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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
MAY 25, 1995
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Date of report (Date of earliest event reported)
ML MEDIA PARTNERS, L.P.
(Exact name of registrant as specified in its governing instruments)
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DELAWARE 0-14871 13-3321085
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(State or other jurisdiction of incorporation) Commission File Number (I.R.S. Employer Identification Number)
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WORLD FINANCIAL CENTER - SOUTH TOWER
NEW YORK, NEW YORK 10080-6114
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 236-6472
N/A
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(Former name or former address, if changed since last report)
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Page 1 of _____ pages
Exhibit Index appears on page 4
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ITEM 5. OTHER EVENTS.
On May 25, 1995, ML Media Partners, L.P. (the "Partnership") entered
into an agreement (the "Asset Purchase Agreement") with Quincy Newspapers, Inc.
("Quincy") to sell to Quincy substantially all of the assets used in the
operations of the Partnership's television station WREX-TV, Rockford, Illinois
(the "Station"), other than cash and accounts receivable. The purchase price
for the assets is $18,370,500. It is expected that the entire proceeds
of the sale, after application to the expenses and liabilities relating to the
sale, will be applied to repay a portion of the bank indebtedness secured by
the assets of the Station and by the assets of the Partnership's television
station KATC-TV, Lafayette, Louisiana; the remaining balance of the
indebtedness will continue to be secured by the assets of KATC-TV. The Buyer
is not assuming the accounts payable or other liabilities of the Station and
the Partnership will remain liable therefor. Consummation of the sale
pursuant to the Asset Purchase Agreement is subject to the satisfaction of
certain conditions, including obtaining approvals from the Federal
Communications Commission.
The Asset Purchase Agreement is attached as an exhibit hereto.
Reference is made to the Asset Purchase Agreement for all of the terms of the
sale.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 10.1 - Asset Purchase Agreement, dated May 25, 1995, between
ML Media Partners, L.P. and Quincy Newspapers, Inc.
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SIGNATURES
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 hereunto duly authorized.
ML MEDIA PARTNERS, L.P.
BY: MEDIA MANAGEMENT PARTNERS, its
general partner
BY: RP MEDIA MANAGEMENT, a general
partner
BY: IMP MEDIA MANAGEMENT, INC.,
its managing general partner
By: /s/ ELIZABETH MCNEY YATES
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Elizabeth McNey Yates
Vice President
Dated: May 26, 1995
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EXHIBIT INDEX
Exhibit 10.1 - Asset Purchase Agreement, dated May 25, 1995, between ML
Media Partners, L.P. and Quincy Newspapers, Inc. . . . . . . . . . page 5
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ASSET PURCHASE AGREEMENT
Between
ML MEDIA PARTNERS, L.P.
and
QUINCY NEWSPAPERS, INC.
Dated: May 25, 1995
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TABLE OF CONTENTS
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1. Sale and Purchase of Assets . . . . . . . . . . . . . . . 1
1.1 Sale of Assets to Buyer . . . . . . . . . . . . . . 1
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . 3
2. Purchase Price. . . . . . . . . . . . . . . . . . . . . . 4
2.1 Amount and Payment of Consideration; Allocation . . 4
2.2 Limitation on Assumption of Liabilities . . . . . . 5
2.3 Apportionment . . . . . . . . . . . . . . . . . . . 5
2.4 Determination of Apportionments . . . . . . . . . . 6
2.5 Deposit . . . . . . . . . . . . . . . . . . . . . . 7
3. Closing . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Date of Closing . . . . . . . . . . . . . . . . . . 8
3.2 Outside Date for Closing. . . . . . . . . . . . . . 8
4. Representations and Warranties by ML Media. . . . . . . . 8
4.1 ML Media's Organization and Authority . . . . . . . 8
4.2 Authorization of Agreement. . . . . . . . . . . . . 9
4.3 Consents of Third Parties . . . . . . . . . . . . . 9
4.4 Title to Assets . . . . . . . . . . . . . . . . . . 9
4.5 FCC Licenses. . . . . . . . . . . . . . . . . . . . 12
4.6 Call Letters. . . . . . . . . . . . . . . . . . . . 12
4.7 Operation of the Station. . . . . . . . . . . . . . 12
4.8 Financial Statements. . . . . . . . . . . . . . . . 12
4.9 Absence of Certain Changes. . . . . . . . . . . . . 13
4.10 Tangible Property . . . . . . . . . . . . . . . . . 13
4.11 Intangible Assets . . . . . . . . . . . . . . . . . 14
4.12 Litigation; Compliance with Laws. . . . . . . . . . 14
4.13 List of Agreements, etc.. . . . . . . . . . . . . . 14
4.14 Agreements Regarding Employees. . . . . . . . . . . 15
4.15 Status of Agreements. . . . . . . . . . . . . . . . 16
4.16 Insurance . . . . . . . . . . . . . . . . . . . . . 16
4.17 Labor Matters . . . . . . . . . . . . . . . . . . . 16
4.18 Environmental Matters . . . . . . . . . . . . . . . 17
4.19 ERISA . . . . . . . . . . . . . . . . . . . . . . . 19
4.20 Commission Reports. . . . . . . . . . . . . . . . . 19
5. Representations and Warranties by the Buyer . . . . . . . 19
5.1 The Buyer's Organization. . . . . . . . . . . . . . 19
5.2 Authorization of Agreement. . . . . . . . . . . . . 19
5.3 Consents of Third Parties . . . . . . . . . . . . . 20
5.4 Litigation. . . . . . . . . . . . . . . . . . . . . 20
5.5 Buyer's Qualification . . . . . . . . . . . . . . . 20
6. Further Agreements of the Parties . . . . . . . . . . . . 21
6.1 Filings. (a) . . . . . . . . . . . . . . . . . . . 21
6.2 Operations of the Station . . . . . . . . . . . . . 21
6.3 No Control. . . . . . . . . . . . . . . . . . . . . 23
6.4 Accounts Receivable . . . . . . . . . . . . . . . . 23
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6.5 Access to Information . . . . . . . . . . . . . . . 25
6.6 Consents; Assignment of Agreements. . . . . . . . . 25
6.7 Title Insurance; Transfer, Recording and Survey
Fees. . . . . . . . . . . . . . . . . . . . . . . . 26
6.8 Employees . . . . . . . . . . . . . . . . . . . . . 26
6.10 Additional Financial Statements . . . . . . . . . . 28
6.11 Two Vehicles. . . . . . . . . . . . . . . . . . . . 28
6.12 Affiliation Payment . . . . . . . . . . . . . . . . 28
6.13 Trade Balances. . . . . . . . . . . . . . . . . . . 28
6.14 Affiliation Switch. . . . . . . . . . . . . . . . . 29
6.15 Other Action. . . . . . . . . . . . . . . . . . . . 29
6.16 Further Assurances. . . . . . . . . . . . . . . . . 29
7. Conditions Precedent to Closing . . . . . . . . . . . . . 30
7.1 Conditions Precedent to the Obligations of the
Buyer . . . . . . . . . . . . . . . . . . . . . . . 30
7.2 Conditions Precedent to the Obligations of ML
Media . . . . . . . . . . . . . . . . . . . . . . . 32
8. Transactions at the Closing . . . . . . . . . . . . . . . 34
8.1 Documents to be Delivered by ML Media . . . . . . . 34
8.2 Documents to be Delivered by the Buyer. . . . . . . 34
9. Survival of Representations and Warranties;
Indemnification . . . . . . . . . . . . . . . . . . . . . 35
9.1 Survival. . . . . . . . . . . . . . . . . . . . . . 35
9.2 Indemnification . . . . . . . . . . . . . . . . . . 35
9.3 Limitation on Liability . . . . . . . . . . . . . . 36
10. Termination . . . . . . . . . . . . . . . . . . . . . . . 37
10.1 Termination . . . . . . . . . . . . . . . . . . . . 37
10.2 Liability . . . . . . . . . . . . . . . . . . . . . 37
11. Risk of Loss. . . . . . . . . . . . . . . . . . . . . . . 37
12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 38
12.1 Notices . . . . . . . . . . . . . . . . . . . . . . 38
12.2 Brokers . . . . . . . . . . . . . . . . . . . . . . 39
12.3 Entire Agreement. . . . . . . . . . . . . . . . . . 39
12.4 Headings. . . . . . . . . . . . . . . . . . . . . . 39
12.5 Governing Law . . . . . . . . . . . . . . . . . . . 39
12.6 Separability. . . . . . . . . . . . . . . . . . . . 39
12.7 Assignment. . . . . . . . . . . . . . . . . . . . . 40
12.8 Publicity . . . . . . . . . . . . . . . . . . . . . 40
12.9 Jurisdiction. . . . . . . . . . . . . . . . . . . . 40
12.10 Counterparts . . . . . . . . . . . . . . . . . . . 40
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ASSET PURCHASE AGREEMENT
MAY 25, 1995
The parties to this agreement are ML Media Partners,
L.P., a Delaware limited partnership ("ML Media"), and Quincy
Newspapers, Inc., an Illinois corporation (the "Buyer").
