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
June 20, 1995 0-16690
(Date of earliest report) (Commission File Number)
ML MEDIA OPPORTUNITY PARTNERS, L.P.
(Exact name of registrant as specified in its governing
instruments)
Delaware 13-3429969
(State of other jurisdiction of (I.R.S. Employer
(incorporation Identification No.
World Financial Center-South Tower, New York, New York 10080-6114
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(212) 236-6472
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On June 20, 1995, TCS Television, Inc. (the "Seller"), Avant
Development Corporation (the "Company") and The Spartan
Radiocasting Company (the "Buyer") entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement") providing for the sale
to the Buyer of all of the outstanding shares (the "Shares") of
capital stock of the Company for a base purchase price of
$20,850,000, subject to certain adjustments, including an
adjustment with respect to the working capital of the Company.
In addition, the Buyer will pay the Seller $1,500,000 for a
covenant-not-to-compete with the Buyer. The Seller is a wholly
owned subsidiary of TCS Television Partners, L.P. ("TCS"), a
limited partnership in which ML Media Opportunity Partners, L.P.
is the general partner and holds an aggregate 51.005% interest.
The Company is a wholly owned subsidiary of the Seller and owns
and operates television station WRBL-TV, Columbus, Georgia. 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 indebtedness of TCS secured by a pledge
of the Shares and the shares of Fabri Development Corporation,
another subsidiary of the Seller which owns and operates KQTV,
St. Josephs, Missouri, and WTWO-TV, Terre Haute, Indiana.
Consummation of the sale pursuant to the Stock Purchase Agreement
is subject to the satisfaction of certain conditions, including
obtaining approvals from TCS' lenders and the Federal
Communications Commission.
The Stock Purchase Agreement is attached as an exhibit
hereto. Reference is made to the Stock Purchase Agreement for
all of the terms of the sale.
Item 7. Financial Statements and Exhibits.
Exhibit 10.1 - Stock Purchase Agreement, dated June 20,
1995, among TCS Television, Inc., Avant Development Corporation
and The Spartan Radiocasting Company.
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 OPPORTUNITY PARTNERS, L.P.
BY: MEDIA MANAGEMENT OPPORTUNITY
PARTNERS, its general partner
BY: RP OPPORTUNITY MANAGEMENT, L.P., a
general partner
BY: IMP OPPORTUNITY MANAGEMENT, INC.,
its general partner
By: [Elizabeth McNey Yates]
Elizabeth McNey Yates
Vice President
Dated: June 22, 1995
EXHIBIT INDEX
Exhibit 10.1 - Stock Purchase Agreement, dated June 20, 1995,
among TCS Television, Inc., Avant Development Corporation and The
Spartan Radiocasting Company .... page 5
STOCK PURCHASE AGREEMENT
BETWEEN
TCS TELEVISION, INC.,
AVANT DEVELOPMENT CORPORATION
AND
THE SPARTAN RADIOCASTING COMPANY
Dated June 20, 1995
TABLE OF CONTENTS
Page
SECTION 1. Definitions 1
SECTION 2. Escrow Deposit; Purchase and Sale of
Shares 4
2.1 Escrow Deposit 4
2.2 Closing Date 4
2.3 Purchase and Sale of the Shares,
Consideration 5
2.4 Purchase Price 5
2.5 Pre-Closing and Closing Date Deliveries 5
2.6 Closing Balance Sheet 6
SECTION 3. Representations, Warranties and Agreements
of Seller and the Company 7
3.1 Organization and Capital Structure of the
Company 7
3.2 Articles of Incorporation and Bylaws 8
3.3 Business 8
3.4 Authority 8
3.6 Financial Statements 8
3.7 No Undisclosed Liabilities 9
3.8 Operations Since Financial Statements Date9
3.9 Taxes 9
3.10 Litigation 9
3.11 FCC Qualifications 9
3.12 Governmental Authorizations 10
3.13 Real Property 10
3.14 Owned Personal Property 10
3.15 Personal Property Leases 10
3.16 Title to Real and Tangible
Personal Property 10
3.17 Station Contracts 11
3.18 Status of Contracts 11
3.19 Insurance 11
3.20 Employees and Related Agreements 12
3.21 Labor Relations, Etc 12
3.22 Employees Benefit Plans, Etc. 12
3.23 Environmental Matters. Except as
disclosed on Schedule 3 12
3.24 Subsidiaries 13
3.25 Brokers and Finders 13
SECTION 4. Representations, Warranties and Agreements
of Buyer 13
4.1 Organization of Buyer 13
4.2 Authority 13
4.3 Effect of Agreement 13
4.4 Litigation 13
4.5 Buyer's FCC Qualifications 14
4.6 Brokers and Finders 14
4.7 Sources of Information, Etc. 14
4.8 Bona Fide Purchaser 14
4.9 Investment Representation 14
4.10 Tangible Assets 14
SECTION 5. Actions Prior to Closing Date 14
5.1 FCC Consent, Improvements Act 14
5.2 Consents 15
5.3 Investigation of the Company's Corporate
and Financial Records 15
5.4 Preserve Accuracy of Representations and
Warranties 16
5.5 Continuation of the Company's Business 16
5.6 Elimination of Intercompany Debt 17
5.7 Payment of Debt by Seller and the Company17
5.8 Preparation and Filing of Returns 18
5.9 401(k) Plan 19
SECTION 6 Additional Agreement 19
6.1 Taxes and Expenses 19
6.2 Noncompetition Agreement 19
6.3 Certain Tax Matters 19
SECTION 7. Conditions Precedent to Obligations of
Buyer 21
7.1 No Misrepresentation or Breach of Covenants
and Warranties 21
7.2 Corporate Action 22
7.3 FCC Consent; Improvements Act 22
7.4 Opinions of Counsel to Seller and the
Company 22
7.5 No Material Adverse Changes 22
7.6 Notice of Failure to Satisfy Condition and
Cure Period 22
SECTION 8. Conditions Precedent to Obligations of
Seller and the Company 23
8.1 No Misrepresentations or Breach of
Covenants and Warranties 23
8.2 Corporate Action 23
8.3 FCC Consent; Improvements Act 23
8.4 Opinion of Counsel to Buyer 23
8.5 Notice of Failure to Satisfy Condition and
Cure Period 23
8.6 Receipt of Consent of Lender 24
SECTION 9. Indemnification 24
9.1 Indemnification by Seller 24
9.2 Indemnification by Buyer 24
9.3 Procedure for Indemnification 25
SECTION 10. Survival of Obligations 26
SECTION 11. Notices 27
SECTION 12. Termination 28
SECTION 13. General Provisions 28
13.1 Confidentiality, Press Releases 28
13.2 Governing Law 29
13.3 Partial Invalidity 29
13.4 Successors and Assigns 30
13.5 Execution in Counterparts 30
13.6 Titles and Headings 30
13.7 Schedules and Exhibits 30
13.8 Waivers 31
13.9 Entire Agreement; Amendments 31
EXHIBITS
Exhibit A Escrow Agreement
Exhibit B Side Letter Agreement
Exhibit C Post Closing Escrow Agreement
Exhibit D Noncompetition Agreement
Exhibit E-1 Opinion of Counsel to Seller and the Company
Exhibit E-2 Opinion of FCC Counsel to Seller and the Company
Exhibit F Opinion of Counsel to Buyer
SCHEDULES
Tab Schedule
No. No. Schedule Title
1 3.3 Business Other Than Station Business
2 3.5 Effect of Agreement
3 3.6-A Company's Financial Statements
4 3.6-B Seller's Financial Statements
5 3.7 Undisclosed Liabilities
6 3.8(a) Operations Since 1994 Statement Date
(Ordinary Course)
7 3.8(b) Operations Since 1994 Statement Date
(Material Adverse Change)
8 3.9 Taxes
9 3.10 Litigation
10 3.11 FCC Qualifications
11 3.12 Governmental Authorizations
12 3.13 Real Property
13 3.14 Owned Personal Property
14 3.15 Personal Property Leases
15 3.16 Title to Real and Tangible Personal Property
16 3.17 Station Contracts
17 3.18 Status of Contracts
18 3.19 Insurance
19 3.20 Employment and Related Agreements
20 3.21 Labor Relations, Etc.
21 3.22 Employee Benefit Plans
22 3.23 Environmental Matters
23 5.5(b) Continuation of the Company's Business
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of the 20th day of June, 1995, among TCS
TELEVISION, INC., a corporation organized under the laws of the
State of Delaware ("Seller"), AVANT DEVELOPMENT CORPORATION, a
corporation organized under the laws of the State of Georgia (the
"Company"), and THE SPARTAN RADIOCASTING COMPANY, a corporation
organized under the laws of South Carolina ("Buyer").
W I T N E S S E T H :
WHEREAS, the Company is the licensee of, and is engaged in
the business of operating, television broadcast station WRBL (the
"Station"), licensed to serve the City of Columbus, Georgia (such
business and operations now being conducted by the Company
hereinafter called the "Station Business");
WHEREAS, Seller owns all issued and outstanding capital
stock of the Company; and
WHEREAS, Buyer desires to acquire from Seller, and Seller
desires to sell to Buyer, all of the capital stock of the
Company, all on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and the
agreements, representations, and warranties hereinafter set forth
and payment of the Purchase Price as set forth in Section 2.4,
Buyer, Seller, and the Company hereby agree as follows:
SECTION 1. Definitions. As used in this Agreement, the
following terms shall have the indicated meanings, which meanings
shall be applicable, except to the extent otherwise indicated in
a definition of a particular term, both to the singular and
plural forms of such terms. Any agreement referred to below
shall mean such agreement as amended, supplemented, and modified
from time to time to the extent permitted by the applicable
provisions thereof and by this Agreement.
"Affiliate" shall mean, with respect to any person, any
other person which directly or indirectly controls, is controlled
by, or is under common control with such person.
"Best Efforts" shall mean reasonable good faith efforts but
shall in no event require the commencement of litigation against
any third party or the payment of any fees to any third party.
"Business Day" shall mean any weekday on which commercial
banks in New York are open. Any action, notice or right which is
to be exercised or lapses on or by a given date which is not a
Business Day may be taken, given or exercised, and shall not
lapse, until the end of the next Business Day.
"Buyer" has the meaning specified in the first paragraph of
this Agreement.
"Closing" has the meaning specified in Section 2.2.
"Closing Balance Sheet" has the meaning specified in Section
2.6.
"Closing Date" has the meaning specified in Section 2.2.
