<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- -----------
Commission File Number 1-13452
-------
PAXSON COMMUNICATIONS CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 59-3212788
------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
601 CLEARWATER PARK ROAD
WEST PALM BEACH, FLORIDA 33401
------------------------ -------------------
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (561) 659-4122
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the
proceeding 12 months (or for shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of October 31, 1997:
CLASS OF STOCK NUMBER OF SHARES
- ---------------------------- ----------------------
COMMON STOCK-CLASS A, $0.001
PAR VALUE PER SHARE ----------------------- 50,651,000
COMMON STOCK-CLASS B, $0.001
PAR VALUE PER SHARE ----------------------- 8,311,639
<PAGE> 2
PAXSON COMMUNICATIONS CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 1997 and December 31, 1996 3
Consolidated Statements of Operations
Nine Months Ended September 30, 1997 and 1996 4
Consolidated Statements of Operations
Three Months Ended September 30, 1997 and 1996 5
Consolidated Statement of Changes in
Common Stockholders' Equity 6
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1997 and 1996 7-8
Notes to Consolidated Financial Statements 9-12
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13-20
Part II - Other Information
Item 1. Legal Proceedings 21
Item 6. Exhibits and Reports on Form 8-K 21-22
Signatures 23
</TABLE>
2
<PAGE> 3
PAXSON COMMUNICATIONS CORPORATION
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- -------------
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 23,716,665 $ 61,748,788
Accounts receivable, less allowance for doubtful
accounts of $1,654,697 and $1,576,593 respectively 22,958,176 29,860,998
Prepaid expenses and other current assets 3,638,350 2,713,565
Current program rights -- 1,512,019
------------- -------------
Total current assets 50,313,191 95,835,370
Property and equipment, net 150,845,360 144,415,412
Intangible assets, net 386,572,723 220,409,421
Investments in broadcast properties 83,392,463 53,297,022
Investment in cable network 57,587,882 --
Program rights, net -- 1,075,536
Other assets, net 54,525,470 28,149,699
------------- -------------
Total assets $ 783,237,089 $ 543,182,460
============= =============
LIABILITIES, REDEEMABLE SECURITIES AND
COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 10,686,896 $ 10,676,692
Accrued interest 14,950,695 6,684,373
Current portion of program rights payable -- 1,628,959
Current portion of long-term debt 635,067 644,509
------------- -------------
Total current liabilities 26,272,658 19,634,533
Program rights payable -- 1,000,260
Deferred gain 12,100,000 --
Long-term debt 122,722,666 3,407,688
Senior subordinated notes, net 227,877,914 227,655,096
Redeemable Cumulative Compounding Junior preferred
stock, $0.001 par value; 12% dividend rate per annum,
33,000 shares authorized, issued and outstanding 41,115,514 36,780,496
Redeemable Exchangeable Preferred stock, $0.001 par value;
12.5% dividend rate per annum, 440,000 shares authorized,
150,000 shares issued and outstanding 162,968,468 147,929,150
Class A common stock, $0.001 par value; one vote per share;
150,000,000 shares authorized, 50,638,000 shares issued
and outstanding 50,638 40,442
Class B common stock, $0.001 par value; ten votes per
share, 35,000,000 shares authorized, 8,311,639 shares
issued and outstanding 8,312 8,312
Class C common stock, $0.001 par value; non-voting; 12,500,000 shares
authorized, 0 shares issued and outstanding -- --
Class A & B common stock warrants 2,316,225 6,862,647
Class C common stock warrants -- 2,335,528
Stock subscription notes receivable (2,813,250) (1,873,139)
Additional paid-in capital 284,261,419 209,621,241
Deferred option plan compensation (4,200,970) (6,397,916)
Accumulated deficit (89,442,505) (103,821,878)
Commitments and contingencies
------------- -------------
Total liabilities, redeemable securities and
common stockholders' equity
$ 783,237,089 $ 543,182,460
============= =============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
3
<PAGE> 4
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
----------------------------
1997 1996
------------ ------------
(Unaudited)
<S> <C> <C>
Revenue:
Local and national advertising $ 60,134,884 $ 41,799,175
Other 1,003,364 1,079,003
Trade and barter 114,935 119,380
------------ ------------
Total revenue 61,253,183 42,997,558
Operating expenses:
Direct 10,184,929 7,328,668
Programming 2,860,906 1,724,135
Sales and promotion 3,209,806 2,515,029
Technical 6,475,845 3,000,227
General and administrative 17,902,283 13,682,638
Trade and barter 214,719 1,849
Time brokerage agreement fees 8,279,699 2,035,859
Option plan compensation 2,154,003 2,345,866
Depreciation and amortization 14,787,998 8,548,508
------------ ------------
Total operating expenses 66,070,188 41,182,779
------------ ------------
Operating (loss) income (4,817,005) 1,814,779
Other income (expense):
Interest expense (27,695,908) (22,287,251)
Interest income 3,316,238 5,323,929
Other expense, net (3,127,364) (689,189)
------------ ------------
Loss from continuing operations (32,324,039) (15,837,732)
Discontinued operations:
Income (loss) from discontinued operations, net of
applicable income taxes (63,224) 2,128,786
Gain on sale, net of applicable income taxes 66,190,291 --
------------ ------------
Income from discontinued operations 66,127,067 2,128,786
------------ ------------
Net income (loss) 33,803,028 (13,708,946)
Dividends and accretion on preferred stock and common stock
warrants (19,423,655) (9,877,126)
------------ ------------
Net income (loss) attributable to common stock and common
stock equivalents $ 14,379,373 $(23,586,072)
============ ============
Income (loss) per common share:
Loss from continuing operations $ (0.56) $ (0.37)
Income from discontinued operations 1.14 0.05
------------ ------------
Net income (loss) 0.58 (0.32)
Dividends and accretion on preferred stock and
common stock warrants (0.33) (0.23)
------------ ------------
Net income (loss) attributable to common stock and
common stock equivalents $ 0.25 $ (0.55)
============ ============
Weighted average common stock and common stock equivalents
outstanding 57,896,733 42,721,280
============ ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
4
<PAGE> 5
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the Three Months
Ended September 30,
----------------------------
1997 1996
------------ ------------
(Unaudited)
<S> <C> <C>
Revenue:
Local and national advertising $ 23,499,947 $ 14,571,696
Other 214,877 358,992
Trade and barter 64,020 19,819
------------ ------------
Total revenue 23,778,844 14,950,507
Operating expenses:
Direct 3,468,352 2,755,982
Programming 898,714 675,526
Sales and promotion 1,613,900 1,033,208
Technical 2,410,400 1,225,979
General and administrative 5,931,697 5,254,563
Trade and barter 162,976 --
Time brokerage agreement fees 5,879,004 794,948
Option plan compensation 722,166 308,200
Depreciation and amortization 5,854,249 3,576,510
------------ ------------
Total operating expenses 26,941,458 15,624,916
------------ ------------
Operating loss (3,162,614) (674,409)
Other income (expense):
Interest expense (9,764,884) (7,240,166)
Interest income 622,964 1,290,465
Other expense, net (2,505,537) (74,626)
------------ ------------
Loss from continuing operations (14,810,071) (6,698,736)
Discontinued operations:
Income from discontinued operations, net of
applicable income taxes 567,962 995,119
Gain on sale, net of applicable income taxes 13,985,511 --
------------ ------------
Income from discontinued operations 14,553,473 995,119
------------ ------------
Net loss (256,598) (5,703,617)
Dividends and accretion on preferred stock and common
stock warrants (6,726,032) (2,463,092)
------------ ------------
Net loss attributable to common stock and common
stock equivalents $ (6,982,630) $ (8,166,709)
============ ============
Income (loss) per common share:
Loss from continuing operations $ (0.24) $ (0.14)
Income from discontinued operations 0.24 0.02
------------ ------------
Net income (loss) 0.00 (0.12)
Dividends and accretion on preferred stock and
common stock warrants (0.11) (0.05)
------------ ------------
Net income (loss) attributable to common stock and
common stock equivalents $ (0.11) $ (0.17)
============ ============
Weighted average common stock and common stock
equivalents outstanding 61,546,251 46,983,274
============ ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
5
<PAGE> 6
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statement of Changes in Common Stockholders' Equity
<TABLE>
<CAPTION>
Common Stock Class A&B Stock
------ ----- Common Class C Subscription
Class Class Class Stock Common Stock Notes
A B C Warrants Warrants Receivable
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $26,227 $8,312 $ -- $ -- $ 5,338,952 $ (115,714)
Release of Put option on Class A&B
common stock warrants 9,116,399
Issuance of common stock, net of
issuance costs 10,300
Exercise of Class A,B&C common stock
warrants 3,623 (2,253,752) (3,003,424)
Stock issued for Todd Communications
acquisition 139
Deferred option plan compensation
Option plan compensation
Increase in stock subscription notes
receivable (1,873,139)
Stock options exercised 153
Repayment of stock subscription note
receivable 115,714
Dividends on redeemable preferred stock
Accretion on Senior redeemable
preferred stock
Accretion on Series B preferred stock
Accretion on Junior preferred stock
Accretion on Redeemable Exchangeable
preferred stock
Accretion on Class A & B common
stock warrants
Net loss
------- ------ ----- ----------- ---------- -----------
Balance at December 31, 1996 40,442 8,312 -- 6,862,647 2,335,528 (1,873,139)
Deferred option plan compensation
(unaudited)
Option plan compensation (unaudited)
Exercise of Class A, B & C common
stock warrants (unaudited) 3,923 (4,546,422) (2,335,528)
Stock issued for acquisitions
(unaudited) 6,069
Stock options exercised (unaudited) 204
Increase in stock subscription
receivable (unaudited) (940,111)
Dividends on redeemable
preferred stock (unaudited)
Accretion on Junior preferred stock
(unaudited)
Accretion on Redeemable Exchangeable
preferred stock (unaudited)
Net income (unaudited)
------- ------ ----- ----------- ----------- -----------
Balance at September 30, 1997
(unaudited) $50,638 $8,312 $ -- $ 2,316,225 $ -- $(2,813,250)
======= ====== ===== =========== =========== ===========
<CAPTION>
Deferred
Additional Option
Paid-in Plan Accumulated
Capital Compensation Deficit
-----------------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1995 $ 34,342,086 $ (1,384,267) $ (55,694,393)
Release of Put option on Class A&B
common stock warrants
Issuance of common stock, net of
issuance costs 154,789,700
Exercise of Class A,B&C common stock
warrants 5,253,548
Stock issued for Todd Communications
acquisition 1,534,967
Deferred option plan compensation 12,932,506 (12,932,506)
Option plan compensation 7,918,857
Increase in stock subscription notes
receivable
Stock options exercised 768,434
Repayment of stock subscription note
receivable
Dividends on redeemable preferred stock (13,223,227)
Accretion on Senior redeemable
preferred stock (1,805,599)
Accretion on Series B preferred stock (3,418,615)
Accretion on Junior preferred stock (650,084)
Accretion on Redeemable Exchangeable
preferred stock (159,977)
Accretion on Class A & B common
stock warrants (2,651,082)
Net loss (26,218,901)
------------ ------------ -------------
Balance at December 31, 1996 209,621,241 (6,397,916) (103,821,878)
Deferred option plan compensation
(unaudited) 946,247 (946,247)
Option plan compensation (unaudited) 3,143,193
Exercise of Class A, B & C common
stock warrants (unaudited) 6,878,027
Stock issued for acquisitions
(unaudited) 66,118,931
Stock options exercised (unaudited) 696,973
Increase in stock subscription
receivable (unaudited)
Dividends on redeemable
preferred stock (unaudited) (18,422,373)
Accretion on Junior preferred stock
(unaudited) (499,155)
Accretion on Redeemable Exchangeable
preferred stock (unaudited) (502,127)
Net income (unaudited) 33,803,028
------------ ------------ -------------
Balance at September 30, 1997
(unaudited) $284,261,419 $ (4,200,970) $ (89,442,505)
============ ============ =============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
6
<PAGE> 7
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
----------------------------------
1997 1996
------------ ------------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 33,803,028 $ (13,708,946)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 28,237,081 18,378,035
Option plan compensation 3,143,193 2,727,223
Program rights amortization 703,789 1,080,430
Provision for doubtful accounts 1,272,526 799,753
Loss on sale or disposal of assets 1,296,768 61,392
Gain on sales of discontinued operations, net (66,190,291) -
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 4,793,385 (5,622,924)
Increase in prepaid expenses and other current
assets (1,079,112) (1,859,823)
(Increase) decrease in other assets (8,692,047) 6,727,610
(Decrease) increase in accounts payable and
accrued liabilities (1,453,020) 7,362,422
Increase in accrued interest 8,266,322 6,436,406
------------- -------------
Net cash provided by operating activities 4,101,622 22,381,578
------------- -------------
Cash flows from investing activities:
Acquisitions of broadcast properties (196,936,733) (146,040,428)
Increase in deposits on broadcast properties (23,940,000) (8,427,000)
Increase in investments in broadcast properties (14,696,441) (22,773,992)
Purchases of property and equipment (35,820,084) (22,931,929)
Increase in investment in cable network (1,462,882) -
Deposits made on buildings and equipment (276,000) -
Proceeds from sales of discontinued operations, net 100,504,687 -
Proceeds from sales of assets 12,233,790 228,279
------------- -------------
Net cash used in investing activities (160,393,663) (199,945,070)
------------- -------------
Cash flows from financing activities:
Proceeds from issuance of common stock, net - 154,800,000
Proceeds from long-term debt 120,000,000 17,700,000
Payments of long-term debt (694,464) (28,071,481)
Proceeds from exercise of common stock options, net 697,177 489,149
Increase in stock subscription notes receivable (940,111) -
Repayments of stock subscription notes receivable - 98,214
Payments for program rights (802,684) (1,150,659)
------------- -------------
Net cash provided by financing activities 118,259,918 143,865,223
------------- -------------
Decrease in cash and cash equivalents (38,032,123) (33,698,269)
------------- -------------
Cash and cash equivalents at beginning of period 61,748,788 68,070,990
------------- -------------
Cash and cash equivalents at end of period $ 23,716,665 $ 34,372,721
============= =============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
7
<PAGE> 8
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Cash Flows (continued)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
--------------------------------
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
Supplemental disclosures of cash flow
information:
Cash paid for interest $17,909,952 $14,694,387
=========== ===========
Cash paid for income taxes $ - $ -
=========== ===========
Non-cash operating and financing activities:
Accretion of discount on senior subordinated notes $ 222,818 $ 202,209
=========== ===========
Issuance of common stock for Travel Channel and WVVI-
TV acquisitions $66,125,000 $ -
=========== ===========
Issuance of common stock for Todd Communications
acquisition $ - $ 1,535,106
=========== ===========
Note payable incurred for WOCD-TV acquisition $ - $ 1,650,000
=========== ===========
Dividends accreted on redeemable preferred stock $18,422,373 $ 6,175,339
=========== ===========
Accretion on redeemable securities $ 1,001,282 $ 3,701,787
=========== ===========
Trade and barter revenue $ 3,549,877 $ 2,728,554
=========== ===========
Trade and barter expense $ 3,680,232 $ 2,048,538
=========== ===========
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
8
<PAGE> 9
PAXSON COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Paxson Communications Corporation's (the "Company") financial information
contained in the financial statements and notes thereto as of September 30, 1997
and for the nine and three month periods ended September 30, 1997 and 1996, are
unaudited. In the opinion of management, all adjustments necessary for the fair
presentation of such financial information have been included. These adjustments
are of a normal recurring nature. There have been no changes in accounting
policies since the period ended December 31, 1996. The composition of accounts
has significantly changed since December 31, 1996 to reflect the operations of
acquisitions discussed elsewhere herein and as a result of operations sold or to
be sold as discussed below.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. Certain reclassifications have been made to the
prior year's financial statements to conform with the 1997 presentation. These
financial statements, footnotes, and discussions should be read in conjunction
with the December 31, 1996 financial statements and related footnotes and
discussions contained in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997, and the definitive proxy statement for
the annual meeting of stockholders held May 16, 1997, and Forms 8-K dated
January 10, 1997, April 29, 1997 and October 1, 1997, all of which were filed
with the United States Securities and Exchange Commission.
2. Discontinued Operations
On June 23, 1997, the Company announced that it entered into a letter of intent
to sell its radio segment, including radio stations currently under acquisition
contracts, to Clear Channel Metroplex, Inc. and Clear Channel Metroplex
Licenses, Inc. (collectively "Clear Channel"). On August 25, 1997, the Company
entered into Asset Purchase Agreements ("Asset Purchase Agreements") with Clear
Channel and L.Paxson, Inc. ("LPI") pursuant to which the Company agreed to sell
substantially all of its radio segment assets, in five groups, and stations
under acquisition contracts for approximatley $629 million. LPI is controlled by
Lowell W. Paxson ("Mr. Paxson"), the Chairman of the Board, Chief Executive
Officer and controlling shareholder of the Company. The sale of certain of the
assets was structured as a tax free exchange, potentially permitting the Company
to defer the gain on the sale of those assets for tax purposes. The Company does
not anticipate an operating loss during the phase-out period of this segment.
Because of the decision to sell substantially all of the radio segment, the
results of operations for Paxson Radio, net of applicable income tax, have been
presented as discontinued operations in the accompanying Consolidated Statements
of Operations for all periods presented.
Pursuant to certain of the Asset Purchase Agreements, on October 1, 1997, the
Company sold its interests in its radio networks and Orlando, Florida billboard
operations to Clear Channel for $25.7 million and sold its interests in 23 of
its 42 radio stations to LPI for approximately $369.4 million in cash and a note
issued by LPI in the amount of $58.9 million. The note bears interest at 7% and
is payable upon the earlier of (i) eighteen months from the date of issuance or
(ii) the closing of the sale of the LPI owned radio stations to Clear Channel
under the Asset Purchase Agreements. The Company will receive $6.3 million in
interest on the note if the note is outstanding for the eighteen months or in
the form of a prepayment penalty if the note is paid before maturity. Also, on
October 1, 1997, Clear Channel began operating the Company's remaining 19 radio
stations and all of LPI's radio stations pursuant to Time Brokerage or Time
Sales Agreements. The Company's and LPI's radio station assets are expected to
be sold to Clear Channel in the fourth quarter of 1997 upon receipt of
regulatory approvals. In addition to payment of the aforementioned LPI note, the
Company expects to receive additional consideration of approximately $140.2
million upon the sale of the remaining radio station assets.
The Company previously contracted to purchase three radio stations in West Palm
Beach, Florida. The Company's rights pursuant to these agreements and its
obligations to sell these stations to Clear Channel under the Asset Purchase
Agreements were assigned to LWP Radio, Inc. ("LWP"). LWP is also controlled by
Mr. Paxson. LWP purchased the assets of these radio stations for approximately
$28.6 million using funds loaned by Clear Channel for the acquisitions and Clear
Channel began operating these radio stations pursuant to Time Brokerage
Agreements on October 3, 1997. These station assets are expected to be sold to
Clear Channel by LWP at their cost of approximately $28.6 million in the fourth
quarter of 1997 upon receipt of regulatory approvals.
LPI and LWP are not expected to realize any direct financial benefit from these
transactions with the Company.
During October 1997, the Company sold the remainder of its billboard assets
located in Tampa, Florida to Universal Outdoor, Inc. for total consideration of
approximately $4.5 million.
9
<PAGE> 10
The Company intends to use the proceeds of the previously described
transactions primarily to complete announced television station acquisitions and
for programming payments as discussed elsewhere herein.
The following table sets forth the actual and pro forma selected balance sheet
amounts of the Company as of September 30, 1997. Pro forma amounts give effect
to the sale of the radio segment.
<TABLE>
<CAPTION>
As of September 30, 1997
------------------------
Actual Pro forma
-------- ---------
Assets (in thousands)
<S> <C> <C>
Cash and cash equivalents $ 23,717 $ 194,111
Other current assets 26,596 7,283
-------- ----------
Total current assets 50,313 201,394
-------- ----------
Property and equipment, net 150,845 96,996
Intangible assets, net 386,573 178,755
Cash held by qualified intermediary - 434,606
Investments and Other assets 195,506 189,557
-------- ----------
Total assets $783,237 $1,101,308
======== ==========
Total current liabilities $ 26,273 $ 41,302
Deferred income taxes - 115,260
(Accumulated deficit) Retained earnings (89,443) 98,614
Other liabilities and equity 846,407 846,132
-------- ----------
Total liabilities and equity $783,237 $1,101,308
======== ==========
</TABLE>
For additional discussion and explanation of significant pro forma
adjustments, see the Company's Form 8-K dated October 1, 1997 filed with the
United States Securities and Exchange Commission.
The Paxson Radio operations generated revenues of approximately $78,190,000 and
$52,481,000, and $26,978,000 and $20,854,000, for the nine and three month
periods ended September 30, 1997 and 1996, respectively.
During the third quarter the Company completed the sale of its Network
Affiliated Television operations. Aggregate consideration of $119 million was
received in conjunction with these sales during the second and third quarters of
1997.
The Paxson Network Affiliated Television operations generated revenues of
approximately $12,319,000 and $14,023,000, and $1,540,000 and $4,326,000 for the
nine and three month periods ended September 30, 1997 and 1996, respectively.
The components of net assets of discontinued operations (both Radio and Network
Affiliated Television) included in the consolidated balance sheets at September
30, 1997 and December 31, 1996, are as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Current assets $ 19,313,796 $ 23,017,001
Noncurrent assets 266,853,825 180,194,830
------------ ------------
Total assets $286,167,621 $203,211,831
============ ============
Current liabilities 4,971,783 8,344,163
Noncurrent liabilities 274,995 1,576,467
------------ ------------
Total liabilities 5,246,778 9,920,630
------------ ------------
Total net assets $280,920,843 $193,291,201
============ ============
</TABLE>
Net assets of discontinued operations at September 30, 1997 and December 31,
1996 excludes cash and cash equivalents and accounts receivable of Paxson
Network Affiliated Television which were retained by the Company. Additionally,
Senior Subordinated Notes, the related deferred loan origination costs and
accrued interest payable have been excluded from the net assets of the
discontinued operations as the Senior Subordinated Notes will not be assumed by
the buyers of the discontinued operations.
3. Investment in Cable Network
On July 11, 1997, the Company through a wholly-owned unconsolidated subsidiary
acquired the assets of The Travel Channel from Landmark Communications, Inc. for
aggregate consideration of $75,000,000, including $55,000,000 of the Company's
class A common stock (4,773,097 shares issued at closing) and $20,000,000 in
cash. The Company also issued 97,632 shares ($1,125,000) of its class A common
stock to Communications Equity Associates, Inc. in connection with their role as
financial advisor in the Travel Channel transaction. The $20,000,000 in cash was
obtained by the Company's unconsolidated subsidiary through a loan secured by
its investment in the Travel Channel ("Acquisition Loan"). The unconsolidated
subsidiary has borrowed an additional $1,000,000 under this
10
<PAGE> 11
loan facility for working capital requirements. The results of operations of the
Travel Channel have been included in the Company's consolidated statements of
operations for the nine and three months ended September 30, 1997 using the
equity method of accounting and as such, the $21,000,000 in outstanding loans
obtained by the Company's unconsolidated subsidiary have not been included in
the Company's consolidated balance sheets at September 30, 1997. The investment
in cable network balance on the Company's September 30, 1997 consolidated
balance sheet reflects the Company's issuance of common stock in connection with
the acquisition as discussed above and advances made to date to the Travel
Channel.
During September 1997, the Company announced that it had entered into a letter
of intent with Discovery Communications, Inc. ("DCI") under which DCI will
acquire a 70% controlling interest in a new cable television service partnership
formed by the Company and DCI. The Company will contribute its cable television
network, The Travel Channel, to this new partnership. The Company's
unconsolidated subsidiary will receive $20 million in cash, a 30% ownership
interest in the new partnership and an annual consulting fee of $300,000. The
Company's unconsolidated subsidiary will receive a priority credit of
$55,000,000 to its capital account and DCI will receive a $20,000,000 priority
credit. The Company's unconsolidated subsidiary intends to use the $20,000,000
that it will receive from this transaction to repay the Acquisition Loan. DCI
will serve as the managing partner with its Discovery Networks US unit
overseeing all operations of the cable television service partnership including
administration, programming, affiliate sales, advertising sales and marketing.
The following unaudited information of The Travel Channel is presented for the
three month period ended September 30, 1997:
<TABLE>
<S> <C>
Current assets $ 4,347,000
Noncurrent assets 76,170,000
-----------
Total assets $80,517,000
===========
Current liabilities 22,757,000
===========
Common stockholders equity 57,760,000
-----------
Total liabilities and common stockholders equity $80,517,000
===========
Net revenues $ 4,584,000
===========
Operating income $ 612,000
===========
Net income $ 172,000
===========
</TABLE>
4. Common Stock Warrants
In July 1997, the holders of the Company's Class A and B common stock warrants
exercised 32.5083 warrants for 900,000 shares of Class A common stock. In
September 1997, the holders of the Company's Class A and B common stock warrants
exercised 32.5121 warrants for 900,000 shares of Class A common stock. The
Company has 33.1252 redeemable common stock warrants still outstanding which
entitle the holders to purchase 688,312 Class A common shares and 229,437 Class
B common shares.
5. Income (Loss) Per Share Data
Computations of the weighted average common stock and common stock equivalents
outstanding are as follows:
<TABLE>
<CAPTION>
For the Nine Months For the Three Months
ended September 30, ended September 30,
----------------------- -----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average Class A and
Class B common stock outstanding 52,065,681 42,721,280 56,835,119 46,983,274
---------- ---------- ---------- ----------
Weighted average of options
outstanding assumed exercised 2,489,928 * 2,670,034 *
---------- ---------- ---------- ----------
Weighted average of common stock
warrants outstanding assumed
exercised 3,341,124 * 2,041,098 *
---------- ---------- ---------- ----------
Weighted average common stock and
common stock equivalents
outstanding 57,896,733 42,721,280 61,546,251 46,983,274
========== ========== ========== ==========
</TABLE>
* In accordance with Accounting Principles Board Opinion No.15, because the
effect of the Company's common stock equivalents was anti-dilutive, they have
been excluded from the Company's per share calculations. Additionally, the
Company does not present fully diluted EPS in the Consolidated Statements of
Operations because the effect of the Company's common stock equivalents resulted
in a less than 3% dilution for the periods presented.
In February 1997, the Financial Accounting Standards Board adopted Statement of
Financial
11
<PAGE> 12
Standards ("SFAS") No. 128, "Earnings per Share". The Statement establishes
standards for computing and presenting earnings per share and applies to
entities with publicly held common stock or potential common stock. The
Statement is effective for financial statements issued for periods ending after
December 15, 1997 and earlier application is not permitted. The adoption of SFAS
No. 128 is not expected to have a material effect on the Company's earnings per
share computation.
12
<PAGE> 13
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Since its inception in 1991, the Company has grown primarily through the
acquisition and management of radio and television broadcast stations and radio
networks, as well as the subsequent improvement of these properties' operations.
Certain of the Company's television stations were and continue to be operated
pursuant to time brokerage agreements for various periods. Under time brokerage
agreements, the stations' operating revenues and expenses are controlled by the
Company and are included in the consolidated statements of operations. The
Company currently operates Paxson Television, a nationwide network of owned,
operated or affiliated television stations carrying its proprietary network,
which presently broadcasts long form paid programming consisting primarily of
infomercials. The Company also operates through an unconsolidated subsidiary The
Travel Channel, a 24 hour per day cable television network dedicated to travel
related programming acquired by the Company on July 11, 1997. During September
1997, the Company entered into a letter of intent to contribute its investment
in The Travel Channel to a new joint venture partnership with Discovery
Communications, Inc. ("DCI") which will be managed by DCI. See the cable
television network joint venture discussion elsewhere herein. The operations of
The Travel Channel have been included in the consolidated statements of
operations using the equity method of accounting. Two other business segments,
Paxson Radio and Paxson Network-Affiliated Television, have been classified as
discontinued operations for financial reporting purposes as a result of the
Company's decisions made during 1997 to sell these segments. See Note 2 of the
Notes to Consolidated Financial Statements.
The Company's operating results throughout the periods discussed have been
affected significantly by the timing of television acquisitions and sales.
Operating revenues are derived from the sale of advertising to local and
national advertisers. The operation of these stations involves low operating
expenses relative to traditional television station operation and does not vary
significantly with revenue, with the exception of costs associated with sales
commissions and agency fees. As such, upon obtaining a certain level of revenue
sufficient to cover fixed costs, additional revenue levels have a significant
impact on the operating results of an individual station.
The Company's past results are not necessarily indicative of future performance
due to various risks and uncertainties which may significantly reduce revenues
and increase operating expenses. For example, a reduction in expenditures by
national or local television advertisers in the Company's markets may result in
lower revenues. The Company may be unable to reduce expenses, including certain
variable expenses, in an amount sufficient in the short term to offset lost
revenues caused by poor market conditions. The broadcasting industry continues
to undergo rapid technological change which may increase competition within the
Company's markets as new delivery systems, such as direct broadcast satellite
and computer networks, attract customers. The changing nature of audience tastes
and viewing habits may affect the continued attractiveness of the Company's
broadcasting stations to advertisers, upon whom the Company is dependent for its
revenue. The concentration of the Company's assets in its television station
operations increases the Company's exposure to the above risks and
uncertainties. The Company currently expects to continue acquiring additional
television stations and to review programming opportunities for broadcast on its
television stations which may have similar effects on the comparability of
revenues, operating expenses, interest expense and operating cash flow as those
described above.
Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount (contingent or otherwise) of assets and liabilities
at the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. The fair values of the Company's long-term
debt and the senior subordinated notes were estimated based on market rates and
instruments with similar risks and maturities. The fair value estimates
presented are based on pertinent information available to management as of
September 30, 1997. As a result of the foregoing, the estimates presented in the
Company's financial statements are not necessarily indicative of the amounts
that the Company could realize in a current market exchange and have not been
comprehensively revalued for purposes of the Company's financial statements.
The Company believes that its network of television stations comprise a valuable
national television broadcasting distribution infrastructure, the value of which
could potentially be greater if employed to air programming other than, or in
addition to, the long form paid programming which is currently being aired. The
Company engaged in discussions with a variety of television and cable networks,
studios, programmers and others concerning various alternative methods of
utilizing its television broadcasting distribution assets. The Company
considered many alternatives, including selling large blocks of air time
to third parties that would select programming to be aired during such blocks of
time and sell the spot advertising for such blocks. The Company recently made a
determination to evaluate and obtain programming and sell spot advertising
during such programming on its own. The Company believes that this strategy
will provide an opportunity to achieve greater long term shareholder value than
other alternative uses of its broadcasting distribution infrastructure that it
considered. In October and November, 1997, the Company entered into
programming contracts to air syndicated television shows
13
<PAGE> 14
"Touched By An Angel", "Dave's World", "Promised Land", "Sisters", "Life Goes
On", "I'll Fly Away", "The New Land", "Medical Center", "Dr. Quinn, Medicine
Woman", "Christy" and "Neon Rider" from 1998 to 2004. The Company has also
entered into programming contracts to air feature films from 1998 to 2001. Such
programming contracts require collective payments by the Company of $243.9
million over such period. See "Programming Commitments" elsewhere herein. The
Company continues to evaluate additional programming and currently plans to
start airing its programming nationwide over its television stations in the fall
of 1998. The Company expects that under the new format the selling expenses
willremain proportionate to revenues and that revenues as well as promotional
and programming expenses will increase significantly. The Company currently
expects that programming amortization costs will average less than $1,000,000
annually per market served by its new network, an amount it believes is
substantially less than such costs incurred on average by other commercial
television stations.
This report contains forward-looking statements which are made pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of 1995.
Statements as to what the Company "believes", "intends", "expects" or
"anticipates", and other similarly anticipatory expressions, are generally
forward-looking and are made only as of the date of this Report. Readers of this
Report are cautioned not to place undue reliance on such forward-looking
statements, as they are subject to risks and uncertainties which could cause
actual results to differ materially from those discussed in the forward-looking
statements and from historical results of operations. Among the risks and
uncertainties which could cause such a difference are those relating to the
Company's high level of indebtedness and the restrictions placed on the
Company's business and operations by the terms of its indebtedness and its
outstanding preferred stock, the risks relating to the comprehensive
governmental regulation of the Company's businesses, including the restrictions
on multiple broadcast property ownership, the broadcast licensing renewal
requirements, the risks of industry and economic conditions which could
adversely affect the Company's business operations, the risk that the remaining
portion of the radio sale is not consummated and the other factors described
in the Company's Annual Report on Form 10-K for the year ended December 31,
1996. In addition, the Company's recent decision to obtain on its own and air
more conventional programming during certain portions of the day on its
nationwide network of television stations entails certain additional risks and
uncertainties, including, those risks associated with the launch of a new
television network, the ability to obtain desirable programming at a
financially-feasible cost, the ability to successfully and profitably sell
advertising spots during such programming.
The following table lists those television properties that the Company owns,
operates or is affiliated with, and those properties which the Company has
agreements to acquire or operate, as identified under "Announced TV
Acquisitions" below. (Television and cable households in thousands.)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
NATIONAL CURRENT TOTAL CURRENT
TV COMMENCEMENT STATION CABLE STATION MARKET STATION TOTAL
MARKET OF CARRIAGE AT CABLE CABLE CABLE MARKET TV
MARKET(1) RANK STATION CH OPERATIONS COMMENCEMENT(2) CARRIAGE(3) HOUSEHOLDS CARRIAGE %(3) HOUSEHOLDS
- ------ ---- ------- -- ---------- ------------ -------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OWNED OR OPERATED
New York, NY* 1 WPXN TV 31 7/97 4,141 4,449 4,825 92.2% 6,756
New York, NY 1 WHAI TV 43 3/96 626 761 4,825 15.8% 6,756
Los Angeles, CA 2 KZKI TV 30 5/95 1,453 2,598 3,133 82.9% 5,009
Philadelphia, PA 4 WTGI TV 61 2/95 1,225 1,702 2,033 83.7% 2,659
San Francisco, CA 5 KLXV TV 65 6/95 650 1,308 1,640 79.8% 2,298
Boston, MA 6 WGOT TV 60 5/95 604 1,051 1,694 62.0% 2,174
Boston, MA* 6 WHRC TV(5) 46 4/97 0 272 1,694 16.0% 2,174
Washington, D.C. 7 WVVI TV 66 8/97 940 993 1,331 74.6% 1,928
Dallas, TX 8 KINZ TV 68 12/96 0 683 989 69.1% 1,899
Atlanta, GA 10 WTLK TV 14 4/94 300 998 1,144 87.3% 1,675
Atlanta, GA* 10 WNGM TV 34 4/96 182 312 1,144 27.2% 1,675
Houston, TX 11 KTFH TV 49 3/95 647 846 918 92.2% 1,624
Cleveland, OH 13 WAKC TV 23 3/96 560 817 1,026 79.6% 1,469
Cleveland, OH* 13 WOAC TV 67 10/95 332 370 1,026 36.0% 1,469
Minneapolis, MN 14 KXLI TV 41 10/96 605 664 746 89.0% 1,448
Tampa, FL* 15 WFCT TV 66 8/94 0 968 1,043 92.8% 1,436
Miami, FL* 16 WCTD TV 35 4/94 396 1,019 1,019 100.0% 1,386
Phoenix, AZ 17 KWBF TV 13 3/96 23 28 755 3.7% 1,289
Phoenix, AZ 17 KAJW TV(4)(8) 51 12/97 0 0 755 0.0% 1,289
Denver, CO 18 KUBD TV 59 8/95 430 463 741 62.4% 1,199
Sacramento, CA* 20 KCMY TV 29 7/95 624 640 726 88.0% 1,127
St. Louis, MO 21 WCEE TV(6)(10) 13 1/96 23 65 585 11.2% 1,109
Orlando, FL* 22 WIRB TV 56 12/94 468 777 796 97.6% 1,041
Hartford, CT* 27 WTWS TV(5) 26 3/95 661 854 792 107.9% 916
Kansas City, MO 31 KINB TV 50 5/97 397 433 518 83.5% 792
Milwaukee, WI 32 WHKE TV 55 7/96 257 345 477 72.4% 791
Salt Lake City, UT 36 KOOG TV 30 7/97 200 200 387 51.6% 690
Grand Rapids, MI 37 WILV TV(6)(10) 43 9/96 0 383 412 93.1% 659
</TABLE>
14
<PAGE> 15
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Norfolk, VA* 39 WJCB TV 49 8/95 343 404 474 85.3% 636
Oklahoma City, OK 44 KMNZ TV 62 10/96 0 230 374 61.5% 593
Greensboro, NC 46 WAAP TV 16 7/96 323 337 367 92.1% 577
Wilkes Barre, PA* 47 WSWB TV(4)(8) 64 12/97 0 0 452 0.0% 566
Providence, RI 49 WOST TV(4)(7) 69 12/97 0 0 433 0.0% 559
Birmingham, AL 51 WNAL TV 44 10/96 31 88 363 24.2% 547
Albany, NY 52 WOCD TV 55 5/96 251 274 376 72.8% 509
Dayton, OH 53 WTJC TV 26 10/95 298 306 351 87.3% 503
Fresno, CA* 55 KKAG TV 61 6/97 195 222 263 84.5% 496
Little Rock, AR* 56 KVUT TV(4)(8) 42 8/97 0 0 301 0.0% 481
Tulsa, OK 58 KGLB TV 44 7/97 0 1 299 0.2% 468
Roanoke, VA 68 WEFC TV 38 12/97 182 182 263 69.3% 402
Green Bay, WI 70 WSCO TV 14 12/97 0 226 226 100.0% 381
Cedar Rapids, IA* 87 KTVC TV 48 5/97 0 11 198 5.7% 308
San Sebastian, PR NR WJWN TV 38 2/96 0 0 0 0.0% 0
Ponce, PR NR WKPV TV 20 2/96 0 0 0 0.0% 0
San Juan, PR NR WSJN TV(11) 24 2/96 285 285 298 95.6% 1,064
---- ---- ---- ----- -----
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL OWNED OR OPERATED(9) 17,653 26,567 32,769 81.1% 49,463
- -------------------------------------------------------------------------------------------------------------------------------
AFFILIATES
Philadelphia, PA 4 WTVE TV 51 10/96 414 700 2,033 34.4% 2,659
Washington, D.C. 7 WSHE TV 60 10/96 0 124 1,331 9.3% 1,928
Indianapolis, IN 25 WIIB TV 63 1/96 401 424 618 68.6% 957
Hartford, CT 27 WHCT TV 18 7/97 0 70 792 8.9% 916
Raleigh, NC 29 WRMY TV 47 6/96 0 317 512 61.8% 826
Fresno, CA 55 KGMC TV 43 1/96 179 164 263 62.3% 496
---- ---- ---- ----- -----
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL OWNED, OPERATED AND AFFILIATES(9) 18,646 28,365 33,899 83.7% 51,246
- -------------------------------------------------------------------------------------------------------------------------------
ANNOUNCED TV ACQUISITIONS
San Fransisco, CA 5 KWOK TV(4)(6) 68 1,640 2,298
Detroit, MI 9 WBSX TV 31 1,191 1,782
Seattle, WA 12 KBCB TV(4) 24 1,104 1,514
Pittsburgh, PA 19 Channel 40 40 899 1,140
Raleigh, NC 29 WFAY TV 62 512 826
Nashville, TN 33 WKZX TV 28 496 789
Buffalo, NY 40 WAQF TV(4) 51 475 630
West Palm Beach, FL 43 WHBI TV(4)(6) 67 496 593
Charleston, WV* 57 WKRP TV(4) 29 353 480
Honolulu, HI* 71 KAPA TV(4) 66 333 380
Tucson, AZ* 78 KXGR TV(4) 46 215 356
--- ---
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNOUNCED TV STATIONS(9) 5,563 7,665
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL TV NETWORK(9) 39,462 58,911
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Operated pursuant to a time brokerage agreement; except as noted, the Company
has an agreement and/or option to acquire a 100% ownership interest.
(1) Each station is licensed by the FCC to serve a specific community, which
is included in the listed market.
(2) Cable households reached at commencement of station's operations.
(3) Cable households reached at 10/97, to be billed in 11/97, and as a
percentage of the total market cable households.
(4) Station is currently under construction or not operating commercially.
(5) No option to acquire.
(6) Pending affiliate.
(7) 50% ownership interest.
(8) 49% ownership interest with remaining 51% to be acquired.
(9) Market Household totals do not double count markets where the Company
has more than one station.
(10) Under contract to sell.
(11) Includes the household numbers for the three markets in Puerto Rico.
15
<PAGE> 16
Purchases of Broadcast Properties:
During August 1997, the Company entered into an agreement to purchase television
station WFAY-TV serving the Raleigh, North Carolina market for $4,500,000.
During September 1997, the Company entered into agreements to purchase
television stations WKRP-TV 29 and KXGR-TV 46 serving, respectively, the
Charleston, West Virginia and Tucson, Arizona markets for, $8,250,000 and
$4,000,000, respectively. The Company intends to initially operate both WKRP-TV
and KXGR-TV pursuant to time brokerage agreements before exercising options to
acquire both stations.
During October 1997, the Company entered into an agreement to purchase
television station WJCB-TV serving the Norfolk, Virginia market for $14,750,000.
During October 1997, the Company completed its previously announced acquisitions
of WSCO-TV in Green Bay, Wisconsin for approximately $4,750,000, WNAL-TV in
Birmingham, Alabama for approximately $10,000,000 and WEFC-TV in Roanoke,
Virginia for approximately $5,500,000.
During November 1997, the Company completed the purchase of the remaining 51% of
KGLB-TV serving the Tulsa, Oklahoma market not already owned.
Sales of Broadcast Properties:
During July 1997, the Company entered into contracts to sell its interests in
television stations WCEE-TV and WILV-TV, serving the St. Louis, Missouri and
Grand Rapids, Michigan markets, for $4,800,000 and $7,000,000 respectively, to
DP Media, Inc., a company beneficially owned by members of Mr. Paxson's family.
The Company plans to continue including these stations in its nationwide
broadcast TV network pursuant to affiliation agreements. The Company has
received approximately $3,600,000 and $5,250,000 of the purchase price for
WCEE-TV and WILV-TV, respectively. The final funds are due upon regulatory
approval and transfer of the station licenses. The Company believes that the
terms of such transactions were at least as favorable as they would have been if
obtained in an arm's length transactions with an unaffiliated third party.
Cable Television Network Joint Venture:
During September 1997, the Company announced that it had entered into a letter
of intent with DCI under which DCI will acquire a 70% controlling interest in a
new cable television service partnership formed by the Company and DCI. The
Company will contribute its cable television network, The Travel Channel, to
this new partnership. The Company's unconsolidated subsidiary will receive $20
million cash, a 30% ownership interest in the new partnership and an annual
consulting fee of $300,000. The Company's unconsolidated subsidiary will receive
a priority credit of $55 million to its capital account and DCI will receive a
$20 million priority credit. The Company's unconsolidated subsidiary intends to
use the $20 million that it will receive from this transaction to repay the
acquisition loan outstanding. See Note 3 of the Notes to Consolidated Financial
Statements. DCI will serve as the managing partner with its Discovery Networks
US unit overseeing all operations of the cable television service partnership
including administration, programming, affiliate sales, advertising sales
and marketing.
16
<PAGE> 17
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected financial
information as a percentage of revenues.
Statements of Operations
<TABLE>
<CAPTION>
For the nine months For the three months
ended September 30, ended September 30,
--------------------- --------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Operating Expenses:
Direct 16.6 17.0 14.6 18.4
Programming 4.7 4.0 3.8 4.5
Sales and promotion 5.2 5.9 6.8 6.9
Technical 10.6 7.0 10.1 8.2
General and administrative 29.2 31.8 25.0 35.2
Trade and barter 0.4 - 0.7 -
Time brokerage agreement fees 13.5 4.7 24.7 5.3
Option plan compensation 3.5 5.5 3.0 2.1
Depreciation and amortization 24.1 19.9 24.6 23.9
----- ----- ----- -----
Total operating expenses 107.8 95.8 113.3 104.5
----- ----- ----- -----
Operating (loss) income (7.8) 4.2 (13.3) (4.5)
Other income (expense):
Interest expense (45.2) (51.8) (41.1) (48.4)
Interest income 5.4 12.4 2.6 8.6
Other expense, net (5.1) (1.6) (10.5) (0.5)
----- ----- ----- -----
Loss from continuing operations (52.7) (36.8) (62.3) (44.8)
===== ===== ===== =====
</TABLE>
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
Consolidated revenues for the nine months ended September 30, 1997 increased 43%
(or $18.3 million) to $61.3 million from $43.0 million for the nine months ended
September 30, 1996. This increase was primarily due to television station
acquisitions and new time brokerage operations.
Operating expenses for the nine months ended September 30, 1997 increased 60.4%
(or $24.9 million) to $66.1 million from $41.2 million for the nine months ended
September 30, 1996. The increase was primarily due to higher direct expenses
such as commissions which rise in proportion to revenues ($2.9 million), other
non-direct costs, which are primarily due to operating new television stations
($9.5 million), higher depreciation and amortization, primarily related to
assets acquired ($6.2 million), and increased time brokerage agreement fees,
primarily related to new time brokerage operations ($6.2 million).
Operating cash flow for the nine months ended September 30, 1997 increased 40.2%
(or $5.9 million) to $20.5 million, from $14.6 million for the nine months ended
September 30, 1996. The increase in operating cash flow was primarily a result
of television station acquisitions and new time brokerage operations. "Operating
cash flow" is defined as net income excluding non-cash items, non-recurring
items including terminated operations, interest, other income, income taxes and
time brokerage fees, less scheduled program rights payments. The Company has
included operating cash flow data because the financial performance of broadcast
companies is frequently evaluated based on some measure of cash flow from
operations. Operating cash flow is not, and should not be used as an indicator
of or alternative to operating income, net income or cash flow as reflected in
the Consolidated Financial Statements as it is not a measure of financial
performance under generally accepted accounting principles.