ML Media owns and operates television station WREX-TV
in Rockford, Illinois (the "Station"). ML Media desires to sell
substantially all of the assets relating to the Station to the
Buyer, and the Buyer desires to purchase those assets, on the
terms and conditions contained in this agreement.
Accordingly, it is agreed as follows:
1. Sale and Purchase of Assets.
1.1 Sale of Assets to Buyer. At the closing
referred to in section 3.1, ML Media shall sell and assign to the
Buyer, and ML Media shall cause WREX Associates, the licensee of the
Station (the "Licensee"), to transfer and assign to the Buyer, and
the Buyer shall purchase and acquire, all of the business of ML Media
and the Licensee relating to the Station and all of the assets of
ML Media and the Licensee used exclusively in the operations of the
Station (excluding only the assets referred to in section 1.2) as
those assets exist on the Closing Date referred to in section 3.1.
Except as otherwise provided in section 1.2, the assets of the
Station to be sold and assigned (collectively, the "Assets") include,
but are not limited to, the following:
(a) all broadcast licenses (the "FCC
Licenses") for the Station issued by the Federal Communications
Commission (the "Commission") and any other permits and
authorizations (and applications for any of them) relating to the
operation of the Station, including, but not limited to, those
listed on schedule 1.1(a);
(b) all equipment (including computers and
office equipment), transmitting towers, transmitters, supplies,
vehicles, furniture, fixtures and leasehold improvements,
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improvements on land being acquired by the Buyer pursuant to
section 1.1(c), any films and tapes owned by the Station, and all
other tangible personal property, wherever located, that is owned
by ML Media and used exclusively in the operation of the Station,
including, but not limited to, the items listed on schedule
1.1(b);
(c) all real property, including, but not
limited to, the property listed on schedule 1.1(c);
(d) all rights of ML Media under leases,
commitments and other agreements relating to the business and
operations of the Station, to the extent that those rights relate
to the period after the close of business on the day preceding
the Closing Date, including, but not limited to (i) all
commitments and other agreements relating to the acquisition of
programming rights, including rights to the film and videotape
prints of motion pictures and television programs broadcast or to
be broadcast by the Station ("Programming Agreements"), (ii) all
commitments and other agreements relating to the sale of
broadcast and advertising time, (iii) all network affiliation
agreements, (iv) the leases, commitments and other agreements
listed on schedules 4.13 and 4.14, and (v) any other leases,
commitments and other agreements relating to the business and
operations of the Station that are entered into consistent with
the provisions of section 6.2 between the date of this agreement
and the Closing Date;
(e) all promotional materials, trademarks,
trade names, logos, copyrights, whether or not registered (and
all issued registrations and pending applications for
registration of any of them), jingles, slogans and other tangible
and intangible personal property (including, but not limited to,
the trademarks, trade names and logos listed on schedule 1.1(e),
and all of ML Media's rights to use the call letters "WREX-TV"),
together with the good will of the business associated with those
trademarks, trade names, logos and copyrights;
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(f) all of ML Media's rights in connection
with any "barter" transactions and "trade" agreements relating to
the Station;
(g) all of ML Media's rights under
manufacturers' and vendors' warranties relating to items included
in the Assets and all similar rights against third parties
relating to items included in the Assets; and
(h) all files, logs and business records of
every kind relating to the operations of the Station, including,
but not limited to, programming information and studies,
technical information and engineering data, news and advertising
studies or consulting reports, sales correspondence, lists of
advertisers, promotional materials, and credit and sales records.
1.2 Excluded Assets. The following assets used
in the operations of the Station shall be retained by ML Media
and shall not be sold or assigned to the Buyer:
(a) all cash, bank accounts, certificates of
deposit, commercial paper, treasury bills and notes and all other
marketable securities as of the close of business on the day
preceding the Closing Date;
(b) all accounts receivable (the "Accounts
Receivable") of the Station for broadcast time and services
provided prior to the close of business on the day preceding the
Closing Date (except that any amounts included in accounts
receivable with respect to "barter" transactions or "trade"
agreements shall not be excluded from the sale);
(c) the Employment Agreement dated ____ with
Larry Manne or any lease, commitment or other agreement as to
which consent to assignment is required but cannot be obtained;
(d) the account books of original entry and
general ledgers and all partnership records of ML Media,
including tax returns and transfer books;
(e) the ML Media Partners, L.P. 401(k) Plan
and all assets and liabilities associated with it; and
(f) any other assets of ML Media not used
exclusively in connection with the operation of the Station.
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2. Purchase Price.
2.1 Amount and Payment of Consideration;
Allocation. As full consideration for the Assets, at the closing
the Buyer shall (a) pay to ML Media, by wire transfer of
immediately available funds, a purchase price equal to the sum of
$18,370,500 less any amounts payable as of the Closing Date with
respect to the equipment referred to on schedules 4.13(a) and
(c), and (b) assume, and agree to pay, perform and discharge
(subject to the apportionment provisions of section 2.4) all of
the obligations of ML Media relating to the operations of the
Station that arise after the close of business on the day
preceding the Closing Date under those leases, commitments and
other agreements relating to the operations of the Station
assigned to the Buyer pursuant to sections 1.1(d) and 1.1(f).
The purchase price shall be allocated among the
Assets in accordance with an appraisal to be obtained by Buyer
from Bond and Pecaro. Buyer agrees to pay for the cost of the
appraisal. It is specifically understood and agreed that the
appraisal shall comply in all respects with the applicable
requirements of Section 1060 of the Internal Revenue Code of
1986, as amended, (the "Code") and the regulations promulgated
thereunder. Buyer and ML Media hereby agree that for both tax
and financial accounting purposes they will report the purchase
and sale of the Assets in a manner which is consistent with the
appraisal, and that they will comply with the applicable
information reporting requirements of Section 1060 of the Code
and the regulations promulgated thereunder. If, contrary to the
intent of the parties hereto, any taxing authority makes or
proposes an allocation of the purchase price which differs
materially from that contained in the appraisal, ML Media and
Buyer shall cooperate with each other in good faith to contest
such taxing authority's determination; provided, however, that
after consultation with the party adversely affected by such
determination, the other party hereto may file such protective
claims or returns as may reasonably be required to protect its
interest.
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2.2 Limitation on Assumption of Liabilities.
Except as provided in section 2.1(b), Buyer
shall not assume, and shall not pay, perform or discharge, any
other liabilities or obligations of ML Media relating to the
Station through the close of business on the day preceding the
Closing Date, and ML Media shall pay and perform any such
liabilities or obligations. Buyer expressly does not assume any
liability for any qualified benefit plan, deferred compensation
plan, or retirement plan of any type of ML Media.
2.3 Apportionment. ML Media shall be entitled to
all income earned or accrued and shall be responsible for all
liabilities and obligations incurred or payable in connection
with the operations of the Station through the close of business
on the day preceding the Closing Date and the Buyer shall be
entitled to all income earned or accrued and shall be responsible
for all liabilities and obligations incurred or payable in
connection with the operations of the Station after the close of
business on the day preceding the Closing Date. For purposes of
this Section 2.3, (a) there shall be no apportionment relating to
Programming Agreements except that the payments under the
Programming Agreements with respect to the month in which the
Closing Date occurs shall be pro-rated between ML Media and Buyer
based on the number of days in that month before and after the
Closing Date, and (b) advance payments with respect to tubes,
office supplies, equipment and other tangible personal property
shall not be considered a prepaid expense. All other overlapping
items of income or expense shall be apportioned between ML Media
and the Buyer, as of the close of business on the day preceding
the Closing Date, in accordance with generally accepted
accounting principles. Items to be apportioned include, but are
not limited to, the following:
(a) advance payments received from
advertisers prior to the Closing Date for services to be rendered
in whole or in part after the close of business on the day
preceding the Closing Date;
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(b) prepaid expenses arising from payments
made for services prior to the close of business on the day
preceding the Closing Date if all or part of the services have
not been received or used prior to the close of business on the
day preceding the Closing Date (for example, rents paid in
advance for a rental period extending beyond the Closing Date);
(c) liabilities, customarily accrued,
arising from expenses incurred but unpaid as of the close of
business on the day preceding the Closing Date (including
severance pay, vacation pay, sick pay or similar items to the
extent provided in section 6.8); frequency discounts; utility
services; property taxes relating to real property interests
assigned to the Buyer; sales commissions; various business and
professional services; and licensing fees, including prior years'
adjustments; and
(d) personal property taxes and utility
charges related to the Station.