"Closing Date Working Capital Amount" means the following,
as of the close of business on the Business Day next preceding
the Closing Date:
(a) the amount of the Company's cash and cash equivalents;
plus
(b) the amount of the Company's accounts receivable, less
an allowance for doubtful accounts; plus
(c) the amount of the Company's prepaid expenses and other
current assets (excluding programming and film contracts); minus
(d) the amount of the Company's accounts payable; minus
(e) the amount of the Company's accrued salary, payroll and
wage compensation to employees (other than vacation, severance,
sick leave and other similar accruals) ; minus
(f) the amount of the Company's other accrued current
liabilities (excluding current portion of long-term debt and
interest on debt, capitalized lease obligations and programming
and film contracts); minus
(g) the amount of any accrued taxes (other than federal,
state and local income taxes that are payable by Seller in its
consolidated tax returns to be filed in accordance with the first
sentence of Section 5.8(a) hereof).
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Communications Act" shall mean the Communications Act of
1934, as amended.
"Company" has the meaning specified in the first paragraph
of this Agreement.
"Damages Escrow" has the meaning specified in the Post
Closing Escrow Agreement.
"DOJ" has the meaning specified in Section 5.1(b).
"Employee Benefit Plans" has the meaning specified in
Section 3.22.
"Encumbrances" shall mean any lien, claim, charge, security
interest, mortgage, pledge, hypothecation, easement, conditional
sale or other title retention agreement, defect in title,
covenant or other restrictions of any kind or any other
arrangement having the practical or legal effect of constituting
a security interest with respect to the payment of indebtedness;
provided, however, that Encumbrances shall not include any
Permitted Encumbrance.
"Environmental Laws" shall mean any federal, state, or local
statute, code, ordinance, rule, regulation, permit, consent,
approval, license, judgment, order, writ, judicial decision,
memorandum of agreement, common law rule, decree, agency
interpretation, injunction or other authorization or requirement
whenever promulgated, issued, or modified, relating to: (a) the
regulation of wetlands; (b) emissions, discharges, spills,
releases or threatened releases of pollutants, contaminants,
Hazardous Substances, materials containing Hazardous Substances,
or hazardous or toxic wastes into air, surface water,
groundwater, treatment works, drains, sewer or septic systems,
wetlands, or onto land; or (c) the generation, manufacture, use,
handling, treatment, transport, or disposal of Hazardous
Substances as defined in or regulated under any federal, state or
local law.
"ERISA" means the Employment Retirement Income Security Act
of 1974, as amended.
"Escrow Agent" has the meaning specified in the first
paragraph of the Escrow Agreement.
"Escrow Agreement" has the meaning specified in Section 2.1.
"Escrowed Funds" has the meaning specified in the preamble
of the Escrow Agreement.
"Expense" has the meaning specified in Section 9.1.
"FCC" shall mean the Federal Communications Commission.
"FCC Authorizations" shall mean all licenses, permits, and
authorizations issued by the FCC which are necessary to entitle
Seller and the Company to own and operate the Station and to
conduct the Station Business as presently conducted.
"FCC Consent" shall mean an initial order of or an action by
the FCC or its staff acting pursuant to delegated authority
consenting to the transfer of the Shares from Seller to Buyer.
"Financial Statements" has the meaning specified in Section
3.6.
"FTC" has the meaning specified in Section 5.1(b).
"Governmental Authorizations" has the meaning specified in
Section 3.12.
"Hazardous Substances" shall mean hazardous wastes and
hazardous substances as defined or regulated under any
Environmental Laws.
"Improvements Act" has the meaning specified in Section
5.1(b).
"Loss" has the meaning specified in Section 9.1.
"1994 Statements" have the meaning specified in Section 3.6.
"Noncompete Payment" has the meaning specified in Section
2.4.
"Noncompetition Agreement" has the meaning specified in
Section 6.2.
"Permitted Encumbrance" means, (a) Encumbrances imposed by
any governmental authority for taxes, assessments or charges not
yet due or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the Company in accordance
with generally accepted accounting principles; (b) carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other
like Encumbrances arising in the ordinary course of the Station
Business which are not overdue for a period of more than 30 days
or which are being contested in good faith and by appropriate
proceedings, if adequate reserves with respect thereto are
maintained on the books of the Company in accordance with
generally accepted accounting principles; (c) pledges or deposits
in connection with worker's compensation, unemployment insurance
and other social security legislation; (d) deposits to secure the
performance of any or all of the following: bids, trade contracts
(other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of the Station
Business; (e) easements, rights-of-way, restrictions and other
similar encumbrances on real property incurred in the ordinary
course of the Station Business which, in the aggregate, are not
substantial in amount, and which do not in any case materially
detract from the value of the property subject thereto or
interfere in any material respect with the ordinary conduct of
the Station Business thereon; (f) all the exceptions to title
reflected in Schedule 3.16,; and (g) Encumbrances in an amount of
less than Fifty Thousand Dollars ($50,000).
"Post Closing Escrow Agent" has the meaning specified in the
first paragraph of the Post Closing Escrow Agreement.
"Post Closing Escrow Agreement" has the meaning specified in
Section 2.5.
"Purchase Price" has the meaning specified in Section 2.4.
"Seller" has the meaning specified in the first paragraph of
this Agreement.
"Shares" have the meaning specified in Section 2.3.
"Side Letter Agreement" has the meaning specified in Section
2.4.
"Station" has the meaning specified in the second paragraph
of this Agreement.
"Station Business" has the meaning specified in the second
paragraph of this Agreement.
"Station Contracts" has the meaning specified in Section
3.18.
"Tax Escrow" has the meaning specified in the Post Closing
Escrow Agreement.
SECTION 2. Escrow Deposit; Purchase and Sale of Shares.
2.1 Escrow Deposit. Immediately upon execution of this
Agreement by all parties, Buyer shall deposit the amount of One
Million Dollars ($1,000,000) with a national bank acceptable to
Seller to be held in an interest bearing escrow account, subject
to an escrow agreement in the form attached hereto as Exhibit A
("Escrow Agreement"). The Buyer acknowledges that the amount of
the Escrowed Funds and interest thereon is the minimum amount of
damages that the Seller would suffer as a result of a default
hereunder by the Buyer, that the Seller's receipt of the Escrowed
Funds and interest thereon shall not constitute a waiver of, or
otherwise prejudice, any other legal or equitable rights or
remedies that the Seller may have as a result of the Buyer's
default, and that in addition to receiving and retaining the
amount of the Escrowed Funds and interest thereon the Seller may
obtain any further legal and equitable relief (including specific
performance), remedies and/or damages to which it may be
entitled.
2.2 Closing Date. Unless this Agreement is terminated
pursuant to Section 12 hereof or unless the Closing Date is
extended pursuant to Section 7.6 or Section 8.5 hereof, the
purchase and sale of the Shares (as such term is defined in
Section 2.3 below) provided for in the Agreement (the "Closing")
shall be consummated at the law offices of Tom Watson Brown,
Esq., 2180 Tower Place, 3340 Peachtree Road, N.E., Atlanta,
Georgia 30326 at 10:00 a.m. Eastern Standard Time on the fifth
(5th) business day after public notice of the FCC Consent, or at
such other time and place as shall be agreed upon in writing by
Seller and Buyer (such date and time being hereafter called the
"Closing Date").
2.3 Purchase and Sale of the Shares, Consideration.
Subject to the terms and conditions of this Agreement, on the
Closing Date, Seller shall sell to Buyer, and Buyer shall
purchase from Seller, all of the issued and outstanding shares of
capital stock of the Company (the "Shares") by completing the
deliveries specified in Sections 2.4 and 2.5.
2.4 Purchase Price. (a) In consideration of the sale of
the Shares, Buyer shall pay to Seller, by wire transfer in U.S.
dollars in immediately available funds, to the account specified
in Section 2.4.(b), on the Closing Date (i) a purchase price (the
"Purchase Price") of Twenty Million, Eight Hundred Fifty Thousand
Dollars ($20,850,000); (ii) plus or minus, as the case may be,
the Closing Date Working Capital Amount, but not more than an
aggregate amount of Twenty-One Million, Three Hundred Thousand
Dollars ($21,300,000); and (iii) plus or minus, as the case may
be, those items specified in the side letter agreement attached
hereto as Exhibit B (the "Side Letter Agreement"). In
consideration of the Noncompetition Agreement referred to in
Section 6.2, Buyer shall pay to Seller, by wire transfer in U.S.
dollars in immediately available funds, to the account specified
in Section 2.4(b), on the Closing Date, an amount equal to One
Million Five Hundred Thousand Dollars ($1,500,000) (the
"Noncompete Payment").
(b) Funds to be delivered to Seller shall be sent to an
account specified by Seller.
2.5 Pre-Closing and Closing Date Deliveries. (a) At least
five (5) Business Days prior to the Closing Date, Seller shall
deliver to Buyer a certificate signed by Seller's Chief Financial
Officer stating that there has been conducted under his or her
supervision a review of all relevant information and data then
available and setting forth in reasonable detail Seller's good
faith estimation of the Closing Date Working Capital Amount.
(b) On the Closing Date, Seller shall deliver or cause to
be delivered to Buyer:
(i) stock certificates representing all of the Shares,
together with duly executed and witnessed stock powers in blank
attached thereto. Buyer and the Company hereby waive any
requirement of a signature guarantee;
(ii) a signed resignation by each of the directors and
officers of the Company:
(iii) all of the documents, instruments, and opinions
required to be delivered pursuant to Section 7.
(c) On the Closing Date, Buyer shall deliver or cause to be
delivered to Seller:
(i) the Purchase Price (based on Seller's estimation
of the Closing Date Working Capital Amount) plus the Noncompete
Payment, plus or minus those items specific in the Side letter
Agreement, minus the Escrowed Funds, all in immediately available
funds by wire transfer to Seller's account, such account to be
identified in a writing from Seller to Buyer no less than three
Business Days prior to the Closing Date;
(ii) Payment instructions to the Escrow Agent to
transfer to Seller the Escrowed Funds as part of the Purchase
Price; and
(iii) all of the certificates and opinions required to
be delivered by Buyer under Section 8 hereof.
