<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM 8-K
_____________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported) February 13, 1998
Busse Broadcasting Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-99622 38-2750516
----------------- ------------ ---------------------
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
141 East Michigan Avenue,
Suite 300
Kalamazoo, Michigan 49007
- ---------------------- ------------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (616) 388-8019
----------------
No Change
------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
BUSSE BROADCASTING CORPORATION
ITEM 5: Other Events:
Reference is made to the Press Release of Busse Broadcasting
Corporation, a Delaware corporation (the "Company"), and Gray Communications
Systems, Inc., a Georgia Corporation (the "Purchaser"), dated February 17, 1998
attached hereto as Exhibit 10.2 and incorporated by reference herein. The Press
Release announces that the Purchaser signed a definitive purchase agreement
dated as of February 13, 1998 (the "Stock Purchase Agreement") to acquire all of
the outstanding capital stock of the Company for a purchase price of (i) $112.0
million, plus (ii) the Company's cash and cash equivalents, less (iii) the
aggregate amount of the Company's indebtedness, including the Company's 11 5/8%
Secured Senior Notes due 2000. A copy of the Stock Purchase Agreement is
attached hereto as Exhibit 10.1 and incorporated by reference herein.
Consummation of the transactions contemplated by the Stock Purchase
Agreement is subject to the receipt of requisite governmental approvals,
including the approval of the Federal Communications Commission. The Company
can make no assurance as to whether the transactions contemplated by the Stock
Purchase Agreement will be completed, but currently anticipates that such
transactions will close on or before September 1, 1998.
ITEM 7: Financial Statements and Exhibits
A. Financial Statements: None
B. Exhibits:
Description Exhibit
------------ --------
Stock Purchase Agreement dated as of February 13, 1998
by and among Busse Broadcasting Corporation, South Street
Corporate Recovery Fund I, L.P., Greycliff Leveraged Fund
1993, L.P., South Street Leveraged Corporate Recovery
Fund, L.P., South Street Corporate Recovery Fund I
(International), L.P. and Gray Communications Systems, Inc. 10.1
Press Release dated February 17, 1998 10.2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BUSSE BROADCASTING CORPORATION
(Registrant)
Dated: February 18, 1998
By: /s/ James C. Ryan
--------------------------------
Name: James C. Ryan
Title: Chief Financial Officer
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<PAGE>
EXHIBIT INDEX
Exhibit
-------
Stock Purchase Agreement dated as of February 13, 1998
by and among Busse Broadcasting Corporation, South Street
Corporate Recovery Fund I, L.P., Greycliff Leveraged Fund
1993, L.P., South Street Leveraged Corporate Recovery
Fund, L.P., South Street Corporate Recovery Fund I
(International), L.P. and Gray Communications Systems, Inc. 10.1
Press Release dated February 17, 1998 10.2
<PAGE>
STOCK PURCHASE AGREEMENT
BY AND AMONG
BUSSE BROADCASTING CORPORATION,
SOUTH STREET CORPORATE RECOVERY FUND I, L.P.,
GREYCLIFF LEVERAGED FUND 1993, L.P.,
SOUTH STREET LEVERAGED CORPORATE RECOVERY FUND, L.P.,
SOUTH STREET CORPORATE RECOVERY FUND I (INTERNATIONAL), L.P.
AND
GRAY COMMUNICATIONS SYSTEMS, INC.
DATED AS OF FEBRUARY 13, 1998
<PAGE>
CONTENTS
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I SALE OF NEW STOCK
1.01 Purchase of Shares by Purchaser. . . . . . . . . . . . . . . . . . . 1
1.02 Purchase Price for the Stock . . . . . . . . . . . . . . . . . . . . 2
1.03 Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Effectiveness of Closing; Deliveries . . . . . . . . . . . . . . . . 2
ARTICLE II REPRESENTATIONS AND WARRANTIES BY
THE STOCKHOLDERS AND THE COMPANY
2.01 Title to Stock; Other Rights . . . . . . . . . . . . . . . . . . . . 3
2.02 Capacity and Validity. . . . . . . . . . . . . . . . . . . . . . . . 3
2.03 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.04 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.05 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.06 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.07 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 5
2.08 Absence of Undisclosed Liability . . . . . . . . . . . . . . . . . . 5
2.09 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Title to Assets; Encumbrances; Condition . . . . . . . . . . . . . . 7
2.12 Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.13 Personal Property. . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.14 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . 9
2.15 Computer Software and Databases. . . . . . . . . . . . . . . . . . . 10
2.16 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . . . 10
2.17 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.18 Bonds, Letters of Credit and Guarantees. . . . . . . . . . . . . . . 11
2.19 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . . 11
2.20 Environmental. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.21 Litigation and Claims. . . . . . . . . . . . . . . . . . . . . . . . 14
2.22 Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.23 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.24 Suppliers and Customers. . . . . . . . . . . . . . . . . . . . . . . 19
2.25 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.26 Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . . . . 20
2.27 Interested Transactions. . . . . . . . . . . . . . . . . . . . . . . 20
2.28 Officers, Directors and Bank Accounts. . . . . . . . . . . . . . . . 20
2.29 Reports and Financial Statements . . . . . . . . . . . . . . . . . . 21
2.30 Statements True and Correct. . . . . . . . . . . . . . . . . . . . . 21
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.01 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.02 Capacity and Validity. . . . . . . . . . . . . . . . . . . . . . . . 21
3.03 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.04 Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . . . . 22
3.05 Investment Representation. . . . . . . . . . . . . . . . . . . . . . 22
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3.06 Qualification of Purchaser . . . . . . . . . . . . . . . . . . . . . 22
3.07 Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.08 Statements True and Correct. . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IV COVENANTS AND ADDITIONAL AGREEMENTS OF THE COMPANY,
THE STOCKHOLDERS AND PURCHASER
4.01 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . 22
4.02 Right of Inspection; Access. . . . . . . . . . . . . . . . . . . . . 23
4.03 Other Offers and Exclusive Dealing . . . . . . . . . . . . . . . . . 24
4.04 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.05 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . 25
4.06 Supplying of Financial Statements. . . . . . . . . . . . . . . . . . 25
4.07 Qualification and Corporate Existence. . . . . . . . . . . . . . . . 25
4.08 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . 25
4.09 Closing Conditions . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.10 Supplements to Schedules . . . . . . . . . . . . . . . . . . . . . . 25
4.11 Certain Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . 26
4.12 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.14 Delivery of Books and Records. . . . . . . . . . . . . . . . . . . . 27
4.15 FCC Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.16 Cooperation To Effect Station Exchange . . . . . . . . . . . . . . . 28
4.17 Name Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.18 Severance and Incentive Payments . . . . . . . . . . . . . . . . . . 28
4.19 HSR Filings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.20 Further Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE V NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
6.01 Representations True and Covenants Performed at Closing. . . . . . . 29
6.02 Incumbency Certificate . . . . . . . . . . . . . . . . . . . . . . . 29
6.03 Certified Copies of Resolutions. . . . . . . . . . . . . . . . . . . 29
6.04 Opinions of Counsel. . . . . . . . . . . . . . . . . . . . . . . . . 30
6.05 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . 30
6.06 No Injunction, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . 30
6.07 Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.08 Approval of Legal Matters. . . . . . . . . . . . . . . . . . . . . . 30
6.09 FCC Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.10 Hart-Scott Approval. . . . . . . . . . . . . . . . . . . . . . . . . 30
6.11 Environmental Report . . . . . . . . . . . . . . . . . . . . . . . . 30
6.12 Sales and Use Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 31
6.13 Title Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE COMPANY AND STOCKHOLDERS
7.01 Representations True and Covenants Performed at Closing. . . . . . . 32
7.02 Incumbency Certificate . . . . . . . . . . . . . . . . . . . . . . . 32
7.03 Certified Copies of Resolutions. . . . . . . . . . . . . . . . . . . 32
7.04 No Injunction, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . 32
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7.05 Hart-Scott Act Approval. . . . . . . . . . . . . . . . . . . . . . . 32
7.06 Approval of Legal Matters. . . . . . . . . . . . . . . . . . . . . . 33
7.07 FCC Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.08 Opinions of Counsel. . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII TERMINATION
8.01 Cause for Termination. . . . . . . . . . . . . . . . . . . . . . . . 33
8.02 Notice of Termination. . . . . . . . . . . . . . . . . . . . . . . . 33
8.03 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . 33
8.04 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE IX DEFINITIONS
Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Balance Sheet Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . 35
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Computer Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Databases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Employee Benefit Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Environmental Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 37
Environmental Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Environmental Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ERISA Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Hart-Scott Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Hazardous Substance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Leased Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 38
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Leased Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
License. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Material or Materially . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Material Adverse Change or Material Adverse Effect . . . . . . . . . . . . 39
Option Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Owned Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Permitted Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Personal Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Preferred Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
PUC Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Registration Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . 41
Related Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Tax or Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Third Party or Third Parties . . . . . . . . . . . . . . . . . . . . . . . 41
Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE X MISCELLANEOUS
10.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.02 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.03 Modifications, Amendments and Waivers . . . . . . . . . . . . . . . 43
10.04 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 43
10.05 Table of Contents; Captions; References . . . . . . . . . . . . . . 43
10.06 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.07 Pronouns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.08 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.09 Remedies Not Exclusive. . . . . . . . . . . . . . . . . . . . . . . 44
10.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.11 Interpretations . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.12 Exclusive Remedy. . . . . . . . . . . . . . . . . . . . . . . . . . 44
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EXHIBITS AND SCHEDULES
Exhibit 1.02 -- Purchase Price Allocation Among Stockholders
Exhibit 2.01 -- Stockholders' Ownership
Exhibit 6.04(i) -- Form of Opinion of Cadwalader, Wickersham & Taft
Exhibit 6.04(ii) -- Form of Opinion of Winston & Strawn
Exhibit 7.08(i) -- Form of Opinion of Counsel to Purchaser
Exhibit IX -- Key Employees of the Company and the Subsidiaries
Exhibit X -- Option Property
Schedule 1.02 -- Payment of the Purchase Price
Schedule 2.03 -- Organization, Standing & Foreign Qualification
Schedule 2.05 -- Conflicts
Schedule 2.06 -- Subsidiaries
Schedule 2.07 -- Financial Statements
Schedule 2.08 -- Absence of Undisclosed Liability
Schedule 2.09 -- Absence of Changes
Schedule 2.10 -- Tax Matters
Schedule 2.11 -- Title to Assets; Encumbrances
Schedule 2.12 -- Real Property
Schedule 2.13 -- Personal Property
Schedule 2.14 -- Intellectual Property
Schedule 2.15 -- Computer Software and Databases
Schedule 2.17 -- Insurance
Schedule 2.18 -- Bonds, Letters of Credit and Guarantees
Schedule 2.19 -- Compliance With Law
Schedule 2.20 -- Environmental
Schedule 2.21 -- Litigation and Claims
Schedule 2.22 -- Benefit Plans
Schedule 2.23(a)(i) -- Real Property Contracts
Schedule 2.23(a)(ii) -- Personal Property Contracts
Schedule 2.23(a)(iii) -- Purchase Orders--Non-Capital Assets
Schedule 2.23(a)(iv) -- Purchase Orders--Capital Assets
Schedule 2.23(a)(v) -- Sales Contracts
Schedule 2.23(a)(vi) -- Employment; Other Affiliate Contracts
Schedule 2.23(a)(vii) -- Sales Representatives Contracts
Schedule 2.23(a)(viii) -- Powers of Attorney
Schedule 2.23(a)(ix) -- Programming and Network Affiliation Agreements
Schedule 2.23(a)(x) -- Barter & Trade Agreements
Schedule 2.23(a)(xi) -- Any Other Contracts
Schedule 2.24 -- Suppliers and Customers
Schedule 2.25 -- Labor Matters
Schedule 2.26 -- Brokers and Finders
Schedule 2.27 -- Interested Transactions
Schedule 2.28 -- Officers, Directors and Bank Accounts
Schedule 3.03 -- Purchaser -- Conflicts
Schedule 3.04 -- Purchaser -- Brokers and Finders
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<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") dated as of the 13th
day of February, 1998, is made and entered into by and among BUSSE
BROADCASTING CORPORATION, a Delaware corporation (the "Company"), SOUTH
STREET CORPORATE RECOVERY FUND I, L.P., GREYCLIFF LEVERAGED FUND 1993, L.P.,
and SOUTH STREET LEVERAGED CORPORATE RECOVERY FUND, L.P., all of which are
Delaware limited partnerships, and SOUTH STREET CORPORATE RECOVERY FUND I
(INTERNATIONAL), L.P., a Cayman Islands exempted limited partnership
(individually, a "Stockholder" and collectively, the "Stockholders"), and
GRAY COMMUNICATIONS SYSTEMS, INC., a Georgia corporation ("Purchaser").
BACKGROUND:
The Stockholders collectively own, beneficially and of record, 107,700
shares of the Common Stock of the Company, representing 100% of the
outstanding shares of the Common Stock and 65,524.41 shares of the Preferred
Stock of the Company, representing 100% of the outstanding shares of the
Preferred Stock.
The Company is the parent corporation of WEAU License, Inc. ("WEAU") and
of KOLN/KGIN, Inc. ("KOLN/KGIN"). KOLN/KGIN is the parent corporation of
KOLN/KGIN License, Inc. ("KOLN/KGIN License" and together with KOLN/KGIN and
WEAU, sometimes collectively referred to herein as the "Subsidiaries" or
individually as a "Subsidiary"). The Company, directly or indirectly, owns
and operates three network-affiliated very high frequency television
stations, KOLN-TV, serving Lincoln, Nebraska, KGIN-TV, serving Grand Island,
Nebraska and WEAU-TV, serving Eau Claire and LaCrosse, Wisconsin
(collectively, the "Stations" and individually, a "Station").
Certain terms used in this Agreement are defined in Article IX hereof.
AGREEMENT:
In consideration of the foregoing, the mutual agreements, covenants,
representations and warranties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and subject to the terms and conditions hereinafter set forth, the parties
hereto agree as follows:
ARTICLE I
SALE OF STOCK
1.01 PURCHASE OF SHARES BY PURCHASER. At the Closing, and subject to the
terms and conditions of this Agreement, the Stockholders shall sell, convey,
assign, transfer and deliver to Purchaser, and Purchaser shall purchase and
accept from the Stockholders, all of the issued and outstanding Common Stock and
all of the issued and outstanding Preferred Stock, in each case free and clear
of any and all Liens other than those created hereunder or by Purchaser.
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1.02 PURCHASE PRICE FOR THE STOCK. The total purchase price for the
Stock shall be equal to (i) One Hundred Twelve Million Dollars ($112,000,000)
LESS (ii) an amount equal to the balance, as of the Closing Date, of (x) the
aggregate accreted value of the Company's 11-5/8% Senior Secured Notes due
2000 (issued under that certain Indenture, dated as of October 26, 1995, by
and among the Company, certain guarantors and Shawmut Bank Connecticut,
National Association) and (y) the outstanding aggregate principal balance of
indebtedness for borrowed money (excluding any intercompany indebtedness)
that is evidenced by a note, bond, debenture or similar instrument of Busse
or its subsidiaries, taken as whole, LESS (iii) accrued interest on the
indebtedness referred to in the foregoing clause (ii), PLUS (iv) an amount
equal to the sum, as of the Closing Date, of all cash, cash equivalents,
marketable securities, bank accounts, certificates of deposit and short term
investments (other than Accounts Receivable) of the Company and the
Subsidiaries, LESS (v) an amount equal to the net book value (calculated in
accordance with GAAP) of the Option Property at the end of the month prior to
the transfer of such Option Property by the Company, LESS (vi) an amount
equal to the aggregate unpaid obligations, if any, of the Company to any
Person (including without limitation any current or former employee, officer,
director, consultant, agent, advisor or representative of the Company) with
respect to or on account of any severance agreement, severance plan,
severance policy, incentive compensation, bonus arrangement, employment
agreement, severance benefit agreement, compensation plan, consulting
agreement or personal service contract (including without limitation the
Company's Long Term Incentive Plan, the Company's Incentive Fee Plan, the
Amended and Restated Employment Agreement with Lawrence A. Busse and the
Amended and Restated Employment Agreement with James C. Ryan) other than any
such obligation that relates solely to a termination of employment by the
Company after the Closing (or any such termination done at the request of
Purchaser prior to the Closing) of any employee of, or any consultant or
independent contractor to, the Company other than Lawrence A. Busse or James
C. Ryan. Each of the foregoing components of the Purchase Price shall be
calculated by the Company in a manner reasonably satisfactory to Purchaser
and (a) according to GAAP, (b) in a manner consistent with the Company's
publicly available financial statements and (c) as of the close of business
on the Business Day immediately preceding the Closing Date. At the Closing,
Purchaser shall pay the Purchase Price to the Stockholders, against delivery
to Purchaser of a certificate or certificates, registered in its name or the
name of its designees, representing the Stock. At the Closing, the Purchase
Price shall be paid in cash by wire transfers of immediately available funds,
or in such other form and manner as may be mutually satisfactory, to an
account designated in writing by each of the Stockholders at least three (3)
days prior to the Closing. The amount of the Purchase Price due to each
Stockholder shall be in the respective percentages set forth on EXHIBIT 1.02
and all payments shall be in such percentages. EXHIBIT 1.02 shall be
prepared by the Stockholders and delivered to Purchaser no later than sixty
(60) days after the date hereof.
1.03 LETTER OF CREDIT. Simultaneously with the execution of this
Agreement, Purchaser shall deposit with SSP, Inc., on behalf of and for the
benefit of the Stockholders, a standby letter of credit in the amount of Five
Million Eight Hundred Fifty Thousand Dollars ($5,850,000) (the "LC") to be
applied as provided herein. In the event of a termination of this Agreement,
the LC will be paid to the Stockholders or Purchaser as provided in Section 8.03
below. At the Closing, the LC shall be returned to Purchaser.
1.04 CLOSING; EFFECTIVENESS OF CLOSING; DELIVERIES. The Closing shall
occur at 10:00 a.m. local time on the Closing Date at the offices of Cadwalader,
Wickersham & Taft in New York, New York or at such other time and place as the
parties may agree. The Closing shall be effective as of the close of business
on the Closing Date. All deliveries, payments and other transactions and
documents relating to the Closing (i) shall be interdependent and none shall be
effective unless and until all are effective (except to the extent that the
party entitled to the benefit thereof has waived satisfaction or performance
thereof as a condition precedent to Closing), and (ii) shall be deemed to be
consummated in
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the order set forth in this Agreement and, to the extent the order is not
specified, shall be deemed to be consummated simultaneously.
ARTICLE II
REPRESENTATIONS AND WARRANTIES BY THE STOCKHOLDERS AND THE COMPANY
Each of the Stockholders and the Company, jointly and severally, hereby
represent and warrant to Purchaser as follows:
2.01 TITLE TO STOCK; OTHER RIGHTS. Each of the Stockholders is the
owner of all right, title and interest (legal and beneficial) in and to that
number of shares of Common Stock and shares of Preferred Stock set forth next
to its name on EXHIBIT 2.01, free and clear of all Liens. Collectively, the
Stockholders own all right, title and interest (legal and beneficial) in and
to all of the issued and outstanding shares of the Stock. Except as
specifically contemplated by this Agreement, no Person has any Contract or
option or any right or privilege (whether pre-emptive or contractual) capable
of becoming a Contract or option for the purchase from the Stockholders of
any shares of Common Stock or Preferred Stock or for the purchase,
subscription or issuance of any securities of the Company.