2.4 Determination of Apportionments. Prior to
the closing, the Buyer and ML Media shall estimate all
apportionments pursuant to section 2.3 and the payment at the
closing pursuant to section 2.1(a) shall be adjusted based on the
estimate. Within 60 days after the Closing Date, the Buyer shall
determine all apportionments pursuant to section 2.3 and shall
deliver a statement of its determinations to ML Media (which
statement shall set forth in reasonable detail the basis for
those determinations), and within 10 days thereafter the Buyer
shall pay to ML Media, or ML Media shall pay to the Buyer, as the
case may be, the net amount due as a result of the final
determination of the apportionments (or, if there is any dispute,
the undisputed amount). If ML Media disputes the Buyer's
determinations, the parties shall confer with regard to the
matter and an appropriate adjustment and payment shall be made as
agreed upon by the parties (or, if they are unable to resolve the
matter, a firm of independent certified public accountants shall
be designated by the parties, which firm's decision on the matter
shall be binding and whose fees and expenses shall be borne 50%
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by ML Media and 50% by the Buyer). If the parties fail to agree
on the accountants, the accountants shall be KPMG Peat Marwick.
2.5 Deposit. Upon execution of this agreement,
the Buyer shall deliver to Boatmen's Bank of Quincy (the "Escrow
Agent") the sum of $925,000 (the "Deposit"), to be held by the
Escrow Agent pursuant to the terms of an Escrow Agreement (the
"Escrow Agreement") in the form of exhibit 2.5 and subject to the
following:
(a) If the purchase of the Assets under this
agreement is not consummated as a result of a material breach by
the Buyer of any of its obligations under this agreement (and ML
Media has not breached any of its material obligations under this
agreement), ML Media shall be entitled to the Deposit (together
with interest thereon) to compensate ML Media as liquidated
damages resulting to ML Media from such breach. In agreeing to
said sum, the parties acknowledge and confirm that the injury to
ML Media which would result from such a breach would be difficult
or impossible of accurate estimation but that said sum is a
reasonable pre-estimate of the probable loss from such a breach.
The parties agree to accept said sum as full and complete payment
for any and all claims ML Media may have for Buyer's failure to
consummate the purchase of the Assets and, upon such a breach by
Buyer, ML Media hereby covenants not to sue or initiate any
action against Buyer to recover damages other than ML Media's
right to receive the Deposit (together with interest thereon).
(b) If the purchase of the Assets under this
agreement is not consummated due to the nonfulfillment of any of
the conditions in section 7.1 or for any other reason except the
Buyer's default in the performance of any of its material
obligations under this agreement, ML Media shall not be entitled
to the Deposit (or interest thereon) and, promptly after the
termination of this agreement, the Deposit (together with
interest thereon) shall be paid by the Escrow Agent to the Buyer.
3. Closing.
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3.1 Date of Closing. The closing under this
agreement shall take place at the offices of the Station in
Rockford, Illinois, on the last day of the month in which the
last of the conditions specified in sections 7.1(c) and (d) and
7.2(c) and (d) has been fulfilled (or waived) (or if those
conditions are satisfied after the 24th day of any month, the
closing shall take place on the last day of the next month), or
such other date as the parties may mutually agree upon. The date
on which the closing is held is referred to in this agreement as
the "Closing Date". At the closing, the parties shall execute
and deliver the documents referred to in section 8.
3.2 Outside Date for Closing. If the closing has
not occurred by December 31, 1995, either ML Media or the Buyer
may terminate this agreement by notice to the other; upon such
termination, neither of the parties shall have any liability of
any kind arising out of this agreement other than for any
liability resulting from its breach of this agreement prior to
termination. If the closing is postponed pursuant to section 11
of this agreement, the date referred to in the previous sentence
shall be extended by the period of the postponement.
4. Representations and Warranties by ML Media. ML
Media represents and warrants to the Buyer as follows:
4.1 ML Media's Organization and Authority. ML
Media is a limited partnership duly organized and validly
existing under the law of Delaware and has the full power and
authority under Delaware law and its partnership agreement to
enter into and to perform this agreement and to own and operate
the Station.
4.2 Authorization of Agreement. The execution,
delivery and performance of this agreement by ML Media have been
duly authorized by all necessary partnership action of ML Media
and this agreement constitutes a valid and binding obligation of
ML Media enforceable against it in accordance with its terms,
except as may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights in
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general and subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
4.3 Consents of Third Parties. Subject to
receipt of the consents and approvals referred to in schedule
4.3, the execution, delivery and performance of this agreement by
ML Media will not (i) conflict with the certificate of limited
partnership or partnership agreement of ML Media and will not
conflict with, or result in a breach or termination of, or
constitute a default under, any lease, agreement, commitment or
other instrument, or any order, judgment or decree, to which ML
Media is a party or by which ML Media is bound or to which any of
the Assets is subject, except for any conflicts, breaches,
terminations or defaults that are not in the aggregate material
to ML Media's performance of this agreement and to the operation
of the Station; (ii) constitute a violation by ML Media of any
law applicable to ML Media; or (iii) result in the creation of
any lien, claim, charge or encumbrance ("Lien") upon any of the
Assets, other than Liens that do not in the aggregate materially
detract from the value of, or materially interfere with, the
operations of the Station. No consent, approval or authorization
of, or designation, declaration or filing with, any governmental
authority is required on the part of ML Media in connection with
the execution, delivery and performance of this agreement, except
for the filings referred to in section 6.1.
4.4 Title to Assets. Except as set forth on
schedule 4.4(a) and property leased pursuant to leases and
agreements listed on schedule 4.13, ML Media has, and at the
closing the Buyer will receive, valid title to all of the
personal property and intangible property included in the Assets,
free and clear of any Lien (except for the lien, if any, of
current taxes not yet due and payable). Schedule 4.4(b) contains
a list and brief description of all real property included in the
Assets, including all structures located on that real property.
ML Media has, and will convey to the Buyer on the Closing Date,
good and marketable title to the real property listed on schedule
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4.4(b), free and clear of any Liens, except as set forth on
schedule 4.4(b) and except for the lien, if any, of current taxes
not due and payable and for imperfections of title and easements
that do not adversely affect the use of the property or detract
from the value of the property to the Buyer (collectively
"Permitted Exceptions"). All liens or security interests in
favor of Chemical Bank referred to on schedule 4.4(a) and 4.4(b)
shall be released and terminated at the Closing.
(a) Buyer shall promptly obtain an ALTA plat
of survey and a title commitment for an owner's title insurance
policy issued by a Title Insurance Company acceptable to Buyer
covering title to the real estate listed on schedule 1.1(c), in
an amount equal to the appraised value of the real estate, and
showing title in the intended grantor subject only to (i) the
general exceptions contained in the policy, (ii) the Permitted
Exceptions, if any, and (iii) the title exceptions pertaining to
liens or encumbrances of a definite or ascertainable amount that
may be removed by the payment of money at the time of closing and
that ML Media may so remove at that time by using a portion of
the funds to be paid at the closing and (iv) unpermitted
exceptions or defects in the title disclosed by the survey, if
any, as to which the title insurer commits to extend insurance in
the manner specified in paragraph (b) below. The title
commitment shall be conclusive evidence of good title as shown
therein as to all matters insured by the policy, subject only to
the exceptions as stated therein. ML Media shall also furnish
Buyer with an affidavit of title in customary form as of the
Closing Date and showing title in ML Media subject only to the
Permitted Exceptions and the exceptions set forth in foregoing
item (iii).
(b) If the title commitment or plat of
survey discloses either unpermitted exceptions or survey matters
that render the title unmarketable, but excluding the
encroachments shown on the survey dated August 13, 1987 by Arnold
Lundgren ("Survey Defects"), ML Media shall have the option, but
shall not be obligated, exercisable by notice to Buyer within 10
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<PAGE> 14
days from the delivery of the survey to ML Media by Buyer, to
have the exceptions removed from the commitment or to correct
such Survey Defects or to have the title insurer commit to insure
against loss or damage that may be occasioned by such exceptions
or Survey Defects. For the purpose of this agreement, the
following matters shown on such survey will not be deemed to be
Survey Defects: (1) variations, if any, between record lines
and tax lot lines; (2) variations, if any, between record lines
and location of fences and hedges; (3) encroachments of stoops,
awnings, cellar steps, trim and cornices, if any; (4) rights or
easements granted to any utility company to maintain and operate
lines, cables, poles and the like in, under, over and upon the
real property, provided the same do not and will not prohibit or
adversely affect the continued existence and/or continued use (as
presently used) or maintenance of the buildings, structures and
improvements located upon such real property. If ML Media elects
not to either (1) have the exceptions removed or correct any
Survey Defects, or (2) obtain the commitment for title insurance
specified above as to such exceptions or Survey Defects within
the specified time, either ML Media or Buyer may terminate this
agreement or Buyer may elect, upon notice to ML Media within ten
(10) days after the date of the notice of election from ML Media,
to take title as it then is with the right to deduct from the
purchase price liens or encumbrances of a definite or
ascertainable amount. If Buyer does not so elect, this agreement
shall become null and void without further action of the parties
and no party shall have any further liability to the other
hereunder.