(d) On the Closing Date, Seller shall deliver to the Post
Closing Escrow Agent the amount of Two Hundred Fifty Thousand
Dollars ($250,000) to be held by the Post Closing Escrow Agent as
the Damages Escrow under the Post Closing Escrow Agreement in the
form of Exhibit C to be executed by the Buyer, the Seller, and
the Post Closing Escrow Agent at the Closing. Such Damages
Escrow shall be used, to the extent necessary, to satisfy any
amount owed by the Seller to the Buyer under Section 2.6(e)(i)
hereof and/or Section 9.1 hereof. On the Closing Date, Seller
shall also deliver to the Post Closing Escrow Agent the amount of
One Million Dollars ($1,000,000) to be held by the Post Closing
Escrow Agent as the Tax Escrow under the Post Closing Escrow
Agreement. Such Tax Escrow shall be used, to the extent
necessary, to satisfy any amount owed by the Seller to the Buyer
under Section 6.3(c) hereof.
2.6 Closing Balance Sheet. (a) Within ninety (90) days
after the Closing Date, Seller shall prepare or cause to be
prepared a balance sheet of the Company as of the Closing Date
(the "Closing Balance Sheet") and final calculation of the
Closing Date Working Capital Amount which shall be calculated
using the components thereof reflected on the Closing Balance
Sheet. Such balance sheet shall be prepared in accordance with
generally accepted accounting principles applied on a basis
consistent with the balance sheet of the Company as of December
31, 1994.
(b) During the preparation of the Closing Balance Sheet (i)
Buyer shall provide Seller and Seller's authorized
representatives during normal business hours with reasonable
access to the books, records, facilities and employees of the
Company, and cooperate fully with Seller and Seller's authorized
representatives, including the provision on a timely basis of all
information necessary or useful in preparing the Closing Balance
Sheet; and (ii) Seller shall provide Buyer and Buyer's authorized
representatives with reasonable access to the books, records,
facilities and employees of Seller pertaining to the Company and
to the work papers of Seller and Seller's accountants pertaining
to the Closing Balance Sheet.
(c) Within fifteen (15) days after the delivery of the
Closing Balance Sheet, the Buyer shall notify the Seller if it
objects to any item or items contained in the Closing Balance
Sheet or if it believes that the Closing Date Working Capital
Amount was not properly calculated based upon the amounts set
forth in the Closing Balance Sheet. Such notice shall specify
each disputed item, shall contain a reasonably detailed basis for
such objection and, if possible, shall set forth a proposed
calculation of the disputed items. The failure to provide any
such notice during such 15-day period shall be conclusively
deemed to be the approval by the Buyer of the Closing Balance
Sheet and the calculation of the Closing Date Working Capital
Amount.
(d) In the event of any timely objection by the Buyer
pursuant to Section 2.6(c) above, the Buyer and the Seller shall
use their good faith efforts to resolve all disputed items for a
period of thirty (30) days and, within ten (10) days after the
end of such 30-day period, the Buyer and Seller shall submit the
disputed items (together with all information necessary or useful
for the calculation of the disputed items) for binding
arbitration by KPMG Peat Marwick or, if such party is unable or
unwilling to act as arbitrator, to another "big 6" accounting
firm designated by Buyer and Seller. Such arbitrator shall be
instructed to decide such disputed items within thirty (30) days,
and the calculation by such arbitrator shall be binding on each
of the parties hereto. The fees and expenses of the arbitrator
shall be borne fifty percent (50%) by the Buyer and fifty percent
(50%) by the Seller.
(e) Upon the approval or deemed approval by the Buyer of
the Closing Balance Sheet and the Closing Date Working Capital
Amount, or the resolution of all disputes relating thereto
pursuant to Section 2.6(d), above, (i) the Seller shall pay to
the Buyer, soley from the Damages Escrow, the amount by which the
Closing Date Working Capital Amount estimated by the Seller at
the Closing Date exceeded the Closing Date Working Capital
Amount, as finally established pursuant to this Section 2.6; or
(ii) the Buyer shall pay to the Seller the amount by which the
Closing Date Working Capital Amount estimated by the Seller at
the Closing Date was less than the Closing Date Working Capital
Amount, as finally established pursuant to this Section 2.6, as
the case may be.
SECTION 3. Representations, Warranties and Agreements of
Seller and the Company. As an inducement to Buyer to enter into
this Agreement and to consummate the transactions contemplated
hereby, each of Seller and the Company, jointly and severally,
represents and warrants to Buyer and agrees as follows:
3.1 Organization and Capital Structure of the Company.
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Georgia. The Company has full corporate power and authority to
carry on the Station Business as now conducted.
(b) The authorized capital stock of the Company consists of
Ten Thousand (10,000) shares of common stock, par value Ten
Dollars ($10.00) per share ("Company Common Stock"), of which
202.70 shares are issued and outstanding and the remaining shares
are unissued and not reserved for any purpose. Except for this
Agreement, there are no agreements, arrangements, options,
warrants, calls, rights, or commitments of any character relating
to the issuance, sale, purchase, or redemption of any shares of
Company Common Stock, except that all such Company Common Stock
is pledged to secure certain indebtedness which pledge will,
subject to receipt of the approval of the lenders as provided in
Section 8.6 hereof, be released at the Closing. Except for such
pledge, no holder of Company Common Stock has any preemptive,
stock purchase, or other rights to acquire Company Common Stock.
All of the outstanding shares of the Company Common Stock are
validly issued, fully paid, and nonassessable and were not issued
in violation of any preemptive or similar rights. Except for the
above-described pledge, Seller is the record and beneficial owner
of 202.70 shares of Company Common Stock.
3.2 Articles of Incorporation and Bylaws. True and
complete copies of the Company's Certificate of Incorporation and
all amendments thereto to date, certified by the Secretary of
State of the State of Georgia, and its Bylaws, as amended to
date. certified by the Secretary of the Company, have been
delivered to Buyer.
3.3 Business. Except as disclosed in Schedule 3.3 hereto,
the Company does not engage in any business other than the
Station Business.
3.4 Authority. Each of Seller and the Company has full
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement by Seller and the
Company have been duly authorized by Seller and the Company,
respectively, and do not require any further authorization or
consent by Seller, the Company and their stockholders. This
Agreement is the legal, valid, and binding agreement of each of
Seller and the Company, enforceable in accordance with its terms
except as the same may be limited by bankruptcy, insolvency,
reorganization, or other laws relating to or affecting the
enforcement of creditor's rights generally.
3.5 Effect of Agreement. Except as set forth in Schedule
3.5 hereto and in this Section 3.5, and assuming receipt of the
FCC Consent and the consents specified in Section 5 and
compliance with the Improvements Act, neither the execution nor
delivery of this Agreement by Seller or the Company, nor
consummation of the transactions contemplated hereby, nor
compliance with or fulfillment of the terms and provisions hereof
or of any other agreement or instrument contemplated hereby or
thereby, will conflict in any material respect with, result in a
material breach of the terms or conditions of, or constitute a
material default or violation under, (i) the Certificate of
Incorporation or the Bylaws of Seller or the Company, (ii) any
material agreement or other instrument or restriction to which
Seller or the Company is a party or by which it is bound or to
which its properties are subject, or (iii) any order, writ,
injunction, decree, statute, other law, or regulatory provision
affecting Seller or the Company in any material respect.
3.6 Financial Statements. Schedule 3.6-A hereto contains
the unaudited balance sheet and related financial statements of
the Station as of December 31, 1994 (the "1994 Statements"), and
the unaudited balance sheets and profit and loss statements for
the years ended December 31, 1993 and 1992 (collectively, the
"Financial Statements"). Schedule 3.6-B hereto contains the
audited financial statements of TCS Television Partners, Ltd. and
its subsidiaries, including the Company, for the years ended
December 31, 1994, 1993 and 1992.
The Financial Statements contained in Schedule 3.6-A have
been prepared in conformity with generally accepted accounting
principles in a manner consistent with the audited financial
statements, except for footnotes, and such differences as are not
material to the information presented therein, and present fairly
in all material respects the financial position of the Company as
of said dates and for the periods indicated. The audited
financial statements referred to in the immediately preceding
paragraph present fairly in all material respects the financial
position of TCS Television Partners, Ltd. and its subsidiaries,
including the Company, as of said dates and for the periods
indicated and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis with
prior periods.
3.7 No Undisclosed Liabilities. Except as set forth in
Schedule 3.7 hereto, the Company is not aware of any material
liability, absolute or contingent, which is either not shown or
which is in excess of amounts shown or reserved for in the
Financial Statements or otherwise disclosed in the Agreement or
reflected in or contemplated by the Schedules to this Agreement.
3.8 Operations Since Financial Statements Date.
(a) Except as set forth in Schedule 3.8(a) hereto and subject to
Section 4.10 hereof, between December 31, 1994 and the date of
this Agreement, there has been no material adverse change in the
Station Business or the operations of the Company, other than
changes affecting the industry generally, changes resulting from
the transactions contemplated by this Agreement, or changes
resulting from conditions known to Buyer prior to the date
hereof.
(b) Except as set forth in Schedule 3.8(b) hereto or as
provided herein, since December 31, 1994, the Company has
conducted the Station Business only in the ordinary course and in
conformity with past practice in all material respects.
3.9 Taxes. Except as set forth in Schedule 3.9 hereto, the
Company has, in respect of the Station Business, filed all
federal, state, county, and local income, excise, withholding,
property, sales, use, franchise, and other tax returns which are
required to be filed and has paid all taxes which were shown as
due pursuant to such returns or pursuant to any assessment which
has become payable. Except as set forth in Schedule 3.9 hereto,
monies required to be withheld by the Company from its employees
for income taxes, social security, and other payroll taxes have
been collected or withheld, and either paid to the respective
governmental agencies, set aside in accounts for such purpose, or
accrued, reserved against, and entered upon the books of Seller.
3.10 Litigation. Except as disclosed in Schedule 3.10
hereto, there is no material action, suit or proceeding pending
(i) against Seller or the Company which restrains or prohibits or
otherwise challenges the legality or validity of the transactions
contemplated hereby or (ii) against the Company which could
adversely affect the Station Business in any material respect.
3.11 FCC Qualifications. Seller warrants that, to the best
of its knowledge, the Company has not violated and is not in
default under any provision of the Act or any applicable order,
rule or regulation of the FCC in any respect which would
materially adversely affect the FCC Licenses or result in the
issuance by the FCC of a notice of violation or apparent
liability or order to show cause. Seller warrants that the
Station is operated in material compliance with the terms of the
FCC Licenses, the Act and applicable rules, regulations and
policies of the FCC.
