's assumption of Station's
liabilities pursuant to Section 2.3 and (b) maintain the
confidentiality of all employment records and personnel files
acquired pursuant to the terms hereof and shall use such
records and files only in the ordinary course of business and
in accordance with applicable law.
6.3.5 Post-Closing Adjustment
(a) As soon as practicable after the Closing Date, but
in no event later than 45 days thereafter, Station shall
<PAGE>
<PAGE> 64
prepare and deliver to Acquiror the Station Closing Balance
Sheet. As soon as practicable after the Closing Date, but in
no event later than 45 days thereafter, Acquiror shall prepare
and deliver to Station the Acquiror Closing Balance Sheet and
a calculation of the Actual Cash Consideration. Acquiror
shall have an opportunity to review and comment upon the
Station Closing Balance Sheet, and Station shall have an
opportunity to review and comment upon the Acquiror Closing
Balance Sheet and the calculation of the Actual Cash
Consideration.
(b) The Station Closing Balance Sheet and the Acquiror
Closing Balance Sheet shall be prepared in accordance with
generally accepted accounting principles on a basis consistent
(including account classifications) with that used in the
preparation of the Station Financial Statements and the
Acquiror Financial Statements, respectively, and shall present
fairly the financial position of Station and Acquiror,
respectively, as of the date indicated. Station will deliver
a certificate confirming the representation set forth in
Section 3.6 with respect to the Station Closing Balance Sheet
and Acquiror will deliver a certificate confirming the
representation set forth in Section 4.6 with respect to the
Acquiror Closing Balance Sheet.
(c) If the Actual Cash Consideration exceeds the
Estimated Cash Consideration, Acquiror shall pay the amount of
such difference to Station plus Interest from the Closing Date
to, but excluding, the date such amount is paid in full. If
the Estimated Cash Consideration exceeds the Actual Cash
Consideration, Station shall pay the amount of such difference
to Acquiror plus Interest from the Closing Date to, but
excluding, the date such amount is paid in full. If payment
is required to be made pursuant to this Section 6.3.5, the
settlement shall take place by delivery of immediately
available funds to the party entitled to receive such funds
promptly after calculation of the Actual Cash Consideration.
6.3.6 Accounts Receivable
Acquiror shall use commercially reasonable efforts to
collect all the Accounts Receivable of Station within 180 days
after the Closing Date. Except for accounts with respect to
which a bona fide payment dispute exists before the Closing,
all payments received by Acquiror from any entity that
constitutes an obligor with respect to any of the accounts
included within the Accounts Receivable of Station as of the
Closing Date shall be credited first against the amounts owed
by such obligor included within the Accounts Receivable of
Station in order of the date of invoice until all such amounts
are paid in full. Acquiror shall not compromise, settle or
<PAGE>
<PAGE> 65
adjust any such accounts without the specific written
permission of Station. Acquiror shall make available to
Station such information as may be necessary or desirable to
permit Station to monitor Acquiror's efforts to collect the
Accounts Receivable of Station. With respect to any accounts
not paid in full within 90 days after the Closing Date,
Station shall have the right, but not the obligation, to take
control from Acquiror of the effort to collect such accounts.
Any and all payments received by Station with respect to such
Accounts Receivable of Station as a result of any such
collection efforts by Station shall be forwarded within five
days of receipt thereof to Acquiror, provided that Station
shall be entitled to deduct therefrom reasonable costs of
collection.
6.3.7 Film Payables
Station agrees to use reasonable efforts to pay its film
contract obligations no more than 60 days after the
contractual due date of each such film contract obligation.
6.3.8 Employee Matters
(a) Schedule 6.3.8 contains a true and complete list of
all persons employed by Station, their current position with
Station, their current employment status and their current
accrued paid leave, whether for vacation, sickness or other
circumstance. Station shall provide to Acquiror at the
Closing a true and complete copy of each personnel file
maintained by Station for each of its employees.
(b) Acquiror agrees to employ at the Closing each of the
employees of Station who are made available to Acquiror by
Station. Such persons shall become employees of Acquiror and
shall initially have positions (including status, offices,
titles and reporting requirements), authority, duties and
responsibilities comparable to those held and exercised by
such employee with Station on the Closing Date; provided,
however, that Acquiror shall in no event be restricted from
making such employment decisions after the Closing as it deems
appropriate. Acquiror further agrees initially to provide
each such employee with compensation and a package of benefit
plans, taken as a whole, comparable to those in effect on the
Closing Date; provided, however, that Acquiror shall in no
event be restricted from making such compensation and benefit
decisions after the Closing as it deems appropriate. Acquiror
agrees to give such employees full credit for the paid time
off and sick pay earned or accrued by them during, and to
which they are entitled as a result of, their employment by
Station, either by allowing such employees such paid time off
and sick pay as to which such employees would have been
<PAGE>
<PAGE> 66
entitled as of the Closing Date under the policies of Station
if such employees had remained employees of Station or, upon
termination of employment, by making full payment to such
employees of the paid time off that such employees would have
received had they taken such paid time off.
(c) Acquiror agrees to provide the employees of Station
with health care benefits consistent with those provided by
Acquiror to its existing employees. Acquiror further agrees
to permit employees of Station participating in Station's
health care plans to participate in Acquiror's health care
plans; provided, however, that such health care benefits shall
be immediately available to such employees as of the Closing
Date, and such employees shall become as of the Closing Date
participants thereunder, without regard to any applicable
waiting period or any limitation with respect to preexisting
conditions. Acquiror agrees to act as a successor employer
for purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), so that Station's employees
will not, as a result, be deemed to have had a termination of
employment for purposes of COBRA and that any COBRA notices or
coverage required to be given or made available to any such
employee shall be given or made by Acquiror, not Station.
(d) Acquiror acknowledges and agrees that as of the date
and time the Closing is effective, Acquiror is considered for
purposes of the WARN Act the employer of the employees of
Station and that Acquiror (and not Station) shall thereupon be
responsible for complying with the WARN Act with respect to
such employees and that prior to such time none of such
employees shall be, nor shall they be deemed to be, terminated
for purposes of the WARN Act.
(e) Acquiror shall indemnify, defend and hold Station
harmless from and against any and all losses, claims and
expenses of any kind whatsoever, including, without
limitation, attorneys' fees and costs of investigation,
resulting from or arising out of (i) the discharge or other
termination of employment by Acquiror from and after the
Closing Date of any employee of Station, including, without
limitation, claims for health care coverage or benefits and
all compliance obligations (including, without limitation, the
obligation to give notice or pay money) of Station or Acquiror
under the WARN Act, and (ii) the Station Union Contracts from
and after the Closing.
(f) Acquiror agrees to assume sponsorship of the Profit
Sharing Plan as of the Closing; provided, however, that
Acquiror shall have the right to amend or terminate the Profit
Sharing Plan at any time and in any manner it deems
appropriate or desirable, including, but not by way of
<PAGE>
<PAGE> 67
limitation, merging the Profit Sharing Plan into a plan
sponsored or maintained by Acquiror. Station agrees,
represents and covenants that it will complete the Form 5500
for the 1993 plan year and file such form with the IRS not
later than July 31, 1994, and will provide Acquiror with a
copy of such filing and such other evidence as the Acquiror
may require to establish that the filing has occurred within
10 days after said filing occurs. Stockholder and Station
agree, represent and covenant that they and their Affiliates
will provide any assistance and any information that Acquiror
deems necessary to obtain a determination from the IRS that
the Profit Sharing Plan is qualified under Section 401(a) of
the Code and that the related trust is exempt from federal
income taxation under Section 501(a) of the Code.
6.3.9 Financial Information
Station has provided Acquiror and Parent with certain
internal budget documents, pacing reports and similar items
(collectively, the "Station Financial Information") regarding
the prospective performance of Station. The Station Financial
Information was prepared in the ordinary course of business
for Station's internal purposes, consists only of management's
estimate of Station's future performance in the categories
reflected in the Station Financial Information, and does not
constitute any representation or agreement that Station's
actual performance will match the Station Financial
Information.
Acquiror has provided Station and Stockholder with
certain internal budget documents, pacing reports, projections
and similar items (collectively, the "Acquiror Financial
Information") regarding the prospective performance of
Acquiror, as well as projected balance sheet items of Acquiror
as of September 30, 1994 ("Balance Sheet Items"). The
Acquiror Financial Information was prepared in the ordinary
course of business for Acquiror's internal purposes, consists
only of management's estimate of Acquiror's future performance
in the categories reflected in the Acquiror Financial
Information, and does not constitute any representation or
agreement that Acquiror's actual performance will match the
Acquiror Financial Information. The Balance Sheet Items were
prepared in good faith, consistent with generally accepted
accounting principles and with Acquiror's regularly prepared
financial statements, and constitute management's best
estimate of such items as of September 30, 1994, but do not
constitute any representation or agreement that Acquiror's
actual September 30, 1994 balance sheet will match the Balance
Sheet Items.
<PAGE>
<PAGE> 68
6.3.10 Prorations; Trade Agreements
Notwithstanding any other provision of this Agreement:
(a) In calculating the amount of the Station Accounts
Payable, all items of expense (including prepaid expenses)
arising from the business or operations of Station, including,
without limitation, rents, property and payroll taxes (other
than taxes payable in connection with the consummation of the
transactions contemplated by this Agreement, which shall be
paid in accordance with the terms of Section 2.5),
assessments, business and license fees (other than the Station
Film Payables Outstanding), insurance premiums, salaries and
wages (other than as excluded from the definition of Station
Accounts Payable), and charges for heat, power, water,
utilities and other current operating expenses, shall be
prorated as of the Closing Date on the basis of a 365-day
year, so as to effectuate the parties' intent that (i) only
items of expense arising from or relating to periods prior to
the Closing are included in the Station Accounts Payable and
(ii) the amount of any expenses prepaid by Station
attributable to post-Closing Date periods is credited against
the expenses included in the Station Accounts Payable; and
(b) To the extent that the aggregate value (as
determined by reference to Station's rate card as in effect at
the Closing) by which Station's post-Closing Date obligations
under trade, barter or similar arrangements for the sale of
advertising time (with the exception of film contracts or
program barter agreements) is greater than the aggregate fair
market value of the goods, services or other items to be
received by Acquiror as Station's successor on or after the
Closing Date, the amount of such difference shall be (i) added
to the amount of the Station Accounts Payable, if positive, or
(ii) added to the amount of the Station Closing Accounts
Receivable, if negative.
6.3.11 Oxford Property
At the Closing, Station shall convey by quit claim deed
without warranty all of its right, title and interest (if any)
to the Oxford property (more particularly described in the
Chicago Title Insurance Company Commitment for Title
Insurance, Title Number 944201332, effective May 26, 1994) to
Acquiror, including, without limitation, by assigning to
Acquiror any rights Station may have to such property pursuant
to the Asset Purchase Agreement, dated July 30, 1985, between
Capital Cities Communications, Inc. and Cook Inlet
Communications, L.P. Station will negotiate with Capital
Cities Communications, Inc. and otherwise use its reasonable
efforts to attempt to provide Acquiror with good and
<PAGE>
<PAGE> 69
marketable title to such property evidenced by a warranty deed
relating to such property. In connection with the foregoing,
Station shall not be obligated to pay any amount or undertake
any obligation to Capital Cities Communications, Inc. or its
successors or Affiliates.
ARTICLE VII CONDITIONS PRECEDENT TO CLOSING
7.1 General Conditions
The respective obligations of Parent, Acquiror,
Stockholder and Station to effect the Closing of the
transactions contemplated hereby are subject to the
satisfaction on or prior to the Closing Date of the following
conditions:
7.1.1 Legal Proceedings
No order of any court or administrative agency shall be
in effect that enjoins, restrains, conditions or prohibits
consummation of this Agreement, and no litigation,
investigation or administrative proceeding initiated by any
bona fide third party shall be pending or threatened that
would enjoin, restrain, condition or prohibit consummation of
this Agreement.