4.5 FCC Licenses. The Licensee holds the FCC
Licenses and ML Media holds all other material permits and
authorizations necessary for or used in the operations of the
Station, and each of the FCC Licenses is, and all such permits
and authorizations are, in full force and effect. Schedule
1.1(a) contains a true and complete list of the FCC Licenses
currently in effect and all such permits and authorizations
(showing, in each case, the expiration date). No application,
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<PAGE> 15
action or proceeding is pending for the renewal or modification
of any of the FCC Licenses or any of such permits or
authorizations, and no application, action or proceeding is
pending or, to the best of ML Media's knowledge, threatened that
may result in the denial of the application for renewal, the
revocation, modification, nonrenewal or suspension of any of the
FCC Licenses or any of such permits or authorizations, the
issuance of a cease-and-desist order, or the imposition of any
administrative or judicial sanction with respect to the Station
that may materially adversely affect the rights of the Buyer
under any such FCC Licenses, permits or authorizations.
4.6 Call Letters. ML Media has the right to the
use of the call letters "WREX-TV", pursuant to the rules and
regulations of the Commission.
4.7 Operation of the Station. The Station is
being operated in all material respects in accordance with the
FCC Licenses and in compliance with the Communications Act of
1934 and the rules and regulations thereunder.
4.8 Financial Statements. ML Media has previously
delivered to the Buyer the audited balance sheets of the Station
as of December 31, 1993 and December 31, 1994, and the related
statements of operations for the years then ended. Except as set
forth on schedule 4.8, all of those financial statements have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, are in accordance with ML Media's
books and records, and fairly present in all material respects
the financial position and the results of operations of the Station
as of the dates and for the years indicated.
4.9 Absence of Certain Changes. Since December
31, 1994, ML Media has operated the business of the Station in
the usual and ordinary course and substantially consistent with
its past practice with respect to the Station, and, except as set
forth on schedule 4.9:
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(a) through the date of this agreement,
there has been no material adverse change in the business or
operations of the Station;
(b) ML Media has not, with respect to the
Station, entered into any transaction or incurred any liability
or obligation that is material to the business or operation of
the Station except in the ordinary course of its business;
(c) ML Media has not sold or transferred any
of the assets of the Station other than in the ordinary course of
business consistent with past practice;
(d) ML Media has not incurred any
indebtedness with respect to the Station other than indebtedness
to trade creditors incurred in the ordinary course of business;
and
(e) ML Media has not granted or agreed to
grant any increase in any rate or rates of salaries or
compensation or other benefits or bonuses payable to employees of
the Station, except for increases in accordance with ML Media's
past employment practices, and has not granted or agreed to
effect any changes in ML Media's management personnel, policies
or employee benefits.
4.10 Tangible Property. Except as set forth on
schedule 4.10, all equipment and other tangible assets to be sold
to Buyer pursuant to this agreement is in reasonably good
operating condition and in reasonably good condition of
maintenance and repair.
4.11 Intangible Assets. Schedule 1.1(e) contains
a complete list of the trademarks, trade names, logos, jingles
and slogans used by ML Media in the operation of the Station. ML
Media owns free and clear of any Liens, each of the trademarks,
trade names, logos, jingles and slogans listed on schedule
1.1(e). ML Media is not operating the Station in a manner that
infringes in any material respect any patent, copyright or
trademark of any third party or otherwise violates in any
material respect the rights of any third party, and no claim has
been made or threatened against it alleging any such violation.
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To the best of ML Media's knowledge, there has been no material
violation by others of any right of ML Media in any trademark,
trade name, logo, jingle or slogan used in the operation of the
Station.
4.12 Litigation; Compliance with Laws. Except as
set forth on schedule 4.12, there is no claim, litigation,
proceeding or governmental investigation pending or, to the best
of ML Media's knowledge, threatened, or any order, injunction or
decree outstanding, against ML Media relating to the Station or
the Assets, which if adversely determined might (i) have a material
adverse effect on the operations of the Station, (ii) materially
delay approval by the Commission of the transactions contemplated
by this agreement, or (iii) prevent the consummation of the transactions
contemplated by this agreement. Except as set forth on Schedule 4.12,
ML Media is not in violation of any law, regulation or ordinance or
any other requirement of any governmental body or court with respect
to the operation of the Station, which violation would have a
material adverse effect upon the operations or business of the
Station, and no notice has been received by ML Media or its general
partner alleging any such violation.
4.13 List of Agreements, etc. Schedules 4.13 and
4.14 together contain, with respect to the Station, a complete
list of: (a) all future commitments and other agreements for the
purchase of materials, supplies or equipment, other than
commitments and other agreements that were entered into in the
ordinary course of business and involve an expenditure by ML
Media of less than $2,000 for any one commitment or two or more
related commitments; (b) all notes and agreements relating to any
indebtedness of ML Media that is secured by any of the Assets,
other than a Bank Agreement dated June 21, 1989; (c) all leases
or other rental agreements under which ML Media is either lessor
or lessee related to the operations or business of the Station;
(d) all network affiliation agreements; (e) all "barter" and
"trade" agreements; (f) all collective bargaining agreements; (g)
all Programming Agreements, including for each of those
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<PAGE> 18
agreements the amounts and availability dates of programming and
the dollar amount and schedule of any payments thereunder; (h)
all employment and consulting agreements; and (i) all other
agreements, commitments and understandings (written or oral) that
require payment by ML Media of more than $2,000 individually or
cannot be terminated by ML Media on less than 60 days notice
without liability. True and complete copies of all written
leases, commitments and other agreements referred to on schedules
4.13 and 4.14 have been delivered to the Buyer.
4.14 Agreements Regarding Employees. Except as
set forth in schedule 4.14, ML Media is not a party to or bound
by any fringe benefit or other non-cash compensation plan, or any
pension, thrift, annuity, retirement, savings, profit sharing or
deferred compensation plan or agreement, or any bonus, vacation,
holiday, sick leave, group insurance, health or other personal
insurance or other incentive or benefit agreement, plan or
arrangement. Except as set forth on schedule 4.14, ML Media does
not have any severance policy and no employee of the Station is
entitled to any severance payment, either by law or by agreement,
upon the termination of his or her employment. Except as set
forth on schedule 4.14, no employee of the Station is represented
by any union or other collective bargaining agent and there are
no collective bargaining or other labor agreements with respect
to any employee of the Station.
4.15 Status of Agreements. All leases, commitments
and other agreements to be assumed by the Buyer were entered into
in the ordinary course of the business of the Station. Each of
the agreements, commitments and leases referred to in sections
4.13 and 4.14 is presently in full force and effect in accordance
with its terms and, except as set forth on schedule 4.14, ML
Media is not in default, and, to the best of ML Media's
knowledge, no other party is in default under any agreement
referred to in section 4.13 or 4.14, which default would have a
material adverse effect upon the operations or business of the
Station. No party to any of the leases, commitments and other
agreements referred to in sections 4.13 and 4.14 has made,
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asserted or has any defense, setoff or counterclaim under any of
those agreements or has exercised any option granted to it to
cancel or terminate its agreement, to shorten the term of its
agreement, or to renew or extend the term of its agreement and ML
Media has not received any notice to that effect.
4.16 Insurance. Schedule 4.16 contains a complete
list of all of ML Media's insurance policies relating to the
operation of the Station specifying the policy limit, type of
coverage, location of the property covered, annual premium,
premium payment date and expiration date of each of the policies.
4.17 Labor Matters. Except as set forth on
schedule 4.17, with respect to the Station (a) there is no unfair
labor practice charge or complaint against ML Media pending
before the National Labor Relations Board, any state labor
relations board or any court or tribunal and, to the best of ML
Media's knowledge, none is or has been threatened; (b) there is
no labor strike, dispute, request for representation, slowdown or
stoppage actually pending against or affecting ML Media and, to
the best of ML Media's knowledge, none is or has been threatened;
and (c) no grievance which might have an adverse effect on the
conduct of the operations of the Station or any arbitration
proceeding arising out of or under any collective bargaining
agreement is pending and, to the best of ML Media's knowledge,
none is or has been threatened.
4.18 Environmental Matters. This section
exclusively covers environmental and worker health and safety
matters. ML Media warrants, except as set forth on schedule
4.18:
(a) ML Media has complied in all material
respects with, and ML Media's existing facility at Rockford,
Illinois ("Existing Property"), is in compliance in all material
respects with the provisions of all applicable federal, state,
and local environmental and worker, health, and safety laws,
codes, and ordinances and all rules and regulations promulgated
thereunder (the "Environmental Laws").
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<PAGE> 20
(b) There are no underground storage tanks
("USTs") located on the Existing Property and to the best of the
knowledge of ML Media, prior to August 31, 1987, there were no
USTs located on the Existing Property.
(c) ML Media has received no notice of, and
ML Media does not know of the existence of, any fact that might
constitute a material violation of any Environmental Laws
relating to the history, use, ownership, or occupancy of the
Existing Property.