Interest expense for the nine months ended September 30, 1997 increased to $27.7
million from $22.3 million for the nine months ended September 30, 1996, an
increase of 24.3% primarily due to a greater level of senior debt throughout the
period. As a result of acquisitions, at September 30, 1997, total long-term debt
and senior subordinated notes were $351.2 million, compared with the balance of
$231.8 million outstanding a year prior.
Interest income for the nine months ended September 30, 1997 decreased to $3.3
million from $5.3 million, primarily due to lower levels of cash and cash
equivalents invested throughout the period.
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
Consolidated revenues for the three months ended September 30, 1997 increased
59% (or $8.9 million) to $23.8 million from $14.9 million for the three months
ended September 30, 1996. This increase was primarily due to television station
acquisitions and new time brokerage operations.
17
<PAGE> 18
Operating expenses for the three months ended September 30, 1997 increased 72.4%
(or $11.3 million) to $26.9 million from $15.6 million for the three months
ended September 30, 1996. The increase was primarily due to higher direct
expenses such as commissions which rise in proportion to revenues ($0.7
million), other non-direct costs, which are primarily due to operating new
television stations ($2.7 million), higher depreciation and amortization,
primarily related to assets acquired ($2.3 million), increased time brokerage
agreement fees, primarily related to new time brokerage operations ($5.1
million), and increased option plan compensation costs ($.4 million).
Operating cash flow for the three months ended September 30, 1997 increased
135.7% (or $5.4 million) to $9.4 million, from $4.0 million for the three months
ended September 30, 1996. The increase in operating cash flow was primarily a
result of television station acquisitions and new time brokerage operations.
Interest expense for the three months ended September 30, 1997 increased to $9.8
million from $7.2 million for the three months ended September 30, 1996, an
increase of 34.9% primarily due to a greater level of senior debt throughout the
period. As a result of acquisitions, at September 30, 1997, total long-term debt
and senior subordinated notes were $351.2 million, compared with the balance of
$231.8 million outstanding a year prior.
Interest income for the three months ended September 30, 1997 decreased to $0.6
million from $1.3 million, primarily due to lower levels of cash and cash
equivalents invested throughout the period.
LIQUIDITY AND CAPITAL RESOURCES
On October 1, 1997, the Company completed the first phase of its radio segment
sale resulting in gross proceeds of approximately $395.1 million. Additional
consideration to be received by the Company upon the sale of the remaining radio
station assets is approximately $205.4 million including the LPI note and
interest. Also during October 1997, the Company sold its Tampa billboard
operations for approximately $4.5 million and assigned its rights to purchase
three radio stations in West Palm Beach, Florida to LWP Radio, Inc., which
completed these purchases. See Note 2 of the Notes to Consolidated Financial
Statements for a discussion of the above transactions. The Company anticipates
that the proceeds from the radio segment sales will be primarily utilized to
fund the television station acquisitions and programming payments discussed
below along with related capital requirements. The completion of each of the
acquisitions discussed below is subject to a variety of factors and to the
satisfaction of various conditions, and there can be no assurance that any of
such acquisitions will be completed.
The Company's working capital at September 30, 1997 and December 31, 1996 was
$24 million and $76.2 million, respectively, and the ratio of current assets to
current liabilities was 1.92:1 and 4.88:1 on such dates, respectively. Working
capital decreased primarily due to the acquisitions previously discussed.
Cash provided by operations of $4.1 million and $22.4 million for the nine
months ended September 30, 1997 and 1996, respectively, reflects the improvement
in operating results of existing properties, acquisitions and time brokerage
properties net of increased interest expense and increases in other assets. Cash
used for investing activities primarily reflects the acquisitions and
investments discussed above, and purchases of equipment for these and existing
properties net of the proceeds from the sale of network affiliated television.
Cash provided by financing activities primarily reflects the proceeds from the
long term debt borrowings net of debt repayments. In addition, the Company has
advanced $1,530,000 to The Christian Network, Inc. ("CNI") during the nine
months ended September 30, 1997 under a demand note bearing interest at the
prime rate (currently 8.50%). At September 30, 1997 the Company had total
advances to CNI outstanding of approximately $4,523,000 million, which has been
included in investments in broadcast properties. Non-cash activity relates to
option plan compensation, reciprocal trade and barter advertising revenue and
expense and accretion of discount on senior subordinated notes, as well as
dividends and accretion on the redeemable preferred stock. The sale of WTWS-TV
during the first quarter of 1997 was a non cash transaction and accordingly is
not reflected in the statement of cash flows.
The Company's primary capital requirements are for the acquisition of
broadcasting properties and related capital expenditures, programming payments
and interest and principal payments on indebtedness. The Company's outstanding
Senior subordinated notes require semi-annual interest payments at a fixed rate.
The Company presently has $120 million of outstanding borrowings under its $200
million senior secured revolving credit facility ("Senior Facility"). Borrowings
under the Senior Facility bear interest at floating rates and require interest
payments on varying dates, but at least quarterly, depending on the interest
rate option selected by the Company.
The Company believes that the cash on hand and net proceeds from the radio
segment sales will be sufficient to complete the investments and programming
payments discussed below (including the expected capital expenditures associated
therewith and net of deposits and advances made to date), and to meet its
anticipated short term and long term working capital requirements for its
existing properties. However, should the Company suffer a
18
<PAGE> 19
significant impairment to its cash flow from operations due to the occurrence of
one or more adverse events, the Company could have insufficient resources to
repay indebtedness under the Senior Facility or the senior subordinated notes
when due or to make required payments on its preferred stock.
PROGRAMMING COMMITMENTS
The Company has entered into commitments for broadcast rights related to
programs that are not currently available for broadcast and therefore not
included in the consolidated financial statements. Future minimum annual
payments under these agreements as of September 30, 1997 are as follows:
<TABLE>
<S> <C>
1997 $ 37,622,500
1998 21,983,701
1999 57,061,934
2000 54,642,766
2001 48,814,099
2002 17,933,333
2003 3,520,000
2004 2,346,667
------------
$243,925,000
</TABLE>
The Company has also committed to purchase additional future episodes of these
programs should they be made available.
INVESTMENT COMMITMENTS
The completion of each of the investments discussed below is subject to a
variety of factors and to the satisfaction of various conditions, and there can
be no assurance that any of such investments will be completed. The Company has
agreements to purchase significant assets of, or to enter into time brokerage
and financing arrangements with respect to, the following properties, which are
subject to various conditions, including the receipt of regulatory approvals:
<TABLE>
<CAPTION>
Property Market Served * Purchase Price
- ------------------------------------------------------------------------------
<S> <C> <C>
Television:
WPXN-TV New York City, NY (1) $257,500,000
WBSX-TV Detroit, MI $ 35,000,000
Channel 40 Pittsburgh, PA $ 35,000,000
KCMY-TV Sacramento, CA (2) $ 17,000,000
WJCB-TV Norfolk, VA $ 14,750,000
WIRB-TV Orlando, FL (3) $ 13,162,000
WNAL-TV Birmingham, AL (4) $ 10,000,000
WKRP-TV Charleston, WV $ 8,250,000
KBCB-TV Seattle, WA $ 8,000,000
KKAG-TV Fresno, CA (5) $ 7,960,000
WHBI-TV West Palm Beach, FL (6) $ 7,000,000
KAJW-TV Phoenix, AZ (7) $ 6,600,000
WSWB-TV Wilkes-Barre, Scranton, PA (7) $ 6,160,000
WEFC-TV Roanoke, VA (11) $ 5,500,000
KAPA-TV Honolulu, HI $ 5,000,000
KTVC-TV Cedar Rapids, IA (8) $ 5,000,000
WSCO-TV Green Bay, WI (11) $ 4,750,000
KWOK-TV San Francisco, CA (6) $ 4,500,000
WFAY-TV Raleigh, NC $ 4,500,000
WKZX-TV Nashville, TN $ 4,200,000
KXGR-TV Tucson, AZ $ 4,000,000
WAQF-TV Buffalo, NY (9) $ 3,000,000
WHCT-TV Hartford, CT $ 3,000,000
KVUT-TV Little Rock, AR (7) $ 1,250,000
WFCT-TV, WCTD-TV Tampa and Miami, FL $ 801,000
KGLB-TV Tulsa, OK (10) $ 421,000
Paxson Radio:
WKGR-FM, WOLL-FM West Palm Beach, FL (12) $ 28,400,000
WBZT-AM
</TABLE>
* Each station is licensed by the FCC to serve a specific community,
which is included in the listed market.
(1) $7,500,000 of the purchase price is payable at the Company's option by
issuance of Class A Common Stock of the Company.
(2) The Company has loaned an aggregate of $8,500,000 to KCMY-TV and began
operating the station pursuant to a time brokerage agreement on October
1, 1996, pending completion of the acquisition of the station. The loan
will be applied to the purchase price at the date of closing.
19
<PAGE> 20
(3) The Company has outstanding loans at September 30, 1997 aggregating
approximately $4,065,000 which will be applied against the purchase
price at the date of closing. The Company is currently operating this
station pursuant to a time brokerage agreement.
(4) In September 1996, the Company loaned $8,000,000 to WNAL-TV and began
operating the station pursuant to a time brokerage agreement pending
completion of the acquisition of the station. The loan was repaid
upon closing during October 1997.
(5) The Company began operating the station pursuant to a time brokerage
agreement on June 1, 1997 pending completion of the acquisition of the
station.
(6) The Company has committed to loan up to $7,000,000, and $4,500,000 to
Cocola Broadcasting ("Cocola") to finance the construction and
acquisition of stations WHBI-TV and KWOK-TV, respectively. At September
30, 1997, the Company had advanced approximately $9,164,000 to Cocola.
The Company plans to provide programming for the stations pursuant to
affiliation agreements upon Cocola's acquisitions and commencement of
operations.
(7) The Company has acquired a 49% interest in this property; commitment
represents purchase price for the remaining 51%.
(8) On May 3, 1997, the Company began operating the station pursuant to a
time brokerage agreement. The purchase price reflects the cash portion
only and does not include additional consideration of 600,000 shares
of Class A Common Stock of the Company.
(9) Includes the purchase of two low power television stations, W69CS and
W63BM.
(10) The Company completed the purchase of the remaining 51% interest in
this station during November 1997.
(11) The Company completed the purchase in October 1997.
(12) The Company assigned its rights to purchase these stations to LWP
Radio as discussed elsewhere herein. LWP Radio completed the purchase
in October 1997.
20
<PAGE> 21
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
No material legal proceedings are pending to which the Company or any of its
property is subject. To the knowledge of the Company, no such legal proceedings
are contemplated by any governmental authority.
Item 6. Exhibits and Reports on Form 8-K.
(a) List of Exhibits:
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
3.1.1 Certificate of Incorporation of the Company**
3.1.2 The Company's Certificate of Designations of the Company's Junior
Cumulative Compounding Redeemable Preferred Stock**
3.1.3 The Company's Certificate of Designations of the Company's 12 1/2%
Cumulative Exchangeable Preferred Stock ****
3.1.4 Bylaws of the Company***
4.1 Form of Stock Certificate of Class A Common Stock*
4.2 Fourth Amendment, dated September 25, 1997, to the Amended and Restated
Credit Agreement, dated as of November 19, 1996, among Paxson
Communications Corporation, the Lenders from time to time party thereto
and Union Bank of California, N.A., as Agent
4.3 Credit Amendment, dated July 11, 1997, among Travel Channel Acquisition
Corporation, the Several Lenders from Time to Time Parties Hereto and
Union Bank of California, N.A., as the Agent
10.179 Asset Purchase Agreement, dated August 25, 1997, by and among Paxson
Communications Corporation, Clear Channel Metroplex, Inc., Clear
Channel Metroplex Licenses, Inc. and Clear Channel Communications, Inc.
(filed as exhibit 2.1 with the Company's Form 8-K, dated October 1,
1997 and incorporated herein by reference)
10.180 Asset Purchase Agreement, dated August 25, 1997, by and among Paxson
Communications Corporation, L. Paxson, Inc., Clear Channel Metroplex,
Inc., Clear Channel Metroplex Licenses, Inc. and Clear Channel
Communications, Inc. (filed as exhibit 2.2 with the Company's Form 8-K,
dated October 1, 1997 and incorporated herein by reference)
10.181 Asset Purchase Agreement, dated August 29, 1997, by and among Paxson
Communications of Fayetteville-62, Inc., Fayetteville-Cumberland
Telecasters, Inc., Fayetteville-Cumberland Telecasters Inc.,
Debtor-in-Possession, and Poplar Apartments Limited Partnership for
Television station WFAY, Fayetteville, North Carolina
10.182 Stock Purchase Agreement, dated September 2, 1997, by and among Channel
29 of Charleston, Inc., Paxson Communications of Charleston-29, Inc.
and Mountaineer Broadcasting Corporation and William L. Kepper
10.183 Stock Purchase Agreement, dated September 9, 1997, by and among Channel
46 of Tucson, Inc., Paxson Communications of Tucson-46, Inc. and
Sungilt Corporation, Inc.
10.184 Asset Purchase Agreement, dated October 16, 1997, by and between Paxson
Communications Corporation and Channel 49 Acquisition Corporation for
television station WJCB-TV, Norfolk, Virginia
10.185 Asset Purchase Agreement, dated October 24, 1997, between Universal
Outdoor, Inc. and Paxson Communications Corporation
27 Financial Data Schedule (for SEC use only)
</TABLE>
21
<PAGE> 22
- -------------------
* Filed with the Company's Registration Statement on Form S-4, filed
September 26, 1994, Registration No. 33-84416 and incorporated herein
by reference.
** Filed with the Company's Annual Report on Form 10-K, dated March 31,
1995 and incorporated herein by reference.
*** Filed with the Company's Registration Statement on Form S-1, as
amended, filed January 26, 1996, Registration No. 333-473 and
incorporated herein by reference.
**** Filed with the Company's Registration Statement on Form S-3, as
amended, filed August 15, 1996, Registration No. 333-10267 and
incorporated herein by reference.
(b) Reports on Form 8-K.
None.
22
<PAGE> 23
PAXSON COMMUNICATIONS CORPORATION
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.
PAXSON COMMUNICATIONS CORPORATION
Date: November 14, 1997 By: /s/ James B. Bocock
-----------------------------
James B. Bocock
President, Chief Operating
Officer, Director
Date: November 14, 1997 By: /s/ Arthur D. Tek
-----------------------------
Arthur D. Tek
Vice President, Chief
Financial Officer, Director
23
<PAGE> 1
EXHIBIT 4.2
FOURTH AMENDMENT, dated as of September 25, 1997 (the "Fourth
Amendment"), to the AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November
19, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among PAXSON COMMUNICATIONS CORPORATION, a Delaware
corporation (the "Borrower"), the lenders from time to time party thereto (the
"Lenders") and UNION BANK OF CALIFORNIA, N.A., as Agent.
W I N E S S E T H :
WHEREAS, the Borrower has requested the Lenders to permit the sale of
its radio and radio related businesses (the "Radio Group Sale") pursuant to (i)
that certain Asset Purchase Agreement dated as of August 25, 1997, by and among
the Borrower, Clear Channel Metroplex, Inc., Clear Channel Metroplex Licenses,
Inc. and Clear Channel Communications, Inc. (the "Group I Asset Purchase
Agreement") and (ii) that certain Asset Purchase Agreement dated as of August
25, 1997, by and among the Borrower, L.Paxson, Inc., Clear Channel Metroplex,
Inc., Clear Channel Metroplex Licenses, Inc. and Clear Channel Communications,
Inc. (the "Group II-V Asset Purchase Agreement") and together with the Group I
Asset Purchase Agreement and each of the exhibits and schedules annexed thereto,
the "Asset Purchase Agreements"). Clear Channel Metroplex, Inc., Clear Channel
Metroplex Licenses, Inc. and Clear Channel Communications, Inc. are referred to
herein individually and collectively as "Clear Channel". The Radio Group and
related transactions contemplated under the Asset Purchase Agreements are
described in greater detail in Exhibits A and B attached hereto.
WHEREAS, the proceeds from the Radio Group Sale will be used, in part,
to consummate the asset acquisitions (the "Asset Acquisitions") described on
Schedule C attached hereto in connection with the Radio Group Sale, which Radio
Group Sale and Asset Acquisitions are intended by the Borrower to qualify, in
part, as a Section 1031 "like-kind" exchange of assets (a "1031 Exchange")
pursuant to the Internal Revenue Code;
WHEREAS, in connection with such Radio Group Sale and Asset
Acquisitions, the Lenders have requested the Borrower to provide a new business
plan (the "Business Plan") to the Lenders for their approval on or prior to
November 1, 1997, which Business Plan shall describe the assets and business
strategies of the Borrower and its Subsidiaries for the period (the "Business
Plan Period") from such date through the scheduled termination of the Credit
Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement shall be used as so defined.
<PAGE> 2
2
2. Amendments to Credit Agreement. The provisions contained in
this Section 2 of this Fourth Amendment shall be effective until BP Lender
Approval is obtained, at which point the amendments to the Credit Agreement
contained in this Section 2 of this Fourth Amendment shall cease to be in effect
and the provisions of the Credit Agreement amended by this Section 2 of this
Fourth Amendment shall be in effect as such provisions were in effect prior to
this Fourth Amendment, except as such provisions may be amended, modified or
supplemented subsequent to the date hereof in accordance with the Credit
Agreement.
A. Subsection 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definitions in their appropriate alphabetical
order:
"Asset Acquisitions": as defined in the Fourth Amendment.
"BP Lender Approval": the approval of the Business Plan by the
BP Required Lenders in a manner satisfactory to the Administrative
Agent.
"BP Required Lenders": at a particular time, the holders of at
least 66- 2/3% of the aggregate unpaid principal amount of the Loans,
or, if no Loan are outstanding, Lenders the Commitment Percentages of
which aggregate at least 66- 2/3%.
"Business Plan": as defined in the Fourth Amendment.
"Business Plan Period": as defined in the Fourth Amendment.
"Fourth Amendment": the Fourth Amendment, dated as of
September 25, 1997, to this Agreement.
"Group V Radio Assets": as defined in Exhibit A to the Fourth
Amendment.
"Radio Group Sale": as defined in the Fourth Amendment.
"1031 Exchange": as defined in the Fourth Amendment.
B. Subsection 1.1 of the Credit Agreement is hereby further
amended by inserting immediately after the radio "6.5 to 1.00" in the last line
of the definition of "Applicable Margin" the following:
"; provided, further, that from October 1, 1997, the
Applicable Margin for Eurodollar Loans shall be 3.00% and for Base Rate
Loans shall be 1.75%; provided, further, however, that if BP Lender
Approval is not obtained prior to December 20, 1997, the Applicable
Margin shall increase to 3.50%, 4.00%, 4.50% and 5.00% for Eurodollar
Loans and to 2.25%, 2.75%, 3.25% and 3.75% for Base Rate
<PAGE> 3
3
Loans on the first date of each fiscal quarter of the Borrower
thereafter for each of the subsequent four fiscal quarters of the
Borrower respectively".
C. Subsection 1.1 of the Credit Agreement is hereby further
amended by inserting immediately after the words "Schedule 1.1C" where they
appear in the definition of "Preapproved Acquisition" the following:
"and each of the Asset Acquisitions."
D. Subsection 2.6(c) of the Credit Agreement is hereby amended
by inserting immediately after the word "debt" in the first and third lines
thereof the words "or equity".
E. Section 5 of the Credit Agreement is hereby amended by
inserting at the end of such Section the following subsection 5.14:
"5.14 Business Plan. Deliver to the Lenders on or before
November 1, 1997, a business Plan reasonably satisfactory to the BP
Required Lenders; provided that such Business Plan will not be
reasonably satisfactory to the BP Required Lenders unless it (a)
indicates that the Borrower and its Subsidiaries will be in compliance
with the provisions of this Agreement (including but not limited to
subsection 6.1) during the Business Plan Period, (b) specifies that,
but for the Radio Group Sale, the assets of the Borrower and its
Subsidiaries during the Business Plan Period shall be comparable to the
assets of the Borrower and its Subsidiaries before the Radio Group Sale
and such assets of the Borrower and its Subsidiaries shall be used in a
manner consistent with the use of the assets of the Borrower and its
Subsidiaries before the Radio Group Sale, unless the BP Required
Lenders agree otherwise and (c) is based on financial assumptions that
are reasonable in light of the historic financial performance of
comparable assets owned by the Borrower on the date hereof."
F. Subsection 6.2(g) of the Credit Agreement is hereby amended
by inserting immediately at the end of such subsection the following:
" provided, further, that after September 30, 1997 neither the
Borrower nor any of its Subsidiaries shall directly or indirectly
create, incur, assume, guaranty or otherwise become directly or
indirectly liable with respect to any unsecured Indebtedness not
outstanding on such date;".
G. Subsection 6.2(i) of the Credit Agreement is hereby amended
by inserting immediately at the end of such subsection the following:
" provided, further, that after September 30, 1997 neither the
Borrower nor any of its Subsidiaries shall directly or indirectly
create, incur, assume, guaranty or otherwise become directly or
indirectly liable with respect to any Exchangeable Preferred Stock not
outstanding on such date;".
<PAGE> 4
4
H. Subsection 6.4(d) of the Credit Agreement is hereby amended
by deleting the amount "$35,000,000" in the second line thereof and substituting
in lieu thereof the amount "$10,000,000".
I. Subsection 6.4(j) of the Credit Agreement is hereby amended
by inserting immediately at the end of such subsection the following:
"provided that after September 30, 1997 no Permitted
Acquisitions shall be permitted;".
J. Subsection 6.4(i) of the Credit Agreement is hereby amended
by inserting immediately after the ";" in the last line of such subsection the
following:
" provided, further, that after September 30, 1997 neither the
Borrower nor any Subsidiary shall make any additional Investment
arising from the acquisition of any Equivalent Assets in connection
with any Asset Swap".
K. Subsection 6.4 of the Credit Agreement is hereby amended by
(a) deleting the word "and" where it appears in the last line of subsection
6.4(l), (b) deleting the "." in the last line of subsection 6.4(m) and
substituting in lieu thereof "; and", and (c) inserting at the end of subsection
6.4 the following subsection 6.4(n):
"(n) Upon the sale by the Borrower of the High Basis Radio
Assets (as such term is defined in the Credit Agreement, dated as of
July 11, 1997, among Travel Channel Acquisition Corporation, the
lenders from time to time parties thereto and Union Bank of California,
N.A. (the "Travel Channel Credit Agreement")), the proceeds of such
sale shall be invested by the Borrower in Travel Channel Acquisition
Corporation to repay all outstanding principal, interest, fees and
other amounts due pursuant to the Travel Channel Credit Agreement (the
total amount of which shall not exceed $23,000,000)."
L. Subsection 6.5(f) of the Credit Agreement is hereby amended
by deleting the amount "$65,000,000" in the fourth line thereof and substituting
in lieu thereof the amount "$25,000,000".
M. Subsection 6.6(b) of the Credit Agreement is hereby amended
by inserting immediately at the end of such subsection the following:
"provided, further, that after September 30, 1997 no such
Restricted Payments shall be permitted;".
N. Subsection 6.6(f) of the Credit Agreement is hereby amended
by inserting immediately at the end of such subsection the following:
"provided that after September 30, 1997 no such redemption
shall be permitted;".
<PAGE> 5
5
O. Subsection 6.7(b) of the Credit Agreement is hereby amended
by inserting immediately at the end of such subsection the following:
"provided that after September 301, 997 no further Asset Sales
shall be permitted other than the Radio Group Sale and, to the extent
the conditions set forth in clauses (w), (x) and (z) are satisfied,
sales of WSRF-AM, Ft. Lauderdale, Florida, WCEE-TV, St. Louis,
Missouri, WILV-TV, Grand Rapids, Michigan, billboards located in Tampa,
Florida and interests in two inactive sports team franchises (arena
football and minor league hockey);".
P. Subsection 6.7(e) of the Credit Agreement is hereby amended
by inserting immediately at the end of such subsection the following:
"provided, further, that after September 30, 1997 no
additional Asset Swap shall be permitted;".
3. Further Amendment to Credit Agreement.
A. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the words "for the 1997 fiscal year of the Borrower" in the last
sentence of the definition of "Leverage Ratio" and substituting in lieu thereof
the words "before December 31, 1997".
B. Subsection 2.6(d) of the Credit Agreement is hereby amended
by inserting immediately at the end of such subsection the following:
"provided, further, that any Net Cash Proceeds from the Radio
Group Sale may be used to effectuate a 1031 Exchange and any other Net
Cash Proceeds from the Radio Group Sale may be used for any other
purpose permitted by this Agreement, including to consummate any
Preapproved Acquisitions, and any such Net Cash Proceeds remaining
after the expiration of the 180 day period for the consummate of a 1031
Exchange shall be applied to prepay the Loans, and, prior to BP Lender
Approval, may not be reborrowed notwithstanding anything to the
contrary contained in this Agreement.
4. Amendment Fee. The Borrower hereby agrees to pay a fee in an
amount equal to 0.10% of such Lender's Commitment to each Lender that approves
this Fourth Amendment by executing and delivering to the Administrative Agent
or its counsel said Amendment on or before September 25, 1997.
5. Effective Date. This Fourth Amendment will become effective
as of the date (the "Effective Date") hereof upon its execution by the Borrower
and the Required Lenders in accordance with the terms of the Credit Agreement.
6. Representations and Warranties. The Borrower represents and
warrants to each Lender that (a) this Fourth Amendment constitutes the legal,
valid and binding obligation of the Borrower, enforceable against it in
accordance with its terms, except as such
<PAGE> 6
6
enforcement may be limited by bankruptcy, insolvency, fraudulent conveyances,
reorganization, moratorium or similar laws affecting creditors' rights
generally, by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) and by an implied covenant of good faith and
fair dealing, (b) the representations and warranties made by the Loan Parties in
the Loan Documents are true and correct in all material respects on and as of
the date hereof (except to the extent that such representations and warranties
are expressly stated to relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date) and (c) no Default or Event of Default
has occurred and is continuing as of the date hereof.
7. Continuing Effect. Except as expressly waived or amended hereby,
the Credit Agreement shall continue to be and shall remain in full force and
effect in accordance with its terms.
8. GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9. Counterparts. This Fourth Amendment may be executed by the parties
hereto in any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
10. Payment of Expenses. The Borrower agrees to pay and reimburse the
Agent for all of its out-of-pocket costs and reasonable expenses incurred in
connection with this Fourth Amendment, including, without limitation, the
reasonable fees and disbursements of counsel to the Agent.
<PAGE> 7
7
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be duly executed and delivered by their properly and duly
authorized officers as of the day and year first above written.
PAXSON COMMUNICATIONS
CORPORATION
By: /s/ Arthur Tele
--------------------------------
Title: Treasurer
UNION BANK OF CALIFORNIA, N.A., as
Agent
By: /s/ Christine P. Ball
--------------------------------
Title: Vice President
THE BANK OF NEW YORK
By: /s/
--------------------------------
Title: Senior Vice President
CIBC, INC.
By: /s/
--------------------------------
Title: Director, CIBC WOOD GUNBY
SECURITIES CORP., AS AGENT
THE FIRST NATIONAL BANK OF BOSTON
By: /s/
--------------------------------
Title:
<PAGE> 8
8
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By: /s/
--------------------------------
Title: SVP
ARN-AMRO BANK N.W.
ABN AMRO NORTH AMERICA, INC.
By: /s/
--------------------------------
Title: GVP
BANK OF AMERICA ILLINOIS
By: /s/
--------------------------------
Title: Managing Director
BANK OF MONTREAL
By: /s/
--------------------------------
Title: Director
BARNETT BANK, N.A.
By: /s/
--------------------------------
Title: Vice President
<PAGE> 9
9
FLEET NATIONAL BANK
By: /s/ Eileen M. Burke
--------------------------------
Title: Senior Vice President
LTCB TRUST COMPANY
By: /s/
--------------------------------
Title: Senior Vice President
THE SUMITOMO BANK, LIMITED
By: /s/ Allen L. Harvell, Jr.
--------------------------------
Title: VICE PRESIDENT & MGR.
By: /s/ M. Phillip Freeman
--------------------------------
Title: VICE PRESIDENT
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By: /s/ David D. Miller
--------------------------------
Title: Vice President
<PAGE> 1
EXHIBIT 4.3
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
AMONG
TRAVEL CHANNEL ACQUISITION CORPORATION
The Several Lenders
from Time to Time Parties Hereto
and
UNION BANK OF CALIFORNIA, N.A.,
AS THE AGENT
DATED AS OF JULY 11, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
CLOSING INDEX
FOR
TRAVEL CHANNEL ACQUISITION CORPORATION
CREDIT AGREEMENT
DATED AS OF
JULY 11, 1997
1. Credit Agreement
Schedules
1.1 Lenders, Commitments and Addresses
3.1(d) Ownership of Subsidiaries
3.1(e) Real Property
3.15 Insurance
3.16(b) Intellectual Property
3.18(b) UCC Filing Offices
Exhibits
A-1 Form of Revolving Credit Note
A-2 Form of Term Note
B-1 Form of Paxson Pledge Agreement
B-2 Form of PCUH Pledge Agreement
B-3 Form of Borrower Pledge Agreement
C Form of Borrower Security Agreement
D Form of Subsidiaries Guarantee
E Form of Subsidiaries Pledge Agreement
F Form of Subsidiaries Security Agreement
G Form of Borrowing Certificate
H Form of Assignment and Acceptance
2. Paxson Pledge Agreement
3. PCUH Pledge Agreement
4. Borrower Security Agreement
5. Legal Opinion of Anthony L. Morrison, Esq.
6. Legal Opinion of Dow, Lohnes & Albertson
7. Legal Opinion of Beckley, Singleton, Jemison & List
8. Borrowing Certificate
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. DEFINITIONS.................................................................................. 1
1.1 Defined Terms................................................................................ 1
1.2 Other Definitional Provisions................................................................ 16
SECTION 2. AMOUNT AND TERMS OF TERM LOANS AND REVOLVING
CREDIT COMMITMENTS........................................................................ 16
2.1 Term Loan.................................................................................... 16
2.2 Revolving Credit Commitments................................................................. 17
2.3 Commitment Fee............................................................................... 18
2.4 Repayment of Loans; Evidence of Debt......................................................... 18
2.5 Optional Prepayments......................................................................... 19
2.6 Mandatory Prepayments........................................................................ 19
2.7 Conversion and Continuation Options.......................................................... 20
2.8 Minimum Amounts and Maximum Number of Tranches............................................... 20
2.9 Interest Rates and Payment Dates............................................................. 20
2.10 Computation of Interest and Fees............................................................. 21
2.11 Inability to Determine Interest Rate......................................................... 21
2.12 Pro Rata Treatment and Payments.............................................................. 22
2.13 Illegality................................................................................... 23
2.14 Requirements of Law.......................................................................... 23
2.15 Taxes........................................................................................ 24
2.16 Indemnity.................................................................................... 26
2.17 Change of Lending Office..................................................................... 26
2.18 Further Assurances Regarding Security........................................................ 26
SECTION 3. REPRESENTATIONS AND WARRANTIES............................................................... 27
3.1 Organization, Powers, Good Standing and Business............................................. 27
3.2 Authorization of Borrowing, etc.............................................................. 28
3.3 Financial Condition.......................................................................... 29
3.4 No Material Adverse Change; No Restricted Payments........................................... 29
3.5 Title To Properties; Liens................................................................... 29
3.6 Litigation; Adverse Facts.................................................................... 30
3.7 Payment of Taxes............................................................................. 30
3.8 Performance of Agreements.................................................................... 30
3.9 Governmental Regulation...................................................................... 30
3.10 Securities Activities........................................................................ 30
3.11 Employee Benefit Plans....................................................................... 31
3.12 Certain Fees................................................................................. 31
3.13 Environmental................................................................................ 31
</TABLE>
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<TABLE>
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3.14 Solvency..................................................................................... 33
3.15 Insurance.................................................................................... 33
3.16 Intellectual Property........................................................................ 33
3.17 Disclosure................................................................................... 34
3.18 Security Documents........................................................................... 34
3.19 Purposes of Loans............................................................................ 34
SECTION 4. CONDITIONS PRECEDENT......................................................................... 35
4.1 Conditions to Initial Loans.................................................................. 35
4.2 Conditions to Each Loan...................................................................... 37
SECTION 5. AFFIRMATIVE COVENANTS........................................................................ 38
5.1 Financial Statements and Systems............................................................. 38
5.2 Maintenance of Existence, etc................................................................ 41
5.3 Payment of Taxes and Claims; Tax Consolidation............................................... 41
5.4 Maintenance of Properties; Insurance......................................................... 42
5.5 Inspection; Lender Meeting................................................................... 42
5.6 Compliance with Laws, etc.................................................................... 42
5.7 Environmental Disclosure and Inspection...................................................... 43
5.8 Hazardous Materials; the Borrower's Remedial Action.......................................... 44
5.9 Additional Loan Parties...................................................................... 44
5.10 Schedule Supplements......................................................................... 44
5.11 Unrestricted Subsidiary...................................................................... 45
SECTION 6. NEGATIVE COVENANTS........................................................................... 45
6.1 Limitation on Indebtedness................................................................... 45
6.2 Liens and Related Matters.................................................................... 45
6.3 Investments; Joint Ventures.................................................................. 46
6.4 Contingent Obligations....................................................................... 46
6.5 Restricted Payments.......................................................................... 47
6.6 Restriction on Fundamental Changes; Asset Sales.............................................. 47
6.7 Sales and Lease-Backs........................................................................ 47
6.8 Sale or Discount of Receivables.............................................................. 47
6.9 Transactions with Shareholders and Affiliates................................................ 48
6.10 Disposal of Subsidiary Stock................................................................. 48
6.11 Conduct of Business.......................................................................... 48
6.12 Amendments or Waivers of Charter Documents; Limitation on
Optional Payments......................................................................... 48
6.13 Fiscal Year.................................................................................. 48
SECTION 7. EVENTS OF DEFAULT............................................................................ 49
</TABLE>
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<TABLE>
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SECTION 8. THE AGENT.................................................................................... 52
8.1 Appointment.................................................................................. 52
8.2 Delegation of Duties......................................................................... 52
8.3 Exculpatory Provisions....................................................................... 53
8.4 Reliance by the Agent........................................................................ 53
8.5 Notice of Default............................................................................ 53
8.6 Non-Reliance on the Agent and Other Lenders.................................................. 54
8.7 Indemnification.............................................................................. 54
8.8 The Agent in Its Individual Capacity......................................................... 54
8.9 Successor the Agent.......................................................................... 55
SECTION 9. MISCELLANEOUS................................................................................ 55
9.1 Amendments and Waivers....................................................................... 55
9.2 Notices...................................................................................... 56
9.3 No Waiver; Cumulative Remedies............................................................... 56
9.4 Survival of Representations and Warranties................................................... 56
9.5 Payment of Expenses and Taxes................................................................ 57
9.6 Successors and Assigns; Participations and Assignments....................................... 57
9.7 Adjustments; Set-off......................................................................... 59
9.8 Counterparts; Effectiveness.................................................................. 60
9.9 Severability................................................................................. 60
9.10 Integration.................................................................................. 60
9.11 GOVERNING LAW................................................................................ 61
9.12 Submission To Jurisdiction; Waivers.......................................................... 61
9.13 Acknowledgements............................................................................. 61
9.14 WAIVERS OF JURY TRIAL........................................................................ 62
9.15 Confidentiality.............................................................................. 62
</TABLE>
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<PAGE> 6
SCHEDULES
1.1 Lenders, Commitments and Addresses
3.1(d) Ownership of Subsidiaries
3.1(e) Real Property
3.15 Insurance
3.16(b) Intellectual Property
3.18(b) UCC Filing Offices
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Term Note
B-1 Form of Paxson Pledge Agreement
B-2 Form of PCUH Pledge Agreement
B-3 Form of Borrower Pledge Agreement
C Form of Borrower Security Agreement
D Form of Subsidiaries Guarantee
E Form of Subsidiaries Pledge Agreement
F Form of Subsidiaries Security Agreement
G Form of Borrowing Certificate
H Form of Assignment and Acceptance
- iv -
<PAGE> 7
CREDIT AGREEMENT, dated as of July 11, 1997, among TRAVEL
CHANNEL ACQUISITION CORPORATION, a Delaware corporation (the "Borrower"), the
several banks and other financial institutions from time to time parties to this
Agreement (the "Lenders") and UNION BANK OF CALIFORNIA, N.A., as Agent for the
Lenders hereunder.
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lenders to make
available a $22,000,000 bridge term loan facility to be used by the Borrower to
finance, in part, the acquisition of substantially all of the assets of The
Travel Channel and interest thereon and a $1,000,000 bridge revolving credit
facility to finance its working capital needs.
NOW THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agent": Union Bank of California, N.A., together with its
affiliates, as the agent for the Lenders under this Agreement and the
other Loan Documents.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": (a) for the period from the Closing Date
through and including March 31, 1998: (i) with respect to Base Rate
Loans, 2.50% and (ii) with respect to Eurodollar Loans, 3.50% and (b)
for the period from April 1, 1998 through and including the Termination
Date: (i) with respect to Base Rate Loans, 2.75% and (ii) with respect
to Eurodollar Loans, 3.75%.
"Asset Acquisition Agreement": the Asset Acquisition Agreement
dated as of June 13, 1997 by and among Landmark Communications, Inc.,
The Travel Channel, Inc., and PCC.
"Available Revolving Credit Commitment": as to any Lender at
any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Credit
<PAGE> 8
2
Commitment over (b) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding.
"Base Rate": with respect to each day, the greater on such day
of (a) the per annum rate most recently determined by the Agent at its
U.S. lending office from time to time as its base rate and (b) 1/2% per
annum plus the Federal Funds Rate. Each change in the Base Rate shall
take effect simultaneously with the corresponding change or changes in
such base rate or the Federal Funds Rate, as the case may be. The Base
Rate is not intended to be necessarily the lowest rate of interest
charged by the Agent in connection with extensions of credit to
debtors.
"Base Rate Loans": Loans the rate of interest applicable to
which is based upon the Base Rate.
"Board": the Board of Governors of the Federal Reserve
System.
"Borrower Pledge Agreement": the Pledge Agreement to be
executed and delivered by the Borrower, substantially in the form of
Exhibit B-3, as the same may be amended, supplemented or otherwise
modified from time to time.
"Borrower Security Agreement": the Security Agreement to be
executed and delivered by the Borrower, substantially in the form of
Exhibit C, as the same may be amended, supplemented or otherwise
modified from time to time.
"Borrowing Date": any Business Day specified in a notice
pursuant to subsections 2.1 and 2.2 as a date on which the Borrower
requests the Lenders to make Loans hereunder.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"Capital Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash": money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents": (i) direct obligations of the United
States or any agency thereof, or obligations guaranteed or insured by
the United States, provided that in each case such obligations mature
within one year from the date of acquisition thereof, (ii) certificates
of deposit maturing within one year from the date of creation thereof
<PAGE> 9
3
issued by any United States national or state banking institution
having capital, surplus and undivided profits aggregating at least
$250,000,000 and rated at least A-1 by Standard & Poor's Corporation
and P-1 by Moody's Investors Service, Inc., (iii) commercial paper with
a maturity of 180 days or less issued by a corporation (except an
Affiliate of the Borrower) organized under the laws of any state of the
United States or the District of Columbia and rated at least A-1 by
Standard & Poor's Corporation or at least P-1 by Moody's Investors
Service, Inc. and (iv) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by an agency
thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition;
provided that the terms of such agreements comply with the guidelines
set forth in the Federal Financial Agreements of Depository
Institutions with Securities Dealers and Others, as adopted by the
Comptroller of the Currency and (v) tax-exempt auction rate securities
and municipal preferred stock, in each case, subject to reset no more
than 35 days after the date of acquisition and having a rating of at
least AA by Standard & Poor's Corporation or AA by Moody's Investors
Service, Inc.
"Clear Channel": Clear Channel Communications Corporation, a
Delaware corporation.
"Closing Date": the date on which the conditions precedent set
forth in subsection 4.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commitment": as to any Lender, the sum of the Term Loan
Commitment and the Revolving Credit Commitment of such Lender.
"Commitment Percentage": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the
aggregate Commitments (or, at any time after the Commitments shall have
expired or terminated, the percentage which the aggregate principal
amount of such Lender's Loans then outstanding constitutes of the
aggregate principal amount of the Loans then outstanding).
"Commitment Period": the period from and including the date
hereof to but not including the Termination Date or such earlier date
on which the Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
<PAGE> 10
4
"Compliance Certificate": as defined in subsection
5.1(b)(iv).
"Contingent Obligation": as applied to any Person, any direct
or indirect liability, contingent or otherwise, of that Person (a) with
respect to any indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the Person
incurring the Contingent Obligation is to provide assurance to the
obligee of such obligation of another that such obligation of another
will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof, (b)
with respect to any letter of credit issued for the account of that
Person or as to which that Person is otherwise liable for reimbursement
of drawings, or (c) under Interest Rate Agreements. Contingent
Obligations shall include, without limitation, (i) the direct or
indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting
with recourse or sale with recourse by such Person of the obligation of
another, (ii) the obligation to make take-or-pay or similar payments if
required regardless of non-performance by any other party or parties to
an agreement, and (iii) any liability of such Person for the
obligations of another through any agreement (contingent or otherwise)
(x) to purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or (y) to maintain the
solvency or any balance sheet item, level of income or financial
condition of another, if in the case of any agreement described under
subclauses (x) or (y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation (other than Interest Rate Agreements) as of any
date shall be equal to the amount of the obligation as of any date so
guaranteed or otherwise supported. The amount of any Interest Rate
Agreement as of any date shall be equal to the aggregate amount that
would be payable by such Person if such Interest Rate Agreement were
terminated on such date as a result of a default thereunder by such
Person.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement (credit or
otherwise), instrument or other undertaking to which such Person is a
party or by which it or any of its property is bound.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Deposit Account": a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable
certificate of deposit.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
<PAGE> 11
5
"Employee Benefit Plan": any employee benefit plan within the
meaning of Section 3(3) of ERISA which is maintained for employees of
the Borrower or any ERISA Affiliates.
"Environmental Claim": any accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person
for any damage, including, without limitation, personal injury
(including sickness, disease or death), tangible or intangible property
damage, contribution, indemnity, indirect or consequential damages,
damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or
restrictions, resulting from or based upon (i) the existence of a
Release (whether sudden or non-sudden or accidental or non-accidental),
of, or exposure to, any Hazardous Material, in, into or onto the
environment, (ii) the use, handling, transportation, storage, treatment
or disposal of Hazardous Materials, or (iii) the violation, or alleged
violation, of any Environmental Laws.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate": the Borrower and (a) any corporation which
is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Code of which the Borrower is a member; (b) any
trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning
of Section 414(c) of the Code of which the Borrower is a member; and
(c) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Code of which the Borrower, any
corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member.
"ERISA Event": (a) the occurrence of a reportable event within
the meaning of Section 4043 of ERISA with respect to any Pension Plan,
(b) a failure to meet the minimum funding standard of Section 412 of
the Code or of Section 302 of ERISA, including, without limitation, the
failure to make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, (regardless of
the issuance of any waivers in accordance with Section 412(d) of the
Code) and any request for a waiver under Section 412(d) of the Code in
connection with any Pension Plan; (c) the provision of the
administrator of any Pension Plan of a notice pursuant to Section
4041(a)(2) of ERISA to terminate such plan pursuant to Section 4041(c)
of ERISA; (d) the withdrawal by the Borrower or any ERISA Affiliate
from a Pension Plan during a plan year for which it was a "substantial
employer"
<PAGE> 12
6
within the meaning of Section 4001(a)(2) of ERISA; (e) the institution
by the PBGC of proceedings to terminate a Pension Plan pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition
which the Borrower or any ERISA Affiliate reasonably anticipates would
constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, a Pension Plan; (f) the
withdrawal by the Borrower or any ERISA Affiliate in a complete or
partial withdrawal (within the meaning of Section 4203 or 4205 of
ERISA) from a Multiemployer Plan, or the receipt by the Borrower or any
ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA
or that it intends to terminate or has terminated under Section 4041A
of ERISA; (g) the imposition on the Borrower or any ERISA Affiliate of
fines, penalties, taxes or related charges under Chapter 43 of the Code
or under Sections 502(c), (i) or (l) or 4071 of ERISA; (h) the
assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan or the assets thereof, or against the
Borrower or any ERISA Affiliate in connection with any such plan; or
(i) receipt from the Service of notice of the failure of any Pension
Plan to qualify under Section 401(a) of the Code, or the failure of any
trust forming part of a Pension Plan to fail to qualify for exemption
from taxation under Section 501(a) of the Code.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined by the Agent to be equal to the arithmetic mean of the rates
per annum offered by leading banks in the London interbank market at
approximately 11:00 a.m. (London time) two Working Days prior to the
beginning of such Interest Period, as quoted on Telerate Page 3750 or,
in the event that Telerate Page 3750 shall at such time quote such
rates for fewer than two leading banks, the rate at which the Agent is
offered Dollar deposits at or about 11:00 A.M. (London time), two
Working Days prior to the beginning of such Interest Period in the
London interbank market for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount
comparable to the amount of the Agent's Eurodollar Loan to be
outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
<PAGE> 13
7
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/16th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Exchange Assets": those assets that are used or useful in the
operation of the radio stations of PCC listed on Exhibit 5 to the
Letter of Intent.
"Facilities": any and all real property (including, without
limitation, all buildings, fixtures or other improvements located
thereon) now, or hereafter, owned, leased, operated or used by the
Borrower or any of its Subsidiaries or any of their respective
predecessors.