7.1.2 HSR Act
Any applicable waiting period under the HSR Act relating
to the transactions contemplated by this Agreement shall have
expired or been terminated.
7.1.3 FCC Approval
The FCC Approval shall have been issued with no
conditions that are, individually or in the aggregate,
materially adverse to Acquiror, such FCC Approval shall be in
full force and effect and the FCC Order containing such FCC
Approval shall have become "Final." For the purposes hereof,
the FCC Order shall have become "Final" when the FCC Order has
been issued by the FCC, when the time for filing any protest,
request for stay, petition or request for reconsideration,
petition for rehearing or appeal or review of the FCC Order by
or to the FCC or any court or Governmental Entity having
jurisdiction over the FCC Order or the premises or review or
reconsideration by the FCC on its own motion has expired and
when no protest, request for stay, petition or request for
reconsideration, petition for rehearing or appeal or review of
the FCC Order is pending.
<PAGE>
<PAGE> 70
7.2 Conditions to Obligations of Parent and Acquiror
Parent's and Acquiror's respective obligations to effect
the Closing of the transactions contemplated hereby are
subject to the satisfaction on or prior to the Closing Date of
the following conditions:
7.2.1 Accuracy of Representations and Warranties
The representations and warranties made by Stockholder
and Station herein (including applicable Exhibits and
Schedules) shall have been true in all material respects when
made and, except as permitted by Section 6.1.2, shall be true
in all material respects as of the Closing Date as though made
on that date, except in each case (a) to the extent of any
event, occurrence or condition that constitutes a breach of
any of such representations and warranties, but which would
not, or could not be reasonably expected to, result in a
Material Adverse Effect on Station (provided, however, that
nothing herein, nor consummation of the Closing, shall be
deemed to constitute a waiver of such breach), (b) as affected
by the transactions contemplated hereby, and (c) to the extent
that such representations and warranties are made as of a
specified date, in which case such representations and
warranties shall be true in all material respects as of the
specified date.
7.2.2 Letter Ruling
Parent shall have received the Letter Ruling.
7.2.3 Performance of Agreement
Stockholder and Station shall have performed in all
material respects all obligations and agreements and complied
in all material respects with all covenants and conditions
contained in this Agreement that are to be performed and
complied with by them on or prior to the Closing Date.
7.2.4 Consents
Acquiror shall have received written consents to the
assignment of those agreements set forth in Schedule 7.2.4,
which consents shall in all respects be satisfactory to
Acquiror in its reasonable discretion.
7.2.5 No Material Change
From the date of the Station Balance Sheet to the Closing
Date, Station shall not have suffered any event or occurrence
<PAGE>
<PAGE> 71
that would, or could reasonably be expected to, result in a
Material Adverse Effect on the Assets or Station.
7.2.6 WTHN-TV License Renewal
The FCC shall have issued an order granting the license
renewal application of WTNH-TV, Hartford-New Haven,
Connecticut, without material adverse condition, for a period
to expire April 1, 1999, and such FCC order shall have become
final as defined in Section 7.1.3.
7.3 Conditions to Obligations of Stockholder and Station
Stockholder's and Station's respective obligations to
effect the Closing of the transactions contemplated hereby are
subject to the satisfaction on or prior to the Closing Date of
the following conditions:
7.3.1 Accuracy of Representations and Warranties
The representations and warranties made by Parent and
Acquiror herein (including applicable Exhibits and Schedules)
shall have been true in all material respects when made and,
except as permitted by Section 6.2.2 and except that the
representations and warranties set forth in the first two
sentences of Section 4.3 shall be updated to reflect
Acquiror's capitalization as it exists on the Closing Date,
shall be true in all material respects as of the Closing Date
as though made on that date, except in each case (a) to the
extent of any event, occurrence or condition that constitutes
a breach of any of such representations and warranties, but
which would not, or could not reasonably be expected to,
result in a Material Adverse Effect on Acquiror or any of the
Major LIN Stations (provided, however, that nothing herein,
nor consummation of the Closing, shall be deemed to constitute
a waiver of such breach), (b) as affected by the transactions
contemplated hereby, and (c) to the extent that such
representations and warranties are made as of a specified
date, in which case such representations and warranties shall
be true in all material respects as of the specified date.
Notwithstanding the foregoing, the representations and
warranties contained in Section 4.4 shall be true on the
Closing Date as though made on such date without reference to
the exceptions set forth in Schedule 4.4.
7.3.2 Performance of Agreement
Parent and Acquiror shall have performed in all material
respects all obligations and agreements and complied in all
material respects with all covenants and conditions contained
<PAGE>
<PAGE> 72
in this Agreement that are to be performed and complied with
by them on or prior to the Closing Date.
7.3.3 Effectiveness of Form S-4
The Form S-4 shall have been declared effective by the
SEC, and no stop order suspending the effectiveness of the
Form S-4 shall be in effect and no proceeding for such purpose
shall be pending before or threatened by the SEC.
7.3.4 Distribution
The Distribution shall have been effected.
7.3.5 Listing
The Acquiror Common Stock shall have been authorized for
quotation on the Nasdaq National Market or listed on the New
York Stock Exchange, Inc. or the American Stock Exchange, Inc.
7.3.6 No Material Change
From the date of the Acquiror Balance Sheet to the
Closing Date, neither Acquiror nor any of the Major LIN
Stations shall have suffered any event or occurrence that
would, or could reasonably be expected to, result in a
Material Adverse Effect on Acquiror or any of the Major LIN
Stations.
ARTICLE VIII THE CLOSING
8.1 Closing Date
The Closing shall take place as soon as practicable at an
hour on such date as is agreed to by the parties (the "Closing
Date") and at a place to be determined by the parties. At the
Closing, each of the parties shall take all such action and
deliver all such documents, instruments, certificates and
other items as may be required, under this Agreement or
otherwise, to perform or fulfill all covenants, conditions and
agreements on its part to be performed or fulfilled on or
prior to the Closing Date.
8.2 Documents to Be Delivered by Parent and Acquiror
Parent and Acquiror shall deliver the following
documents, agreements and supporting papers to Stockholder at
or prior to the Closing, the delivery of which shall be a
condition to the performance by Stockholder and Station of the
obligations to be performed by Stockholder and Station at the
Closing:
<PAGE>
<PAGE> 73
(a) the Estimated Cash Consideration and certificate(s)
representing the Share Consideration;
(b) an executed copy of each of the Related Agreements
to which Parent or Acquiror is a party;
(c) an executed copy of the Solvency Letter Agreement;
(d) executed Officer's Certificates of the President or
Vice President and Secretary of each of Parent and Acquiror in
a form mutually acceptable to Stockholder and Acquiror; and
(e) opinions of Perkins Coie, Covington & Burling and
Ford & Harridan, counsel to Parent and Acquiror, in the forms
attached as Exhibit E hereto.
8.3 Documents to Be Delivered by Stockholder and Station
Stockholder and Station shall deliver the following
documents, agreements and supporting papers to Acquiror at or
prior to the Closing, the delivery of which shall be a
condition to the performance by Parent and Acquiror of the
obligations to be performed by Parent and Acquiror at the
Closing:
(a) an executed copy of each of the Related Agreements
to which Stockholder or Station is a party;
(b) an executed copy of the Solvency Letter Agreement;
(c) executed Officer's Certificates of the President or
Vice President and Secretary of each of Stockholder and
Station in a form mutually acceptable to Acquiror and
Stockholder;
(d) opinions of Mugger, Tolles & Olson and Hopkins &
Sutter, counsel to Stockholder and Station, in the forms
attached as Exhibit F hereto;
(e) an executed copy of each of the warranty deeds
relating to the Station Real Property, duly endorsed in favor
of Acquiror and, in each case, in due form for recordation
with the appropriate governmental authorities;
(f) American Land Title Association policies of title
insurance, with extended coverage, dated as of the Closing
Date, insuring that fee simple title to each parcel of the
Station Real Property is vested in Acquiror, subject only to
the Encumbrances described in Schedule 3.12(c), which policies
of title insurance shall insure up to the amounts mutually
acceptable to Acquiror and Station;
<PAGE>
<PAGE> 74
(g) any and all certificates of title relating to
Station Personal Property included in the Assets;
(h) consents to assignment of the agreements set forth
in Schedule 7.2.4;
(i) an executed Non-Foreign Person Certificate in the
form required by the Foreign Investment in Real Property Tax
Act of 1984; and
(j) a "Conveyance Tax Return" and, as applicable, a
"Conveyance Tax Statement" as provided for under Connecticut
law relating to the Station Real Property.
ARTICLE IX TERMINATION
This Agreement may be terminated as follows in this
Article IX, provided that the party terminating this Agreement
is not then in material default hereof, upon written notice to
the other parties:
(a) by any party if the Closing shall not have occurred
by March 31, 1995; or
(b) by any party after Parent's delivery of the Letter
Ruling Notice to Station; or
(c) by Parent and Acquiror, if Stockholder or Station
should default in any material respect in the observance or in
the due and timely performance of any of its covenants or
agreements herein contained; or
(d) by Stockholder and Station, if Parent or Acquiror
should default in any material respect in the observance or in
the due and timely performance of any of its covenants or
agreements herein contained.
Notwithstanding the foregoing, any notice of termination
pursuant to subsection (c) or (d) shall not be effective
unless the terminating party shall have given to the
defaulting party at least 30 days' advance written notice of
its claim of default so as to afford the other party the
opportunity to cure.
ARTICLE X GENERAL
10.1 Expenses
Except as expressly provided to the contrary, whether or
not the transactions contemplated by this Agreement are
consummated, each party hereto shall pay its own fees, costs
<PAGE>
<PAGE> 75
and expenses incident to the negotiation, preparation and
carrying out of this Agreement and the Related Agreements and
the consummation of the transactions contemplated hereby and
thereby; provided, however, that the cost of the title
insurance policies referred to in Section 8.3(g) shall be
split evenly between Station and Acquiror.
10.2 Amendment
The parties hereto may amend, modify or supplement this
Agreement at any time, but only in a written amendment duly
executed on behalf of each of the parties.
10.3 Indemnification and Survival of Warranties
10.3.1 Generally
(a) Subject to the limitations set forth in
Section 10.3.5, Parent and Acquiror, jointly and severally,
agree to indemnify and hold harmless Stockholder and Station,
their successors and permitted assigns, and the officers,
directors, Affiliates, employees, controlling Persons and
agents of the foregoing and to hold each such party harmless
against and in respect of any and all losses, damages,
penalties, costs and expenses, including reasonable attorneys'
and accountants' fees (the "Seller Indemnified Damages"),
incurred by any such party by reason of any of the following:
(i) a breach of any of the representations or warranties made
by Parent or Acquiror in this Agreement, (ii) Acquiror's
failure to satisfy the Assumed Liabilities, (iii) a breach of
undertakings by Parent or Acquiror in any other document,
agreement or amendment relating to or executed in connection
with this Agreement or the Related Agreements, or in any
Officer's Certificate or other certificate delivered to
Stockholder at or in connection with the Closing, (iv) the
nonperformance (whether partial or total) of any covenant or
agreement made in this Agreement or the Related Agreements by
Parent or Acquiror, or (v) liability or alleged liability to
unaffiliated third parties under the Securities Act, the
Exchange Act, state securities laws or related common law
claims because of any untrue statement or alleged untrue
statement of a material fact contained in any Acquiror
Disclosure Document, including any preliminary prospectus or
final prospectus contained therein or any amendments or
supplements thereto, the omission or alleged omission to state
therein a material fact required to be stated therein, or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or
in connection therewith any other violation or alleged
violation by Acquiror of the Securities Act, the Exchange Act,
any state securities law or any rule or regulation promulgated
<PAGE>
<PAGE> 76
thereunder or any related common law claim; provided, however,
that Acquiror and Parent shall not be liable in any such case
referred to in this subparagraph (v) for any such Seller
Indemnified Damages to the extent that they are not permitted
to be paid under law (in which event the Indemnitees shall be
entitled to contribution as to Seller Indemnified Damages in
such proportion as is appropriate to reflect the relative
fault of the Indemnifying Parties and the Indemnitees) or that
they arise out of or are based upon any of the foregoing that
occurs in reliance upon and in conformity with written
information furnished by Stockholder or Station expressly for
use in connection with such Acquiror Disclosure Document.