(d) Except in compliance in all material
respects with applicable Environmental Laws or the terms of a
permit issued by an environmental regulatory agency, since August
31, 1987, there has been, and to the best of the knowledge of ML
Media, prior to August 31, 1987, there was no emission, spill,
dumping, storage, impoundment, release, or discharge into or upon
(i) the air, (ii) soils or any improvements located thereon,
(iii) surface water or groundwater, or (iv) the sewer, septic
system, or solid or liquid waste treatment, storage, or disposal
system servicing the Existing Property ("Hazardous Discharge"),
of any regulated hazardous waste or "hazardous substances" (as
such term is defined at 42 U.S.C. sec. 9601(14) and secs. 3.14 -
3.15 of the Illinois Environmental Protection Act, Ill.Rev.Stat.,
c. 111-1/2, paras. 1003.14 - 1003.15 [415 ILCS 5/3.14 - 3.19],
including petroleum, crude oil, and any fraction thereof) at or
from the Existing Property (any of which is hereafter referred to
as a "Hazardous Material"). To the best of ML Media's knowledge,
the Existing Property, including the groundwater under the
Existing Property, is free of all Hazardous Material whether
discharged from the Existing Property or from any other property
that would violate applicable law in any material respect.
(e) ML Media has not received any complaint,
order, directive, claim, citation, request for information, or
notice by any governmental authority or any other person or
entity with respect to (i) air emission, (ii) Hazardous
Discharges relating to the Existing Property, (iii) noise
emissions, (iv) solid or liquid waste disposal whether hazardous
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<PAGE> 21
or nonhazardous, (v) the use, generation, storage,
transportation, or disposal of Hazardous Materials, or (vi) other
environmental or worker, health and safety matters affecting ML
Media, the Existing Property, any improvements located thereon,
or the business conducted on the Existing Property (any of which
is hereafter referred to as an "Environmental Complaint").
(f) There are no friable asbestos-containing
materials located at the Existing Property.
(g) There are no PCB-containing materials
that are regulated under the Environmental Laws located at the
Existing Property.
(h) ML Media has been issued, and shall
maintain until the Closing Date, all required federal, state, and
local permits, licenses, certificates, and approvals relating to
(i) air emission, (ii) discharges to surface water or
groundwater, (iii) noise emissions, (iv) solid or liquid waste
disposal, (v) the use, generation, storage, transportation, or
disposal of regulated "special," toxic, or hazardous substances
or waste (intended in this paragraph and hereafter to include any
and all such materials regulated under any applicable
Environmental Laws) and (vi) other environmental and worker,
health and safety matters. A true, accurate, and complete list
of all such permits, licenses, certificates, or approvals issued
under the Environmental Laws is included on schedule 4.18.
4.19 ERISA. Schedule 4.19 lists each "employee
benefit plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
sponsored or maintained by ML Media or the Station for the
benefit of employees of the Station. ML Media has delivered to
the Buyer copies of the documents which constitute the ML Media
Partners 401(k) Plan (the "401(k) Plan"). The 401(k) Plan
complies in all material respects with all applicable provisions
of ERISA and the Internal Revenue Code of 1986, as amended (the
"Code").
The 401(k) Plan has received a favorable
determination letter from the Internal Revenue Service ("IRS")
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with respect to its qualification under the Code and, to the best
of ML Media's knowledge, the IRS has not taken any action to
revoke any such letter. To the best of ML Media's knowledge,
nothing has occurred which would adversely effect the qualified
status of the 401(k) Plan.
4.20 Commission Reports. All material returns,
reports and statements required to be filed by ML Media with the
Commission relating to the Station have been filed and complied
with and are complete and correct in all material respects as
filed.
5. Representations and Warranties by the Buyer. The
Buyer represents and warrants to ML Media as follows:
5.1 The Buyer's Organization. The Buyer is a
corporation duly organized and validly existing under the law of
the state of Illinois and has the full power and authority to
enter into and perform this agreement and to own and operate the
Station.
5.2 Authorization of Agreement. The execution,
delivery and performance of this agreement by the Buyer have been
duly authorized by all necessary action of the Buyer and this
agreement constitutes a valid and binding obligation of the Buyer
enforceable against it in accordance with its terms, except as
may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
5.3 Consents of Third Parties. The execution,
delivery and performance of this agreement by the Buyer will not
(a) conflict with the Buyer's certificate of incorporation or
by-laws and will not conflict with or result in the breach or
termination of, or constitute a default under, any lease, agreement,
commitment or other instrument, or any order, judgment or decree, to
which the Buyer is a party or by which the Buyer is bound or (b)
constitute a violation by the Buyer of any law
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<PAGE> 23
applicable to it. No consent, approval or authorization of, or
designation, declaration or filing with, any governmental authority
is required on the part of the Buyer in connection with the execution,
delivery and performance of this agreement, except for the filings
referred to in section 6.1.
5.4 Litigation. There is no claim, litigation,
proceeding or governmental investigation pending or, to the best
of the Buyer's knowledge, threatened, or any order, injunction or
decree outstanding, against the Buyer or any of its affiliates
that would prevent the consummation of the transactions
contemplated by this agreement.
5.5 Buyer's Qualification. To the best of
Buyer's knowledge, it is legally, financially and otherwise
qualified under the rules and regulations of the Commission and
the Communications Act of 1934, as amended, to become the owner,
operator and licensee of the Station.
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6. Further Agreements of the Parties.
6.1 Filings. (a) As soon as practicable, but in
no event later than 15 days after the date of this agreement, the
parties shall file with the Commission an application requesting
consent to the transactions contemplated by this agreement; the
parties shall with due diligence take all reasonable steps
necessary to expedite the processing of the application and to
secure such consent or approval. Each party shall bear its own
costs and expenses (including the fees and disbursements of its
counsel) in connection with the preparation of the portion of the
application to be prepared by it and in connection with the
processing of that application. All filing and grant fees, if
any, paid to the Commission, shall be split equally between Buyer
and ML Media.
(b) Within 30 days after the execution of
this agreement, ML Media and the Buyer shall, in cooperation with
the other, file in connection with the transactions contemplated
by this agreement any reports or notifications that may be
required to be filed by them under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act"), with each of
the Department of Justice and the Federal Trade Commission, and
each of ML Media and the Buyer shall comply promptly with all
requests for further documents and information made by the
Department of Justice or the Federal Trade Commission, and shall
furnish to the other all such information in its possession as
may be necessary for the completion of the reports or
notifications to be filed by the other. All filing fees required
in connection with the filings under the HSR Act shall be split
equally between Buyer and ML Media.
6.2 Operations of the Station. From the date of
this agreement through the Closing Date:
(a) ML Media shall operate the business of
the Station in the usual and ordinary course and substantially
consistent with past practices and in substantial conformity with
(i) the FCC Licenses, the Communications Act of 1934, and the
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<PAGE> 25
rules and regulations of the Commission, and (ii) all other
material laws, ordinances, regulations, rules or orders relating
to the operations of the Station;
(b) ML Media shall use reasonable efforts,
consistent with its past practices, (i) to preserve the business
organization of the Station intact and to preserve the goodwill
and business of the advertisers, suppliers and others having
business relations with the Station, (ii) to retain the services
of the employees of the Station, and (iii) to preserve all
trademarks, trade names, service marks and copyrights and related
registrations of the Station, and all slogans and logos, owned by
it or in which it has any rights;
(c) ML Media shall not, except in the
ordinary course and substantially consistent with past practice,
(i) enter into any transaction or incur any liability or
obligation that is material to the business or operations of the
Station or (ii) sell or transfer any of the assets relating to
the Station, other than assets that have worn out or been
replaced with other assets of equal or greater value or assets
that are no longer needed in the operation of the Station;
(d) ML Media shall not, except with the
Buyer's prior approval, (i) enter into or renew any lease,
commitment or other agreement relating to the Station that, if
entered into prior to the date of this agreement, would have been
required to be included on schedule 4.13 or 4.14 (or that would
require receipt of a consent or approval required to be included
on schedule 4.3), (ii) enter into any new time sale agreement for
the Station except in the ordinary course of business for cash,
barter or trade and consistent with past practices, (iii) cause
or take any action to allow any material lease, commitment or
other agreement to lapse (other than in accordance with its
terms), to be modified in any adverse respect, or otherwise to
become impaired in any material manner, except in the ordinary
course of business, (iv) grant or agree to grant any general
increases in the rates of salaries or compensation payable to
employees of the Station except for increases to be given
22
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consistent with past practices on the anniversary date of
employment to each employee in the amount set forth in the
Station's operating plan, as set forth on schedule 6.2(d), (v)
grant or agree to grant any specific bonus or increase to any
executive or management employee of the Station whose total
annual compensation after the increase would be at an annual rate
in excess of $50,000 except in the ordinary cause of business and
consistent with past practices, or (vi) provide for any new
pension, retirement or other employment benefits for employees of
the Station or any increase in any existing benefits, establish
any new employee benefit plan or amend or modify any existing
employee benefit plan, or otherwise incur any obligation or
liability under any employee benefit plan materially different in
nature or amount from obligations or liabilities incurred during
similar periods in prior years; and
(e) ML Media shall (i) maintain all of its
assets relating to the Station in customary repair, maintenance
and condition, except to the extent of normal wear and tear, and
repair or replace, consistently with past practice and subject to
the provisions of section 11 hereof any asset that may be damaged
or destroyed, and (ii) maintain or caused to be maintained
insurance on the assets and business of the Station as described
in section 4.16.