"Federal Funds Rate": with respect to each day, the rate per
annum (rounded upward, if necessary, to the nearest 1/16 of 1%) offered
in the interbank market to the Agent as the overnight "federal funds
rate" at or about 10:00 A.M., Los Angeles time, on such day (or, if
such day is not a Business Day, for the next preceding Business Day).
"Financial Statements": the unaudited consolidated statement
of operations for the Seller for the fiscal years ended December 31,
1995 and December 31, 1996 and the unaudited statement of operations
for the Borrower and its consolidated Subsidiaries for the five months
ended May 31, 1996 and May 31, 1997.
"GAAP": generally accepted accounting principles in the United
States of America consistent with those utilized in preparing the
audited financial statements referred to in subsection 3.3.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Materials": (a) any chemical, material or substance
defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", or "toxic substances" or words of similar
import under any applicable Environmental Laws, (b) any oil, petroleum
or petroleum derived substance, any drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, any flammable substances or explosives, any
radioactive materials, any hazardous wastes or substances, any toxic
wastes or substances or any other materials
<PAGE> 14
8
or pollutants which (i) pose a material hazard to any property of the
Borrower or any of its Subsidiaries or to Persons on or about such
property or (ii) cause such property to be in violation of any
Environmental Laws, (c) asbestos in any form which is or could become
friable, urea formaldehyde foam insulation, polychlorinated biphenyls,
and (d) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority or may
or could pose a hazard to the health and safety of the owners,
occupants or any Persons surrounding the Facilities.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Capital Leases,
(d) all obligations of such Person in respect of acceptances issued or
created for the account of such Person, (e) all liabilities secured by
any Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof and
(f) the liquidation value of any preferred capital stock of such Person
its Subsidiaries held by any Person other than such Person and its
wholly owned Subsidiaries.
"Intellectual Property": all patents, trademarks, trade names,
copyrights, technology, know-how and processes used in or necessary for
the conduct of business of the Borrower and its Subsidiaries as
currently conducted that are material to the condition (financial or
other), business, or operations of the Borrower and its Subsidiaries
taken as a whole.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December and the date on
which such Loan is paid or converted into a Loan of another Type, (b)
as to any Eurodollar Loan having an Interest Period of three months or
less, the last day of such Interest Period, and (c) as to any
Eurodollar Loan having an Interest Period longer than three months,
each day which is three months or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest
Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three, six or twelve
months thereafter, as selected by the Borrower in its notice
of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three, six or twelve
months thereafter, as selected by the Borrower by
<PAGE> 15
9
irrevocable notice to the Agent not less than three Working
Days prior to the last day of the then current Interest Period
with respect thereto;
provided that if the Borrower at any time selects an Interest Period
with respect to any Eurodollar Loan of twelve months, such selection is
subject to the availability of Eurodollar Loans having an Interest
Period of twelve months on the part of all of the Lenders; provided,
further, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Working Day,
such Interest Period shall be extended to the next succeeding
Working Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Working Day;
(2) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Working Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Working Day of a calendar month; and
(3) the Borrower shall select Interest Periods with
respect to any Eurodollar Loan so as not to require a payment
or prepayment of any such Eurodollar Loan during an Interest
Period for such Loan.
"Interest Rate Agreement": any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect the Borrower or
any of its Subsidiaries against fluctuations in interest rates.
"Investment": (a) any direct or indirect purchase or other
acquisition by the Borrower or any of its Subsidiaries of, or a
beneficial interest in, stock or other Securities of any other Person,
or (b) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business)
or capital contribution by the Borrower or any of its Subsidiaries to
any other Person, including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The
amount of any Investment shall be the original cost of such Investment
plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such investment.
"Joint Venture": a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form.
<PAGE> 16
10
"Letter of Intent": the Letter of Intent dated as of June 16,
1997 among PCC and Clear Channel.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capital Lease having substantially the same
economic effect as any of the foregoing).
"Loan Documents": this Agreement, any Notes and the Security
Documents.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Loans": as defined in subsection 2.1.
"Margin Stock": has the meaning assigned to that term in
Regulation U of the Board as in effect from time to time.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole or
(b) the validity or enforceability of this or any of the other Loan
Documents or the Purchase Documentation or the rights or remedies of
the Agent or the Lenders hereunder or thereunder.
"Multiemployer Plan": a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which the Borrower or any
ERISA Affiliate has an obligation to contribute or in respect of which
the Borrower or any ERISA Affiliate has any outstanding liability,
contingent or otherwise.
"Net Cash Proceeds": in connection with:
(a) any asset sale, the proceeds thereof in the form of Cash
and Cash Equivalents (including any such proceeds received by way of
deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise, but
only as and when received), net of attorneys' fees, accountants' fees,
investment banking fees, amounts required to be applied to the
repayment of Indebtedness secured by a Lien expressly permitted
hereunder on any asset which is the subject of such asset sale (other
than any Lien in favor of the Agent for the benefit of the Lenders) and
other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements); and
<PAGE> 17
11
(b) any issuance or sale of equity securities, the Cash
proceeds received from such issuance or sale, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in subsection 2.15.
"Non-Broadcast Assets": those assets that are used or useful
in the operation of the billboards, radio networks and sports
franchises of PCC listed on Exhibit 1 to the Letter of Intent.
"Notes": the collective reference to the Term Notes and the
Revolving Credit Notes.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding)
the Notes and all other obligations and liabilities of the Borrower to
the Agent or to any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, any Interest Rate Agreement entered
into with any Lender, whether on account of principal, interest, fees,
indemnities, costs, expenses (including, without limitation, all fees,
charges and disbursements of counsel to the Agent or to any Lender that
are required to be paid by the Borrower pursuant hereto) or otherwise.
"Operating Lease": as applied to any Person, any lease
(including, without limitation, any leases that may be terminated by
the lessee at any time) of any property (whether real, personal or
mixed) of such Person that is not a Capital Lease other than any such
lease under which such Person is the lessor.
"Participant": as defined in subsection 9.6(b).
"Paxson": Lowell W. Paxson, residing on the date hereof at 780
South Ocean Boulevard, Palm Beach, Florida 33480.
"Paxson Pledge Agreement": the Pledge Agreement to be executed
and delivered by Paxson and Second Crystal, substantially in the form
of Exhibit B-1, as the same may be amended, supplemented or otherwise
modified from time to time.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PCC": Paxson Communications Corporation, a Delaware
corporation.
<PAGE> 18
12
"PCC Existing Credit Agreement": the Amended and Restated
Credit Agreement dated as of November 19, 1996 among PCC, Union Bank of
California, N.A., as agent, and the several lenders from time to time
parties thereto as amended in accordance with the terms thereof.
"PCUH": Paxson Communications Unrestricted Holdings, Inc., a
Delaware corporation, and the direct 100% owner of the Borrower.
"PCUH Pledge Agreement": the Pledge Agreement to be executed
and delivered by PCUH, substantially in the form of Exhibit B-2, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Pension Plan": any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of
ERISA.
"Permitted Encumbrances": the following types of Liens
(provided that enforcement of the same will not have a Material Adverse
Effect except with respect to clauses (i) and (v) hereof):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection
5.3;
(ii) Liens of carriers, warehousemen and other liens imposed
by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have
been made therefor;
(iii) Liens of mechanics and materialmen for sums not yet due
or the validity of which are being contested in good faith;
(iv) Liens (other than any Lien imposed pursuant to Section
401(a)(29) or Section 412(n) of the Code or under ERISA or any
Environmental Law) incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(v) any attachment or judgment Lien not constituting an
Event of Default under subsection 7(j);
(vi) leases or subleases granted to others not interfering in
any material respect with the business of the Borrower or any of its
Subsidiaries;
<PAGE> 19
13
(vii) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries; and
(vii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledge Agreements": the collective reference to the Paxson
Pledge Agreement, the PCUH Pledge Agreement, the Borrower Pledge
Agreement and the Subsidiaries Pledge Agreement.
"Purchase Documentation": collectively, the Asset Acquisition
Agreement and all schedules, exhibits, certificates and agreements
entered into in connection therewith, as the same may be amended,
supplemented or otherwise modified in accordance therewith.
"Release": any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
leaching, or migration into the indoor or outdoor environment
(including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any
Hazardous Materials), or into or out of any Facility, including the
movement of any Hazardous Material through the air, soil, surface
water, groundwater or property.
"Required Lenders": at a particular time, the holders of at
least 51% of the aggregate unpaid principal amount of the Loans, or, if
no Loans are outstanding, Lenders the Commitment Percentages of which
aggregate at least 51%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Restricted Payment": means (i) any dividend or other
distribution, direct or indirect, on account of any equity interests
(including preferred capital stock) of the Borrower or any of its
Subsidiaries now or hereafter outstanding, (ii) any redemption,
<PAGE> 20
14
retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any equity interests
(including preferred capital stock) of the Borrower or any of its
Subsidiaries now or hereafter outstanding, (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire any equity interests (including
preferred capital stock) of the Borrower or any of its Subsidiaries now
or hereafter outstanding and (iv) any direct or indirect payment, loan,
contribution or other transfer of funds or other property to any equity
holder of the Borrower or any of its Subsidiaries.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans to
the Borrower hereunder in an aggregate principal amount not to exceed
the amount set forth under the heading "Revolving Credit Commitment"
opposite such Lender's name on Schedule 1.1, as the same may be changed
from time to time pursuant to the terms hereof.
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in subsection 2.2(a).
"Revolving Credit Note": as defined in subsection 2.4(e).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the aggregate Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).
"Securities": any stock, shares, voting trust certificates,
bonds, debentures, options, warrants, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities"
or any certificates of interest, shares or participations in temporary
or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Second Crystal": Second Crystal Diamond Limited Partnership,
a Nevada limited partnership, of which at least 99% of the equity
interests are owned directly or indirectly by Paxson, and of which the
sole general partners are Paxson Enterprises, Inc., a Nevada
corporation, and Paxson, and of which the sole limited partner is
Paxson, as Trustee for the Paxson Family Trust, having its address c/o
John P. Sande III, Esquire, 201 West Liberty Street, Reno, Nevada
89504.
"Security Agreements": the collective reference to the
Borrower Security Agreement and the Subsidiaries Security Agreement.
<PAGE> 21
15
"Security Documents": the collective reference to the Pledge
Agreements, the Subsidiaries Guarantee, the Security Agreements and all
other security documents hereafter delivered to the Agent granting a
Lien on any asset or assets of any Person to secure the obligations and
liabilities of the Borrower hereunder and under any of the other Loan
Documents or to secure any guarantee of any such obligations and
liabilities.
"Seller": The Travel Channel, Inc., a Virginia corporation.
"Solvent": with respect to any Person, that as of the date of
determination, both (A) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including Contingent Obligations) of such Person and (z)
greater than the amount that will be required to pay the probable
liabilities of such Person's then existing debts as they become
absolute and matured considering all financing alternatives, sharing
and allocation arrangements and potential asset sales reasonably
available to such Person; (ii) such Person's capital is not
unreasonably small in relation to its business or any contemplated or
undertaken transaction; and (iii) such Person does not intend to incur,
or believe or reasonably should believe that it will incur, debts
beyond its ability to pay such debts as they become due and (B) such
Person is solvent within the meaning given that term and similar terms
under applicable laws relating to fraudulent transfers.
"Subsidiaries Guarantee": the Guarantee to be executed and
delivered by each Subsidiary in favor of the Agent, substantially in
the form of Exhibit D, as the same may be amended, supplemented or
otherwise modified from time to time.
"Subsidiaries Pledge Agreement": the Subsidiaries Pledge
Agreement to be executed and delivered by each Subsidiary in favor of
the Agent, substantially in the form of Exhibit E, as the same may be
amended, supplemented or otherwise modified from time to time.
"Subsidiaries Security Agreement": the Subsidiaries Security
Agreement to be executed and delivered by each Subsidiary in favor of
the Agent, substantially in the form of Exhibit F, as the same may be
amended, supplemented or otherwise modified from time to time.
"Subsidiaries Security Documents": the collective reference to
the Subsidiaries Pledge Agreement and the Subsidiaries Security
Agreement.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all
<PAGE> 22
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references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": any Subsidiary of the Borrower that is
a party to the Subsidiaries Guarantee.
"Termination Date": June 30, 1998.
"Term Loan": as defined in subsection 2.1(a).
"Term Loan Commitment": as to any Lender, the obligation of
such Lender, if any, to make a Term Loan to the Borrower hereunder in
an aggregate principal amount not to exceed the amount set forth under
the heading "Term Loan Commitment" opposite such Lender's name on
Schedule 1.1, as the same may be changed from time to time pursuant to
the terms hereof.
"Term Loan Lender": each Lender which has a Term Loan
Commitment or which has made a Term Loan.
"Term Loan Percentage": as to any Term Loan Lender at any
time, the percentage which such Lender's Term Loan Commitment then
constitutes of the aggregate Term Loan Commitments (or, at any time
after the Term Loan Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's Term
Loans then outstanding constitutes of the aggregate principal amount of
the Term Loans then outstanding).
"Term Note": as defined in subsection 2.4(e).
"The Travel Channel": The Travel Channel, a cable television
network providing viewers in the United States with programming
relating to leisure travel and related topics through original,
co-produced, and acquired non-fiction programming (as further defined
in the Purchase Documentation).
"Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"Transferee": as defined in subsection 9.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Warrants": each of the warrants to purchase shares of common
stock or preferred capital stock of the Borrower.
<PAGE> 23
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"Working Day": shall mean any Business Day on which dealings
in foreign currencies and exchange between banks may be carried on in
London, England.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF TERM LOANS AND REVOLVING CREDIT COMMITMENTS
2.1 Term Loan. (a) Subject to the terms and conditions hereof, each
Term Loan Lender severally agrees to make term loans ("Term Loans") to the
Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the amount of such
Term Loan Lender's Term Loan Commitment; provided that $20,000,000 of such term
loans shall only be available to the Borrower on the Closing Date and the
remaining $2,000,000 of term loans shall be available to the Borrower during the
Commitment Period solely to pay interest on the due date thereof on the Loans as
required hereunder.
(b) The Term Loans may from time to time be (i) Eurodollar Loans or
(ii) Base Rate Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Agent in accordance with subsections 2.1(c) and
2.7, provided that no Term Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Termination Date.
(c) The Borrower may borrow during the Commitment Period in accordance
with the proviso to subsection 2.1(a) on any Working Day, if all or any part of
such Term Loans are to be initially Eurodollar Loans, or on a Business Day, if
all of such Term Loans are to be initially Base Rate Loans, provided that the
Borrower shall give the Agent irrevocable notice (which notice must be received
by the Agent prior to 10:00 A.M., Los Angeles time, (a) three Business Days
prior to the requested Borrowing Date, if all or any part of the requested Term
Loans are to be initially Eurodollar Loans or (b) one Business Day prior to the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
<PAGE> 24
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(ii) the requested Borrowing Date, (iii) whether the borrowing is to be
Eurodollar Loans, Base Rate Loans, or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Each borrowing under the Term Loan Commitments shall
be in an amount equal to (x) in the case of Base Rate Loans, $500,000 or a whole
multiple of $100,000 in excess thereof (or such lesser amount as may be agreed
to by the Agent) and (y) in the case of Eurodollar Loans, $3,000,000 or a whole
multiple of $1,000,000 in excess thereof. Upon receipt of any such notice from
the Borrower, the Agent shall promptly notify each Term Loan Lender thereof.
Each Term Loan Lender will make the amount of its pro rata share of each
borrowing available to the Agent for the account of the Borrower at the office
of the Agent specified in subsection 9.2 prior to 11:00 A.M., New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Agent. Such borrowing will then be made available to the
Borrower by the Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Agent by the Term
Loan Lenders and in like funds as received by the Agent.
2.2 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed the amount of such Revolving Credit Lender's
Revolving Credit Commitment. During the Commitment Period the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans or (ii) Base Rate Loans or (iii) a combination thereof, as determined by
the Borrower and notified to the Agent in accordance with subsections 2.2(c) and
2.7, provided that no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the Termination Date.
(c) The Borrower may borrow under the Revolving Credit Commitments
during the Commitment Period on any Working Day, if all or any part of such
Loans are to be initially Eurodollar Loans, or on a Business Day, if all of such
Revolving Credit Loans are to be initially Base Rate Loans, provided that the
Borrower shall give the Agent irrevocable notice (which notice must be received
by the Agent prior to 10:00 A.M., Los Angeles time, (a) three Business Days
prior to the requested Borrowing Date, if all or any part of the requested
Revolving Credit Loans are to be initially Eurodollar Loans or (b) one Business
Day prior to the requested Borrowing Date, otherwise), specifying (i) the amount
to be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing
is to be Eurodollar Loans, Base Rate Loans, or a combination thereof and (iv) if
the borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Each borrowing under the Revolving Credit Commitments
shall be in an amount equal to (x) in the case of Base Rate Loans, $100,000 or a
whole multiple of $100,000 in excess thereof (or, if the then aggregate
<PAGE> 25
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Available Commitments are less than $100,000, such lesser amount) and (y) in the
case of Eurodollar Loans, $100,000 or a whole multiple of $100,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Agent shall
promptly notify each Revolving Credit Lender thereof. Each Revolving Credit
Lender will make the amount of its pro rata share of each borrowing available to
the Agent for the account of the Borrower at the office of the Agent specified
in subsection 9.2 prior to 11:00 A.M., New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Agent. Such
borrowing will then be made available to the Borrower by the Agent crediting the
account of the Borrower on the books of such office with the aggregate of the
amounts made available to the Agent by the Revolving Credit Lenders and in like
funds as received by the Agent.
2.3 Commitment Fee. The Borrower agrees to pay to the Agent for the
account of each Lender a commitment fee for the duration of the Commitment
Period from and including the first day of the Commitment Period, computed at a
rate per annum equal to .50% on the average daily amount of the Available
Revolving Credit Commitment of such Lender during the period for which payment
is made, payable quarterly in arrears on the last day of each March, June,
September and December and on the Termination Date or such earlier date as the
Commitments shall terminate as provided herein, commencing on the first of such
dates to occur after the date hereof.
2.4 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Agent for the account of the appropriate
Lender: (i) the then unpaid principal amount of each Revolving Credit Loan of
such Revolving Credit Lender on the Termination Date (or such earlier date on
which the Revolving Credit Loans become due and payable pursuant to Section 7)
and (ii) the principal amount of the Term Loans of such Term Loan Lender on the
Termination Date (or on such earlier date on which the then unpaid principal
amount of the Term Loans become due and payable pursuant to Section 7). The
Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Loans from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in subsection
2.9.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Agent shall maintain the Register pursuant to subsection
9.6(d), and a subaccount therein for each Lender, in which shall be recorded (i)
the amount of each Revolving Credit Loan and Term Loan made hereunder, the Type
thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.4(b) shall, to the extent permitted by
applicable law, be
<PAGE> 26
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prima facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of any Lender or
the Agent to maintain the Register or any such account, or any error therein,
shall not in any manner affect the obligation of the Borrower to repay (with
applicable interest) the Loans made to the Borrower by such Lender in accordance
with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Agent by any
Lender, the Borrower will execute and deliver to such Lender (i) a promissory
note of the Borrower evidencing any Revolving Credit Loans of such Lender,
substantially in the form of Exhibit A-1 with appropriate insertions as to date
and principal amount (a "Revolving Credit Note"), and/or (ii) a promissory note
of the Borrower evidencing any Term Loan of such Lender, substantially in the
form of Exhibit A-2 with appropriate insertions as to date and principal amount
(a "Term Note").
2.5 Optional Prepayments. The Borrower may, at any time and from time
to time, prepay the Loans, in whole or in part, without premium or penalty, upon
at least three Business Days' irrevocable notice to the Agent in the case of
Eurodollar Loans, and upon at least one Business Days' irrevocable notice to the
Agent in the case of Base Rate Loans, specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, Base Rate Loans or
a combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 2.16. Partial prepayments shall be in an
aggregate principal amount of $250,000 or a whole multiple of $50,000 in excess
thereof. Partial prepayments of the Term Loans may not be reborrowed.
2.6 Mandatory Prepayments. If permitted by the PCC Existing Credit
Agreement, the Term Loans shall be prepaid and the Revolving Credit Commitments
reduced by an amount equal to the aggregate Net Cash Proceeds of (i) the sale of
Non-Broadcast Assets to Clear Channel, (ii) the sale of the Exchange Assets to
Clear Channel (if the Net Cash Proceeds thereof are not reinvested within six
months in a like-kind exchange pursuant to Section 1031 of the Internal Revenue
Code) or (iii) the issuance or sale by PCC of equity securities. Any prepayment
of the Loans shall include accrued interest and any amounts due pursuant to
subsection 2.16. Any reduction of the Revolving Credit Commitments pursuant to
this subsection 2.6 shall be accompanied by the prepayment of the Revolving
Credit Loans to the extent, if any, that the aggregate then outstanding
principal amount of the Revolving Credit Loans exceeds the amount of the
Revolving Credit Commitments as so reduced.
2.7 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans, by giving the
Agent at least two Business Days' prior irrevocable notice of such election,
provided that any such conversion of Eurodollar Loans may only be made on the
last day of an Interest Period with respect thereto. The Borrower may elect from
time to time to convert Base Rate Loans to Eurodollar Loans by giving the Agent
at least three Working Days' prior irrevocable notice of such election. Any such
notice of conversion to Eurodollar Loans shall specify the length of
<PAGE> 27
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the initial Interest Period or Interest Periods therefor. Upon receipt of any
such notice the Agent shall promptly notify each Lender thereof. All or any part
of outstanding Eurodollar Loans and Base Rate Loans may be converted as provided
herein, provided that (i) no Loan may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and the Agent has or the
Required Lenders have determined that such a conversion is not appropriate and
(ii) no Loan may be converted into a Eurodollar Loan after the date that is one
month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loans, provided that no Eurodollar Loan
may be continued as such (i) when any Event of Default has occurred and is
continuing and the Agent has or the Required Lenders have determined that such a
continuation is not appropriate or (ii) after the date that is one month prior
to the Termination Date and provided, further, that if the Borrower shall fail
to give such notice or if such continuation is not permitted such Loans shall be
automatically converted to Base Rate Loans on the last day of such then expiring
Interest Period.
2.8 Minimum Amounts and Maximum Number of Tranches. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or
a whole multiple of $1,000,000 in excess thereof. In no event shall there be
more than 5 Eurodollar Tranches outstanding at any time.
2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined with respect to such Loan
for such day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of such overdue Loans and any such
overdue interest, commitment fee or other amount shall bear interest at a rate
per annum which is (x) in the case of principal, the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this subsection
plus 2% or (y) in the case of any such overdue interest, commitment fee or other
amount, the rate described in paragraph (b) of this subsection plus 2%, in each
case from the date of such non-payment until such overdue principal, interest,
commitment fee or other amount is paid in full (as well after as before
judgment).
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22
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this subsection
shall be payable from time to time on demand.
2.10 Computation of Interest and Fees. (a) Interest on Base Rate Loans
and facility fees shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. Interest on Eurodollar Loans
shall be calculated on the basis of a 360-day year for the actual days elapsed.
The Agent shall as soon as practicable notify the Borrower and the Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Agent shall as soon as practicable
notify the Borrower and the Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and
the Lenders in the absence of manifest error. The Agent shall, at the request of
the Borrower, deliver to the Borrower a statement showing the quotations used by
the Agent in determining any interest rate pursuant to subsection 2.9(a) or (b).
2.11 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Agent shall have determined (which determination shall
be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as Base Rate Loans, (y) any Loans that were to have been converted
on the first day of such Interest Period to Eurodollar Loans shall be continued
as Base Rate Loans and (z) any affected outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to Base Rate Loans. Until
such notice has been withdrawn by the Agent, no further Eurodollar Loans shall
be made or continued as such, nor shall the Borrower have the right to convert
Loans to Eurodollar Loans.
2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any facility fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the
<PAGE> 29
23
respective Term Loan Percentages or Revolving Credit Percentages, as the case
may be, of the relevant Lenders. Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Term Loans shall be made
pro rata according to the respective outstanding principal amounts of the Term
Loans then held by the Term Loan Lenders. Each payment (including each
prepayment) by the Borrower on account of principal of and interest on the
Revolving Credit Loans shall be made pro rata according to the respective
outstanding principal amounts of the Revolving Credit Loans then held by the
Revolving Credit Lenders. All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set off or counterclaim and shall be made prior
to 11:00 A.M. Los Angeles time, on the due date thereof to the Agent, for the
account of the Lenders, at the Agent's office specified in subsection 9.2, in
Dollars and in immediately available funds. The Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(b) Unless the Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its applicable Commitment Percentage of such borrowing available to
the Agent, the Agent may assume that such Lender is making such amount available
to the Agent, and the Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not made
available to the Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Rate for the period until such
Lender makes such amount immediately available to the Agent. A certificate of
the Agent submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such
Lender's applicable Commitment Percentage of such borrowing is not made
available to the Agent by such Lender within three Business Days of such
Borrowing Date, the Agent shall also be entitled to recover such amount with
interest thereon, without duplication of any amounts received by the Agent from
such Lender, at the rate per annum applicable to Base Rate Loans hereunder, on
demand, from the Borrower.
2.13 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, other than as a result of the gross negligence or willful act of such
Lender, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.16.
<PAGE> 30
24
2.14 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any Eurodollar
Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Non- Excluded Taxes covered by
subsection 2.15 and changes in the rate of tax on the overall net
income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
thereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, such Lender shall notify
the Borrower of such increased cost or reduced amount receivable and describe in
reasonable detail the basis for such notification, and the Borrower shall
promptly pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower (with a copy
to the Agent) of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this subsection
submitted by such Lender to the Borrower (with a copy to the Agent) shall be
conclusive in the absence of manifest error. The agreements in
<PAGE> 31
25
this subsection shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.
(d) In the event any Lender delivers a certificate requesting
compensation pursuant to this subsection 2.14, the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Agent, require such
Lender to transfer and assign, without recourse (in accordance with and subject
to the restrictions contained in subsection 9.6), all of its interests, rights
and obligations under this Agreement to an assignee which shall assume such
assigned obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided, however, that (x) such assignment shall not conflict
with any law, rule or regulation or order of any court or other Governmental
Authority having jurisdiction, (y) the Borrower shall have received the prior
written consent to such assignment of the Agent, which consent shall not
unreasonably be withheld, and (z) the Borrower or such assignee shall have paid
to the affected Lender in immediately available funds an amount equal to the sum
of the principal of the outstanding Loans of such Lender plus all interest, fees
and other amounts accrued and unpaid for the account of such Lender hereunder
(including any amounts under this subsection 2.14); provided, further, that if
prior to any such transfer and assignment the circumstances or event that
resulted in such Lender's claim for compensation under this subsection 2.14
cease to cause such Lender to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital (including as a result
of any action taken by such Lender pursuant to subsection 2.17), or if, within
twenty days after the Borrower shall have notified such Lender of its election
to exercise its rights pursuant to this subsection, such Lender shall waive its
right to claim further compensation under this subsection 2.14 in respect of
such circumstances or event, then such Lender shall not thereafter be required
to make any such transfer and assignment hereunder.
2.15 Taxes. (a) All payments made by the Borrower under this Agreement
and any Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or any Lender as a result of a
present or former connection between the Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any Note). If any such non-excluded taxes, levies, imposts,
duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Agent or any Lender
hereunder or under any Note, the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement,
provided, however, that the Borrower shall not be required to increase any such
amounts payable to any Lender that is not organized under the laws of the United
States of America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection. Whenever any Non-Excluded
Taxes are
<PAGE> 32
26
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. The agreements in this subsection shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly
completed copies of United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form,
as the case may be;
(ii) deliver to the Borrower and the Agent two further copies
of any such form or certification on or before the date that any such
form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 9.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements required
pursuant to this subsection, provided that in the case of a Participant such
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
2.16 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of
<PAGE> 33
27
this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day
which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
2.17 Change of Lending Office. Each Lender agrees that if it makes any
demand for payment under subsection 2.14 or 2.15(a), or if any adoption or
change of the type described in subsection 2.13 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 2.14 or
2.15(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 2.13.
2.18 Further Assurances Regarding Security. (a) The Borrower shall, and
shall cause each of its Subsidiaries to, from time to time, execute and deliver
to the Agent on behalf of the Lenders, such additional Security Documents,
statements, documents, agreements and reports as it may from time to time
reasonably request to evidence, perfect or otherwise implement or assure the
security for repayment of the Obligations. With respect to the Lenders'
insurance policies, upon the Agent's reasonable request, the Borrower shall
arrange for co-insurance and/or reinsurance, with companies and in amounts
satisfactory to the Agent. All reinsurance policies shall include direct access
agreements acceptable to the Agent.
(b) The Borrower shall, and shall cause each of its Subsidiaries to,
execute and deliver such further documents (including without limitation such
financing statements, continuation statements or amendments thereto and such
other documents and certificates as the Agent may reasonably request to perfect
and preserve the security interests granted or purported to be granted under any
of the Security Documents) and do such other acts and things as the Agent may
reasonably request to effect fully the purposes of this Agreement and the other
Loan Documents and to provide for payment of the Obligations in accordance with
the terms of this Agreement and the other Loan Documents. Without limiting any
of the foregoing, in the event a Person becomes a Subsidiary of the Borrower
after the Closing Date, the Borrower shall cause such Subsidiary to execute and
deliver such guarantees, Security Documents and such other agreements, pledges,
assignments, documents and certificates (including, without limitation, any
amendments to the Loan Documents) as the Agent may reasonably request and do
such other acts and things as the Agent may reasonably request to
<PAGE> 34
28
have such Subsidiary guaranty the Obligations, grant to the Agent on behalf of
Lenders, a duly perfected first priority Lien (subject to Liens permitted
hereunder) on all real, personal and mixed property of such Subsidiary, and
effect fully the purposes of this Agreement and the other Loan Documents and to
provide for payment of the Obligations in accordance with the terms of this
Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, in the event the Borrower forms or otherwise acquires a Subsidiary
after the Closing Date, the Borrower shall (i) execute and deliver to the Agent
a pledge agreement substantially in the form attached hereto as Exhibit B and
(ii) cause such Subsidiary to execute and deliver a guarantee substantially in
the form attached hereto as Exhibit E, a pledge agreement substantially in the
form attached hereto as Exhibit E and a security agreement in the form of
Exhibit F.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and to
make the Loans, the Borrower hereby represents and warrants to the Agent and
each Lender that:
3.1 Organization, Powers, Good Standing and Business
(a) Organization and Powers. Each Loan Party is a corporation or
limited partnership, as the case may be, duly formed and validly existing under
the laws of the jurisdiction of its organization. Each Loan Party has all
requisite corporate or partnership, as the case may be, power and authority to
own and operate its properties, to carry on its business as now conducted and
proposed to be conducted, and each Loan Party has all requisite corporate or
partnership, as the case may be, power and authority to enter into the Loan
Documents and the Purchase Documentation, to carry out the transactions
contemplated thereby and to issue the Notes, in each case to the extent it is a
party thereto.
(b) Good Standing. Each Loan Party is in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its present business and operations, except where the failure to be so qualified
has not had and could not reasonably be expected to have a Material Adverse
Effect.
(c) Conduct of Business. The Loan Parties are engaged only in the
businesses permitted to be engaged in under subsection 6.11 and are conducting
their businesses in accordance with the provisions of subsection 6.11. Each Loan
Party holds all licenses, permits, franchises, leases, certificates of
authority, or any waivers of the foregoing that are necessary to permit each of
them to conduct their respective businesses as now conducted and to hold and
operate their respective properties, except where the failure to have such
licenses, permits, franchises, leases and certificates of authority, or waivers
of any of the foregoing, could not reasonably be expected to have a Material
Adverse Effect. All such licenses, permits, franchises, leases, certificates of
authority and waivers are valid and in full force and effect, except where the
failure to be in full force and effect of such licenses, permits, franchises,
leases, certificates of authority and waivers could not reasonably be expected
to have a Material Adverse Effect.
<PAGE> 35
29
(d) Ownership and Subsidiaries. The ownership of each of the Loan
Parties is specified correctly and completely on Schedule 3.1(d) annexed hereto.
None of the Capital Stock of the Persons identified on Schedule 3.1(d) annexed
hereto is Margin Stock, except as specified on such Schedule.
(e) Real Property. Schedule 3.1(e) accurately states all material real
property interests held by the Loan Parties.
3.2 Authorization of Borrowing, etc.
(a) Authorization of Borrowing. The execution, delivery and performance
of the Loan Documents and the issuance, delivery and payment of the Notes have
been duly authorized by all necessary corporate or partnership, as the case may
be, action by each Loan Party a party thereto.
(b) No Conflict. The execution, delivery and performance by each Loan
Party of the Loan Documents and the Purchase Documentation the issuance,
delivery and performance of the Notes and any other transaction contemplated by
the Loan Documents do not and will not (i) violate any provision of law
applicable to any Loan Party, the Certificate of Incorporation, Bylaws,
Partnership Agreement or other organizational documents of any Loan Party or any
order, judgment or decree of any court or other agency of government binding on
any Loan Party, (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any material Contractual
Obligation of any Loan Party, (iii) result in or require the creation or
imposition of any material Lien upon any of the properties or assets of any Loan
Party (other than Liens hereunder in favor of the Agent on behalf of the
Lenders) or (iv) require any approval of stockholders or other equity holders or
any approval or consent of any Person under any Contractual Obligation of any
Loan Party.
(c) Governmental Consents. The execution, delivery and performance by
each Loan Party of the Loan Documents to which it is a party, the issuance,
delivery and performance of the Notes and any other transactions contemplated by
the Loan Documents (including the sale and purchase of substantially all of the
assets of The Travel Channel pursuant to the Purchase Documentation) do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body.
(d) Binding Obligation. Each of the Loan Documents has been duly
executed and delivered by each Loan Party which is a party thereto, and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally and subject to the
availability of equitable remedies. The Purchase Documentation has been duly
executed by PCC and is the legally valid and binding obligation of PCC,
enforceable against PCC in accordance with its terms, except as may be limited
by bankruptcy,
<PAGE> 36
30
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally and subject to the availability of equitable
remedies.
3.3 Financial Condition. The Borrower has heretofore delivered to the
Lenders, at the Lenders' request, the Financial Statements. All such statements
were prepared in conformity with GAAP and, together with the accompanying notes
thereto, if any, fairly present the financial position (where applicable on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and changes in
financial position (where applicable on a consolidated basis) of the entities
described therein for each of the periods then ended (subject to, in the case of
unaudited financial statements, normal year-end adjustments). The Borrower has
no (and will not following the funding of the Loans have) material Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not (or will not be, upon the
delivery thereof) reflected in the foregoing financial statements or the notes
thereto or in the annual financial statements required to be delivered pursuant
to subsection 5.1(b)(iii).
3.4 No Material Adverse Change; No Restricted Payments. Since December
31, 1996, no event or change has occurred that has caused or evidences, either
individually or in the aggregate, a Material Adverse Effect. Since December 31,
1996, the Borrower has not directly or indirectly declared, ordered, paid or
made or set apart any sum or property for any Restricted Payment or agreed so to
do, except as permitted by subsection 6.5.
3.5 Title To Properties; Liens. Each Loan Party holds (i) good,
marketable and insurable fee simple title, subject to Liens permitted by
subsection 6.2, to all its owned real property, (ii) good, sufficient, insurable
and valid leasehold title, subject to Liens permitted by subsection 6.2, to its
respective leased real property and (iii) good, sufficient and legal title,
subject to Liens permitted by subsection 6.2, to all of its material properties
and assets (other than as described in clauses (i) and (ii) of this sentence)
reflected in the balance sheet included with the Financial Statements or in the
most recent financial statements delivered pursuant to subsection 5.1(b) of this
Agreement, except for assets acquired or disposed of since the date of such
financial statements. Except as permitted by subsection 6.2, all such properties
and assets are free and clear of Liens.
3.6 Litigation; Adverse Facts. There is no action, suit, proceeding,
governmental arbitration or governmental investigation (whether or not
purportedly on behalf of any Loan Party) at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, pending or, to the
knowledge of the Borrower, threatened against or affecting any Loan Party or any
property of any Loan Party that has had, or could reasonably be expected to
result in any Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries has received any notice of termination of any material contract,
lease or other agreement, or suffered any material damage, destruction or loss,
(whether or not covered by insurance) or had any employee strike, work-stoppage,
slow-down or lock-out or any substantial threat directed to it of any imminent
strike, work-stoppage, slow-down or lock-out, any of which
<PAGE> 37
31
remain pending and are material to the conduct of the Borrower or its
Subsidiaries' business as presently conducted that could reasonably be expected
to result in a Material Adverse Effect.
3.7 Payment of Taxes. Except to the extent permitted by subsection 5.3,
all tax returns and reports of the Borrower and its Subsidiaries required to be
filed by it or on its behalf have been timely filed, and all taxes, assessments,
fees and other governmental charges upon such Persons and upon their respective
properties, assets, income and franchises which are due and payable have been
paid when due and payable. The Borrower does not know of any proposed tax
assessment against any such Person which is not being actively contested by such
Person, in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
3.8 Performance of Agreements. (a) No Loan Party is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except, in each case, where the consequences, direct
or indirect, of such default or defaults, if any, could not have a Material
Adverse Effect.
(b) No Loan Party is a party or subject to any agreement or instrument
which has or could reasonably be expected to have, individually or the
aggregate, a Material Adverse Effect.
3.9 Governmental Regulation. No Loan Party is subject to regulation
under the Public Utility Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940 or to any federal or state statute or regulation
limiting its ability to incur Indebtedness.
3.10 Securities Activities. Neither any Loan Party nor any of their
respective Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock.
3.11 Employee Benefit Plans. (a) The Borrower and each ERISA Affiliate
is in substantial compliance with all provisions and requirements of ERISA with
respect to each Employee Benefit Plan, and have substantially performed all
their obligations under each Employee Benefit Plan. There are no actions, suits
or claims (other than routine claims for benefits) pending or threatened against
any Employee Benefit Plan or its assets, and, to the best knowledge of the
Borrower, no facts exist which could give rise to any such actions, suits or
claims.
(b) Within the period of five years ending on the Closing Date, no
ERISA Event has occurred, and there is no unpaid liability of the Borrower or
any ERISA Affiliate that arose in connection with any ERISA Event that occurred
prior to that five-year period.
<PAGE> 38
32
As of the Closing Date, no ERISA Event is reasonably expected to occur with
respect to any Employee Benefit Plan.
(c) Except to the extent required under Section 4980B of the Code, no
Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employees of the Borrower
or any ERISA Affiliate.
(d) As of the most recent valuation date for any Pension Plan, the
excess of the actuarial present value (determined on the basis of reasonable
assumptions employed by the independent actuary for such Pension Plan) of the
benefit liabilities (as defined in Section 4001(a)(16) of ERISA), whether or not
vested, over the fair market value of the assets of such Pension Plan,
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which there is no such
excess), does not exceed $500,000.
3.12 Certain Fees. No broker's or finder's fee or commission will be
payable by the Borrower or any of its Subsidiaries (or to the best knowledge of
the Borrower, by any other Person), with respect to the making of the Loans, or
any of the other transactions contemplated hereby, and the Borrower hereby
indemnifies the Lenders against and agree that they will hold the Lenders
harmless from any claim, demand or liability for broker's or finder's fees
(other than any broker's or finder's fee of any broker or finder retained by the
Agent or the Lenders) alleged to have been incurred in connection with any such
offer, issuance and sale, or any of the other transactions contemplated hereby
and any expenses, including legal fees, arising in connection with any such
claim, demand or liability.
3.13 Environmental.
(i) The operations of the Borrower and its Subsidiaries
(including, without limitation, all operations and conditions at or in
the Facilities) comply, and for the period within any applicable
statute of limitations have complied, in all material respects with all
Environmental Laws;
(ii) The Borrower and each of its Subsidiaries has obtained
all permits under Environmental Laws necessary to their respective
operations, and all such permits are in good standing, and the Borrower
and each of its Subsidiaries is in compliance with all material terms
and conditions of such permits;
(iii) Neither the Borrower nor any of its Subsidiaries has
received (a) any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release
of any Hazardous Materials or (b) any letter or request for information
under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9604) or comparable
state laws, and to the best of the Borrower's knowledge, none of the
operations of the Borrower or any of its Subsidiaries is the subject of
any federal or state investigation evaluating whether any further
investigation or remedial action is needed to respond to a Release
<PAGE> 39
33
or threatened Release of any Hazardous Material at any Facility or at
any other location;
(iv) None of the operations of the Borrower or any of its
Subsidiaries is subject to any judicial, administrative, or arbitral
proceeding alleging the violation of or liability under any
Environmental Laws which if adversely determined could reasonably be
expected to have a Material Adverse Effect;
(v) The Borrower and each of its Subsidiaries and all of
their Facilities or operations are not subject to any outstanding
written order or agreement with any governmental authority or private
party relating to (a) any Environmental Laws or (b) any Environmental
Claims that in each case could reasonably be expected to have a
Material Adverse Effect;
(vi) To the best knowledge of each Loan Party, neither the
Borrower nor any of its Subsidiaries has any contingent liability in
connection with any Release of any Hazardous Materials by the Borrower
or any Subsidiaries of the Borrower that could reasonably be expected
to have a Material Adverse Effect;
(vii) Neither the Borrower nor any of its Subsidiaries or, to
the best of the Borrower's knowledge, any predecessor of the Borrower
or any Subsidiaries of the Borrower has filed any notice under any
Environmental Law indicating past or present treatment or disposal of
Hazardous Materials at any Facility, and none of the Borrower's or any
of its Subsidiary's operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent in material violation of
any such law;
(viii) To the best knowledge of each Loan Party, no Hazardous
Material exists on, under or about any Facility in a manner that could
give rise to an Environmental Claim having a Material Adverse Effect,
and neither the Borrower nor any Subsidiary of the Borrower has filed
any notice or report of a Release of any Hazardous Materials that could
reasonably be expected to give rise to an Environmental Claim having a
Material Adverse Effect;
(ix) To the best knowledge of each Loan Party, neither the
Borrower nor any Subsidiary of the Borrower (or any of their
predecessors) has disposed of any Hazardous Materials in a manner that
could reasonably be expected to give rise to an Environmental Claim
having a Material Adverse Effect;
(x) No underground storage tanks or surface impoundments
are on or at the Facilities, other than those that could not reasonably
be expected to give rise to an Environmental Claim having a Material
Adverse Effect;
(xi) No Lien in favor of any Person for (a) any liability
under Environmental Laws, or (b) damages arising from or costs incurred
by such Person in response to a Release has been filed or has been
attached to the Facilities; and
<PAGE> 40
34
(xii) There is no radio frequency radiation, electromagnetic
field or similar condition of or about any property owned, operated, or
otherwise used by any Loan Party that could reasonably be expected to
give rise to a Material Adverse Effect.
3.14 Solvency. Each Loan Party is, and on and after the consummation of
the transactions contemplated hereby will be, Solvent.
3.15 Insurance. The Borrower and its Subsidiaries maintain, with
financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and business of its Subsidiaries,
against loss or damage of the kinds customarily insured against by entities of
established reputation engaged in the same or similar business of such types and
in such amounts as are customarily carried under similar circumstances by such
other entities, including business interruption insurance in an amount
reasonably satisfactory to the Agent. Schedule 3.15 is a complete and accurate
description of all policies of insurance that will be in effect as of the
Closing Date for the Borrower and its Subsidiaries.
3.16 Intellectual Property. (a) The Borrower and its Subsidiaries own,
or are licensed to use, the Intellectual Property and all such Intellectual
Property is, in all material respects, fully protected and duly and properly
registered, filed or issued in the appropriate office and jurisdictions for such
registrations, filing or issuances.
(b) Except as disclosed on Schedule 3.16(b), (i) no material claim has
been asserted by any Person with respect to the use of any such Intellectual
Property, or challenging or questioning the validity or effectiveness of any
such Intellectual Property; (ii) to the best of the Borrower's knowledge, the
use of such Intellectual Property by the Borrower or any of its Subsidiaries
does not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liabilities on the
part of the Borrower or any of its Subsidiaries that are material to the
Borrower or any of its Subsidiaries; and (iii) the consummation of the
transactions contemplated by this Agreement will not in any material manner or
to any material extent impair the ownership of (or the license to use, as the
case may be) any of such Intellectual Property by the Borrower or any of its
Subsidiaries.
3.17 Disclosure. No representation or warranty of any Loan Party
contained in any Loan Document or any other document, certificate or written
statement furnished to the Lenders by or on behalf of any Loan Party for use in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state a material fact (known to
the Borrower in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made. The projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by the Borrower to be reasonable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results. There is no fact known (or which should upon the reasonable exercise of
<PAGE> 41
35
diligence be known) to the Borrower (other than matters of a general economic
nature) that has had or could reasonably be expected to have a Material Adverse
Effect and that has not been disclosed herein or in such other documents,
certificates and statements furnished to the Lenders for use in connection with
the transactions contemplated hereby.
3.18 Security Documents. (a) Each of the Pledge Agreements is effective
to create in favor of the Agent, for the benefit of the Lenders, a legal, valid
and enforceable security interest in the Pledged Securities described therein
and proceeds thereof and, when the Pledged Notes described therein and stock
certificates representing the Pledged Stock described therein are delivered to
the Agent, each such Pledge Agreement shall constitute a fully perfected first
priority Lien on, and security interest in, all right, title and interest of the
relevant Loan Party in such Pledged Securities and the proceeds thereof, as
security for the Obligations (as defined in the relevant Pledge Agreement), in
each case prior and superior in right to any other Person.
(b) Each of the Security Agreements is effective to create in favor of
the Agent, for the benefit of the Lenders, a legal, valid and enforceable
security interest in the Collateral described therein and proceeds thereof, and
when financing statements in appropriate form are filed in the offices specified
on Schedule 3.18(b), each such Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the relevant Security Agreement), in each case
prior and superior in right to any other Person, other than with respect to
Liens expressly permitted by subsection 6.2.