2.02 CAPACITY AND VALIDITY. Each of the Stockholders has the full power
and authority necessary to enter into and perform its obligations under this
Agreement and the Other Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby. The Company has the full
corporate power, capacity and authority necessary to enter into and perform its
obligations under this Agreement and the Other Agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and the Other Agreements
have been approved by all necessary action of (i) the Board of Directors and
stockholders of the Company and (ii) the partners of each of the Stockholders,
including the Board of Directors of each corporate partner. This Agreement has
been, and the Other Agreements to which the Company or any of the Stockholders
are parties will be when executed and delivered, duly executed and delivered by
duly authorized officers of the Company and duly authorized partners or agents
of each Stockholder, including duly authorized officers of corporate partners,
and the Agreement and each of the Other Agreements constitutes, or will
constitute when executed and delivered, the legal, valid and binding obligation
of the Company and each of the Stockholders, as the case may be, enforceable
against the Company and each of the Stockholders, as the case may be, in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or
general equitable principles (regardless of whether considered in a proceeding
in equity or at law) or by an implied covenant of good faith and fair dealing.
2.03 ORGANIZATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its assets and to carry on its Business as presently conducted. Each of the
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its respective assets
and to carry on its respective business as presently conducted. Each of the
Stockholders is a limited partnership duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and has all
requisite power and authority to own, operate and lease its respective assets
and to conduct its respective business as presently conducted. The Company
and each of the Subsidiaries are duly qualified or licensed to transact
business as a foreign corporation in good standing
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in the jurisdictions listed in SCHEDULE 2.03, and the character of their
respective assets or the nature of their respective businesses do not require
such qualification or licensing in any other jurisdiction except where the
failure to so qualify or be so licensed would not have a Material Adverse
Effect on the Company or any such Subsidiary, as the case may be. Complete
and correct copies of the Certificate of Incorporation of the Company and
each of the Subsidiaries, and all amendments thereto (certified by the
Secretary of State of the State of Delaware) and complete and correct copies
of the By-Laws of the Company and each of the Subsidiaries, and all
amendments thereto, previously have been delivered to Purchaser. Except as
may be set forth in Schedule 2.03, copies of all records of the proceedings
of incorporators, stockholders and directors of each of the Company and each
of the Subsidiaries, which are set forth in the Company's and each of the
Subsidiaries' respective minute books (collectively, the "Minute Books"), are
correct and complete in all Material respects and accurately reflect in all
Material respects all proceedings of each of the Company's and each of the
Subsidiaries' respective incorporators, stockholders and Board of Directors
and all committees thereof. Except as may be set forth in Schedule 2.03, the
stock record books of each of the Company and each of the Subsidiaries
(collectively, the "Stock Record Books") are correct and complete and
accurately reflect the stock ownership of their respective stockholders. The
Minute Books and the Stock Record Books have been made available to Purchaser
for review.
2.04 CAPITALIZATION. The authorized capital stock of the Company
consists of 2,154,000 shares of Common Stock, of which 107,700 are issued and
outstanding, and 65,524.41 shares of Preferred Stock, all of which are issued
and outstanding. All of such Stock is duly and validly issued and
outstanding, is fully paid and nonassessable and was issued pursuant to a
valid exemption from registration under the Securities Act of 1933, as
amended, and all applicable state securities laws. Except for shares of
Common Stock issuable upon conversion of the Preferred Stock, no Stock is
reserved for issuance. Except as contemplated by the conversion rights
applicable to the Preferred Stock, the Company has no obligation to issue any
additional Stock or securities convertible or exchangeable for Stock, or
options or warrants for the purchase of (a) any Stock or (b) any securities
convertible into or exchangeable for any Stock. Excepted as contemplated by
the Registration Rights Agreement, there are no outstanding rights to either
demand registration of any Stock under the Securities Act of 1933, as
amended, or to sell any Stock in connection with such a registration of Stock.
2.05 NO CONFLICT. Except as disclosed on SCHEDULE 2.05 and assuming
compliance with the Hart-Scott Act and the receipt of all necessary FCC
approvals, neither the execution, delivery and performance of this Agreement
or the Other Agreements to which it is a party by either the Company or any
of the Stockholders nor the consummation by the Company or any of the
Stockholders of the transactions contemplated hereby or thereby will (i)
conflict with or result in a violation, contravention or breach of any of the
terms, conditions or provisions of the Certificate of Incorporation, as
amended, or the By-Laws, as amended, of the Company or any of the
Subsidiaries, (ii) conflict with or result in a violation, contravention or
breach of any of the terms, conditions or provisions of the partnership
agreement, certificate of limited partnership or other governing document or
agreement of any of the Stockholders, (iii) result in a Default under, or
require the consent or approval of any party to, any Contract or License of
the Company or any of the Subsidiaries required to be set forth on one or
more of the Schedules contemplated by Section 2.23 hereof or any Contract or
License of any of the Stockholders (which, in the case of the Stockholders,
would (a) affect the ability of the Stockholders to consummate the
transactions contemplated hereby) or (b) result in any Liability to Purchaser
(iv) result in the violation of any Law or Order applicable to the Company,
any of the Subsidiaries or any of the Stockholders (which, in the case of the
Stockholders, would (a) affect the ability of the Stockholders to consummate
the transactions contemplated hereby) or (b) result in any Liability to
Purchaser or (v) result in the creation or imposition of any Lien applicable
to the Stock, the Company or any of the Subsidiaries, except in each case as
would not have a Material Adverse Effect.
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<PAGE>
2.06 SUBSIDIARIES. Except as set forth on SCHEDULE 2.06 and except for
the Subsidiaries, neither the Company nor any of the Subsidiaries has in the
past three (3) years had, and none of them currently has, a direct or
indirect majority or controlling interest in any entity. Except as disclosed
on SCHEDULE 2.06, neither the Company nor any of the Subsidiaries has in the
past three (3) years owned and none of them owns, directly or indirectly,
more than 1% of any capital stock or other equity, ownership, proprietary or
voting interest in any Person. The Company owns, directly or indirectly,
100% of the issued and outstanding capital stock of each of the Subsidiaries.
None of the Subsidiaries has any obligation to issue any additional capital
stock or other securities or securities convertible or exchangeable for
capital stock or other securities, or options or warrants for the purchase of
(a) any capital stock or other securities or (b) any securities convertible
into or exchangeable for any capital stock or other securities.
2.07 FINANCIAL STATEMENTS. The Financial Statements (of the type
provided for in clauses (i) and (ii) of the definition thereof), correct and
complete copies of which are included in SCHEDULE 2.07, (i) are in accordance
with the books and records of the Company and each of the Subsidiaries, which
are correct and complete in all Material respects and which have been
maintained in accordance with good business practices; (ii) present fairly in
all Material respects the financial position of the Company and each of the
Subsidiaries as of the dates indicated and the results of each of their
operations and their respective cash flows for the periods then ended; and
(iii) have been prepared in accordance with GAAP, subject, in the case of
interim financial statements, to the condensing of the Financial Statements
or the absence of footnotes. The Financial Statements contain all
adjustments, which are solely of a normal recurring nature, necessary to
present fairly in all Material respects the consolidated financial condition
and the consolidated results of operations, changes in stockholders' equity
and changes in financial position or cash flows of the Company and each of
the Subsidiaries as of the dates and for the periods indicated.
2.08 ABSENCE OF UNDISCLOSED LIABILITY. Except as set forth in SCHEDULE
2.08, neither the Company nor any of the Subsidiaries has any Undisclosed
Liabilities nor does there exist any Known basis for or threat of an
assertion against the Company or any of the Subsidiaries, their respective
businesses or their respective assets of any Undisclosed Liability, except
for Liabilities incurred since the Balance Sheet Date in the ordinary course
of business consistent with past practice, none of which are Material.
2.09 ABSENCE OF CHANGES. Except as disclosed on SCHEDULE 2.09, since the
Balance Sheet Date, (i) the Business has been carried on only in the ordinary
course consistent with past practice, (ii) there has been no Material Adverse
Change, and there has been no event or circumstance that reasonably is
anticipated to result in a Material Adverse Change with respect to the Company
or any of the Subsidiaries, their respective assets or businesses or the
Business, (iii) the Company has not directly or indirectly declared, paid or
authorized any dividends or other distributions or payments in respect of its
Stock or other equity securities, if any, (iv) neither the Company nor any of
the Subsidiaries has made any change in any method of accounting or accounting
practice, and (v) except in the ordinary course of business consistent with past
practice, neither the Company nor any of the Subsidiaries has canceled, modified
or waived, without receiving payment or performance in full, any (a) Liability
owed to the Company or any of the Subsidiaries, as the case may be, including
without limitation, any receivable of the Company from any Affiliate (other than
a Subsidiary) or any Related Person to an Affiliate, (b) Litigation the Company
or any of the Subsidiaries may have against other Persons, or (c) other rights
of the Company or any of the Subsidiaries, as the case may be.
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2.10 TAX MATTERS. Except as set forth on SCHEDULE 2.10:
(a) The Company and each of the Subsidiaries have timely filed
with the appropriate Governmental Authorities all required Tax Returns in all
jurisdictions in which Tax Returns are required to be filed. Neither the
Company nor any of the Subsidiaries is presently the beneficiary of any
extension of time within which to file any Tax Return. All Taxes (whether or
not shown on any Tax Return) for all periods ending on or before the Balance
Sheet Date, have been fully paid or appropriate deposits or adequate accruals
have been made therefor on the Balance Sheet.
(b) Since the Balance Sheet Date, neither the Company nor any of
the Subsidiaries has incurred any Liability for Taxes other than in the
ordinary course of business and no such Tax Liability so incurred (other than
any Liability incurred by the Company or the Subsidiaries in connection with
their cooperation under Section 4.16 hereof) is Material. Neither the
Company nor any of the Subsidiaries is currently delinquent in the payment of
any Tax, assessment, deposit or other charge by any Governmental Authority
for which any Liability is pending or has been assessed, asserted or
threatened (in writing, or otherwise to the Knowledge of the Company, any of
the Subsidiaries or any of the Stockholders) against the Company, any of the
Subsidiaries or any of their respective assets in connection with any Tax and
there is no basis for any such Liability. Neither the Company nor any of the
Subsidiaries has received any notice of assessment or proposed assessment in
connection with any Tax Returns and there are no pending Tax examinations of
or Tax claims asserted (in writing, or otherwise to the Knowledge of the
Company, any of the Subsidiaries or any of the Stockholders) against the
Company, any of the Subsidiaries or any of their respective assets, including
without limitation, any claim by any Governmental Authority in any
jurisdiction where the Company or any of the Subsidiaries did not file Tax
Returns that the Company or any of the Subsidiaries, respectively, is or may
be subject to or liable for Taxes imposed by that Governmental Authority or
jurisdiction. There are no Liens for any Taxes (other than any Lien for
current real property or ad valorem Taxes not yet due and payable) on any of
the Company's or any of the Subsidiaries' assets.
(c) None of the Company's or any of the Subsidiaries' Tax
Returns have ever been audited by the IRS or any other Governmental Authority
and the neither the Company nor any of the Subsidiaries has waived any statute
of limitations in respect of Taxes or agreed to a Tax assessment or deficiency.
Neither the Company nor any of the Subsidiaries has filed any consent under
Section 341(f) of the Code relating to collapsible corporations. No Tax is
required to be withheld pursuant to Section l445 of the Code as a result of any
of the transfers contemplated by this Agreement and the Company and each of the
Subsidiaries will provide any certificate reasonably requested by Purchaser at
Closing with respect thereto.
(d) The Company and each of the Subsidiaries have withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other Third Party.
(e) Neither the Company nor any of the Subsidiaries is a party to
any agreement, contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code or any
similar provision of foreign, state or local Law.
(f) Neither the Company nor any of the Subsidiaries has agreed,
nor is it required to make, any adjustment under Section 481(a) of the Code by
reason of a change in accounting method or otherwise.
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(g) Neither the Company nor any of the Subsidiaries is a party to
or bound by (nor will the Company or the Subsidiaries, prior to the Closing,
become a party to or be bound by) any Tax indemnity, Tax sharing or Tax
allocation agreement or arrangement.
(h) Except for the group of which the Company and the Subsidiaries
are presently members, none of the Company or any of the Subsidiaries has
been a member of an affiliated group filing a consolidated federal income Tax
Return (other than a group the common parent of which was the Company) or has
any Liability for Taxes of any Person (other than the Company or any of the
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of the state, local, or foreign Law), as a transferee or successor,
by contract, or otherwise.
(i) Neither the Company nor any of the Subsidiaries is a party
to any joint venture, partnership, or other arrangement or Contract which is
treated as a partnership for federal income Tax purposes.
(j) Neither the Company nor any of the Subsidiaries has issued or
assumed any corporate acquisition indebtedness, within the meaning of Section
279(b) of the Code, or any obligation described in Section 279(a)(2) of the
Code.
(k) Neither the Company nor any Subsidiary has any excess loss
account (as defined in Treasury Regulation Section 1.1502-19) with respect to
the stock of any Subsidiary.
(l) SCHEDULE 2.10 contains Materially complete and accurate
descriptions of the following information with respect to the Company and its
Subsidiaries (or, in the case of clause (B) below, with respect to each of
the Subsidiaries) as of the most recent practicable date: (A) the basis of
the Company or the Subsidiary in its assets; (B) the basis of each
shareholder in each Subsidiary's stock; and (C) the amount of any deferred
gain or loss allocable to the Company or Subsidiary arising out of any
deferred intercompany transaction.
(m) The net operating loss and other carryovers reported by the
Company and each of the Subsidiaries as of the Balance Sheet Date are as set
forth in SCHEDULE 2.10; as of the Closing Date and immediately prior to the
consummation of any of the transactions contemplated hereby the ability of the
Company and each of the Subsidiaries to use such reported carryovers will not
have been affected by Sections 382, 383 or 384 of the Code or by the SRLY or
CRCO limitations of Treasury Regulation Sections 1.1502-21 or 1.1502-22. Except
as set forth in this clause (m) and notwithstanding anything in this Agreement
to the contrary, the Stockholders and the Company make no representation or
warranty as to the extent, availability or use of the net operating loss and
other carryover items reported by the Company and its Subsidiaries.
2.11 TITLE TO ASSETS; ENCUMBRANCES; CONDITION.
(a) Each of the Company and each of the Subsidiaries has good,
valid and marketable (and, in the case of the Owned Real Property, insurable)
title to all of its respective assets free and clear of any and all Liens,
except Permitted Liens. SCHEDULE 2.11 contains true and complete copies (in all
Material respects) of (i) Commitments to issue owner's title insurance policies
for all of the Owned Real Property in the amounts indicated in each such
Commitment, except for the Owned Real Property located in York County, Nebraska,
a copy of which will be delivered to Purchaser prior to Closing, and (ii) all
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existing owner's title insurance policies. A survey of each parcel of the Owned
Real Property has been delivered to Purchaser prior to the date hereof, except
for the Owned Real Property located in York County, Nebraska, a copy of which
will be delivered to Purchaser prior to Closing. Copies of all documents
evidencing the Liens upon the Company's and each of the Subsidiaries' respective
assets are either contained in SCHEDULE 2.11 or previously have been delivered
to Purchaser.
(b) Except as set forth in SCHEDULE 2.11, each of the Material
Improvements and each item of Material Personal Property is in good condition
and repair, reasonable wear and tear excepted, and is usable in the ordinary
course of business consistent with past practices. Each Material Improvement
and each item of Material Personal Property is adequate for its present and
intended uses and operation and neither the Company nor any of the
Subsidiaries has any intention to use or operate any Material Improvement or
any item of Material Personal Property other than as presently used or
operated. The Company's and each of the Subsidiaries' respective assets
(including the Company's and each of the Subsidiaries' respective interest in
all leased assets) include all Material assets required to operate the
Business as presently conducted.
2.12 REAL PROPERTY.
(a) SCHEDULE 2.12 contains a correct and complete list of all of
the Real Property, including, without limitation, a legal description for all of
the Owned Real Property. To the Knowledge of the Company, any of the
Subsidiaries or any of the Stockholders, no facts or circumstances exist which
do, or potentially may, adversely affect any of the access to and from the Real
Property, from and to the existing public highways and roads, and, to the
Knowledge of the Company, any of the Subsidiaries or any of the Stockholders,
there is no pending or threatened denial, revocation, modification or
restriction of such access. The primary tower, transmitter and Real Property on
which such tower and transmitter are located are all owned by the Company or one
of the Subsidiaries in fee simple title, except for the 2000 foot television
tower located on a permanent easement which is located in Eau Claire County
(Fairchild Township), Wisconsin.
(b) The Real Property is served by utilities as required for its
current operation.
(c) No zoning or similar land use restrictions are presently in
effect or proposed by any Governmental Authority that would impair in any
Material respect the operation of the Business as presently conducted by the
Company and each of the Subsidiaries or which would prevent the use of any of
the Real Property as currently operated. All of the Real Property is in
compliance in all Material aspects with all applicable zoning laws and recorded
covenants. Neither the Company nor any of the Subsidiaries has received any
notice from any Governmental Authority or other Third Party with regard to
encroachments on or off the Real Property, violations of building codes, zoning,
subdivision or other similar Laws or other material defects in the Improvements
or in the good, valid, marketable and insurable title of said Real Property.
(d) As of the Closing Date, there will be no Persons in
possession of the Real Property or any part thereof other than the Company or
one or more of the Subsidiaries or their lessees pursuant to Contracts that are
Permitted Liens.
(e) No condemnation proceedings are pending or to the Knowledge
of the Company, any of the Subsidiaries or any of the Stockholders, threatened
with regard to the Owned Real Property.
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(f) With respect to each parcel of Leased Real Property, (i) the
lessor was the owner of the premises leased to the lessee at the time of the
execution and delivery of the lease, (ii) the Company is the owner and holder of
the interest of the lessee in the lease, (iii) all buildings and towers
constructed by the lessee of each lease are located within the boundaries of the
leased premises, (iv) each lease contains an adequate description of the leased
premises, (v) each lease is enforceable by the lessee, (vi) all payments of rent
are current under each lease and no default exists under any lease and (vii)
except as set forth on Schedule 2.21, there are no disputes with or adverse
claims asserted by any lessor of a lease. Each of the Contracts of the Company
or any of the Subsidiaries relating to such Leased Real Property is fully and
accurately identified, and the expiration date and current rent are described,
in SCHEDULE 2.23(a)(i) and each such Contract is in full force and effect.
Except as disclosed on SCHEDULE 2.12, neither the Leased Real Property nor any
of the Company's or any of the Subsidiaries' right, title or interest therein is
affected by any Lien, prior interests or superior interests of any nature
whatsoever that will, or could reasonably be expected to, terminate or otherwise
adversely affect such Leased Real Property or any of the Company's or any of the
Subsidiaries' right, title and interest therein.