3.12 Governmental Authorizations. Schedule 3.12 hereto sets
forth a list and brief description of all governmental licenses,
franchises, permits, privileges, immunities, approvals, and other
authorizations which are held by the Company in the conduct of
the Station Business substantially as currently conducted,
including the FCC Authorizations (herein collectively called the
"Governmental Authorizations"). For the purposes of this
Agreement, the term "Governmental Authorizations" shall not be
deemed to include any incidental licenses, permits, and other
authorizations which would be readily obtainable by a qualified
applicant without undue burden in the event of any lapse,
termination, cancellation, or forfeiture thereof.
True and complete copies of the Governmental Authorizations
have been delivered to Buyer. No notice of cancellation, of
default, or of any material dispute concerning any Governmental
Authorization, or of any event, condition, or state of facts
described in the preceding sentence, has been received by, or is
known to, Seller or the Company. Except as set forth in Schedule
3.12 hereto, each of the Governmental Authorizations is in full
force and effect and will continue in full force and effect.
3.13 Real Property. Schedule 3.13 contains a brief
description of each parcel of real property owned by the Company
and used in the conduct of the Station Business
3.14 Owned Personal Property. Schedule 3.14 contains a
brief description of the tangible personal property (including
equipment, furniture, fixtures, machinery, and vehicles) which is
owned by the Company as of the date hereof.
3.15 Personal Property Leases. Schedule 3.15 contains a
brief description of each lease under which the Company is (i)
lessee of any machinery, equipment, vehicle, or other tangible
personal property owned by a third party, or (ii) lessor of any
machinery, equipment, vehicle, or other tangible personal
property owned by the Company.
3.16 Title to Real and Tangible Personal Property. The
Company has good and marketable title to all of the real property
listed in Schedule 3.13 and to all buildings and other
improvements thereon, in each case subject to no Encumbrances,
except (i) as set forth in Schedule 3.16 hereto, (ii) Permitted
Encumbrances, and (iii) for such imperfections of title or
Encumbrances which do not materially detract from the value or
materially interfere with the use of such properties in the
conduct of the Station Business. The Company has good title to
all of the other assets material to the conduct of the Station
Business, subject to no Encumbrances, except for Permitted
Encumbrances and except as set forth in Schedule 3.16 hereto.
3.17 Station Contracts. Except as set forth in Schedule
3.17 hereto, and any other Schedule or Exhibit hereto, the
Company is neither a party to nor bound by:
(a) any contract for the purchase, sale or lease of real
property;
(b) any contract for the purchase of supplies, equipment,
replacement parts, or other tangible personal property which
Seller reasonably anticipates will require the expenditure of
more than Fifty Thousand Dollars ($50,000) in 1995 or in any year
thereafter;
(c) any contract for the lease of personal property from
third parties which the Company reasonably anticipates will
involve annual rental payments in excess of Fifty Thousand
Dollars ($50,000) in 1995 or in any year thereafter;
(d) any contract for the right to broadcast filmed or taped
programming which the Company reasonably anticipates will involve
annual license fee payments in excess of Fifty Thousand Dollars
($50,000) in 1995 or in any year thereafter;
(e) any contract for the sale of advertising time valued in
excess of Fifteen Thousand Dollars ($15,000), based on the
Company's rate cards, wherein the consideration to be received by
the Company does not consist solely of money;
(f) any other written contract, agreement, commitment,
understanding or instrument which is material to Seller or the
Station Business; or
(g) any contract not made in the ordinary course of
business.
3.18 Status of Contracts. Except as set forth in Schedule
3.18 hereto or in any other Schedule or Exhibit hereto, each of
the leases, contracts, and other agreements listed in Schedules
3.15, 3.17, and 3.20 (collectively, the "Station Contracts"), is
in full force and effect. The Company has fulfilled and
performed in all material respects its obligations under each of
the Station Contracts, and the Company has received no written
claim that (i) it is in breach or default under any of the
Station Contracts or (ii) there is a basis for termination of any
of the Station Contracts, and, to the knowledge of each of Seller
and the Company (except as described in Schedule 3.18 hereto), no
other party to any of the Station Contracts has materially
breached or defaulted thereunder, no event has occurred, and no
condition or state of facts exists which, with the passage of
time or the giving of notice or both, would constitute such a
default or breach by the Company or, to the knowledge of Seller
or the Company, by any such other party. Complete and correct
copies of each of the Station Contracts have been delivered to
Buyer.
3.19 Insurance. Schedule 3.19 hereto sets forth a list of
all policies of insurance maintained, owned, or held by the
Company or maintained for the benefit of the Company. The
Company shall cause such insurance policies or comparable
policies to be kept in full force and effect through the Closing
Date.
3.20 Employees and Related Agreements. Except as disclosed
in Schedule 3.20 hereto, the Company is not party to or bound by
any oral or written (i) employee collective bargaining agreement,
employment agreement (other than employment agreements terminable
by the Company without premium or penalty on notice of thirty
(30) days or less under which the only monetary obligation of the
Company is to make current wage, salary, bonus, or commission
payments and provide current fringe benefits), consulting,
advisory or service agreement, deferred compensation agreement,
confidentiality agreement, or covenant not to compete; (ii)
contract or agreement (other than indemnification arrangements
set forth in the Seller's and Company's charters and bylaws) with
any officer, director, stockholder, employee, agent, or attorney-
in-fact; or (iii) employees' pension, profit-sharing, stock
option, bonus, incentive, stock purchase, welfare, life
insurance, hospital or medical plan, or any other employee
benefit agreement or plan.
3.21 Labor Relations, Etc. Except as disclosed in Schedule
3.21 hereto, the Company has withheld federal and state taxes,
FICA and Medicare from the wages or salaries of its employees
and is not liable for any material arrears of wages, or any
material payroll taxes or withholdings, or penalties for failure
to comply with any of the foregoing. Except as set forth in
Schedule 3.21 hereto, (i) there are no unfair labor practice or
discrimination complaints pending against the Company before any
federal or state board or any arbitrator; (ii) there are no
existing labor strikes, or, to the knowledge of the Company or
the Seller, disputes, grievances, controversies, or other labor
troubles affecting the Company; (iii) there are no pending
representation questions respecting the employees of the Company;
and (iv) there are no collective bargaining agreements binding
upon the Company.
3.22 Employees Benefit Plans, Etc. Schedule 3.22 hereto
contains a true and complete list of each "employee benefit plan"
(as such term is defined in Section 3(3) of ERISA), now
maintained by the Company or to which the Company contributes or
is required to contribute (such plans hereinafter referred to as
the "Employee Benefit Plans").
3.23 Environmental Matters. Except as disclosed on Schedule
3.23 hereto, (i) the Company has not been identified in any
litigation, administrative proceeding, or investigation as a
responsible party for any liability under any Environmental Laws
with respect to the discharge and removal of Hazardous
Substances; (ii) the Company is not subject to any order from or
agreement with any governmental authority under any Environmental
Laws; (iii) the Company has not filed or received any notice
under any Environmental Laws relating to the release of Hazardous
Substances; (iv) the Company, to the best of its knowledge, is in
compliance with all federal, state and local laws, rules and
regulations relating to environmental protection; and (v) the
Company, to the best of its knowledge, has not disposed,
released, buried or placed hazardous or toxic substances,
pollutants, contaminants, petroleum, gas products or asbestos-
containing materials (as any of such terms may be defined under
federal, state or local law, rule or regulation) in quantities
that violate applicable law on, in, at or about any of the
Company's real property described in Schedule 3.13.
3.24 Subsidiaries. The Company has no subsidiaries and no
equity interests in any other business entity.
3.25 Brokers and Finders. Neither Seller nor the Company
nor any party acting on behalf of either of them has paid or
become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions
contemplated by this Agreement, other than Furman Selz,
Incorporated, payment of whose fees and commissions are the sole
responsibility of Seller.
SECTION 4. Representations, Warranties and Agreements of
Buyer. As an inducement to each of Seller and the Company to
enter into this Agreement and to consummate the transactions
contemplated herein, Buyer hereby represents and warrants to each
of Seller and the Company and agrees as follows:
4.1 Organization of Buyer. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of South Carolina.
4.2 Authority. Buyer has full corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery, and
performance of this Agreement by Buyer has been duly authorized
by the Board of Directors of Buyer and does not require any
further authorization or consent by Buyer or its stockholders.
This Agreement is the legal, valid, and binding agreement of
Buyer enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, reorganization, or
other laws relating to or affecting the enforcement of creditor's
rights generally.
4.3 Effect of Agreement. Neither the execution nor the
delivery of this Agreement by Buyer, nor consummation of the
transactions contemplated hereby, nor compliance with or
fulfillment of the terms and provisions hereof or of any other
agreement or instrument contemplated hereby, will conflict in any
material respect with, result in a material breach of the terms
or conditions of, or constitute a material default or violation
under, the Articles of Incorporation or the Bylaws of Buyer, any
agreement or other instrument or restriction to which Buyer is a
party or any of its properties is subject or by which it is
bound, or any order, writ, injunction, decree, statute, other law
or regulatory provision affecting Buyer in any material respect,
except that the FCC Consent is required and a filing under the
Improvements Act is required.
4.4 Litigation. No action, suit or proceeding has been
instituted to restrain or prohibit or otherwise challenge the
legality or validity of the transactions contemplated hereby.
4.5 Buyer's FCC Qualifications. Buyer knows of no facts or
circumstances that would, under existing law and the existing
rules, regulations, and practices of the FCC, disqualify it as
transferee of the Shares or as the owner or operator of the
Station; provided, however, the parties acknowledge the necessity
to request waiver of the FCC's duopoly rule as a result of the de
minimis Grade B overlap between WRBL and WMBB.
4.6 Brokers and Finders. Neither Buyer nor any party
acting on its behalf has paid or become obligated to pay any fee
or commission to any broker, finder or intermediary for or on
account of the transactions contemplated by this Agreement.
4.7 Sources of Information, Etc. Buyer acknowledges that
it must conduct its own investigation of the business and
affairs of the Company; that it may not rely on any information
provided by a party other than the Company, the Seller, or their
authorized representatives; and that by accepting receipt of and
making payment for the Shares, Buyer shall be deemed to have
received all the information that it requested from the Company
and the Seller and all the information that it required to make
an informed decision regarding the purchase of the Shares.
4.8 Bona Fide Purchaser. Buyer is not aware of any adverse
claims against Seller's ownership of the Shares.