3.19 Purposes of Loans. The proceeds of the Term Loans shall be used by
the Borrower to finance, in part, the acquisition of substantially all of the
assets of The Travel Channel (and $2,000,000 of such Loans shall be used by the
Borrower to pay interest due on the Loans pursuant to the terms hereof) and the
proceeds of the Revolving Credit Loans shall be used by the Borrower for working
capital purposes.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of each Lender to make
the initial Loan requested to be made by it is subject to the satisfaction on or
prior to July 14, 1997 of the following conditions precedent:
(a) Loan Documents. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for each Lender, (ii) the Paxson Pledge
Agreement, executed and delivered by Paxson and Second Crystal, with a
counterpart or a conformed copy for each Lender, (iii) the PCUH Pledge
Agreement, executed and delivered by a duly authorized officer of the
parties thereto, with a counterpart or a conformed copy for each
Lender, (iv) the Borrower Security Agreement, executed and delivered by
a duly authorized officer of the parties thereto, with a counterpart or
a conformed copy for
<PAGE> 42
36
each Lender and (v) for the account of each relevant Lender, Notes
conforming to the requirements hereof and executed and delivered by a
duly authorized officer of the Borrower.
(b) Related Agreements. The Agent shall have received, with a
copy for each Lender, true and correct copies, certified as to
authenticity by the Borrower, of the Purchase Documentation and such
documents or instruments as may be reasonably requested by the Agent,
including, without limitation, a copy of any debt instrument, security
agreement or other material contract to which the Borrower or any of
its Subsidiaries may be a party.
(c) Borrowing Certificate. The Agent shall have received, with
a counterpart for each Lender, a certificate of each Loan Party, dated
the Closing Date, substantially in the form of Exhibit G, with
appropriate insertions and attachments, satisfactory in form and
substance to the Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of the Borrower.
(d) Corporate Proceedings of the Borrower. The Agent shall
have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Agent, of the
Board of Directors of the Borrower authorizing (i) the execution,
delivery and performance of this Agreement and the other Loan Documents
to which it is a party, (ii) the borrowings contemplated hereunder and
(iii) the granting by it of the Liens created pursuant to the Borrower
Security Documents, certified by the Secretary or an Assistant
Secretary of the Borrower as of the Closing Date, which certificate
shall be in form and substance satisfactory to the Agent and its
counsel and shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded.
(e) Borrower Incumbency Certificate. The Agent shall have
received, with a counterpart for each Lender, a Certificate of the
Borrower, dated the Closing Date, as to the incumbency and signature of
the officers of the Borrower executing any Loan Document satisfactory
in form and substance to the Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of the
Borrower.
(f) Due Diligence. The Agent shall be satisfied with the
corporate and capital structures of each Loan Party, including any
ownership or management agreements. The Agent shall have received, and
shall be satisfied with the form and substance of, such additional
financial, legal and operating information of the Loan Parties as it
shall request, including but not limited to operating projections, film
payment obligation information and a pro forma balance sheet dated as
of the Closing Date giving effect to the transactions contemplated
hereby.
(g) Consummation of the Acquisition. On or prior to the
Closing Date, (i) the Borrower shall have acquired substantially all of
the assets of The Travel Channel in accordance with the Purchase
Documentation and (ii) the aggregate amount of fees and expenses paid
in connection therewith and the other transactions contemplated
<PAGE> 43
37
thereby and by the Loan Documents shall not have been more than
$2,000,000; provided that the Lenders shall be reasonably satisfied (i)
with the terms and conditions of the Purchase Documentation including,
without limitation, any amendment or modification thereto and (ii) that
such terms and conditions shall have been complied with and satisfied
in all material respects and that such acquisition shall have been
consummated in accordance with such terms and conditions in all
material respects.
(h) Organizational Documents. The Agent shall have received,
with a counterpart for each Lender, true and complete copies of the
certificate of incorporation and by-laws or other organizational
documents of each Loan Party, certified as of the Closing Date as
complete and correct copies thereof by the Secretary or an Assistant
Secretary of the such Loan Party.
(i) Fees. All fees and expenses which the Borrower has agreed
to pay in connection with the execution and delivery of this Agreement
shall have been paid in full to the Agent and Lenders on the date on
which this Agreement shall become effective in accordance with
subsection 9.8, including but not limited to fees due under the fee
letter dated as of July 7, 1997 between the Borrower and the Agent.
(j) Legal Opinions. The Agent shall have received, with a
counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Dow, Lohnes &
Albertson, counsel to the Borrower and the other Loan Parties,
in form and substance satisfactory to the Agent and the
Lenders; and
(ii) the executed legal opinion of Anthony L.
Morrison, General Counsel to the Borrower, in form and
substance satisfactory to the Agent and the Lenders.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agent may reasonably
require.
(k) Pledged Stock; Stock Powers; Pledged Notes. The Agent
shall have received the certificates representing the shares pledged
pursuant to each of the Paxson Pledge Agreement and the PCUH Pledge
Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the
pledgor thereof, and an executed Federal Reserve Form U-1 in connection
with the Paxson Pledge Agreement.
(l) Actions to Perfect Liens. The Agent shall have received
evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without
limitation, the filing of duly executed financing statements on form
UCC-1, necessary or, in the opinion of the Agent, desirable to perfect
the Liens created by the Security Documents shall have been completed.
<PAGE> 44
38
(m) Lien Searches. The Agent shall have received the results
of a recent search by a Person satisfactory to the Agent, of the
Uniform Commercial Code, judgement and tax lien filings which may have
been filed with respect to personal property of the Borrower, and the
results of such search shall be satisfactory to the Agent.
(n) Insurance. The Agent shall have received evidence in form
and substance satisfactory to it that all of the requirements of
subsection 5.4 shall have been satisfied.
4.2 Conditions to Each Loan. The agreement of each Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan) is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower and its
Subsidiaries in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as if made on
and as of such date except for any representation and warranty which is
expressly made as of an earlier date, which representation and warranty
shall have been true and correct in all material respects as of such
earlier date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement, the other Loan
Documents shall be reasonably satisfactory in form and substance to the
Agent, and the Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
(d) Paxson Pledge. In the case of the initial Term Loan in an
aggregate principal amount of $20,000,000, Paxson and Second Crystal
shall have pledged at least 3,200,000 shares of common stock of PCC
pursuant to the Paxson Pledge Agreement, and in the case of any
subsequent Loans, Paxson and Second Crystal shall have pledged at least
3,680,000 shares of common stock of PCC pursuant to the Paxson Pledge
Agreement.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this subsection have been satisfied.
<PAGE> 45
39
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Agent hereunder or under any
other Loan Document, the Borrower shall and (except in the case of delivery of
financial information, reports and notices) shall cause each of its Subsidiaries
to:
5.1 Financial Statements and Systems.
(a) Accounting System: Maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP.
(b) Financial Statements and Other Reports: Deliver to the Lenders:
(i) Monthly Financials: as soon as practicable and in any
event within 30 days after the end of each fiscal month of the
Borrower, copies of the consolidated income statement, operating cash
flow statement and performance to budget analysis for the Borrower and
its Subsidiaries for and as of the end of such fiscal month and
comparative figures for such fiscal month in the prior fiscal year;
(ii) Quarterly Financials: as soon as practicable and in any
event within 45 days after the end of each fiscal quarter of the
Borrower ending after the Closing Date, a consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such
period, and the related unaudited consolidated statements of income and
of cash flows, certified by the chief financial officer of the Borrower
that they fairly present the financial condition and results of
operations of the Borrower and its Subsidiaries, as appropriate, as at
the end of such periods and for such periods, subject to changes
resulting from audit and normal year-end adjustments;
(iii) Year-End Financials: as soon as practicable and in any
event within 90 days after the end of each fiscal year of the Borrower,
the audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries, as at the end of such year, and the related
consolidated statements of income, shareholders' equity and cash flows
of the Borrower and its Subsidiaries for such fiscal year, (a)
accompanied by a report thereon of independent certified public
accountants of recognized national standing selected by the Borrower
and reasonably satisfactory to Agent and the Required Lenders, which
report shall contain no qualifications with respect to the continuance
of the Borrower and its consolidated Subsidiaries as going concerns and
shall state that such financial statements present fairly the financial
position of the Borrower and its consolidated Subsidiaries as at the
dates indicated and the statements of income and cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent
with prior years (except as otherwise stated therein) and that the
examination by such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards without any limitations being imposed on the scope of such
examination and (b) certified by the chief
<PAGE> 46
40
financial officer of the Borrower that they fairly present the
financial condition and results of operations of the Borrower and its
Subsidiaries, as at the dates and for the periods indicated, as
appropriate;
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements of the Borrower and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officer's
Certificate of the Borrower stating that the signers have reviewed the
terms of this Agreement and the Notes and have made, or caused to be
made under their supervision, a review in reasonable detail of the
transactions and condition of the Borrower and its Subsidiaries during
the accounting period covered by such financial statements and that
such review has not disclosed the existence during or at the end of
such accounting period, and that the signers do not have knowledge of
the existence as at the date of such Officers' Certificate, of any
condition or event which constitutes an Event of Default or Default,
or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the Borrower has
taken, is taking and proposes to take with respect thereto; (b) a
certificate (a "Compliance Certificate") in a form satisfactory to the
Agent demonstrating in reasonable detail compliance during and at the
end of the applicable accounting periods with the provisions of Section
6 and (c) a performance to budget analysis for the Borrower and its
Subsidiaries for and as of the end of such fiscal period and
comparative figures for such fiscal period in the prior fiscal year;
(v) Reconciliation Statement: if, as a result of any change
in accounting principles and policies from those used in the
preparation of the Financial Statements, the financial statements of
the Borrower and its consolidated Subsidiaries delivered pursuant to
subsections (ii), (iii) or (xii) of this subsection 5.1(b) will differ
in any material respect from the financial statements that would have
been delivered pursuant to such subsections had no such change in
accounting principles and policies been made, then, together with the
first delivery of financial statements pursuant to subsection (ii),
(iii) or (xii) following such change, financial statements of the
Borrower and its consolidated Subsidiaries prepared on a pro forma
basis, for (y) the current year to the effective date of such change
and (z) the one full fiscal year immediately preceding the fiscal year
in which such change is made, as if such change had been in effect
during such period;
(vi) Accountants' Certification: together with each delivery
of consolidated financial statements of the Borrower and its
Subsidiaries pursuant to subdivision (iii) above, to the extent
available, a written statement by the independent public accountants
giving the report thereon (a) stating that their audit examination has
included a review of the terms of this Agreement and the Notes as they
relate to accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that constitutes an
Event of Default or Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature
and period of existence thereof; provided that such accountants shall
not be liable by reason of any failure to obtain knowledge of any such
Event of Default or Default with respect to accounting matters that
would not be disclosed in the course of
<PAGE> 47
41
their audit examination and (c) stating that, based on their audit
examinations nothing has come to their attention that causes them to
believe that the information contained in the Compliance Certificate
delivered therewith pursuant to clause (b) of subdivision (iv) above
for the applicable fiscal year are not stated in accordance with the
terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
significant reports submitted to the Borrower by independent public
accountants in connection with each annual, interim or special audit of
the financial statements of the Borrower made by such accountants,
including, without limitation, the comment letter submitted by such
accountants to management in connection with their annual audit;
(viii) Reports and Filings: within five days after the same
are sent, copies of all financial statements and reports which the
Borrower sends to its stockholders, and within five days after the same
are filed, copies of all financial statements and reports which the
Borrower may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(ix) Events of Default etc.: promptly upon, but in any event
no later than two Business Days after, any officer of the Borrower
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Default, or becoming aware that any Lender or the
Agent has given any notice or taken any other action with respect to a
claimed Event of Default or Default under this Agreement, (b) that any
Person has given any notice to the Borrower or any of its Subsidiaries
or taken any other action with respect to a claimed default or event or
condition of the type referred to in Section 7(b) and (e), (c) of any
condition or event that would be required to be disclosed in a current
report filed by the Borrower with the Securities and Exchange
Commission on Form 8-K (Items 1, 2, 4 and 5 of such Form as in effect
on the date hereof) if the Borrower were a filing Person under the
rules thereof or (d) of any condition or event which has had or could
reasonably be expected to have a Material Adverse Effect (which, for
such purposes, shall be determined with respect to the Borrower
individually), an Officer's Certificate specifying the nature and
period of existence of such condition or event, or specifying the
notice given or action taken by such holder or Person and the nature of
such claimed default, Event of Default, Default, event or condition,
and what action the Borrower has taken, is taking and proposes to take
with respect thereto;
(x) Litigation: promptly upon any officer of the Borrower
obtaining knowledge of (a) the institution of any action, suit,
proceeding, governmental investigation or arbitration against or
affecting any Loan Party or any property of any Loan Party not
previously disclosed by the Borrower or the other Loan Parties to the
Lenders or (b) any material adverse development in any such action,
suit, proceeding, governmental investigation or arbitration that, in
any case:
(y) involves claims in excess of $100,000 in the aggregate;
or
<PAGE> 48
42
(z) would reasonably be expected to cause a Material Adverse
Effect;
the Borrower shall promptly give notice thereof to the Lenders and
provide such other information as may be reasonably available to them
to enable the Lenders and their counsel to evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event in
connection with any Employee Benefit Plan or any trust created
thereunder, with a written notice specifying the nature thereof, what
action the Borrower or ERISA Affiliate has taken, is taking or proposes
to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of
(a) all notices received by the Borrower or any of its ERISA Affiliates
from the PBGC relating to an ERISA Event, (b) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed
by the Borrower or any of its ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan, if any, and (c) all
notices received by the Borrower or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event;
(xiii) Financial Plans: as soon as practicable and in any
event no later than the 30 days after the end of any fiscal year of the
Borrower, a budget and financial forecast for the Borrower and its
Subsidiaries including, (a) a forecasted operating cash flows statement
of the Borrower and its Subsidiaries for the next succeeding fiscal
year, (b) forecasted operating cash flows statement of the Borrower and
its Subsidiaries for each fiscal quarter of the next succeeding fiscal
year and (c) such other information and projections as any Lender may
reasonably request, in each case, in a format satisfactory to the
Agent; and
(xiv) Other Information: with reasonable promptness, such
other information and data with respect to the Borrower or any of its
Subsidiaries or Affiliates as from time to time may be reasonably
requested by any Lender.
5.2 Maintenance of Existence, etc.. Except as permitted by subsection
6.6, preserve and keep in full force and effect its corporate or partnership
existence, as the case may be, and rights and franchises material to its
business.
5.3 Payment of Taxes and Claims; Tax Consolidation. Pay all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its franchises, business, income or
property, non-payment of which would cause a Material Adverse Effect, before any
penalty accrues thereon, and all claims (including, without limitation, claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a material Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with
<PAGE> 49
43
respect thereto; provided that no such tax, assessment, charge or claim need be
paid if being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor. Neither the Borrower nor any of its Subsidiaries will file or
consent to the filing of any consolidated income tax return with any Person
(other than the Borrower or its Subsidiaries).
5.4 Maintenance of Properties; Insurance. Maintain in good repair,
working order and condition all material properties used or useful in the
business of the Borrower and its Subsidiaries (including, without limitation,
Intellectual Property) and from time to time will make or cause to be made all
appropriate (as reasonably determined by the Borrower) repairs, renewals and
replacements thereof. The Borrower will maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and business of its Subsidiaries
(including without limitation, business interruption insurance and insurance on
plant, property and equipment) against loss or damage of the kinds customarily
carried or maintained under similar circumstances by entities of established
reputation engaged in similar businesses. On or before the end of each fiscal
year, the Borrower shall submit to the Agent an Officers' Certificate updating
the information contained in Schedule 3.15 as of such date. Each such policy of
insurance (other than business interruption insurance) shall name the Agent as
the loss payee or as additional insured, as the Agent may require, for the
benefit of the Lenders thereunder and provide for at least thirty (30) days
prior written notice (or such other period as is customary in the industry) to
the Agent of any material modification or any cancellation of such policies.
5.5 Inspection; Lender Meeting. Subject to subsection 9.15, permit any
authorized representatives designated by the Agent to visit and inspect any of
the properties of the Borrower, any of its Subsidiaries, including its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants, all upon reasonable
notice and at such reasonable times during normal business hours and as often as
may be reasonably requested. Without in any way limiting the foregoing, the
Borrower will, upon the request of the Required Lenders, participate in a
meeting with the Agent and the Lenders once during each fiscal year to be held
at the Borrower's corporate offices at such time as may be agreed to by the
Borrower and the Required Lenders.
5.6 Compliance with Laws, etc. (a)(i) Comply with the requirements of
all applicable laws, rules, regulations and orders of any Governmental Authority
noncompliance with which could reasonably be expected to cause a Material
Adverse Effect and (ii) comply in all material respects at all times with all
provisions of all material agreements, licenses and leases to which it is a
party or of which it is a beneficiary and suffer no loss or forfeiture thereof
or thereunder except for any non-compliance or a loss or forfeiture which does
not have and could not reasonably be expected to have a Material Adverse Effect;
and
(b) Not engage in any transaction or permit the occurrence of any act
or omission, and shall cause each ERISA Affiliate not to engage in any
transaction or to permit
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44
the occurrence of any act or omission, which would constitute, or would give
rise to, an ERISA Event which would cause a Material Adverse Effect.
5.7 Environmental Disclosure and Inspection. (a) Comply, and undertake
all reasonable efforts to ensure that all tenants under any lease or occupancy
agreement affecting any portion of the Facilities and all other Persons on or
occupying such property comply, in all materials respects with all Environmental
Laws, provided that upon learning of any noncompliance with Environmental Laws
by the Borrower or any of its Subsidiaries, shall promptly undertake all
reasonable efforts to remedy such non-compliance.
(b) Agree that the Agent is entitled (but has no obligation), from time
to time (upon the Agent's determination in its reasonable discretion that any of
the following is advisable), upon notice to the Borrower and as often as may
reasonably be requested, retain, at the Borrower's expense, an independent
professional consultant to review any report relating to Hazardous Materials
prepared by or for the Borrower and to conduct its own investigation of any
Facility. The Borrower hereby grants to the Agent, its agents, employees,
consultants and contractors the right to enter into or on to the Facilities upon
reasonable notice and at such times during normal business hours and as often as
may reasonably be requested to perform such tests on such property as are
reasonably necessary to conduct such a review and/or investigation. The Borrower
may receive copies of any reports prepared by independent experts, but the
Lenders shall have no duty to disclose or discuss any information produced by
such reviews or investigations with the Borrower or any of its Subsidiaries.
(c) Promptly advise the Lenders in writing and in reasonable detail of
(i) any Release of any Hazardous Material (of which the Borrower is aware)
required to be reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws, (ii) any and all
written communications with respect to Environmental Claims or any Release of
Hazardous Material required to be reported to any federal, state or local
governmental or regulatory agency, (iii) any remedial action taken by the
Borrower or any other Person in response to (a) any Hazardous Material on, under
or about any Facility, the existence of which could reasonably be expected to
result in an Environmental Claim having a Material Adverse Effect or (b) any
Environmental Claim that could reasonably be expected to have a Material Adverse
Effect, (iv) the Borrower's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could cause such
Facility or any part thereof to be classified as a "border-zone property" or to
be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws that could
reasonably be expected to have a Material Adverse Effect, and (v) any request
for information from any governmental agency that indicates such agency is
investigating whether the Borrower or any of its Subsidiaries may be potentially
responsible for a Release of Hazardous Materials.
(d) Promptly notify the Lenders of any proposed acquisition or
disposition of stock, assets, or property by any Loan Party, that could
reasonably be expected to expose the Borrower or any of its Subsidiaries to, or
result in, Environmental Claims that could have a Material Adverse Effect and of
any proposed action to be taken by the Borrower or any of its
<PAGE> 51
45
Subsidiaries to commence or cease manufacturing, industrial or other operations
that could reasonably be expected to subject the Borrower or any of its
Subsidiaries to additional laws, rules or regulations, including, without
limitation, laws, rules and regulations requiring additional environmental
permits or licenses.
(e) At their own expense, provide copies of such documents or
information as the Agent may reasonably request in relation to any matters
disclosed pursuant to this subsection.
5.8 Hazardous Materials; the Borrower's Remedial Action. Take promptly
any and all necessary remedial action required by all applicable Environmental
Laws and perform such remedial action in compliance with all applicable
Environmental Laws and orders and directives of all federal, state and local
governmental authorities except when and only to the extent that the Borrower's
or such Subsidiary's liability for the presence, storage, use, disposal,
transportation or discharge of any Hazardous Material is being contested in good
faith by the Borrower or such Subsidiary by appropriate proceedings, and the
pendency of such proceedings is not reasonably likely to give rise to a Material
Adverse Effect.
5.9 Additional Loan Parties. In the event that (i) the Borrower
proposes for any other reason to add any Subsidiary or Affiliate thereof as a
Loan Party hereunder (each such Subsidiary or Affiliate in any case referred to
herein as an "Additional Loan Party" and collectively as the "Additional Loan
Parties"), then, on or before the consummation of any such transaction or
addition as a Loan Party hereunder, such Additional Loan Party shall deliver
appropriate counterparts and assumptions of each Loan Document to which it is to
be a party and all such documents, opinions of counsel, certificate and
instruments as such Additional Loan Party would have been required to deliver
pursuant to subsection 4.1 had such Additional Loan Party been a Loan Party
hereunder on the Closing Date and such other documents, certificates,
instruments and assurances as are consistent with the provisions of subsection
2.18 and Section 4 in relation to such Additional Loan Party's proposed status
hereunder and under the other Loan Documents (including, without limitation,
taking into consideration whether the obligations of such Additional Loan Party
are to be of a limited recourse nature or otherwise), all as shall be determined
at the time such Additional Loan Party is approved by the Agent. Upon
satisfaction of the foregoing conditions, such Additional Loan Party shall be a
Loan Party for all purposes hereunder and under the other Loan Documents.
5.10 Schedule Supplements. Each of the Schedules referred to in
subsection 3.1 shall be automatically amended from time to time upon written
notice by the Borrower to the Agent and the Lenders to reflect additional
information described in such notice under this Agreement including, without
limitation, the addition (or deletion) of any Subsidiaries or any other
transaction permitted hereunder. Without limiting the foregoing, on the request
of the Agent or any Lender (in the event that such information is not otherwise
delivered by the Borrower to the Agent or the Lenders pursuant to this
Agreement), the Borrower will supplement each Schedule hereto, or representation
herein or in any other Loan Document with respect to any matter hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such
<PAGE> 52
46
Schedule or as an exception to such representation or which is necessary to
correct any information in such Schedule or representation which has been
rendered inaccurate thereby; provided that such supplement to such Schedule or
representation shall not be deemed an amendment thereof if such amendment would
require the consent of the Required Lenders under the terms of this Agreement,
unless expressly consented to in writing by the Required Lenders, and no such
amendments, except as the same may be consented to in a writing which expressly
includes a waiver, shall be or be deemed a waiver by the Lenders of any Event of
Default or Default disclosed therein.
5.11 Unrestricted Subsidiary. Each of the Borrower and PCUH shall
maintain its status as an "Unrestricted Subsidiary" (as defined in the PCC
Existing Credit Agreement) under the PCC Existing Credit Agreement.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Agent hereunder or under any
other Loan Document, the Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
6.1 Limitation on Indebtedness. Create, incur, assume, guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Contingent Obligations permitted by subsection 6.4 and,
upon any obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so
extinguished;
(c) purchase money Indebtedness incurred in the ordinary
course of business not in excess of $100,000 in the aggregate
outstanding at any time; and
(d) Indebtedness of the Borrower or any Subsidiary to any
Subsidiary and of any Subsidiary to the Borrower or any Subsidiary.
6.2 Liens and Related Matters.
(a) Prohibitions on Liens. Create, incur, assume or permit to exist any
Lien on or with respect to any property or asset (including any document or
instrument in respect of goods or accounts receivable) of the Borrower or any of
its Subsidiaries, whether now owned or hereafter acquired, or any income or
profits therefrom, except:
(i) Permitted Encumbrances;
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47
(ii) Liens securing purchase money Indebtedness permitted
pursuant to subsection 6.1(c); provided that such Liens shall encumber
only the assets purchased with the proceeds of such Indebtedness; and
(iii) Liens granted pursuant to the Loan Documents.
(b) Equitable Lien in Favor of the Lenders. Create or assume any Lien
upon any of its property or assets, whether now owned or hereafter acquired,
other than Liens excepted by the provisions of this subsection, unless the
Borrower and its Subsidiaries make or cause to be made effective provision
whereby the Obligations will be secured by such Lien equally and ratably with
any and all other Indebtedness thereby secured as long as any such Indebtedness
shall be secured; provided that, notwithstanding the foregoing, this covenant
shall not be construed as a consent by the Required Lenders to any creation or
assumption of any such Lien not permitted by the provisions of this subsection.
(c) No Further Negative Pledges. Enter into any agreement prohibiting
(i) the creation or assumption of any Lien upon its properties or assets,
whether now owned or hereafter acquired or (ii) any incurrence of any Contingent
Obligations.
(d) No Restrictions on Subsidiary Distributions to the Borrower. Except
as provided herein, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary to (a) pay dividends or make any other distribution on any of
such Subsidiary's capital stock, partnership interests or other interests, as
the case may be, owned by the Borrower or any Subsidiary of the Borrower, (b)
subject to subordination provisions any payments in respect of any Indebtedness
owed to the Borrower or any Subsidiary of the Borrower, (c) make loans or
advances to the Borrower or any Subsidiary of the Borrower or (d) transfer any
of its property or assets to the Borrower or any Subsidiary of the Borrower.
6.3 Investments; Joint Ventures. Make or own any Investment, directly
or indirectly, in any Person including any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents; and
(b) Investments by the Borrower in any Subsidiary Guarantor and
Investments by Subsidiaries in the Borrower and in any Subsidiary Guarantor.
6.4 Contingent Obligations. Create or become or be liable, directly or
indirectly, with respect to any Contingent Obligation except:
(a) Contingent Obligations incurred pursuant to the Loan Documents;
(b) Contingent Obligations resulting from the endorsement of
negotiable instruments for collection in the ordinary course of business; and
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(c) Contingent Obligations in respect of Indebtedness permitted
under subsection 6.1(c).
6.5 Restricted Payments. Declare, order, pay, make or set apart any
sum, directly or indirectly for any Restricted Payment except, so long as no
Event of Default or Default has occurred and is continuing or would result
therefrom, any Subsidiary may make Restricted Payments to the Borrower or any
Subsidiary Guarantor.
6.6 Restriction on Fundamental Changes; Asset Sales. Alter the
corporate, partnership, capital or legal structure of the Borrower or any of its
Subsidiaries or enter into any transaction of merger, or consolidate, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any part of its
business, property or assets (including, without limitation, any of the capital
stock or partnership interests held by such Person in any of its Subsidiaries),
whether now owned or hereafter acquired (other than in the ordinary course of
business), or acquire by purchase, lease or otherwise (in one transaction or a
series of related transactions) all or any part of the business, property or
fixed assets of, or stock or other evidence of beneficial ownership of, any
Person (other than purchases or other acquisitions of inventory, leases,
materials, property and equipment in the ordinary course of business) or agree
to do any of the foregoing at any future time, except:
(a) Investments permitted by subsection 6.3;
(b) the sale of programming or other inventory-like assets in the
ordinary course of business; and
(c) the sale of less than or equal to 50% of the voting and economic
equity interests in the Borrower to a cable network satisfactory to the Agent so
long as (i) the Agent is reasonably satisfied with the terms and conditions of
such sale (including the collateral for the Loans subsequent to such sale) and
(ii) no Default or Event of Default shall have occurred and be continuing.
6.7 Sales and Lease-Backs. Become or remain liable, directly or
indirectly, as lessee or as guarantor or other surety with respect to any lease,
whether an Operating Lease or a Capital Lease, of any property (whether real or
personal or mixed) whether now owned or hereafter acquired, (i) which the
Borrower or any of its Subsidiaries has sold or transferred or is to sell or
transfer to any other Person (other than the Borrower or any of its
Subsidiaries), or (ii) which the Borrower or any such Subsidiary of the Borrower
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by the Borrower or any such Subsidiary
of the Borrower to any Person (other than the Borrower or one of its
Subsidiaries) in connection with such lease.
6.8 Sale or Discount of Receivables. Sell, directly or indirectly, any
of their notes or accounts receivable other than in the ordinary course of
business.
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6.9 Transactions with Shareholders and Affiliates. Enter into or permit
to exist any transaction (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service), directly or
indirectly, with any holder (other than any Subsidiary directly or indirectly
wholly owned by the Borrower) of 5% or more of any class of equity Securities or
other interests of the Borrower or any of its Subsidiaries or with any Affiliate
of the Borrower or of any such holder, as the case may be, on terms that are
less favorable to the Borrower or any Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate.
6.10 Disposal of Subsidiary Stock.
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock, partnership
interests, or other equity securities of (or warrants, rights or
options to acquire shares or other equity securities of) any of its
Subsidiaries, except to qualify directors if required by applicable
law; or
(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock, partnership interests, or other securities of (or
warrants, rights or options to acquire shares or other securities of)
any of its Subsidiaries, except to the Borrower, a Subsidiary of the
Borrower, or to qualify directors if required by applicable law.
6.11 Conduct of Business. Engage in any business other than those
businesses conducted on the Closing Date or directly related thereto.
6.12 Amendments or Waivers of Charter Documents; Limitation on Optional
Payments.
(a) Agree to any amendment to, or waive any of its rights under, its
articles of incorporation, by-laws, partnership agreement or other documents
relating to its capital stock or other equity interests of the Borrower or its
Subsidiaries (other than amendments or waivers which individually, or together
with all other amendments, waivers or changes made, would not be adverse to the
Borrower or any of its Subsidiaries or the Agent or any Lender) without, in each
case, obtaining the written consent of the Agent and the Required Lenders to
such amendment or waiver.
(b) Make any optional payment or prepayment on or redemption,
defeasance or purchase of any Indebtedness (excluding the Obligations) or amend,
modify or change, or consent or agree to any amendment, modification or change
to, any of the terms relating to any Indebtedness other than the Obligations
(other than any such amendment, modification or change (including, without
limitation, pursuant to a waiver) which would extend the maturity or reduce the
amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon.
6.13 Fiscal Year. Change its fiscal year-end from December 31 without
the consent of the Required Lenders.
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SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Failure of any Loan Party to pay any installment of
principal of any Loan when due in accordance with the terms thereof or
hereof; or any Loan Party shall fail to pay any interest on any Loan
when due or any other amount due pursuant to the Loan Documents within
two Business Days after the date due in accordance with the terms
thereof or hereof; or
(b) Failure of any Loan Party or any of their respective
Subsidiaries, to pay when due (x) any principal or interest on any
Indebtedness (other than Indebtedness referred to in paragraph (a) of
this Section and intercompany debt) in an individual principal amount
of $100,000 or more or items of Indebtedness with an aggregate
principal amount of $100,000 or more or (y) any Contingent Obligation
in an individual principal amount of $100,000 or more or Contingent
Obligations with an aggregate principal amount of $100,000 or more, in
each case beyond the end of any grace period provided therefor; or
(c) Breach or default of any Loan Party or any of their
respective Subsidiaries, with respect to any other material term of (i)
any evidence of any Indebtedness (other than intercompany debt) in an
individual principal amount of $100,000 or more or items of
Indebtedness (other than intercompany debt) with an aggregate principal
amount of $100,000 or more or any Contingent Obligation in an
individual principal amount of $100,000 or more or Contingent
Obligations with an aggregate principal amount of $100,000 or more or
(ii) any loan agreement, mortgage, indenture or other agreement
relating thereto, if the effect of such failure, default or breach is
to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation (or a trustee on behalf of such holder or
holders) then to cause, that Indebtedness or Contingent Obligation to
become or be declared due prior to its stated maturity (or the stated
maturity of any underlying obligation, as the case may be); or
(d) Failure of the Borrower to perform or comply with any term
or condition contained in subsection 5.2 or Section 6; or
(e) Any representation, warranty, certification or other
statement made by any Loan Party in any Loan Document or in any
statement or certificate at any time given by any Loan Party in writing
pursuant hereto or in connection herewith or therewith, shall be false
in any material respect on the date as of which made; or
(f) Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or the other Loan
Documents, applicable to that Loan Party, other than those referred to
elsewhere in this Section 7 and such default shall not have been
remedied or waived within 30 days after the earlier of (i) receipt
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51
by the Borrower of notice from any Lender or the Agent of such default
or (ii) the Borrower's knowledge of such default; or
(g) (i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of any Loan Party or any
of their respective Subsidiaries in an involuntary case under the
Bankruptcy Code or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, which decree or order is not
stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case is
commenced against any Loan Party or any of their respective
Subsidiaries under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over any Loan Party or any of their respective
Subsidiaries, or over all or a substantial part of its property, shall
have been entered; or the involuntary appointment of an interim
receiver, trustee or other custodian of any Loan Party or any of their
respective Subsidiaries for all or a substantial part of its property;
or the issuance of a warrant of attachment, execution or similar
process against any substantial part of the property of any Loan Party
or any of their respective Subsidiaries, and the continuance of any
such event in clause (ii) for 60 days unless dismissed, bonded or
discharged; or
(h) Any Loan Party or any of their respective Subsidiaries
shall have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or
to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession
by a receiver, trustee or other custodian for all or a substantial part
of its property; the making by any Loan Party or any of their
respective Subsidiaries of any assignment for the benefit of creditors;
or
(i) The inability or failure of any Loan Party or any of their
respective Subsidiaries, or the admission by any Loan Party or any of
their respective Subsidiaries in writing of its inability, to pay its
debts as such debts become due; or the Board of Directors (or any
committee thereof) of any Loan Party or any of their respective
Subsidiaries adopts any resolution or otherwise authorizes action to
approve any of the actions referred to in this clause (i); or
(j) Any money judgment, writ or warrant of attachment, or
similar process involving (i) in any individual case an amount in
excess of $100,000, or (ii) in the aggregate at any time an amount in
excess of $100,000, and in either case not adequately covered by
insurance as to which the insurance company has acknowledged coverage
shall be entered or filed against any Loan Party or any of their
respective Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 30
days or in any event later than five days prior to the date of any
proposed sale thereunder; or
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52
(k) Any order, judgment or decree shall be entered against any
Loan Party or any of their respective Subsidiaries decreeing a
dissolution or split-up of any Loan Party or any of their respective
Subsidiaries, and such order shall remain undischarged or unstayed for
a period in excess of 30 days; or
(l) There occurs one or more ERISA Events which singly or in
the aggregate results in liability to the Borrower or any ERISA
Affiliate in excess of $100,000; or there exists, as of any valuation
date for a Pension Plan, an excess of the actuarial present value
(determined on the basis of reasonable assumptions employed by the
independent actuary for such Pension Plan) of the benefit liabilities
(as defined in Section 4001(a)(16) of ERISA), whether or not vested
over the fair market value of the assets of such Pension Plan,
individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which
there is no such excess) which exceeds $100,000; or
(m) Any Guaranty for any reason, other than the satisfaction
in full of all Obligations, ceases to be in full force and effect
(other than in accordance with its terms) or is declared to be null and
void, or any Loan Party denies that it has any further liability,
including without limitation with respect to future advances by the
Lenders, under any Loan Document to which it is a party, or gives
notice to such effect; or
(n) Any Security Document shall, at any time, cease to be in
full force and effect (other than by reason of a release of Collateral
in accordance with the terms thereof) or shall be declared null and
void, or the validity or enforceability thereof shall be contested by
any Loan Party or the Agent shall not have or cease to have a valid and
perfected first priority security interest in the Collateral other than
the failure of the Agent or any Lender to take any action within its
control; or
(o) the occurrence and continuance of a default or event of
default under the PCC Existing Credit Agreement (including any
refinancing, amendment and/or restatement thereof) or the refinancing,
amendment, replacement or restatement of the PCC Existing Credit
Agreement on terms and conditions which are not reasonably satisfactory
to the Agent; or
(p) Any event having a Material Adverse Effect shall occur and
such default shall not have been remedied or waived within 30 days
after receipt by the Borrower of notice from any Lender or the Agent of
such default; or
(q) Any of the following shall occur: (i) any Subsidiary of
the Borrower shall issue or have outstanding any Capital Stock (or any
security convertible into any of its Capital Stock) which is not
pledged to the Agent for the benefit of the Lenders in a manner
reasonably satisfactory to the Required Lenders or waived by the Agent
or the Lenders hereunder in accordance with the terms hereof; (ii)
Paxson (or, after his death, collectively, his heirs or estate or both)
shall cease to own and control, directly or indirectly, of record and
beneficially, Capital Stock of the Borrower possessing the
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53
voting power under normal circumstances to cast 51% or more of the
total votes entitled to be cast for the election of directors of the
Borrower, (iii) Paxson (or, after his death, collectively, his heirs or
estate or both) shall no longer have the voting power, directly or
indirectly, or the contractual right to elect a majority of the
Borrower's directors and (iv) PCC and PCUH shall cease to own or
control, directly or indirectly, of record and beneficially, Capital
Stock of the Borrower possessing the voting power under normal
circumstances to cast 50% or more of the total votes entitled to be
cast for the election of directors of the Borrower;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraphs (g), (h) or (i) of this Section with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Required Lenders, the Agent may, or upon the request
of the Required Lenders, the Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Agent as the agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes the Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
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54
8.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of the Borrower to perform its obligations hereunder or thereunder. The Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.
8.4 Reliance by the Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the other Loan Documents
in accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
the Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
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8.6 Non-Reliance on the Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Commitment Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
8.8 The Agent in Its Individual Capacity. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower as though the Agent were not the Agent hereunder and
under the other Loan Documents. With respect to the Loans made by it, the Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise
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the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
8.9 Successor to the Agent. The Agent may resign as the Agent upon 10
days' notice to the Lenders and the Agent may be removed at any time with or
without cause by an instrument or concurrent instruments in writing delivered to
the Borrower and Agent and signed by Required Lenders. If the Agent shall resign
or be removed as the Agent under this Agreement and the other Loan Documents,
then the Required Lenders shall appoint from among the Lenders a successor agent
for the Lenders, which successor agent shall be approved by the Borrower,
whereupon such successor agent shall succeed to the rights, powers and duties of
the Agent, and the term "the Agent" shall mean such successor agent effective
upon such appointment and approval, and the former the Agent's rights, powers
and duties as the Agent shall be terminated, without any other or further act or
deed on the part of such former the Agent or any of the parties to this
Agreement or any holders of the Loans. After any retiring the Agent's
resignation as the Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement and the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Agent may, from time to time, (a) enter into with the Borrower written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Borrower
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) reduce the amount or extend the scheduled date of maturity of any
scheduled payment of any Loan or of any scheduled installment thereof, or reduce
the stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the aggregate amount or extend the
expiration date of any Lender's Commitments, in each case without the consent of
each Lender affected thereby, or (ii) amend, modify or waive any provision of
this subsection or reduce the percentage specified in the definition of Required
Lenders, or consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents or
release all or substantially all of the Collateral or any material Subsidiary
from the Subsidiaries Guarantee, and in each case without the written consent of
all the Lenders, or (iii) amend, modify or waive any provision of Section 8
without the written consent of the then the Agent. Any such waiver and any such
amendment, supplement, modification or release shall apply equally to each of
the Lenders and shall be binding upon the Borrower, the Lenders, the Agent and
all future holders of the
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57
Loans. In the case of any waiver, the Borrower, the Lenders and the Agent shall
be restored to their former positions and rights hereunder and under the other
Loan Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower and the Agent, and as set forth in Schedule
1.1 in the case of the other parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto:
The Borrower: Travel Channel Acquisition Corporation
c/o Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Arthur Tek
Fax: 561-659-4252
with a copy to Anthony Morrison at the foregoing address
The Agent: Union Bank of California, N.A.
445 South Figueroa Street
Los Angeles, California 90071-1602
Attention: Christine P. Ball
Fax: 213-236-5747
with a copy to Lena M. Bryant at the foregoing address
provided that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.1, 2.2, 2.5, 2.6, 2.7, 2.12 or 9.6 shall not be
effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Lender, any right, remedy, power
or privilege hereunder or under the other Loan Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or
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statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Loans hereunder.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent, (b) to pay or reimburse each Lender and
the Agent for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to the Agent, (c) to pay,
indemnify, and hold each Lender and the Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes (which are
Non-Excluded Taxes), if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender and the Agent harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower, any of its Subsidiaries or any of
its properties or assets (all the foregoing in this clause (d), collectively,
the "indemnified liabilities"), provided, that the Borrower shall have no
obligation under this subsection 9.5 to the Agent or any Lender with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of the Agent or any such Lender. The agreements in this subsection shall survive
repayment of the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Agent and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest
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to a Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. The Borrower
agrees that if amounts outstanding under this Agreement are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in subsection 9.7(a) as fully
as if it were a Lender hereunder. The Borrower also agrees that each Participant
shall be entitled to the benefits of subsections 2.14, 2.15, 2.16 with respect
to its participation in the Commitments and the Loans outstanding from time to
time as if it was a Lender; provided that, in the case of subsection 2.15, such
Participant shall have complied with the requirements of said subsection and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof or, with the consent of the
Borrower and the Agent (which in each case shall not be unreasonably withheld),
to an additional bank or financial institution ("an Assignee") all or any part
of its rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
H, executed by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof, by the Borrower and
the Agent) and delivered to the Agent for its acceptance and recording in the
Register provided that (i) no such assignment to an Assignee (other than any
Lender or any affiliate thereof) shall be in an aggregate principal amount of
less than $3,000,000 (other than in the case of an assignment of all of a
Lender's interests under this Agreement) and (ii) after giving effect to any
such assignment (other than an assignment of all of a Lender's interests under
this Agreement), the assigning Lender (together with any Lender which is an
affiliate of such assigning Lender) shall retain Loans and/or Commitments
aggregating not less than $3,000,000. Upon such execution, delivery, acceptance
and recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto).
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Notwithstanding any provision of this paragraph (c) and paragraph (e) of this
subsection, the consent of the Borrower shall not be required, and, unless
requested by the Assignee and/or the assigning Lender, new Notes shall not be
required to be executed and delivered by the Borrower, for any assignment which
occurs at any time when any of the events described in paragraphs (g), (h) or
(i) of Section 7 shall have occurred and be continuing.
(d) The Agent, on behalf of the Borrower, shall maintain at the address
of the Agent referred to in subsection 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders and the Commitments of, and principal
amounts of the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Lenders may (and, in the case of any Loan or other
obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Agent) together
with payment by such Lender or Assignee to the Agent of a registration and
processing fee of $2,500 the Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Assignee that agrees to be bound by the terms and conditions of subsection
9.15 (each, a "Transferee") and any prospective Transferee any and all financial
information in such Lender's possession concerning the Borrower and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
9.7 Adjustments; Set-off. (a) If any Lender (a "benefitted Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to
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events or proceedings of the nature referred to in paragraphs (g), (h) or (i) of
Section 7, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans, or interest thereon, such benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Loan, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Agent after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
9.8 Counterparts; Effectiveness. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Agreement shall become effective when counterparts hereof shall have been
executed by each of the parties hereto. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the Agent.
9.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents represent
the agreement of the Borrower, the Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
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9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United States
of America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in subsection 9.2 or
at such other address of which the Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
9.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between the Agent and the Lenders, on one hand, and
the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
<PAGE> 69
63
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
9.15 Confidentiality. Each Lender agrees to keep confidential all
non-public information provided to it by the Borrower pursuant to this Agreement
that is designated by the Borrower in writing as confidential; provided that
nothing herein shall prevent any Lender from disclosing any such information (i)
to the Agent or any other Lender, (ii) to any Transferee, (iii) to its
employees, directors, agents, attorneys, accountants and other professional
advisors, (iv) upon the request or demand of any Governmental Authority having
jurisdiction over such Lender, (v) in response to any order of any court or
other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (vi) which has been publicly disclosed other than in breach
of this Agreement, or (vii) in connection with the exercise of any remedy
hereunder.
<PAGE> 70
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
TRAVEL CHANNEL ACQUISITION
CORPORATION
By:/s/
-----------------------------------
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Agent and as a Lender
By:/s/ Christine P. Ball
-----------------------------------
Title: Vice President
<PAGE> 71
SCHEDULE 1.1
LENDERS, COMMITMENTS AND ADDRESSES
<TABLE>
<CAPTION>
Term Loan Revolving Credit
LENDER AND ADDRESS Commitment Commitment
<S> <C> <C>
UNION BANK OF CALIFORNIA, N.A $22,000,000 $1,000,000
445 South Figueroa Street, 15th Floor
Los Angeles, CA 90071-6176
Tel: (213) 236-6176
Fax: (213) 236-5747
Contact: Christine P. Ball
</TABLE>
<PAGE> 72
SCHEDULE 3.1(d)
Paxson Communications Unrestricted Holdings, Inc., a Delaware corporation, a
100% directly owned subsidiary of Paxson Communications Corporation
Travel Channel Acquisition Corporation, a Delaware corporation, a 100% directly
owned subsidiary of Paxson Communications Unrestricted Holdings, Inc.
<PAGE> 73
SCHEDULE 3.1(e)
Real Property
Owned:
None.
Lease:
Address: 2690 Cumberland Parkway
Suite 500
Atlanta, GA 30339
County: DeKalb County, Georgia
Term: Month to Month
1. Lease Agreement between Prentiss Properties Acquisition Partners,
L.P. and TTC Communications, Inc., dated as of April 20, 1992.
2. First Amendment to Lease between Prentiss Properties Acquisition
Partners, L.P. and TTC Communications, Inc., dated October 20,
1993.
3. Second Amendment to Lease between Prentiss Properties Acquisition
Partners, L.P. and TTC Communications, Inc., dated October 14,
1994.
4. Third Amendment to Lease between Prentiss Properties Acquisition
Partners, L.P. and TTC Communications, Inc., dated December 5,
1994.
5. Fourth Amendment to Lease between Prentiss Properties Acquisition
Partners, L.P. and TTC Communications, Inc., dated May 23, 1995.