6.3 No Control. Between the date of this
agreement and the Closing Date, the Buyer shall not, directly or
indirectly, control, supervise or direct, or attempt to control,
supervise or direct, the operations of the Station, but such
operations shall be solely the responsibility of ML Media and,
subject to the provisions of section 6.2, shall be in its
complete discretion.
6.4 Accounts Receivable.
(a) Promptly after the closing, ML Media
shall furnish to Buyer a list of the Accounts Receivable that
arose out of the operations of the Station as of the close of
business on the day preceding the Closing Date but are due and
payable thereafter. For a period of six months after the
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closing, Buyer, as ML Media's agent, shall, without compensation,
collect the Accounts Receivable for ML Media. Within 10 days
after the last day of each month during the six-month period,
Buyer shall remit to ML Media the amount collected by Buyer
during that month with respect to the Accounts Receivable and
Buyer shall provide ML Media with a report setting forth the
Accounts Receivable collected by Buyer that month. Buyer shall
furnish ML Media with such records and other information as ML
Media may reasonably require to verify the amounts collected by
Buyer with respect to the Accounts Receivable. Upon five days
prior written notice from ML Media, Buyer shall terminate all
collection efforts on behalf of ML Media with respect to the
Accounts Receivable specified in the notice and those Accounts
Receivable shall no longer be considered Accounts Receivable for
purposes of this section 6.4.
(b) For the purpose of determining amounts
collected by Buyer with respect to the Accounts Receivable, (i)
in the absence of a bona fide dispute between an account debtor
and ML Media, all payments by an account debtor shall first be
applied to Accounts Receivable due from the account debtor, and
(ii) any amount received by Buyer which is from an account debtor
who claims to have a bona fide dispute with ML Media shall be
deemed to have been received with respect to the accounts
receivable due Buyer to the extent of such dispute.
(c) Buyer shall not be required to retain a
collection agency, bring any suit, or take any other action out
of the ordinary course of business to collect any of the Accounts
Receivable. Buyer shall not compromise, settle or adjust the
amount of any of the Accounts Receivable without the written
consent of ML Media.
(d) Buyer shall have the right to offset any
Accounts Receivable collected by Buyer against any amounts owing
to Buyer resulting from adjustment to the purchase price pursuant
to sections 2.3 and 2.4.
6.5 Access to Information. Prior to the closing,
the Buyer and its representatives may make such investigation of
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the property, assets and businesses of the Station as it may desire,
and ML Media shall give to the Buyer and to its counsel, accountants
and other representatives, upon reasonable notice, full access during
normal business hours throughout the period prior to the closing
to all of the assets, books, commitments, agreements, records and
files of ML Media relating to the Station and ML Media shall furnish
to the Buyer during that period all documents and copies of documents
and information concerning the businesses and affairs of the Station
as the Buyer reasonably may request; provided that any and all
investigation and due diligence concerning environmental matters shall
be conducted solely as provided in section 7.1(i) of this agreement.
The Buyer shall hold, and shall cause its representatives to hold,
all such information and documents and all other information and
documents delivered pursuant to this agreement confidential and, if the
purchase and sale contemplated by this agreement is not consummated for
any reason, shall return to ML Media all such information and documents
and any copies as soon as practicable, and shall not disclose any such
information (that has not previously been disclosed by a party other
than the Buyer) to any third party unless required to do so pursuant
to a request or order under applicable laws and regulations or pursuant
to a subpoena or other legal process. The Buyer's obligations under
this section shall survive the termination of this agreement.
6.6 Consents; Assignment of Agreements. ML Media
shall use reasonable efforts (but shall not be required to make
any payment) to obtain at the earliest practicable date all
consents and approvals referred to in section 4.3. If, with
respect to any lease, commitment or agreement to be assigned to
the Buyer, a required consent to the assignment is not obtained
(and, accordingly, pursuant to section 1.2(c), the lease,
commitment or agreement is excluded from the sale to the Buyer),
ML Media shall use reasonable efforts to keep it in effect and
give the Buyer the benefit of it to the same extent as if it had
been assigned, and the Buyer shall perform ML Media's obligations
under the agreement relating to the benefit obtained by the
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Buyer. Nothing in this agreement shall be construed as an
attempt to assign any agreement or other instrument that is by
its terms nonassignable without the consent of the other party.
6.7 Title Insurance; Transfer, Recording and
Survey Fees. The Buyer and ML Media shall split equally any
stamp or transfer taxes, real or personal property taxes or
recording fees payable in connection with the sale of the Assets,
any fees for title insurance on the fee interest acquired by the
Buyer pursuant to this agreement and any expense of an ALTA
survey as specified in section 4.4(a).
6.8 Employees.
(a) Employment. The Buyer may determine to
which of ML Media's employees the Buyer wishes to offer
employment except that the Buyer shall offer employment to Larry
Manne, the general manager of the Station, on the terms discussed
by the Buyer and Mr. Manne. ML Media shall pay severance and
accrued vacation pay to up to and including three (3) employees
of ML Media that the Buyer does not offer employment on the
Closing Date (other than Mr. Manne) and the Buyer shall pay
severance to any other employees of ML Media that the Buyer does
not offer employment on the Closing Date, all in accordance with
ML Media's policies described on schedule 4.14. Except as
provided in the preceding sentence, Buyer assumes no liability or
responsibility for severance.
For purposes of the apportionments pursuant
to section 2.3, the aggregate obligation for accrued vacation
pay, sick pay and similar obligations shall be included as a
liability only to the extent such obligations relate to
employment prior to the Closing Date (e.g., if the closing occurs
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on September 30, with respect to an employee entitled to four
weeks of vacation per year who has only taken one week by that
date, only two weeks of that employee's accrued vacation pay will
be included as a liability in calculating the apportionments).
To the extent that accrued vacation with respect to any employee
that the Buyer employs on the Closing Date is included as a
liability in calculating the apportionments, the Buyer shall
allow such employee to take that vacation time in addition to any
other vacation time to which the employee is entitled from Buyer.
(b) Employee Benefits Generally. The Buyer
shall not be obligated to continue any benefits presently offered
by ML Media. Nothing in this agreement shall be construed to
obligate Buyer to continue any vacation policy, sick pay policy
or other employee benefit presently offered by ML Media.
(c) Medical Benefits. The Buyer will offer
such medical benefits as the Buyer may determine. The Buyer does
not assume any responsibility for ML Media's medical benefit
plan.
(d) 401(k) Plan. The employees of the
Station participate in the 401(k) Plan. If an employee of the
Station who participates in the 401(k) Plan and becomes an
employee of the Buyer as of the Closing Date (a "401(k)
Employee") is entitled to and receives an "eligible rollover
distribution" (as defined under Section 402(c)(4) of the Code and
the regulations promulgated thereunder) for the 401(k) Plan at
any time on or after the Closing Date, and if that employee
elects to rollover (whether by direct or indirect rollover, as
selected by such employee) his or her eligible rollover
distribution from the 401(k) Plan to a retirement plan maintained
by Buyer that is qualified under Section 401(a) of the Code
("Buyer's Plan"), Buyer shall permit the employee to do so.
Buyer's Plan shall not impose any waiting periods, service
requirements or other limitations that would prevent any 401(k)
Employee from rolling over an eligible rollover distribution from
the 401(k) Plan into Buyer's Plan at any time following the
Closing Date. Buyer shall amend Buyer's Plan to the extent
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necessary in order to effectuate the transaction contemplated
under this section 6.8(d). ML Media and Buyer shall cooperate
with each other (and cause the trustees of the 401(k) Plan and
Buyer's Plan to cooperate with each other) with respect to the
rollover of the distributions to the 401(k) Employees.
6.9 Expenses. Each party shall bear its own
expenses incurred in connection with the negotiation and preparation
of this agreement and in connection with all obligations required
to be performed by it under this agreement, except where specific
expenses have been otherwise allocated by this agreement.
6.10 Additional Financial Statements. ML Media
shall promptly deliver to the Buyer copies of all monthly,
quarterly or annual financial statements relating to the Station
that may be prepared by it during the period from the date of
this agreement to the Closing Date. All financial statements
delivered pursuant to this section 6.10 shall be in accordance
with the books and records of the Station.
6.11 Two Vehicles. If either or both of the two
vehicles referred to on schedule 4.13(b) is foreclosed upon as a
result of a default by Bryden Ford, Inc., Buyer shall so notify
ML Media and ML Media shall promptly replace the vehicle(s) with
a comparable vehicle(s) and indemnify and hold harmless Buyer
from any expenses relating to the foreclosure.
6.12 Affiliation Payment. At the closing, Buyer
shall pay to ML Media an amount equal to $4,000 per month (prorated
for any partial month) for each month from January 1995 through the
month in which the Closing Date occurs, inclusive, up to a maximum
of $32,000.
6.13 Trade Balances. If as of the close of
business on the day preceding the Closing Date the aggregate rate
card value of the unused broadcast time on the Station exchanged
for products or services pursuant to trade or barter agreements
(excluding barter agreements for programming) exceeds the fair
market value of any products (other than capital items) or
services to be received by the Station after the close of
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business on the day preceding the closing Date, then, at the
Closing, ML Media shall pay to the Buyer an amount equal to such
excess. At the closing, ML Media shall deliver to Buyer a
certificate setting forth the calculation of the payment, if any,
required pursuant to this section 6.13.