4.9 Investment Representation. Buyer represents, warrants
and covenants that it is purchasing the Shares for investment
only and not with a view to the distribution, resale or other
transfer thereof, and Buyer agrees that it will not participate,
directly or indirectly, in any distribution, resale or other
transfer of the Shares, or any underwriting of any such
undertaking, unless the distribution, resale or other transfer of
the shares has been registered pursuant to the Securities Act of
1933, as amended, (the "Securities Act") or pursuant to an
exemption from the registration requirements of the Securities
Act. Buyer acknowledges that the transfer of the Shares to Buyer
has not been registered pursuant to the Securities Act in
reliance upon the exemption from such registration provisions set
forth in Section 4(l) of the Securities Act, and that the Shares
constitute "restricted securities" as that term is defined in
Rule 144 promulgated under the Securities Act ("Rule 144").
Buyer understands that the availability of the foregoing
exemption depends upon the Buyer's intent with respect to future
disposition of the Shares, and Buyer acknowledges that the Seller
is relying upon this Section 4.9 as a representation of Buyer's
intent.
4.10 Tangible Assets. Buyer hereby acknowledges that it has
had the opportunity to examine the Company's tangible assets and
properties and agrees that, except as specifically set forth in
Sections 3.13, 3.14, 3.15, 3.16 and 3.23, it is purchasing such
assets and properties on an "AS IS; WHERE IS" basis without
representation or warranty.
SECTION 5. Actions Prior to Closing Date. The parties
covenant to take the following actions between the date hereof
and the Closing Date:
5.1 FCC Consent, Improvements Act. (a) (i) Buyer, Seller,
and the Company will file with the FCC applications and exhibits
for FCC Consent to transfer of the Shares from Seller to Buyer,
together with all information, surveys, data, exhibits,
resolutions, and statements or other materials necessary and
proper in connection with such applications within ten (10) days
of the execution of this Stock Purchase Agreement. Buyer,
Seller, and the Company further agree to prepare and file
expeditiously any amendments to their respective portions of such
applications whenever such amendments are requested by the FCC or
required by the rules of the FCC in order to maintain the
continuing accuracy and completeness of the statements contained
in the applications. Copies of any amendments, filings, or
correspondence pertaining to the applications filed by one party
shall be mailed simultaneously to the other party. To the extent
any person or entity not a party to this Agreement shall contest
or take any action to contest, object to, or interfere with the
transfer of the Shares to Buyer, Buyer, Seller, and the Company
shall cooperate to the extent deemed necessary or appropriate in
Seller's opinion to resolve such objection, including making
vigorous opposition thereto; and (ii) except as expressly
provided herein, each party shall be responsible for and bear the
expenses incurred by it in the preparation, filing, and
prosecution of its respective portions of the applications, and
all fees paid to the FCC in connection with the filing of the
applications shall be borne equally by Seller and Buyer.
(b) As promptly as practicable after the date hereof, but
in any event not later than the thirtieth (30th) day following
the date hereof, Buyer shall file with the Federal Trade
Commission ("FTC") and the Antitrust Division of the Department
of Justice ("DOJ") the notifications and other information
required to be filed under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "Improvements Act"), or
any rules and regulations promulgated thereunder, with respect to
the transactions contemplated hereby, and Seller shall file (or
cause its ultimate parent to file, as applicable) the information
required in response thereto as promptly as practicable
thereafter. Each party warrants that all such filings by it or
its ultimate parent will be, to the best of their knowledge and
belief, as of the date filed, true and accurate in all material
respects and in accordance with the requirements of the
Improvements Act and any such rules and regulations. Each of
Buyer and Seller agrees to make available to the other such
information as each of them or its ultimate parent may reasonably
request relative to its business, assets, and property
(including, in the case of the Company, the Station Business) and
to file (or cause their ultimate parents to file, as applicable)
any additional information requested by such agencies under the
Improvements Act and any such rules and regulations.
5.2 Consents. Buyer, Seller, and the Company shall
cooperate in using their Best Efforts to obtain the consents from
parties to the Station Contracts which are required to be
obtained by the terms thereof, this Agreement, or otherwise for
the due and punctual consummation of the transactions
contemplated under this Agreement.
5.3 Investigation of the Company's Corporate and Financial
Records. (a) Each of Seller and the Company shall provide to
the officers, employees, and authorized representatives of Buyer
(including, without limitation, independent public accountants
and attorneys) reasonable access, during normal business hours
and upon reasonable advance notice, to the corporate, financial,
and accounting records of the Company to the extent Buyer shall
deem reasonably necessary or desirable and shall furnish or cause
to be furnished to Buyer or its authorized representatives such
additional information concerning the Company as shall be
reasonably requested and which Seller or the Company can obtain
or cause to be obtained without unreasonable effort or expense
(unless Buyer agrees to bear such expense and such information
can be obtained without unreasonable effort on the part of Seller
or the Company). Buyer agrees that such investigation shall be
conducted in such manner as not to interfere unreasonably with
the operation of the Company's business. Any interview or
discussion with officers, employees, viewers, or advertisers of
the Company or parties to Station Contracts will be arranged by
Seller or the Company at Buyer's reasonable request and on terms
mutually agreeable to Buyer, Seller, and the Company, and Seller
shall have the right to have a management representative of
Seller present at all interviews of Company personnel.
(b) Buyer agrees that, having received such access, should
the transaction not close within the time periods provided for
herein, Buyer will return all information and all copies of all
documents it obtains regarding Seller, the Company, or the
Station to Seller and not use such information for any purpose
for thirty-six (36) months from the date hereof and will not
solicit or seek to hire any officer, employee, or commission
salesperson of Seller or the Company for a like period.
5.4 Preserve Accuracy of Representations and Warranties.
Except with the prior written consent of the other party, each of
the parties hereto shall refrain from knowingly taking any action
which would render any representation or warranty contained in
Sections 3 or 4 hereof inaccurate in any material respect as of
the Closing Date. If, prior to the Closing Date, Buyer learns of
any material breach of warranty or inaccuracy of any
representation of Seller or the Company herein, Buyer shall so
notify both Seller and the Company promptly, and in all events
prior to the Closing. Failure to so notify Seller and the
Company shall be deemed a waiver by Buyer of its right to allege
such breach or inaccuracy in any action against Seller following
the Closing, and Closing shall constitute a waiver.
5.5 Continuation of the Company's Business. (a) From the
date hereof until the Closing Date, each of Seller and the
Company, subject in each case to Section 5.7 and to the extent
consistent with prudent business practices, shall use its Best
Efforts to cause the Company to (i) continue to operate the
Station in the ordinary course, in the public interest, and in
conformity with the FCC Authorizations and the Communications Act
of 1934, as amended, and the rules and regulations thereunder;
(ii) preserve for the Station all existing contracts, accounts,
advertisers, suppliers, franchising authorities, and other
business relationships, audiences, and goodwill; (iii) enter only
into such transactions as are in the ordinary course of business
consistent with prior practices and as a careful and prudent
business and FCC licensee would; (iv) maintain the assets and the
properties of the Company in their current or better condition;
(v) maintain its books in the usual, regular, and ordinary course
on a basis consistent with prior years; and (vi) preserve the
Company's business organization.
(b) Subject in each case to Section 5.7, from the date
hereof until the Closing, neither Seller nor the Company shall
(i) make any material change in the business or operations of the
Station; (ii) enter into any contract, agreement, or
understanding that is not in the ordinary course of business and
which involves the payment of more than Two Hundred Fifty
Thousand Dollars ($250,000) per annum, or which is not terminable
without penalty on no more than thirty (30) days notice; (iii)
except in the ordinary course of business cancel, amend, modify,
or extend any Governmental Authorizations or any contract listed
in Schedule 3.12; (iv) place any Encumbrance on any asset
material to the Station Business; (v) sell, lease, transfer, or
otherwise dispose of any asset material to the Station Business,
except as provided for in this Agreement and for personal
property sold or otherwise disposed of in the ordinary course of
business; (vi) except as provided in Schedule 5.5(b), increase or
otherwise change the rate or nature of the compensation payable
or to become payable by the Company to any officer or employee
(excluding all commission salespersons) of the Company, except
for any increase in Station employee compensation equal to ten
percent (10%) of such compensation prior to such increase, in the
ordinary course of business and except pursuant to any existing
Plan or written agreement with such employee; (vii) solicit,
negotiate or agree to any merger, acquisition, reorganization, or
business combination involving the Company or any sale of the
Shares or all or substantially all of the Company's assets;
(viii) amend, modify or repeal the Certificate of Incorporation
or Bylaws of the Company, in whole or in part; (ix) incur any
long-term debt or capitalized lease that is not in the ordinary
course of business and which is in an amount in excess of One
Hundred Thousand Dollars ($100,000); or (x) otherwise knowingly
take any action which may materially adversely affect the
property, assets, business, operations, financial condition, or
prospects, of the Company, in each case without prior written
notification to Buyer.
(c) Nothing contained in this Agreement shall give Buyer
any right to control or influence in any way the programming or
operations of the Station prior to the Closing. The Company will
remain the sole owner and operator of, and shall control, the
Station as required by FCC rules and regulations until such time
as the sale and purchase is consummated, and Seller shall retain
full right to vote the Shares.
5.6 Elimination of Intercompany Debt. Between the date
hereof and the Closing Date, Seller and the Company will
eliminate any and all indebtedness owed to the Company by any
Affiliate of the Company or owed by the Company to any Affiliate
of the Company.
5.7 Payment of Debt by Seller and the Company.
Notwithstanding any other provision of this Agreement, Buyer
acknowledges that each of the Seller and the Company may pay or
prepay (and the Company may dividend to the Seller amounts to be
used for the payment or prepayment of) any principal of, or
interest on, any of its or their outstanding indebtedness
(including, without limitation, intercompany debt) on or prior to
the Closing.
5.8 Preparation and Filing of Returns. (a) Seller shall
cause to be prepared and filed on a timely basis all federal,
state and local income tax returns of or which include the
Company and which are filed on a consolidated, combined, unitary,
or similar basis with affiliates of the Company which include the
period ending on the Closing Date, and Seller shall be
responsible for all tax liability reflected thereon and shall
have the benefit of any tax item reflected thereon. Buyer shall
cause to be prepared and filed on a timely basis all tax returns
of the Company that are due after the Closing Date other than
returns referred to in the immediately preceding sentence, and
Buyer or the Company shall be responsible for all tax liability
reflected thereon and shall have the benefit of any tax item
reflected thereon.