(b) In addition to the rights afforded by
Section 10.3.1(a) and subject to the limitations set forth in
Section 10.3.5, Parent agrees to pay to Station and its
successors and permitted assigns the amount of any and all
losses, damages, penalties, costs and expenses, including
reasonable attorneys' and accountants' fees, incurred by
Acquiror by reason of (i) the existence of any condition or
fact, or the happening of any event, that constitutes a breach
of any of the representations or warranties made by Parent or
Acquiror in this Agreement and (ii) all federal and state
Taxes imposed on the operations or property of Acquiror or any
of Acquiror's subsidiaries for all periods or portions of
periods up to and including the Closing Date, which are not
otherwise accrued for on the Acquiror Closing Balance Sheet
(either (i) or (ii), an "Acquiror Loss"); provided, however,
that the payment to be made to any Indemnitee (as defined
below) with respect to an Acquiror Loss shall be equal to the
product of (y) such payee's percentage ownership interest in
the Acquiror Common Stock as of the date that Acquiror first
learned of the circumstance that resulted in such Acquiror
Loss (counting for purposes of determining such ownership
interest only those shares of Acquiror Common Stock included
as part of the Share Consideration) multiplied by (z) the
amount of the Acquiror Loss (such product being the "Deemed
Loss"). The parties hereto hereby agree and acknowledge that
the foregoing agreement regarding the calculation of an
Indemnitee's claim for damages under this Section 10.3.1(b)
with respect to a Deemed Loss is reasonable and appropriate,
given that it may be impracticable or extremely difficult to
establish such Indemnitee's actual damages. Nothing in
Section 10.3.1(a) or (b) shall be construed to limit any
claims Indemnitees under this section may have against the
Indemnifying Parties under state or federal securities laws,
provided that amounts payable to any Indemnitee as a Deemed
Loss and any other amounts payable to such Indemnitee under
other potential causes of action, including, without
limitation, pursuant to Section 10.3.1(a), arising out of the
<PAGE>
<PAGE> 77
same facts and circumstances shall be offset against each
other.
(c) Subject to the limitations set forth in
Section 10.3.5, Stockholder and Station, jointly and
severally, agree to indemnify and hold harmless Parent and
Acquiror, their successors and permitted assigns, and the
officers, directors, Affiliates, employees, controlling
Persons and agents of the foregoing and to hold each such
party harmless against and in respect of any and all losses,
damages, penalties, costs and expenses, including reasonable
attorneys' and accountants' fees (the "Buyer Indemnified
Damages"), incurred by any such party by reason of any of the
following: (i) a breach of any of the representations or
warranties made by Stockholder or Station in this Agreement,
(ii) Station's failure to satisfy the Excluded Liabilities,
(iii) a breach of undertakings by Stockholder or Station in
any other document, agreement or amendment relating to or
executed in connection with this Agreement or the Related
Agreements, or in any Officer's Certificate or other
certificate delivered to Acquiror at or in connection with the
Closing, (iv) the nonperformance (whether partial or total) of
any covenant or agreement made in this Agreement or the
Related Agreements by Stockholder or Station, or (v) liability
or alleged liability to unaffiliated third parties under the
Securities Act, the Exchange Act, state securities laws or
related common law claims because of any untrue statement or
alleged untrue statement of a material fact contained in any
Acquiror Disclosure Document, including any preliminary
prospectus or final prospectus contained therein or any
amendments or supplements thereto, the omission or alleged
omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading, or in connection therewith any other violation or
alleged violation by Acquiror of the Securities Act, the
Exchange Act, any state securities law or any rule or
regulation promulgated thereunder or any related common law
claim because of reliance by Acquiror or Parent upon and in
conformity with written information furnished by Stockholder
or Station expressly for use in connection with the Acquiror
Disclosure Documents. To the extent such Buyer Indemnified
Damages are not permitted to be paid under law, the
Indemnitees shall be entitled to contribution as to Buyer
Indemnified Damages in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Parties and the
Indemnitees.
Nothing in this section shall be construed to limit any
claims Indemnitees under this section may have against the
Indemnifying Parties under state or federal securities laws.
<PAGE>
<PAGE> 78
(d) For purposes of the indemnifications made in this
Section 10.3, all representations and warranties shall be
deemed to have been made as of and on the Closing Date, except
to the extent that such representations and warranties are
made as of a specified date, in which case such
representations and warranties shall be deemed to have been
made as of such specified date.
10.3.2 Notice
In the event of any matter that may give rise to the
right of Parent, Acquiror, Stockholder or Station, their
successors or permitted assigns, or the officers, directors,
Affiliates, employees, controlling Persons or agents of the
foregoing to be indemnified under this Section 10.3 (the
"Indemnitee") with respect to claims made by third parties, if
any Indemnitee is threatened with any claim, or any claim is
presented to, or any action or proceeding is commenced
against, such Indemnitee that may give rise to the right of
indemnification hereunder, the Indemnitee shall promptly
notify the party or parties bearing the indemnification
obligation (the "Indemnifying Party") thereof in writing.
The failure to deliver written notice to the Indemnifying
Party within a reasonable time to the extent such delay is
prejudicial shall relieve such Indemnifying Party of liability
to the Indemnitee under this Section 10.3 to the extent of the
monetary impact of such prejudice, but the omission so to
deliver written notice to the Indemnifying Party will not
relieve it of any liability that it may have to any Indemnitee
otherwise.
10.3.3 Procedure for Third-Party Claims
With respect to claims made or actions or proceedings
commenced by third parties, the Indemnifying Party shall have
the right to participate in the defense of such claim, action
or proceeding and, except as to such third party claims,
actions or proceedings seeking damages in excess of the
remaining limitations set forth in Section 10.3.5, and except
as to third party claims, actions or proceedings seeking, in
whole or in part, injunctive or other equitable relief against
Indemnitee, to the extent the Indemnifying Party so desires,
jointly with any other Indemnifying Party similarly notified,
to assume the defense thereof with counsel mutually
satisfactory to such parties and the Indemnitee. The
Indemnifying Party shall assume the expense of the
Indemnitee's attorneys' fees unless the Indemnifying Party and
the Indemnitee agree upon mutually satisfactory counsel to
assume the defense, in which case the Indemnifying Party shall
be obligated to pay only the fees and expenses of such
<PAGE>
<PAGE> 79
mutually satisfactory counsel. In the event the Indemnifying
Party undertakes to compromise or defend any such liability,
the Indemnifying Party shall so notify the Indemnitee promptly
in writing of its intention to do so, and the Indemnitee shall
cooperate with the Indemnifying Party and its counsel in the
compromising of or the defending against any such liability or
claim except that the Indemnifying Party may not seek to
compromise or settle any liability which exceeds the remaining
limitations on indemnification set forth in Section 10.3.5 or
any claim, action or proceeding which involves injunctive or
other equitable relief against the Indemnitee without the
express written approval of the Indemnitee. Such approval may
be given or withheld by Indemnitee in its sole discretion.
Such cooperation shall include, without limitation, providing
the Indemnifying Party reasonable access to the Indemnitee's
business records, research, documents and employees as they
relate to the defense of any indemnified claim. In response
to a bona fide settlement offer, the Indemnifying Party may
settle the monetary portion of an indemnifiable matter that it
has duly elected to contest to the extent such settlement does
not exceed the remaining limitations set forth in
Section 10.3.5 and does not involve a matter in which
injunctive or other equitable relief is sought but such
matters shall only be settled with the consent of the
Indemnitee, which consent shall not be unreasonably withheld.
In the event the Indemnitee unreasonably declines to consent
to the monetary settlement described in the preceding
sentence, then the Indemnitee shall have no right to
indemnification beyond, and the Indemnifying Party shall have
no obligation to pay damages or attorneys' fees hereunder in
excess of, the amount of the proposed settlement.
10.3.4 Survival
All representations and warranties made by Parent,
Acquiror, Stockholder and Station shall survive the Closing to
the following extent:
(a) the representations and warranties made by
Stockholder and Station in Sections 3.1 and 3.2 and by Parent
and Acquiror in Sections 4.1, 4.2 and 4.3(a) shall survive
indefinitely;
(b) all other representations and warranties shall
survive for a period of three years; and
(c) except as to claims under Sections 10.3.1(a)(v) and
10.3.1(c)(v), no party shall be entitled to indemnification
under this Section 10.3 unless such claim for indemnification
is asserted in writing to the party from whom indemnification
is sought within three years after the Closing Date.
<PAGE>
<PAGE> 80
10.3.5 Certain Limitations
(a) No claim for indemnification for any breach of any
representation or warranty under Section 10.3.1(a) or for any
Deemed Loss under Section 10.3.1(b) shall be made by any party
until the aggregate amount of any Seller Indemnified Damages
and Deemed Losses equals or exceeds $2,775,000, at which time
the Indemnitees shall have the right to indemnification for
all Seller Indemnified Damages and Deemed Losses, including
the first $2,775,000 of such Seller Indemnified Damages and
Deemed Losses up to an aggregate maximum indemnification
payment of $15 million pursuant to Section 10.3.1(a) for
breaches of any representations or warranties and for Deemed
Losses under Section 10.3.1(b). The terms of this Section
10.3.5(a) shall not apply to a Deemed Loss relating to federal
and state Taxes under Section 10.3.1(b)(ii).
(b) No claim for indemnification for any breach of any
representation or warranty shall be made under
Section 10.3.1(c) or 10.4.1 by any party until the aggregate
amount of any Buyer Indemnified Damages and claims pursuant to
Section 10.4.1 equals or exceeds $925,000, at which time the
Indemnitees shall have the right to indemnification for all
Buyer Indemnified Damages and claims pursuant to
Section 10.4.1, including the first $925,000 of such Buyer
Indemnified Damages and claims pursuant to Section 10.4.1.
Stockholder and Station shall be liable for an aggregate
maximum payment of $15 million pursuant to Section 10.3.1(c)
for breaches of any representations or warranties and Section
10.4.1.
10.3.6 Effectiveness
The provisions of this Section 10.3 shall have no force
or effect prior to consummation of the Closing.
10.4 Tax Indemnification and Tax Matters
10.4.1 Stockholder and Station Indemnification
Subject to the limitations set forth in Section 10.3.5,
Stockholder and Station, jointly and severally, agree to
indemnify and hold harmless Acquiror and its successors,
permitted assigns, officers, directors, employees and agents
for all Taxes (a) imposed on Stockholder's and Station's
Affiliated Group for any taxable year or (b) imposed on
Station or its successors, or for which Station or its
successors may otherwise be liable for any period or portion
of a period up to and including the Closing Date.
<PAGE>
<PAGE> 81
10.4.2 Additional Stockholder and Station
Indemnification
Stockholder and Station, jointly and severally, also
agree to indemnify and hold harmless Parent and its successors
(the "Parent Tax Indemnitees") for their proportionate share
of the Taxes imposed upon Parent as a result of the
Distribution not qualifying for nonrecognition of gain (or no
inclusion of income) treatment under Section 355 of the Code,
but only to the extent the Distribution's failure to so
qualify is finally determined, in judicial proceedings to
which Stockholder and Station are parties, to have been
proximately caused, in whole or in part, by a breach of a
Section 355 Representation by Stockholder or Station.