<PAGE> 74
SCHEDULE 3.15
Insurance
See Attached.
<PAGE> 75
<TABLE>
<CAPTION>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
ACORD. CERTIFICATE OF INSURANCE DATE (MM/DD/YY)
7/10/97
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
Aon Risk Services of Florida HOLDER, THIS CERTIFICATE DOES NOT AMEND, EXTEND, OR
7850 W. Courtney Campbell Cxwy ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
Suite 800 -----------------------------------------------------------
Tampa, FL 33607 COMPANIES AFFORDING COVERAGE
813-638-3500 -----------------------------------------------------------
COMPANY
A Zurich-American Ins, Group
- ------------------------------------------------------------------------------------------------------------------------------------
INSURED
COMPANY
The Travel Channel Acquisition B
Corporation -----------------------------------------------------------
2590 Cumberland Parkway COMPANY
Suite 600 C
Atlanta, GA 30330 -----------------------------------------------------------
COMPANY
D
- ------------------------------------------------------------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES, LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
- ------------------------------------------------------------------------------------------------------------------------------------
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS
LTR DATE (MM/DD/YY) DATE (MM/DD/YY)
- ------------------------------------------------------------------------------------------------------------------------------------
GENERAL AGGREGATE $ 200000
A [X] COMMERCIAL GENERAL LIABILITY CPO6103278 12/31/96 12/31/97 PRODUCTS COMP/OP AGG $ 200000
[ ] CLAIMS MADE [X] OCCUR PERSONAL & ADV INJURY $ 100000
[ ] OWNERS & CONTRACTORS PRO EACH OCCURENCE $ 100000
[ ] ____________________________ FIRE DAMAGE (Any one fire) $ 100000
[ ] MED EXP (Any one person) $ 1000
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $
[ ] ART AUTO
[ ] ALL OWNED AUTOS BODILY INJURY $
[ ] SCHEDULED AUTOS (Per person)
[ ] HIRED AUTOS BODILY INJURY $
[ ] NON-OWNED AUTOS (Per accident)
[ ] ___________________________
[ ] PROPERTY DAMAGE $
- ------------------------------------------------------------------------------------------------------------------------------------
GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $
[ ] ANY AUTO OTHER THAN AUTO ONLY:
[ ] ____________________________ EACH ACCIDENT $
[ ] AGGREGATE $
- ------------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCCURENCE $ 100000
[X] UMBRELLA FORM CC8103280 12/31/96 12/31/97 AGGREGATE $ 200000
[ ] OTHER THAN UMBRELLA FORM
- ------------------------------------------------------------------------------------------------------------------------------------
WORKERS COMPENSATION AND [ ] STATUTORY LIMITS
EMPLOYERS' LIABILITY EACH ACCIDENT $
THE PROPRIETOR/ [ ] INCL.
PARTNERS/EXECUTIVE DISEASE - POLICY LIMIT $
OFFICERS ARE [ ] EXCL. DISEASE - EACH EMPLOYEE $
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL
UNION BANK, AS AGENT 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEASE
445 SOUTH FIGUEROA STREET BUT FAILURE TO MAIL SUCH NOTICE SHALL RENDER NO OBLIGATION OR LIABILITY
LOS ANGELES, CA 90071-1501 OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
AUTHORIZED REPRESENTATIVE 761723
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 76
<TABLE>
<CAPTION>
<S> <C> <C>
ACORD. EVIDENCE OF PROPERTY INSURANCE DATE (MM/DD/YY)
[ ] 7/10/97
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES
UNDER THE POLICY.
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER COMPANY
Asn Risk Services of Florida ZURICH AMERICAN INS OF ILL
7860 W. Courtney Campbell Cswy
Suite 800
Tampa, FL 33607
813-638-3500
CODE SUB-CODE
- ------------------------------------------------------------------------------------------------------------------------------------
INSURED The Travel Channel Acquisition LOAN NUMER POLICY NUMBER
Corporation CPO8102279
2590 Cumberland Parkway EFFECTIVE DATE (MM/DD/YY) EXPIRATION DATE (MM/DD/YY) CONT. INTL
Suite 600 12/31/96 12/21/97 TERMINATED
Atlanta IF CHECKED
GA 30330 THIS REPLACES PRIOR EVIDENCE DATED:
- -----------------------------------------------------------------------------------------------------------------------------------
PROPERTY INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
LOCATION DESCRIPTION Location: 2690 Cumberland Parkway
Suite 500
Atlanta, GA 30339
- ------------------------------------------------------------------------------------------------------------------------------------
COVERAGE INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
COVERAGE PER AMOUNT OF INSURANCE DEDUCTIBLE
- ------------------------------------------------------------------------------------------------------------------------------------
Business Inc. incl. Ex. Exp.
Special Causes of Loss 10,000,000
Buildings & Leasehold
Improvements 139,820 5
Business Personal
Property 498,552 5
- ------------------------------------------------------------------------------------------------------------------------------------
REMARKS FOR SPECIAL CONDITIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Broadcasting Equipment - $5,501,258/Deductible $5,000
Data Processing Equipment - $489,947/Deductible $5,000
- ------------------------------------------------------------------------------------------------------------------------------------
CANCELLATION
- ------------------------------------------------------------------------------------------------------------------------------------
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH POLICY PERIOD. SHOULD THE POLICY BE TERMINATED,
THE COMPANY WILL GIVE THE ADDITIONAL INTEREST IDENTIFIED BELOW 30 WRITTEN NOTICE, AND WILL SEND NOTIFICATION OF ANY
CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS NATURE OF INTEREST
[X] X MORTGAGE: [ ] ADDITIONAL INSURED
UNION BANK, AS AGENT
445 SOUTH FIGUEROA STREET [X] LOSS PAYEE [ ] (OTHER)__________
LOS ANGELES, CA 90071-1501
----------------------------------------
SIGNATURE OF AUTHORIZED AGENT OF COMPANY
</TABLE>
<PAGE> 77
SCHEDULE 3.16(b)
Intellectual Property
See Attached.
<PAGE> 78
Copyrights in all episodes of the following programs:
1. "Designs on Travel"
2. "Etc. . . Etc"
3. "The World Through Celebrities Eyes"
4. "First Impressions"
5. "Great Getaway Game"
6. "Inside Travel"
7. "The Perfect Trip"
8. "Sense of Place"
9. "United States"
10. "Arthur Frommer's Almanac of Travel"
11. "Countries of the World"
12. "On the Agenda"
<PAGE> 79
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 1
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
AMERICAN ROAD TRIPS T07626 74/082821 1681684 WSB Sec. 8 Deadline 31-Mar-1998
Registered 30-Jul-1990 31-Mar-1992 JSP Renewal Earliest Date 30-Sep-2001
United States of America Owner: The Travel Channel, Inc. WXB Next Renewal 31-Mar-2002
Classes: 041 Grade Period Ends 30-Jun-2002
Goods: Entertainment services in the nature of a television program
series featuring travel information
Remarks: Additionally Attorney(s): THD THD
First Use In Commerce: 11/26/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Natn-1 Class(es): 107
Service Mark: Supplemental Register
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DESIGNS ON TRAVEL T07621 74/082822 1692008 WSB Sec. 8 Deadline 09-Jun-1998
Registered 30-Jul-1990 09-Jun-1992 JSP Renewal Earliest Date 09-Dec-2001
United States of America Owner: The Travel Channel, Inc. LJL Next Renewal 09-Jun-2002
Classes: 041 Grace Period Ends 09-Sep-2002
Goods: Entertainment services in the nature of a televised program
series featuring travel information
Remarks: Disclaimer: "travel"
First Use In Commerce: 4/18/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 80
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 2
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ETC...ETC... T07624 74/084643 1651090 WSB Sec. 8 Deadline 16-Jul-1997
Registered 03-Aug-1990 16-Jul-1991 JSP Renewal Earliest Date 16-Jan-2001
United States of America Owner: The Travel Channel, Inc. WXB Next Renewal 16-Jul-2001
Classes: 41 Grace Period Ends 16-Oct-2001
Goods: Entertainment services in the nature of a television program
series concerning travel
Remarks: Additionally Attorney(s): THD THD
First Use In Commerce: 4/1/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
FIRST IMPRESSIONS T07627 74/209918 1741812 WSB Sec. 8/15 Earliest Dt. 22-Dec-1997
Registered 07-Oct-1991 22-Dec-1992 JSP Sec. 8 Deadline 22-Dec-1998
United States of America Owner: The Travel Channel, Inc. WXB Renewal Earliest Date 22-Jun-2002
Classes: 041 Next Renewal 22-Dec-2002
Goods: Entertainment services in the nature of a televised program Grace Period Ends 22-Mar-2003
series featuring travel information
Remarks: Addional Attorney(s): THD THD
First Use In Commerce: 10/1/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Natn-1 Class(es): 107
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 81
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 3
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
NAVIGATOR T07924 74/727084 1985853 WSB Sec. 8/15/ Earliest Dt. 09-Jul-2001
Registered 11-Sep-1995 09-Jul-1996 JSP Sec. 8 Deadline 09-Jul-2002
United States of America Owner: The Travel Channel, Inc. THD Renewal Earliest Date 09-Jan-2006
Classes: 16 Next Renewal 09-Jul-2006
Goods: Monthly televison program guide Grade Period Ends 09-Oct-2006
Remarks:
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
THE PERFECT TRIP T07625 73/832207 1669767 WSB Sec. 8 Deadline 24-Dec-1997
Registered 18-Oct-1989 24-Dec-1991 JSP Renewal Earliest Date 24-Jun-2001
United States of America Owner: The Travel Channel, Inc. THD Next Renewal 24-Dec-2001
Classes: 041 Grace Period Ends 24-Mar-2002
Goods: Entertainment services in the nature of a televised program
series featuring travel information
Remarks: Additional Attorney(s) LJL LJL
First Use In Commerce: 3/19/87
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Natn-1 Class(es): 107
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 82
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 4
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
THE TRAVEL CHANNEL T07815 74/688681 1982443 WSB Sec. 8/15 Earliest Dt. 25-Jun-2001
Registered 14-Jun-1995 25-Jun-1996 JSP Sec. 8 Deadline 25-Jun-2002
United States of America Owner: The Travel Channel, Inc. WXB Renewal Earliest Date 25-Dec-2005
Classes: 038 & 041 Next Renewal 25-Jun-2006
Goods: Cable televison broadcasting services (C1.38); producing Grace Period Ends 25-Sep-2006
television programs (C1.41)
Remarks: Disclaimer: "channel"
First Use In Commerce: 10/13/86
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
THE TRAVEL CHANNEL T07622 73/308959 1205086 WSB Renewal Earliest Date 10-Feb-2002
Registered 06-May-1981 10-Aug-1982 JSP Next Renewal 10-Aug-2002
United States of America Owner: The Travel Channel, Inc. WXB Grace Period Ends 10-Nov-2002
Classes: 038
Goods: Broadasting services to cable television systems by the
way of satellite
Remarks: Disclaimer: "channel"
First Use In Commerce: 4/1/81
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark; Supplemental Register
Client: T242 The Travel Channel, Inc.
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 83
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 5
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
THE TRAVEL CHANNEL AND DESIGN T07814 74/688684 1980990 JSP Sec. 8/15 Earliest Dt. 18-Jun-2001
Registered 14-Jun-1995 18-Jun-1996 JSP Sec. 8 Deadline 18-Jun-2002
United States of America Owner: The Travel Channel, Inc. THD Renewal Earliest Date 18-Dec-2005
Classes: 038 & 041 Next Renewal 18-Jun-2006
Goods: Cable television broadcasting services (C1.38); producing Grade Period Ends 18-Sep-2006
televison programs (C1.41)
Remarks: Disclaimer: "channel"
First Use In Commerce: 5/1/93
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
THE TRAVEL CHANNEL AND DESIGN 081990 73/684289 1522924 WSB Renewal Earliest Date 31-Jul-2008
Registered 14-Sep-1987 31-Jan-1989 JSP Next Renewal 31-Jan-2009
WXB Grace Period Ends 30-Apr-2009
United States of America Owner: The Travel Channel, Inc.
Classes: 38, 39, 41 & 42
Goods: Cable television/broadcasting (C1.38); travel agency
services (C1.39); producing tv progams..(C1.41);tv
shopping services (C1.42)
Remarks: Reel/Frame/Date: 1220/0311;9/21/94
Assign./Owner Change: From Travel Marketing Corporation
</TABLE>
<PAGE> 84
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 6
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ULTIMATE WORLD TOUR T07995 74/578712 1918300 WSB Sec. 8/15 Earliest Dt. 12-Sep-2000
Registered 26-Sep-1994 12-Sep-1995 JSP Sec. 8 Deadline 12-Sep-2001
United States of America Owner: The Travel Channel, Inc. Renewal Earliest Date 12-Mar-2005
Classes: 35 Next Renewal 12-Sep-2005
Goods: Promoting the sale of goods and services of others by Grace Period Ends 12-Dec-2005
conducting an incentive program
Remarks: First Use In Commerce: 9/1/94
Natn-1 Class(es): 100,101,102
Client: T242 The Travel Channel
Registrant: The Travel Channel
</TABLE>
<PAGE> 85
SCHEDULE 3.18(b)
UCC Filing Offices
a. File in the following:
Georgia-Secretary of State and DeKalb County
b. Precautionary Statement-Should file in the following:
Virginia-Secretary of State and City of Norfolk
Florida-Secretary of State
<PAGE> 86
EXHIBIT A-1
TO THE CREDIT
AGREEMENT
FORM OF REVOLVING CREDIT NOTE
$________ New York, New York
July __, 1997
FOR VALUE RECEIVED, the undersigned, TRAVEL CHANNEL ACQUISITION
CORPORATION, a Delaware corporation (the "Borrower"), hereby unconditionally
promises to pay to the order of [LENDER'S NAME] (the "Lender") at the office of
Union Bank of California, N.A., located at _____________, in lawful money of the
United States of America and in immediately available funds, on the Termination
Date the principal amount of (a) _____________ DOLLARS ($_______), or, if less,
(b) the aggregate unpaid principal amount of all Revolving Credit Loans made by
the Lender to the Borrower pursuant to subsection 2.2 of the Credit Agreement,
as hereinafter defined. The Borrower further agrees to pay interest in like
money at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in subsections 2.7 and 2.9
of such Credit Agreement.
The holder of this Revolving Credit Note is authorized to endorse on
the schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Revolving Credit Loan made pursuant to the Credit Agreement and the date
and amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Borrower in respect of such Revolving
Credit Loan.
This Revolving Credit Note (a) is one of the Revolving Credit Notes
referred to in the Credit Agreement dated as of July __, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Borrower, the Lender, the other banks and financial institutions from
time to time parties thereto and Union Bank of California, N.A., as agent, (b)
is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Revolving Credit Note is secured and guaranteed as provided in
the Loan Documents. Reference is hereby made to the Loan Documents for a
description of the properties and assets in which a security interest has been
granted, the nature and extent of the security and the guarantees, the terms and
conditions upon which the security interests and each guarantee were granted and
the rights of the holder of this Revolving Credit Note in respect thereof.
<PAGE> 87
2
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Revolving Credit Note shall become, or may
be declared to be, immediately due and payable, all as provided in the Credit
Agreement.
All parties now and hereafter liable with respect to this Revolving
Credit Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
TRAVEL CHANNEL ACQUISITION
CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
<PAGE> 88
Schedule A
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount Amount of Principal Amount of Base Rate Unpaid Principal
Amount of Base Rate Converted to of Base Rate Loans Loans Converted to Balance of Base Notation Made
Date Loans Base Rate Loans Repaid Eurodollar Loans Rate Loans By
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 89
Schedule B
to Revolving Credit Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount Interest Period Amount of Amount of
Amount of Converted to and Eurodollar Principal of Eurodollar Loans Unpaid Principal
Eurodollar Eurodollar Rate with Eurodollar Loans Converted to Balance of Notation
Date Loans Loans Respect Thereto Repaid Base Rate Loans Eurodollar Loans Made By
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 90
EXHIBIT A-2 TO THE
CREDIT AGREEMENT
FORM OF TERM NOTE
$_________ New York, New York
July __, 1997
FOR VALUE RECEIVED, the undersigned, TRAVEL CHANNEL ACQUISITION
CORPORATION, a [ ] corporation (the "Borrower"), hereby unconditionally
promises to pay to the order of [LENDER'S NAME] (the "Lender") at the office of
Union Bank of California, N.A., located at _______________________________, in
lawful money of the United States of America and in immediately available funds
on the Termination Date, the principal amount of (a) __________ DOLLARS
($_______ ), or, if less, (b) the unpaid principal amount of all Term Loans made
by the Lender pursuant to subsection 2.1 of the Credit Agreement, as hereinafter
defined. The Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time outstanding at
the rates and on the dates specified in subsections 2.7 and 2.9 of such Credit
Agreement.
The holder of this Term Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the Term
Loan and the date and amount of each payment or prepayment of principal thereof,
each conversion of all or a portion thereof to another Type, each continuation
thereof and, in the case of Eurodollar Loans, the length of each Interest Period
with respect thereto. Each such endorsement shall constitute prima facie
evidence of the accuracy of the information endorsed. The failure to make any
such endorsement shall not affect the obligations of the Borrower in respect of
such Term Loan.
This Term Note (a) is one of the Term Notes referred to in the Credit
Agreement dated as of July __, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto and Union Bank of California, N.A., as agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Credit Agreement. This Term
Note is secured and guaranteed as provided in the Loan Documents. Reference is
hereby made to the Loan Documents for a description of the properties and assets
in which a security interest has been granted, the nature and extent of the
security and the guarantees, the terms and conditions upon which the security
interests and each guarantee were granted and the rights of the holder of this
Term Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Term Note shall become, or may be declared
to be, immediately due and payable, all as provided in the Credit Agreement.
<PAGE> 91
2
All parties now and hereafter liable with respect to this Term Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
TRAVEL CHANNEL ACQUISITION
CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
<PAGE> 92
Schedule A
to Term Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount Amount of Principal Amount of Base Rate Unpaid Principal
Amount of Base Rate Converted to of Base Rate Loans Loans Converted to Balance of Base Notation Made
Date Loans Base Rate Loans Repaid Eurodollar Loans Rate Loans By
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 93
Schedule B
to Term Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount Interest Period Amount of Amount of
Amount of Converted to and Eurodollar Principal of Eurodollar Loans Unpaid Principal
Eurodollar Eurodollar Rate with Eurodollar Loans Converted to Balance of Notation
Date Loans Loans Respect Thereto Repaid Base Rate Loans Eurodollar Loans Made By
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 94
EXHIBIT B-1
TO THE
CREDIT AGREEMENT
FORM OF PAXSON PLEDGE AGREEMENT
PAXSON PLEDGE AGREEMENT, dated as of July __, 1997, made by
Lowell W. Paxson, an individual residing on the date hereof at 780 South Ocean
Boulevard, Palm Beach, Florida 33480, and Second Crystal Diamond Limited
Partnership, a Nevada limited Partnership (the "Pledgors"), in favor of Union
Bank of California, N.A., as Agent (in such capacity, the "Agent") for the
Lenders parties to the Credit Agreement, dated as of July __, 1997, (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Travel Channel Acquisition Corporation (the "Borrower"), the Agent and
such Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Pledgors are the legal and beneficial owners of the shares
of Pledged Stock (as hereinafter defined) issued by the Issuer (as hereinafter
defined); and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Pledgors shall have executed and delivered this Pledge Agreement to the
Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans under the Credit Agreement, the Pledgors
hereby agree with the Agent, for the ratable benefit of the Lenders, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in effect in the
State of New York.
"Collateral": the Pledged Stock and all Proceeds.
<PAGE> 95
2
"Collateral Account": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders only as provided in
subsection 8(a).
"Issuer": the company identified on Schedule 1 attached hereto as the
issuer of the Pledged Stock.
"Pledged Stock": the shares of capital stock listed on Schedule 1
hereto, together with all stock certificates, options or rights of any nature
whatsoever that may be issued or granted by the Issuer to the Pledgors in
respect of the Pledged Stock while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1)
of the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Stock, collections thereon or distributions with
respect thereto.
"Secured Obligations": the collective reference to (a) the Obligations
and (b) all obligations and liabilities of the Pledgors which may arise under or
in connection with this Agreement or any other Loan Document to which the
Pledgors are a party, whether on account of reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Agent or to the Lenders that are
required to be paid by the Pledgors pursuant to the terms of this Agreement or
any other Loan Document to which the Pledgors are a party).
"Securities Act": the Securities Act of 1933, as amended.
"Stockholders' Agreement": the Amended and Restated Stockholders'
Agreement of the Borrower dated as of December 22, 1994, as the same may be
amended, supplemented or otherwise modified from time to time.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. The Pledgors hereby deliver to
the Agent, for the ratable benefit of the Lenders, all the Pledged Stock and
hereby grant to Agent, for the ratable benefit of the Lenders, a first security
interest in the Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
<PAGE> 96
3
3. Stock Powers. (a) Concurrently with the delivery to the Agent of
each certificate representing one or more shares of Pledged Stock to the Agent,
the Pledgors shall deliver an undated stock power covering such certificate,
duly executed in blank by the Pledgors with, if the Agent so requests, signature
guaranteed.
(b) The Pledgors shall deliver to the Agent an Acknowledgement and
Consent, substantially in the form of Exhibit A to this Agreement, duly executed
by the Issuer of such Pledged Stock.
4. Representations and Warranties. The Pledgors represent and warrant
that:
(a) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(b) The Pledgors are the record and beneficial owners of, and have good
and marketable title to, the Pledged Stock, free of any and all Liens or options
in favor of, or claims of, any other Person, except the security interest
created by this Agreement and the terms and conditions of the Stockholders'
Agreement; provided that after consideration of the Stockholders' Agreement,
this Agreement and the laws of the State of New York contain adequate remedial
provisions for the practical realization of the rights and benefits purported to
be afforded thereby.
(c) Upon delivery to the Agent of the stock certificates evidencing the
Pledged Stock, the security interest created pursuant to this Agreement will
constitute a valid, perfected first priority security interest in the
Collateral, enforceable in accordance with its terms against all creditors of
the Pledgors and any Persons purporting to purchase any Collateral from the
Pledgors, except in each case as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) The Pledgors have obtained from the Issuer and have delivered to
the Agent an Acknowledgement and Consent, substantially in the form attached
hereto as Exhibit A, executed by the Issuer.
5. Covenants. The Pledgors covenant and agree with the Agent and the
Lenders that, from and after the date of this Agreement until this Agreement is
terminated and the security interests created hereby are released:
(a) If the Pledgors shall, as a result of their ownership of the
Pledged Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
the Pledgors shall accept the same as the agent of the Agent and the Lenders,
hold the same in
<PAGE> 97
4
trust for the Agent and the Lenders and deliver the same forthwith to the Agent
in the exact form received, duly indorsed by the Pledgors to the Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by the Pledgors and with, if the Agent so requests, signature
guaranteed, to be held by the Agent, subject to the terms hereof, as additional
collateral security for the Obligations. Any sums paid upon or in respect of the
Pledged Stock upon the liquidation or dissolution of the Issuer shall be paid
over to the Agent to be held by it hereunder as additional collateral security
for the Obligations, and in case any distribution of capital shall be made on or
in respect of the Pledged Stock or any property shall be distributed upon or
with respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of the Issuer or pursuant to the reorganization
thereof, the property so distributed shall be delivered to the Agent to be held
by it hereunder as additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect of the Pledged Stock
shall be received by the Pledgors, the Pledgors shall, until such money or
property is paid or delivered to the Agent, hold such money or property in trust
for the Lenders, segregated from other funds of the Pledgors, as additional
collateral security for the Obligations.
(b) Without the prior written consent of the Agent (or except as (i)
expressly permitted under the terms of the PCC Credit Agreement or (ii) provided
under the Stockholders' Agreement), the Pledgors will not (i) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, (ii) create, incur or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, any of the Collateral, or
any interest therein, except for the security interests created by this
Agreement or (iii) enter into any agreement or undertaking restricting the right
or ability of the Pledgors or the Agent to sell, assign or transfer any of the
Collateral.
(c) The Pledgors shall maintain the security interest created by this
Agreement as a first, perfected security interest and shall defend such security
interest against claims and demands of all Persons other than the Agent. At any
time and from time to time, upon the written request of the Agent, and at the
sole expense of the Pledgors, the Pledgors will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
the Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the Agent,
duly endorsed if necessary in a manner satisfactory to the Agent, to be held as
Collateral pursuant to this Agreement.
(d) The Pledgors shall pay, and save the Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes and any and all
recording and filing fees which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
<PAGE> 98
5
(e) The Pledgors will not take or omit to take any action, the taking
or the omission of which would result in an alteration or impairment of the
Collateral or the security of this Agreement, except as otherwise expressly
permitted under the terms of the Credit Agreement.
(f) The Pledgors will not enter into any agreement amending or
supplementing the Collateral, except as otherwise expressly permitted under the
terms of the Credit Agreement.
(g) The Pledgors will not waive or release any obligation of any party
to the Collateral, except as otherwise expressly permitted under the terms of
the Credit Agreement.
(h) Unless directed otherwise by the Agent, the Pledgors will exercise
promptly and diligently each and every material right which it may have under
the Collateral (except the right to release or cancel).
(i) The Pledgors will not take or omit to take any action or suffer or
permit any action to be omitted or taken, the taking or omission of which would
result in any right of offset against sums payable under the Collateral.
(j) Upon the occurrence and continuance of an Event of Default, the
Pledgors will give the Agent copies of all material notices (including notices
of default) given or received with respect to the Collateral, promptly after
giving or receiving such notices.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall have
occurred and be continuing and the Agent shall have given notice to the Pledgors
of the Agent's intent to exercise its corresponding rights pursuant to Section 7
below, the Pledgors shall be permitted to receive all cash dividends paid in the
normal course of business of the Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, in respect of the Pledged Stock
and to exercise all voting and corporate rights with respect to the Pledged
Stock; provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in the Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, the Notes, this Agreement or
any other Loan Document.
7. Rights of the Lenders and the Agent. (a) All money Proceeds received
by the Agent hereunder shall be held by the Agent for the benefit of the Lenders
in a Collateral Account. All Proceeds while held by the Agent in a Collateral
Account (or by the Pledgors in trust for the Agent and the Lenders) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in subsection 8(a).
(b) If an Event of Default shall occur and be continuing and the Agent
shall give notice of its intent to exercise such rights to the Pledgors, (i) the
Agent shall have the right to receive any and all cash dividends paid in respect
of the Pledged Stock and make application thereof to the Obligations in such
order as the Agent may determine, and (ii) all shares of the Pledged Stock shall
be registered in the name of the Agent or its nominee, and the Agent or its
nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to
<PAGE> 99
6
such shares of the Pledged Stock at any meeting of shareholders of the Issuer or
otherwise and (B) any and all rights of conversion, exchange, subscription and
any other rights, privileges or options pertaining to such shares of the Pledged
Stock as if it were the absolute owner thereof (including, without limitation,
the right to exchange at its discretion any and all of the Pledged Stock upon
the merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of the Issuer, or upon the exercise by the
Pledgors or the Agent of any right, privilege or option pertaining to such
shares of the Pledged Stock, and in connection therewith, the right to deposit
and deliver any and all of the Pledged Stock with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Agent may determine), all without liability except to account
for property actually received by it, but the Agent shall have no duty to the
Pledgors to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
8. Remedies. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations in
such order as the Agent may elect.
(b) If an Event of Default shall have occurred and be continuing, the
Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of the
foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Pledgors or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker's board or office of the Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in the Pledgors, which right
or equity is hereby waived or released. The Agent shall apply any Proceeds from
time to time held by it and the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred in respect thereof or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements of counsel to
the Agent, to the payment in whole or in part of the Obligations, in such order
as the Agent may elect, and only after such application and after the payment by
the Agent of any other amount required by any provision of law, including,
without limitation, Section 9-504(1)(c) of the Code, need the Agent account for
the surplus, if any, to the Pledgors. To the extent permitted by
<PAGE> 100
7
applicable law, the Pledgors waive all claims, damages and demands they may
acquire against the Agent or any Lender arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition. The
Pledgors shall remain liable for any deficiency if the proceeds of any sale or
other disposition of Collateral are insufficient to pay the Obligations and the
fees and disbursements of any attorneys employed by the Agent or any Lender to
collect such deficiency.
(c) The Pledgors waive and agree not to assert any rights or privileges
which they may acquire solely under Section 9-112 of the Code. The Pledgors
shall remain liable for any deficiency if the proceeds of any sale or other
disposition of Collateral are insufficient to pay the Secured Obligations and
the fees and disbursements of any attorneys employed by the Agent or any Lender
to collect such deficiency.
9. Registration Rights; Private Sales. (a) The Pledgors agree to cause
the Issuer to comply with the provisions of the securities or "Blue Sky" laws of
any and all jurisdictions which the Agent shall designate and to make available
to its security holders, as soon as practicable, an earnings statement (which
need not be audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) The Pledgors recognize that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgors acknowledge and
agree that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Agent shall be under no obligation
to delay a sale of any of the Pledged Stock for the period of time necessary to
permit the Issuer thereof to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if the Issuer
would agree to do so.
(c) The Pledgors further agree to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgors further agree that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Agent and the Lenders, that
the Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against the Pledgors, and the Pledgors
hereby waive and agree not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the Credit Agreement.
<PAGE> 101
8
10. Irrevocable Authorization and Instruction to Issuer. The Pledgors
hereby authorize and instruct the Issuer to comply with any instruction received
by it from the Agent in writing that (a) states that an Event of Default has
occurred and (b) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from the Pledgors, and the Pledgors
agree that the Issuer shall be fully protected in so complying.
11. Agent's Appointment as Attorney-in-Fact. (a) The Pledgors hereby
irrevocably constitute and appoint the Agent and any officer or agent of the
Agent, with full power of substitution, as their true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Pledgors and in the name of the Pledgors or in the Agent's own
name, from time to time in the Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer.
(b) The Pledgors hereby ratify all that said attorneys shall lawfully
do or cause to be done pursuant to the power of attorney granted in subsection
11(a). All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
12. Duty of Agent. The Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it in the same
manner as the Agent deals with similar securities and property for its own
account, except that the Agent shall have no obligation to invest funds held in
any Collateral Account and may hold the same as demand deposits. Neither the
Agent, any Lender nor any of their respective directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of the Pledgors or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.
13. Execution of Financing Statements. Pursuant to Section 9-402 of the
Code, the Pledgors authorize the Agent to file financing statements with respect
to the Collateral without the signature of the Pledgors in such form and in such
filing offices as the Agent reasonably determines appropriate to perfect the
security interests of the Agent under this Agreement. A carbon, photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement for filing in any jurisdiction.
14. Authority of Agent. The Pledgors acknowledge that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between
<PAGE> 102
9
the Agent and the Pledgors, the Agent shall be conclusively presumed to be
acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and neither the Pledgors nor the Issuer shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
15. Notices. All notices, requests and demands to or upon the Agent or
the Pledgors to be effective shall be in writing (or by telex, fax or similar
electronic transfer confirmed in writing) and shall be deemed to have been duly
given or made (i) when delivered by hand or (ii) if given by mail, when
deposited in the mails by certified mail, return receipt requested, or (iii) if
by telex, fax or similar electronic transfer, when sent and receipt has been
confirmed, addressed to the Agent or the Pledgors at their address or
transmission number for notices provided on the signature page hereto. The Agent
and the Pledgors may change their addresses and transmission numbers for notices
by notice in the manner provided in this Section.
16. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
17. Return of Documents; Cooperation. When this Agreement is terminated
and the security interests created hereby are released, the Agent shall (i)
execute and deliver to the Pledgors such documents of assignment as are
reasonably necessary to terminate the Agent's security interest in the
Collateral and (ii) return to the Pledgors the documents delivered to the Agent
as provided in Section 3. If any part of the Collateral is released in
connection with any disposition thereof expressly permitted under the terms of
the Credit Agreement, and the corresponding security interests created hereby
are released, the Agent shall take the actions under clauses (i) and (ii) as
appropriate, with respect to such release.
18. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Pledgors
and the Agent, provided that any provision of this Agreement may be waived by
the Agent and the Lenders in a letter or agreement executed by the Agent or by
telex or facsimile transmission from the Agent.
(b) Neither the Agent nor any Lender shall by any act (except by a
written instrument pursuant to subsection 18(a) hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
or such Lender would otherwise have on any future occasion.
<PAGE> 103
10
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
19. Section Headings. The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
20. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Pledgors and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
22. Guarantee. (a) Subject to the provisions of paragraph 2 below, the
Pledgors hereby unconditionally and irrevocably guarantee to the Agent, for the
ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations.
(b) The Pledgors shall have no personal liability for payment of the
Obligations, and in any action or suit to collect the Obligations the Agent and
the Lenders, for themselves and their respective successors, indorsees,
transferees and assigns, agree that under no circumstances shall any of them
seek, nor shall the Pledgors be subject to, any in personam judgment against the
Pledgors or any judgment for a deficiency but shall look solely to the security
interests hereunder and the collateral described herein for payment of the
Obligations. Nothing contained in this Section shall be construed to impair the
validity of the Obligations or this Agreement or, except as expressly set forth
above, affect or impair in any way the right of the Agent and the Lenders to
exercise their rights and remedies under the Credit Agreement, the Notes and any
other Loan Documents in accordance with their terms.
23. Regulatory Approval. (a) Notwithstanding anything herein to the
contrary, to the extent this Agreement or any other Loan Document purports to
require any Loan Party to grant to the Agent, on behalf of Lenders, a security
interest in the FCC Licenses of any Loan Party now owned or hereafter acquired,
as the case may be, the Agent, on behalf of Lenders, shall only have a security
interest in such FCC Licenses at such times and to the extent that a security
interest in such licenses is permitted under applicable law. Notwithstanding
anything to the contrary set forth herein, the Agent, on behalf of Lenders,
agrees that to the extent prior FCC approval is required pursuant to the
Communications Act for (a) the operation and effectiveness of any grant, right
or remedy hereunder or under the Security Agreements or (b) taking any action
that may be taken by the Agent hereunder or under the Security Agreements, such
grant, right, remedy or actions will be subject to such prior FCC approval
having been obtained by or in favor of the Agent, on behalf of Lenders. The
Borrower agrees that, upon an Event of Default and at the Agent's request, the
Borrower will, and will cause its Subsidiaries to, immediately file, or cause to
be filed, such applications for approval
<PAGE> 104
11
and shall take all other and further actions reasonably required by the Agent,
on behalf of Lenders, to obtain such FCC approvals or consents as are necessary
to transfer ownership and control to the Agent, on behalf of Lenders, or their
successors, assigns or designees of the FCC Licenses held by the Borrower, its
License Subsidiaries or any of its other Subsidiaries. To enforce the provisions
of this subsection, the Agent is empowered to request the appointment of a
receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the FCC an involuntary transfer of control of any such
FCC License for the purpose of seeking a bona fide purchaser to whom control
will ultimately be transferred. The Borrower hereby agrees to authorize, and to
cause each of its Subsidiaries to authorize, such an involuntary transfer of
control upon the request of the receiver so appointed, and, if the Borrower
shall refuse to authorize or cause any of its Subsidiaries to so authorize the
transfer, its approval may be required by the court. Upon the occurrence and
continuance of an Event of Default, and at the request of the Agent, the
Borrower shall further use its best efforts to assist in obtaining approval of
the FCC, if required, for any action or transactions contemplated by this
Agreement or the other Loan Documents, including, without limitation, the
preparation, execution and filing with the FCC of the assignor's or transferor's
portion of any application or applications for consent to the assignment of any
FCC License or transfer of control necessary or appropriate under the FCC's
rules and regulations for approval of the transfer or assignment of any portion
of the Collateral, together with any FCC License or other authorization.
(b) The Borrower acknowledges that the assignment or transfer of such
FCC Licenses is integral to the Lenders' realization of the value of the
Collateral, that there is no adequate remedy at law for failure by the Borrower
to comply with the provisions of this Section 24 and that such failure would not
be adequately compensable in damages, and therefore agrees that the agreements
contained in this Section 24 may be specifically enforced.
<PAGE> 105
12
(c) Notwithstanding anything to the contrary contained in this
Agreement or any other Loan Document, neither the Agent nor any Lender shall,
without first obtaining the approval of the FCC, take any action pursuant to
this Agreement or any other Loan Document which would constitute or result in
any assignment of an FCC License or any change of control of the Borrower or any
of its Subsidiaries if such assignment or change in control would require, under
then existing law (including the written rules and regulations promulgated by
the FCC), the prior approval of the FCC.
<PAGE> 106
13
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
By:
-----------------------------------
Lowell W. Paxson
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
SECOND CRYSTAL DIAMOND
LIMITED PARTNERSHIP
By: PAXSON ENTERPRISES, INC.,
a Nevada corporation, as managing
general partner
By:
-----------------------------
Lowell W. Paxson,
President
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
<PAGE> 107
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Pledge
Agreement dated July 11, 1997 made by Lowell W. Paxson and Second Crystal
Diamond Limited Partnership for the benefit of Union Bank of California, N.A.,
as Agent (the "Pledge Agreement"). The undersigned agrees for the benefit of the
Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in subsection 5(a) of the Pledge
Agreement.
3. The terms of subsection 9(c) of the Pledge Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 9 of the Pledge Agreement.
PAXSON COMMUNICATIONS CORPORATION
By:
-----------------------------
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
<PAGE> 108
SCHEDULE 1
TO PAXSON
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
<TABLE>
<CAPTION>
Stock Certificate
Issuer Class of Stock* No. No. of Shares
- ----------------------------------------- -------------------- ------------------------ --------------------
<S> <C> <C> <C>
Paxson Communications Common 0733 207,624
Corporation
Paxson Communications Common PCC1097 2,000,000
Corporation
Paxson Communications Common PCC1100 1,000,000
Corporation
Paxson Communications Common 472,376(1)
Corporation
</TABLE>
- --------
(1) Additional pledge of 472,376 shares to be consummated post-closing. The
Agent may complete the missing information regarding "Stock Certificate No."
after such additional pledge takes place.
- ------------------------------------
<PAGE> 109
EXHIBIT B-2
TO THE
CREDIT AGREEMENT
FORM OF PCUH PLEDGE AGREEMENT
PCUH PLEDGE AGREEMENT, dated as of July __, 1997, made by
Paxson Communications Unrestricted Holdings, Inc., a Delaware corporation (the
"Pledgor"), in favor of Union Bank of California, N.A., as Agent (in such
capacity, the "Agent") for the Lenders parties to the Credit Agreement, dated as
of July __, 1997, (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Travel Channel Acquisition Corporation (the
"Borrower"), the Agent and such Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Pledgor is the legal and beneficial owner of the shares of
Pledged Stock (as hereinafter defined) issued by the Issuers (as hereinafter
defined); and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Pledgor shall have executed and delivered this Pledge Agreement to the Agent
for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans under the Credit Agreement, the Pledgor
hereby agrees with the Agent, for the ratable benefit of the Lenders, as
follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in effect in the
State of New York.
"Collateral": the Pledged Stock and all Proceeds.
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<PAGE> 110
2
"Collateral Account": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders only as provided in
subsection 8(a).
"Issuers": the collective reference to the companies identified on
Schedule 1 attached hereto as the issuers of the Pledged Stock; individually,
each an "Issuer."
"Pledged Stock": the shares of capital stock listed on Schedule 1
hereto, together with all stock certificates, options or rights of any nature
whatsoever that may be issued or granted by any Issuer to the Pledgor in respect
of the Pledged Stock while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1)
of the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Stock, collections thereon or distributions with
respect thereto.
"Secured Obligations": the collective reference to (a) the Obligations
and (b) all obligations and liabilities of the Pledgor which may arise under or
in connection with this Agreement or any other Loan Document to which the
Pledgor is a party, whether on account of reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Agent or to the Lenders that are
required to be paid by the Pledgor pursuant to the terms of this Agreement or
any other Loan Document to which the Pledgor is a party).
"Securities Act": the Securities Act of 1933, as amended.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. The Pledgor hereby delivers to
the Agent, for the ratable benefit of the Lenders, all the Pledged Stock and
hereby grants to Agent, for the ratable benefit of the Lenders, a first security
interest in the Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
3. Stock Powers. (a) Concurrently with the delivery to the Agent of
each certificate representing one or more shares of Pledged Stock to the Agent,
the Pledgor shall deliver an undated stock power covering such certificate, duly
executed in blank by the Pledgor with, if the Agent so requests, signature
guaranteed.
- ------------------------------------
<PAGE> 111
3
(b) The Pledgor shall deliver to the Agent an Acknowledgement and
Consent, substantially in the form of Exhibit A to this Agreement, duly executed
by the Issuer of such Pledged Stock.
4. Representations and Warranties. The Pledgor represents and warrants
that:
(a) The shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the capital stock of each Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) The Pledgor is the record and beneficial owner of, and has good and
marketable title to, the Pledged Stock, free of any and all Liens or options in
favor of, or claims of, any other Person, except the security interest created
by this Agreement.
(d) Upon delivery to the Agent of the stock certificates evidencing the
Pledged Stock, the security interest created pursuant to this Agreement will
constitute a valid, perfected first priority security interest in the
Collateral, enforceable in accordance with its terms against all creditors of
the Pledgor and any Persons purporting to purchase any Collateral from the
Pledgor, except in each case as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(e) The Pledgor has obtained from each Issuer and has delivered to the
Agent an Acknowledgement and Consent, substantially in the form attached hereto
as Exhibit A, executed by each such Issuer.
(f) The Pledgor is 100% owned by PCC.
5. Covenants. The Pledgor covenants and agrees with the Agent and the
Lenders that, from and after the date of this Agreement until this Agreement is
terminated and the security interests created hereby are released:
(a) If the Pledgor shall, as a result of its ownership of the Pledged
Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
the Pledgor shall accept the same as the agent of the Agent and the Lenders,
hold the same in trust for the Agent and the Lenders and deliver the same
forthwith to the Agent in the exact form received, duly indorsed by the Pledgor
to the Agent, if required, together with an
- ------------------------------------
<PAGE> 112
4
undated stock power covering such certificate duly executed in blank by the
Pledgor and with, if the Agent so requests, signature guaranteed, to be held by
the Agent, subject to the terms hereof, as additional collateral security for
the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the
liquidation or dissolution of any Issuer shall be paid over to the Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Pledged Stock or any property shall be distributed upon or with respect to the
Pledged Stock pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall be delivered to the Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Stock shall be
received by the Pledgor, the Pledgor shall, until such money or property is paid
or delivered to the Agent, hold such money or property in trust for the Lenders,
segregated from other funds of the Pledgor, as additional collateral security
for the Obligations.
(b) Without the prior written consent of the Agent (or except as
expressly permitted under the terms of the Credit Agreement) , the Pledgor will
not (i) vote to enable, or take any other action to permit, any Issuer to issue
any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Collateral, (iii) create, incur or permit to exist any Lien or
option in favor of, or any claim of any Person with respect to, any of the
Collateral, or any interest therein, except for the security interests created
by this Agreement or (iv) enter into any agreement or undertaking restricting
the right or ability of the Pledgor or the Agent to sell, assign or transfer any
of the Collateral.
(c) The Pledgor shall maintain the security interest created by this
Agreement as a first, perfected security interest and shall defend such security
interest against claims and demands of all Persons other than the Agent. At any
time and from time to time, upon the written request of the Agent, and at the
sole expense of the Pledgor, the Pledgor will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
the Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the Agent,
duly endorsed if necessary in a manner satisfactory to the Agent, to be held as
Collateral pursuant to this Agreement.
(d) The Pledgor shall pay, and save the Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes and any and all
recording and filing fees which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
- ------------------------------------
<PAGE> 113
5
(e) The Pledgor will not take or omit to take any action, the taking or
the omission of which would result in an alteration or impairment of the
Collateral or the security of this Agreement, except as otherwise expressly
permitted under the terms of the Credit Agreement.
(f) The Pledgor will not enter into any agreement amending or
supplementing the Collateral, except as otherwise expressly permitted under the
terms of the Credit Agreement.
(g) The Pledgor will not waive or release any obligation of any party
to the Collateral, except as otherwise expressly permitted under the terms of
the Credit Agreement.
(h) Unless directed otherwise by the Agent, the Pledgor will exercise
promptly and diligently each and every material right which it may have under
the Collateral (except the right to release or cancel).
(i) The Pledgor will not take or omit to take any action or suffer or
permit any action to be omitted or taken, the taking or omission of which would
result in any right of offset against sums payable under the Collateral.
(j) Upon the occurrence and continuance of an Event of Default, the
Pledgor will give the Agent copies of all material notices (including notices of
default) given or received with respect to the Collateral, promptly after giving
or receiving such notices.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall have
occurred and be continuing and the Agent shall have given notice to the Pledgor
of the Agent's intent to exercise its corresponding rights pursuant to Section 7
below, the Pledgor shall be permitted to receive all cash dividends paid in the
normal course of business of the Issuers and consistent with past practice, to
the extent permitted in the Credit Agreement, in respect of the Pledged Stock
and to exercise all voting and corporate rights with respect to the Pledged
Stock; provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in the Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, the Notes, this Agreement or
any other Loan Document.
7. Rights of the Lenders and the Agent. (a) All money Proceeds received
by the Agent hereunder shall be held by the Agent for the benefit of the Lenders
in a Collateral Account. All Proceeds while held by the Agent in a Collateral
Account (or by the Pledgor in trust for the Agent and the Lenders) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in subsection 8(a).