6.14 Affiliation Switch. As of August 14, 1995,
the Station will switch from an affiliate of the ABC television
network to an affiliate of the NBC television network. At the
closing, the Buyer shall reimburse ML Media for any out-of-pocket
expenses incurred by ML Media (and assume, without any adjustment
in the purchase price, any amounts payable after the closing)
with respect to the switch in affiliations, including, but not
limited to, the cost of any receiving equipment, transmission
lines or other equipment that is installed to receive NBC
programming. ML Media shall consult with the Buyer prior to
purchasing any such equipment.
6.15 Other Action. Neither party to this
agreement shall take any action that would result in any of its
representations and warranties not being true as of the Closing
Date. Each of the parties to this agreement shall use its best
efforts to cause the fulfillment at the earliest practicable date
of all of the conditions to the obligations of the parties to
consummate the sale and purchase under this agreement.
6.16 Further Assurances. At any time and from
time to time after the closing, each of the parties shall,
without further consideration, execute and deliver to the other
such additional instruments and shall take such other action as
the other may request to carry out the transactions contemplated
by this agreement. For a period of three years after the
closing, each party shall grant the other reasonable access
during normal business hours upon reasonable prior notice to the
books and records of that party for the purpose of complying with
any applicable law or governmental rule or request relating to
the period during which the other party operated the Station or
as otherwise reasonably required.
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7. Conditions Precedent to Closing.
7.1 Conditions Precedent to the Obligations of
the Buyer. The Buyer's obligation to consummate the purchase
under this agreement is subject to the fulfillment, at or prior
to the closing, of each of the following conditions (any of which
may be waived in writing by the Buyer):
(a) all representations and warranties of ML
Media under this agreement shall be true at and as of the time of
the closing with the same effect as though those representations
and warranties had been made again at and as of that time, with
such exceptions as do not in the aggregate have a material
adverse effect on the operations or business of the Station;
(b) ML Media shall have performed and
complied in all material respects with each obligation, covenant
and condition required by this agreement to be performed or
complied with by it prior to or at the closing;
(c) the Commission shall have given all
requisite approvals and consents, without any condition or
qualification materially adverse to the Buyer or the operations
of the Station, to the assignment of the FCC Licenses to the
Buyer and the acquisition of control of the Station by the Buyer
as provided in this agreement and such approvals shall have
become a Final Order (as defined below);
(d) all applicable waiting periods under the
HSR Act with respect to the transactions contemplated by this
agreement shall have expired or been terminated;
(e) ML Media shall have duly received,
without any condition materially adverse to the Buyer, all
consents and approvals referred to in schedule 7.1(e);
(f) there shall not be in effect an injunction
or restraining order issued by a court of competent jurisdiction
in an action or proceeding against the consummation of the
transactions contemplated by this agreement;
(g) the Buyer shall have been furnished with
a certificate of an officer of ML Media, dated the Closing Date,
in form and substance satisfactory to the Buyer, certifying to
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the fulfillment of the conditions set forth in sections 7.1(a)
and (b);
(h) the Buyer shall have been furnished with
the opinion of counsel for ML Media as described in section 8.1;
and
(i) not later than thirty (30) days prior to
closing, ML Media shall have furnished Buyer with a Phase I
Environmental Audit of the Existing Property (the cost of which
shall be borne one half by ML Media and one half by Buyer) which
shall have been performed in accordance with the requirements and
definitions set forth in Section 22.2 of the Illinois Environmental
Protection Act, as amended, 415 ILCS 5/22.2, and the audit report
shall contain a written affirmation of the Environmental
Professional performing the audit that it has been performed in
compliance with such requirements and definitions. If such
report indicates that any conditions exist on the Existing
Property that violate applicable environmental laws in any
material respect, ML Media shall take whatever remedial actions
are necessary to cause the property to be in compliance in all
material respects with applicable environmental laws; provided,
that if ML Media receives a written estimate indicating that the
aggregate cost of such remediation would exceed $500,000, ML
Media shall have no obligation to undertake such remediation. If
ML Media elects not to undertake such remediation, the Buyer may
elect, by notice to ML Media given within 30 days of the date of
the election by ML Media, to (i) close the transaction on the
scheduled date of the closing and accept the Existing Property as
is, provided that if the Buyer begins to undertake such
remediation within six months after the Closing Date ML Media
shall pay the first $500,000 of remediation costs, or (ii)
terminate this agreement by written notice to ML Media, in which
event no party shall have any liability to any other party and
the Escrow Agent shall return the Deposit (and interest thereon)
to the Buyer.
For the purpose of this agreement, "Final
Order" means action by the Commission (a) which has not been
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vacated, reversed, stayed, set aside, annulled or suspended, (b)
with respect to which no appeal, request for stay, or petition
for rehearing, reconsideration or review by any party or by the
Commission on its motion, is pending, and (c) as to which the
time for filing any such appeal, request, petition, or similar
document for the reconsideration or review by the Commission on
its own motion under the express provisions of the Communications
Act of 1934 and the rules and regulations of the Commission, has
expired (or if any such appeal, request, petition or similar
document has been filed, a Commission order has been upheld in a
proceeding pursuant thereto and no additional review or
reconsideration may be sought).
The Buyer acknowledges and agrees that the
termination of the Station's affiliation agreement with the ABC
network and the Station's affiliation with the NBC network as of
September 1995 and any adverse financial or other effects
therefrom on the business or operations of the Station shall not
affect the Buyer's obligation to consummate the purchase under
this agreement.
7.2 Conditions Precedent to the Obligations of ML
Media. ML Media's obligation to consummate the sale under this
agreement is subject to the fulfillment, at or prior to the
closing, of each of the following conditions (any of which may be
waived in writing by ML Media):
(a) all representations and warranties of
the Buyer under this agreement shall be true at and as of the
time of the closing with the same effect as though those
representations and warranties had been made at and as of that
time, with such exceptions as do not in the aggregate have a
material adverse effect on the ability of the Buyer to consummate
the transactions contemplated by this agreement;
(b) the Buyer shall have performed and
complied in all material respects with all obligations, covenants
and conditions required by this agreement to be performed or
complied with by it prior to or at the closing;
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(c) the Commission shall have given all
requisite approvals and consents, without any condition or
qualification materially adverse to ML Media, to the assignment
of the FCC Licenses to the Buyer and the acquisition or control
of the Station by the Buyer as provided in this agreement, and
such approvals shall have become a Final Order;
(d) all applicable waiting periods under the
HSR Act with respect to the transactions contemplated by this
agreement shall have expired or been terminated;
(e) the Buyer shall have paid the amounts
payable at the closing in accordance with section 2.1(a) and
Chemical Bank, the lender under the Bank Agreement dated June 21,
1989, shall have released its lien on substantially all of the
Assets in exchange for payment by ML Media to Chemical Bank of
the net proceeds of the sale of the Assets;
(f) there shall not be in effect an injunction
or restraining order issued by a court of competent jurisdiction in an
action or proceeding against the consummation of the transactions
contemplated by this agreement; and
(g) ML Media shall have been furnished with
a certificate of an officer of the Buyer, dated the Closing Date,
in form and substance satisfactory to ML Media, certifying to the
fulfillment of the conditions set forth in sections 7.2(a) and
(b).
8. Transactions at the Closing.
8.1 Documents to be Delivered by ML Media. At
the closing, ML Media shall deliver to the Buyer the following:
(a) such bills of sale, assignments, deeds
or other instruments of transfer and assignment, and such
termination letters and UCC-3 termination statements, all in form
and substance reasonably satisfactory to Buyer and its counsel,
as shall be effective to vest in Buyer title to the Assets in
accordance with section 4.4;
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(b) an opinion of Proskauer Rose Goetz &
Mendelsohn LLP, counsel to ML Media, dated the Closing Date, in
substantially the form of exhibit 8.1(b);
(c) an opinion of Wiley, Rein & Fielding,
Commission counsel to ML Media, dated the Closing Date, in
substantially the form of exhibit 8.1(c);
(d) the certificate referred to in section
7.1(g); and
(e) copies of all consents and approvals
received pursuant to section 6.6.
8.2 Documents to be Delivered by the Buyer. At
the closing, the Buyer shall deliver to ML Media the following:
(a) wire transfer of funds in the amount
provided in section 2.1(a);
(b) instruments, in form and substance
reasonably satisfactory to ML Media and its counsel, pursuant to
which the Buyer shall assume the obligations of ML Media to be
assumed by the Buyer pursuant to section 2.1(b);
(c) an opinion of Scholz, Loos, Palmer,
Siebers & Duesterhaus, counsel to the Buyer, dated the Closing
Date, in substantially the form of exhibit 8.2(c);
(d) a copy of resolutions of the board of
directors of the Buyer authorizing the execution, delivery and
performance of this agreement by the Buyer, and a certificate of
the secretary or an assistant secretary of the Buyer, dated the
Closing Date, that such resolutions were duly adopted and are in
full force and effect; and
(e) the certificate referred to in section
7.2(g).