Stockholder and Station's proportionate share of such Taxes
shall be determined by a comparison between (i) the extent to
which their breach of a Section 355 Representation proximately
caused the Distribution to not qualify for nonrecognition of
gain (or no inclusion of income) treatment under Section 355
of the Code and (ii) the extent to which the actions of any
other person or entity not an Affiliate of Stockholder or
Station proximately caused the Distribution not to qualify for
nonrecognition of gain (or no inclusion of income) treatment
under Section 355 of the Code. Notwithstanding the foregoing,
unless Stockholder's and Station's proportionate share of
responsibility equals or exceeds 25%, Stockholder and Station
shall have no responsibility to indemnify under this
Section 10.4.2 and no liability to any person or entity based
upon the breach of such representation. For purposes hereof,
only the following shall constitute a Section 355
Representation: the representations made by Stockholder or
Station in Exhibit C to this Agreement. Stockholder and
Station agree and acknowledge that the Section 355
Representations are being made directly to Parent and Acquiror
and that Parent and Acquiror intend to rely upon the Section
355 Representations. Stockholder and Station shall be liable
for no more than an aggregate maximum of $35 million for
breaches of Section 355 representations.
10.4.3 Additional Parent Indemnification
Parent agrees to indemnify, defend, and hold harmless
Stockholder, Station, and each of their successors, permitted
assigns, officers, directors, employees, and agents (the
"Station Tax Indemnitees") from and against any and all
claims, causes of action, losses, damages, costs, and expenses
(including attorney's fees and costs of investigation) of any
nature whatsoever arising out of or resulting from the
Distribution not qualifying for nonrecognition of gain (or no
inclusion of income) treatment under Section 355 of the Code,
provided, however, that Parent shall not be required by the
<PAGE>
<PAGE> 82
terms hereof to indemnify Stockholder or Station with respect
to any amount required to be paid by Stockholder or Station to
the Parent Tax Indemnitees pursuant to the terms of
Section 10.4.2.
10.4.4 Separate Obligations
The indemnification obligations set forth in
Sections 10.4.2 and 10.4.3 are separate and independent.
Accordingly, Parent's obligation to indemnify the Station Tax
Indemnitees set forth in Section 10.4.3 shall not be
diminished or in any way affected by the pendency of any claim
against Stockholder or Station pursuant to the terms of
Section 10.4.2, provided, however, that in the event a final
determination is obtained in judicial proceedings to which
Stockholder and Station are parties holding that Stockholder
and Station are obligated to indemnify the Parent Tax
Indemnitees pursuant to the terms of Section 10.4.2, then the
amount of any such indemnification obligation may be offset
following such determination against any amounts due to the
Station Tax Indemnitees pursuant to the terms of
Section 10.4.3. The above is not intended to delay the
obligation of Stockholder and/or Station to pay any
indemnification in accordance with Section 10.4.2 after a
final determination is obtained in judicial proceedings.
10.4.5 Procedure as to Judicial Proceedings
Relating to Section 10.4.2 Indemnification
For the purpose of seeking a final determination in a
judicial proceeding to which Stockholder and Station are
parties as to Stockholder and/or Station's responsibility for
indemnification under Section 10.4.2, if deemed necessary by
Parent Tax Indemnitees, Stockholder and Station consent and
submit to jurisdiction over them in the courts (state or
federal) of the State of Washington. The requirements in
Sections 10.4.2, 10.4.3, and 10.4.4 that both Stockholder and
Station be parties to such a proceeding shall not apply if
either no longer exists at the time such a judicial
determination is sought in which event only the then existing
entity, if any, need be made a party to the judicial
proceeding.
10.4.6 Limitation
(a) Stockholder and Station shall not be entitled to
indemnification for a 10.4.3 Claim (as defined below) under
Section 10.4.3 unless such 10.4.3 Claim is pending within
seven years and one month after the Trigger Date (as defined
below). Any claim pursuant to the indemnification provisions
of Section 10.4.3 hereof or any written indication from the
<PAGE>
<PAGE> 83
IRS of its intention to challenge the Distribution's
qualification for nonrecognition of gain (or no inclusion of
income) treatment under Section 355 of the Code shall be
considered claims (each, a "10.4.3 Claim"). The date on which
Acquiror files its federal income tax return with the Internal
Revenue Service for the year in which the Distribution is
completed shall be the trigger date (the "Trigger Date").
(b) Parent shall not be entitled to indemnification for
a 10.4.2 Claim (as defined below) under Section 10.4.2 unless
such 10.4.2 Claim is pending within three years after the
Trigger Date. Any claim pursuant to the indemnification
provisions of Section 10.4.2 hereof or any written indication
from the IRS of its intention to challenge the Distribution's
qualification for nonrecognition of gain (or no inclusion of
income) treatment under Section 355 of the Code shall be
considered claims (each, a "10.4.2 Claim").
10.4.7 Assistance and Cooperation
After the Closing Date, each of Stockholder, Station,
Parent and Acquiror shall:
(a) assist (and cause their respective Affiliates to
assist) the other parties in preparing any Tax Returns or
reports that any such other party is responsible for preparing
and filing in accordance with this Section 10.4;
(b) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns;
(c) make available to the other parties and to any
taxing authority as reasonably requested all information,
records and documents relating to Taxes of Station or Taxes of
Parent as a result of the Distribution; and
(d) furnish the other parties with copies of all
correspondence received from any taxing authority in
connection with any Tax audit or information request relating
to Taxes that the other parties may be required to indemnify
under Section 10.4.1 or 10.4.2.
10.4.8 Parent Indemnification of Acquiror
Parent agrees to indemnify Acquiror for all Tax liability
for which Acquiror is or may be liable solely as a result of
being a member of Parent's Affilitated Group (and not as a
result of its own operations).
<PAGE>
<PAGE> 84
10.5 Waivers
Any terms, covenants, representations, warranties or
agreements of any party hereto may be waived at any time by an
instrument in writing executed by the party for whose benefit
such terms exist. The failure of any party at any time or
times to require performance of any provision hereof shall not
in any manner affect its right at a later time to enforce the
same. No waiver by any party of any condition or breach of
any terms, covenants, representations, warranties or
agreements contained in this Agreement shall be effective
unless in writing, and no waiver in any one or more instances
shall be deemed to be a further or continuing waiver of any
other condition or any breach of any other terms, covenants,
representations, warranties or agreements.
10.6 Counterparts
This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
10.7 Headings
The headings preceding the text of Sections of this
Agreement are for convenience of reference only and shall not
be deemed parts hereof.
10.8 Applicable Law
This Agreement shall be governed by and construed and
enforced in accordance with the laws of the state of
Washington, as applied to contracts executed and to be fully
performed in such state by citizens of such state.
10.9 Parties in Interest
All the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable
against the respective successors and permitted assigns of the
parties hereto, whether herein so expressed or not, but this
Agreement shall not be assigned by any party hereto in whole
or in part without the prior written consent of the other
parties hereto. Nothing in Section 6.3.8 shall be construed
to give to any employee of Station any legal or equitable
right, remedy or claim under this Agreement.
<PAGE>
<PAGE> 85
10.10 Notices
Any notice or demand desired or required to be given
hereunder shall be in writing and given by personal delivery,
facsimile or certified or registered mail, postage prepaid and
addressed as set forth below, or to such other address as any
party shall have previously designated by such notice. Any
notice delivered personally or by facsimile shall be deemed to
be received on the date of delivery and any notice mailed
shall be deemed to be received three days after the date on
which it was mailed, so long as it is in fact received within
five days.
Notices to Parent, Acquiror, Stockholder and Station
shall be sent, unless any such party shall have notified the
other parties hereto in writing of any change in such address:
TO PARENT:
LIN Broadcasting Corporation
5295 Carillon Point
Kirkland, Washington 98033
Attention: General Counsel
Facsimile: (206) 828-1900
TO ACQUIROR:
LIN Television Corporation
5295 Carillon Point
Kirkland, Washington 98033
Attention: General Counsel
Facsimile: (206) 828-1900
TO STOCKHOLDER:
Cook Inlet Communications, Inc.
Suite 450
1800 Avenue of the Stars
Los Angeles, California 90067
Attention: Stephen C. Hillard
Facsimile: (310) 556-2752
with a copy to:
Munger, Tolles & Olson
Suite 3500
355 South Grand Avenue
Los Angeles, California 90071
Attention: John Frank
Facsimile: (213) 687-3702
<PAGE>
<PAGE> 86
TO STATION:
Cook Inlet Communications Corp.
Suite 450
1800 Avenue of the Stars
Los Angeles, California 90067
Attention: Stephen C. Hillard
Facsimile: (310) 556-2752
with a copy to:
Munger, Tolles & Olson at the above address
10.11 Bulk Sales Laws
Acquiror hereby waives compliance with the Bulk Sales
Laws of the state of Connecticut, and Stockholder agrees to
indemnify and hold harmless Acquiror from, and reimburse
Acquiror for, any and all claims, liabilities or obligations
that Acquiror may suffer or incur by virtue of such
noncompliance.
10.12 Entire Understanding
The terms set forth in this Agreement, together with the
other agreements executed by the parties and their Affiliates
on the date hereof and the Confidentiality Agreement, as
modified by Section 6.1.6, are intended to be the final,
complete and exclusive expression of the parties' agreement
and supersede all prior or contemporaneous understandings or
agreements, whether oral or written.
<PAGE>
<PAGE> 87
IN WITNESS WHEREOF, the parties hereto have entered into
and signed this Agreement as of the date and year first above
written.
LIN BROADCASTING CORPORATION
DONALD GUTHRIE
By ____________________________
Its ______________________
LIN TELEVISION CORPORATION
DONALD GUTHRIE
By ____________________________
Its ____________________
COOK INLET COMMUNICATIONS, INC.
STEVE HILLARD
By ____________________________
Its VICE PRESIDENT
COOK INLET COMMUNICATIONS CORP.
STEVE HILLARD
By ____________________________
Its VICE PRESIDENT
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
made and entered into on ___________________, 1994 between LIN
Television Corporation, a Delaware corporation (the "Company"),
and Cook Inlet Communications Corp., a Delaware corporation
("Station").
RECITALS
A. The Company and Station are entering into an Asset
Purchase Agreement (the "Purchase Agreement") pursuant to which
the Company will issue shares of its common stock, $.01 par value
per share ("Common Stock"), to Station as partial consideration
for the purchase of substantially all its assets.
B. The execution and delivery of this Agreement by the
Company is a condition precedent to the obligations of the
parties under the Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants contained herein, the parties hereto agree as
follows:
1. Definitions
For the purposes of this Agreement, the following terms have
the meanings indicated below:
1933 Act. The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
1934 Act. The Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
Commission. The Securities and Exchange Commission.
Form S-1. Such form under the 1933 Act as in effect on
the date hereof or any registration form subsequently adopted by
the Commission.
Register, registration and registered. A registration
effected by preparing and filing a registration statement or
similar document with the Commission in compliance with the
1933 Act, and the declaration or ordering of effectiveness of
such registration statement or document.
<PAGE>
<PAGE> 2
Registrable Securities. The Shares (as defined below);
provided, however, that those Shares as to which the following
apply shall cease to be Registrable Securities: (a) a
registration statement with respect to the sale of such
Registrable Securities (other than any registration statement
registering the sale of such securities by the Company to
Station) shall have become effective under the 1933 Act and such
Registrable Securities shall have been disposed of under such
registration statement; (b) such Registrable Securities shall
have been sold pursuant to Rule 144 or 145(d) or any successor
rule or provision promulgated under the 1933 Act; or (c) such
Registrable Securities shall have ceased to be outstanding.