(b) If an Event of Default shall occur and be continuing and the Agent
shall give notice of its intent to exercise such rights to the Pledgor, (i) the
Agent shall have the right to receive any and all cash dividends paid in respect
of the Pledged Stock and make application thereof to the Obligations in such
order as the Agent may determine, and (ii) all shares of the
- ------------------------------------
<PAGE> 114
6
Pledged Stock shall be registered in the name of the Agent or its nominee, and
the Agent or its nominee may thereafter exercise (A) all voting, corporate and
other rights pertaining to such shares of the Pledged Stock at any meeting of
shareholders of any Issuer or otherwise and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options
pertaining to such shares of the Pledged Stock as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by the Pledgor or the Agent of any right, privilege
or option pertaining to such shares of the Pledged Stock, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Stock
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Agent may determine), all without
liability except to account for property actually received by it, but the Agent
shall have no duty to the Pledgor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.
8. Remedies. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations in
such order as the Agent may elect.
(b) If an Event of Default shall have occurred and be continuing, the
Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of the
foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Pledgor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker's board or office of the Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in the Pledgor, which right
or equity is hereby waived or released. The Agent shall apply any Proceeds from
time to time held by it and the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred in respect thereof or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements of counsel to
the Agent, to the
- ------------------------------------
<PAGE> 115
7
payment in whole or in part of the Obligations, in such order as the Agent may
elect, and only after such application and after the payment by the Agent of any
other amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the Code, need the Agent account for the surplus, if any,
to the Pledgor. To the extent permitted by applicable law, the Pledgor waives
all claims, damages and demands it may acquire against the Agent or any Lender
arising out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition. The Pledgor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of Collateral are
insufficient to pay the Obligations and the fees and disbursements of any
attorneys employed by the Agent or any Lender to collect such deficiency.
(c) The Pledgor waives and agrees not to assert any rights or
privileges which it may acquire solely under Section 9-112 of the Code. The
Pledgor shall remain liable for any deficiency if the proceeds of any sale or
other disposition of Collateral are insufficient to pay the Secured Obligations
and the fees and disbursements of any attorneys employed by the Agent or any
Lender to collect such deficiency.
9. Registration Rights; Private Sales. (a) If the Agent shall determine
to exercise its right to sell any or all of the Pledged Stock pursuant to
Section 8(b) hereof, and if in the opinion of the Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the Pledgor will cause
the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Agent, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act,
(ii) to use its best efforts to cause the registration statement relating
thereto to become effective and to remain effective for a period of one year
from the date of the first public offering of the Pledged Stock, or that portion
thereof to be sold, and (iii) to make all amendments thereto and/or to the
related prospectus which, in the opinion of the Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto. The Pledgor agrees to cause such Issuer to comply with the provisions
of the securities or "Blue Sky" laws of any and all jurisdictions which the
Agent shall designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) The Pledgor recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that
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<PAGE> 116
8
any such private sale may result in prices and other terms less favorable than
if such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Agent shall be under no obligation to delay a sale of any
of the Pledged Stock for the period of time necessary to permit the Issuer
thereof to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if such Issuer would agree to do
so.
(c) The Pledgor further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgor further agrees that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Agent and the Lenders, that
the Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against the Pledgor, and the Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
10. Irrevocable Authorization and Instruction to Issuer. The Pledgor
hereby authorizes and instructs each Issuer to comply with any instruction
received by it from the Agent in writing that (a) states that an Event of
Default has occurred and (b) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from the Pledgor, and the
Pledgor agrees that each Issuer shall be fully protected in so complying.
11. Agent's Appointment as Attorney-in-Fact. (a) The Pledgor hereby
irrevocably constitutes and appoints the Agent and any officer or agent of the
Agent, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of the Pledgor
and in the name of the Pledgor or in the Agent's own name, from time to time in
the Agent's discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
(b) The Pledgor hereby ratifies all that said attorneys shall lawfully
do or cause to be done pursuant to the power of attorney granted in subsection
11(a). All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
12. Duty of Agent. The Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it in the same
manner as the Agent deals with similar
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<PAGE> 117
9
securities and property for its own account, except that the Agent shall have no
obligation to invest funds held in any Collateral Account and may hold the same
as demand deposits. Neither the Agent, any Lender nor any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
13. Execution of Financing Statements. Pursuant to Section 9-402 of the
Code, the Pledgor authorizes the Agent to file financing statements with respect
to the Collateral without the signature of the Pledgor in such form and in such
filing offices as the Agent reasonably determines appropriate to perfect the
security interests of the Agent under this Agreement. A carbon, photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement for filing in any jurisdiction.
14. Authority of Agent. The Pledgor acknowledges that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and the Pledgor, the Agent shall be conclusively presumed to be acting as
agent for the Lenders with full and valid authority so to act or refrain from
acting, and neither the Pledgor nor any Issuer shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
15. Notices. All notices, requests and demands to or upon the Agent or
the Pledgor to be effective shall be in writing (or by telex, fax or similar
electronic transfer confirmed in writing) and shall be deemed to have been duly
given or made (i) when delivered by hand or (ii) if given by mail, when
deposited in the mails by certified mail, return receipt requested, or (iii) if
by telex, fax or similar electronic transfer, when sent and receipt has been
confirmed, addressed to the Agent or the Pledgor at its address or transmission
number for notices provided on the signature page hereto. The Agent and the
Pledgor may change their addresses and transmission numbers for notices by
notice in the manner provided in this Section.
16. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
17. Return of Documents; Cooperation. (a) When this Agreement is
terminated and the security interests created hereby are released, the Agent
shall (i) execute and deliver to the
- ------------------------------------
<PAGE> 118
10
Pledgor such documents of assignment as are reasonably necessary to terminate
the Agent's security interest in the Collateral and (ii) return to the Pledgor
the documents delivered to the Agent as provided in Section 3. If any part of
the Collateral is released in connection with any disposition thereof expressly
permitted under the terms of the Credit Agreement, and the corresponding
security interests created hereby are released, the Agent shall take the actions
under clauses (i) and (ii) as appropriate, with respect to such release.
18. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Pledgor and
the Agent, provided that any provision of this Agreement may be waived by the
Agent and the Lenders in a letter or agreement executed by the Agent or by telex
or facsimile transmission from the Agent.
(b) Neither the Agent nor any Lender shall by any act (except by a
written instrument pursuant to subsection 18(a) hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
or such Lender would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
19. Section Headings. The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
20. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
22. Guarantee. (a) Subject to the provisions of paragraph 2 below, the
Pledgor hereby unconditionally and irrevocably guarantees to the Agent, for the
ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations.
- ------------------------------------
<PAGE> 119
11
(b) The Pledgor shall have no personal liability for payment of the
Obligations, and in any action or suit to collect the Obligations the Agent and
the Lenders shall not seek any in personam judgment against the Pledgor or any
judgment for a deficiency but shall look solely to the security interests
hereunder and the collateral described herein for payment of the Obligations.
Nothing contained in this Section shall be construed to impair the validity of
the Obligations or this Agreement or affect or impair in any way the right of
the Agent and the Lenders to exercise their rights and remedies under the Credit
Agreement, the Notes and any other Loan Documents in accordance with their
terms.
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<PAGE> 120
12
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
PAXSON COMMUNICATIONS
UNRESTRICTED HOLDINGS, INC.
By:
--------------------------------------
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
- ------------------------------------
<PAGE> 121
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Pledge
Agreement dated July 11, 1997 made by Paxson Communications Unrestricted
Holdings, Inc. for the benefit of Union Bank of California, N.A., as Agent (the
"Pledge Agreement"). The undersigned agrees for the benefit of the Agent and the
Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in subsection 5(a) of the Pledge
Agreement.
3. The terms of subsection 9(c) of the Pledge Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 9 of the Pledge Agreement.
TRAVEL CHANNEL ACQUISITION CORPORATION
By:
----------------------------------
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
- ------------------------------------
<PAGE> 122
SCHEDULE 1
TO PCUH
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
<TABLE>
<CAPTION>
Stock Certificate
Issuer Class of Stock* No. No. of Shares
- ----------------------------------------- --------------- ------------------ -------------
<S> <C> <C> <C>
Travel Channel Common ($.01 2 1,000
Acquisition Corporation par value)
</TABLE>
- ------------------------------------
*Stock is assumed to be common stock unless otherwise indicated.
<PAGE> 123
EXHIBIT B-3
TO THE
CREDIT AGREEMENT
FORM OF BORROWER PLEDGE AGREEMENT
BORROWER PLEDGE AGREEMENT, dated as of July __, 1997, made by
Travel Channel Acquisition Corporation, a Delaware corporation (the
"Borrower"), in favor of Union Bank of California, N.A., as Agent (in such
capacity, the "Agent") for the Lenders parties to the Credit Agreement, dated
as of July 11, 1997, (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the Agent and such
Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower is the legal and beneficial owner of the shares
of Pledged Stock (as hereinafter defined) issued by the Issuers (as hereinafter
defined) and the payee of the Pledged Notes (as hereinafter defined); and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Borrower shall have executed and delivered this Pledge Agreement to the
Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans under the Credit Agreement, the Borrower
hereby agrees with the Agent, for the ratable benefit of the Lenders, as
follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in effect in
the State of New York.
"Collateral": the Pledged Stock, the Pledged Notes and all Proceeds.
<PAGE> 124
2
"Collateral Account": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders only as provided in
subsection 10(a).
"Issuers": the collective reference to the companies identified on
Schedule 1 attached hereto as the issuers of the Pledged Stock; individually,
each an "Issuer."
"Obligors": the collective reference to the companies identified on
Schedule 2 hereto, as such Schedule may be amended from time to time.
"Pledged Notes": the promissory note or notes of the Obligors
identified on Schedule 2, together with all substitutes, replacements or
refinancings thereto that may be issued or granted by any Obligor to the
Borrower while this Agreement is in effect.
"Pledged Securities": collectively, the Pledged Notes and the Pledged
Stock.
"Pledged Stock": the shares of capital stock listed on Schedule 1
hereto, together with all stock certificates, options or rights of any nature
whatsoever that may be issued or granted by any Issuer to the Borrower in
respect of the Pledged Stock while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York on
the date hereof and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Stock, collections thereon or
distributions with respect thereto.
"Securities Act": the Securities Act of 1933, as amended.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. The Borrower hereby delivers
to the Agent, for the ratable benefit of the Lenders, all the Pledged
Securities and hereby grants to Agent, for the ratable benefit of the Lenders,
a first security interest in the Collateral, as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.
3. Stock Powers. (a) Concurrently with the delivery to the Agent of
each certificate representing one or more shares of Pledged Stock to the Agent,
the Borrower shall deliver an undated stock power covering such certificate,
duly executed in blank by the Borrower with, if the Agent so requests,
signature guaranteed.
<PAGE> 125
3
(b) The Borrower shall deliver to the Agent an Acknowledgement and
Consent, substantially in the form of Exhibit A to this Agreement, duly
executed by the Issuer of such Pledged Stock.
4. Indorsement; Acknowledgement and Consent. Concurrently with the
delivery of each Pledged Note to the Agent pursuant to Section 2 of this
Agreement, such Pledged Note shall be indorsed by the Borrower as follows:
Pay to the order of Bearer
[NAME OF BORROWER]
By: _____________________
Title: ____________________;
5. Payments Under the Pledged Notes. Unless an Event of Default
shall have occurred and be continuing, the Borrower shall be permitted to
receive all regularly scheduled payments of principal and interest under the
Pledged Notes, as such payments become due. If an Event of Default shall occur
and be continuing, and the Agent shall have given notice to the Borrower of the
Agent's intent to exercise its rights pursuant to Section 9 or 10 below, all
payments of principal and interest under the Pledged Notes shall be paid to the
Agent, who shall hold the same as Collateral hereunder. If the Borrower shall
receive any such payments, the Borrower shall hold the same in trust for the
Agent and the Lenders, segregated from other funds of the Borrower, and deliver
the same forthwith to the Agent in the exact form received, duly indorsed by
the Borrower to the Agent, if required.
6. Representations and Warranties. The Borrower represents and
warrants that:
(a) The shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the capital stock of each Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) The Pledged Notes of the Borrower listed on Schedule 2 hereto
constitute all of the issued and outstanding promissory notes payable to the
Borrower.
(d) Each Pledged Note and each document and instrument that secures
or guarantees payment of such Pledged Note is, to the best knowledge of the
Borrower, the legal, valid and enforceable obligation of the maker thereof,
except as enforceability may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing; none of the Pledged Notes is subject to any right of
counterclaim or offset whatsoever.
<PAGE> 126
4
(e) The Borrower is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities, free of any and all Liens or
options in favor of, or claims of, any other Person, except the security
interest created by this Agreement.
(f) Upon delivery to the Agent of the Pledged Notes and the stock
certificates evidencing the Pledged Stock, the security interest created
pursuant to this Agreement will constitute a valid, perfected first priority
security interest in the Collateral, enforceable in accordance with its terms
against all creditors of the Borrower and any Persons purporting to purchase
any Collateral from the Borrower, except in each case as enforceability may be
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(g) The Borrower has obtained from each Issuer and has delivered
to the Agent an Acknowledgement and Consent, substantially in the form attached
hereto as Exhibit A, executed by each such Issuer.
(h) There exists, to the best knowledge of the Borrower, no default
under any Pledged Note. The principal amount outstanding under each Pledged
Note as of the date hereof is as specified on Schedule 2. Except as described
in Schedule 2, there exists no security interest or guarantee that secures or
supports payment of the indebtedness evidenced by any Pledged Note, and the
descriptions of such security interests and guarantees in Schedule 2 are
complete and accurate in all material respects.
7. Covenants. The Borrower covenants and agrees with the Agent and
the Lenders that, from and after the date of this Agreement until this
Agreement is terminated and the security interests created hereby are released:
(a) If the Borrower shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection with
any reorganization), option or rights, whether in addition to, in substitution
of, as a conversion of, or in exchange for any shares of the Pledged Stock, or
otherwise in respect thereof, the Borrower shall accept the same as the agent
of the Agent and the Lenders, hold the same in trust for the Agent and the
Lenders and deliver the same forthwith to the Agent in the exact form received,
duly indorsed by the Borrower to the Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by the
Borrower and with, if the Agent so requests, signature guaranteed, to be held
by the Agent, subject to the terms hereof, as additional collateral security
for the Obligations. Any sums paid upon or in respect of the Pledged Stock
upon the liquidation or dissolution of any Issuer shall be paid over to the
Agent to be held by it hereunder as additional collateral security for the
Obligations, and in case any distribution of capital shall be made on or in
respect of the Pledged Stock or any property shall be distributed upon or with
respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to
<PAGE> 127
5
the reorganization thereof, the property so distributed shall be delivered to
the Agent to be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in
respect of the Pledged Stock shall be received by the Borrower, the Borrower
shall, until such money or property is paid or delivered to the Agent, hold
such money or property in trust for the Lenders, segregated from other funds of
the Borrower, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Agent (or except as
expressly permitted under the terms of the Credit Agreement) , the Borrower
will not (i) vote to enable, or take any other action to permit, any Issuer to
issue any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Collateral, (iii) create, incur or permit to exist any Lien or
option in favor of, or any claim of any Person with respect to, any of the
Collateral, or any interest therein, except for the security interests created
by this Agreement or (iv) enter into any agreement or undertaking restricting
the right or ability of the Borrower or the Agent to sell, assign or transfer
any of the Collateral.
(c) The Borrower shall maintain the security interest created by this
Agreement as a first, perfected security interest and shall defend such
security interest against claims and demands of all Persons other than the
Agent. At any time and from time to time, upon the written request of the
Agent, and at the sole expense of the Borrower, the Borrower will promptly and
duly execute and deliver such further instruments and documents and take such
further actions as the Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any promissory note,
other instrument or chattel paper, such note, instrument or chattel paper shall
be immediately delivered to the Agent, duly endorsed if necessary in a manner
satisfactory to the Agent, to be held as Collateral pursuant to this Agreement.
(d) The Borrower shall pay, and save the Agent and the Lenders
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes and any and
all recording and filing fees which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
(e) The Borrower will not take or omit to take any action, the taking
or the omission of which would result in an alteration or impairment of the
Collateral or the security of this Agreement, except as otherwise expressly
permitted under the terms of the Credit Agreement.
(f) The Borrower will not enter into any agreement amending or
supplementing the Collateral, except as otherwise expressly permitted under the
terms of the Credit Agreement.
(g) The Borrower will not waive or release any obligation of any
party to the Collateral, except as otherwise expressly permitted under the
terms of the Credit Agreement.
<PAGE> 128
6
(h) Unless directed otherwise by the Agent, the Borrower will
exercise promptly and diligently each and every material right which it may
have under the Collateral (except the right to release or cancel).
(i) The Borrower will not take or omit to take any action or suffer
or permit any action to be omitted or taken, the taking or omission of which
would result in any right of offset against sums payable under the Collateral.
(j) Upon the occurrence and continuance of an Event of Default, the
Borrower will give the Agent copies of all material notices (including notices
of default) given or received with respect to the Collateral, promptly after
giving or receiving such notices.
(k) The Borrower shall deliver to the Agent, in the exact form
received, to be held by the Agent, subject to the terms hereof, as additional
collateral security for the Secured Obligations of the Borrower any additional
promissory notes made by any Obligor for the benefit of the Borrower or other
securities, options or rights received by it in substitution or exchange for,
or as a conversion of, or in addition to, any of the Pledged Notes, or
otherwise in respect thereof, together with an undated endorsement or power, as
the case may be, duly executed to the order of "Bearer" or in blank, as the
case may be, by the Borrower and with, if the Agent reasonably requests,
signature guaranteed.
8. Cash Dividends; Voting Rights. (a) Unless an Event of Default
shall have occurred and be continuing and the Agent shall have given notice to
the Borrower of the Agent's intent to exercise its corresponding rights
pursuant to Section 9 below, the Borrower shall be permitted to receive all
cash dividends paid in the normal course of business of the Issuers and
consistent with past practice, to the extent permitted in the Credit Agreement,
in respect of the Pledged Stock and to exercise all voting and corporate rights
with respect to the Pledged Stock; provided, however, that no vote shall be
cast or corporate right exercised or other action taken which, in the Agent's
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Credit Agreement, the
Notes, this Agreement or any other Loan Document.
(b) Unless an Event of Default shall have occurred and be
continuing and the Agent shall have given notice to the Borrower of the Agent's
intent to exercise its corresponding rights pursuant to Section 9 hereof, the
Borrower shall be permitted to receive and retain all scheduled interest and
principal payments on account of the Pledged Notes of the Borrower.
9. Rights of the Lenders and the Agent. (a) All money Proceeds
received by the Agent hereunder shall be held by the Agent for the benefit of
the Lenders in a Collateral Account. All Proceeds while held by the Agent in a
Collateral Account (or by the Borrower in trust for the Agent and the Lenders)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in subsection
10(a).
<PAGE> 129
7
(b) If an Event of Default shall occur and be continuing and the
Agent shall give notice of its intent to exercise such rights to the Borrower,
(i) the Agent shall have the right to receive any and all cash dividends paid
in respect of the Pledged Stock and make application thereof to the Obligations
in such order as the Agent may determine, and (ii) all shares of the Pledged
Stock shall be registered in the name of the Agent or its nominee, and the
Agent or its nominee may thereafter exercise (A) all voting, corporate and
other rights pertaining to such shares of the Pledged Stock at any meeting of
shareholders of any Issuer or otherwise and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options
pertaining to such shares of the Pledged Stock as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by the Borrower or the Agent of
any right, privilege or option pertaining to such shares of the Pledged Stock,
and in connection therewith, the right to deposit and deliver any and all of
the Pledged Stock with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Agent may
determine), all without liability except to account for property actually
received by it, but the Agent shall have no duty to the Borrower to exercise
any such right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing.
(c) Anything herein to the contrary notwithstanding, the Borrower
shall remain liable under the Pledged Notes to observe and perform all the
conditions and obligations to be observed and performed by it thereunder all in
accordance with the terms and provisions of such Pledged Notes. Neither the
Agent nor the Lenders shall have any obligation or liability under any Pledged
Note by reason of or arising out of this Agreement or the receipt by the Agent
or the Lenders of any payment relating to such Pledged Note pursuant hereto
(other than to account for monies actually received by it), nor shall the Agent
or any of the Lenders be obligated in any manner to perform any of the
obligations of the Borrower under or pursuant to any Pledged Note, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any Pledged Note, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
10. Remedies. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations
in such order as the Agent may elect.
(b) If an Event of Default shall have occurred and be continuing, the
Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of the
foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Borrower or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances
<PAGE> 130
8
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any exchange,
broker's board or office of the Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Agent or any Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in the Borrower, which right or equity is
hereby waived or released. The Agent shall apply any Proceeds from time to
time held by it and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred in respect thereof or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral
or the rights of the Agent and the Lenders hereunder, including, without
limitation, reasonable attorneys' fees and disbursements of counsel to the
Agent, to the payment in whole or in part of the Obligations, in such order as
the Agent may elect, and only after such application and after the payment by
the Agent of any other amount required by any provision of law, including,
without limitation, Section 9-504(1)(c) of the Code, need the Agent account for
the surplus, if any, to the Borrower. To the extent permitted by applicable
law, the Borrower waives all claims, damages and demands it may acquire against
the Agent or any Lender arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. The Borrower
shall remain liable for any deficiency if the proceeds of any sale or other
disposition of Collateral are insufficient to pay the Obligations and the fees
and disbursements of any attorneys employed by the Agent or any Lender to
collect such deficiency.
(c) The Borrower waives and agrees not to assert any rights or
privileges which it may acquire solely under Section 9-112 of the Code. The
Borrower shall remain liable for any deficiency if the proceeds of any sale or
other disposition of Collateral are insufficient to pay the Secured Obligations
and the fees and disbursements of any attorneys employed by the Agent or any
Lender to collect such deficiency.
11. Registration Rights; Private Sales. (a) If the Agent shall
determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 10(b) hereof, and if in the opinion of the Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the Borrower will
cause the Issuer thereof to (i) execute and deliver, and cause the directors
and officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Agent, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act,
(ii) to use its best efforts to cause the registration statement relating
thereto to become effective and to remain effective for a period of one year
from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) to make all
<PAGE> 131
9
amendments thereto and/or to the related prospectus which, in the opinion of
the Agent, are necessary or advisable, all in conformity with the requirements
of the Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto. The Borrower agrees to cause such
Issuer to comply with the provisions of the securities or "Blue Sky" laws of
any and all jurisdictions which the Agent shall designate and to make available
to its security holders, as soon as practicable, an earnings statement (which
need not be audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) The Borrower recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Borrower acknowledges
and agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(c) The Borrower further agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section valid
and binding and in compliance with any and all other applicable Requirements of
Law. The Borrower further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the Agent and the
Lenders, that the Agent and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against the
Borrower, and the Borrower hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit Agreement.
12. Irrevocable Authorization and Instruction to Issuer. The
Borrower hereby authorizes and instructs each Issuer to comply with any
instruction received by it from the Agent in writing that (a) states that an
Event of Default has occurred and (b) is otherwise in accordance with the terms
of this Agreement, without any other or further instructions from the Borrower,
and the Borrower agrees that each Issuer shall be fully protected in so
complying.
13. Agent's Appointment as Attorney-in-Fact. (a) The Borrower
hereby irrevocably constitutes and appoints the Agent and any officer or agent
of the Agent, with full power of substitution, as its true and lawful
attorney-in- fact with full irrevocable power and authority in the place and
stead of the Borrower and in the name of the Borrower or in the Agent's own
name, from time to time in the Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all
<PAGE> 132
10
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
(b) The Borrower hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
subsection 13(a). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
14. Duty of Agent. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Agent deals with similar securities and property
for its own account, except that the Agent shall have no obligation to invest
funds held in any Collateral Account and may hold the same as demand deposits.
Neither the Agent, any Lender nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Borrower or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof.
15. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, the Borrower authorizes the Agent to file financing statements with
respect to the Collateral without the signature of the Borrower in such form
and in such filing offices as the Agent reasonably determines appropriate to
perfect the security interests of the Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
16. Authority of Agent. The Borrower acknowledges that the rights
and responsibilities of the Agent under this Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Borrower, the Agent shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act
or refrain from acting, and neither the Borrower nor any Issuer shall be under
any obligation, or entitlement, to make any inquiry respecting such authority.
17. Notices. All notices, requests and demands to or upon the Agent
or the Borrower to be effective shall be in writing (or by telex, fax or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (i) when delivered by hand or (ii) if given by mail,
when deposited in the mails by certified mail, return receipt requested, or
(iii) if by telex, fax or similar electronic transfer, when sent and receipt
has been confirmed, addressed to the Agent or the Borrower at its address or
transmission number for notices provided in subsection 9.2 of the Credit
Agreement. The Agent and the Borrower
<PAGE> 133
11
may change their addresses and transmission numbers for notices by notice in
the manner provided in this Section.
18. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
19. Return of Documents; Cooperation. (a) When this Agreement is
terminated and the security interests created hereby are released, the Agent
shall (i) return to the Borrower the Pledged Notes, (ii) execute and deliver to
the Borrower such documents of assignment as are reasonably necessary to
terminate the Agent's security interest in the Collateral and to advise the
makers of the Pledged Notes of the termination of the Agent's rights and
security interest hereunder and (iii) return to the Borrower the documents
delivered to the Agent as provided in section 3. If any part of the Collateral
is released in connection with any disposition thereof expressly permitted
under the terms of the Credit Agreement, and the corresponding security
interests created hereby are released, the Agent shall take the actions under
clauses (i), (ii) and (iii) as appropriate, with respect to such release.
(b) Upon payment in full of any Pledged Note and payment of the
Proceeds thereof as provided in this Agreement, the Agent shall (i) return to
the Borrower such Pledged Note, indorsed to the Borrower without recourse,
representation or warranty and (ii) execute and deliver to the Borrower such
documents of assignment as are reasonably necessary to terminate the Agent's
security interest in any Collateral related to such Pledged Note.
(c) Upon the occurrence of a default or event of default under any
Pledged Note, the Agent shall cooperate reasonably with the Borrower, at the
expense of the Borrower, in the exercise of the Borrower's rights and remedies
under such Pledged Note and any document or instrument securing or supporting
the same.
20. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Borrower and the Agent, provided that any provision of this Agreement may
be waived by the Agent and the Lenders in a letter or agreement executed by the
Agent or by telex or facsimile transmission from the Agent.
(b) Neither the Agent nor any Lender shall by any act (except by a
written instrument pursuant to subsection 20(a) hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any
of the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any
<PAGE> 134
12
right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which the Agent or such Lender would otherwise have on
any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
21. Section Headings. The section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
22. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Borrower and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
23. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
<PAGE> 135
13
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
TRAVEL CHANNEL ACQUISITION
CORPORATION
By:
-----------------------
<PAGE> 136
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Pledge
Agreement dated July __, 1997 made by Travel Channel Acquisition Corporation
for the benefit of Union Bank of California, N.A., as Agent (the "Pledge
Agreement"). The undersigned agrees for the benefit of the Agent and the
Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in subsection 7(a) of the Pledge
Agreement.
3. The terms of subsection 11(c) of the Pledge Agreement shall apply
to it, mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 11 of the Pledge Agreement.
[ ]
By: _____________________________
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (407) 659-4252
<PAGE> 137
SCHEDULE 1
TO BORROWER
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
<TABLE>
<CAPTION>
Stock Certificate
Issuer Class of Stock* No. No. of Shares
- ------ --------------- ----------------- -------------
<S> <C> <C> <C>
</TABLE>
- -----------------------------
*Stock is assumed to be common stock unless otherwise indicated.
<PAGE> 138
SCHEDULE 2
TO BORROWER
PLEDGE AGREEMENT
THE PLEDGED NOTES
<TABLE>
<CAPTION>
Description of Pledged
Note[s] Collateral Security Guarantee[s]
- ----------------------------------- --------------------------------- ----------------------------------
<S> <C> <C>
[Promissory Note] dated __________, Describe security agreements, Describe each guarantee. If none,
19__, made by _______________ to mortgages, etc. Include recording state "None."
the order of [the Borrower] in the and filing information. If none,
original principal amount of state "None."
$_________
<CAPTION>
Principal Amount/ Interest
Payment
- --------------------------------
<S> <C>
Outstanding principal amount:
$__________________
Last date to which interest was
paid: ___________, 199__
</TABLE>
<PAGE> 139
EXHIBIT C
TO THE
CREDIT AGREEMENT
FORM OF BORROWER SECURITY AGREEMENT
BORROWER SECURITY AGREEMENT, dated as of July __, 1997, made by Travel
Channel Acquisition Corporation, a Delaware corporation, (the "Borrower") in
favor of Union Bank of California, N.A., as Agent (in such capacity, the
"Agent") for the Lenders parties to the Credit Agreement, dated as of July 11,
1997, (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the Agent and such Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Borrower shall have executed and delivered this Security Agreement to the
Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce the
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans to the Borrower, the Borrower hereby
agrees with the Agent, for the ratable benefit of the Lenders, as follows:
1. Defined Terms.
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement, and the following terms which are defined in
the Uniform Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Accounts, Chattel Paper, Documents,
Equipment, Farm Products, General Intangibles, Instruments, Inventory and
Proceeds.
(b) The following terms shall have the following meanings:
"Agreement": this Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
<PAGE> 140
2
"Collateral": as defined in Section 2.
"Collateral Account": any collateral account established by
the Agent as provided in subsection 5.3 or subsection 9.2.
"Contracts": all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which the Borrower is
a party or under which the Borrower has any right, title or interest
or to which the Borrower or any property of the Borrower is subject,
as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (a) all rights of
the Borrower to receive moneys due and to become due to it thereunder
or in connection therewith, (b) all rights of the Borrower to damages
arising out of, or for, breach or default in respect thereof and (c)
all rights of the Borrower to perform and to exercise all remedies
thereunder, except, in each case to the extent the grant by the
Borrower of a security interest pursuant to this Agreement in its
right, title and interest in such contract, agreement, instrument or
indenture (i) is prohibited by such contract, agreement, instrument or
indenture without the consent of any other party thereto, (ii) would
give any other party to such contract, agreement, instrument or
indenture the right to terminate its obligations thereunder, or (iii)
is permitted with consent if all necessary consents to such grant of a
security interest have not been obtained from the other parties
thereto (it being understood that the foregoing shall not be deemed to
obligate the Borrower to obtain such consents) (the contracts,
agreements, instruments or indentures referred to in clauses (i), (ii)
and (iii) which, if terminated could reasonably be expected to result
in a Material Adverse Effect, are specified on Schedule 1 attached
hereto); provided, that the foregoing limitation shall not affect,
limit, restrict or impair the grant by the Borrower of a security
interest pursuant to this Agreement in any Account or any money or
other amounts due or to become due under any such contract, agreement,
instrument or indenture.
"Patents": (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Schedule 2, and (b) all
applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any thereof referred to in
Schedule 2.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to the Borrower of any right to
manufacture, use or sell any invention covered by a Patent, including,
without limitation, any thereof referred to in Schedule 2.
"Receivable": any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
<PAGE> 141
3
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 3, and (b) all renewals thereof.
"Trademark License" means any agreement, written or oral,
providing for the grant by or to the Borrower of any right to use any
Trademark, including, without limitation, any thereof referred to in
Schedule 3.
"Vehicles" means all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of
title law of any state.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, subsection and Schedule
references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations, the Borrower hereby grants to
the Agent for the ratable benefit of the Lenders a security interest in all of
the following property now owned or at any time hereafter acquired by the
Borrower or in which the Borrower now has or at any time in the future may
acquire any right, title or interest (collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments, other than Excluded Investments;
<PAGE> 142
4
(h) all Inventory;
(i) all Patents;
(j) all Patent Licenses;
(k) all Trademarks;
(l) all Trademark Licenses;
(m) all Vehicles;
(n) all books, records, ledgercards, files, correspondence,
computer programs, tapes, disks, and related data processing software (owned by
the Borrower or in which it has an interest) that at any time evidence or
contain information relating to any Collateral or are otherwise necessary or
helpful on the collection thereof or realization thereupon; and
(o) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
3. Representations and Warranties. The Borrower hereby represents
and warrants that:
3.1 Title; No Other Liens. Except for the security interest granted
to the Agent for the ratable benefit of the Lenders pursuant to this Agreement
and the other Liens permitted to exist on the Collateral pursuant to the Credit
Agreement, the Borrower owns each item of the Collateral free and clear of any
and all Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Agent, for the ratable benefit of the Lenders, pursuant to this Agreement or as
are permitted pursuant to the Credit Agreement.
3.2 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 5 will constitute perfected security interests in the
Collateral (other than Vehicles) in favor of the Agent, for the ratable benefit
of the Lenders, as collateral security for the Obligations and (b) are prior to
all other Liens on the Collateral in existence on the date hereof.
3.3 Inventory and Equipment. The Inventory and the Equipment are
kept at the locations listed on Schedule 6.
<PAGE> 143
5
3.4 Chief Executive Office. The chief executive office of the
Borrower is located at:
Travel Channel Acquisition Corporation
c/o Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, Florida 33401
3.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4. Covenants. The Borrower covenants and agrees with the Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full and the Commitments shall have expired
or otherwise been terminated:
4.1 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Agent, duly indorsed in a manner satisfactory to
the Agent, to be held as Collateral pursuant to this Agreement.
4.2 Maintenance of Insurance. The Borrower will maintain insurance
on the Collateral as required under the Credit Agreement.
4.3 Maintenance of Perfected Security Interest; Further
Documentation. (a) The Borrower shall maintain the security interest created
by this Agreement as a perfected security interest having at least the priority
described in subsection 3.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) At any time and from time to time, upon the written request of
the Agent, and at the sole expense of the Borrower, the Borrower will promptly
and duly execute and deliver such further instruments and documents and take
such further actions as the Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the security interests created
hereby.
4.4 Changes in Locations, Name, etc. The Borrower will not:
(a) permit any of the Inventory or Equipment to be kept at a location
other than those listed on Schedule 6; or
(b) change the location of its chief executive office from that
specified in subsection 3.4, unless it shall have given the Agent and the
Lenders at least 30 days' prior written notice of such change;
<PAGE> 144
6
(c) change its name, identity or corporate structure to such an extent
that any financing statement filed by the Agent in connection with this
Agreement would become seriously misleading, unless it shall have given the
Agent and the Lenders at least 30 days' prior written notice of such change.
4.5 Further Identification of Collateral. The Borrower will furnish
to the Agent and the Lenders from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Agent may reasonably request, all in reasonable
detail.
4.6 Notices. The Borrower will advise the Agent and the Lenders
promptly, in reasonable detail, at their respective addresses for notices
provided for in the Credit Agreement of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5. Provisions Relating to Receivables.
5.1 Borrower Remains Liable under Receivables. Anything herein to
the contrary notwithstanding, the Borrower shall remain liable under each of
the Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise to each such Receivable. Neither the Agent nor any
Lender shall have any obligation or liability under any Receivable (or any
agreement giving rise thereto) by reason of or arising out of this Agreement or
the receipt by the Agent or any Lender of any payment relating to such
Receivable pursuant hereto, nor shall the Agent or any Lender be obligated in
any manner to perform any of the obligations of the Borrower under or pursuant
to any Receivable (or any agreement giving rise thereto), to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party under any
Receivable (or any agreement giving rise thereto), to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
5.2 Analysis of Receivables. Upon the occurrence and continuance of
an Event of Default: (a) The Agent shall have the right to make test
verifications of the Receivables in any manner and through any medium that it
reasonably considers advisable, and each Borrower shall furnish all such
assistance and information as the Agent may require in connection with such
test verifications; (b) upon the Agent's request and at the expense of such
Borrower, such Borrower shall cause independent public accountants or others
satisfactory to the Agent to furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables; and (c) the Agent in its own name
<PAGE> 145
7
or in the name of others may communicate with the obligors on the Receivables
to verify with them to the Agent's satisfaction the existence, amount and terms
of any Receivables.
5.3 Collections on Receivables. (a) The Agent hereby authorizes the
Borrower to collect the Receivables, subject to the Agent's direction and
control, and the Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default. If
required by the Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by the Borrower, (i) shall be forthwith (and, in any event, within two Business
Days) deposited by the Borrower in the exact form received, duly indorsed by
the Borrower to the Agent if required, in a Collateral Account maintained under
the sole dominion and control of the Agent, subject to withdrawal by the Agent
for the account of the Lenders only as provided in subsection 9.3, and (ii)
until so turned over, shall be held by the Borrower in trust for the Agent and
the Lenders, segregated from other funds of the Borrower.
(b) Each such deposit of Proceeds of Receivables shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(c) Upon the occurrence and continuance of an Event of Default, at
the Agent's request, the Borrower shall deliver to the Agent all original and
other documents evidencing, and relating to, the agreements and transactions
which gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.
5.4 Representations and Warranties. (a) No amount payable to the
Borrower under or in connection with any Receivable is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Agent.
(b) None of the obligors on any Receivables is a Governmental
Authority.
(c) The amounts represented by the Borrower to the Lenders from time
to time (upon the Agent's request) as owing to the Borrower in respect of the
Receivables will at such times be accurate in all material respects.
5.5 Covenants. (a) Other than in the ordinary course of business
consistent with its past practice, the Borrower will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable, (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof or (vi) fail to exercise promptly and diligently each and every
material right which it may have under each agreement giving rise to a
Receivable (other than any right of termination).
(b) The Borrower will deliver to the Agent a copy of each material
demand, notice or document received by it that questions the validity or
enforceability of more than 5% of the aggregate amount of the then outstanding
Receivables.
<PAGE> 146
8
6. Provisions Relating to Contracts.
6.1 Borrower Remains Liable under Contracts. Anything herein to the
contrary notwithstanding, the Borrower shall remain liable under each of the
Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of such Contract. Neither the Agent nor any Lender
shall have any obligation or liability under any Contract by reason of or
arising out of this Agreement or the receipt by the Agent or any such Lender of
any payment relating to such Contract pursuant hereto, nor shall the Agent or
any Lender be obligated in any manner to perform any of the obligations of the
Borrower under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party under any Contract, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
6.2 Communication With Contracting Parties. Upon the occurrence and
continuance of an Event of Default, the Agent in its own name or in the name of
others may communicate with parties to the Contracts to verify with them to the
Agent's satisfaction the existence, amount and terms of any Contracts.
6.3 Representations and Warranties. (a) No consent of any party
(other than the Borrower) to any Contract is required, or purports to be
required, in connection with the execution, delivery and performance of this
Agreement other than any consent that has been received.
(b) Each Contract is in full force and effect and constitutes a valid
and legally enforceable obligation of the parties thereto, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or
general in nature.
(d) Neither the Borrower nor (to the best of the Borrower's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof in any manner that, in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
<PAGE> 147
9
(e) The right, title and interest of the Borrower in, to and under
the Contracts are not subject to any defenses, offsets, counterclaims or claims
that, in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(f) The Borrower has made available to the Agent a complete and
correct copy of each Contract, including all amendments, supplements and other
modifications thereto.
(g) No amount payable to the Borrower under or in connection with any
Contract is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Agent.
(h) None of the parties to any Contract is a Governmental Authority.
Schedule 1 accurately specifies all contracts, agreements, instruments or
indentures referred to in clauses (i), (ii) and (iii) of the definition of
"Contracts" in subsection 1.1.
6.4 Covenants. Except as otherwise provided in the Credit Agreement:
(a) The Borrower will perform and comply in all material respects with all its
obligations under the Contracts.
(b) The Borrower will not amend, modify, terminate or waive any
provision of any Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral.
(c) The Borrower will exercise promptly and diligently each and every
material right which it may have under each Contract (other than any right of
termination).
(d) The Borrower will deliver to the Agent a copy of each material
demand, notice or document received by it relating in any way to any Contract
that questions the validity or enforceability of such Contract.
7. Provisions Relating to Patents and Trademarks.
7.1 Representations and Warranties. (a) Schedule 2 includes all
material Patents and Patent Licenses owned by the Borrower in its own name on
the date hereof.
(b) Schedule 3 includes all material Trademarks and Trademark
Licenses owned by the Borrower in its own name on the date hereof.
(c) To the best of the Borrower's knowledge, each such Patent and
Trademark is on the date hereof valid, subsisting, unexpired, enforceable and
has not been abandoned.
(d) Except as set forth in either Schedule 2 or Schedule 3, none of
such Patents and Trademarks is on the date hereof the subject of any licensing
or franchise agreement.
(e) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of
any Patent or Trademark in any respect that could reasonably be expected to
have a Material Adverse Effect.
<PAGE> 148
10
(f) No action or proceeding is pending on the date hereof (i) seeking
to limit, cancel or question the validity of any Patent or Trademark, or (ii)
which, if adversely determined, would have a material adverse effect on the
value of any Patent or Trademark.
7.2 Covenants.
(a) The Borrower (either itself or through licensees) will (i)
continue to use each material Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force
free from any claim of abandonment for non-use, (ii) maintain as in the past
the quality of products and services offered under such Trademark, (iii) employ
such Trademark with the appropriate notice of registration, (iv) not adopt or
use any mark which is confusingly similar or a colorable imitation of such
Trademark unless the Agent, for the ratable benefit of the Lenders, shall
obtain a perfected security interest in such mark pursuant to this Agreement,
and (v) not (and not permit any licensee or sublicensee thereof to) do any act
or knowingly omit to do any act whereby such Trademark may become invalidated.
(b) The Borrower will not do any act, or omit to do any act, whereby
any material Patent may become abandoned or dedicated.
(c) The Borrower will notify the Agent and the Lenders immediately if
it knows, or has reason to know, that any application or registration relating
to any material Patent or Trademark may become abandoned or dedicated, or of
any adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office or any court or tribunal in any
country) regarding the Borrower's ownership of any material Patent or Trademark
or its right to register the same or to keep and maintain the same.
(d) Whenever the Borrower, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Patent or Trademark with the United States Patent and Trademark Office
or any similar office or agency in any other country or any political
subdivision thereof, the Borrower shall report such filing to the Agent and the
Lenders within five Business Days after the last day of the fiscal quarter in
which such filing occurs. Upon request of the Agent, the Borrower shall
execute and deliver any and all agreements, instruments, documents, and papers
as the Agent may request to evidence the Agent's and the Lenders' security
interest in any Patent or Trademark and the goodwill and general intangibles of
the Borrower relating thereto or represented thereby.
(e) The Borrower will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the material Patents and Trademarks, including, without
limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
<PAGE> 149
11
(f) In the event that any Patent or Trademark is infringed,
misappropriated or diluted by a third party, the Borrower shall (i) take such
actions as the Borrower shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark and (ii) if such Patent or
Trademark is of material economic value, promptly notify the Agent and the
Lenders after it learns thereof and sue for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover any and
all damages for such infringement, misappropriation or dilution.
8. Provisions Relating to Vehicles.
8.1 Representation and Warranty. Upon the occurrence and continuance
of an Event of Default, upon the request of the Agent, the Borrower shall
provide within 20 days of such request a complete and correct list of all
Vehicles owned by the Borrower on such date.
8.2 Covenants.
(a) Upon the occurrence and continuance of an Event of Default, no
Vehicle shall be removed from the state which has issued the certificate of
title/ownership therefor for a period in excess of 30 days.
(b) Within 30 days of the date of the Agent's request, all
applications for certificates of title/ownership indicating the Agent's first
priority security interest in the Vehicle covered by such certificate, and any
other necessary documentation, shall be filed in each office in each
jurisdiction which the Agent shall deem advisable to perfect its security
interests in the Vehicles.
9. Remedies.
9.1 Notice to Obligors and Contract Parties. Upon the request of the
Agent at any time after the occurrence and during the continuance of an Event
of Default, the Borrower shall notify obligors on the Receivables and parties
to the Contracts that the Receivables and the Contracts have been assigned to
the Agent for the ratable benefit of the Lenders and that payments in respect
thereof shall be made directly to the Agent.
9.2 Proceeds to be Turned Over To Agent. In addition to the rights
of the Agent and the Lenders specified in subsection 5.3 with respect to
payments of Receivables, if an Event of Default shall occur and be continuing,
upon written notice from the Agent, all Proceeds received by the Borrower
consisting of cash, checks and other near-cash items shall be held by the
Borrower in trust for the Agent and the Lenders, segregated from other funds of
the Borrower, and shall, forthwith upon receipt by the Borrower, be turned over
to the Agent in the exact form received by the Borrower (duly indorsed by the
Borrower to the Agent, if required) and held by the Agent in a Collateral
Account maintained under the sole dominion and control of the Agent. All
Proceeds while held by the Agent in a Collateral Account (or by the Borrower in
trust for the Agent and the Lenders) shall continue to be held as collateral
security for all the Obligations and shall not constitute payment thereof until
applied as provided in subsection 9.3.
<PAGE> 150
12
9.3 Application of Proceeds. At such intervals as may be agreed upon
by the Borrower and the Agent, or, if an Event of Default shall have occurred
and be continuing, at any time at the Agent's election, the Agent may apply all
or any part of Proceeds held in any Collateral Account in payment of the
Obligations in such order as the Agent may elect, and any part of such funds
which the Agent elects not so to apply and deems not required as collateral
security for the Obligations shall be paid over from time to time by the Agent
to the Borrower or to whomsoever may be lawfully entitled to receive the same.
Any balance of such Proceeds remaining after the Obligations shall have been
paid in full and the Commitments shall have expired or otherwise been
terminated shall be paid over to the Borrower or to whomsoever may be lawfully
entitled to receive the same.
9.4 Code Remedies. If an Event of Default shall occur and be
continuing, the Agent, on behalf of the Lenders may exercise, in addition to
all other rights and remedies granted to them in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, the Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Borrower or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Agent or any Lender or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Agent or any
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in the Borrower, which right or equity is hereby waived or released.
The Borrower further agrees, at the Agent's request, to assemble the Collateral
and make it available to the Agent at places which the Agent shall reasonably
select, whether at the Borrower's premises or elsewhere. The Agent shall apply
the net proceeds of any action taken by it pursuant to this subsection, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Agent
and the Lenders hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the Obligations,
in such order as the Agent may elect, and only after such application and after
the payment by the Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the Agent
account for the surplus, if any, to the Borrower. To the extent permitted by
applicable law, the Borrower waives all claims, damages and demands it may
acquire against the Agent or any Lender arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
<PAGE> 151
13
10. Agent's Appointment as Attorney-in-Fact; Agent's Performance of
Borrower's Obligations.