(b) to Section 2.3 hereof, neither the Company nor the
Buyer will cause any election to be made, accounting method to be
adopted or reporting position to be taken by, or with respect to,
the Company on a tax return that is inconsistent with any
election, accounting method or reporting position previously
made, elected or taken by, or with resect to, the Company on a
return filed by the Seller or to be filed by the Seller pursuant
to the first sentence of Section 5.8(a) above, unless Seller
shall provide its written consent. Buyer shall not file, and it
will cause the Company not to file, any amended return or claim
for refund for the Company relating to a return filed by the
Seller or required to be filed by the Seller pursuant to the
first sentence of Section 5.8(a) above, unless directed to do so
by Seller.
(c) Seller and Buyer each agree to furnish or cause to be
furnished to the other, upon request and on a timely basis, such
information (including access to books and records) and
assistance relating to the Company as is reasonably necessary to
complete and file any tax return, respond to audits, obtain
refunds, verify issues, negotiate settlements with tax
authorities, or defend or prosecute tax claims.
(d) If the Seller or the Company (i) shall have paid, prior
to the Closing, estimated taxes for any pre-Closing tax period in
excess of the actual tax liability for such period, or (ii) is
otherwise entitled to a refund (whether directly or indirectly
through a right of offset or credit) of taxes for a pre-Closing
tax period, Buyer shall, upon Seller's written request and at
Seller's reasonable expense, prepare and prosecute such claim for
refund, subject to Seller's review, and shall pay to Seller the
amount of such refund of estimated taxes or other taxes at the
time that Buyer or the Company receives a cash refund (or
receives the benefit of a refund through a right of offset or
credit).
5.9 401(k) Plan. A 401(k) Profit Sharing Plan (the "401(k)
Plan") is maintained for the benefit of employees of the Station.
If an employee of the Station who participates in the 401(k) Plan
(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) from the 401(k)
Plan, Buyer shall permit such 401(k) Employee 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 the Buyer's retirement plan qualified under
Section 401(a) of the Code ("Buyer's Plan"). Buyer's Plan shall
not impose any waiting periods, service requirements or other
limitations that would prohibit 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. The Seller
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.
SECTION 6. Additional Agreements.
6.1 Taxes and Expenses. (a) All costs of transferring the
Shares, including recordation, transfer, documentary, excise,
sales or use taxes or fees, shall be become fifty percent (50%)
by the Buyer and fifty percent (50%) by the Seller, it being
understood that the foregoing use of the term "fees" means fees
directly related to a transfer of capital stock and does not
include governmental filing fees required in connection with
filings referred to elsewhere in this Agreement.
(b) Except with respect to the costs and expenses provided
for in Section 5.1(a)(ii) and 6.1(a), each party hereto will pay
all costs and expenses incident to its negotiation and
preparation of this Agreement and to its performance and
compliance with all agreements and conditions contained herein on
its part to be performed or complied with, including the fees,
expenses and disbursements of its counsel, accountants, brokers,
or finders.
6.2 Noncompetition Agreement. At the Closing, Seller shall
execute and deliver to the Buyer a noncompetition agreement in
the form annexed hereto as Exhibit D. As full consideration for
the noncompetition agreement, Buyer shall pay to Seller the
amount of One Million Five Hundred Thousand Dollars ($1,500,000).
6.3 Certain Tax Matters. (a) In order that there shall be
available (subject to the limitations of Section 382 of the Code)
to the Company following the Closing the portion of the
consolidated net operating loss of the Seller affiliated group
that is attributable to the Company, as provided for in Section
1.1502-79 of the Treasury consolidated return regulations, Seller
shall not elect under Section 1.1502-20(g) of those regulations
to reattribute to itself any portion of the net operating loss
attributable to the Company.
(b) Under Section 5.6 hereof liabilities of the Company to
related persons are to be eliminated prior to the Closing. The
elimination of those liabilities shall be denominated on the
books and records of the Company and the related persons as
contributions to capital.
(c) The consolidated federal income tax returns of the
Seller for the years ended October 31, 1991 and 1992 (the "Audit
Years") are currently being audited by the Internal Revenue
Service ("IRS"). Two of the issues under review are the
deductibility of payments for a covenant-not-to-compete given by
the seller of the shares of the Company (the "Covenant Payments")
and the deductibility of the accrual of certain consulting
payments due to an affiliate of the Company (the "Consulting
Payments"). Seller shall control the audit (or any litigation
relating thereto), shall deal exclusively with the IRS with
respect to the audit (or such litigation), and may settle the
audit (or such litigation) on any terms that the Seller
determines in its sole discretion. Buyer shall cooperate with
Seller in all reasonable respects and provide reasonable access
to Seller to the books and records of the Company in connection
with such audit or litigation. Upon settlement of the audit or
final resolution of such litigation (or, if later, 120 days after
the close of the Seller's taxable year including the Closing),
Seller's accountants shall determine the net operating loss of
the Company as of the time when the Company ceased to be included
in Seller's consolidated federal income tax return. which shall
be based on the net operating loss shown on Seller's consolidated
federal income tax return for that year, adjusted to give effect
to the assumption that any deductions taken with respect to the
Covenant Payments or the Consulting Payments for years after the
Audit Years are disallowed to the same extent as the Covenant
Payments or the Consulting Payments were disallowed for the Audit
Years as a result of the audit (or litigation) (as so adjusted,
the "Company Separate NOL"). For example, if 25% of the Covenant
Payments during the Audit Years and 50% of the Consulting
Payments during the Audit Years were disallowed as a result of
the audit (or litigation), then the Company Separate NOL shall be
redetermined assuming that 25% of the Covenant Payments and 50%
of the Consulting Payments are not deductible. Seller shall
promptly provide to Buyer Seller's accountant's calculation of
the Company Separate NOL.
Within thirty (30) days after the delivery to Buyer of the
calculation of the Company Separate NOL, the Buyer shall notify
the Seller if it believes that the Company Separate NOL was not
properly calculated. Such notice shall contain a reasonably
detailed basis for such objection and, if possible, shall set
forth a proposed calculation of the Company Separate NOL. The
failure to provide any such notice during such 30-day period
shall be conclusively deemed to be the approval by the Buyer of
the Company Separate NOL.
In the event of any timely objection by the Buyer pursuant
to the previous paragraph, the Buyer and the Seller shall use
their good faith efforts to resolve the dispute for a period of
thirty (30) days, and within ten (10) days after the end of such
30-day period, the Buyer and Seller shall submit the dispute
(together with all information necessary or useful for the
calculation of the Company Separate NOL) for binding arbitration
by KPMG Peat Marwick or, if such party is unable or unwilling to
act as arbitrator, to another "big 6" accounting firm designated
by Buyer and Seller. Such arbitrator shall be instructed to
decide such dispute within thirty (30) days, and the calculation
by such arbitrator shall be binding on each of the parties
hereto. The fees and expenses of the arbitrator shall be become
50% by the Buyer and 50% by the Seller. Upon the approval or
deemed approval by the Buyer of the calculation of the Company
Separate NOL, or the resolution of any dispute relating thereto
pursuant to the preceding sentences, the Seller shall pay to the
Buyer, solely from the Tax Escrow, an amount equal to 35% of the
amount, if any, by which the amount of the Company Separate NOL
is less than Two Million Dollars ($2,000,000).
(d) Upon any settlement of the audit or final resolution of
any related litigation referred to in Section 6.3(d) hereof after
the Closing, the Seller shall pay to the Buyer, solely from the
Tax Escrow, an amount equal to any tax payment, plus penalties
and interest thereon, required to be made by the Company as a
result of such settlement or resolution.
(e) Upon payment of any amounts payable to the Buyer
pursuant to Sections 6.3(c) and (d) above, any remaining amount
in the Tax Escrow shall be returned to the Seller.
SECTION 7. Conditions Precedent to Obligations of Buyer.
The obligations of Buyer under this Agreement shall, at the
option of Buyer, be subject to the satisfaction, on or prior to
the Closing Date, of the following conditions:
7.1 No Misrepresentation or Breach of Covenants and
Warranties. (a) The representations and warranties of Seller
and the Company contained in Section 3 of this Agreement shall be
true and correct in all material respects on the Closing Date as
though made on the Closing Date (except for changes therein
specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by Buyer or any
transaction permitted by Section 5.5 hereof); the Seller and the
Company shall have performed in all material respects their
covenants to be performed hereunder on or prior to the Closing;
and there shall have been delivered to Buyer a certificate or
certificates to such effect, dated the Closing Date, signed on
behalf of Seller by its president or any of its vice presidents
and on behalf of the Company by its president or any of its vice
presidents.
(b) Seller and the Company shall have the right to amend or
supplement any schedule to this Agreement prior to Closing
without the consent of Buyer, and the related representation or
warranty of Seller and the Company shall be deemed to refer to
such schedule, as so amended or supplemented, for purposes of any
action brought or claim asserted by Buyer against Seller after
the Closing, whether such action or claim is brought pursuant to
Section 9 or otherwise.
7.2 Corporate Action. (a) Each of Seller and the Company
shall have taken all corporate action necessary to approve the
transactions contemplated by this Agreement, and each of Seller
and the Company shall have furnished Buyer with certified copies
of resolutions adopted by the Board of Directors of Seller and
the Company, in form and substance satisfactory to counsel for
Buyer, in connection with such transactions.
(b) Seller shall not consolidate with or merge with or
into, or transfer all or substantially all of its assets to, any
person. The Seller shall not dissolve, liquidate its assets, or
otherwise cease its corporate existence in a manner not referred
to in the preceding sentence.
7.3 FCC Consent; Improvements Act. Public notice of the
FCC Consent without condition materially adverse to Buyer shall
have been issued, and any applicable notice period relevant to
any required notification under the Improvements Act shall have
expired (or been terminated) without objection (or with any such
objection having been withdrawn or resolved) by the FTC or the
DOJ.
7.4 Opinions of Counsel to Seller and the Company. Buyer
shall have received (i) a favorable opinion of Proskauer Rose
Goetz & Mendelsohn LLP, counsel to Seller and the Company, in
the form of Exhibit E-1 hereto, addressed to Buyer and dated the
Closing Date; and (ii) a favorable opinion of Wiley, Rein and
Fielding, special FCC counsel to Seller and the Company, in the
form of Exhibit E-2 hereto, addressed to Buyer and dated the
Closing Date.