Registration Expenses. All expenses incident to the
Company's performance of or compliance with Sections 2 and 4,
including, without limitation, all registration and filing fees
(including filing fees with respect to the Commission and to the
National Association of Securities Dealers, Inc.), all fees and
expenses of complying with state securities or "blue sky" laws
(including fees and disbursements of underwriters' counsel in
connection with any "blue sky" memorandum or survey), all
printing expenses, all registrars' and transfer agents' fees and
all fees and disbursements of the Company's counsel and
independent public accountants.
Selling Expenses. All underwriters' discounts, fees
and commissions, applicable transfer taxes, fees and
disbursements of counsel for any underwriter of any Registrable
Securities being registered (other than as described above)
including such fees and disbursements of counsel which the
parties expect to be paid by the underwriter, and any fees and
disbursements of any counsel, accountants or other advisors for
any seller of the Registrable Securities being registered.
Shares. The shares of Common Stock issued to Station
pursuant to the Purchase Agreement and any securities that may be
issued by the Company from time to time with respect to, in
exchange for, or in replacement of such shares of Common Stock,
including, without limitation, securities issued as a stock
dividend on or pursuant to a stock split of such shares of Common
Stock.
2. Request for Registration
2.1 Request by Station
Subject to the limitations set forth in Section 2.2, upon
written request of the holder or holders of an aggregate of 20%
or more of the Registrable Securities then outstanding that the
Company effect the registration of all or part of the Registrable
Securities held by such holder or holders, the Company will
promptly give written notice of such requested
<PAGE>
<PAGE> 3
registration to all holders of Registrable Securities and
thereupon will promptly exercise all reasonable efforts to effect
the registration under the 1933 Act of:
(a) the Registrable Securities that the Company has
been so requested to register by such holder or holders and
(b) all other Registrable Securities that the Company
has been requested to register by the holders of Registrable
Securities by written request delivered to the Company within
15 days after the giving of such written notice by the Company.
Each such registration shall be on Form S-1, or on Form S-3
(if available for such offering), as determined by the Company,
permitting registration of such Registrable Securities for resale
by such holders in the manner or manners designated by them
(including, without limitation, one or more underwritten
offerings).
The Company shall use all reasonable efforts to keep such
registration effective for a period of 30 days from the date on
which the registration is declared effective (subject to
extension pursuant to the next paragraph of this Section 2.1) or
for such shorter period that will terminate when all Registrable
Securities covered by such registration have been sold pursuant
to such registration or withdrawn from sale, unless such failure
to become or remain effective is the result of an action or
failure to act by any holder of Registrable Securities to be
covered by such registration.
A registration will not be deemed to have been effected
unless it has become effective; provided, that if after it has
become effective the offering of Registrable Securities pursuant
to such registration is interfered with by any stop order or
other governmental agency, such registration will be extended for
the period of any such suspension or, if required, a new
registration statement shall be filed and diligently prosecuted,
so that the holders shall have had Registrable Securities
included in an effective registration until they have been sold.
If any of the Registrable Securities covered by a
registration pursuant to this Section 2.1 are to be sold in an
underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering
will be selected by the holders of a majority of such Registrable
Securities included in such offering, provided that such
investment banker or manager shall be reasonably satisfactory to
the Company.
<PAGE>
<PAGE> 4
2.2 Limitations on Registration Obligation
The Company's obligations under Section 2.1 shall be subject
to the following limitations:
(a) the Company shall not be required to effect a
registration pursuant to Section 2.1 unless the requests from
such holder or holders for such registration, which have not been
withdrawn or reduced, cover Registrable Securities at least equal
to an aggregate offering of $2,000,000;
(b) if the Company shall furnish to such holder or
holders a certificate signed by the President or Vice President
of the Company stating that the Board of Directors reasonably
believes that, during such period, the requested registration
would have a material adverse effect on, or interfere in any
material respect with, any proposal or plan by the Company to
engage in any private or public financing or any material pending
corporate development or transaction, including, without
limitation, a material acquisition of assets, any tender offer or
any merger, consolidation or other similar transaction material
to the Company and its subsidiaries taken as a whole, the Company
shall have the right to defer the filing or effectiveness of the
registration statement for a period of not more than 120 days in
any one calendar year after receipt of the request of such holder
or holders under Section 2.1; provided, however, that no deferral
of the registration pursuant to this Section 2.2(b) shall relieve
the Company of its obligations pursuant to this Agreement by
virtue of Section 2.2(c);
(c) the Company shall not be required to effect any
registration pursuant to Section 2.1 if the written request
therefor is not received by the Company within seven years from
the date of this Agreement;
(d) the Company shall not be obligated to effect more
than two registrations pursuant to Section 2.1; and
(e) if (i) the registration pursuant to Section 2.1
involves a firm commitment underwritten offering and (ii) the
managing underwriters of such offering shall advise such holders
in writing that, in their judgment, the total amount of
securities proposed to be included in such offering is
sufficiently large to materially and adversely affect the success
of the offering, then the number of shares of Registrable
Securities that are proposed to be registered by each holder who
requests registration pursuant to Section 2.1 shall be reduced
pro rata in proportion to the reduction in the total number of
shares of Registrable Securities as to which registration has
been requested. To the extent Registrable Securities requested
to be registered are excluded from the offering, then the holders
of such Registrable Securities shall
<PAGE>
<PAGE> 5
have the right to one additional registration hereunder with
respect to such Registrable Securities, provided that the failure
of such Registrable Securities to be registered is through no
fault of such holder, and provided that such an additional
registration is available on only one occasion.
2.3 Inclusion of the Company's Securities in
Registration
The Company, on its own behalf or on behalf of its security
holders, shall have the right to include any of the Company's
securities in any registration initiated by a holder or holders
of Registrable Securities pursuant to Section 2.1 (to the extent
permitted by the rules applicable to use of Form S-1 or other
appropriate form); provided, however, that if (i) the
registration pursuant to Section 2.1 involves a firm commitment
underwritten offering and (ii) the managing underwriters of such
underwritten offering shall advise the Company in writing that,
in their judgment, the distribution of all or a specified portion
of the securities to be registered on behalf of the Company or
its security holders pursuant to this Section 2.3 concurrently
with the Registrable Securities being distributed by such
underwriters will materially and adversely affect the
distribution of such Registrable Securities by such underwriters,
then the Company will exclude all or such specified portion of
such securities (other than the Registrable Securities) to be
registered on behalf of the Company or its security holders from
such underwritten offering and will select, in its sole
discretion, the securities to be so excluded from such offering.
2.4 Withdrawal of Registrable Securities by
Holders
The holders of Registrable Securities may withdraw their
Shares from registration, but unless the withdrawal is due to a
material adverse change in the condition, business or prospects
of the Company which was not, and upon reasonable investigation
of public information by such holders could not have been, known
at the time of the request, the Company will not be obligated to
effect another registration pursuant to Section 2.1.
Notwithstanding the foregoing, any request for a registration
that is withdrawn by the holders prior to the effectiveness of
the registration statement shall not be counted as one of the two
registrations referenced in Section 2.2(d) if the holders
reimburse the Company for all expenses incurred by the Company in
preparing such registration statement.
2.5 Piggyback Registration
2.5.1 If the Company shall, at any time prior
to the seventh anniversary of this Agreement, propose to
<PAGE>
<PAGE> 6
register any shares of Common Stock under the 1933 Act, whether
or not for sale for its own account, on a registration form and
in a manner that would permit registration of Registrable
Securities for sale to the public under the 1933 Act, it will
each such time give prompt written notice to all holders of
Registrable Securities of its intention to do so, describing such
securities and specifying the form and manner and the other
relevant facts involved in such proposed registration and, upon
the written request of any such holder of Registrable Securities
delivered to the Company within 15 days after such notice shall
have been given to such holder and subject to the limitations set
forth in Section 2.5.2, the Company will use all reasonable
efforts to effect the registration under the 1933 Act, as
expeditiously as is reasonably possible, of all Registrable
Securities that the Company has been so requested to register by
the holders of Registrable Securities, to the extent required to
permit the disposition (in accordance with the intended method
thereof specified in such notice from the Company as aforesaid)
of the Registrable Securities so to be registered. The Company
shall use all reasonable efforts to cause the managing
underwriter or underwriters of a proposed firm commitment
underwriting to permit the holders of Registrable Securities
requesting to be included in such offering to include such
securities in such offering on the same terms and conditions as
any similar security of the Company included therein.
2.5.2 The Company's obligations under
Section 2.5.1 shall be subject to the following limitations:
(a) if, at any time after giving such
written notice of its intention to register any of such
securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company
shall determine for any reason not to register such securities,
the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities that has
requested to register Registrable Securities and thereupon the
Company shall be relieved of its obligation to register any
Registrable Securities in connection with such registration;
(b) if (i) the registration so proposed by
the Company involves a firm commitment underwritten offering and
(ii) the managing underwriters of such underwritten offering
shall advise the Company in writing that, in their judgment, the
total amount of securities which they or the Company and any
other persons or entities intended to include in such offering is
sufficiently large to materially and adversely affect the success
of the distribution of such securities by such underwriters, then
the Company will promptly advise each such holder of Registrable
Securities thereof and may require, by written notice to each
such holder accompanying such advice,
<PAGE>
<PAGE> 7
that all or such specified portion of such Registrable Securities
be excluded from such underwritten offering; provided, however,
that the securities so excluded shall be apportioned first to any
selling security holders other than holders of Registrable
Securities and then pro rata among holders of Registrable
Securities according to the total dollar amount of securities
entitled to be included therein owned by each holder of
Registrable Securities or in such other proportions as shall
mutually be agreed to by such holders of Registrable Securities;
(c) the Company shall not be obligated to
effect any registration of Registrable Securities under this
Section 2.5 incidental to the registration of any of its
securities in connection with mergers, acquisitions, exchange
offers, distributions to its stockholders, dividend reinvestment
plans, stock option or other employee benefit plans, debenture
offerings or preferred stock offerings; and
(d) if the registration so proposed by the
Company involves an underwritten offering, the right of any
holder to include his or her Registrable Securities in such
registration shall be conditioned upon the following: (i) such
holder shall participate in such underwriting and only such
holder's shares of Registrable Securities that are to be
distributed pursuant to the underwriting shall be included in
such registration and (ii) all holders proposing to distribute
their Registrable Securities through such underwriting shall
enter into an underwriting agreement in customary form with the
underwriter or underwriters.
3. Expenses
The Company will pay all Registration Expenses in connection
with each of the registrations of Registrable Securities effected
by the Company pursuant to Section 2; provided, however, that the
Company shall not be required to pay Registration Expenses for
any registration process begun pursuant to Section 2 if the
registration process is terminated by the Company pursuant to
Section 2.2(a) because of withdrawals of requests for
registration by the holders of Registrable Securities (in which
case all withdrawing holders shall bear such expenses pro rata in
proportion to the shares of Registrable Securities withdrawn);
provided, further, however, that if at the time of such
withdrawal the withdrawing holders have learned of a material
adverse change in the condition, business or prospects of the
Company from that which was not, and, upon reasonable
investigation would not have been, known to the withdrawing
holders at the time of their request, then the withdrawing
holders shall not be required to pay any of such expenses and
shall retain their rights pursuant to Section 2. Holders of
Registrable Securities being registered pursuant to
<PAGE>
<PAGE> 8
this Agreement shall pay all Selling Expenses with each such
holder bearing a pro rata portion of the Selling Expenses based
upon the number of Registrable Securities registered in such
registration by each such holder.