2.13 PERSONAL PROPERTY.
(a) SCHEDULE 2.13 contains a correct and complete list of each
item of Personal Property, other than Inventory and the Option Property
(excluding office furniture, equipment, supplies and miscellaneous items of
personal property with an individual cost of less than $2,500).
(b) SCHEDULE 2.13 contains a correct and complete description of
all Material Leased Personal Property. Each of the Contracts of the Company
or any of the Subsidiaries relating to such Leased Personal Property is
identified on SCHEDULE 2.13 and each such Contract is in full force and
effect.
2.14 INTELLECTUAL PROPERTY.
(a) SCHEDULE 2.14 contains a correct and complete list of all of
the Company's and each of the Subsidiaries' respective Material Intellectual
Property, including all Material license agreements relating thereto.
Neither the Company nor any of the Subsidiaries (or any goods or services
sold by any of them) has violated, infringed upon or unlawfully or wrongfully
used the Intellectual Property of others and none of the Company's or any of
the Subsidiaries' Intellectual Property or any related rights or any customer
lists, supplier lists or mailing lists, as used in the Business or in the
other businesses now or heretofore conducted by the Company or any of the
Subsidiaries, Materially infringes upon or otherwise Materially violates the
rights of others, nor has any Person asserted a claim of such infringement or
misuse, which infringement or violation is likely to result in a cost to the
Company in excess of $20,000. Each of the Company and the Subsidiaries has
taken all reasonable measures to enforce, maintain and protect its interests
and, to the extent applicable, the rights of Third Parties, in and to the
Company's and each of the Subsidiaries' Material Intellectual Property. The
Company and each of the Subsidiaries have all right, title and interest in
the Intellectual Property identified on SCHEDULE 2.14. The consummation of
the transactions contemplated by this Agreement will not alter or impair any
Material Intellectual Property rights of the Company or any of the
Subsidiaries. Except as set forth in SCHEDULE 2.14, neither the Company nor
any of the Subsidiaries is obligated nor has the Company or any of the
Subsidiaries incurred any Liability to make any Material payments for
royalties, fees or otherwise to any Person in connection with any of the
Company's or any of the Subsidiaries' Intellectual Property. All patents,
trademarks, trade names, service marks, assumed names, and copyrights and all
registrations thereof included in or related to the Company's or any of the
Subsidiaries' Intellectual Property are valid, subsisting and in full force
and effect. The Company is unaware of any Material infringement of the
Company's or any of the Subsidiaries' Material
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Intellectual Property, and there are no pending infringement actions against
another for infringement of the Company's or any of the Subsidiaries'
Intellectual Property or theft of the Company's trade secrets.
(b) No present or former officer, director, partner or employee of
the Company or any of the Subsidiaries owns or has any proprietary, financial
or other interest, direct or indirect, in any of the Company's or any of the
Subsidiaries' Material Intellectual Property, except as described on SCHEDULE
2.14. Except as set forth on Schedule 2.14, no officer, director, partner or
employee of the Company or any of the Subsidiaries has entered into any
Contract (i) that requires such officer, director, partner or employee to (A)
assign any interest to inventions or other Material Intellectual Property, or
(B) keep confidential any Material trade secrets, proprietary data, customer
lists or other business information or (ii) that restricts or prohibits such
officer, director, partner or employee from engaging in competitive
activities with or soliciting customers to or from any competitor of the
Company or any of the Subsidiaries.
2.15 COMPUTER SOFTWARE AND DATABASES. SCHEDULE 2.15 identifies all
Material Computer Software and Databases owned, licensed, leased, internally
developed or otherwise used in connection with the Business. The Company and
each of the Subsidiaries have use of or the ability to freely acquire,
without substantial costs to the Company or any of the Subsidiaries for such
acquisition, all Computer Software and Databases that are necessary to
conduct the Business as presently conducted by the Company and each of the
Subsidiaries and all documentation relating to all such Material Computer
Software and Databases. Such Computer Software and Databases perform in all
Material respects in accordance with the documentation related thereto or
used in connection therewith and are free of Material defects in programming
and operation. The Company has previously delivered to Purchaser complete
and accurate copies of all documents relating to the sale, license, lease or
other transfer or grant of Material Computer Software and Databases by the
Company or any of its Subsidiaries since January 1, 1996.
2.16 ACCOUNTS RECEIVABLE. The Accounts Receivable are (i) validly
existing, (ii) enforceable by the Company or the Subsidiaries in accordance
with the terms of the instruments or documents creating them, and (iii)
collectible in the ordinary course of business consistent with past practice
at the full recorded amount thereof less an allowance for collection losses
disclosed in the Balance Sheet, or in the case of Accounts Receivable arising
after the Balance Sheet Date, an allowance for collection losses accrued on
the books of the Company or any of the Subsidiaries in the ordinary course of
business consistent with past practices and in accordance with GAAP. The
allowance for collection losses on the Balance Sheet was established in the
ordinary course of business consistent with past practices and in accordance
with GAAP. The Accounts Receivable represent monies due for, and have arisen
solely out of, bona fide sales and deliveries of goods, performance of
services and other business transactions in the ordinary course of business
consistent with past practices. None of the Accounts Receivable represent
monies due for goods either sold on consignment or sold on approval. There
are no refunds, discounts or other adjustments payable with respect to any
such Accounts Receivable, and there are no defenses, rights of set-off,
counterclaims, assignments, restrictions, encumbrances, or conditions
enforceable by Third Parties on or affecting any Account Receivable, except,
in each case, for terms arising in the ordinary course of business consistent
with past practice.
2.17 INSURANCE. All of the assets and the operations of the Company,
each of the Subsidiaries and the Business of an insurable nature and of a
character usually insured by companies of similar size and in similar
businesses are insured by the Company or any of the Subsidiaries in such
amounts and against such losses, casualties or risks as is (i) usual in such
companies and for such assets, operations and businesses, (ii) required by
any Law applicable to the Company, any of the Subsidiaries or the Business,
or (iii) required by any Contract of the Company or any of the Subsidiaries.
SCHEDULE 2.17
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contains a complete and accurate list of all Material insurance policies now
in force and held or owned by the Company or any of the Subsidiaries and such
Schedule indicates the name of the insurer, the type of policy, the risks
covered thereby, the amount of the premiums, the term of each policy, the
policy number and the amounts of coverage and deductible in each case and all
outstanding claims thereunder. Correct and complete copies or summaries of
all such policies have been delivered to Purchaser by the Company or will be
delivered to Purchaser by the Company as soon as such policies are available
to the Company after the date hereof. All such policies are in full force
and effect and enforceable in accordance with their terms. Neither the
Company nor any of the Subsidiaries is now in Material Default regarding the
provisions of any such policy, including, without limitation, failure to make
timely payment of any premiums due thereon, and neither the Company nor any
of the Subsidiaries has failed to give any Material notice or present any
Material claim thereunder in due and timely fashion. Neither the Company nor
any of the Subsidiaries has been refused or denied renewal of, any Material
insurance coverage in connection with the Company, any of the Subsidiaries,
the ownership or use of the Company's or any of the Subsidiaries' respective
assets or the operation of the Business. In addition to the deductibles set
forth on SCHEDULE 2.17, such Schedule discloses all Material risks that are
self-insured by the Company and each of the Subsidiaries that in the ordinary
course of business could be insured.
2.18 BONDS, LETTERS OF CREDIT AND GUARANTEES. SCHEDULE 2.18 contains a
complete and accurate list of all bonds (whether denominated bid, litigation,
performance, fidelity, or otherwise), letters of credit, and guarantees
(other than instruments that are guaranteed in the ordinary course) issued by
the Company, any of the Subsidiaries, the Stockholders or others for the
benefit of the Company or any of the Subsidiaries and now in force or
outstanding. Correct and complete copies of each such Material bond, letter
of credit and guarantee have been delivered to Purchaser by the Company on or
before the date of this Agreement. The bonds, letters of credit and
guarantees listed in SCHEDULE 2.18 satisfy all Material requirements for
bonds, letters of credit or guarantees set forth in (i) any Law applicable to
the Company, any of the Subsidiaries or the Business and (ii) any Contracts
of the Company or any of the Subsidiaries. All such bonds, letters of
credit and guarantees are in full force and effect and enforceable in
accordance with their terms. Neither the Company nor any of the Subsidiaries
is in Material Default regarding the provisions of any such bond, letter of
credit or guarantee, including, without limitation, the failure to make
timely payment of all premiums and fees due thereon, and neither the Company
nor any of the Subsidiaries has failed to give any notice or present any
claim thereunder in due and timely fashion.
2.19 COMPLIANCE WITH LAW.
(a) The Company and each of the Subsidiaries have complied with
and are in compliance with all Laws, Licenses and Orders applicable to,
required of or binding on the Company or any of the Subsidiaries,
respectively, their respective assets or the Business, including without
limitation, the FCC Licenses, the Communications Act of 1934, and PUC Laws,
and none of the Company, any of the Subsidiaries, or any of the Stockholders
has Knowledge of any basis for any claim of current or past non-compliance
with any such Law, License or Order, in each case where such non-compliance
would be Material to the business, operations, assets, Liabilities, financial
condition, or results of operations of the Company and the Subsidiaries,
taken as a whole, including, without limitation, the value of the Company and
the Subsidiaries, taken as a whole. No notices from any Governmental
Authority with respect to any failure or alleged failure of the Company, any
of the Subsidiaries, their respective assets or the Business to comply with
any such Law, License or Order have been received by the Company, any of the
Subsidiaries or any of the Stockholders, nor, to the Knowledge of the
Company, any of the Subsidiaries or any of the Stockholders, are any such
notices proposed or threatened. SCHEDULE 2.19 contains a complete and
correct list of all Material Licenses and Orders applicable to, required of
or binding on the Company, any of the
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Subsidiaries, their respective assets or the Business, true and complete
copies of which (other than the FCC Licenses) previously have been delivered
to the Purchaser.
(b) The Company and each of the Subsidiaries hold the FCC Licenses
and all other Material Licenses necessary for or used in the operations of
the Business, and each of the FCC Licenses is, and all such other Material
Licenses are, in full force and effect. SCHEDULE 2.19 contains a true and
complete list of the FCC Licenses currently in effect and all such other
Material Licenses (showing, in each case, the expiration date). Except as
set forth on SCHEDULE 2.19, no application, action or proceeding is pending
for the renewal or modification of any of the FCC Licenses or any of such
other Material Licenses, and no application, action or proceeding is pending
or, to the Company's, any of the Subsidiaries' or any of the Stockholder's
Knowledge, threatened that may result in the denial of the application for
renewal, the revocation, modification, nonrenewal or suspension of any of the
FCC Licenses or any of such other Material Licenses, the issuance of a
cease-and-desist order, or the imposition of any administrative or judicial
sanction with respect to the Business that may Materially and adversely
affect the rights of Purchaser, the Company or any of the Subsidiaries under
any such FCC Licenses or other Material Licenses. All Material returns,
reports and statements required to be filed by the Company or any of the
Subsidiaries with the FCC relating to the Business have been filed and
complied with and are complete and correct in all Material respects as filed.
(c) Except as described in SCHEDULE 2.19, there are no Material
capital expenditures that the Company, any of the Subsidiaries or any of the
Stockholders anticipates will be required to be made in connection with the
Company's or any of the Subsidiaries' respective assets or the Business as now
conducted in order to comply with any Law applicable to the Company, any of the
Subsidiaries, their respective assets or the Business as now conducted.
2.20 ENVIRONMENTAL. Except as set forth in SCHEDULE 2.20 or the
Environmental Report:
(a) There is no Environmental Litigation (or any Litigation
against any Person whose Liability, or any portion thereof, for Environmental
Matters or under any Environmental Laws the Company or any of the Subsidiaries
has or, to the Knowledge of the Company, any of the Subsidiaries or any of the
Stockholders, may have retained or assumed contractually or by operation of Law)
pending or, to the Knowledge of the Company, any of the Subsidiaries or any of
the Stockholders, threatened with respect to (i) the ownership, use, condition
or operation of the Business, the Real Property or any other asset of the
Company or any of the Subsidiaries or any asset formerly held for use or sale by
the Company or any of the Subsidiaries or any of their respective predecessors
or any of their respective current or former subsidiaries, or (ii) any violation
or alleged violation of or Liability or alleged Liability under any
Environmental Law or any Order related to Environmental Matters. To the
Knowledge of the Company, any of the Subsidiaries or any of the Stockholders,
there have been and there are no existing violations of (i) any Environmental
Law, or (ii) any Order related to Environmental Matters, with respect to the
ownership, use, condition or operation of the Business, the Real Property or any
other asset of the Company or any of the Subsidiaries or any asset formerly held
for use or sale by the Company or any of the Subsidiaries or any of their
respective predecessors or any of their respective current or former
subsidiaries. To the Knowledge of the Company, any of the Subsidiaries or any
of the Stockholders, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
any Environmental Matter, that could reasonably be expected to form the basis of
(i) any Environmental Litigation against the Company or any of the Subsidiaries,
or (ii) any Litigation against any Person whose Liability (or any portion
thereof) for Environmental Matters or under any Environmental Laws the Company
or any of the Subsidiaries has or may have retained or assumed contractually or
by operation of Law. To the Knowledge of the Company, any of the Subsidiaries
or any of the Stockholders,
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none of the Company, any of the Subsidiaries or any of their respective
predecessors or any of their respective current or former subsidiaries nor
anyone Known to the Company, any of the Subsidiaries or any of the
Stockholders has used any assets or premises of the Company or any of the
Subsidiaries or any of their respective predecessors or any of their
respective current or former subsidiaries or any part thereof for the
handling, treatment, storage, or disposal of any Hazardous Substances except
in Material compliance with applicable Environmental Laws. The disclosure of
facts set forth in SCHEDULE 2.20 shall not relieve the Company, any of the
Subsidiaries or any of the Stockholders of any of their respective
obligations under this Agreement.
(b) To the Knowledge of the Company, any of the Subsidiaries or
any of the Stockholders, no release, discharge, spillage or disposal of any
Hazardous Substances has occurred or is occurring at any assets owned,
leased, operated or managed by the Company or any of the Subsidiaries or any
of their respective predecessors or any of their respective current or former
subsidiaries or any part thereof while or before such assets were owned,
leased, operated or managed by the Company or any of the Subsidiaries.
(c) To the Knowledge of the Company, any of the Subsidiaries or
any of the Stockholders, no soil or water in, under or adjacent to any assets
owned, leased, operated or managed, directly or indirectly, by the Company or
any of the Subsidiaries or assets formerly held for use or sale by the
Company or any of the Subsidiaries or, in either case, any of their
respective predecessors or any of their respective current or former
subsidiaries has been contaminated by any Hazardous Substance while or before
such assets were owned, leased, operated or managed by the Company or any of
the Subsidiaries or any of their respective predecessors or any of their
respective current or former subsidiaries.
(d) To the Knowledge of the Company, any of the Subsidiaries or
any of the Stockholders, all waste containing any Hazardous Substances
generated, used, handled, stored, treated or disposed of (directly or
indirectly) by the Company or any of the Subsidiaries or any of their
respective predecessors or any of their respective current or former
subsidiaries has been released or disposed of in compliance with all
applicable reporting requirements under any Environmental Laws and there is
no Environmental Litigation with respect to any such release or disposal.
(e) To the Knowledge of the Company, any of the Subsidiaries or
any of the Stockholders, all underground tanks and other underground storage
facilities presently or previously located at any Real Property owned, leased,
operated or managed by the Company or any of the Subsidiaries or any of their
respective predecessors or any of their respective current or former
subsidiaries or any such tanks or facilities located at any Real Property while
such Real Property was owned, leased, operated, or managed by the Company or any
of the Subsidiaries or any of their respective predecessors or any of their
respective current or former subsidiaries are listed together with the capacity
and contents (former and current) of each such tank or facility in SCHEDULE
2.20. To the Knowledge of the Company, any of the Subsidiaries or any of the
Stockholders, none of such underground tanks or facilities is leaking or has
ever leaked, and none of the Company, any of the Subsidiaries or any of their
respective current or former subsidiaries holds any responsibility or Liability
for any underground tanks or underground facilities at any other location.
(f) To the Knowledge of the Company, any of the Subsidiaries or
any of the Stockholders, all hazardous waste has been removed from all Real
Property of the Company and each of the Subsidiaries and each of their
respective predecessors and each of their respective current and former
subsidiaries in Material compliance with applicable Environmental Laws.
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<PAGE>
(g) To the Knowledge of the Company, any of the Subsidiaries or
any of the Stockholders, the Company, each of the Subsidiaries and each of their
respective predecessors or any of their respective current or former
subsidiaries has complied with all applicable reporting requirements under all
Environmental Laws concerning the disposal or release of Hazardous Substances
and none of the Company, any of the Subsidiaries or any of their respective
predecessors or any of their respective current or former subsidiaries has made
any such reports concerning any Real Property of the Company or any of the
Subsidiaries or concerning the operations or activities of the Company, any of
the Subsidiaries or any of their respective predecessors or any of their
respective current or former subsidiaries.
(h) To the Knowledge of the Company, any of the Subsidiaries or
any of the Stockholders, no building or other Improvement or any Real Property
owned, leased, operated or managed by the Company or any of the Subsidiaries
contains any asbestos-containing materials.
(i) To the Knowledge of the Company, any of the Subsidiaries or
any of the Stockholders, without limiting the generality of any of the
foregoing, (i) all on-site and off-site locations where the Company, any of the
Subsidiaries or any of their respective predecessors or any of their respective
current or former subsidiaries has disposed or arranged for the disposal of
Hazardous Substances are identified in SCHEDULE 2.20, (ii) none of the on-site
or off-site locations identified in SCHEDULE 2.20 is listed on any federal,
state or local government lists of abandoned disposal sites or sites where
Hazardous Substances have or may have occurred, and (iii) no polychlorinated
biphenyls ("PCB's") are used or stored on or in any real property owned, leased,
operated or managed by the Company, any of the subsidiaries or any of their
respective predecessors or any of their respective current or former
Subsidiaries, except in Material compliance with applicable Environmental Laws.
(j) SCHEDULE 2.20 contains a correct and complete list of all
environmental site assessments and other studies relating to the investigation
of the possibility of the presence or existence of any Environmental Matter with
respect to the Company, any of the Subsidiaries, the Business, any assets owned,
leased, operated or managed by the Company, any of the Subsidiaries or any of
their respective predecessors or any of their respective current or former
subsidiaries, and the Company has previously delivered to Purchaser a correct
and complete copy of each such assessment and study.
2.21 LITIGATION AND CLAIMS. Except as disclosed on SCHEDULE 2.21:
(a) There is no Litigation pending or, to the Knowledge of the
Company, any of the Subsidiaries or any of the Stockholders, threatened and none
of the Company, any of the Subsidiaries or any of the Stockholders has any
Knowledge of any basis for any such Litigation or any facts or the occurrence of
any event which might give rise to any Litigation;
(b) No Litigation has been pending during the three (3) years
prior to the date hereof that, individually or in the aggregate resulted in an
uninsured Loss in excess of $150,000 or granted any injunctive relief against
the Company or any of the Subsidiaries.