10.1 Powers. The Borrower hereby irrevocably constitutes and
appoints the Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Borrower and in the name of
the Borrower or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, the Borrower hereby gives the Agent the power and right, on behalf
of the Borrower, without notice to or assent by the Borrower, to do any or all
of the following:
(a) in the name of the Borrower or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Agent for the purpose of collecting any and all
such moneys due under any Receivable or Contract or with respect to
any other Collateral whenever payable;
(b) in the case of any Patent or Trademark, execute and
deliver any and all agreements, instruments, documents and papers as
the Agent may request to evidence the Agent's and the Lenders'
security interest in such Patent or Trademark and the goodwill and
general intangibles of the Borrower relating thereto or represented
thereby;
(c) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(d) execute, in connection with any sale provided for in
subsection 9.4, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(e) (i) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Agent or as the Agent shall direct;
(ii) ask or demand for, collect, receive payment of and receipt for,
any and all moneys, claims and other amounts due or to become due at
any time in respect of or arising out of any Collateral; (iii) sign
and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of
the Collateral; (iv) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (v) defend any suit, action or
proceeding brought against the Borrower with respect to
<PAGE> 152
14
any Collateral; (vi) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, to give such
discharges or releases as the Agent may deem appropriate; (vii) assign
any Patent or Trademark (along with the goodwill of the business to
which any such Patent or Trademark pertains), throughout the world for
such term or terms, on such conditions, and in such manner, as the
Agent shall in its sole discretion determine; and (viii) generally,
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Agent were the absolute owner thereof for all purposes, and
do, at the Agent's option and the Borrower's expense, at any time, or
from time to time, all acts and things which the Agent deems necessary
to protect, preserve or realize upon the Collateral and the Agent's
and the Lenders' security interests therein and to effect the intent
of this Agreement, all as fully and effectively as the Borrower might
do.
Anything in this subsection to the contrary notwithstanding, the Agent
agrees that it will not exercise any rights under the power of attorney
provided for in this subsection unless an Event of Default shall have occurred
and be continuing.
10.2 Performance by Agent of Borrower's Obligations. If the Borrower
fails to perform or comply with any of its agreements contained herein, the
Agent, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement.
10.3 Borrower's Reimbursement Obligation. The expenses of the Agent
incurred in connection with actions undertaken as provided in this Section,
together with interest thereon at a rate per annum equal to the rate per annum
at which interest would then be payable on past due Base Rate Loans under the
Credit Agreement, from the date of payment by the Agent to the date reimbursed
by the Borrower, shall be payable by the Borrower to the Agent on demand.
10.4 Ratification; Power Coupled With An Interest. The Borrower
hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
11. Duty of Agent. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Agent deals with similar property for its own
account. Neither the Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Borrower or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Agent and the Lenders hereunder are solely to protect the
Agent's and the Lenders' interests in the Collateral and shall not impose any
duty upon
<PAGE> 153
15
the Agent or any Lender to exercise any such powers. The Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Borrower for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
12. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, the Borrower authorizes the Agent to file financing statements with
respect to the Collateral without the signature of the Borrower in such form
and in such filing offices as the Agent reasonably determines appropriate to
perfect the security interests of the Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
13. Authority of Agent. The Borrower acknowledges that the rights
and responsibilities of the Agent under this Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Borrower, the Agent shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act
or refrain from acting, and the Borrower shall be under no obligation, or
entitlement, to make any inquiry respecting such authority.
14. Notices. All notices, requests and demands to or upon the Agent
or the Borrower hereunder shall be effected in the manner provided for in
subsection 9.2 of the Credit Agreement.
15. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Amendments in Writing; No Waiver; Cumulative Remedies.
16.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by
a written instrument executed by the Borrower and the Agent, provided that any
provision of this Agreement imposing obligations on the Borrower may be waived
by the Agent in a written instrument executed by the Agent.
16.2 No Waiver by Course of Conduct. Neither the Agent nor any
Lender shall by any act (except by a written instrument pursuant to subsection
16.1), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in
<PAGE> 154
16
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Agent or such Lender would otherwise have on any future
occasion.
16.3 Remedies Cumulative. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive
of any other rights or remedies provided by law.
17. Section Headings. The Section and subsection headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
18. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Borrower and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
<PAGE> 155
17
IN WITNESS WHEREOF, the undersigned has caused this Security Agreement
to be duly executed and delivered as of the date first above written.
TRAVEL CHANNEL ACQUISITION
CORPORATION
By:
-----------------------------
<PAGE> 156
SCHEDULE I
TO BORROWER SECURITY AGREEMENT
CONTRACTS
None
<PAGE> 157
SCHEDULE II
TO BORROWER SECURITY AGREEMENT
PATENTS AND PATENT LICENSES
None
<PAGE> 158
SCHEDULE III
TO BORROWER SECURITY AGREEMENT
TRADEMARKS AND TRADEMARK LICENSES
See Attached.
<PAGE> 159
Copyrights in all episodes of the following programs:
1. "Designs on Travel"
2. "Etc. . . . Etc"
3. "The World Through Celebrities Eyes"
4. "First Impressions"
5. "Great Getaway Game"
6. "Inside Travel"
7. "The Perfect Trip"
8. "Sense of Place"
9. "United States"
10. "Arthur Frommer's Almanac of Travel"
11. "Countries of the World"
12. "On the Agenda"
<PAGE> 160
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 1
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
AMERICAN ROAD TRIPS T07626 74/082821 1681684 WSB Sec. 8 Deadline 31-Mar-1998
Registered 30-Jul-1990 31-Mar-1992 JSP Renewal Earliest Date 30-Sep-2001
United States of America Owner: The Travel Channel, Inc. WXB Next Renewal 31-Mar-2002
Classes: 041 Grace Period Ends 30-Jun-2002
Goods: Entertainment services in the nature of a television program
series concerning travel
Remarks: Additional Attorney(s): THD THD
First Use In Commerce: 11/26/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Natn-1 Class(es): 107
Service Mark; Supplemental Register
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DESIGNS ON TRAVEL T07621 74/082822 1692008 WSB Sec. 8 Deadline 09-Jun-1998
Registered 30-Jul-1990 09-Jun-1992 JSP Renewal Earliest Date 09-Dec-2001
United States of America Owner: The Travel Channel, Inc. LJL Next Renewal 09-Jun-2002
Classes: 041 Grace Period Ends 09-Sep-2002
Goods: Entertainment services in the nature of a televised program
series featuring travel information
Remarks: Disclaimer: "travel"
First Use In Commerce: 4/18/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 161
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 2
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ETC...ETC... T07624 74/084643 1651090 WSB Sec. 8 Deadline 16-Jul-1997
Registered 03-Aug-1990 16-Jul-1991 JSP Renewal Earliest Date 16-Jan-2001
United States of America Owner: The Travel Channel, Inc. WXB Next Renewal 16-Jul-2001
Classes: 41 Grace Period Ends 16-Oct-2001
Goods: Entertainment services in the nature of a televised program
series concerning travel
Remarks: Additional Attorney(s): THD THD
First Use In Commerce: 4/1/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
FIRST IMPRESSIONS T07627 74/209918 1741812 WSB Sec. 8/15 Earliest Dt. 22-Dec-1997
Registered 07-Oct-1991 22-Dec-1992 JSP Sec. 8 Deadline 22-Dec-1998
United States of America Owner: The Travel Channel, Inc. WXB Renewal Earliest Date 22-Jun-2002
Classes: 041 Next Renewal 22-Dec-2002
Goods: Entertainment services in the nature of a televised program Grace Period Ends 22-Mar-2003
series featuring travel information
Remarks: Additional Attorney(s): THD THD
First Use In Commerce: 10/1/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 162
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 3
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
NAVIGATOR T07924 74/727084 1985853 WSB Sec. 8/15 Earliest Dt. 09-Jul-2001
Registered 11-Sep-1995 09-Jul-1996 JSP Sec. 8 Deadline 09-Jul-2002
United States of America Owner: The Travel Channel, Inc. THD Renewal Earliest Date 09-Jan-2006
Classes: 16 Next Renewal 09-Jul-2006
Goods: Monthly television program guide Grace Period Ends 09-Oct-2006
Remarks:
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
THE PERFECT TRIP T07625 74/832207 1669767 WSB Sec. 8 Deadline 24-Dec-1997
Registered 30-Jul-1990 09-Jun-1992 JSP Renewal Earliest Date 24-Jun-2001
United States of America Owner: The Travel Channel, Inc. THD Next Renewal 24-Dec-2001
Classes: 041 Grace Period Ends 24-Mar-2002
Goods: Entertainment services in the nature of travel, tourism and
adventure programs
Remarks: Additional Attorney(s): LJL LJL
First Use In Commerce: 3/19/87
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Natn-1 Class(es): 107
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 163
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 4
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
THE TRAVEL CHANNEL T07815 74/688681 1982443 JSP Sec. 8/15 Earliest Dt. 25-Jun-2001
Registered 30-Jul-1990 31-Mar-1992 JSP Sec. 8 Deadline 25-Jun-2002
United States of America Owner: The Travel Channel, Inc. THD Renewal Earliest Date 25-Dec-2005
Classes: 038 & 041 Next Renewal 25-Jun-2006
Goods: Cable television broadcasting services (C1.38); producing Grace Period Ends 25-Sep-2006
television programs (C1.41)
Remarks: Disclaimer: "channel"
First Use In Commerce: 10/13/86
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
THE TRAVEL CHANNEL T07622 73/308959 1205086 WSB Renewal Earliest Date 10-Feb-2002
Registered 30-Jul-1990 09-Jun-1992 JSP Next Renewal 10-Aug-2002
United States of America Owner: The Travel Channel, Inc. WXB Grace Period Ends 10-Nov-2002
Classes: 038
Goods: Broadcasting services to cable television systems by the
way of satellite
Remarks: Disclaimer: "channel"
First Use In Commerce: 4/1/81
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark; Supplemental Register
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 164
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 5
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
THE TRAVEL CHANNEL & DESIGN T07814 74/688684 1980990 JSP Sec. 8/15 Earliest Dt. 18-Jun-2001
Registered 14-Jun-1995 18-Jun-1996 JSP Sec. 8 Deadline 18-Jun-2002
United States of America Owner: The Travel Channel, Inc. THD Renewal Earliest Date 18-Dec-2005
Classes: 038 & 041 Next Renewal 18-Jun-2006
Grace Period Ends 18-Sep-2006
Goods: Cable television broadcasting services (C1.38); producing
television programs (C1.41)
Remarks: Disclaimer: "channel"
First Use In Commerce: 5/1/93
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
THE TRAVEL CHANNEL & DESIGN 081990 73/684289 1522924 WSB Renewal Earliest Date 31-Jul-2008
Registered 14-Sep-1987 31-Jan-1989 JSP Next Renewal 31-Jan-2009
United States of America Owner: The Travel Channel, Inc. WXB Grace Period Ends 30-Apr-2009
Classes: 38, 39, 41 & 42
Goods: Cable television/broadcasting (C1.38); travel agency
services (C1.39); producing tv programs...(C1.41); tv
shopping services (C1.42)
Remarks: Reel/Frame/Date: 1220/0311; 9/21/94
Assign/Owner Change: From Travel Marketing Corporation
</TABLE>
<PAGE> 165
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 6
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ULTIMATE WORLD TOUR T07995 74/578712 1918300 WSB Sec. 8/15 Earliest Dt. 12-Sep-2000
Registered 26-Sep-1994 12-Sep-1995 JSP Sec. 8 Deadline 12-Sep-2001
United States of America Owner: The Travel Channel, Inc. Renewal Earliest Date 12-Mar-2005
Classes: 35 Next Renewal Ends 12-Sep-2005
Grace Period Ends 12-Dec-2005
Goods: Promoting the sale of goods and services of others by
conducting an incentive program
Remarks: First Use In Commerce: 9/1/94
Natn-1 Class(es): 100, 101, 102
Client: T242 The Travel Channel
Registrant: The Travel Channel
</TABLE>
<PAGE> 166
SCHEDULE IV
TO BORROWER'S
SECURITY AGREEMENT
VEHICLES
Not Applicable.
<PAGE> 167
SCHEDULE V
TO BORROWER'S SECURITY AGREEMENT
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
a. File in the following:
Georgia - Secretary of State and DeKalb County
b. Precautionary Statement - Should file in the
following:
Virginia - Secretary of State and City of Norfolk
Florida - Secretary of State
Patent and Trademark Filings
See Attached.
Other Actions
<PAGE> 168
SCHEDULE VI
TO BORROWER'S SECURITY AGREEMENT
INVENTORY AND EQUIPMENT
Inventory and Equipment located in the following places:
1. The Travel Channel, Inc.
2690 Cumberland Parkway
Suite 500
Atlanta, GA 30339
2. Crawford Communications, Inc.
535 Plasamour Drive
Atlanta, GA 30324
<PAGE> 169
EXHIBIT D
TO THE
CREDIT AGREEMENT
FORM OF SUBSIDIARIES GUARANTEE
SUBSIDIARIES GUARANTEE, dated as of July __, 1997, made by each of the
corporations that are signatories hereto (the "Guarantors"), in favor of Union
Bank of California, N.A., as agent (in such capacity, the "Agent") for the
Lenders parties to the Credit Agreement, dated as of July 11, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Travel Channel Acquisition Corporation (the "Borrower"), the Lenders and
the Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower owns directly or indirectly all of the issued
and outstanding stock of each Guarantor;
WHEREAS, the Borrower and the Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the Loans;
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Guarantors shall have executed and delivered this Amended and Restated
Guarantee to the Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce the
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective loans to the Borrower under the Credit
Agreement, the Guarantors hereby agree with the Agent, for the ratable benefit
of the Lenders, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them
in the Credit Agreement.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole and
not to any particular provision of this Guarantee, and section and paragraph
references are to this Guarantee unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
<PAGE> 170
2
2. Guarantee (a) Subject to the provisions of paragraph 2(b),
each of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Agent, for the ratable benefit of the Lenders
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating
to the insolvency of debtors.
(c) Each Guarantor further agrees to pay any and all expenses
(including, without limitation, all fees and disbursements of counsel) which
may be paid or incurred by the Agent or any Lender in enforcing, or obtaining
advice of counsel in respect of, any rights with respect to, or collecting, any
or all of the Obligations and/or enforcing any rights with respect to, or
collecting against, such Guarantor under this Guarantee. This Guarantee shall
remain in full force and effect until the Obligations are paid in full and the
Commitments are terminated, notwithstanding that from time to time prior
thereto the Borrower may be free from any Obligations.
(d) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing this Guarantee or affecting the rights and remedies
of the Agent or any Lender hereunder.
(e) No payment or payments made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment or payments other than payments
made by such Guarantor in respect of the Obligations or payments received or
collected from such Guarantor in respect of the Obligations, remain liable for
the Obligations up to the maximum liability of such Guarantor hereunder until
the Obligations are paid in full and the Commitments are terminated.
(f) Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Agent or any Lender on account of its
liability hereunder, it will notify the Agent in writing that such payment is
made under this Guarantee for such purpose.
3. Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder who has not
paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 5 hereof.
The provisions of this Section shall in no respect limit the obligations and
liabilities
<PAGE> 171
3
of any Guarantor to the Agent and the Lenders, and each Guarantor shall remain
liable to the Agent and the Lenders for the full amount guaranteed by such
Guarantor hereunder.
4. Right of Set-off. Upon the occurrence and during the continuance
of any Event of Default, each Guarantor hereby irrevocably authorizes each
Lender at any time and from time to time without notice to such Guarantor or
any other Guarantor, any such notice being expressly waived by each Guarantor,
to set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender to or for the credit or the account of such Guarantor, or
any part thereof in such amounts as such Lender may elect, against and on
account of the obligations and liabilities of such Guarantor to such Lender
hereunder and claims of every nature and description of such Lender against
such Guarantor, in any currency, whether arising hereunder, under the Credit
Agreement, any Note, any Loan Documents or otherwise, as such Lender may elect,
whether or not the Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Agent and each Lender shall notify such Guarantor promptly of
any such set-off and the application made by the Agent or such Lender, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Agent and each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Agent or such Lender may have.
5. No Subrogation. Notwithstanding any payment or payments made by
any of the Guarantors hereunder or any set-off or application of funds of any
of the Guarantors by any Lender, (a) no Guarantor shall be entitled to be
subrogated to any of the rights of the Agent or any Lender against the Borrower
or any other Guarantor or any collateral security or guarantee or right of
offset held by any Lender for the payment of the Obligations nor (b) shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from
the Borrower or any other Guarantor in respect of payments made by such
Guarantor hereunder, in each case, until all amounts owing to the Agent and the
Lenders by the Borrower on account of the Obligations are paid in full and the
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by such Guarantor
in trust for the Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Agent in the exact form received by such Guarantor (duly indorsed by
such Guarantor to the Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Agent may
determine.
6. Amendments, etc. with respect to the Obligations; Waiver of
Rights. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to
or further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Agent or any Lender may be rescinded by such party and
any of the Obligations continued, and the Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or
guarantee
<PAGE> 172
4
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Agent or any Lender, and
the Credit Agreement, the Notes and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Agent (or the
Required Lenders, as the case may be) may deem advisable from time to time, and
any collateral security, guarantee or right of offset at any time held by the
Agent or any Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Agent nor any Lender shall have
any obligation to protect, secure, perfect or insure any Lien at any time held
by it as security for the Obligations or for this Guarantee or any property
subject thereto. When making any demand hereunder against any of the
Guarantors, the Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrower or any other Guarantor or guarantor, and
any failure by the Agent or any Lender to make any such demand or to collect
any payments from the Borrower or any such other Guarantor or guarantor or any
release of the Borrower or such other Guarantor or guarantor shall not relieve
any of the Guarantors in respect of which a demand or collection is not made or
any of the Guarantors not so released of their several obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Agent or any Lender against
any of the Guarantors. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
7. Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Agent or any Lender upon
this Guarantee or acceptance of this Guarantee, the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrower and any of the Guarantors, on
the one hand, and the Agent and the Lenders, on the other hand, likewise shall
be conclusively presumed to have been had or consummated in reliance upon this
Guarantee. Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or any of
the Guarantors with respect to the Obligations. Each Guarantor understands and
agrees that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of the Credit Agreement, any Note or any other
Loan Document, any of the Obligations or any other collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time
to time held by the Agent or any Lender (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower against the Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for
the Obligations, or of such Guarantor under this Guarantee, in bankruptcy or in
any other instance. When pursuing its rights and remedies hereunder against
any Guarantor, the Agent and any Lender may, but shall be under no obligation
to, pursue such rights and remedies as it may have against the Borrower or any
other Person or against any collateral security or guarantee for the
Obligations or any right of offset with respect thereto, and any failure by the
Agent or any Lender to pursue such other
<PAGE> 173
5
rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower or any such
other Person or any such collateral security, guarantee or right of offset,
shall not relieve such Guarantor of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Agent and the Lenders against such Guarantor. This
Guarantee shall remain in full force and effect and be binding in accordance
with and to the extent of its terms upon each Guarantor and the successors and
assigns thereof, and shall inure to the benefit of the Agent and the Lenders,
and their respective successors, indorsees, transferees and assigns, until all
the Obligations and the obligations of each Guarantor under this Guarantee
shall have been satisfied by payment in full and the Commitments shall be
terminated, notwithstanding that from time to time during the term of the
Credit Agreement the Borrower may be free from any Obligations.
8. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or
returned by the Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
9. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Agent without set- off or counterclaim in U.S.
Dollars at the office of the Agent located at Union Bank of California, N.A.,
445 South Figueroa Street, Los Angeles, CA 90071-1602 Attn: Christine A. Ball.
10. Representations and Warranties; Covenants. (a) Each Guarantor
hereby represents and warrants that the representations and warranties set
forth in Section 3 of the Credit Agreement as they relate to such Guarantor or
the Loan Documents to which such Guarantor is a party, each of which is hereby
incorporated herein by reference, are true and correct, and the Agent and each
Lender shall be entitled to rely on each of them as if they were fully set
forth herein, provided that each reference in each such representation and
warranty to the Borrower's knowledge shall, for the purposes of this paragraph
(a), be deemed to be a reference to such Guarantor's knowledge.
(b) Each Guarantor hereby covenants and agrees with the Agent
and each Lender that, from and after the Closing Date until the Obligations are
paid in full, no Loan remains outstanding and the Commitments are terminated,
such Guarantor shall take, or shall refrain from taking, as the case may be,
all actions that are necessary to be taken or not taken so that no violation of
any provision, covenant or agreement contained in Sections 5 or 6 of the Credit
Agreement, and so that no Default or Event of Default, is caused by any act or
failure to act of such Guarantor or any of its Subsidiaries.
11. Authority of Agent. Each Guarantor acknowledges that the rights
and responsibilities of the Agent under this Guarantee with respect to any
action taken by the
<PAGE> 174
6
Agent or the exercise or non-exercise by the Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guarantee shall, as between the Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the Agent
and such Guarantor, the Agent shall be conclusively presumed to be acting as
agent for the Lenders with full and valid authority so to act or refrain from
acting, and no Guarantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.
12. Notices. All notices, requests and demands to or upon the Agent,
any Lender or any Guarantor to be effective shall be in writing (or by telex,
fax or similar electronic transfer confirmed in writing) and shall be deemed to
have been duly given or made (1) when delivered by hand or (2) if given by
mail, when deposited in the mails by certified mail, return receipt requested,
or (3) if by telex, fax or similar electronic transfer, when sent and receipt
has been confirmed, addressed as follows:
(a) if to the Agent or any Lender, at its address or transmission
number for notices provided in subsection 9.2 of the Credit Agreement; and
(b) if to any Guarantor, at its address or transmission number for
notices set forth under its signature below.
The Agent, each Lender and each Guarantor may change its address and
transmission numbers for notices by notice in the manner provided in this
Section.
13. Counterparts. This Guarantee may be executed by one or more of
the Guarantors on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the counterparts of this Guarantee signed by all the
Guarantors shall be lodged with the Agent.
14. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15. Integration. This Guarantee represents the agreement of each
Guarantor with respect to the subject matter hereof and there are no promises
or representations by the Agent or any Lender relative to the subject matter
hereof not reflected herein.
16. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Guarantor and the Agent, provided that any provision of this Guarantee may
be waived by the Agent and the Lenders in a letter or agreement executed by the
Agent or by telex or facsimile transmission from the Agent.
<PAGE> 175
7
(b) Neither the Agent nor any Lender shall by any act (except by a
written instrument pursuant to paragraph 16(a) hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any
of the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Agent or such Lender would otherwise have on any future
occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
17. Section Headings. The section headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
18. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
19. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
20. Submission To Jurisdiction. Each of the Guarantors hereby
irrevocable and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the United
States of America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to pleas or
claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Guarantor at its address set forth under its signature below or at such other
address of which the Agent shall have been notified pursuant to the terms of
Section 12 hereof;
<PAGE> 176
8
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or consequential damages.
21. Acknowledgements. Each Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Guarantee and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to such Guarantor arising out of or in connection
with this Guarantee or any of the other Loan Documents, and the relationship
between the Agent and the Lenders, on one hand, and the Guarantors on the other
hand, in connection herewith or therewith is solely that of creditor and
debtor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Guarantors and the Lenders.
22. WAIVERS OF JURY TRIAL. THE GUARANTORS AND THE AGENT AND THE
LENDERS BY THEIR ACCEPTANCE HEREOF HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR
ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
<PAGE> 177
9
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
[ ]
By:___________________________________
<PAGE> 178
EXHIBIT E
TO THE
CREDIT AGREEMENT
FORM OF SUBSIDIARIES PLEDGE AGREEMENT
SUBSIDIARIES PLEDGE AGREEMENT, dated as of July __, 1997, made
by each of the corporations signatories hereto (each a "Pledgor" and
collectively the "Pledgors") in favor of Union Bank of California, N.A., as
Agent (in such capacity, the "Agent") for the Lenders parties to the Credit
Agreement, dated as of July 11, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Travel Channel
Acquisition Corporation, a Delaware corporation (the "Borrower"), the Agent and
such Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower that each Pledgor guarantee
payment and performance of the Borrower's obligations under the Credit
Agreement, the Notes and the other Loan Documents; and
WHEREAS, in satisfaction of such condition, each Pledgor has entered
into the Subsidiaries Guarantee of even date herewith for the benefit of the
Agent and the Lenders; and
WHEREAS, each Pledgor is the legal and beneficial owner of the shares
of Pledged Stock (as hereinafter defined) hereby pledged by such Pledgor;
WHEREAS, each Pledgor is the legal and beneficial owner of each of the
Pledged Notes (as hereinafter defined) hereby pledged by such Pledgor; and
WHEREAS, it is a further condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower under the Credit
Agreement that each Pledgor shall have executed and delivered this Pledge
Agreement to secure payment and performance of each Pledgor's obligations under
the Subsidiaries Guarantee.
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans to the Borrower, each Pledgor hereby
agrees with the Agent, for the ratable benefit of the Lenders, as follows:
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1. Defined Terms. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in effect in
the State of New York.
"Collateral": the Pledged Stock, the Pledged Notes and all Proceeds.
"Collateral Account": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders only as provided in
subsection 10(a).
"Issuers": the collective reference to the companies identified on
Schedule 1 attached hereto as the issuers of the Pledged Stock; individually,
each an "Issuer."
"Obligors": the collective reference to the companies identified on
Schedule 2 hereto, as such Schedule may be amended from time to time.
"Pledged Notes": the promissory note or notes of the Obligors
identified on Schedule 2, together with all substitutes, replacements or
refinancings thereto that may be issued or granted by any Obligor to any
Pledgor while this Agreement is in effect.
"Pledged Securities": collectively, the Pledged Notes and the Pledged
Stock.
"Pledged Stock": the shares of capital stock listed on Schedule 1
hereto, together with all stock certificates, options or rights of any nature
whatsoever that may be issued or granted by any Issuer to any Pledgor in
respect of the Pledged Stock while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York on
the date hereof and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Stock, collections thereon or
distributions with respect thereto.
"Secured Obligations": the collective reference to (a) the
Obligations and (b) all obligations and liabilities of each Pledgor which may
arise under or in connection with this Agreement or any other Loan Document to
which any such Pledgor is a party, whether on account of reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Agent or to
the Lenders that are required to be paid by any Pledgor pursuant to the terms
of this Agreement or any other Loan Document to which such Pledgor is a party).
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"Securities Act": the Securities Act of 1933, as amended.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. Each Pledgor hereby delivers
to the Agent, for the ratable benefit of the Lenders, all the Pledged Stock
listed with its name on Schedule 1 hereto, and all of the Pledged Notes listed
with it's name on Schedule 2 hereto, and hereby grants to Agent, for the
ratable benefit of the Lenders, a first security interest in the Collateral, as
collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the
Secured Obligations.
3. Stock Powers. (a) Concurrently with the delivery to the Agent of
each certificate representing one or more shares of Pledged Stock to the Agent,
the relevant Pledgor shall deliver an undated stock power covering such
certificate, duly executed in blank by such Pledgor with, if the Agent so
requests, signature guaranteed.
(b) Each Pledgor shall deliver to the Agent an Acknowledgement and
Consent, substantially in the form of Exhibit A to this Agreement, duly
executed by the Pledgor of such Pledged Stock.
4. Indorsement; Acknowledgement and Consent. Concurrently with the
delivery of each Pledged Note to the Agent pursuant to Section 2 of this
Agreement such Pledged Note shall be indorsed by the appropriate Pledgor as
follows:
Pay to the order of Bearer
[NAME OF PLEDGOR]
By: _____________________
Title: ____________________;
5. Payments Under the Pledged Notes. Unless an Event of Default
shall have occurred and be continuing, each Pledgor shall be permitted to
receive all regularly scheduled payments of principal and interest under the
Pledged Notes, as such payments become due. If an Event of Default shall occur
and be continuing, and the Agent shall have given notice to such Pledgor of the
Agent's intent to exercise its rights pursuant to Section 9 or 10 below, all
payments of principal and interest under the Pledged Notes shall be paid to the
Agent, who shall hold the same as Collateral hereunder. If such Pledgor shall
receive any such payments, such Pledgor shall hold the same in trust for the
Agent and the Lenders, segregated from
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other funds of such Pledgor, and deliver the same forthwith to the Agent in the
exact form received, duly indorsed by such Pledgor to the Agent, if required.
6. Representations and Warranties. Each Pledgor represents and
warrants that:
(a) The shares of Pledged Stock of such Pledgor constitute all the
issued and outstanding shares of all classes of the capital stock of the
Issuers thereof.
(b) The Pledged Notes of such Pledgor listed on Schedule 2 hereto
constitute all of the issued and outstanding promissory notes payable to such
Pledgor other than Excluded Investments.
(c) All the shares of such Pledged Stock have been duly and validly
issued and are fully paid and nonassessable; and each of such Pledged Notes has
been duly and validly issued and such Pledged Notes and each document and
instrument that secures or guarantees payment of such Pledged Note is, to the
best knowledge of the Pledgor of each such Pledged Note, the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with its
terms, except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing; and none of the Pledged Notes is subject to any right of
counterclaim or offset whatsoever.
(d) Such Pledgor is the record and beneficial owner of, and has
good and marketable title to the Pledged Securities, free of any and all Liens
or options in favor of, or claims of, any other Person, except the security
interest created by this Agreement.
(e) Upon delivery to the Agent of the stock certificates
evidencing the Pledged Stock and the Pledged Notes, the security interest
created by this Agreement will constitute a valid, perfected first priority
security interest in the Collateral granted by such Pledgor, enforceable in
accordance with its terms against all creditors of such Pledgor and any Persons
purporting to purchase any Collateral from such Pledgor, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.
(f) Such Pledgor has obtained from each Issuer and has delivered
to the Agent an Acknowledgement and Consent, substantially in the form attached
hereto as Annex A, executed by each such Issuer.
(g) No consent or authorization of, filing with or other act by or
in respect of any Person is required in connection with the execution,
delivery, performance, validity or enforceability of the Pledged Notes, and
such Pledgor has fully performed all its obligations under the Pledged Notes.
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(h) Each Pledgor has the corporate power and authority and the legal
right to execute and deliver, to perform its obligations under, and to grant
the security interest in the Collateral pursuant to, this Agreement and has
taken all necessary corporate action to authorize its execution, delivery and
performance of, and grant of the security interest in the Collateral pursuant
to, this Agreement.
(i) The execution, delivery and performance of this Agreement will
not violate any provision of any Requirement of Law or material Contractual
Obligation of any Pledgor.
(j) There exists, to the best knowledge of each Pledgor, no default
under any Pledged Note pledged by such Pledgor. The principal amount
outstanding under each Pledged Note as of the date hereof is as specified on
Schedule 1. Except as described in Schedule 1, there exists no security
interest or guarantee that secures or supports payment of the indebtedness
evidenced by any Pledged Note, and the descriptions of such security interests
and guarantees in Schedule 1 are complete and accurate in all material
respects.
7. Covenants. Each Pledgor covenants and agrees with the Agent and
the Lenders that, from and after the date of this Agreement until this
Agreement is terminated and the security interests created hereby are released:
(a) If such Pledgor shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection with
any reorganization), option or rights, whether in addition to, in substitution
of, as a conversion of, or in exchange for any shares of the Pledged Stock, or
otherwise in respect thereof, such Pledgor shall accept the same as the agent
of the Agent and the Lenders, hold the same in trust for the Agent and the
Lenders and deliver the same forthwith to the Agent in the exact form received,
duly indorsed by such Pledgor to the Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Pledgor and with, if the Agent so requests, signature guaranteed, to be held by
the Agent, subject to the terms hereof, as additional collateral security for
the Secured Obligations. Any sums paid upon or in respect of the Pledged Stock
upon the liquidation or dissolution of any Issuer shall be paid over to the
Agent to be held by it hereunder as additional collateral security for the
Secured Obligations, and in case any distribution of capital shall be made on
or in respect of the Pledged Stock or any property shall be distributed upon or
with respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall be delivered to the Agent to be held
by it hereunder as additional collateral security for the Secured Obligations.
If any sums of money or property so paid or distributed in respect of the
Pledged Stock shall be received by such Pledgor, such Pledgor shall, until such
money or property is paid or delivered to the Agent, hold such money or
property in trust for the Lenders, segregated from other funds of such Pledgor,
as additional collateral security for the Secured Obligations.
(b) Without the prior written consent of the Agent (or except as
expressly permitted under the terms of the Credit Agreement), no Pledgor will
(i) vote to enable, or take any
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other action to permit, any Issuer to issue any stock or other equity
securities of any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any stock or other equity
securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the Collateral,
(iii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Collateral, or any interest
therein, except for the security interests created by this Agreement or (iv)
enter into any agreement or undertaking restricting the right or ability of the
Pledgor or the Agent to sell, assign or transfer any of the Collateral.
(c) Each Pledgor shall maintain the security interest created by this
Agreement as a first, perfected security interest and shall defend such
security interest against claims and demands of all Persons other than the
Agent whomsoever. At any time and from time to time, upon the written request
of the Agent, and at the sole expense of such Pledgor, such Pledgor will
promptly and duly execute and deliver such further instruments and documents
and take such further actions as the Agent may reasonably request for the
purposes of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be immediately delivered to the Agent, duly endorsed in a
manner satisfactory to the Agent, to be held as Collateral pursuant to this
Agreement.
(d) Each Pledgor shall pay, and save the Agent and the Lenders
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
(e) Each Pledgor will not take or omit to take any action, the taking
or the omission of which would result in an alteration or impairment of the
Collateral or the security of this Agreement, except as otherwise permitted by
the terms of the Credit Agreement.
(f) Each Pledgor will not enter into any agreement amending or
supplementing the Collateral, except as otherwise permitted by the terms of the
Credit Agreement.
(g) Each Pledgor will not waive or release any obligation of any
party to the Collateral, except as otherwise permitted by the terms of the
Credit Agreement.
(h) Unless directed otherwise by the Agent, each Pledgor will
exercise promptly and diligently each and every material right which it may
have under the Collateral (except the right to release or cancel).
(i) Each Pledgor will not take or omit to take any action or suffer
or permit any action to be omitted or taken, the taking or omission of which
would result in any right of offset against sums payable under the Collateral.
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(j) Upon the occurrence and continuance of an Event of Default, each
Pledgor will give the Agent copies of all material notices (including notices
of default) given or received with respect to the Collateral, promptly after
giving or receiving such notices.
(k) Each Pledgor shall deliver to the Agent, in the exact form
received, to be held by the Agent, subject to the terms hereof, as additional
collateral security for the Secured Obligations of such Pledgor any additional
promissory notes made by any Obligor for the benefit of such Pledgor or other
securities, options or rights received by it in substitution or exchange for,
or as a conversion of, or in addition to, any of the Pledged Notes, except to
the extent that such constitutes an Excluded Investment, or otherwise in
respect thereof, together with an undated endorsement or power, as the case may
be, duly executed to the order of "Bearer" or in blank, as the case may be, by
such Pledgor and with, if the Agent reasonably requests, signature guaranteed.
8. Cash Dividends; Voting Rights. (a) Unless an Event of Default
shall have occurred and be continuing and the Agent shall have given notice to
a Pledgor of the Agent's intent to exercise its corresponding rights pursuant
to Section 9 below, such Pledgor shall be permitted to receive all cash
dividends paid in the normal course of business of the Issuers and consistent
with past practice, to the extent permitted in the Credit Agreement, in respect
of the Pledged Stock and to exercise all voting and corporate rights with
respect to the Pledged Stock; provided, however, that no vote shall be cast or
corporate right exercised or other action taken which, in the Agent's
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Credit Agreement, the
Notes, this Agreement or any other Loan Document.
(b) Unless an Event of Default shall have occurred and be
continuing and the Agent shall have given notice to a Pledgor of the Agent's
intent to exercise its corresponding rights pursuant to Section 9 hereof, such
Pledgor shall be permitted to receive and retain all scheduled interest and
principal payments on account of the Pledged Notes of such Pledgor.
9. Rights of the Lenders and the Agent. (a) All money Proceeds
received by the Agent hereunder shall be held by the Agent for the benefit of
the Lenders in a Collateral Account. All Proceeds while held by the Agent in a
Collateral Account (or by each Pledgor in trust for the Agent and the Lenders)
shall continue to be held as collateral security for all the Secured
Obligations and shall not constitute payment thereof until applied as provided
in subsection 10(a).
(b) If an Event of Default shall occur and be continuing and the
Agent shall give notice of its intent to exercise such rights to a Pledgor, (i)
the Agent shall have the right to receive any and all cash dividends paid in
respect of the Pledged Stock and make application thereof to the Secured
Obligations in such order as the Agent may determine, and (ii) all shares of
the Pledged Stock shall be registered in the name of the Agent or its nominee,
and the Agent or its nominee may thereafter exercise (A) all voting, corporate
and other rights pertaining to such shares of the Pledged Stock at any meeting
of shareholders of any Issuer or otherwise and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options
pertaining to such shares of the Pledged Stock as if it were the
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absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by such Pledgor or the Agent of
any right, privilege or option pertaining to such shares of the Pledged Stock,
and in connection therewith, the right to deposit and deliver any and all of
the Pledged Stock with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Agent may
determine), all without liability except to account for property actually
received by it, but the Agent shall have no duty to such Pledgor to exercise
any such right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing.
(c) Anything herein to the contrary notwithstanding, each Pledgor
shall remain liable under the Pledged Notes of such Pledgor to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder all in accordance with the terms and provisions of such Pledged
Notes. Neither the Agent nor the Lenders shall have any obligation or
liability under any Pledged Note by reason of or arising out of this Agreement
or the receipt by the Agent or the Lenders of any payment relating to such
Pledged Note pursuant hereto (other than to account for monies actually
received by it), nor shall the Agent or any of the Lenders be obligated in any
manner to perform any of the obligations of any Pledgor under or pursuant to
any Pledged Note, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Pledged Note, to present or file any claim,
to take any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to it or to which it may be entitled at
any time or times.
10. Remedies. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Secured
Obligations in such order as the Agent may elect.
(b) If an Event of Default shall occur and be continuing, the Agent,
on behalf of the Lenders, may exercise, in addition to all other rights and
remedies granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the Code. Without limiting the generality of
the foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Pledgor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker's board or office of the Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Agent or any Lender shall have the
right upon any such public sale or sales, and, to the extent permitted by
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law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption in any
Pledgor, which right or equity is hereby waived or released. The Agent shall
apply any Proceeds from time to time held by it and the net proceeds of any
such collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred in respect
thereof or incidental to the care or safekeeping of any of the Collateral or in
any way relating to the Collateral or the rights of the Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements of counsel to the Agent, to the payment in whole or in part of
the Secured Obligations, in such order as the Agent may elect, and only after
such application and after the payment by the Agent of any other amount
required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Agent account for the surplus, if any, to the
Pledgor. To the extent permitted by applicable law, each Pledgor waives all
claims, damages and demands it may acquire against the Agent or any Lender
arising out of the exercise by them of any rights hereunder. If any notice of
a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.
(c) Each Pledgor waives and agrees not to assert any rights or
privileges which it may acquire solely under Section 9-112 of the Code. Such
Pledgor shall remain liable for any deficiency if the proceeds of any sale or
other disposition of Collateral are insufficient to pay the Secured Obligations
and the fees and disbursements of any attorneys employed by the Agent or any
Lender to collect such deficiency.
11. Registration Rights; Private Sales. (a) If the Agent shall
determine to exercise its right to sell any or all of the Pledged Stock
pursuant to subsection 10(b) hereof, and if in the opinion of the Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, such Pledgor will
cause the Issuer thereof to (i) execute and deliver, and cause the directors
and officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Agent, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act,
(ii) to use its best efforts to cause the registration statement relating
thereto to become effective and to remain effective for a period of one year
from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) to make all amendments thereto and/or to
the related prospectus which, in the opinion of the Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable
thereto. Such Pledgor agrees to cause the such Issuer to comply with the
provisions of the securities or "Blue Sky" laws of any and all jurisdictions
which the Agent shall designate and to make available to its security holders,
as soon as practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Pledgor recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or
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more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Such Pledgor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Pledgor further agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section valid
and binding and in compliance with any and all other applicable Requirements of
Law. Such Pledgor further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the Agent and the
Lenders, that the Agent and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 9 shall be specifically enforceable against such
Pledgor, and such Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit Agreement.
12. Irrevocable Authorization and Instruction to Issuer. Each
Pledgor hereby authorizes and instructs each Issuer to comply with any
instruction received by it from the Agent in writing that (a) states that an
Event of Default has occurred and (b) is otherwise in accordance with the terms
of this Agreement, without any other or further instructions from such Pledgor,
and such Pledgor agrees that each Issuer shall be fully protected in so
complying.
13. Agent's Appointment as Attorney-in-Fact. (a) Each Pledgor
hereby irrevocably constitutes and appoints the Agent and any officer or agent
of the Agent, with full power of substitution, as its true and lawful
attorney-in- fact with full irrevocable power and authority in the place and
stead of such Pledgor and in the name of such Pledgor or in the Agent's own
name, from time to time in the Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer.
(b) Each Pledgor hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
subsection 13(a). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
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14. Duty of Agent. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Agent deals with similar securities and property
for its own account, except that the Agent shall have no obligation to invest
funds held in any Collateral Account and may hold the same as demand deposits.
Neither the Agent, any Lender nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Pledgor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof.
15. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, each Pledgor authorizes the Agent to file financing statements with
respect to the Collateral without the signature of such Pledgor in such form
and in such filing offices as the Agent reasonably determines appropriate to
perfect the security interests of the Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
16. Authority of Agent. Each Pledgor acknowledges that the rights
and responsibilities of the Agent under this Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Pledgor, the Agent shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act
or refrain from acting, and neither the Pledgor nor any Issuer shall be under
any obligation, or entitlement, to make any inquiry respecting such authority.
17. Notices. All notices, requests and demands to or upon the Agent
or any Pledgor to be effective shall be in writing (or by telex, fax or similar
electronic transfer confirmed in writing) and shall be deemed to have been duly
given or made (a) when delivered by hand or (b) if given by mail, when
deposited in the mails by certified mail, return receipt requested, or (c) if
by telex, fax or similar electronic transfer, when sent and receipt has been
confirmed, addressed as follows:
(i) if to the Agent, at its address or transmission number for
notices provided in subsection 9.2 of the Credit Agreement; and
(ii) if to a Pledgor, at its address or transmission number for
notices set forth under its signature below.
The Agent and each Pledgor may change their addresses and transmission numbers
for notices by notice in the manner provided in this Section.
<PAGE> 189
12
18. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
19. Return of Documents; Cooperation. (a) When this Agreement is
terminated and the security interests created hereby are released, the Agent
shall (i) return to each relevant Pledgor the Pledged Notes, (ii) execute and
deliver to such Pledgor such documents of assignment as are reasonably
necessary to terminate the Agent's security interest in the Collateral and to
advise the makers of the Pledged Notes of the termination of the Agent's rights
and security interest hereunder and (iii) return to such Pledgor the documents
delivered to the Agent as provided in Section 3. If any part of the Collateral
is released in connection with any disposition thereof expressly permitted
under the terms of the Credit Agreement, and the corresponding security
interests created hereby are released, the Agent shall take the actions under
clauses (i), (ii) and (iii) as appropriate, with respect to such release.
(b) Upon payment in full of any Pledged Note and payment of the
Proceeds thereof as provided in this Agreement, the Agent shall (i) return to
the relevant Pledgor such Pledged Note, indorsed to such Pledgor without
recourse, representation or warranty and (ii) execute and deliver to such
Pledgor such documents of assignment as are reasonably necessary to terminate
the Agent's security interest in any Collateral related to such Pledged Note.
(c) Upon the occurrence of a default or event of default under any
Pledged Note, the Agent shall cooperate reasonably with each relevant Pledgor,
at the expense of such Pledgor, in the exercise of such Pledgor's rights and
remedies under such Pledged Note and any document or instrument securing or
supporting the same.
20. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
such Pledgor and the Agent, provided that any provision of this Agreement may
be waived by the Agent and the Lenders in a letter or agreement executed by the
Agent or by telex or facsimile transmission from the Agent.
(b) Neither the Agent nor any Lender shall by any act (except by a
written instrument pursuant to subsection 20(a) hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any
of the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Agent or such Lender would otherwise have on any future
occasion.
<PAGE> 190
13
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
21. Section Headings. The section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
22. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
23. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
<PAGE> 191
14
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
[ ]
By:___________________________________
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (407) 659-4252
<PAGE> 192
ACKNOWLEDGEMENT AND CONSENT
The undersigned is an Issuer referred to in the foregoing Subsidiaries
Pledge Agreement, and each of the undersigned hereby acknowledges receipt of a
copy of the Subsidiaries Pledge Agreement dated July __, 1997, made by the
Pledgors (as defined therein) for the benefit of Union Bank of California,
N.A., as Agent (as amended, supplemented or otherwise modified from time to
time, the "Pledge Agreement"). The undersigned agrees for the benefit of the
Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in subsection 7(a) of the Pledge
Agreement.
3. The terms of subsection 11(c) of the Pledge Agreement shall apply
to it, mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 11 of the Pledge Agreement.
[ ]
By: ___________________________
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (407) 659-4252
<PAGE> 193
SCHEDULE 1
TO SUBSIDIARIES
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Issuer Class of Stock* Certificate No. No. of Shares
---------- -------------------- ------------------ ----------------
- -----------------
* Stock is assumed to be common stock unless otherwise indicated.