4. Registration Procedures
4.1 The Company's Obligations
If and whenever the Company is required to effect the
registration of any Registrable Securities under this Agreement,
the Company will as expeditiously as is reasonably possible:
(a) prepare and file with the Commission, on any
appropriate form, a registration statement with respect to such
Registrable Securities and use all reasonable efforts to cause
such registration statement to become and remain effective;
provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of
the registration statement, the Company shall furnish to the
holders of the Registrable Securities covered by such
registration statement and the underwriters, if any, copies of
all such documents proposed to be filed, which documents will be
subject to the review of such holders and underwriters, and the
Company will not file any registration statement or amendment
thereto or any prospectus or any supplement thereto (including
such documents incorporated by reference) to which the holders of
a majority of the shares of the Registrable Securities covered by
such registration statement or the underwriters, if any, shall
reasonably object, but their reasonable objection may only be
with respect to information contained in such document about the
selling holder of the Registrable Securities and may be based
only upon an assertion that such information contains an untrue
statement of a material fact or an omission to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances, not
misleading;
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to
keep such registration statement effective for the applicable
period, cause the related prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in
force) under the 1933 Act, and comply with the provisions of the
1933 Act with respect to the disposition of all Registrable
Securities and other securities covered by such registration
statement in accordance with the intended method of disposition
by the seller or sellers thereof set forth in such registration
statement;
<PAGE>
<PAGE> 9
(c) furnish to each selling holder of Registrable
Securities and each managing underwriter, without charge, at
least one signed copy of the registration statement and any
posteffective amendment thereto, including financial statements
and schedules, all documents incorporated therein by reference
and all exhibits (including those incorporated by reference);
(d) furnish to each seller of such Registrable
Securities such number of copies of the prospectus and any
supplements thereto included in such registration statement
(including a preliminary prospectus) and other documents as such
seller may reasonably request in order to facilitate the sale or
disposition of such Registrable Securities, and consent to the
use of the prospectus or any amendment or supplement thereto by
each of the selling holders of Registrable Securities and the
underwriters, if any, in connection with the offering and sale of
the Registrable Securities covered by the prospectus or any
amendment or supplement thereto;
(e) use all reasonable efforts to register or qualify
all securities covered by such registration statement under such
other securities or "blue sky" laws of such jurisdictions as each
seller or underwriter shall reasonably request, and do any and
all other acts and things that may be necessary to enable such
seller or underwriter to consummate the disposition in such
jurisdictions of its Registrable Securities covered by such
registration statement, except that the Company shall not for any
such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it is not so
qualified, or to subject itself to taxation in respect of doing
business in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(f) notify the selling holders of Registrable
Securities and the managing underwriters, if any, promptly, and
(if requested by any such person) confirm such advice in writing:
(i) when the prospectus or any prospectus supplement
or posteffective amendment has been filed, and, with respect
to the registration statement or any posteffective
amendment, when the same has become effective;
(ii) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus
or for additional information;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that
purpose;
<PAGE>
<PAGE> 10
(iv) if at any time the representations and warranties
of the Company contemplated by paragraph (k) below cease to
be true and correct;
(v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the
Company's knowledge of the initiation or threatening of any
proceedings for such purpose; and
(vi) of the happening of any event as a result of which
the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing
or if it is necessary to amend or supplement such prospectus
to comply with the law, and, at the request of any such
seller, prepare and furnish to such seller a reasonable
number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities
or securities, such prospectus, as amended or supplemented,
will comply with the law;
(g) cause all Registrable Securities to be listed on
any national securities exchange on which shares of Common Stock
are then listed, if such securities are not already so listed and
if such listing is then permitted under the rules of such
exchange, or qualify such securities for inclusion in the
National Association of Securities Dealers, Inc. Automated
Quotation System, and provide a transfer agent and registrar for
such Registrable Securities not later than the effective date of
such registration statement;
(h) issue to any underwriter or any other person to
which any holder of Registrable Securities may sell such
Registrable Securities in connection with such registration (and
to any direct or indirect transferee of any such underwriter or
to such holder, if such registered offering is not underwritten)
certificates evidencing such Registrable Securities without any
legend restricting the transferability of the Registrable
Securities;
(i) use all reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the
registration statement or the lifting of any suspension of the
qualifications (or exemption from qualification) at the earliest
possible moment;
(j) if reasonably requested by the managing
underwriter or underwriters or the holders of a majority of the
<PAGE>
<PAGE> 11
Registrable Securities being sold in connection with an
underwritten offering, immediately incorporate in a prospectus
supplement or posteffective amendment such information as the
managing underwriters and the holders of a majority of the
Registrable Securities being sold agree should be included
therein relating to the sale of the Registrable Securities,
including, without limitation, information with respect to the
number of shares of Registrable Securities being sold to such
underwriters and the purchase price being paid therefor by such
underwriters and with respect to any other terms of the
underwritten (or best efforts underwritten) offering of the
Registrable Securities to be sold in such offering; and make all
required filings of such prospectus supplement or posteffective
amendment as soon as notified of the matters to be incorporated
in such prospectus supplement or posteffective amendment;
(k) otherwise use its commercially reasonable efforts
to comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders
earnings statements satisfying the provisions of Section 11(a) of
the 1933 Act, no later than 45 days after the end of any 12-month
period (or 90 days, if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in an
underwritten offering or, if not sold to underwriters in such an
offering, (ii) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the
registration statement, which statements shall cover said 12-
month periods; and
(l) enter into such agreements (including an
underwriting agreement) and take all such actions in connection
therewith in order to expedite or facilitate the disposition of
such Registrable Securities and, in such connection, whether or
not an underwriting agreement is entered into and whether or not
the registration is an underwritten registration:
(i) make such representations and warranties to the
holders of such Registrable Securities and the underwriters,
if any, in form, substance and scope as are customarily made
by issuers to underwriters in primary underwritten
offerings;
(ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the
managing underwriters, if any, and the holders of a majority
of the shares of Registrable Securities being sold)
addressed to each selling holder and the underwriters, if
any, covering the matters customarily covered in opinions
requested in underwritten offerings and
<PAGE>
<PAGE> 12
such other matters as may be reasonably requested by the
underwriters;
(iii) obtain "cold comfort" letters and updates thereof
from the Company's independent certified public accountants
addressed to the selling holders of Registrable Securities
and the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily
covered in "cold comfort" letters by underwriters in
connection with primary underwritten offerings;
(iv) if an underwriting agreement is entered into, the
same shall set forth in full the customary indemnification
provisions and procedures of Section 7 hereof with respect
to all parties to be indemnified pursuant to said Section;
and
(v) the Company shall deliver such documents and
certificates as may be requested by the holders of a
majority of the shares of the Registrable Securities being
sold and the managing underwriters, if any, to evidence
compliance with clause (i) above and with any customary
conditions contained in the underwriting agreement.
The above shall be done at each closing under such underwriting
or similar agreement or as and to the extent required thereunder.
In the event the Company shall give any notice of the
happening of an event of the kind described in Section 4(f)(vi),
the time period mentioned in Section 2.1 shall be extended by the
number of days during the period from and including the date of
the giving of such notice to and including the date when each
seller of Registrable Securities covered by such registration
statement either receives the copies of the supplemented or
amended prospectus contemplated by Section 4(f)(vi) or is advised
in writing by the Company that the use of the Prospectus may be
resumed.
5. Preparation; Reasonable Investigation
In connection with the preparation and filing of each
registration statement registering Registrable Securities under
the 1933 Act, the Company will give the holders of Registrable
Securities on whose behalf such Registrable Securities are to be
so registered and their underwriters, if any, and their
respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission,
and each amendment thereof or supplement thereto, and will afford
such holders of Registrable Securities, underwriters, counsel and
accountants reasonable access to the Company's
<PAGE>
<PAGE> 13
records, personnel and properties, including all financial
records, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any
such representative, underwriter, attorney or accountant in
connection with the registration.
6. Furnish Information
The Company may require each seller of Registrable
Securities as to which registration is being effected to furnish
to the Company such information regarding such seller, the
Registrable Securities held by such seller and the intended
method of disposition of such securities as shall be reasonably
required to effect the registration of such seller's Registrable
Securities as the Company may reasonably request, and the Company
may exclude from such registration the Registrable Securities of
any seller who unreasonably refuses to furnish such information
within a reasonable period after receiving such request.
7. Indemnification and Contribution
In the event any Registrable Securities are included in a
registration statement under Section 2:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless Station, the officers, directors,
agents and employees of Station, any underwriter (as defined in
the 1933 Act) for Station and each person, if any, who controls
Station or any underwriter within the meaning of the 1933 Act or
the 1934 Act, against any losses, claims, damages or liabilities
(joint or several) to which they may become subject under the
1933 Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively, a
"Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements
thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading, or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the
1933 Act, the 1934 Act or any state securities law; and the
Company will reimburse Station, officer, director, agent,
employee, underwriter or controlling person for any legal or
other expenses reasonably incurred by it, him or her in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
<PAGE>
<PAGE> 14
indemnity agreement contained in this Section 7(a) shall not
apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action
to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by Station, or any such underwriter or controlling
person.
(b) To the extent permitted by law, Station will
indemnify and hold harmless the Company, each of its officers,
directors, agents or employees, each person, if any, who controls
the Company within the meaning of the 1933 Act and any
underwriter against any losses, claims, damages or liabilities
(joint or several) to which they may become subject, under the
1933 Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with
information furnished by Station expressly for use in connection
with such registration; and Station will reimburse any legal or
other expenses reasonably incurred by the Company or any such
officer, director, agent, employee, controlling person or
underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 7(b) shall
not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected
without the consent of Station, which consent shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any action
(including any governmental action), such indemnified party will,
if a claim in respect thereof is to be made against any
indemnifying party under this Section 7, deliver to the
indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate
in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party shall have
the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing
or conflicting interests between such indemnified party and any
other party represented by such
<PAGE>
<PAGE> 15
counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the
commencement of any such action, to the extent prejudicial to its
ability to defend such action, shall relieve such indemnifying
party of liability to the indemnified party under this Section 7
to the extent of such prejudice, but the omission so to deliver
written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise
than under this Section 7.
(d) If recovery is not available under the foregoing
indemnification provisions of this Section 7, for any reason
other than as specified therein, the parties entitled to
indemnification by the terms thereof shall be entitled to
contribution to liabilities and expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying
parties and the indemnified parties, except to the extent that
contribution is not permitted under Section 11(f) of the
1933 Act. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among
other things, the parties' relative knowledge and access to
information concerning the matter with respect to which the claim
was asserted, the opportunity to correct and prevent any
statement or omission and any other equitable considerations
appropriate under the circumstances. The Company and Station
agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita
allocation. Station shall not be obligated to make any
contribution hereunder which in the aggregate exceeds the total
public offering price of the securities sold by Station, less the
aggregate amount of any damages which Station has otherwise been
required to pay in respect of the same claim or any substantially
similar claim.
8. Reports Under the 1934 Act
With a view to making available to the holders of
Registrable Securities the benefits of Rules 144 and 145(d)
promulgated under the 1933 Act and any other rule or regulation
of the Commission that may at any time permit a holder of
Registrable Securities to sell securities of the Company to the
public without registration or pursuant to a registration
hereunder, the Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144, at all times;
(b) take such action as is reasonably necessary to
enable holders of Registrable Securities to utilize Form S-3 for
the sale of their Registrable Securities;
<PAGE>
<PAGE> 16
(c) file with the Commission in a timely manner all
reports and other documents required of the Company under the
1933 Act and the 1934 Act; and
(d) furnish to any holder of Registrable Securities,
so long as such holder owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, and/or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most
recent annual or quarterly report of the Company and such other
reports and documents filed with the Commission by the Company,
and (iii) such other information as may be reasonably requested
in availing any such holder of any rule or regulation of the
Commission which permits the selling of any such securities
without registration or pursuant to such form, including making
publicly available other information necessary to permit sales
pursuant to Rule 144A under the 1933 Act.
9. Registration of Securities Other Than Registrable
Securities
The Company has not granted and, without the written consent
of the holders of a majority of the then-outstanding Registrable
Securities, shall not grant to any person the right to request
the Company to register any equity securities under the 1933 Act
unless the rights so granted are subject to the prior rights of
the Holders of Registrable Securities set forth in, and are not
otherwise in conflict or inconsistent with the provisions of,
this Agreement.