(c) Except as disclosed on SCHEDULE 2.21, neither the Company
nor any of the Subsidiaries has been advised by any attorney representing it
that there are any "loss contingencies" (as defined in Statement of Financial
Accounting Standards No. 5 issued by the Financial Accounting Standards Board in
March 1975 ("FASB 5"), which would be required by FASB 5 to be disclosed or
accrued in financial statements of the Company or any of the Subsidiaries, were
such financial statements prepared as of the date hereof.
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2.22 BENEFIT PLANS.
(a) SCHEDULE 2.22 lists every Employee Benefit Plan of the Company
and each of the Subsidiaries. On or after September 26, 1980, none of the
Company, any of the Subsidiaries or any entity aggregated with the Company or
any of the Subsidiaries under Code Section 414 (for purposes of this Section,
an "ERISA Affiliate") has had an "obligation to contribute" (as defined in
ERISA Section 4212) to a "multiemployer plan" (as defined in ERISA Sections
4001(a)(3) and (3)(37)(A)). No Employee Benefit Plan is or has been a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) The Employee Benefit Plans listed on SCHEDULE 2.22 have been
or will be made available to Purchaser for review, including correct and
complete copies of: (i) all trust agreements or other funding arrangements
for such Employee Benefit Plans (including insurance contracts), and all
amendments thereto, (ii) with respect to any such Employee Benefit Plans or
amendments, all determination letters, rulings, opinion letters, information
letters, or advisory opinions issued by the United States Internal Revenue
Service, the United States Department of Labor, or the Pension Benefit
Guaranty Corporation after December 31, 1974, (iii) annual reports or
returns, audited or unaudited Financial Statements, actuarial valuations and
reports, and summary annual reports prepared for any Employee Benefit Plan
with respect to the most recent three plan years, and (iv) the most recent
summary plan descriptions and any material modifications thereto.
(c) Except as disclosed in SCHEDULE 2.22, all the Employee
Benefit Plans and the related trusts subject to ERISA comply in all Material
respects with and have been administered in compliance in all Materials respects
with, (i) the applicable provisions of ERISA, (ii) all applicable provisions of
the Code relating to qualification and Tax exemption under Code Sections 401(a)
and 501(a) or otherwise applicable to secure intended Tax consequences, (iii)
all applicable state or federal securities Laws, and (iv) all other applicable
Laws and collective bargaining agreements, and neither the Company nor any of
the Subsidiaries has received any notice from any Governmental Authority
questioning or challenging such compliance. All available determination letters
and required registrations under federal and state securities Laws ("Permits")
for the Employee Benefit Plans have been obtained, including, but not limited
to, timely determination letters on the qualification of the ERISA Plans and Tax
exemption of related trusts, as applicable under the Code, and all such Permits
continue in full force and effect. No event has occurred which will or could
reasonably be expected to give rise to disqualification of any such plan or loss
of intended Tax consequences under the Code or to any Tax under Section 511 of
the Code.
(d) Except as disclosed in SCHEDULE 2.22, no oral or written
representation or communication with respect to any aspect of the Employee
Benefit Plans has been made to employees of the Company or any of the
Subsidiaries prior to the date hereof that is not in accordance with the written
or otherwise preexisting terms and provisions of such plans. None of the
Company, any of the Subsidiaries or any administrator or fiduciary of any
Employee Benefit Plan (or any agent of any of the foregoing) has engaged in any
transaction, or acted or failed to act in any manner that could subject the
Company, any of the Subsidiaries or Purchaser to any direct or indirect Material
Liability (by indemnity or otherwise) for breach of any fiduciary, co-fiduciary
or other duty under ERISA. There are no unresolved claims or disputes under the
terms of, or in connection with, the Employee Benefit Plans other than claims
for benefits which are payable in the ordinary course and no Litigation has been
commenced with respect to any Employee Benefit Plan.
(e) Except as disclosed in SCHEDULE 2.22, all Employee Benefit
Plan documents and annual reports or returns, audited or unaudited financial
statements, actuarial valuations, summary annual reports, and summary plan
descriptions issued with respect to the Employee Benefit Plans are
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correct and complete in all Material respects, have been timely filed with
the IRS and the United States Department of Labor, have been timely
distributed to participants in the Employee Benefit Plans, and there have
been no changes in the information set forth therein.
(f) No "party in interest" (as defined in Section 3(14) of ERISA)
or "disqualified person" (as defined in Code Section 4975) of any Employee
Benefit Plan has engaged in any Material nonexempt "prohibited transaction"
(described in Code Section 4975 or ERISA Section 406). Except as disclosed
in SCHEDULE 2.22, there has been no (i) "reportable event" (as defined in
Section 4043 of ERISA), or event described in Sections 4041, 4042, 4062
(including ERISA Section 4062(e)), 4064, 4069 or 4063 of ERISA, or (ii)
termination or partial termination, withdrawal or partial withdrawal with
respect to any of the ERISA Plans which the Company or any of the
Subsidiaries maintains or contributes to or has maintained or contributed to.
Except as disclosed in SCHEDULE 2.22, neither the Company nor any of the
Subsidiaries has incurred any liability under Title IV of ERISA, including
any Liability that could arise under Title IV of ERISA as a result of the
Company's or any of the Subsidiaries' membership in a "controlled group" as
defined in ERISA Sections 4001(a)(14) and 4001(b)(1).
(g) Except as disclosed in SCHEDULE 2.22, for any ERISA Plan that
is an employee pension benefit plan as defined in ERISA Section 3(2) ("ERISA
Pension Plan"), the fair market value of such Plan's assets equals or exceeds
the present value of all benefits (whether vested or not) accrued to date by
all present or former participants in such ERISA Pension Plan. For this
purpose the assumptions prescribed by the Pension Benefit Guaranty
Corporation for valuing plan assets or liabilities upon plan termination
shall be applied and the term "benefits" shall include the value of all
benefits, rights and features protected under Code Section 411(d)(6) or its
successors and any ancillary benefits (including disability, shutdown, early
retirement and welfare benefits) provided under any such employee pension
benefit plan and all "benefit liabilities" as defined in ERISA Section
4001(a)(16). Since the date of the most recent actuarial valuation, there
has been (i) no Material change in the financial position of an ERISA Pension
Plan, (ii) no change in the actuarial assumptions with respect to any ERISA
Pension Plan, and (iii) no increase in benefits under any ERISA Pension Plan
as a result of ERISA Pension Plan amendments or changes in any applicable
regulation which is reasonably likely to have, individually or in the
aggregate, a Material effect on the funding status of such ERISA Pension
Plan. All contributions with respect to an Employee Benefit Plan of the
Company or of an ERISA Affiliate that is subject to Code Section 412 or ERISA
Section 302 have been, or will be, timely made and there is no Lien or
expected to be a Lien under Code Section 412(n) or ERISA Section 302(f) or
Tax under Code Section 4971. No ERISA Pension Plan of the Company or any of
the Subsidiaries or of an ERISA Affiliate has a "liquidity shortfall" as
defined in Code Section 412(m)(5). No event described in Code Section
401(a)(29) has occurred or can reasonably be expected to occur with respect
to the Company or its ERISA Affiliates. All premiums required to be paid
under ERISA Section 4006 have been paid by the Company and each of the
Subsidiaries and by any Person aggregated with the Company or any of the
Subsidiaries under ERISA Sections 4001(a)(14) and 4001(b)(1).
(h) Neither the Company nor any of the Subsidiaries has, or
maintains, an Employee Benefit Plan providing welfare benefits (as defined in
ERISA Section 3(1)) to employees after retirement or other separation of service
except to the extent required under Part 6 of Title I of ERISA or Code Section
4980B or their successors. No Material Tax under Code Sections 4980B or 5000
has been incurred with respect to any Employee Benefit Plan and no circumstances
exist which could reasonably be expected to give rise to such Taxes.
(i) Except as disclosed on SCHEDULE 2.22, neither the execution
or delivery of this Agreement or the Other Agreements nor the consummation of
the transactions contemplated by this
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Agreement will (1) entitle any current or former employee of the Company or
any of the Subsidiaries to severance pay, unemployment compensation or any
payment contingent upon a change in control or ownership of the Company or
any of the Subsidiaries, or (2) accelerate the time of payment or vesting, or
increase the amount, of any compensation due to any such employee or former
employee.
(j) Except as disclosed on SCHEDULE 2.22, all individuals
participating in (or eligible to participate in) any Employee Benefit Plan
maintained (or contributed to) by the Company or any of the Subsidiaries are
common-law employees.
2.23 CONTRACTS.
(a) DESCRIPTION.
(i) REAL PROPERTY. SCHEDULE 2.23(a)(i) is a list or brief
description of all Material Contracts affecting or relating to the Real
Property, including, without limitation, Contracts evidencing Material Liens
(including those referred to in SCHEDULE 2.11).
(ii) PERSONAL PROPERTY. SCHEDULE 2.23(a)(ii) is a list of all
Contracts affecting or relating to the Personal Property, including, without
limitation, Contracts evidencing Liens (including those referred to in SCHEDULE
2.11) (other than Contracts affecting rights in the Personal Property each of
which does not involve the payment by the Company or any of the Subsidiaries of
more than $25,000 per year).
(iii) PURCHASE ORDERS -- NON-CAPITAL ASSETS. SCHEDULE
2.23(a)(iii) is a list of all outstanding Contracts of the Company or any of the
Subsidiaries or that relate to the Business, for the acquisition or sale of
goods, assets or services (other than purchase orders or other commitments for
the acquisition of capital assets), all of which were executed in the ordinary
course of business consistent with past practice of the Company or any of the
Subsidiaries (other than purchase orders and other commitments which do not
exceed $25,000 each).
(iv) PURCHASE ORDERS -- CAPITAL ASSETS. SCHEDULE 2.23(a)(iv) is
a list of all outstanding Contracts of the Company or any of the Subsidiaries or
that relate to the Business, for the acquisition of capital assets and that were
executed in the ordinary course of business consistent with past practice of the
Company or any of the Subsidiaries (other than purchase orders and other
commitments which do not exceed $25,000 each).
(v) SALES. SCHEDULE 2.23(a)(v) is a list or brief description
of all Contracts of the Company or any of the Subsidiaries or that relate to the
Business, for the sale of products or the performance of services by the Company
or any of the Subsidiaries and which exceed $5,000 each.
(vi) EMPLOYMENT; OTHER AFFILIATE CONTRACTS. SCHEDULE
2.23(a)(vi) contains a list of all Material Contracts of the Company or any of
the Subsidiaries or that relate to the Business, with any employee, officer,
agent, consultant, distributor, dealer or Affiliate of the Company or any of the
Subsidiaries (other than those entered into in the ordinary course of business
consistent with past practice that are immediately terminable at will by the
Company or any of the Subsidiaries, as the case may be, without any Liability).
(vii) SALES REPRESENTATIVES. SCHEDULE 2.23(a)(vii) is a list of
all Material Contracts of the Company or any of the Subsidiaries or that relate
to the Business, with any agent, broker,
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sales representative of, or any Person in a similar representative capacity
for, the Company or any of the Subsidiaries (other than those entered into in
the ordinary course of business consistent with past practice that are
terminable within sixty (60) days by the Company or any of the Subsidiaries,
as the case may be, without Liability).
(viii) POWERS OF ATTORNEY. SCHEDULE 2.23(a)(viii) is a list of
all powers of attorney given by the Company or any of the Subsidiaries, whether
limited or general, to any Person continuing in effect.
(ix) PROGRAMMING, NETWORK AFFILIATION, OPERATING AND CABLE
RETRANSMISSION AGREEMENTS. SCHEDULE 2.23(a)(ix) is a list of all network
affiliation agreements, operating agreements, cable retransmission agreements
and all programming agreements of the Company or that relate to the Business
(correct and complete copies of which previously have been delivered to
Purchaser), including for each of those agreements the amounts and availability
dates of programming and the dollar amount and schedule of payments thereunder.
(x) BARTER AND TRADE AGREEMENTS. SCHEDULE 2.23(a)(x) is a list
of all "barter" and "trade" agreements of the Company or any of the Subsidiaries
or that relate to the Business (correct and complete copies of which previously
have been delivered to Purchaser) and includes an estimate of the positive or
negative trade balances associated with each such agreement.
(xi) ANY OTHER CONTRACTS. SCHEDULE 2.23(a)(xi) is a list or
brief description of any other Contracts of the Company or any of the
Subsidiaries or that relate to the Business and that: (A) payments provided for
or actually made thereunder by or to the Company or any of the Subsidiaries in
any calendar year exceed $25,000, (B) require performance by the Company or any
of the Subsidiaries of any obligation for a period of time extending beyond six
(6) months from the Closing Date or which is not terminable by the Company or
any of the Subsidiaries without penalty upon sixty (60) days or less notice, (C)
evidence, create, guarantee or service indebtedness of the Company or any of the
Subsidiaries, (D) establish or provide for any joint venture, partnership or
similar arrangement involving any of the Stockholders, the Company or any of the
Subsidiaries, or (E) guarantee or endorse the Liabilities of any other Person.
The lists in all Schedules referred to above are correct and complete as of
the date hereof unless otherwise noted thereon.
(b) COPIES. Correct and complete copies of all the written
Contracts, and correct and complete descriptions of all oral Contracts, referred
to in Section 2.23(a) have been delivered to Purchaser on or before the date
hereof.
(c) NO DEFAULT. None of the Company, any of the Subsidiaries
or, to the Knowledge of the Company, any of the Subsidiaries or any of the
Stockholders, any other party is in Default under any of the Contracts or any
Liens referred to in Section 2.23(a) and, to the Knowledge of the Company, any
of the Subsidiaries or any of the Stockholders, there is no basis for any claim
of Material Default under any of the foregoing.
(d) ASSURANCES. Each of the Contracts referred to in this
Section 2.23 is in full force and effect and constitutes a valid, legal and
binding agreement of the Company or the Subsidiaries party thereto and, to the
Knowledge of the Company, any of the Subsidiaries or any of the Stockholders,
the other parties thereto, enforceable in accordance with its terms except for
bankruptcy, insolvency,
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fraudulent conveyance, reorganization, moratorium or other Laws affecting
creditors' rights generally, or general equitable principles (regardless of
whether considered in a proceeding in equity or at law) or by an implied
covenant of good faith and fair dealing, and as otherwise set forth in
SCHEDULE 2.23. Neither the Company nor any of the Subsidiaries is a party
to or bound by any Contract or Contracts that, either separately or in the
aggregate has or will have a Material Adverse Effect with respect to the
Company, any of the Subsidiaries, their respective assets, or the Business.
The continuation, validity and effectiveness of each of the Contracts
referred to in this Section 2.23 will not be affected in any way by the
consummation of the transactions contemplated by this Agreement.
2.24 SUPPLIERS AND CUSTOMERS. SCHEDULE 2.24 sets forth each supplier
to whom payments were made that equaled or exceeded five percent (5%) of the
Company's and each of the Subsidiaries' aggregate operating expenses for the
fiscal year ended December 28, 1997 (the "Large Suppliers"). SCHEDULE 2.24
sets forth each customer or group of related customers from whom payments
were received that equaled or exceeded five percent (5%) of the Company's and
each of the Subsidiaries' aggregate gross sales for the fiscal year ended
December 28, 1997 (the "Large Customers"). Except as reflected in SCHEDULE
2.24, no Large Supplier is a sole source of supply of any good or service to
the Company or any of the Subsidiaries. To the Knowledge of the Company, any
of the Subsidiaries or any of the Stockholders, the relationships of the
Company and each of the Subsidiaries with its Large Suppliers and Large
Customers are good commercial working relationships and, except as set forth
on SCHEDULE 2.24, neither (i) any of the Large Suppliers or any of the Large
Customers, nor (ii) any Large Supplier who at any time during 1997 was or now
is the sole source of supply of any good or service, has terminated, or, to
the Knowledge of the Company, any of the Subsidiaries or any of the
Stockholders, made any threat reasonably likely to be acted upon to
terminate, its relationship with the Company or any of the Subsidiaries or
has during the last twelve (12) months Materially decreased or Materially
limited, or, to the Knowledge of the Company, any of the Subsidiaries or any
of the Stockholders, made any threat reasonably likely to be acted upon to
Materially decrease or Materially limit, its services, supplies or materials
to the Company or any of the Subsidiaries or its usage or purchase of the
goods or services of the Company or any of the Subsidiaries, as the case may
be. None of the Company, any of the Subsidiaries or any of the Stockholders
has any Knowledge and belief that any of the Large Suppliers or any of the
Large Customers intends to terminate or otherwise modify adversely to the
Company or any of the Subsidiaries its relationship with the Company or any
of the Subsidiaries or to decrease or limit its services, supplies or
materials to the Company or any of the Subsidiaries or its usage or purchase
of the goods or services of the Company or any of the Subsidiaries, as the
case may be, and the acquisition of the Stock by Purchaser will not, to the
Knowledge of the Company, any of the Subsidiaries or any of the Stockholders
adversely affect the relationship of the Business or of the Company or any of
the Subsidiaries with any of the Large Suppliers or any of the Large
Customers.
2.25 LABOR MATTERS. SCHEDULE 2.25 contains a correct and complete list
of all employees of the Company and each of the Subsidiaries whose direct
annual compensation exceeds $50,000. Except as disclosed on SCHEDULE 2.25,
the employment of all employees of the Company and each of the Subsidiaries
is terminable at will by the Company and each of the Subsidiaries,
respectively, without any penalty or severance obligation incurred by the
Company or any of the Subsidiaries. Except as set forth on SCHEDULE 2.25 and
other than in the ordinary course of business consistent with past practices,
neither the Company nor any of the Subsidiaries will owe any amounts to any
of its employees as of the Closing Date, including, without limitation, any
amounts incurred for wages, bonuses, vacation pay, sick leave or any
severance obligations other than amounts owed with respect to the then
current pay period. Except as and to the extent set forth in SCHEDULE 2.25,
(i) neither the Company nor any of the Subsidiaries is a party to any union
agreement or collective bargaining agreement or work rules or practices
agreed to with any labor organization or employee association applicable to
any employees of the Company or any of
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the Subsidiaries and, to the Knowledge of the Company, any of the
Subsidiaries or any of the Stockholders, no attempt to organize any of the
employees of the Business has been made, proposed or threatened in the past
three years, (ii) neither the Company nor any of the Subsidiaries is, or
within the past three years has been, subject to any Equal Employment
Opportunity Commission charges or other claims of employment discrimination
made against it, (iii) no Wage and Hour Department investigations have been
made in the past 3 years of the Company or any of the Subsidiaries, (iv) no
labor strike, dispute, slowdown, stoppage or lockout is pending or, to the
Knowledge of the Company, any of the Subsidiaries or any of the Stockholders,
threatened against or affecting the Company, any of the Subsidiaries, their
respective assets or the Business and during the past five (5) years there
has not been any such action, (v) no unfair labor practice charge or
complaint against the Company or any of the Subsidiaries is pending or, to
the Knowledge of the Company, any of the Subsidiaries or any of the
Stockholders, threatened before the National Labor Relations Board or any
similar Governmental Authority, and (vi) neither the Company nor any of the
Subsidiaries has received any formal notice (other than as set forth in
Section 6.07 hereof) that any of the employees listed on Schedule 2.25 will
terminate or contemplates terminating his or her employment currently or at
any time within sixty (60) days after the Closing Date or will otherwise not
be available to the Company or any of the Subsidiaries. Since the enactment
of the Worker Adjustment and Retraining Notification Act (the "WARN Act"),
neither the Company nor any of the Subsidiaries has effectuated (a) a "plant
closing" (as defined in the WARN Act) affecting any site of employment or one
or more facilities or operating units within any site of employment or
facility of the Company or any of the Subsidiaries; or (b) a "mass layoff"
(as defined in the WARN Act) affecting any site of employment or facility of
the Company or any of the Subsidiaries; nor has either the Company or any of
the Subsidiaries been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar state or local Law. Except as set forth in SCHEDULE 2.25, none of
the Company's or any of the Subsidiaries' employees has suffered an
"employment loss" (as defined in the WARN Act) since six (6) months prior to
the date hereof.