7.5 No Material Adverse Changes. Between the date hereof
and the Closing Date, there shall have been no material damage,
fire, flooding, taking, loss, or similar adverse change in, to or
of the assets or properties of the Company which materially
interferes with the operation of the Station Business
substantially as currently conducted; provided that if there
shall occur after the date hereof and prior to the Closing any
such material adverse change in the assets or properties of the
Company which is not remedied prior to the Closing, and such
damage materially interferes with the operation of the Station
Business as currently conducted, Seller shall promptly notify
Buyer in writing of any such occurrence, and, within ten (10)
Business Days after receipt of such notice, Buyer shall elect
either (i) to consummate the transactions contemplated by this
Agreement, or (ii) to terminate this Agreement. Buyer's right to
such election shall be deemed waived by failure of Buyer to give
such notice within such ten-day period. If Buyer elects to
consummate the transactions contemplated by this Agreement, there
shall be no diminution of the Purchase Price, and all insurance
proceeds payable as a result of the occurrence of the event
resulting in loss or damage to the property as aforesaid (to the
extent not used to repair such assets or properties) shall be
delivered, or the rights thereto assigned, to Buyer at Closing.
7.6 Notice of Failure to Satisfy Condition and Cure Period.
For the purposes of this Section 7, the conditions set forth in
Sections 7.1 through 7.5 shall be deemed conclusively to have
been satisfied unless Buyer gives written notice to Seller after
receipt of the FCC Consent and prior to or on the Closing Date of
the condition or conditions which have not been satisfied,
specifying the manner in which such condition or conditions have
not been satisfied. In the event that such notice is provided to
Seller, then notwithstanding any other provision of this
Agreement, Seller shall have thirty (30) Business Days within
which to satisfy the condition or conditions alleged to have been
not satisfied, and, if such condition or conditions are satisfied
within such 30-day period, the Closing shall take place in the
manner described in Section 2.2 on the tenth (10th) business day
following the satisfaction of such condition or conditions and,
for all purposes of this Agreement, such date shall be deemed to
be the Closing Date.
SECTION 8. Conditions Precedent to Obligations of Seller
and the Company. The obligations of each of Seller and the
Company under this Agreement shall, at the option of each of
Seller and the Company, be subject to the satisfaction, on or
prior to the Closing Date, of the following conditions:
8.1 No Misrepresentations or Breach of Covenants and
Warranties. Each of the representations and warranties of Buyer
contained in Section 4 of this Agreement shall be true and
correct in all respects on the Closing Date as though made on the
Closing Date (except for changes therein specifically permitted
by this Agreement or resulting from any transaction expressly
consented to in writing by Seller and the Company or any
transaction contemplated by this Agreement); the Buyer shall have
performed in all material respects its covenants to be performed
hereunder on or prior to the Closing; and there shall have been
delivered to Seller and the Company a certificate or certificates
to such effect, dated the Closing Date, signed on behalf of Buyer
by its president or vice chairman.
8.2 Corporate Action. Buyer shall have taken all corporate
action necessary to approve the transactions contemplated by this
Agreement, and Buyer shall have furnished Seller and the Company
with certified copies of resolutions adopted by the Board of
Directors of Buyer, in form and substance satisfactory to Seller
and the Company, in connection with such transactions.
8.3 FCC Consent; Improvements Act. Public notice of the
FCC Consent shall have been issued, and any applicable notice
period relevant to any required notification under the
Improvements Act shall have expired (or been terminated) without
objection by the FTC or the DOJ.
8.4 Opinion of Counsel to Buyer. Seller and the Company
shall have received a favorable opinion of counsel to Buyer in
the form of Exhibit F hereto, addressed to Seller and the Company
and dated the Closing Date.
8.5 Notice of Failure to Satisfy Condition and Cure Period.
For the purposes of this Section 8, the conditions set forth in
Sections 8.1 through 8.4 shall be conclusively deemed to have
been satisfied unless Seller gives written notice to Buyer after
receipt of the FCC Consent and prior to or on the Closing Date of
the condition or conditions which have not been satisfied,
specifying in detail the manner in which such condition or
conditions have not been satisfied. In the event that such
notice is provided to Buyer, then notwithstanding any other
provision of this Agreement, Buyer shall have thirty (30)
Business Days within which to satisfy the condition or conditions
alleged to have been not satisfied, and, if such condition or
conditions are satisfied within such 30-day period, the Closing
shall take place in the manner described in Section 2.2 on the
tenth (10th) business day following the satisfaction of such
condition or conditions, and for all purposes of this Agreement
such date shall be deemed to be the Closing Date.
8.6 Receipt of Consent of Lender. All necessary consents
to the Closing of the transactions contemplated by this Agreement
shall have been received from the Company's and Seller's lenders,
and such lenders shall have released all Encumbrances in their
favor on the Shares.
SECTION 9. Indemnification.
9.1 Indemnification by Seller. Seller agrees to indemnify
and hold harmless Buyer and its Affiliates, successors, and
assigns, and their respective officers, directors, and employees
("Indemnified Buyer Parties"), from and against. and to pay any
and all (a) liabilities, losses, costs, or damages ("Loss") and
(b) reasonable attorneys' and accountants' fees and expenses,
court costs, and all other out-of-pocket expenses ("Expense")
incurred by any of them in connection with or arising from (1)
any failure of the Company (prior to the Closing) or Seller to
perform any of its obligations in this Agreement, or (2) any
breach of any covenant or warranty contained herein by the
Company (prior to the Closing) or the Seller, or (3) any
misrepresentation of Seller or the Company contained in this
Agreement; provided, however, that (i) Seller and the Company
shall be required to indemnify and hold harmless under this
Section 9.1 only to the extent that the aggregate amount of Loss
and Expense incurred by an Indemnified Buyer Party exceeds
Twenty-five Thousand Dollars ($25,000); (ii) Seller and the
Company shall not be obligated to pay all Indemnified Buyer
Parties, in the aggregate, more than Two Hundred Fifty Thousand
Dollars ($250,000) for the total of all claims of Loss and
Expense made pursuant to this Section 9.1 and/or claims pursuant
to Section 2.6(e)(i), such payment to be made solely from the
Damages Escrow; (iii) Seller shall receive credit for any
increase in assets of Buyer or the Company as a result of the
fact giving rise to the claim against Seller; and (iv) no amount
shall be required to be indemnified hereunder except for the
Buyer's or the Company's actual out of pocket costs and expenses.
The indemnification provided for in this Section 9.1 shall
terminate one (1) year after the Closing Date (and no claims
shall be made by an Indemnified Buyer Party under this Section
9.1 thereafter), except as to (x) any Loss or Expense of which
Seller has been notified in accordance with Section 9.3 and which
shall have been reduced to a liquidated amount within the said
one-year period, and (y) any Loss or Expense incurred by Buyer in
connection with a violation of the covenant not to compete
provided for in Section 6.2 of which Seller has been notified in
accordance with Section 9.3 prior to the third (3rd) anniversary
of the Closing Date.
9.2 Indemnification by Buyer. Buyer agrees to indemnify
and hold harmless Seller and its Affiliates, successors, and
assigns, and their respective officers, directors and employees
("Indemnified Seller Parties") from and against, and to pay any
and all Loss and Expense incurred by any Indemnified Seller Party
in connection with or arising from (a) any failure by Buyer to
perform any of its obligations in this Agreement, or (b) any
breach of any covenant or warranty contained herein, or (c) any
misrepresentation of Buyer contained in this Agreement; provided,
however, that (i) Buyer shall be required to indemnify and hold
harmless under this Section 9.2 the Indemnified Seller Parties
only to the extent that the aggregate amount of the Loss and
Expense incurred by all Indemnified Seller Parties, in the
aggregate, exceeds Twenty-Five Thousand Dollars ($25,000); (ii)
Buyer shall not be obligated to pay any Indemnified Seller
Parties, in the aggregate, more than Two Hundred Fifty Thousand
Dollars ($250,000) pursuant to this Section 9.2 for the total of
all claims of Loss and Expense hereunder; (iii) this Section 9.2
shall in no way limit Seller's right to damages or other remedies
in respect of a failure by the Buyer to consummate the
transaction contemplated hereby (including, without limitation,
the right to the Escrow Deposit) as provided in Section 2.1. The
indemnification provided for in this Section 9.2 shall terminate
one (1) year after the Closing Date (and no claims shall be made
by an Indemnified Seller Party with respect thereto under this
Section 9.2 thereafter), except as to any such Loss or Expense of
which Buyer has been notified in accordance with Section 9.3 and
which shall have been reduced to a liquidated amount within the
said one-year period.
9.3 Procedure for Indemnification. The following
procedures apply to indemnification under Section 9.1 and 9.2 of
this Agreement:
(a) If the indemnified party believes that, under this
Section 9, it has suffered or incurred any Loss or any Expense,
whether or not the applicable dollar limitation specified by
Section 9.1 or 9.2 has been exceeded, the indemnified party shall
so notify the indemnifying party promptly, and in no event later
than ten (10) Business Days after the indemnified party acquires
knowledge of any such suffered or incurred Loss or Expense, in
writing, describing such Loss or Expense, the amount thereof, if
known, and the method of computation of such Loss or Expense, all
with reasonable particularity and containing a reference to the
provisions of this Agreement or any certificate delivered
pursuant hereto in respect of which such Loss or Expense shall
have occurred. If any such indemnity shall arise from the claim
of a third party, the indemnified party shall permit the
indemnifying party to assume the defense of any such claim and
any litigation resulting from such claim. Failure by an
indemnifying party to notify an indemnified party of its election
to defend any such claim or action by a third party within thirty
(30) Business Days after notice thereof shall have been given to
the indemnifying party shall be deemed a waiver by the
indemnifying party of its right to defend such claim or action.
(b) If the indemnifying party assumes the defense of such
claim or litigation resulting therefrom, the obligations of the
indemnifying party hereunder as to such claim shall include
taking all steps necessary in the defense or settlement of such
claim or litigation and holding the indemnified party harmless
from and against any and all damages caused by or arising out of
any settlement approved by the indemnifying party or any judgment
in connection with such claim or litigation. The indemnifying
party shall not, in the defense of such claim or any litigation
resulting therefrom, consent to entry of any judgment (other than
a judgment of dismissal on the merits without costs) or enter
into any settlement, except with the written consent of the
indemnified party, which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the
indemnified party of an unconditional release from all liability
in respect of such claim or litigation. The indemnified party
shall not enter into any settlement with respect to any such
claim or litigation without the indemnifying party's prior
written consent.
(c) If the indemnifying party shall not assume the defense
of any such claim by a third party or litigation resulting
therefrom after receipt of notice from such indemnified party,
the indemnified party may defend against such claim or litigation
in such manner as the indemnified party reasonably deems
appropriate and may settle such claim or litigation on such terms
as the indemnified party reasonably may deem appropriate, and,
subject to the limitations contained in this Section 9, the
indemnifying party shall promptly reimburse the indemnified party
for the amount of such settlement and for all damages or costs
incurred by the indemnified party in connection with the defense
against or settlement of such claim or litigation.