9. Survival of Representations and Warranties;
Indemnification.
9.1 Survival. All representations, warranties,
covenants and agreements of ML Media and the Buyer contained in
this agreement shall survive the Closing Date, but neither party
shall be liable to the other for misrepresentation or breach of
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warranty, covenant or agreement except to the extent that notice
of a claim is asserted in writing and delivered prior to April
30, 1997 except for any warranties contained in section 4.4 which
shall extend indefinitely. Until April 30, 1997, ML Media shall
maintain at all times cash and other assets with a fair market
value that exceeds the liabilities of ML Media by not less than
$1,000,000. Any notice of a claim for misrepresentation or
breach of warranty, covenant or agreement shall state
specifically the representation or warranty, covenant or
agreement with respect to which the claim is made, the facts
giving rise to an alleged basis for the claim, and the amount of
liability asserted against the other party by reason of the
claim.
9.2 Indemnification.
(a) ML Media shall indemnify and hold
harmless the Buyer against all loss, liability, damage or expense
(including reasonable fees and expenses of counsel), that the
Buyer may suffer, sustain or become subject to as a result of (i)
subject to sections 9.1 and 9.3, any misrepresentation by ML
Media or any breach by ML Media of any warranty, covenant or
other agreement contained in this agreement, (ii) subject to
sections 9.1 and 9.3, any liability or obligation to any third
party arising out of the failure by ML Media to pay, perform or
discharge when due any of ML Media's obligations, liabilities,
agreements or commitments not assumed by the Buyer pursuant to
this agreement, and (iii) without giving effect to the
limitations in section 9.1 and 9.3, the litigation described on
schedule 4.12 and any third party claim resulting from a
misrepresentation or breach of warranty in section 4.18.
(b) Subject to sections 9.1 and 9.3, the
Buyer shall indemnify and hold harmless ML Media against all
loss, liability, damage or expense (including reasonable fees and
expenses of counsel) that ML Media may suffer, sustain or become
subject to as a result of (i) any misrepresentation by the Buyer
or any breach by the Buyer of any warranty, covenant or other
agreement contained in this agreement, and (ii) any liability or
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obligation arising out of the operations of the Station on or
after the Closing Date.
(c) If any claim is made against the Buyer
that, if sustained, would give rise to a liability of ML Media
under this agreement, or otherwise, the Buyer promptly shall
cause notice of the claim to be delivered to ML Media and shall
afford ML Media and its counsel, at ML Media's expense, the
opportunity to defend or settle the claim. If such notice and
opportunity are not given, or if the claim is settled without ML
Media's consent, ML Media shall not have any liability to the
Buyer with respect to the claim. The Buyer shall cooperate with
ML Media in the defense of the claim and may, at its own expense,
participate in the defense, but complete control of the defense
shall remain with ML Media.
9.3 Limitation on Liability. Notwithstanding
anything to the contrary in this agreement, neither party shall
be liable to the other for misrepresentation or breach of
warranty except to the extent that the aggregate amount of loss,
liability, damage and expense incurred as a result of all such
misrepresentations and breaches of warranty exceeds the sum of
$45,000; provided, however, the $45,000 "basket" shall not apply
with respect to any claim by Buyer for indemnification relating
to section 4.4, 4.18, 6.11 or 6.13.
10. Termination.
10.1 Termination. Except with respect to
provisions that expressly survive termination, this agreement may
be terminated:
(a) by written agreement of the Buyer and ML
Media;
(b) by the Buyer or ML Media, by notice to
the other, if at any time prior to the Closing Date any event
shall have occurred or any state of facts shall exist that
renders any of the conditions to its obligations as provided in
this agreement incapable of fulfillment;
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(c) by the Buyer as provided in section 11;
or
(d) by the Buyer or ML Media, by notice to
the other, if the Commission designates for a hearing the
application for Commission consent contemplated by this
agreement.
10.2 Liability. The termination of this agreement
under section 10.1(b), (c) or (d) shall not relieve any party of
any liability for breach of this agreement prior to the date of
termination.
11. Risk of Loss. The risk of loss or damage to any
of the Assets shall be on ML Media prior to the closing and
thereafter shall be on the Buyer. If any material Asset is
damaged or destroyed prior to the Closing Date (any such event
being referred to as an "Event of Loss"), ML Media shall
immediately notify Buyer in writing of the Event of Loss. The
notice shall specify with particularity the loss or damage
incurred, the cause of the Event of Loss, if known or reasonably
ascertainable, and the applicable insurance coverage. If ML
Media elects to repair, replace or restore the Asset and the
Asset so damaged or destroyed cannot be completely repaired,
replaced or restored by the scheduled date of the closing but can
be accomplished within 90 days after that date, the date of the
closing shall be postponed for up to that 90-day period to allow
ML Media an opportunity to repair, replace or restore the Asset.
If ML Media does not elect to repair, replace or restore the
Asset or if the repair, replacement or restoration cannot be
accomplished within that 90-day period, the Buyer may elect, by
written notice to ML Media within 20 days after the Buyer has
received notice that an Event of Loss has occurred or that the
repair, replacement or restoration cannot be so completed:
(a) to close the transaction on the
scheduled date of the closing and accept the damaged Asset as is;
or
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(b) to terminate this agreement without
liability, in which event the Escrow Agent shall return the
Deposit to Buyer.
If the date of the closing is postponed
beyond the time specified in section 3.2, the parties shall amend
their application or applications to the Commission to request an
extension of the date of closing.
12. Miscellaneous.
12.1 Notices. Any notice or other communication
under this agreement shall be in writing and shall be considered
given when delivered personally or when mailed by registered
mail, return receipt requested, to the parties at the addresses
set forth below (or at such other address as a party may specify
by notice to the other):
to the Buyer, to it at:
Quincy Newspapers, Inc.
130 South 5th Street
Quincy, Illinois 62301
Attention: Ralph Oakley
with a copy to:
Scholz, Loos, Palmer, Siebers
& Duesterhaus
625 Vermont Street
Quincy, Illinois 62301
Attention: Steven E. Siebers, Esq.
if to ML Media, to it at:
350 Park Avenue
16th Floor
New York, New York 10022
Attention: I. Martin Pompadur
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with a copy to:
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, New York 10036
Attention: Lawrence H. Budish, Esq.
12.2 Brokers. Each of the Buyer and ML Media
represents and warrants to the other that it has not retained or
dealt with any broker or finder in connection with the
transactions contemplated by this agreement, except that ML Media
has retained and shall pay any fees payable to The Ted Hepburn
Company.
12.3 Entire Agreement. This agreement, including
the schedules and exhibits, contains a complete statement of all
the arrangements between the parties with respect to its subject
matter, supersedes any previous agreement between them relating
to that subject matter, and cannot be changed or terminated
orally. Except as specifically set forth in this agreement,
there are no representations or warranties by either party in
connection with the transactions contemplated by this agreement.
12.4 Headings. The section headings of this
agreement are for reference purposes only and are to be given no
effect in the construction or interpretation of this agreement.
12.5 Governing Law. This agreement shall be
governed by and construed in accordance with the law of the State
of Illinois applicable to agreements made and to be performed in
Illinois.
12.6 Separability. If any provision of this
agreement is invalid or unenforceable, the balance of this
agreement shall remain in effect.
12.7 Assignment. No party may assign any of its
rights or delegate any of its duties under this agreement without
the consent of the other.
12.8 Publicity. Except as required by applicable
law, no party shall issue any press release or other public
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statement regarding the transactions contemplated by this
agreement without consulting with the other.
12.9 Jurisdiction. The courts of the State of
Illinois and the United States District Court for the Central
District of Illinois shall have jurisdiction over the parties
with respect to any dispute or controversy between them arising
under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement
submits to the jurisdiction of those courts, including, but not
limited to, the in personam and subject matter jurisdiction of
those courts, waives any objection to such jurisdiction on the
grounds of venue or forum non conveniens, the absence of in
personam or subject matter jurisdiction and any similar grounds,
consents to service of process by mail (in accordance with
section 12.1) or any other manner permitted by law, and
irrevocably agrees to be bound by any judgment rendered thereby
in connection with this agreement. These consents to
jurisdiction shall not be deemed to confer rights on any person
other than the parties to this agreement.
12.10 Counterparts. This agreement may be
executed in any number of counterparts, which together shall
constitute one and the same instrument.
13. Specific Performance. If ML Media defaults in the
performance of its obligations under this agreement and fails to
complete the sale and purchase, as and when herein set forth, and
Buyer shall not be in material default, the Buyer shall be
entitled to apply and obtain specific performance, which shall be
in addition to any and all other rights and remedies available to
Buyer at law or in equity.
QUINCY NEWSPAPERS, INC.
By:
-------------------------
Name:
Title:
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ML MEDIA PARTNERS, L.P.
By:
-------------------------
Name:
Title:
41