2.26 BROKERS AND FINDERS. Except as set forth on SCHEDULE 2.26, no
finder or any agent, broker or other Person acting pursuant to authority of
the Company, any of the Subsidiaries or any of the Stockholders is entitled
to any commission or finder's fee in connection with the transactions
contemplated by this Agreement.
2.27 INTERESTED TRANSACTIONS. Except as set forth in SCHEDULE 2.27,
neither the Company nor any of the Subsidiaries is a party to any Contract or
other transaction with any Affiliate of the Company or any of the
Subsidiaries, any Related Party of any Affiliate of the Company or any of the
Subsidiaries (other than as a stockholder or employee of the Company or any
of the Subsidiaries), or any Person in which any of the foregoing
(individually or in the aggregate) beneficially or legally owns, directly or
indirectly, five percent (5%) or more of the equity or voting interests
(other than, in each case, Contracts or transactions between or among the
Company and its Subsidiaries). Each of such Contracts and other transactions
described in the preceding sentence was negotiated on an arm's length basis,
contains pricing terms that reflected fair market value at the time entered
into and otherwise contains terms and conditions comparable to those
customarily contained in similar transactions between unrelated parties.
Except as described in SCHEDULE 2.27 and other than the Stockholders and
their Affiliates, none of the Persons described in the first sentence of this
Section 2.27 owns, or during the last three (3) years has owned, directly or
indirectly, beneficially or legally, (individually or in the aggregate) five
percent (5%) or more of the equity or voting interests of any Person that
competes with the Company, any of the Subsidiaries or the Business.
2.28 OFFICERS, DIRECTORS AND BANK ACCOUNTS. SCHEDULE 2.28 lists (i) the
names of all officers and directors of the Company and each of the Subsidiaries
and (ii) the name and location of each
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bank or other institution in which the Company or any of the Subsidiaries has
any deposit account or safe deposit box in which the Company or any of the
Subsidiaries has any interest or access, all account numbers and names of all
Persons authorized to draw thereon or to have access thereto.
2.29 REPORTS AND FINANCIAL STATEMENTS. The Company has filed all
reports required to be filed with the Securities and Exchange Commission
since January 1, 1997 (collectively, the "SEC Reports"). None of such SEC
Reports, as of their respective dates or as of the date of any amendment or
supplement thereto, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading . Each of the financial statements (including
the related notes) included in the SEC Reports presents fairly, in all
Material respects, the consolidated financial position and consolidated
results of operations and cash flows of the Company and its subsidiaries as
of the respective dates or for the respective periods set forth therein, all
in conformity with GAAP consistently applied during the periods involved,
except as otherwise noted therein, and subject, in the case of the unaudited
interim financial statements, to normal year-end adjustments and any other
adjustments described therein. All of such SEC Reports, as of their
respective dates, complied in all material respects with the requirements of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
2.30 STATEMENTS TRUE AND CORRECT. No representation or warranty made
by the Company or the Stockholders, nor any statement, certificate or
instrument furnished or to be furnished to Purchaser pursuant to this
Agreement, the Other Agreements or any other document, agreement or
instrument referred to herein or therein, including, without limitation, the
Financial Statements, contains or will contain any untrue statement of fact
or omits or will omit to state a Material fact necessary to make the
statements contained therein not misleading in light of the circumstances
under which they were made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company and the
Stockholders that:
3.01 ORGANIZATION. Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Georgia, with
the corporate power and authority to carry on its business and to own, lease
and operate its assets.
3.02 CAPACITY AND VALIDITY. Purchaser has the full corporate power and
authority necessary to enter into and perform its obligations under this
Agreement and the Other Agreements to which it is a party and to consummate
the transactions contemplated hereby and thereby. The execution, delivery
and performance of this Agreement and the Other Agreements will have been
approved by all necessary action of the Board of Directors and stockholders
of Purchaser on or before Closing. This Agreement has been, and the Other
Agreements will be when executed and delivered, duly executed and delivered
by duly authorized officers of Purchaser, and the Agreement and each of the
Other Agreements constitutes, or will constitute when executed and delivered,
the legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or general equitable principles (regardless of whether considered
in a proceeding in equity or at law) or by an implied covenant of good faith
and fair dealing.
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3.03 NO CONFLICT. Except as disclosed on SCHEDULE 3.03, neither the
execution, delivery and performance of this Agreement and the Other
Agreements to which it is a party by Purchaser nor the consummation of the
transactions contemplated hereby or thereby, will (i) conflict with or result
in a violation, contravention or breach of any of the terms, conditions or
provisions of the Articles of Incorporation, as amended, or By-laws, as
amended, of Purchaser, (ii) result in a Default under, or require the consent
or approval of any party to, Contract or License of Purchaser, (iii) result
in the violation of any Law or Order, or (iv) result in the creation or
imposition of any Lien.
3.04 BROKERS AND FINDERS. Except as set forth in SCHEDULE 3.04, no
finder or any agent, broker or other Person acting pursuant to authority of
Purchaser is entitled to any commission or finder's fee in connection with the
transactions contemplated by this Agreement.
3.05 INVESTMENT REPRESENTATION. Purchaser is purchasing the Stock for
investment and is not acquiring the Stock with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act of 1933, as amended.
3.06 QUALIFICATION OF PURCHASER. Purchaser is fully qualified to assume
control and operation of the Stations and, to the best of Purchaser's knowledge
and belief, there exists no reason for the FCC to refuse to consent to the
assignment of the broadcast Licenses to Purchaser.
3.07 FINANCING. Purchaser has all necessary financial resources or has
secured a binding commitment for all financing necessary for Purchaser to
consummate the transactions contemplated by this Agreement.
3.08 STATEMENTS TRUE AND CORRECT. No representation or warranty made by
Purchaser, nor any statement, certificate or instrument furnished or to be
furnished to the Company or the Stockholders pursuant to this Agreement, the
Other Agreements or any other document, agreement or instrument referred to
herein or therein, contains or will contain any untrue statement of fact or
omits or will omit to state a fact necessary to make the statements contained
therein not misleading.
ARTICLE IV
COVENANTS AND ADDITIONAL AGREEMENTS OF THE COMPANY, THE
STOCKHOLDERS AND PURCHASER
4.01 CONDUCT OF BUSINESS. Prior to the Closing Date, except with the
prior written consent of Purchaser and except as necessary to effect the
transactions contemplated in this Agreement, the Company shall, and the
Stockholders shall cause the Company and each of the Subsidiaries to:
(a) conduct the Business in substantially the same manner as
presently being conducted, and refrain from entering into any transaction or
Contract other than in the ordinary course of business consistent with past
practice, except as otherwise contemplated by this Agreement;
(b) confer on a regular and frequent basis with Purchaser to
report Material operational matters and to report the general status of ongoing
operations;
(c) notify Purchaser of any unexpected emergency or other change
in the normal course of the Business or the operation of the assets of the
Company or any of the Subsidiaries, and of any Litigation (or communications
indicating that the same may be contemplated), affecting the
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Company, any of the Subsidiaries, the Business or any Material assets, and
keep Purchaser fully informed of such events and permit its representatives
prompt access to all materials prepared in connection therewith in each case
where such emergency, change, Litigation or other event could cause a
Material Adverse Effect;
(d) except in the ordinary course of business consistent with
past practice, not make any Material capital expenditure;
(e) not take any action, or omit to take any action, that would
cause the representations and warranties contained in Article II hereof to be
incorrect or incomplete in any Material respect;
(f) promptly notify Purchaser in writing of any Material Adverse
Change with respect to the Company, the Business or any of the Subsidiaries, or
any condition or event which threatens to result in a Material Adverse Change
with respect to the Company, the Business or any of the Subsidiaries;
(g) notwithstanding the $1,000,000 threshold contained in the
definition of Material Adverse Change in Article IX, use all reasonable efforts
to promptly remedy any adverse change, condition or event that causes or is
reasonably likely to cause any of the Stations to be or go off the air; and
(h) not make any agreement or commitment which will result in or
cause to occur a Default of any of the items contained in paragraphs (a)
through (g) above.
Notwithstanding any of the foregoing provisions of this Section 4.01, prior to
the Closing, control of the operation of the Stations shall remain exclusively
with the Company, any of the Subsidiaries and the Stockholders.
4.02 RIGHT OF INSPECTION; ACCESS. In order to allow Purchaser to
conduct its due diligence investigation, including, without limitation,
environmental due diligence, the Company shall give to Purchaser and its
designees, during normal working hours, full and free access to all of its
and each of the Subsidiaries' respective assets, Contracts, reports and other
records and shall furnish to Purchaser and its designees all additional
financial, legal and other information with respect to the Company, any of
the Subsidiaries, their respective assets and the Business that Purchaser may
reasonably request. The Company shall also allow and arrange for Purchaser
and its designees free and full access and opportunity, during normal
business hours, to consult and meet with the officers, directors, employees,
attorneys, accountants and other agents of the Company and each of the
Subsidiaries. The Company shall instruct such individuals to cooperate fully
with Purchaser and its designees. Purchaser and its designees shall have the
right to make copies of any of the records referred to above. In addition to
the foregoing, the Company and the Stockholders shall provide to Purchaser
such evidence as Purchaser reasonably requires to verify the accuracy of the
representation and warranty contained in paragraph (m) of Section 2.10.
Within thirty (30) days after the date of this Agreement, the Stockholders
shall provide to Purchaser a letter from Arthur Andersen in form and
substance reasonably satisfactory to Purchaser and its counsel that verifies
that since April 20, 1995 there has not been an ownership change (within the
meaning of Section 382 of the Code) with respect to the Company. Further, at
Closing, the Stockholders shall provide to Purchaser an updated letter from
Arthur Andersen bringing current to the Closing Date the letter provided
pursuant to the foregoing sentence. Purchaser agrees to indemnify against
and hold the Company, the Subsidiaries and the Stockholders harmless from any
claim for Liability, costs, expenses (including reasonable attorneys' fees
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actually incurred), damages or injuries arising out of or resulting from the
inspection of the Company by Purchaser or its agents.
4.03 OTHER OFFERS AND EXCLUSIVE DEALING. Unless and until this
Agreement is terminated prior to Closing pursuant to Section 8.01, the
Company and each of the Stockholders shall, and shall cause each of the
Subsidiaries to, deal exclusively with Purchaser with respect to the sale of
the Stock or any assets or properties of the Company or any of the
Subsidiaries. In addition, unless and until this Agreement is terminated
prior to Closing pursuant to Section 8.01, neither the Company nor any of the
Stockholders, acting in any capacity, shall, and the Company and the
Stockholders shall direct each of the Subsidiaries and the officers,
directors, limited partners, general partners (as applicable), financial
advisors, accountants and counsel of the Company, any of the Subsidiaries and
the Stockholders not to, either directly or indirectly, through the Company,
any of the Subsidiaries, any officer, director, employee, agent or otherwise,
(a) solicit, initiate or encourage submission of proposals or offers from any
Person relating to any purchase of the Stock, or any merger, sale of
substantial assets, or purchase of securities or similar transaction
involving the Company or any of the Subsidiaries, (b) participate in any
discussions or negotiations regarding, or, except as required by a legal or
judicial process, furnish to any other Person any information with respect
to, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other Person to
purchase the assets of the Company or any of the Subsidiaries, or engage in a
merger, purchase of substantial assets or purchase of stock or similar
transaction involving the Company or any of the Subsidiaries, or (c) approve
or undertake any such transaction. If, notwithstanding the foregoing, the
Company, the Stockholders or any of their respective shareholders, directors,
partners, officers, employees or agents shall receive any written proposal or
inquiry regarding any such transaction, the Company and the Stockholders
shall, and shall cause any of the Subsidiaries to, promptly communicate to
Purchaser the terms of any such proposal or offer upon Knowledge or receipt
of such written proposal or offer.
4.04 CONFIDENTIALITY. For a period of one (1) year from and after the
date hereof, each of Purchaser, the Company and the Stockholders agrees that
it will not, and will use reasonable efforts to ensure that none of its
representatives or Affiliates will, use in the conduct of its business
(except as contemplated by this Agreement), or disclose to or file with any
other Person (other than financing sources, financial advisors, accountants
and attorneys for the foregoing who will be informed of the confidential
nature of such information and who have a need to know such information), (a)
any confidential or non-public information relating to the other parties to
this Agreement or (b) the existence of this Agreement or the fact of the
transactions contemplated hereby, except (i) for a disclosure that is
required by Law or by a Governmental Authority or is reasonably believed to
be so required, including, without limitation, disclosures to the FCC and the
Department of Justice for purposes of obtaining consents to the transactions
contemplated hereby and disclosures to the Securities and Exchange Commission
and related public disclosures (in connection with public offerings or
otherwise); (ii) information that is ascertainable or obtained from public or
published information; (iii) information received from a Third Party not
known to the disclosing party to be under an obligation to keep such
information confidential; (iv) information independently developed by the
disclosing party; or (v) information disclosed to or filed with any Persons
necessary to obtaining the consents or the equity and debt financing relating
to the transactions contemplated by this Agreement. Notwithstanding the
foregoing, (i) neither Purchaser nor its assignees, in the course of any
investigation it shall deem necessary and desirable in connection with the
transactions contemplated by this Agreement, shall be prohibited from
discussing the Company, any of the Subsidiaries, their respective assets and
the Business with others having business dealings with the Company or any of
the Subsidiaries, and (ii) the foregoing provisions of this Section 4.04
shall not apply to Purchaser or any of its representatives or Affiliates
after consummation of the transactions contemplated hereby at the Closing
with respect to information relating to the Company or its Subsidiaries. If
the transaction
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contemplated by this Agreement is not consummated, each party will return or
destroy as much of such written information as the party furnishing such
information may reasonably request.
4.05 CONSENTS AND APPROVALS. The Company and the Stockholders shall
obtain the waiver, consent and approval of all Persons whose waiver, consent
or approval (i) is required in order to consummate the transactions
contemplated by this Agreement, or (ii) is required by any Material Contract,
Order, Law or License to which the Company, any of the Subsidiaries or any of
the Stockholders is a party or subject on the Closing Date, and Purchaser
shall cooperate with the Company and the Stockholders in connection
therewith. All written waivers, consents and approvals obtained by the
Company and the Stockholders shall be produced at Closing in form and content
reasonably satisfactory to Purchaser.
4.06 SUPPLYING OF FINANCIAL STATEMENTS. The Stockholders shall cause
the Company and each of the Subsidiaries to deliver to Purchaser within
twenty (20) days following the end of each month true and complete copies of
all unaudited monthly financial statements of the Company and each of the
Subsidiaries for each calendar month ending subsequent to the date hereof and
prior to the Closing Date in the format historically utilized internally by
the Company and each of the Subsidiaries. In addition, the Stockholders
shall cause the Company and each of the Subsidiaries to deliver to Purchaser
as soon as practicable consolidated audited financial statements as of
December 28, 1997 and for the year then ended.
4.07 QUALIFICATION AND CORPORATE EXISTENCE. The Company shall deliver
to Purchaser (i) certificates of the Secretary of State of the State of
Delaware, dated within ten (10) days prior to the Closing Date, stating that
the Company and each of the Subsidiaries are corporations in good standing
under the laws of the State of Delaware, and have paid all applicable
franchise and other fees and Taxes due to such state and (ii) certificates of
the appropriate officials of the states and foreign jurisdictions listed on
SCHEDULE 2.03, each dated not more than ten (10) days prior to the Closing
Date, stating that each of the Company and each of the Subsidiaries is duly
qualified and in good standing to transact business as a foreign corporation
as stated in Section 2.03 in each such state and foreign jurisdiction and has
paid all applicable franchise and other fees and Taxes due to each such state
and foreign jurisdiction.
4.08 PUBLIC ANNOUNCEMENTS. Upon execution of this Agreement,
Purchaser and the Company shall each issue a press release and public
announcement regarding this Agreement and the transactions contemplated
hereby, each of which press releases shall be reasonably satisfactory to the
other party. Except as permitted by the foregoing sentence or Section 4.04,
none of Purchaser, the Company, or the Stockholders, nor any of their
representatives or Affiliates, shall make any public announcement with
respect to this Agreement or the transactions contemplated hereby without the
prior consent of the other parties hereto unless required by Law or judicial
process, in which case notification shall be given to the other parties
hereto prior to such disclosure.
4.09 CLOSING CONDITIONS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to take, or cause to be taken,
all commercially reasonable actions to consummate the transactions
contemplated by this Agreement and to satisfy the conditions precedent to
Closing set forth in Article VI and Article VII of this Agreement.
4.10 SUPPLEMENTS TO SCHEDULES. The Company and the Stockholders shall
from time to time after the date hereof, supplement or amend the Schedules
referred to in Article II with respect to any matter arising after the date
hereof which, if existing or occurring at the date hereof, would have been
required to be set forth or described in such Schedules. Purchaser may
unilaterally extend the Closing Date if necessary to allow Purchaser five (5)
business days to review such supplements to the Schedules prior to the
Closing Date. If, in Purchaser's reasonable determination, any such
supplements to the Schedules
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reveal any Material Adverse Change with respect to the Company, any of the
Subsidiaries or the Business, or any condition or event which threatens to
result in a Material Adverse Change with respect to the Company, any of the
Subsidiaries or the Business, Purchaser may, subject to the Stockholder's
right to cure any such Material Adverse Change or reduce the Purchase Price
in the manner contemplated herein, terminate this Agreement pursuant to
Section 8.01.
4.11 CERTAIN TAX MATTERS.
(a) Purchaser, on the one hand, and the Company and the
Stockholders, on the other hand, shall provide the other parties to this
Agreement, at the expense of the requesting party, with such assistance as
may reasonably be requested by any of them in connection with the preparation
of any Tax Return, any audit or other examination by any Governmental
Authority, or any judicial or administrative proceedings relating to any
Liability for Taxes, and each will retain and provide the requesting party
with any records or information that may be relevant to any of the foregoing.