10. Miscellaneous
10.1 Amendment and Waivers
Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively),
only with the written consent of the Company and the holders of a
majority of the Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this Section 10.1
shall be binding upon each holder of Registrable Securities at
the time outstanding, each future holder of Registrable
Securities, and the Company.
10.2 No Inconsistent Agreements
The Company will not on or after the date of this Agreement
enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the holders of
<PAGE>
<PAGE> 17
Registrable Securities in this Agreement or otherwise conflicts
with the provisions hereof. The Company has not previously
entered into any agreement with respect to its securities
granting any registration rights to any person. The rights
granted to the holders of Registrable Securities hereunder do not
in any way conflict with and are not inconsistent with the rights
granted to the holders of the Company's securities under any such
agreements.
10.3 Successors and Assigns
This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties,
including, without limitation and without the need for an express
assignment, subsequent holders of Registrable Securities;
provided, however, that this Agreement shall not inure to the
benefit of or be binding upon a successor or assign of a holder
of Registrable Securities unless and to the extent such successor
or assign acquired Registrable Securities from such holder, and
such successor or assign is restricted by Rule 144 of the
Commission in the public sale of such Registrable Securities
because such successor or assign is an "affiliate" of the Company
at the time of sale.
10.4 Notices
Any notice required or permitted to be given hereunder shall
be in writing given by personal delivery, certified or registered
mail (postage prepaid) or facsimile, addressed as respectively
set forth below or to such other address as any party shall have
previously designated by such a notice. The effective date of
any notice or request shall be three days from the date it is
sent so long as it is in fact received within five days, or when
sent by facsimile or personally delivered.
Notices to the Company and holders of Registrable Securities
shall be sent as follows:
To the Company:
LIN Television Corporation
5295 Carillon Point
Kirkland, WA 98033
Attention: General Counsel
Fax: (206) 828-1900
To a holder of Registrable Securities:
Cook Inlet Communications Corp.
Suite 450
1800 Avenue of the Stars
Los Angeles, CA 90067
<PAGE>
<PAGE> 18
Attention: ______________________
Fax: _____________________________
with a copy to:
Munger, Tolles & Olson
35th Floor
355 South Grand Avenue
Los Angeles, CA 90071-1560
Attention: John B. Frank
Fax: (213) 687-3702
10.5 Governing Law
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Washington
without regard to conflicts-of-laws principles.
10.6 Counterparts
This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
<PAGE>
<PAGE> 19
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
LIN TELEVISION CORPORATION
By: ___________________________
Its _______________________
COOK INLET COMMUNICATIONS CORP.
By: ___________________________
Its _______________________
LIN TELEVISION CORPORATION
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made as of
the __ day of ______, 1994, by and among LIN TELEVISION
CORPORATION, a Delaware corporation (the "Company"), McCAW
CELLULAR COMMUNICATIONS, INC., a Delaware corporation ("McCaw"),
and COOK INLET COMMUNICATIONS CORP., a Delaware corporation ("Cook
Inlet") (McCaw and Cook Inlet being referred to collectively as,
the "Stockholders").
RECITALS
A. McCaw, through its wholly owned subsidiary, owns
____________ shares of common stock, par value $.01 per share (the
"Common Stock"), of the Company.
B. Cook Inlet is acquiring __________ shares of the Common
Stock as partial consideration for the sale of substantially all
of its assets to the Company pursuant to an Asset Purchase
Agreement dated May __, 1994 (the "Asset Purchase Agreement").
C. It is a condition to the Asset Purchase Agreement that
the parties enter into this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and the
agreements set forth below, the parties hereby agree as follows:
1. General
1.1 Voting of Shares
The Stockholders shall vote or cause to be voted all shares
of Common Stock or other voting securities of the Company
beneficially owned by them or as to which they have voting power
(the "Stock"), and shall timely take any other necessary actions
to accomplish and effectuate the provisions of this Agreement.
1.2 Legend on Certificates
Each certificate evidencing any of the Stock shall bear a
legend substantially as follows:
"The securities represented by this certificate are
subject to the terms and conditions of a certain
Stockholders Agreement dated as of _____, 1994, as
at any time amended, and may not be transferred
except in accordance with the terms and provisions
of said Agreement, a copy of which is on file at
the principal executive office of
<PAGE>
<PAGE> 2
the Company and will be furnished to the holder of
this certificate upon request and without charge."
2. Election of Directors
2.1 Composition of the Board of Directors
The Stockholders shall take all necessary action to cause the
Company's Board of Directors to consist of ten (10) members. In
connection with each election of directors of the Company, the
Stockholders will take all necessary action to cause members of
the Company's Board of Directors (except in the case of
replacement directors, which is governed by Section 2.2) to be
nominated, in accordance with the Company's procedure for
nomination of directors as provided in its By-Laws and to the
extent permissible in accordance with applicable legal
requirements, as follows:
(a) McCaw Nominees. McCaw shall have the right to
designate six (6) qualified nominees, each of whom shall be a
United States citizen; provided, however, that if at any time
McCaw is the beneficial owner of less than twenty-five percent
(25%) of the outstanding Common Stock, McCaw's right under this
Agreement to nominate six nominees shall thereupon cease.
(b) Cook Inlet Nominees. Cook Inlet shall have the
right to designate one (1) qualified nominee, who shall be a
United States citizen; provided, however, that if at any time Cook
Inlet is the beneficial holder of less than three and one-half
percent (3 1/2%) of the outstanding Common Stock, Cook Inlet's right
under this Agreement to nominate one director shall thereupon
cease.
(c) Independent Directors. If required by the
Television Private Market Value Guarantee dated ____________, 1994
between the Company and McCaw (the "TV PMVG"), McCaw shall
designate, in addition to the nominees designated pursuant to
paragraph (a) above, the three (3) nominees selected to serve as
the independent directors under Section 1 of the TV PMVG (the
"Independent Directors").
The Stockholders shall cause the persons so designated above
to be nominated for election to the Company's Board of Directors
at the time and in the manner proper for such nomination,
whereupon the Stockholders shall cast all the votes they are
entitled to cast in such election (whether at an annual or special
meeting of stockholders or by written consent in lieu of a meeting
or otherwise and whether they are entitled to cast such votes as a
result of ownership or other control of Stock or by proxy or
otherwise) for the election of such nominees to the Company's
Board of Directors.
<PAGE>
<PAGE> 3
2.2 Replacement of Directors
In the event one or more directors shall cease to serve on
the Company's Board of Directors at a time when the entire Board
of Directors is not being elected, the party that so designated
such person, subject to the next succeeding sentence, shall be
entitled to and shall designate a replacement director as soon as
practicable. In the event of the resignation, withdrawal or
removal of any Independent Director, McCaw will as soon as
practicable designate in accordance with the terms of the TV PMVG
another nominee to serve as Independent Director. The
Stockholders shall thereafter cooperate to effectuate the election
to the Board of Directors each replacement director designated as
provided in this Section 2.2 as soon as practicable and shall cast
all the votes they are entitled to vote (whether at an annual or
special meeting of stockholders or by written consent in lieu of a
meeting or otherwise and whether they are entitled to cast such
votes as a result of ownership or other control of Stock or by
proxy or otherwise) for election of such replacement director to
the Company's Board of Directors.
2.3 Removal of Directors
In the event that any Stockholder that has nominated a
director proposes that such director be removed from the Company's
Board of Directors subject, in the case of the Independent
Directors, to the terms of the TV PMVG, upon the giving of notice
thereof to the other Stockholders, the Stockholders will cast all
the votes they are entitled to vote (whether at an annual or
special meeting of stockholders or by written consent in lieu of a
meeting or otherwise and whether they are entitled to cast such
votes as a result of ownership or other control of Stock or by
proxy or otherwise) and will otherwise cooperate to remove from
the Company's Board of Directors such director as soon as
practicable.
3. Remedies
3.1 Specific Performance
The parties acknowledge that money damages are not an
adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to a court of competent
jurisdiction for specific performance or injunctive or such other
relief as such court may deem just and proper in order to enforce
this Agreement or prevent any violation hereof and, to the extent
permitted by applicable law, each party waives any objection to
the imposition of such relief.
<PAGE>
<PAGE> 4
3.2 Remedies Cumulative
All rights, powers and remedies provided under this Agreement
or otherwise available in respect hereof at law or in equity shall
be cumulative and not alternative, and theexercise or beginning of
the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or
remedy by such party.
4. Successors and Assigns
The provisions of this Agreement shall inure to the benefit
of, and shall be binding upon, any successors to the parties
hereto but shall not otherwise be transferable. No Stockholder
may assign or transfer any Common Stock, or any right to vote or
direct the vote of any Common Stock, to any assignee or transferee
that is an affiliate of such Stockholder or a "group" of which
such Stockholder or any affiliate is a part (as such term is used
in Rule 13d-5 under the Securities Exchange Act of 1934, as
amended) unless such assignee or transferee shall agree in
writing, as a condition to such transfer or assignment, to be
bound as a Stockholder under this Agreement.
5. Third-Party Beneficiaries
This Agreement is not intended to be for the benefit of and
shall not be enforceable by any person or entity that is not a
party hereto, including, without limitation, any stockholders of
the Company not parties hereto.
6. Termination of Agreement
This Agreement shall terminate and be of no further force or
effect upon the earliest to occur of:
(a) The tenth (10th) anniversary of the date hereof
(the "Termination Date"); provided, however, that at any time
within two (2) years prior to the Termination Date (as the same
may be extended from time to time pursuant to this paragraph), any
or all of the parties hereto may by written agreement extend the
duration of this Agreement for an additional period not to exceed
ten (10) years;
(b) With respect to Cook Inlet only, written notice by
Cook Inlet to the other parties hereto, provided that Cook Inlet
and its affiliates and group (as described above) members
beneficially own in the aggregate less than one percent (1%) of
the outstanding shares of Common Stock; and
<PAGE>
<PAGE> 5
(c) With respect to McCaw only, written notice by McCaw
to the other parties hereto, provided that McCaw and its
affiliates and group (as described above) members beneficially own
in the aggregate less than five percent (5%) of the outstanding
shares of Common Stock.
7. Miscellaneous
7.1 No Conflicts
The parties hereto represent that they are not parties to and
do not know of any other agreements that conflict with any of the
provisions of this Agreement.
7.2 Further Assurances
Each party shall execute and deliver such additional
instruments and other documents and shall take such further
actions as may be necessary or appropriate to effect, carry out
and comply with all their obligations under this Agreement.
7.3 Counterparts
This Agreement may be executed in more than one counterpart,
each of which shall constitute an original of this Agreement, but
all of which, when taken together, shall constitute one and the
same instrument.
7.4 Amendment
Except as otherwise provided herein, no amendment, waiver,
interpretation, alteration or modification of any provision of
this Agreement shall be binding unless in writing and signed by
authorized representatives of all the parties hereto.
7.5 Applicable Law
This Agreement shall for all purposes be governed by and
construed in accordance with the laws of Washington, without
regard to the choice of law provisions thereof.
7.6 Notices
Notices given hereunder shall be in writing and shall be
deemed to have been duly given (a) on the date of personal
delivery, (b) on the date of facsimile transmission if such
transmission is sent before or during the addressee's business
hours on a day that is not a Saturday, Sunday or statutory holiday
in the location of the addressee (a "Business Day"), (c) on the
Business Day following facsimile transmission if such transmission
is sent after the addressee's business hours or on a day that is <PAGE>
<PAGE> 6
not a Business Day, or (d) five (5) days after being mailed by
registered or certified mail, return receipt requested, in each
case to the party being notified at the address specified below or
at such other address of which the addressee may subsequently
notify the other parties in writing. Until otherwise notified,
notices shall be directed as follows:
If to the Company:
LIN Television Corporation
5295 Carillon Point
Kirkland, WA 98033
Attn: General Counsel
If to McCaw:
McCaw Cellular Communications, Inc.