(d) The indemnifying party shall, subject to the
limitations contained in this Section 9, promptly reimburse the
indemnified party for the amount of any judgment rendered with
respect to any claim by a third party in such litigation and for
all damages incurred by the indemnified party in connection with
the defense against such claim or litigation, whether or not
resulting from, arising out of, or incurred with respect to the
act of a third party.
SECTION 10. Survival of Obligations. Except as otherwise
provided herein, all representations, warranties, covenants, and
obligations contained in this Agreement shall survive the Closing
only insofar as a party hereto is entitled to indemnification
pursuant to Section 9 and, in such case, only for such period as
indemnification is provided pursuant to Section 9, and no action
or claim in respect of this Agreement, the Shares, or the
purchase and sale of the Shares may be brought or commenced in
any forum or jurisdiction on any theory in law or equity after
the expiration of such period. Indemnification provided in
Section 9 (and damages and remedies for a failure to close
hereunder, including, without limitation, those contemplated by
Section 2.1) is the sole and exclusive remedy. Notwithstanding
the limitations set forth in Section 9, nothing herein shall
preclude any party from asserting any breach, act or omission in
defense of any claim.
SECTION 11. Notices. All notices or other communications
required or permitted hereunder shall be in writing and shall be
given by hand or by registered mail, return receipt requested,
and addressed as follows:
(a) If to Buyer:
The Spartan Radiocasting Company
250 International Drive
P.O. Box 1717
Spartanburg, South Carolina 29304
Attention: Nick W. Evans, President
Telephone: (803) 576-7777
Telecopier: (803) 587-5444
With a copy to:
Tom Watson Brown, Esq.
2180 Tower Place
3340 Peachtree Road, N.E.
Atlanta, Georgia 30326
Telephone: (404) 841-0885
Telecopier: (404) 231-3608
(b) If to Seller:
TCS Television, Inc.
350 Park Avenue
New York, New York 10022
Attention: I. Martin Pompadur, President
Telephone: (212) 980-7110
Telecopier: (212) 980-8374
With a copy to:
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, New York 10036
Attention: Lawrence H. Budish, Esq.
Telephone: (212) 969-3225
Telecopier: (212) 969-3000
(c) If to the Company:
Avant Development Corporation
c/o Seller at the address and
with the copy set forth above.
Either party hereto may specify a different address for such
purpose by written notice to the other party.
SECTION 12. Termination. Anything contained in this
Agreement to the contrary notwithstanding, this Agreement may be
terminated in any of the following ways:
(a) At any time on or prior to the Closing Date, by the
mutual consent in writing of Buyer, Seller, and the Company;
(b) By Buyer in writing if, following written notice and
expiration of the thirty (30) day period specified in Section
7.6, any of the conditions set forth in Section 7 of this
Agreement shall not have been met and shall not have been waived
by Buyer; provided, however, that termination by Buyer must occur
prior to the tenth (10th) Business Day following the expiration
of the aforesaid thirty (30) day period or the unsatisfied
condition or conditions shall be deemed to have been waived by
Buyer (unless such condition or conditions cannot be waived
without creating a violation of applicable law) and the Closing
shall occur on such tenth (10th) Business Day.
(c) By Seller in writing, if, following written notice and
expiration of the thirty (30) day period specified in Section
8.5, any of the conditions set forth in Section 8 shall not have
been met and shall not have been waived by Seller; provided,
however, that termination by Seller must occur prior to the tenth
(10th) Business Day following the expiration of the aforesaid
thirty (30) day period or the unsatisfied condition or conditions
shall be deemed to have been waived by Seller (unless such
condition or conditions cannot be waived without creating a
violation of applicable law) and the Closing shall occur on such
tenth (10th) Business Day.
(d) By either Buyer or Seller on or after the date which is
nine (9) months after the date hereof if (i) the FCC Consent has
not been obtained prior to such date, provided that Buyer's right
to terminate shall be available to Buyer only if it has acted in
good faith and taken all actions necessary and appropriate to
obtain the FCC Consent, or (ii) the FTC or the DOJ has objected
to the transaction described in the filings made pursuant to the
Improvements Act or either such agency has threatened to take
action to prevent the consummation of such transaction and such
objection or threat has not been removed on or prior to such
date. In the event that this Agreement shall be terminated
pursuant to this Section 12, all further obligations of the
parties under this Agreement (other than Sections 2.1,
5.1(a)(ii), 5.3(b), 6.1(b), and 13.1) shall terminate without
further liability of either party to the other, provided, that
nothing herein shall relieve any party from liability for its
willful breach of this Agreement.
SECTION 13. General Provisions.
13.1 Confidentiality, Press Releases. (a) Buyer agrees to
keep confidential all proprietary information regarding Seller
and the Company, and any and all information on or relating to
the transactions contemplated hereby, in accordance with Seller's
customary practices and agrees that it will only use such
information in connection with the transactions contemplated by
this Agreement and not disclose any of such information other
than (i) to Buyer's directors, officers, employees,
representatives, and agents who are or may be involved with the
transactions contemplated by this Agreement on a need-to-know
basis; (ii) to the extent such information presently is or
hereafter becomes available, on a nonconfidential basis, from a
source other than Seller; and (iii) to the extent disclosure is
required by law, regulation, or judicial order by any
governmental authority (including, without limitations the FCC).
(b) Seller agrees to keep confidential all proprietary
information regarding Buyer and its Affiliates, and their
respective successors and assigns, and any and all information on
or relating to the transactions contemplated hereby, and agrees
that it will only use information in connection therewith and not
discuss or disclose any of such information other than (i) to
Seller's directors, officers, employees, representatives, and
agents who are involved with the transactions contemplated by
this Agreement on a need-to-know basis; (ii) to the extent such
information presently is or hereafter becomes available, on a
nonconfidential basis, from a source other than Buyer; and (iii)
to the extent disclosure is required by law, regulation, or
judicial order by any governmental authority (including, without
limitation, the Securities and Exchange Commission and the FCC).
(c) After the date hereof and prior to Closing, none of
Buyer, Seller, and the Company shall make any press release or
public announcement in connection with the transactions
contemplated hereby without the prior written consent of the
other party, except to the extent required by law, regulation, or
judicial order by any governmental authority (including, without
limitation, the Securities and Exchange Commission and the FCC).
Buyer, Seller, and the Company agree to cooperate with each other
in preparation of a mutually acceptable press release to be
issued at the time of filing the FCC applications and exhibits
described in Section 5.1(a).
13.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia
(without reference to any rule as to conflicts of law). Each
party to this Agreement agrees to submit to the jurisdiction of
Federal courts sitting in the City of New York, New York, and in
the City of Spartanburg, South Carolina, if an action is
commenced in either such place, and each party further agrees
that it will not object to the laying of venue in either New
York, New York, or Spartanburg, South Carolina.
13.3 Partial Invalidity. In case any one or more of the
provisions contained herein shall, for any reason, be held to be
invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any
other provisions of this Agreement, but this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision
or provisions had never been contained herein unless the deletion
of such provision or provisions would result in such a material
change as to cause completion of the transactions contemplated
hereby to be unreasonable.
13.4 Successors and Assigns. (a) Neither this Agreement
nor any rights, remedy, obligation, or liability arising
hereunder or by reason hereof shall be assignable by any party
hereto without the prior written consent of the other parties
hereto, except, that the rights of Buyer hereunder may be
assigned at any time by Buyer to an Affiliate of Buyer, provided,
however, that (i) such Affiliate shall assume in writing all of
Buyer's obligations hereunder; (ii) Buyer shall not be released
from any of its obligations hereunder by reason of such
assignment; (iii) the obligations of Seller and the Company under
this Agreement shall be subject to the delivery by such
Affiliate, on or prior to the assignment, of a certificate signed
on its behalf containing representations and warranties similar
to those made by Buyer in Section 4 hereof and an opinion of
counsel with respect to the Affiliate which is similar to the
opinion with respect to Buyer set forth in Exhibit E; and (iv) no
such assignment shall be made if it is reasonably likely that
such assignment would delay receipt of the FCC Consent.
(b) Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and permitted
assigns. Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon any person other
than the parties and successors and assigns permitted by Section
13.4(a) any right, remedy or claim under or by reason of this
Agreement.
13.5 Execution in Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
considered an original counterpart, and shall become a binding
agreement when each of Buyer, Seller, and the Company shall have
executed one counterpart.
13.6 Titles and Headings. Titles and headings to Sections
herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation
of this Agreement.
13.7 Schedules and Exhibits. The Schedules and Exhibits to
this Agreement shall be incorporated into and construed with and
as an integral part of this Agreement to the same extent as if
the same had been set forth verbatim herein. Disclosure of any
fact or item in any Schedule hereto referenced by a particular
Section in this Agreement shall, should existence of the fact or
item or its contents be relevant to any other Section, be deemed
to be disclosed with respect to that other Section whether or not
an explicit cross-reference appears. The specification of any
dollar amount in the representations and warranties or other
provisions contained in this Agreement or the inclusion of any
specific item in any Schedule hereto is not intended to imply
that such amounts, or higher or lower amounts, or the items so
included or other items, are or are not material, and neither
party shall use the fact of the setting of such amounts or the
inclusion of any such item in any dispute or controversy between
the parties as to whether any obligation, item or matter not
described herein or included in a Schedule is or is not material
for purposes of this Agreement.
13.8 Waivers. Except as provided herein, the failure of any
party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such
provision, nor in any way to affect the validity of this
Agreement or any part hereof or thereof, or the right of such
party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to
constitute a waiver of any other subsequent breach.
13.9 Entire Agreement; Amendments. This Agreement, the
Schedules and Exhibits referred to herein, the Escrow Agreement
and the Post Closing Escrow Agreement (side letters), and the
other agreements delivered pursuant hereto contain the entire
understanding of the parties hereto with regard to the subject
matter contained herein or therein, and supersede all prior
agreements, understandings or intents between or among any of the
parties hereto. The parties hereto, by mutual agreement in
writing, may amend, modify and supplement this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written.
TCS TELEVISION, INC.
By:_______________________________
Name: I. Martin Pompadur
Title: President
AVANT DEVELOPMENT CORPORATION
By:_______________________________
Name:
Title: President
THE SPARTAN RADIOCASTING COMPANY
By:_______________________________
Name: Tom Watson Brown
Title: Vice Chairman