(b) The Stockholders shall cause the Company to prepare and file
on or before the due date therefor (including any extensions thereof) all Tax
Returns and amendments thereto required to be filed by the Company on or before
the Closing Date, and shall cause the Company to pay, or cause to be paid, all
Taxes (including estimated taxes) due on such Tax Return or which are otherwise
required to be paid at any time prior to or during such period. Such Tax
Returns shall be prepared in accordance with the most recent Tax practices as to
elections and accounting method. Purchaser shall have a reasonable opportunity
to review all Material Tax Returns and amendments thereto prior to their filing.
(c) The Stockholders shall not, without the prior written
consent of Purchaser, file or cause to be filed, any amended Tax Return or claim
for Tax Refund with respect to the Company or any Subsidiary for any period
ending on or before the Closing Date, to the extent that any such filing may
affect the Tax Liability of Purchaser, any of its Affiliates, the Company or any
Subsidiary for any period ending after the Closing Date (including, but not
limited to, the imposition of Tax deficiencies, the reduction of asset basis or
cost adjustments, the lengthening of any amortization or depreciation periods,
the denial of amortization or depreciation deductions, or the reduction of loss
or credit carryforwards).
(d) To the extent the Company, any of the Subsidiaries or any of
the Stockholders have Knowledge of the commencement or scheduling of any Tax
audit, the assessment of any Tax, the issuance of any notice of Tax due or any
bill for collection of any Tax, or the commencement or scheduling of any other
administrative or judicial proceeding with respect to the determination,
assessment or collection of any Tax of the Company or any of the Subsidiaries,
the Company, the Subsidiaries or the Stockholders shall provide prompt notice to
Purchaser of such matter, setting forth information (to the extent Known)
describing any asserted Tax Liability in reasonable detail and including copies
of any notice or other documentation received from the applicable Tax authority
with respect to such matter.
(e) The Stockholders shall furnish Purchaser on or before the
Closing Date an affidavit, stating, under penalty of perjury, the transferor's
United States taxpayer identification number and that the transferor is not a
foreign person, pursuant to Section 1445(b)(2) of the Code.
(f) The Stockholders shall not agree to settle any Tax Liability
or compromise any claim with respect to Taxes which settlement or compromise may
affect the Liability
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for Taxes hereunder (or right to Tax benefit hereunder) of the Company or
Purchaser without Purchaser's prior written consent.
4.12 EXPENSES.
(a) Except as provided below, regardless of whether the
transactions contemplated by this Agreement are consummated, the Company
shall be responsible for all expenses and fees incurred by it and by the
Stockholders in connection with the transactions contemplated hereby and
Purchaser shall be responsible for all expenses and costs incurred by it in
connection with the transactions contemplated hereby.
(b) At the Closing the Stockholders shall pay out of the Purchase
Price all Taxes, if any, relating to the transfer of the Stock to Purchaser.
The Stockholders shall file all necessary documentation and Tax Returns
required to be filed by them with respect to such Taxes.
(c) The Company and Purchaser each shall pay one-half of the costs
and fees relating to the environmental report or reports required by Section
6.13.
(d) The Company and Purchaser shall each pay one-half of the
initial $45,000 filing fee associated with the pre-merger notifications and
reports required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
(e) The Company shall bear the costs and expenses associated with
delivery of the title documents described in Section 6.14.
(f) The Company and Purchaser shall each pay one-half of the
processing fees incident to the filing of the transfer of control
applications with the FCC; PROVIDED that none of the Company or any
Stockholder shall have any obligation to pay any such processing fees arising
out of the transactions contemplated by Section 4.16.
4.13 FURTHER ASSURANCES. At any time and from time to time after the
Closing, the Company and the Stockholders shall, at the request of Purchaser,
take any and all actions necessary to fulfill their respective obligations
hereunder, to put Purchaser in actual possession and control of the Stock and
execute and deliver such further instruments of conveyance, sale, transfer
and assignment, and take such other actions necessary or desirable to
effectuate, record or perfect the transfer of the Stock to Purchaser free and
clear of all Liens, to confirm the title of the Stock to Purchaser, to assist
Purchaser in exercising rights relating thereto, or to otherwise effectuate
or consummate any of the transactions contemplated hereby.
4.14 DELIVERY OF BOOKS AND RECORDS. The Company and the Stockholders
shall deliver to Purchaser at the Closing all original documents, books and
records pertaining to the Company, the Business and the Stock, including
without limitation, the original minute books and stock record books. The
Company and the Stockholders may retain copies of any of the foregoing for
their own use. Without limiting the generality of the foregoing, the Company
and the Stockholders shall deliver to Purchaser at the Closing all documents
and records relating to the Intellectual Property, including without
limitation, Certificates of Registration for all letters patent, trademarks
and service marks listed on SCHEDULE 2.14 and all such documents relating
thereto.
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4.15 FCC MATTERS.
(a) If not previously filed, then as promptly as practical
following the date of this Agreement, the Company and Purchaser or its
assignees shall prepare and file, and the Company shall cause each of the
Subsidiaries as may be required or necessary to prepare and file, with the
FCC all necessary applications for approval of the transactions contemplated
in this Agreement. In connection therewith, Purchaser or its assignees shall
provide the information requested by the FCC and take actions reasonably
necessary to enable the FCC to grant the applications including, but not
limited to, authority for KGIN-TV to operate as a satellite of KOLN-TV within
the time periods contemplated by this Agreement.
(b) The Company, each of the Stockholders and Purchaser further
covenant that from the date hereof until the Closing Date, without the prior
written consent of the Company or Purchaser, as the case may be, neither the
Company nor Purchaser shall take any action, and neither the Company nor any
of the Stockholders shall permit any of the Subsidiaries to take any action,
that is reasonably likely to adversely affect, or delay or interfere with,
obtaining the FCC Order or complying with or satisfying the terms thereof,
including without limitation, acquiring any new or increased attributable
interest, as defined in the FCC rules, in any media property, which property
could not be held (without the need for a waiver) in common control by the
Company, any of the Subsidiaries and Purchaser following the Closing Date.
4.16 COOPERATION TO EFFECT STATION EXCHANGE. Each of the Stockholders
and the Company shall use reasonable efforts to cooperate with Purchaser to
effect a tax-free, like-kind exchange of Purchaser's Albany station with a
designated purchaser of one or more of the Stations, provided that such
exchange shall not be likely to cause the Closing to occur subsequent to
September 1, 1998. Purchaser will bear all costs and expenses resulting from
or arising out of any such like-kind exchange. In addition, the
identification of such purchaser, the closing of such transaction or the
execution of documents relating thereto shall not be a condition to the
Closing. The provisions of this Section will expire if Purchaser has not
identified to the Stockholders such designated purchaser and the terms of
such like-kind exchange by April 15, 1998.
4.17 NAME CHANGE. Immediately following the Closing, Purchaser
shall cause the Company to take all action necessary to change its name to
delete any references to "Busse" therein.
4.18 SEVERANCE AND INCENTIVE PAYMENTS. The parties intend that either
(i) prior to the Closing, the Company will make payments to certain of its
employees or former employees pursuant to the Company's obligations to make
severance or incentive payments as a result of the transactions contemplated
by this Agreement, which payments include payments required under the
Company's Long Term Incentive Plan, the Company's Incentive Fee Plan, the
Amended and Restated Employment Agreement with Lawrence A. Busse and the
Amended and Restated Employment Agreement with James C. Ryan or (ii) the
amount of such obligations will be a reduction in the Purchase Price pursuant
to Section 1.02. Further, the Company and the Stockholders shall provide
Purchaser with such evidence as it shall reasonably require to verify that
such payments were made prior to the Closing or to verify the amount of such
obligations for purposes of calculating the Purchase Price.
4.19 HSR FILINGS. Purchaser, the Company and the Stockholders shall,
as promptly as practicable following the execution of this Agreement, and in
cooperation with each other, file with the Department of Justice and the
Federal Trade Commission the premerger notification forms and any other
documents required under the HSR Act, and each shall use its best efforts to
obtain earliest termination of all waiting periods under the HSR Act.
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4.20 FURTHER ACTIONS. Subject to the terms and conditions of this
Agreement, the Stockholders, the Company and Purchaser each agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated in this Agreement and to satisfy
the conditions hereto, in each case in as prompt a manner as is reasonably
possible.
ARTICLE V
NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES
None of the representations or warranties made by the parties in this
Agreement and the Other Agreements shall survive the Closing hereunder.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction, on or before the
Closing Date, of each and every one of the following conditions, all or any
of which may be waived, in whole or in part, by Purchaser for purposes of
consummating such transactions, but without prejudice to any other right or
remedy which Purchaser may have hereunder as a result of any
misrepresentation by, or breach of any agreement, covenant or warranty of the
Company or the Stockholders contained in this Agreement or any Other
Agreement:
6.01 REPRESENTATIONS TRUE AND COVENANTS PERFORMED AT CLOSING. The
representations and warranties made by the Company and each of the
Stockholders shall be correct and complete in all Material respects on the
Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date. The Company and each
of the Stockholders shall have each duly performed and complied in all
Material respects with all of the agreements, covenants, acts and
undertakings to be performed or complied with by it in all Material respects
on or prior to the Closing Date. The Company and each of the Stockholders
shall have delivered to Purchaser a certificate or certificates dated as of
the Closing Date certifying as to the fulfillment of the conditions of this
Section 6.01. Notwithstanding any other provision of this Agreement to the
contrary, for purposes of this Section 6.01, all Materiality qualifications
contained in the representations and warranties made by the Company and each
of the Stockholders shall be disregarded and given no effect.
6.02 INCUMBENCY CERTIFICATE. Purchaser shall have received an
appropriate incumbency certificate or certificates, dated the Closing Date,
certifying the incumbency of all officers of the Company and the partners and
agents of each Stockholder who have executed this Agreement and the Other
Agreements. The certificate or certificates shall contain specimens of the
signatures of each of the officers, agents and partners whose incumbency is
certified and shall be executed by officers of the Company and partners of
each Stockholder other than officers and partners, respectively, whose
incumbency is certified.
6.03 CERTIFIED COPIES OF RESOLUTIONS. Purchaser shall have received
copies, certified by the duly qualified and acting Secretary or Assistant
Secretary of the Company and each corporate general partner of any Stockholder,
of resolutions adopted by the Board of Directors of the Company and each such
corporate partner of any Stockholder approving this Agreement and the Other
Agreements and the consummation of the transactions contemplated hereby and
thereby.
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6.04 OPINIONS OF COUNSEL. Purchaser shall have received (i) a written
opinion of Cadwalader, Wickersham & Taft, counsel to the Stockholders, dated
the Closing Date and substantially in the form of EXHIBIT 6.04(i) attached
hereto and made a part hereof by this reference, (ii) a written opinion of
Winston & Strawn, counsel to the Company and the Subsidiaries, dated the
Closing Date and substantially in form and substance reasonably satisfactory
to Purchaser and its counsel, and (iii) a written opinion of Pepper &
Corazzini L.L.P., FCC counsel to the Company and each of the Subsidiaries,
dated the Closing Date and substantially in the form of EXHIBIT 6.0(ii)
attached hereto and made a part hereof by this reference.
6.05 NO MATERIAL ADVERSE CHANGE. There shall not have occurred any
Material Adverse Change, or any condition or event that is reasonably likely
to cause a Material Adverse Change, with respect to the Business, the
Company, or any of the Subsidiaries, taken as a whole, or any of their
respective assets from the Balance Sheet Date. The Company and each of the
Stockholders shall have delivered to Purchaser a certificate or certificates
dated as of the Closing Date executed by the Company and each of the
Stockholders certifying the foregoing statement.
6.06 NO INJUNCTION, ETC. No Litigation, Law, Order or legislation
shall have been instituted, threatened or proposed by a Third Party before
any court or Governmental Authority to enjoin, restrain, prohibit or obtain
damages in respect of this Agreement or the consummation of the transactions
contemplated hereby, if such Litigation, Law, Order or legislation, in the
reasonable judgment of Purchaser, would make it inadvisable to consummate the
transactions contemplated hereby.
6.07 RESIGNATIONS. Purchaser shall have received a written instrument
signed by each of the directors and officers of the Company and each of the
Subsidiaries resigning from the Board of Directors and as corporate officers
of the Company and each of the Subsidiaries, as the case may be, effective
the Closing Date.
6.08 APPROVAL OF LEGAL MATTERS. All actions, proceedings, instruments
and documents reasonably deemed necessary or appropriate by Purchaser or its
attorneys to effectuate this Agreement and to consummate the transactions
contemplated hereby shall have been approved by such attorneys in the
exercise of their reasonable discretion.
6.09 FCC APPROVALS. The FCC shall have given all requisite approvals
and consents, without any condition or qualification Materially adverse to
Purchaser or its assignee, the Company or any of the Subsidiaries or
Materially adverse to the operations of the Business, to the acquisition of
control of the Company or any of the Subsidiaries by Purchaser as provided in
this Agreement (whether or not any appeal or request for reconsideration or
review is pending or the time for filing any appeal or request for
reconsideration or review, or for any SUA SPONTE action by the FCC with
similar effect has expired), including without limitation, any Materially
Adverse Condition on Purchaser's acquisition or operation of any of the
Stations. In addition, the FCC shall have granted the renewal of the FCC
Licenses of each Station for a full eight (8) year term from the date of the
expiration of the most recent License term.
6.10 HART-SCOTT APPROVAL. All waiting periods applicable to this
Agreement and the transactions contemplated hereby under the Hart-Scott Act
shall have expired or been terminated.
6.11 ENVIRONMENTAL REPORT. Prior to the Closing, the Company shall (i)
provide to Purchaser a letter from the Nebraska Department of Environmental
Quality ("DEQ") stating that no further investigation or remediation will be
required by DEQ related to the two fuel oil underground storage tanks formerly
located at KOLN-TV, Lincoln, Nebraska and noted in Section 4.7 of the
Environmental Report
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related to KOLN-TV (the "Former USTs"), or (ii) cause, at its sole cost and
expense, Montgomery Watson or such other environmental consultant as shall be
reasonably acceptable to Purchaser (the "Environmental Consultant") to
perform an investigation, consistent with applicable state regulations (the
"Investigation"), of the area surrounding the Former USTs to determine if
contamination from the Former USTs is present. In the event actionable
levels of contamination related to the Former USTs are detected by such
Investigation, the Stockholders may, at their sole discretion, elect to cause
the Company to remediate the identified contamination in compliance with
applicable state regulations (the "Remedial Action"). In the event the
Stockholders do not make such election or the Remedial Action is not
completed on or prior to the Closing Date, then the Purchase Price shall be
reduced by the amount determined by the Environmental Consultant to be
reasonably necessary to complete the Remedial Action. The Company shall keep
the Purchaser reasonably apprised of the status of any Investigation or
Remedial Action by providing the Purchaser with Material documents and
information relating to the performance of the Investigation and Remedial
Action.
Prior to the Closing, the Company shall further cause Montgomery Watson or
the Environmental Consultant to visually observe the towers located in Beaver
Crossing and Heartwell, Nebraska and provide a letter report summarizing such
observations to Purchaser and the Company. The Environmental Consultant's costs
to conduct such visual observations shall be paid equally by the Stockholders
and Purchaser. Such letter report shall state that no condition exists with
respect to the assets currently owned, leased, operated, or controlled by the
Company or any of the Subsidiaries that has resulted in, or would reasonably be
expected to result in, any violation of an Environmental Law, any Environmental
Claim, or in any Liability relating to an Environmental Matter. Such report
shall include an estimate of the total cost of remedying any such condition
reported therein. In the event such letter report indicates that such a
condition exists, the Stockholders shall remedy such condition to Purchaser's
reasonable satisfaction within ninety (90) days after the date of the
Stockholders' receipt of the final draft of the letter report. If such
condition cannot be remedied to Purchaser's reasonable satisfaction within
ninety (90) days, the Purchase Price shall be reduced by the amount determined
by Montgomery Watson or the Environmental Consultant to be reasonably necessary
to remedy such condition.
6.12 SALES AND USE TAXES. The Company shall have used its reasonable
best efforts to obtain and deliver to Purchaser an updated certificate or
certificates from the Michigan, Nebraska and Wisconsin Departments of Revenue
(or similar Taxing authorities) and from any other state and foreign Tax
authority listed on SCHEDULE 2.03 stating that no sales or use Taxes are due
relating to the Business or the assets or operations of the Company or any of
the Subsidiaries prior to Closing.
6.13 TITLE DOCUMENTS. Purchaser shall have received an owner's title
insurance policy (or an endorsement to an existing owner's title insurance
policy) for each parcel of the Owned Real Property bringing forward the
effective date of the policy to the Closing Date subject to no additional
Liens other than Permitted Liens and reflecting no change in ownership of the
Owned Real Property. With respect to each parcel of Leased Real Property in
which the Company or any of its Subsidiaries is the lessee, except for the
Kalamazoo, Michigan leased property, Purchaser shall have received a
leasehold insurance policy insuring the Company or its Subsidiary, as the
case may be, subject to no Liens other than Permitted Liens and a current
updated and revised ALTA survey. Each of the title insurance policies
described in this Section 6.13 shall contain zoning endorsements in form and
substance reasonably satisfactory to Purchaser and shall be paid equally by
the Stockholders and Purchaser. The title insurance commitment for the
owner's title insurance policy for the Owned Real Property in Eau Claire
County, Wisconsin will be endorsed to remove exception No. 21 relating to a
mortgage held by Chemical Bank so that the policy when issued will contain no
special exception for the mortgage held by Chemical Bank, but
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will reference the estate, right, title and interest of Americus (successor
to Sage Broadcasting) and all parties claiming by, through or under Americus.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND STOCKHOLDERS
The obligations of the Company and the Stockholders to consummate the
transactions contemplated by this Agreement shall be subject to the
satisfaction, on or before the Closing Date, of each and every one of the
following conditions, all or any of which may be waived, in whole or in part,
by the Company and the Stockholders for purposes of consummating such
transactions, but without prejudice to any other right or remedy which the
Company and the Stockholders may have hereunder as a result of any
misrepresentation by, or breach of any agreement, covenant or warranty of
Purchaser contained in this Agreement or any Other Agreement:
7.01 REPRESENTATIONS TRUE AND COVENANTS PERFORMED AT CLOSING. The
representations and warranties made by Purchaser shall be correct and
complete in all Material respects on the Closing Date with the same force and
effect as if such representations and warranties had been made on and as of
the Closing Date. Purchaser shall have duly performed and complied with all
of the agreements, covenants, acts and undertakings to be performed or
complied with by it on or prior to the Closing Date. Purchaser shall have
delivered to the Company and the Stockholders a certificate dated as of the
Closing Date certifying as to the fulfillment of the conditions of this
Section 7.01. Notwithstanding any other provision of this Agreement to the
contrary, for purposes of this Section 7.01, all Materiality qualifications
contained in the representations and warranties made by Purchaser shall be
disregarded and given no effect.