5400 Carillon Point
Kirkland, WA 98033
Attn: General Counsel
If to Cook Inlet: With a copy to:
Cook Inlet Communications Corp. Munger, Tolles & Olson
1800 Avenue of the Stars 355 South Grand Avenue
Suite 450 35th Floor
Los Angeles, CA 90067 Los Angeles, CA 90071
Attn: General Counsel Attn: John B. Frank
7.7 Waivers
Any failure of any party to insist upon or enforce strict
performance of any of the provisions of this Agreement or to
exercise any rights or remedies under this Agreement shall not be
interpreted or construed as a waiver or relinquishment to any
extent of such party's right to assert or rely upon any such
provision, right or remedy in that or any other instance.
7.8 Headings
The headings of the sections of this Agreement are for
convenience only and shall not by themselves determine the
interpretation of this Agreement.
7.9 Severability
If any of the provisions or any portion of the provisions of
this Agreement shall be invalid or unenforceable, such invalidity
or unenforceability shall not invalidate or render unenforceable
the entire Agreement, but rather the entire Agreement shall be
construed as if not containing the particular invalid or
<PAGE>
<PAGE> 7
unenforceable provisions or portion thereof and the rights and
obligations of the parties hereto shall be construed and enforced
accordingly.
7.10 Entire Agreement
This Agreement contains the entire agreement and
understanding among the parties with respect to the subject matter
hereof and supersedes all prior understandings and
representations.
IN WITNESS WHEREOF, this Agreement has been executed as of
the date and year first above written.
LIN TELEVISION CORPORATION
By:__________________________
Title:_______________________
MCCAW CELLULAR COMMUNICATIONS, INC.
By:__________________________
Title:_______________________
COOK INLET COMMUNICATIONS CORP.
By:__________________________
Title:_______________________
FIRST AMENDMENT TO PRIVATE MARKET VALUE GUARANTEE
This FIRST AMENDMENT TO PRIVATE MARKET VALUE GUARANTEE
(this "Amendment"), dated June 7, 1994, is between McCaw
Cellular Communications, Inc., a Delaware corporation
("McCaw"), and LIN Broadcasting Corporation, a Delaware
corporation (the "Company"). Capitalized terms used but not
defined in this Amendment shall have the meanings ascribed
thereto in the Guarantee.
WHEREAS, McCaw and the Company have previously entered
into a Private Market Value Guarantee, dated December 11, 1989
(the "Guarantee"), for the benefit of the Company's
stockholders (other than McCaw and its affiliates) in
connection with McCaw's tender offer for the shares of common
stock of the Company;
WHEREAS, the Company is proposing the Transaction (as
hereinafter defined);
WHEREAS, McCaw and the Company have agreed to amend the
Guarantee in connection with the Transaction; and
WHEREAS, the Independent Directors have approved this
Amendment in accordance with the requirements of the
Guarantee;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the parties agree as
follows:
1. Continuing Stockholder Protections
Section 3(C) of the Guarantee is hereby amended to add
the following sentence at the end thereof:
"Notwithstanding the foregoing, the Transaction
will not be undertaken, and the Company will
not take any action whether or not approved by
a majority of the board of directors of the
Company, if the Independent Directors determine
in their good faith judgment, by unanimous
vote, that such Transaction or action would
likely depress the value of the Public Shares
on January 1, 1995, after giving effect to the
Transaction; provided the Transaction may be
undertaken if the Independent Directors
determine in their good faith judgment that
(i) the Transaction is fair, from a financial
point of view, to the holders of the Public
<PAGE>
<PAGE> 2
Shares and (ii) the consideration to be paid in
the proposed acquisition of WTNH - Hartford -
New Haven is fair, from a financial point of
view, to the holders of the Public Shares. The
"Transaction" involves the (y) acquisition by
LIN Television Corporation ("LIN TV") of WTNH -
Hartford - New Haven from Cook Inlet
Communications Corp. and (z) the tax-free
distribution pursuant to Section 355 of the
Internal Revenue Code of the remaining shares
of LIN TV to stockholders of the Company."
2. Counterparts
This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one instrument.
3. Effectiveness
Except as expressly modified herein, the rights and
obligations of the parties hereto under the Guarantee are
hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties have duly executed this
Amendment as of the date first above written.
McCAW CELLULAR COMMUNICATIONS,
INC.
By: WAYNE M. PERRY
Title: Vice Chairman
LIN BROADCASTING CORPORATION
By: DONALD GUTHRIE
Title: Senior Vice President-
Finance
LIN BROADCASTING CORPORATION
5295 Carillon Point
Kirkland, WA 98033
(206) 828-1902
(206) 828-1900 (FAX)
FOR IMMEDIATE RELEASE
LIN BROADCASTING TO SPIN OFF LIN TELEVISION GROUP
ACQUIRES WTNH-TV, CONNECTICUT
KIRKLAND, Wash., June 8, 1994 - LIN Broadcasting Corporation
(NASDAQ: LINB) today announced that it intends to distribute the
common stock of its subsidiary, LIN Television Corp., to LIN
Broadcasting's stockholders on a tax-free basis. LIN also
announced that it entered into a definitive agreement to acquire
WTNH-TV, the ABC affiliate in Hartford-New Haven, Connecticut
from Cook Inlet Communications Corp. for approximately $120
million cash and 11.5% of the common stock of LIN Television
Corp. These transactions will create a public company which owns
seven network-affiliated television stations, including stations
in Dallas, Indianapolis and Norfolk.
Craig O. McCaw, Chairman of the Board and Chief Executive
Officer of LIN Broadcasting Corporation, said "Television and
cellular are two great but fundamentally different businesses
that should be managed separately. We believe the spin-off
enables LIN Television to continue to do acquisitions like WTNH-
TV and feel there is substantial opportunity for an independent,
highly focused television business to grow rapidly and take
advantage of the opportunities we see ahead."
McCaw, who will serve as the Chairman of the new entity,
went on to say, "I am pleased to announce that Gary Chapman, who
has ably shepherded the LIN Television properties since 1989 has
been named President and Chief Executive Officer of the company
which I am confident will continue to grow and prosper as an
independent public company under his leadership. Gary has not
only delivered excellent financial performance, but also been
innovative in the areas of programming and community
involvement."
Gary R. Chapman, currently President of LIN Broadcasting's
television group, said "It is a great time to be going out on our
own in the television industry. Free over-the-air broadcasting
has recovered with the economy and has proven its durability in
the face of competition from cable and other media. These
stations have strong franchises in attractive markets. We
believe that with our major news presence and local programming,
combined with our network affiliations, we can provide real value
to viewers, advertisers and investors."
(more)
<PAGE>
<PAGE> 2
Following the spin off, it is expected that approximately
42% of LIN Television Corp.'s shares will be publicly owned and
approximately 46% will be owned by McCaw Cellular Communications,
Inc. (NASDAQ: MCAWA). A share distribution ratio has not yet
been established. LIN Television Corp. intends to apply for
listing of its shares on NASDAQ. The transaction is subject to
Federal Communications Commission and other approvals, and to
obtaining a satisfactory tax ruling permitting the spin off to be
structured as a tax-free distribution to shareholders of the
common stock of LIN Broadcasting. The closing of the acquisition
and the spin off are expected to occur by year-end 1994.
In connection with these transactions, LIN Television Corp.
and McCaw Cellular will enter into a Private Market Value
Guarantee which will require McCaw Cellular, effective January,
1998, either to acquire all the outstanding shares of LIN
Television Corp. at a private market value per share as
determined by independent investment banks, or to put LIN
Television Corp. in its entirety up for sale, under the direction
of independent directors, in a manner intended to maximize value
for all LIN Television Corp. shareholders. This Guarantee does
not otherwise change the existing Private Market Value Guarantee
between LIN Broadcasting and McCaw Cellular, which provides for
an appraisal process of LIN Broadcasting beginning in January,
1995.
On May 31, LIN entered into a Local Marketing Agreement with
KXTX-TV, channel 39, an independent station in Dallas-Ft. Worth
owned by the Christian Broadcasting Network, Inc. LIN Television
Corp.'s Dallas station, KXAS-TV will handle substantially all
programming and production for both stations. It will also
program the highly acclaimed children's program "Bill Nye the
Science Guy," which is produced in partnership with the Disney
Co., and local news will be rebroadcast over KXTX-TV, providing a
larger audience and expanded production facilities for KXAS-TV's
programming.
Following the acquisition, LIN Television Corp. will own
WTNH-TV; KXAS-TV, channel 5, an NBC affiliate in Dallas-Ft.
Worth, Texas; WISH-TV, channel 8, a CBS affiliate in
Indianapolis, Indiana; WAVY-TV, channel 10, an NBC affiliate in
Hampton Roads-Norfolk-Portsmouth, Virginia; KXAN-TV, channel 36,
an NBC affiliate in Austin, Texas; WAND-TV, channel 17, an ABC
affiliate in Decatur-Champaign-Springfield-Danville, Illinois;
and WANE-TV, channel 15, a CBS affiliate in Ft. Wayne, Indiana.
Pro-forma for the acquisition, LIN Television Corp.'s 1993
revenue would have been approximately $160 million and
broadcasting cash flow would have been approximately $80 million.
LIN Television Corp. expects to have debt at closing of the
acquisition and spin off of approximately $320 million.
(more)
<PAGE>
<PAGE> 3
LIN Broadcasting Corporation is engaged in cellular
telephone operations, television broadcasting and specialty
publishing. LIN has major ownership interests in cellular
telephone systems serving the metropolitan areas of New York
City, Los Angeles, Philadelphia, Dallas-Ft. Worth, Houston and
Galveston. LIN also owns seven network-affiliated television
stations, and publishes advertiser-supported hard cover magazines
placed in the rooms of distinguished hotels in 34 market areas
including most major cities nationwide. McCaw Cellular
Communications, Inc. owns approximately 52% of LIN.
McCaw Cellular Communications, Inc. operating under the name
Cellular One in most of its markets, is the largest cellular
service provider in the United States and is developing and
marketing a broad range of wireless communication services,
including a cellular network that spans the continent and is
capable of transmitting voice and data communications. McCaw
Cellular is the nation's fifth largest messaging service provider
and also provides telephone service for commercial and private
aircraft through its ownership of Claircom Communications Group.,
L.P.
# # #
Contacts:
Media: Bob Ratliffe
Vice President of Corporate Communications
McCaw Cellular Communications, Inc.
(206) 828-8685
(206) 979-4254 (cellular)
Investors/ Donald Guthrie
Analysts: Senior Vice President - Finance
LIN Broadcasting Corporation
(206) 828-1902
Lisa La Magna
Abernathy MacGregor Scanlon
(212) 371-5999
(attachment)
<PAGE>
<PAGE> 4
LIN TELEVISION CORP. STATIONS
NSI
Call Market
Letters Market Rank(1) Channel Affiliation
- - -------- ----------------------- ------- ------- -----------
KXAS-TV Ft. Worth-Dallas, Texas 8 5 NBC
WTNH-TV Hartford-New Haven 25 8 ABC
Connecticut (2)
WISH-TV Indianapolis, Indiana 26 8 CBS
WAVY-TV Hampton Roads-Norfolk- 39 10 NBC
Portsmouth, Virginia
KXAN-TV Austin, Texas 68 36 NBC
WAND-TV Decatur-Champaign- 77 17 ABC
Springfield-Danville,
Illinois
WANE-TV Fort Wayne, Indiana 103 15 CBS
(1) Source: Nielsen Station Index ("NSI") - DMA Market Ranking 1993-
1994, A.C. Nielsen Company.
(2) To be acquired.