7.02 INCUMBENCY CERTIFICATE. The Company and the Stockholders shall
have received an incumbency certificate or certificates dated the Closing
Date certifying the incumbency of all officers of Purchaser who have executed
this Agreement or documents in connection with this Agreement. The
certificate or certificates shall contain specimens of the signatures of each
of the officers whose incumbency is certified and shall be executed by an
officer of Purchaser other than an officer whose incumbency is certified.
7.03 CERTIFIED COPIES OF RESOLUTIONS. The Company and the Stockholders
shall have received copies, duly certified by the duly qualified and acting
Secretary or Assistant Secretary of Purchaser of resolutions adopted by the
Board of Directors of Purchaser approving this Agreement and the consummation
of the transactions contemplated herein.
7.04 NO INJUNCTION, ETC. No Litigation, Law, Order or legislation
shall have been instituted, threatened or proposed by a Third Party before
any court or Governmental Authority to enjoin, restrain, prohibit or obtain
damages in respect of this Agreement or the consummation of the transactions
contemplated hereby, if such Litigation, Law, Order or legislation, in the
reasonable judgment of Purchaser, would make it inadvisable to consummate the
transactions contemplated hereby.
7.05 HART-SCOTT ACT APPROVAL. All waiting periods applicable to this
Agreement and the transactions contemplated hereby under the Hart-Scott Act
shall have expired or been terminated.
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7.06 APPROVAL OF LEGAL MATTERS. All actions, proceedings, instruments
and documents reasonably deemed necessary or appropriate by the Stockholders
or their attorneys to effectuate this Agreement and to consummate the
transactions contemplated hereby shall have been approved by such attorneys
in the exercise of their reasonable discretion.
7.07 FCC APPROVALS. The FCC shall have given all requisite approvals
and consents, without any condition or qualification Materially adverse to
Purchaser or its assignee, the Company or any of the Subsidiaries or
Materially adverse to the operations of the Business, to the acquisition of
control of the Company or any of the Subsidiaries by Purchaser as provided in
this Agreement (whether or not any appeal or request for reconsideration or
review is pending or the time for filing any appeal or request for
reconsideration or review, or for any SUA SPONTE action by the FCC with
similar effect has expired), including without limitation, any Materially
Adverse Condition on Purchaser's acquisition or operation of any of the
Stations. In addition, the FCC shall have granted the renewal of the FCC
Licenses of each Station for a full eight (8) year term from the date of the
expiration of the most recent License term.
7.08 OPINIONS OF COUNSEL. The Stockholders shall have received a
written opinion of either Heyman & Sizemore or Alston & Bird, LLP, counsel to
Purchaser, dated the Closing Date and in form and substance reasonably
satisfactory to the Stockholders and their counsel.
ARTICLE VIII
TERMINATION
8.01 CAUSES FOR TERMINATION. This Agreement and the transactions
contemplated by this Agreement may be terminated at any time prior to the
Closing Date: (i) by the mutual consent of the Stockholders and Purchaser;
(ii) by Purchaser in the event the conditions set forth in Article VI of this
Agreement shall not have been satisfied or waived by September 1, 1998; (iii)
by the Stockholders in the event that the conditions set forth in Article VII
of this Agreement shall not have been satisfied or waived by September 1,
1998; (iv) by Purchaser pursuant to Sections 4.10 or 6.11; or (v) by
Purchaser or the Stockholders at any time if Purchaser determines in good
faith that any Material Adverse Change, or any condition or event that is
reasonably likely to cause a Material Adverse Change, with respect to the
Company, any of the Subsidiaries, their respective assets or the Business
shall have occurred or been discovered since the Balance Sheet Date.
8.02 NOTICE OF TERMINATION. Notice of termination of this Agreement
as provided for in this Article VIII shall be given by the party so
terminating to the other parties hereto in accordance with the provisions of
Section 10.01.
8.03 EFFECT OF TERMINATION.
(a) In the event of a termination of this Agreement pursuant to
Section 8.01 hereof, except for the confidentiality provisions of Section 4.04,
which shall remain in full force and effect, this Agreement shall become void
and of no further force and effect, and each party shall pay the costs and
expenses incurred by it in connection with this Agreement, and no party (or any
of its agents, counsel, representatives, Affiliates or assigns) shall be liable
to any other party for any Loss hereunder. Notwithstanding the foregoing
sentence, if the non-occurrence of Closing is the direct or indirect result of
the Material Default by any of the Stockholders or the Company of any of their
or its respective obligations hereunder, including without limitation, any
Material inaccuracy in any representation or warranty made by such party, and
Purchaser has not Materially Defaulted on any of its obligations hereunder, such
Defaulting parties shall be fully liable to Purchaser for any such Default; and
if the non-occurrence of
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Closing is the direct or indirect result of the Material Default by Purchaser
of any of its obligations hereunder, and neither the Company nor any of the
Stockholders has Materially Defaulted on any of its respective obligations
hereunder, the LC shall be paid to the Stockholders as liquidated damages to
compensate the Stockholders and the Company for the damages resulting to such
parties from such Default. The parties agree that actual damages pursuant to
a breach of this Agreement prior to the Closing would be impossible to
measure. Receipt of the LC shall be the sole and exclusive remedy that the
Stockholders and the Company shall have in the event of such Default and
shall constitute a waiver of any and all other legal or equitable rights or
remedies that any of the Stockholders or the Company may otherwise have as a
result of Purchaser's Default, and that in consideration for the receipt of
the LC as liquidated damages, neither the Company nor any of the Stockholders
may obtain any further legal or equitable relief, including specific
performance, to which it may otherwise have been entitled and Purchaser shall
have no further Liability to the Company or any of the Stockholders as a
result of such Default or the non-occurrence of Closing.
(b) If the Closing does not occur due to the nonfulfillment of
any of the conditions in Article VI or for any other reason except Purchaser's
Material Default in the performance of any of its obligations under this
Agreement, neither the Company nor any of the Stockholders shall be entitled to
the LC and, promptly after the termination of this Agreement, the LC shall be
returned to Purchaser. In addition, the Company and each of the Stockholders
acknowledge that Purchaser, at its option (to be exercised in its sole and
absolute discretion), may elect to have the Agreement specifically performed by
the Company and the Stockholders in addition to receipt of the LC. The Company
and the Stockholders further acknowledge that any breach of this Agreement by
either the Company or any of the Stockholders will cause irreparable damage and
injury to Purchaser and that Purchaser will be entitled to injunctive relief in
any court of competent jurisdiction without the necessity of posting any bond.
(c) It is agreed that time is of the essence in the performance
and satisfaction of this Agreement and each of the conditions specified in
Articles VI and VII of this Agreement are Material for purposes of this
Agreement.
8.04 RISK OF LOSS. The Stockholders assume all risk
of condemnation, destruction or Loss to the Company or any of the
Subsidiaries due to fire or other casualty from the date of this Agreement
until the Closing.
ARTICLE IX
DEFINITIONS
The following terms (in their singular and plural forms as appropriate) as
used in this Agreement shall have the meanings set forth below unless the
context requires otherwise:
"ACCOUNTS RECEIVABLE" means, as of any applicable date, all accounts
receivable, notes receivable, and other monies due to the Company or any of the
Subsidiaries for sales and deliveries of goods, performance of services and
other business transactions (whether or not on the books of the Company or any
of the Subsidiaries).
"AFFILIATE" of a Person means: (i) any Person directly, or indirectly
through one or more intermediaries, controlling, controlled by or under common
control with such Person; (ii) any officer, director, partner, employee, agent,
or representative or direct or indirect beneficial or legal owner of any
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10% or greater equity or voting interest of such Person (other than the
limited partners of the Stockholders); (iii) any entity for which a Person
described in (ii) above acts in any such capacity.
"AGREEMENT" means this Stock Purchase Agreement, including the Exhibits
and Schedules delivered pursuant hereto or referred to herein, each of which
is incorporated herein by reference.
"BALANCE SHEET" means initially, the consolidated balance sheet of the
Company and each of the Subsidiaries as of September 28, 1997 and included in
the Financial Statements and, subsequently, when delivered to Purchaser
pursuant to Section 4.06, the consolidated audited balance sheet of the
Company and each of the Subsidiaries as of December 28, 1997 and included in
the Financial Statements.
"BALANCE SHEET DATE" means the date of the most recent Balance Sheet.
"BOARD OF DIRECTORS" means the Board of Directors of a Person that is a
corporation.
"BUSINESS" means the Company's business conducted through the
Subsidiaries, of owning and operating (i) the television station KOLN/TV,
serving Lincoln, Nebraska, (ii) the television station KGIN-TV, serving Grand
Island, Nebraska and (iii) the television station WEAU-TV serving Eau Claire
and LaCrosse, Wisconsin.
"BUSINESS DAY" means a day other than a Saturday, a Sunday, a day on
which banking institutions in the State of Georgia are authorized or
obligated by law or required by executive order to be closed, or a day on
which the New York Stock Exchange is closed.
"CERTIFICATE OF INCORPORATION" means the certificate of incorporation of a
Person that is a corporation.
"CLOSING" means the consummation of the transactions contemplated by this
Agreement.
"CLOSING DATE" means the fifth business day after issuance of the FCC Order
as set forth in Section 4.15 and the satisfaction (or waiver) of all of the
conditions set forth in Articles VI and VII, or such other date as the parties
may agree in writing; provided that the Closing Date may be extended to
September 1, 1998 by Purchaser as necessary to effectuate the tax-free like-kind
exchange described in Section 4.16; provided, further, that the provisions of
Section 4.16 shall continue to be in effect on the date of issuance of such FCC
Order.
"CODE" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"COMMITMENTS" means the owner's title insurance policy commitments
contained in SCHEDULE 2.11.
"COMMON STOCK" means the $.01 par value per share common stock of the
Company.
"COMPUTER SOFTWARE" means all computer programs, materials, tapes, source
and object codes, and all prior and proposed versions, releases, modifications,
updates, upgrades and enhancements thereto, as well as all documentation and
listings related thereto used in the Business.
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"CONTRACT" means any written or oral contract, agreement, understanding,
lease, usufruct, license, plan, instrument, commitment, restriction,
arrangement, obligation, undertaking, practice or authorization of any kind or
character or other document to which any Person is a party or that is binding on
any Person or its securities, assets or business.
"DATABASES" means databases in all forms, versions and media, together with
prior and proposed updates, modifications and enhancements thereto, as well as
all documentation and listings therefor used in the Business, other than
Licenses.
"DEFAULT" means (1) a breach of, default under, or misrepresentation in or
with respect to any Contract or License, (2) the occurrence of an event that
with the passage of time or the giving of notice or both would constitute a
breach of, default under, or misrepresentation in any Contract or License, or
(3) the occurrence of an event that with or without the passage of time or the
giving of notice or both would give rise to a right to terminate, change the
terms of or renegotiate any Contract or License or to accelerate, increase, or
impose any Liability under any Contract or License.
"EMPLOYEE BENEFIT PLAN" means collectively, each pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus or other incentive plan, any other
written or unwritten employee program, arrangement, agreement or
understanding, whether arrived at through collective bargaining or otherwise,
any medical, vision, dental or other health plan, any life insurance plan, or
any other employee benefit plan or fringe benefit plan, including, without
limitation, any "employee benefit plan," as that term is defined in Section
3(3) of ERISA currently or previously adopted, maintained by, sponsored in
whole or in part by, or contributed to by the Company, any of the
Subsidiaries or any other ERISA Affiliate thereof or under which the Company,
any of the Subsidiaries, any other ERISA Affiliate thereof has any Liability
for the benefit of employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries and under which employees,
retirees, dependents, spouses, directors, independent contractors or other
beneficiaries are eligible to participate. "Employee Benefit Plans" also
means any plans, programs, agreements, arrangements or understandings
previously maintained by, sponsored in whole or in part by, or contributed to
by the Company, any of the Subsidiaries, or any other ERISA Affiliate thereof
that could result in a Material Liability to the Company or any of the
Subsidiaries, including but not limited to, any plan covered by or subject to
Title IV of ERISA. Employee Benefit Plans include (but are not limited to)
"employee benefit plans" as defined in Section 3(3) of ERISA and any other
plan, fund, policy, program, practice, custom, understanding or arrangement
providing compensation or other benefits to any current or former officer or
employee or director or independent contractor of the Company, any of the
Subsidiaries or any dependent or beneficiary thereof, maintained by the
Company or any of the Subsidiaries or under which the Company or any of the
Subsidiaries has any obligation or Liability, whether or not they are or are
intended to be (i) covered or qualified under the Code, ERISA or any other
applicable Law, (ii) written or oral, (iii) funding or unfunded, (iv) actual
or contingent, or (v) generally available to any or all employees (or former
employees) of the Company or any of the Subsidiaries (or their beneficiaries
or dependents), including, without limitation, all incentive, bonus, deferred
compensation, flexible spending accounts, cafeteria plans, vacation, holiday,
medical, disability, share purchase or other similar plans, policies,
programs, practices or arrangements.
"ENVIRONMENTAL LAWS" means all Laws relating to pollution or protection of
the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including, without limitation,
the Comprehensive Environmental Response Compensation and Liability Act, as
amended, 42 U.S.C. 9601 ET SEQ. ("CERCLA"), the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. 6901 ET SEQ. ("RCRA"), and other Laws
relating
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to emissions, discharges, releases or threatened releases of any Hazardous
Substance, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Hazardous Substance.
"ENVIRONMENTAL LITIGATION" means any Litigation against the Company, any of
the Subsidiaries, or the Business or the assets of the Company, or any of the
Subsidiaries (including, without limitation, written notice or other written
communication by any Person alleging potential Liability for investigatory
costs, cleanup costs, private or governmental response or remedial costs,
natural resources damages, property damages, personal injuries, or penalties)
arising out of, based upon, or resulting from (i) any Environmental Matter or
(ii) any circumstances or state of facts forming the basis of any Liability or
alleged Liability under, or violation or alleged violation of, any Environmental
Law.
"ENVIRONMENTAL MATTER" Environmental Matter means any matter or
circumstances related in any manner whatsoever to (i) the emission,
discharge, disposal, release or threatened release of any Hazardous Substance
into the environment, or (ii) the transportation, treatment, storage,
recycling or other handling of any Hazardous Substance or (iii) the placement
of structures or materials into waters of the United States, by, in each
case, the Company, any of the Subsidiaries or any of their respective
predecessors or (iv) the presence of any Hazardous Substance, including, but
not limited to, asbestos, in any building, structure or workplace or on any
of the Real Property.
"ENVIRONMENTAL REPORT" Environmental Report means collectively, the
three independent Phase I environmental site assessment reports of the
Company's and its Subsidiaries' properties and operations prepared for the
Company and Purchaser by Montgomery Watson, each dated February, 1998.
"ERISA" means Employee Retirement Income Security Act of 1974, as amended.
"ERISA PLAN" means any Employee Benefit Plan which is an "employee pension
benefit plan," as that term is defined in Section 3(2) of ERISA, or an "employee
welfare benefit plan" as that term is defined in Section 3(1) of ERISA.
"FCC" means the Federal Communications Commission.
"FINANCIAL STATEMENTS" means (i) the consolidated audited balance sheets
of the Company and each of the Subsidiaries as of December 29, 1996 and
December 31, 1995 and, when delivered to Purchaser pursuant to Section 4.06,
December 28, 1997 and the related statements of income and cash flows for the
periods then ended and (ii) the consolidated unaudited balance sheets of the
Company and each of the Subsidiaries as of the end of each fiscal quarter
from December 30, 1996 through December 28, 1997 and the related statements
of income for the months then ended, and (iii) the monthly financial
statements provided to Purchaser pursuant to Section 4.06.
"GAAP" means generally accepted accounting principles as in effect in
the United States consistently applied.
"GOVERNMENTAL AUTHORITY" means any federal, state, county, local,
foreign or other governmental or public agency, instrumentality, commission,
authority, board or body.
"HART-SCOTT ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, 15 U.S.C.A. Section 18(a), as amended, and all Laws promulgated
thereunder.
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"HAZARDOUS SUBSTANCE" means (i) any hazardous substance, hazardous
material, hazardous waste pollutants, contaminants, or toxic substance (as those
terms are defined by any applicable Environmental Laws) and (ii) any petroleum,
petroleum products, or oil.
"IMPROVEMENTS" means all buildings, structures, fixtures and other
improvements included in the Real Property.
"INTELLECTUAL PROPERTY" means, with the exception of the Option Property,
(i) patents and pending patent applications together with any and all
continuations, divisions, reissues, extensions and renewals thereof, (ii) trade
secrets, know-how, inventions, formulae and processes, whether trade secrets or
not, (iii) trade names, trademarks, service marks, logos, assumed names, brand
names and all registrations and applications therefor together with the goodwill
of the business symbolized thereby, (iv) copyrights and any registrations and
applications therefor, (v) technology rights and licenses, and (vi) Computer
Software and all other intellectual property owned by, registered in the name
of, or used in the business of a Person or in which a Person or its business has
any interest.
"INVENTORY" means all inventories of raw materials, supplies, products,
advertising materials, and other inventories.
"IRS" means the Internal Revenue Service of the United States of America.
"KNOWLEDGE" or "KNOWN" with respect to the Company, any of the
Subsidiaries or any of the Stockholders, means collectively those facts that
any of the Company, any of the Subsidiaries, any of its officers and
employees listed on EXHIBIT IX hereto or Alfred C. Eckert, III, after due
inquiry, knew or reasonably should have known.
"LAW" means any code, law, order, ordinance, regulation, rule, or statute
of any Governmental Authority.
"LEASED PERSONAL PROPERTY" means all Personal Property that is not owned by
the Company or any of the Subsidiaries that the Company or any of the
Subsidiaries either uses or has the right to use.
"LEASED REAL PROPERTY" means all Real Property that is not owned in fee
simple by the Company or any of the Subsidiaries that the Company or any of the
Subsidiaries either occupies or uses or has the right to occupy or use.
"LIABILITY" means any direct or indirect, primary or secondary, liability,
indebtedness, obligation, penalty, expense (including, without limitation, costs
of investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills and
checks presented to banks for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute, contingent, liquidated,
unliquidated, matured, unmatured or otherwise.
"LICENSE" means any license, franchise, notice, permit, easement, right,
certificate, authorization, approval or filing with any Governmental Authority
or court to which any Person is a party or that is or may be binding on any
Person or its securities, property or business.
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"LIEN" means any mortgage, lien, security interest, pledge, hypothecation,
encumbrance, restriction, reservation, encroachment, infringement, easement,
conditional sale agreement, title retention, lease, right of occupancy or other
security arrangement, defect of title, adverse right or interest, charge or
claim of any nature whatsoever of, on, or with respect to any property or
property interest.
"LITIGATION" means any action, administrative or other proceeding,
arbitration, cause of action, claim, complaint, criminal prosecution, inquiry,
hearing, investigation (governmental or otherwise), litigation, notice (written
or oral) before any Governmental Authority or arbitration, mediation or similar
tribunal by any Person alleging potential Liability or requesting information
relating to or affecting the Company or any of the Subsidiaries, their
respective assets (including, without limitation, Contracts relating to the
Company or any of the Subsidiaries), the Business or the transactions
contemplated by this Agreement.
"LOSS" means any and all direct or indirect demands, claims, payments,
obligations, recoveries, deficiencies, fines, penalties, interest, assessments,
actions, causes of action, suits, losses, diminution in the value of assets,
damages, punitive, exemplary or consequential damages (including, but not
limited to, lost income and profits and interruptions of business), liabilities,
costs, expenses (including without limitation, (i) interest, penalties and
reasonable attorneys' fees and expenses, (ii) attorneys' fees and expenses
necessary to enforce rights to indemnification hereunder, and (iii) consultants'
fees and other costs of defense or investigation), and interest on any amount
payable to a Third Party as a result of the foregoing, whether accrued,
absolute, contingent, known, unknown, or otherwise as of the Closing Date or
thereafter.
"MATERIAL" or "MATERIALLY" shall be determined in light of the facts and
circumstances of the matter in question; PROVIDED, HOWEVER, that any specific
monetary amount cited in this Agreement shall be deemed to determine materiality
in that instance.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means any Material
adverse change in or effect on (i) the business, operations, assets,
Liabilities, financial condition or results of operations of such Person,
including, without limitation, any Material adverse change in the value of the
Company or its Subsidiaries, taken as a whole, (ii) the ability of such party to
consummate the transactions contemplated by this Agreement or any of the Other
Agreements to which it is or will be a party, or (iii) the ability of such party
to perform any of its obligations under this Agreement or any of the Other
Agreements to which it is or will be a party, if such change or effect
Materially impairs the ability of such party to perform its obligations
hereunder or thereunder, taken as a whole. If any change, condition or event
shall have an adverse effect or a reasonably likely adverse effect of less than
$1,000,000, no Material Adverse Change or Material Adverse Effect will be deemed
to have occurred. If any change, condition or event shall have an adverse
effect or a reasonably likely adverse effect of $1,000,000 or more but less than
$7,500,000, no Material Adverse Effect will be deemed to have occurred and the
Stockholders shall have the option to either (i) cure such change, condition or
event or (ii) reduce the Purchase Price by the amount of the adverse effect
caused by such change, condition or event. If any change, condition or event
shall have an adverse effect or a reasonably likely adverse effect of $7,500,000
or more, either Purchaser or the Stockholders may terminate this Agreement at
their discretion. Neither a Material Adverse Change nor a Material Adverse
Effect shall be deemed to result from an adverse change in general economic
conditions, industry conditions or general conditions in the markets in which
the Company operates. Further, notwithstanding the $1,000,000 threshold
contained in the third sentence of this definition, the Stockholders shall cause
the Company to use all reasonable efforts to promptly remedy any adverse change,
condition or event that causes or is reasonably likely to cause any of the
Company's stations to be or go off the air.
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"OPTION PROPERTY" means all of the Personal Property subject to Lawrence
A. Busse's option to purchase under that certain letter agreement dated the
date hereof, 1998 between Mr. Busse and the Company, a correct and complete
list of each item of Option Property is contained on EXHIBIT X.
"ORDER" means any decree, injunction, judgment, order, ruling, writ,
quasi-judicial decision or award or administrative decision or award of any
federal, state, local, foreign or other court, arbitrator, mediator,
tribunal, administrative agency or Governmental Authority to which any Person
is a party or that is or may be binding on any Person or its securities,
assets or business (including, in the case of the FCC, a public notice or
other written authorization).
"OTHER AGREEMENTS" means the agreements, documents, assignments and
instruments to be executed and delivered by the Company or the Stockholders
pursuant to this Agreement.
"OWNED REAL PROPERTY" means all Real Property other than Leased Real
Property.
"PERMITTED LIENS" means (i) Liens for current real property Taxes not yet
due and payable, (ii) non-monetary Liens that do not affect the value or use of
any parcel of Real Property, (iii) Liens related to the Company's 11-5/8% Senior
Secured Notes due 2000 referred to in Section 1.02 and (iv) all Special
Exceptions (but not General Exceptions) to title contained in the Commitments.
"PERSON" means a natural person or any legal, commercial or governmental
entity, such as, but not limited to, a business association, corporation,
general partnership, joint venture, limited partnership, limited liability
company, trust, or any person acting in a representative capacity.
"PERSONAL PROPERTY" means collectively and with the exception of the
Option Property all of the personal property or interests therein owned,
leased, used or controlled by the Company or any of the Subsidiaries
including, without limitation, machinery, tools, equipment (including office
equipment and supplies), furniture, furnishings, fixtures (including trade
fixtures), vehicles, leasehold improvements, all other tangible personal
property other than Inventory (which is specifically excluded from the
Personal Property).
"PREFERRED STOCK" means the $.01 par value per share Series A preferred
stock of the Company.
"PUC LAWS" means public utility commission laws, rules and regulations.
"PURCHASE PRICE" means the total consideration to be paid to the
Stockholders by Purchaser for the purchase of the Stock pursuant to this
Agreement and which shall be paid in accordance with Section 1.02 of this
Agreement.
"REAL PROPERTY" means collectively all the real property or interests
therein owned, leased, occupied, or used by the Company or any of the
Subsidiaries as of the date of this Agreement, together with (i) all rights,
easements, tenements, hereditaments, appurtenances, privileges, immunities,
mineral rights and other benefits belonging or appertaining thereto which run
with said real property and (ii) all right, title and interest, if any, of
the Company or any of the Subsidiaries in and to (A) any land lying in the
bed of any street, road, avenue, open or proposed, adjoining said real
property, (B) any award made or to be made in lieu of the land described in
the preceding clause (A), (C) any unpaid award for damage to said real
property, and (D) all strips and rights-of-way abutting or adjoining said
real property, if any. The
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Real Property includes, without limitation, all buildings, structures,
fixtures and other improvements located on the land described in the
preceding sentence.
"REGISTRATION RIGHTS AGREEMENT" means that certain Registration Rights
Agreement dated May 3, 1995 entered into by the Company and KOLN/KGIN, Inc.,
as amended.
"RELATED PERSON" means, with regard to any natural Person, its spouse,
parent, sibling, child, aunt, uncle, niece, nephew, in-law, grandparent and
grandchild (including by adoption) and any trustees or other fiduciaries for
the benefit of such relatives.
"STOCK" means the Common Stock and the Preferred Stock.
"SUBSIDIARY" means any of WEAU License, Inc., a Delaware corporation,
KOLN/KGIN, Inc., a Delaware corporation, and KOLN/KGIN License, Inc., a Delaware
corporation.
"TAX" or "TAXES" means any federal, state, county, local, foreign and other
taxes, assessments, charges, fees, and impositions, including interest and
penalties thereon or with respect thereto, whether disputed or not, and
including Liabilities relating to unclaimed property.
"TAX RETURNS" means all returns, reports, filings, declarations and
statements relating to Taxes that are required to be filed, recorded, or
deposited with any Governmental Authority, including any attachment thereto or
amendment thereof.
"THIRD PARTY" or "THIRD PARTIES" means any Person that is not Purchaser,
the Company, the Stockholders, the Subsidiaries or an Affiliate of any of the
foregoing.
"UNDISCLOSED LIABILITIES" means any Liability that is not fully reflected
or reserved against in the Financial Statements or fully disclosed in a Schedule
to this Agreement.
ARTICLE X
MISCELLANEOUS
10.01 NOTICES.
(a) All notices, requests, demands and other communications
hereunder shall be (i) delivered by hand, (ii) mailed by registered or
certified mail, return receipt requested, first class postage prepaid and
properly addressed, (iii) sent by national overnight courier service, or (iv)
sent by facsimile, graphic scanning or other telegraphic communications
equipment to the parties or their assignees, addressed as follows:
To the Company: Busse Broadcasting Corporation
141 East Michigan Avenue
Suite 300
Kalamazoo, Michigan 49007
Attention: Mr. Lawrence A. Busse
Telephone: (616) 388-8019
Facsimile: (616) 388-6089
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with copies to: Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601-9703
Attention: Steven J. Gavin, Esquire
Telephone: (312) 558-5600
Facsimile: (312) 558-5700
To the Stockholders: SSP, Inc.
c/o Greenwich Street Capital Partners, Inc.
388 Greenwich Street -- 36th Floor
New York, New York 10013
Attention: Mr. Alfred C. Eckert, III
Telephone: (212) 816-9506
Facsimile: (212) 816-0166
with copies to: Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attn: Jonathan M. Wainwright, Esquire
Telephone: (212) 504-6122
Facsimile: (212) 504-6666
and to: Morgan, Stanley & Co. Incorporated
1585 Broadway -- 35th Floor
New York, New York 10036
Attention: Mr. Michael F. Wyatt
Telephone: (212) 761-4000
Facsimile: (212) 761-0501
To Purchaser: Gray Communications Systems, Inc.
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319-3099
Attention: Mr. Robert S. Prather, Jr.
Telephone: (404) 266-8333
Facsimile: (404) 261-9607
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with copies to: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attention: Stephen A. Opler, Esquire
Telephone: (404) 881-7693
Facsimile: (404) 881-4777
(b) All notices, requests, instructions or documents given to
any party in accordance with this Section 10.01 shall be deemed to have been
given (i) on the date of receipt if delivered by hand, overnight courier service
or if sent by facsimile, graphic scanning or other telegraphic communications
equipment or (ii) on the date three (3) business days after depositing with the
United States Postal Service if mailed by United States registered or certified
mail, return receipt requested, first class postage prepaid and properly
addressed.
(c) Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this
Section 10.01.
10.02 ENTIRE AGREEMENT. This Agreement, the Schedules, the Exhibits
and the Other Agreements constitute the entire agreement between the parties
relating to the subject matter hereof and thereof and supersede all prior
oral and written, and all contemporaneous oral negotiations, discussions,
writings and agreements relating to the subject matter of this Agreement.
10.03 MODIFICATIONS, AMENDMENTS AND WAIVERS. The failure or delay
of any party at any time or times to require performance of any provision of
this Agreement shall in no manner affect its right to enforce that provision.
No single or partial waiver by any party of any condition of this Agreement,
or the breach of any term, agreement or covenant or the inaccuracy of any
representation or warranty of this Agreement, whether by conduct or
otherwise, in any one or more instances shall be construed or deemed to be a
further or continuing waiver of any such condition, breach or inaccuracy or a
waiver of any other condition, breach or inaccuracy.
10.04 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of and be enforceable by the parties hereto,
and their respective estates, successors, legal or personal representatives,
heirs, distributees, designees and assigns, but no assignment shall relieve
any party of the obligations hereunder. This Agreement or any portion
thereof cannot be assigned by any party without the prior written consent of
the other parties hereto; PROVIDED, HOWEVER, that Purchaser may assign this
Agreement with the prior written consent of the Company and the Stockholders,
to an Affiliate of Purchaser; PROVIDED, FURTHER, such assignment shall not
relieve Purchaser of its obligations hereunder. With respect to such
assignments, all representations, warranties, covenants and indemnification
rights shall be binding upon, and inure to the benefit of, the assignee or
assignees as if such representations, warranties, covenants and
indemnification rights were made directly between the original parties to
this Agreement.
10.05 TABLE OF CONTENTS; CAPTIONS; REFERENCES. The table of
contents and the captions and other headings contained in this Agreement as
to the contents of particular articles, sections, paragraphs or other
subdivisions contained herein are inserted for convenience of reference only
and are in no way to be construed as part of this Agreement or as limitations
on the scope of the particular articles, sections, paragraphs or other
subdivisions to which they refer and shall not affect the interpretation or
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meaning of this Agreement. All references in this Agreement to "Section" or
"Article" shall be deemed to be references to a Section or Article of this
Agreement.
10.06 GOVERNING LAW. This Agreement shall be controlled, construed
and enforced in accordance with the substantive Laws of the State of New
York, without respect to the Laws related to choice or conflicts of Laws.
10.07 PRONOUNS. All pronouns used herein shall be deemed to refer
to the masculine, feminine or neuter gender as the context requires.
10.08 SEVERABILITY. Should any one or more of the provisions of
this Agreement be determined to be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as practicable to that of the invalid, illegal or
unenforceable provisions.
10.09 REMEDIES NOT EXCLUSIVE. Except for the liquidated damages
provided for in Section 8.03(a), no remedy conferred by any of the specific
provisions of this Agreement is intended to be, nor shall be, exclusive of
any other remedy available at law, in equity or otherwise.
10.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original; but all of such
counterparts shall together constitute one and the same instrument.
10.11 INTERPRETATIONS. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against Purchaser, the
Company, or the Stockholders whether under any rule of construction or
otherwise. No party to this Agreement shall be considered the draftsman. On
the contrary, this Agreement has been reviewed, negotiated and accepted by
all parties and their attorneys and shall be construed and interpreted
according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all parties hereto.
10.12 EXCLUSIVE REMEDY. The parties acknowledge and agree that this
Agreement shall provide the exclusive remedies of Purchaser, the Stockholders,
the Company and the Subsidiaries with respect to the transactions contemplated
by this Agreement. Without limiting the generality of the foregoing, on and
after the Closing, Purchaser, the Stockholders, the Company and the Subsidiaries
hereby waive any statutory, equitable or common law rights or remedies relating
to any environmental health and safety matters, including without limitation,
any such matters arising under any Environmental , Health and Safety
Requirements, the Comprehensive Environmental Response, Compensation and
Liability Act or any analogous state law.
[SIGNATURES ON FOLLOWING PAGES]
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<PAGE>
IN WITNESS WHEREOF, the Company, each of the Stockholders and Purchaser
have duly executed this Agreement under seal as of the date first above
written.
THE COMPANY:
BUSSE BROADCASTING CORPORATION
By: /s/ James C. Ryan
-----------------------------
Name: James C. Ryan
Title: Treasurer
THE STOCKHOLDERS:
SOUTH STREET CORPORATE RECOVERY FUND I, L.P.
By: SSP Advisors, L.P., its general partner
By: SSP, Inc., its general partner
By: ______________________________
Alfred C. Eckert III
President
GREYCLIFF LEVERAGED FUND 1993, L.P.
By: SSP Partners, L.P., its general partner
By: SSP, Inc., its general partner
By: ______________________________
Alfred C. Eckert III
President
<PAGE>
IN WITNESS WHEREOF, the Company, each of the Stockholders and Purchaser
have duly executed this Agreement under seal as of the date first above
written.
THE COMPANY:
BUSSE BROADCASTING CORPORATION
By: __________________________
Name:
Title:
THE STOCKHOLDERS:
SOUTH STREET CORPORATE RECOVERY FUND I, L.P.
By: SSP Advisors, L.P., its general partner
By: SSP, Inc., its general partner
By: /s/ Alfred C. Eckert
---------------------------------
Alfred C. Eckert III
President
GREYCLIFF LEVERAGED FUND 1993, L.P.
By: SSP Partners, L.P., its general partner
By: SSP, Inc., its general partner
By: /s/ Alfred C. Eckert
----------------------------------
Alfred C. Eckert III
President
<PAGE>
SOUTH STREET LEVERAGED CORPORATE RECOVERY
FUND, L.P.
By: SSP Partners, L.P., its general partner
By: SSP, Inc., its general partner
By: /s/ Alfred C. Eckert
--------------------------------
Alfred C. Eckert III
President
SOUTH STREET CORPORATE RECOVERY FUND I,
(INTERNATIONAL) L.P.
By: Greycliff Partners, its authorized agent
By: /s/ Alfred C. Eckert
--------------------------------
Alfred C. Eckert III
Partner
<PAGE>
PURCHASER:
GRAY COMMUNICATIONS SYSTEM, INC.
By: /s/ Bob Prather
----------------------------------------
Name: Bob Prather
Title: Interim Executive Vice President--
Acquisitions
<PAGE>
GRAY
COMMUNICATIONS SYSTEMS, INC.
- -------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE FEBRUARY 17, 1998
GRAY COMMUNICATIONS SYSTEMS, INC. ANNOUNCES
SIGNING OF DEFINITIVE PURCHASE AGREEMENT
TO ACQUIRE THREE TELEVISION STATIONS
Gray Communications Systems, Inc. (NYSE: GCS and GCS.B) announced today
that it has signed a definitive purchase agreement to acquire all of the
outstanding capital stock of Busse Broadcasting Corporation. The purchase
price will be $112.0 million plus Busse's cash and cash equivalents less
Busse's indebtedness including its 11-5/8% Senior Secured Notes due 2000.
Busse Broadcasting owns and operates three VHF television stations: KOLN-TV,
the CBS affiliate operating on Channel 10 in the Lincoln-Hastings-Kearney,
Nebraska television market, and its satellite station KGIN-TV, the CBS
affiliate operating on Channel 11 serving Grand Island, Nebraska; and
WEAU-TV, the NBC affiliate operating on Channel 13 serving the Eau Claire-La
Crosse, Wisconsin market. The purchase of Busse Broadcasting is subject to
FCC approval; however, the parties expect to close on or before September 1,
1998.
KOLN-TV, KGIN-TV and WEAU-TV will complement Gray's existing group of
television stations. The markets served by these stations include one state
capitol, Lincoln, Nebraska, and are mid-sized fast growing markets. The
stations add to Gray's presence in significant collegiate market areas
including the University of Nebraska and the University of Wisconsin - Eau
Claire. The markets are fast growing with unemployment rates not exceeding
3%. The Lincoln-Hastings-Kearney market ranks as the 101st largest
television market in the U.S. with a current population of 658,000 persons
and 253,000 television households. The Eau Claire-La Crosse market ranks as
the 129th largest television market with a current population of 490,000
persons and 179,000 television households. The stations are the number one
rated stations in their respective markets and are also the local news
leaders.
J. Mack Robinson, President and Chief Executive Officer of Gray
Communications Systems, Inc. said, "We are pleased that the acquisition of
Busse Broadcasting is progressing as planned. These stations serve fast
growing markets and will make great additions to our broadcasting family."
GRAY COMMUNICATIONS SYSTEMS, INC. IS A COMMUNICATIONS COMPANY LOCATED IN
ALBANY, GEORGIA WHICH OPERATES THREE NBC-AFFILIATED TELEVISION STATIONS, FIVE
CBS-AFFILIATED TELEVISION STATIONS, THREE DAILY NEWSPAPERS, TWO ADVERTISING
WEEKLY SHOPPERS IN SOUTHWEST GEORGIA AND NORTH FLORIDA; LYNQX COMMUNICATIONS,
INC., A SATELLITE UPLINK AND PRODUCTION BUSINESS BASED IN THE SOUTHEASTERN
UNITED STATES; AND PORTAPHONE PAGING, A COMMUNICATIONS AND PAGING BUSINESS IN
THE SOUTHEAST.
For additional information, contact:
Bill Fielder Jim Ryan
Vice President and Chief Financial Officer
Chief Financial Officer Busse Broadcasting Corporation
Gray Communications Systems, Inc. (616) 388-8019
(912) 434-8732
126 N. Washington Street, P.O. Box 48, Albany, Georgia 31702-0048
(912) 888-9390 Fax (912) 888-9374