<PAGE> 194
SCHEDULE 2
TO SUBSIDIARIES
PLEDGE AGREEMENT
THE PLEDGED NOTES
<TABLE>
<CAPTION>
Description of Pledged Principal Amount/Interest
Note[s] Collateral Security Guarantee[s] Payment
- ------------------------ --------------------------------- ---------------------------- -------------------------
<S> <C> <C> <C>
[Promissory Note] dated Describe security agreements, Describe each guarantee. If Outstanding principal amount
__________, 19__, made mortgages, etc. Include recording none, state "None." $_____________________ipal
by _______________ to and filing information. If none,
the order of [the Pledgor] state "None." Last date to which interest
in the original principal was paid:_____________
amount of $_________ 199__
</TABLE>
<PAGE> 195
EXHIBIT F
TO THE
CREDIT AGREEMENT
FORM OF SUBSIDIARIES SECURITY AGREEMENT
SUBSIDIARIES SECURITY AGREEMENT, dated as of July __, 1997, made by
each of the corporations that are signatories hereto (each a "Pledgor" and
collectively the "Pledgors"), in favor of Union Bank of California, N.A., as
Agent (in such capacity, the "Agent") for the Lenders parties to the Credit
Agreement, dated as of July 11, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Travel Channel
Acquisition Corporation, a Delaware corporation (the "Borrower"), the Agent and
such Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
each Pledgor guarantees payment and performance of the Borrower's obligations
under the Credit Agreement and other Loan Documents;
WHEREAS, in satisfaction of such condition, each Pledgor has entered
into a Subsidiaries Guarantee of even date herewith for the benefit of the
Agent and the Lenders; and
WHEREAS, it is a further condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower under the Credit
Agreement that each Pledgor shall have executed and delivered this Security
Agreement to secure payment and performance of such Pledgor's obligations under
the Subsidiaries Guarantee.
NOW, THEREFORE, in consideration of the premises and to induce the
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans to the Borrower, each Pledgor hereby
agrees with the Agent, for the ratable benefit of the Lenders, as follows:
1. Defined Terms.
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them
in the Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Accounts, Chattel Paper,
<PAGE> 196
2
Documents, Equipment, Farm Products, General Intangibles, Instruments,
Inventory and Proceeds.
(b) The following terms shall have the following meanings:
"Agreement": this Amended and Restated Security Agreement, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2.
"Collateral Account": any collateral account established by
the Agent as provided in subsection 5.3 or subsection 9.2.
"Contracts": with respect to any Pledgor, all contracts,
agreements, instruments and indentures in any form, and portions
thereof, to which such Pledgor is a party or under which such Pledgor
has any right, title or interest or to which such Pledgor or any
property of such Pledgor is subject, as the same may from time to time
be amended, supplemented or otherwise modified, including, without
limitation, (a) all rights of such Pledgor to receive moneys due and
to become due to it thereunder or in connection therewith, (b) all
rights of such Pledgor to damages arising out of, or for, breach or
default in respect thereof and (c) all rights of such Pledgor to
perform and to exercise all remedies thereunder, except, in each case
to the extent the grant by such Pledgor of a security interest
pursuant to this Agreement in its right, title and interest in such
contract, agreement, instrument or indenture (i) is prohibited by such
contract, agreement, instrument or indenture without the consent of
any other party thereto, (ii) would give any other party to such
contract, agreement, instrument or indenture the right to terminate
its obligations thereunder, or (iii) is permitted with consent if all
necessary consents to such grant of a security interest have not been
obtained from the other parties thereto (it being understood that the
foregoing shall not be deemed to obligate such Pledgor to obtain such
consents) (the contracts, agreements, instruments or indentures
referred to in clauses (i), (ii) and (iii) which, if terminated could
reasonably be expected to have a Material Adverse Effect, are
specified on Schedule 1 attached hereto); provided, that the foregoing
limitation shall not affect, limit, restrict or impair the grant by
such Pledgor of a security interest pursuant to this Agreement in any
Account or any money or other amounts due or to become due under any
such contract, agreement, instrument or indenture.
"Patents": (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Schedule 2, and (b) all
applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any thereof referred to in
Schedule 2.
<PAGE> 197
3
"Patent License": all agreements, whether written or oral,
providing for the grant by or to the Pledgor of any right to
manufacture, use or sell any invention covered by a Patent, including,
without limitation, any thereof referred to in Schedule 2.
"Receivable": any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"Secured Obligations": the collective reference to (a) the
Obligations and (b) all obligations and liabilities of any Pledgor
which may arise under or in connection with this Agreement or any
other Loan Document to which each Pledgor is a party, whether on
account of reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Agent or to the Lenders that are
required to be paid by any Pledgor pursuant to the terms of this
Agreement or any other Loan Document to which such Pledgor is a
party).
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 3, and (b) all renewals thereof.
"Trademark License" means any agreement, written or oral,
providing for the grant by or to the Pledgor of any right to use any
Trademark, including, without limitation, any thereof referred to in
Schedule 3.
"Vehicles" means all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of
title law of any state.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, subsection and Schedule
references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
<PAGE> 198
4
2. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Secured Obligations, each
Pledgor hereby grants to the Agent for the ratable benefit of the Lenders a
security interest in all of the following property now owned or at any time
hereafter acquired by such Pledgor or in which such Pledgor now has or at any
time in the future may acquire any right, title or interest (collectively,
the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments, other than Excluded Investments;
(h) all Inventory;
(i) all Patents;
(j) all Patent Licenses;
(k) all Trademarks;
(l) all Trademark Licenses;
(m) all Vehicles;
(n) all books, records, ledgercards, files, correspondence,
competitor programs, tapes, desks, and related data processing software (owned
by any Pledgor or in which any Pledgor has an interest) that at any time
evidence or certain information pertaining to the Collateral or are otherwise
necessary or helpful in the Collection thereof or realization thereupon; and
(o) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
3. Representations and Warranties. Each Pledgor hereby represents
and warrants that:
<PAGE> 199
5
3.1 Power and Authority. Such Pledgor has the corporate power and
authority and the legal right to execute and deliver, to perform its
obligations under, and to grant the security interest in the Collateral
pursuant to, this Agreement and has taken all necessary corporate action to
authorize its execution, delivery and performance of, and grant of the security
interest in the Collateral pursuant to, this Agreement.
3.2 Title; No Other Liens. Except for the security interest granted
to the Agent for the ratable benefit of the Lenders pursuant to this Agreement
and the other liens permitted to exist on the Collateral pursuant to the Credit
Agreement, such Pledgor owns each item of the Collateral free and clear of any
and all Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Agent, for the ratable benefit of the Lenders, pursuant to this Agreement or as
permitted pursuant to the Credit Agreement.
3.3 Perfected, First Priority Security Interests. The security
interests granted pursuant to this Agreement (a) upon completion of the filings
and other actions specified on Schedule 5 will constitute perfected security
interests on the Collateral (other than Vehicles) in favor of the Agent, for
the ratable benefit of the Lenders, as collateral security for the Secured
Obligations and (b) are prior to all other Liens on the Collateral in existence
on the date hereof.
3.4 No Violation. The execution, delivery and performance of this
Agreement will not violate any provision of any Requirement of Law or material
Contractual Obligation of such Pledgor.
3.5 Inventory and Equipment. The Inventory and the Equipment are
kept at the locations listed on Schedule 6.
3.6 Chief Executive Office. The chief executive office and chief
place of business of each of the Pledgors is located at the addresses set forth
on the signature page to this Agreement.
3.7 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4. Covenants. Each Pledgor covenants and agrees with the Agent and
the Lenders that, from and after the date of this Agreement until
the Secured Obligations shall have been paid in full and the
Commitments shall have expired or otherwise been terminated:
4.1 Maintenance of Property. Such Pledgor will keep all material
Equipment and Inventory used or useful in the business of such Pledgor in good
working order and condition.
4.2 Inspection of Property; Books and Records; Discussions. Such
Pledgor will keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to the Collateral. Subject
to Section 9.15 of the Credit Agreement, such Pledgor will permit
<PAGE> 200
6
representatives of any Lender to visit and to inspect the Collateral and to
examine and make abstracts from any of its books and records and to discuss the
condition and operation of the Collateral with officers and employees of each
Pledgor and with its independent certified public accountants all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may be reasonably requested.
4.3 Maintenance of Insurance. The Pledgors will maintain insurance
on the Collateral as required under the Credit Agreement.
4.4 Payment of Obligations. Such Pledgor will pay and discharge or
otherwise satisfy before any penalty accrues thereon, all taxes, assessments
and governmental charges or levies imposed upon the Collateral or in respect of
its income or profits therefrom, nonpayment of which would cause a Material
Adverse Effect, as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect
to the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Pledgor and such proceedings do not involve any
material danger of the sale, forfeiture or loss of any of the Collateral or any
interest therein.
4.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Pledgor will maintain the security interest created
by this Agreement as a perfected security interest having the priority
described in subsection 3.3 and will defend such security interest against
claims and demands of all Persons whomsoever.
(b) At any time and from time to time, upon the written
request of the Agent, and at the sole expense of such Pledgor, such Pledgor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of any financing or continuation statements under the Uniform Commercial Code
in effect in any jurisdiction with respect to the security interests created
hereby.
4.6 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Agent, duly indorsed in a manner satisfactory to
the Agent, to be held as Collateral pursuant to this Agreement.
4.7 Changes in Locations, Name, etc. Such Pledgor will not:
(a) permit any of the Inventory or Equipment to be kept at a location
other than those listed on Schedule 6; or
(b) change the location of its chief executive office from that
specified in subsection 3.6, unless it shall have given the Agent and the
Lenders at least 30 days' prior written notice of such change;
<PAGE> 201
7
(c) change its name, identity or corporate structure to such an extent
that any financing statement filed by the Agent in connection with this
Agreement would become seriously misleading unless it shall have given the
Agent and the Lenders at least 30 days prior written notice of such change.
4.8 Further Identification of Collateral. Such Pledgor will furnish
to the Agent and the Lenders from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Agent may reasonably request, all in reasonable
detail.
4.9 Notices. Such Pledgor will advise the Agent and the Lenders
promptly, in reasonable detail, at their respective addresses for notices
provided for in the Credit Agreement, of:
(a) any Lien (other than security interests created hereby or as
permitted pursuant to subsection 6.3 of the Credit Agreement) on any of the
Collateral; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
4.10 Indemnification. Such Pledgor agrees to pay, and to save the
Agent and the Lenders harmless from, any and all liabilities, costs and
expenses to the same extent as the Borrower's obligations under subsection 9.5
of the Credit Agreement.
5. Provisions Relating to Receivables.
5.1 Each Pledgor Remains Liable under Receivables. Anything herein
to the contrary notwithstanding, each Pledgor shall remain liable under each of
the Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise to each such Receivable. Neither the Agent nor any
Lender shall have any obligation or liability under any Receivable (or any
agreement giving rise thereto) by reason of or arising out of this Agreement or
the receipt by the Agent or any Lender of any payment relating to such
Receivable pursuant hereto, nor shall the Agent or any Lender be obligated in
any manner to perform any of the obligations of such Pledgor under or pursuant
to any Receivable (or any agreement giving rise thereto), to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party under any
Receivable (or any agreement giving rise thereto), to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
5.2 Analysis of Receivables. Upon the occurrence and continuance of
an Event of Default: (a) The Agent shall have the right to make test
verifications of the Receivables in any manner and through any medium that it
reasonably considers advisable, and each Pledgor shall furnish all such
assistance and information as the Agent may require in connection with
<PAGE> 202
8
such test verifications; (b) upon the Agent's request and at the expense of
such Pledgor, such Pledgor shall cause independent public accountants or others
satisfactory to the Agent to furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables; and (c) the Agent in its own name or in the name of others may
communicate with the obligors on the Receivables to verify with them to the
Agent's satisfaction the existence, amount and terms of any Receivables.
5.3 Collections on Receivables. (a) The Agent hereby authorizes each
Pledgor to collect such Receivables, subject to the Agent's direction and
control, and the Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default. If
required by the Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by such Pledgor, (i) shall be forthwith (and, in any event, within two Business
Days) deposited by such Pledgor in the exact form received, duly indorsed by
such Pledgor to the Agent if required, in a Collateral Account maintained under
the sole dominion and control of the Agent, subject to withdrawal by the Agent
for the account of the Lenders only as provided in subsection 9.3, and (ii)
until so turned over, shall be held by such Pledgor in trust for the Agent and
the Lenders, segregated from other funds of such Pledgor.
(b) Each such deposit of Proceeds of Receivables shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(c) Upon the occurrence and during the continuance of an Event of
Default, at the Agent's request, each Pledgor shall deliver to the Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Receivables, including, without limitation,
all original orders, invoices and shipping receipts.
5.4 Representations and Warranties. (a) No amount payable to any
Pledgor under or in connection with any Receivable is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Agent.
(b) None of the obligors on any Receivable is a Governmental
Authority.
(c) The amounts represented by each Pledgor to each Lenders from time
to time (upon the Agent's request) as owing to such Pledgor in respect of the
Receivables will at such time be accurate in all material respects.
5.5 Covenants. (a) Other than in the ordinary course of business
consistent with its past practice, each Pledgor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable, (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof or (vi) fail to exercise promptly and diligently each and every
material right which it may have under each agreement giving rise to a
Receivable (other than any right of termination).
<PAGE> 203
9
(b) Each Pledgor will deliver to the Agent a copy of each material
demand, notice or document received by it that questions the validity or
enforceability of more than 5% of the aggregate amount of the then outstanding
Receivables.
6. Provisions Relating to Contracts.
6.1 Pledgor Remains Liable under Contracts. Anything herein to the
contrary notwithstanding, each Pledgor shall remain liable under each of the
Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of such Contract. Neither the Agent nor any Lender
shall have any obligation or liability under any Contract by reason of or
arising out of this Agreement or the receipt by the Agent or any such Lender of
any payment relating to such Contract pursuant hereto, nor shall the Agent or
any Lender be obligated in any manner to perform any of the obligations of such
Pledgor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party under any Contract, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
6.2 Communication With Contracting Parties. Upon the occurrence and
continuance of an Event of Default, the Agent in its own name or in the name of
others may communicate with parties to the Contracts to verify with them to the
Agent's satisfaction the existence, amount and terms of any Contracts.
6.3 Representations and Warranties. (a) No consent of any party
(other than any Pledgor) to any Contract is required, or purports to be
required, in connection with the execution, delivery and performance of this
Agreement other than any consent that has been received.
(b) Each Contract is in full force and effect and constitutes a valid
and legally enforceable obligation of the parties thereto, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or
general in nature.
(d) Each Pledgor warrants that such Pledgor is not, nor (to the best
of such Pledgor's knowledge) are any of the other parties to the Contracts, in
default in the performance or
<PAGE> 204
10
observance of any of the terms thereof, that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(e) The right, title and interest of each Pledgor in, to and under
the Contracts are not subject to any defenses, offsets, counterclaims or
claims, except, in each case, for any defenses, offsets, counterclaims and
claims that, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(f) Each Pledgor has made available to the Agent a complete and
correct copy of each Contract, including all amendments, supplements and other
modifications thereto.
(g) No amount payable to any Pledgor under or in connection with any
Contract is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Agent.
(h) None of the parties to any Contract is a Governmental Authority.
Schedule 1 accurately specifies all contracts, agreements, instruments or
indentures referred to in clauses (i), (ii) and (iii) of the definition of
"Contracts" in subsection 1.1.
6.4 Covenants. Except as otherwise provided in the Credit Agreement:
(a) each Pledgor will perform and comply in all material respects with all its
obligations under the Contracts.
(b) Each Pledgor will not amend, modify, terminate or waive any
provision of any Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral. Such
Pledgor will exercise promptly and diligently each and every material right
which it may have under each Contract (other than any right of termination).
(c) Such Pledgor will deliver to the Agent a copy of each material
demand, notice or document received by it relating in any way to any Contract
that questions the validity or enforceability of such Contract.
7. Provisions Relating to Patents and Trademarks.
7.1 Representations and Warranties. (a) Schedule 2 includes all
material Patents and Patent Licenses owned by each Pledgor in its own name on
the date hereof.
(b) Schedule 3 includes all material Trademarks and Trademark
Licenses owned by each Pledgor in its own name on the date hereof.
(c) To the best of each Pledgor's knowledge, each such Patent and
Trademark is on the date hereof valid, subsisting, unexpired, enforceable and
has not been abandoned.
(d) Except as set forth in either Schedule 2 or Schedule 3, none of
such Patents and Trademarks is on the date hereof the subject of any licensing
or franchise agreement.
<PAGE> 205
11
(e) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of
any Patent or Trademark in any respect that could reasonably be expected to
have a Material Adverse Effect.
(f) No action or proceeding is pending on the date hereof seeking to
limit, cancel or question the validity of any Patent or Trademark, or which,
if adversely determined, would have a material adverse effect on the value of
any Patent or Trademark.
7.2 Covenants.
(a) Each Pledgor (either itself or through licensees) will (i)
continue to use each material Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force
free from any claim of abandonment for non-use, (ii) maintain as in the past
the quality of products and services offered under such Trademark, (iii) employ
such Trademark with the appropriate notice of registration, (iv) not adopt or
use any mark which is confusingly similar or a colorable imitation of such
Trademark unless the Agent, for the ratable benefit of the Lenders, shall
obtain a perfected security interest in such mark pursuant to this Agreement,
and (v) not (and not permit any licensee or sublicensee thereof to) do any act
or knowingly omit to do any act whereby such Trademark may become invalidated.
(b) Each Pledgor will not do any act, or omit to do any act, whereby
any material Patent may become abandoned or dedicated.
(c) Each Pledgor will notify the Agent and the Lenders immediately if
it knows, or has reason to know, that any application or registration relating
to any material Patent or Trademark may become abandoned or dedicated, or of
any adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office or any court or tribunal in any
country) regarding such Pledgor's ownership of any material Patent or Trademark
or its right to register the same or to keep and maintain the same.
(d) Whenever each Pledgor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Patent or Trademark with the United States Patent and Trademark Office
or any similar office or agency in any other country or any political
subdivision thereof, such Pledgor shall report such filing to the Agent and the
Lenders within five Business Days after the last day of the fiscal quarter in
which such filing occurs. Upon request of the Agent, such Pledgor shall
execute and deliver any and all agreements, instruments, documents, and papers
as the Agent may request to evidence the Agent's and the Lenders' security
interest in any Patent or Trademark and the goodwill and general intangibles of
such Pledgor relating thereto or represented thereby.
(e) Each Pledgor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
<PAGE> 206
12
registration of the material Patents and Trademarks, including, without
limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(f) In the event that any Patent or Trademark included in the
Collateral is infringed, misappropriated or diluted by a third party, each
Pledgor shall (i) take such actions as such Pledgor shall reasonably deem
appropriate under the circumstances to protect such Patent or Trademark and
(ii) if such Patent or Trademark is of material economic value, promptly notify
the Agent and the Lenders after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and
to recover any and all damages for such infringement, misappropriation or
dilution.
8. Provisions Relating to Vehicles.
8.1 Representation and Warranty. Upon the occurrence and continuance
of an Event of Default, and upon the request of the Agent, each Pledgor shall
provide within 20 days of such request, a complete and correct list of all
Vehicles owned by each Pledgor on such date.
8.2 Covenants.
(a) Upon the occurrence and continuance of an Event of Default, no
Vehicle shall be removed from the state which has issued the certificate of
title/ownership therefor for a period in excess of 30 days.
(b) Within 30 days of the date of Agent's request to do so, all
applications for certificates of title/ownership indicating the Agent's first
priority security interest in the Vehicle covered by such certificate, and any
other necessary documentation, shall be filed in each office in each
jurisdiction which the Agent shall deem advisable to perfect its security
interests in the Vehicles.
9. Remedies.
9.1 Notice to Obligors and Contract Parties. Upon the request of the
Agent at any time after the occurrence and during the continuance of an Event
of Default, each Pledgor shall notify obligors on the Receivables and parties
to the Contracts that the Receivables and the Contracts have been assigned to
the Agent for the ratable benefit of the Lenders and that payments in respect
thereof shall be made directly to the Agent.
9.2 Proceeds to be Turned Over To Agent. In addition to the rights
of the Agent and the Lenders specified in subsection 5.3 with respect to
payments of Receivables, if an Event of Default shall occur and be continuing,
upon the written notice of the Agent, all Proceeds received by each Pledgor
consisting of cash, checks and other near-cash items shall be held by such
Pledgor in trust for the Agent and the Lenders, segregated from other funds of
such Pledgor, and shall, forthwith upon receipt by such Pledgor, be turned over
to the Agent in the exact form received by such Pledgor (duly indorsed by such
Pledgor to the Agent, if required) and held by the Agent in a Collateral
Account maintained under the sole dominion and control of the Agent. All
Proceeds while held by the Agent in a Collateral Account (or by a
<PAGE> 207
13
Pledgor in trust for the Agent and the Lenders) shall continue to be held as
collateral security for all the Secured Obligations and shall not constitute
payment thereof until applied as provided in subsection 9.3.
9.3 Application of Proceeds. At such intervals as may be agreed upon
by each Pledgor and the Agent, or, if an Event of Default shall have occurred
and be continuing, at any time at the Agent's election, the Agent may apply all
or any part of Proceeds held in any Collateral Account in payment of the
Secured Obligations in such order as the Agent may elect, and any part of such
funds which the Agent elects not so to apply and deems not required as
collateral security for the Secured Obligations shall be paid over from time to
time by the Agent to such Pledgor or to whomsoever may be lawfully entitled to
receive the same. Any balance of such Proceeds remaining after the Secured
Obligations shall have been paid in full and the Commitments shall have expired
or otherwise been terminated shall be paid over to such Pledgor or to
whomsoever may be lawfully entitled to receive the same.
9.4 Code Remedies. If an Event of Default shall occur and be
continuing, the Agent, on behalf of the Lenders may exercise, in addition to
all other rights and remedies granted to them in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, the Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Pledgor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Agent or any Lender or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Agent or any
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Pledgor, which right or equity is hereby waived or released.
Each Pledgor further agrees, at the Agent's request, to assemble the Collateral
and make it available to the Agent at places which the Agent shall reasonably
select, whether at such Pledgor's premises or elsewhere. The Agent shall apply
the net proceeds of any action taken by it pursuant to this subsection, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Agent
and the Lenders hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the Secured
Obligations, in such order as the Agent may elect, and only after such
application and after the payment by the Agent of any other amount required by
any provision of law, including, without limitation, Section 9- 504(1)(c) of
the Code, need the Agent account for the surplus, if any, to such Pledgor. To
the extent permitted by applicable law, each Pledgor waives all claims, damages
and demands it may acquire against the Agent or any Lender arising out of the
exercise by
<PAGE> 208
14
them of any rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition.
9.5 Waiver; Deficiency. Each Pledgor waives and agrees not to assert
any rights or privileges which it may acquire solely under Section 9-112 of the
Code. Each such Pledgor will remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay the
Secured Obligations and the fees and disbursements of any attorneys employed by
the Agent or any Lender to collect such deficiency.
10. Agent's Appointment as Attorney-in-Fact; Agent's Performance of
Pledgors' Obligations.
10.1 Powers. Each Pledgor hereby irrevocably constitutes and appoints
the Agent and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of such Pledgor and in the name of such Pledgor or in
its own name, from time to time in the Agent's discretion, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Pledgor hereby gives the
Agent the power and right, on behalf of such Pledgor, without notice to or
assent by such Pledgor, to do any or all of the following:
(a) in the name of such Pledgor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Agent for the purpose of collecting any and all
such moneys due under any Receivable or Contract or with respect to
any other Collateral whenever payable;
(b) in the case of any Patent or Trademark, execute and
deliver any and all agreements, instruments, documents and papers as
the Agent may request to evidence the Agent's and the Lenders'
security interest in such Patent or Trademark and the goodwill and
general intangibles of the Pledgor relating thereto or represented
thereby;
(c) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(d) execute, in connection with the sale provided for in
subsection 9.4 hereof, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;
and
(e) (i) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the
<PAGE> 209
15
Agent or as the Agent shall direct; (ii) ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or
arising out of any Collateral; (iii) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral; (iv)
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any thereof and to enforce any other right in respect of
any Collateral; (v) defend any suit, action or proceeding brought
against any Pledgor with respect to any Collateral; (vi) settle,
compromise or adjust any such suit, action or proceeding and, in
connection therewith, to give such discharges or releases as the Agent
may deem appropriate; (vii) assign any Patent or Trademark (along with
the goodwill of the business to which any such Patent or Trademark
pertains), throughout the world for such term or terms, on such
conditions, and in such manner, as the Agent shall in its sole
discretion determine; and (viii) generally, sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Agent were the
absolute owner thereof for all purposes, and do, at the Agent's option
and such Pledgor's expense, at any time, or from time to time, all
acts and things which the Agent deems necessary to protect, preserve
or realize upon the Collateral and the Agent's and the Lenders'
security interests therein and to effect the intent of this Agreement,
all as fully and effectively as the Pledgor might do.
Anything in this subsection to the contrary notwithstanding,
the Agent agrees that it will not exercise any rights under the power
of attorney provided for in this subsection unless an Event of Default
shall have occurred and be continuing.
10.2 Performance by Agent of Pledgors' Obligations. If any Pledgor
fails to perform or comply with any of its agreements contained herein, the
Agent, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement.
10.3 Pledgors' Reimbursement Obligation. The expenses of the Agent
incurred in connection with actions undertaken as provided in this Section,
together with interest thereon at a rate per annum equal to the rate per annum
at which interest would then be payable on past due Base Rate Loans under the
Credit Agreement, from the date of payment by the Agent to the date reimbursed
by the relevant Pledgor, shall be payable by such Pledgor to the Agent on
demand.
10.4 Ratification; Power Coupled With An Interest. Each Pledgor
hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
<PAGE> 210
16
11. Duty of Agent. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Agent deals with similar property for its own
account. Neither the Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Agent and the Lenders hereunder are solely to protect the
Agent's and the Lenders' interests in the Collateral and shall not impose any
duty upon the Agent or any Lender to exercise any such powers. The Agent and
the Lenders shall be accountable only for amounts that they actually receive as
a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Pledgor
for any act or failure to act hereunder, except for their own gross negligence
or willful misconduct.
12. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, each Pledgor authorizes the Agent to file financing statements with
respect to the Collateral without the signature of such Pledgor in such form
and in such filing offices as the Agent reasonably determines appropriate to
perfect the security interests of the Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
13. Authority of Agent. Each Pledgor acknowledges that the rights
and responsibilities of the Agent under this Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and such Pledgor, the Agent shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act
or refrain from acting, and such Pledgor shall be under no obligation, or
entitlement, to make any inquiry respecting such authority.
14. Notices. All notices, requests and demands pursuant hereto shall
be made in accordance with Section 12 of the Subsidiaries Guarantee.
15. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Amendments in Writing; No Waiver; Cumulative Remedies.
<PAGE> 211
17
16.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by
a written instrument executed by each Pledgor and the Agent, provided that any
provision of this Agreement imposing obligations on any Pledgor may be waived
by the Agent in a written instrument executed by the Agent.
16.2 No Waiver by Course of Conduct. Neither the Agent nor any Lender
shall by any act (except by a written instrument pursuant to subsection 16.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the Agent or
any Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Agent or such Lender would otherwise have
on any future occasion.
16.3 Remedies Cumulative. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
17. Section Headings. The Section and subsection headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
18. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Pledgor and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Security Agreement
to be duly executed and delivered as of the date first above written.
[ ]
By:_________________________________
<PAGE> 212
SCHEDULE 1
TO SUBSIDIARIES
SECURITY AGREEMENT
CONTRACTS
<PAGE> 213
SCHEDULE 2
TO SUBSIDIARIES
SECURITY AGREEMENT
PATENTS AND PATENT LICENSES
<PAGE> 214
SCHEDULE 3
TO SUBSIDIARIES
SECURITY AGREEMENT
TRADEMARKS AND TRADEMARK LICENSES
<PAGE> 215
SCHEDULE 4
TO SUBSIDIARIES
SECURITY AGREEMENT
VEHICLES
<PAGE> 216
SCHEDULE 5
TO SUBSIDIARIES
SECURITY AGREEMENT
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
-------------------------------
Patent and Trademark Filings
----------------------------
Other Actions
-------------
<PAGE> 217
SCHEDULE 6
TO SUBSIDIARIES
SECURITY AGREEMENT
INVENTORY AND EQUIPMENT
Item Location
---- --------
<PAGE> 218
EXHIBIT G
TO THE
CREDIT AGREEMENT
FORM OF BORROWING CERTIFICATE
[NAME OF LOAN PARTY]
Pursuant to subsection 4.1(c) of the Credit Agreement dated as
of July __, 1997 (the "Credit Agreement"; terms defined therein being used
herein as therein defined), among Travel Channel Acquisition Corporation, the
several banks and other financial institutions from time to time parties
thereto, and Union Bank of California, N.A., as Agent, the undersigned
____________ of ____________(the "Certifying Loan Party") hereby certifies as
follows:
1. The representations and warranties of the Certifying
Loan Party set forth in each of the Loan Documents to which it is a
party or which are contained in any certificate furnished by or on
behalf of the Certifying Loan Party pursuant to or in connection with
any of the Loan Documents to which it is a party are true and correct
in all material respects on and as of the date hereof with the same
effect as if made on the date hereof except for representations and
warranties expressly stated to relate to a specific earlier date, in
which case such representations and warranties are true and correct in
all material respects as of such earlier date;
2. No Default or Event of Default shall have occurred
and be continuing as of the date hereof or after giving effect to the
Loans to be made on the date hereof;
3. ___________ is and at all times since ___ __, 199_
has been, the duly elected and qualified [Assistant] Secretary of the
Certifying Loan Party and the signature set forth for such officer
below is such officer's true and genuine signature;
and the undersigned [Assistant] Secretary of the Certifying Loan Party
certifies as follows:
4. There are no liquidation or dissolution proceedings
pending or to my knowledge threatened against the Certifying Loan
Party, nor has any other event occurred adversely affecting or
threatening the continued corporate existence of the Certifying Loan
Party after the date hereof;
5. The Certifying Loan Party is a corporation duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its organization;
6. Attached hereto as Annex 1 is a correct and complete
copy of resolutions duly adopted by the Board of Directors of the
Certifying Loan Party on _______, 1997 authorizing (i) the execution,
delivery and performance of the Loan Documents to which it is a party
and (ii) the transactions contemplated by the Loan
<PAGE> 219
2
Documents to which it is a party; such resolutions have not in any way
been amended, modified, revoked or rescinded and have been in full
force and effect since their adoption to and including the date hereof
and are now in full force and effect; such resolutions are the only
corporate proceedings of the Certifying Loan Party now in force
relating to or affecting the matters referred to therein; attached
hereto as Annex 2 is a correct and complete copy of the By-Laws of the
Certifying Loan Party as in effect at all times since ____ __, 199_ to
and including the date hereof; and attached hereto as Annex 3 is a
correct and complete copy of the Certificate of Incorporation of the
Certifying Loan Party as in effect at all times since ____ __, 199_ to
and including the date hereof, and such certificate has not been
amended, repealed, modified or restated;
7. The following persons are now duly elected and
qualified officers of the Certifying Loan Party holding the offices
indicated next to their respective names below, and such officers have
held such offices with the Certifying Loan Party at all times since
the date indicated next to their respective titles to and including
the date hereof, and the signatures appearing opposite their
respective names below are the true and genuine signatures of such
officers, and each of such officers is duly authorized to execute and
deliver on behalf of the Certifying Loan Party, each of the Loan
Documents to which it is a party, and each of such officers is duly
authorized to execute and deliver on behalf of the Certifying Loan
Party any certificate or other document to be delivered by the
Certifying Loan Party pursuant to the Loan Documents to which it is a
party:
<TABLE>
<CAPTION>
Name Office Signature
---- ------ ---------
<S> <C> <C>
_________________ ______ (since ____, 19_) ____________________
_________________ ______ (since ____, 19_) ____________________
_________________ ______ (since ____, 19_) ____________________
_________________ ______ (since ____, 19_) ____________________
</TABLE>
<PAGE> 220
3
IN WITNESS WHEREOF, the undersigned have hereunto set our
names as of the date set forth below.
By:___________________________ By:__________________________
Title: Title: [Assistant] Secretary
Date: ________________, 1997
<PAGE> 221
ANNEX 1
Resolutions
ANNEX 2
By-Laws
ANNEX 3
Certificate of Incorporation
<PAGE> 222
EXHIBIT H
TO THE
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of July
__, 1997 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Travel Channel Acquisition Corporation (the
"Borrower"), the Lenders named therein and Union Bank of California, N.A., as
agent for the Lenders (in such capacity, the "Agent"). Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "Assignor")
and the Assignee identified on Schedule l hereto (the "Assignee") agree as
follows:
1. The Assignor hereby irrevocably sells and assigns to
the Assignee without recourse to the Assignor, and the Assignee hereby
irrevocably purchases and assumes from the Assignor without recourse to the
Assignor, as of the Effective Date (as defined below), the interest described
in Schedule 1 hereto (the "Assigned Interest") in and to the Assignor's rights
and obligations under the Credit Agreement with respect to those credit
facilities contained in the Credit Agreement as are set forth on Schedule 1
hereto (individually, an "Assigned Facility"; collectively, the "Assigned
Facilities"), in a principal amount for each Assigned Facility as set forth on
Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or with
respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto, other than that the
Assignor has not created any adverse claim upon the interest being assigned by
it hereunder and that such interest is free and clear of any such adverse
claim; (b) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower, any of its
Subsidiaries or any other obligor or the performance or observance by the
Borrower, any of its Subsidiaries or any other obligor of any of their
respective obligations under the Credit Agreement or any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto; and (c)
attaches any Notes held by it evidencing the Assigned Facilities and (i)
requests that the Agent, upon request by the Assignee, exchange the attached
Notes for a new Note or Notes payable to the Assignee and (ii) if the Assignor
has retained any interest in the Assigned Facility, requests that the Agent
exchange the attached Notes for a new Note or Notes payable to the Assignor, in
each case in amounts which reflect the assignment being made hereby (and after
giving effect to any other assignments which have become effective on the
Effective Date).
<PAGE> 223
2
3. The Assignee (a) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance; (b) confirms
that it has received a copy of the Credit Agreement, together with copies of
the financial statements delivered pursuant to subsection 3.3 thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (c)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto; (d) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender including,
if it is organized under the laws of a jurisdiction outside the United States,
its obligation pursuant to subsection 2.15(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance
shall be the Effective Date of Assignment described in Schedule 1 hereto (the
"Effective Date"). Following the execution of this Assignment and Acceptance,
it will be delivered to the Agent for acceptance by it and recording by the
Agent pursuant to the Credit Agreement, effective as of the Effective Date
(which shall not, unless otherwise agreed to by the Agent, be earlier than five
Business Days after the date of such acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after
the Effective Date, the Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to the Effective Date
and to the Assignee for amounts which have accrued subsequent to the Effective
Date. The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Agent for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
<PAGE> 224
3
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
<PAGE> 225
Schedule 1
to Assignment and Acceptance
Name of Assignor: __________________________________________________________
Name of Assignee: __________________________________________________________
Effective Date of Assignment: ______________________________________________
<TABLE>
<CAPTION>
Credit Principal
Facility Assigned Amount Assigned Commitment Percentage Assigned*
---------------------- -------------------- -------------------------------------
<S> <C> <C>
$_______________ ___._______________%
[Name of Assignee] [Name of Assignor]
By: ___________________________________________ By: _______________________________________
Title: Title:
Accepted: [Consented To:
UNION BANK OF CALIFORNIA N.A., as Agent TRAVEL CHANNEL ACQUISITION
CORPORATION
By: _______________________________________
By: ___________________________________________ Title:]
Title:
</TABLE>
__________________________________
* Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
<PAGE> 226
PAXSON PLEDGE AGREEMENT
PAXSON PLEDGE AGREEMENT, dated as of July 11, 1997, made by
Lowell W. Paxson, an individual residing on the date hereof at 780 South Ocean
Boulevard, Palm Beach, Florida 33480, and Second Crystal Diamond Limited
Partnership, a Nevada limited Partnership (the "Pledgors"), in favor of Union
Bank of California, N.A., as Agent (in such capacity, the "Agent") for the
Lenders parties to the Credit Agreement, dated as of July 11, 1997, (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Travel Channel Acquisition Corporation (the "Borrower"), the Agent and
such Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Pledgors are the legal and beneficial owners of the shares
of Pledged Stock (as hereinafter defined) issued by the Issuer (as hereinafter
defined); and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Pledgors shall have executed and delivered this Pledge Agreement to the
Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans under the Credit Agreement, the Pledgors
hereby agree with the Agent, for the ratable benefit of the Lenders, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in effect in the
State of New York.
"Collateral": the Pledged Stock and all Proceeds.
<PAGE> 227
2
"Collateral Account": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders only as provided in
subsection 8(a).
"Issuer": the company identified on Schedule 1 attached hereto as the
issuer of the Pledged Stock.
"Pledged Stock": the shares of capital stock listed on Schedule 1
hereto, together with all stock certificates, options or rights of any nature
whatsoever that may be issued or granted by the Issuer to the Pledgors in
respect of the Pledged Stock while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1)
of the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Stock, collections thereon or distributions with
respect thereto.
"Secured Obligations": the collective reference to (a) the Obligations
and (b) all obligations and liabilities of the Pledgors which may arise under or
in connection with this Agreement or any other Loan Document to which the
Pledgors are a party, whether on account of reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Agent or to the Lenders that are
required to be paid by the Pledgors pursuant to the terms of this Agreement or
any other Loan Document to which the Pledgors are a party).
"Securities Act": the Securities Act of 1933, as amended.
"Stockholders' Agreement": the Amended and Restated Stockholders'
Agreement of the Borrower dated as of December 22, 1994, as the same may be
amended, supplemented or otherwise modified from time to time.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. The Pledgors hereby deliver to
the Agent, for the ratable benefit of the Lenders, all the Pledged Stock and
hereby grant to Agent, for the ratable benefit of the Lenders, a first security
interest in the Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
<PAGE> 228
3
3. Stock Powers. (a) Concurrently with the delivery to the Agent of
each certificate representing one or more shares of Pledged Stock to the Agent,
the Pledgors shall deliver an undated stock power covering such certificate,
duly executed in blank by the Pledgors with, if the Agent so requests, signature
guaranteed.
(b) The Pledgors shall deliver to the Agent an Acknowledgement and
Consent, substantially in the form of Exhibit A to this Agreement, duly executed
by the Issuer of such Pledged Stock.
4. Representations and Warranties. The Pledgors represent and warrant
that:
(a) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(b) The Pledgors are the record and beneficial owners of, and have good
and marketable title to, the Pledged Stock, free of any and all Liens or options
in favor of, or claims of, any other Person, except the security interest
created by this Agreement and the terms and conditions of the Stockholders'
Agreement; provided that after consideration of the Stockholders' Agreement,
this Agreement and the laws of the State of New York contain adequate remedial
provisions for the practical realization of the rights and benefits purported to
be afforded thereby.
(c) Upon delivery to the Agent of the stock certificates evidencing the
Pledged Stock, the security interest created pursuant to this Agreement will
constitute a valid, perfected first priority security interest in the
Collateral, enforceable in accordance with its terms against all creditors of
the Pledgors and any Persons purporting to purchase any Collateral from the
Pledgors, except in each case as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) The Pledgors have obtained from the Issuer and have delivered to
the Agent an Acknowledgement and Consent, substantially in the form attached
hereto as Exhibit A, executed by the Issuer.
5. Covenants. The Pledgors covenant and agree with the Agent and the
Lenders that, from and after the date of this Agreement until this Agreement is
terminated and the security interests created hereby are released:
(a) If the Pledgors shall, as a result of their ownership of the
Pledged Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
the Pledgors shall accept the same as the agent of the Agent and the Lenders,
hold the same in
<PAGE> 229
4
trust for the Agent and the Lenders and deliver the same forthwith to the Agent
in the exact form received, duly indorsed by the Pledgors to the Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by the Pledgors and with, if the Agent so requests, signature
guaranteed, to be held by the Agent, subject to the terms hereof, as additional
collateral security for the Obligations. Any sums paid upon or in respect of the
Pledged Stock upon the liquidation or dissolution of the Issuer shall be paid
over to the Agent to be held by it hereunder as additional collateral security
for the Obligations, and in case any distribution of capital shall be made on or
in respect of the Pledged Stock or any property shall be distributed upon or
with respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of the Issuer or pursuant to the reorganization
thereof, the property so distributed shall be delivered to the Agent to be held
by it hereunder as additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect of the Pledged Stock
shall be received by the Pledgors, the Pledgors shall, until such money or
property is paid or delivered to the Agent, hold such money or property in trust
for the Lenders, segregated from other funds of the Pledgors, as additional
collateral security for the Obligations.
(b) Without the prior written consent of the Agent (or except as (i)
expressly permitted under the terms of the PCC Credit Agreement or (ii) provided
under the Stockholders' Agreement), the Pledgors will not (i) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, (ii) create, incur or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, any of the Collateral, or
any interest therein, except for the security interests created by this
Agreement or (iii) enter into any agreement or undertaking restricting the right
or ability of the Pledgors or the Agent to sell, assign or transfer any of the
Collateral.
(c) The Pledgors shall maintain the security interest created by this
Agreement as a first, perfected security interest and shall defend such security
interest against claims and demands of all Persons other than the Agent. At any
time and from time to time, upon the written request of the Agent, and at the
sole expense of the Pledgors, the Pledgors will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
the Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the Agent,
duly endorsed if necessary in a manner satisfactory to the Agent, to be held as
Collateral pursuant to this Agreement.
(d) The Pledgors shall pay, and save the Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes and any and all
recording and filing fees which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
<PAGE> 230
5
(e) The Pledgors will not take or omit to take any action, the taking
or the omission of which would result in an alteration or impairment of the
Collateral or the security of this Agreement, except as otherwise expressly
permitted under the terms of the Credit Agreement.
(f) The Pledgors will not enter into any agreement amending or
supplementing the Collateral, except as otherwise expressly permitted under the
terms of the Credit Agreement.
(g) The Pledgors will not waive or release any obligation of any party
to the Collateral, except as otherwise expressly permitted under the terms of
the Credit Agreement.
(h) Unless directed otherwise by the Agent, the Pledgors will exercise
promptly and diligently each and every material right which it may have under
the Collateral (except the right to release or cancel).
(i) The Pledgors will not take or omit to take any action or suffer or
permit any action to be omitted or taken, the taking or omission of which would
result in any right of offset against sums payable under the Collateral.
(j) Upon the occurrence and continuance of an Event of Default, the
Pledgors will give the Agent copies of all material notices (including notices
of default) given or received with respect to the Collateral, promptly after
giving or receiving such notices.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall have
occurred and be continuing and the Agent shall have given notice to the Pledgors
of the Agent's intent to exercise its corresponding rights pursuant to Section 7
below, the Pledgors shall be permitted to receive all cash dividends paid in the
normal course of business of the Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, in respect of the Pledged Stock
and to exercise all voting and corporate rights with respect to the Pledged
Stock; provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in the Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, the Notes, this Agreement or
any other Loan Document.
7. Rights of the Lenders and the Agent. (a) All money Proceeds received
by the Agent hereunder shall be held by the Agent for the benefit of the Lenders
in a Collateral Account. All Proceeds while held by the Agent in a Collateral
Account (or by the Pledgors in trust for the Agent and the Lenders) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in subsection 8(a).
(b) If an Event of Default shall occur and be continuing and the Agent
shall give notice of its intent to exercise such rights to the Pledgors, (i) the
Agent shall have the right to receive any and all cash dividends paid in respect
of the Pledged Stock and make application thereof to the Obligations in such
order as the Agent may determine, and (ii) all shares of the Pledged Stock shall
be registered in the name of the Agent or its nominee, and the Agent or its
nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to
<PAGE> 231
6
such shares of the Pledged Stock at any meeting of shareholders of the Issuer or
otherwise and (B) any and all rights of conversion, exchange, subscription and
any other rights, privileges or options pertaining to such shares of the Pledged
Stock as if it were the absolute owner thereof (including, without limitation,
the right to exchange at its discretion any and all of the Pledged Stock upon
the merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of the Issuer, or upon the exercise by the
Pledgors or the Agent of any right, privilege or option pertaining to such
shares of the Pledged Stock, and in connection therewith, the right to deposit
and deliver any and all of the Pledged Stock with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Agent may determine), all without liability except to account
for property actually received by it, but the Agent shall have no duty to the
Pledgors to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
8. Remedies. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations in
such order as the Agent may elect.
(b) If an Event of Default shall have occurred and be continuing, the
Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of the
foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Pledgors or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker's board or office of the Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in the Pledgors, which right
or equity is hereby waived or released. The Agent shall apply any Proceeds from
time to time held by it and the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred in respect thereof or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements of counsel to
the Agent, to the payment in whole or in part of the Obligations, in such order
as the Agent may elect, and only after such application and after the payment by
the Agent of any other amount required by any provision of law, including,
without limitation, Section 9-504(1)(c) of the Code, need the Agent account for
the surplus, if any, to the Pledgors. To the extent permitted by
<PAGE> 232
7
applicable law, the Pledgors waive all claims, damages and demands they may
acquire against the Agent or any Lender arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition. The
Pledgors shall remain liable for any deficiency if the proceeds of any sale or
other disposition of Collateral are insufficient to pay the Obligations and the
fees and disbursements of any attorneys employed by the Agent or any Lender to
collect such deficiency.
(c) The Pledgors waive and agree not to assert any rights or privileges
which they may acquire solely under Section 9-112 of the Code. The Pledgors
shall remain liable for any deficiency if the proceeds of any sale or other
disposition of Collateral are insufficient to pay the Secured Obligations and
the fees and disbursements of any attorneys employed by the Agent or any Lender
to collect such deficiency.
9. Registration Rights; Private Sales. (a) The Pledgors agree to cause
the Issuer to comply with the provisions of the securities or "Blue Sky" laws of
any and all jurisdictions which the Agent shall designate and to make available
to its security holders, as soon as practicable, an earnings statement (which
need not be audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) The Pledgors recognize that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgors acknowledge and
agree that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Agent shall be under no obligation
to delay a sale of any of the Pledged Stock for the period of time necessary to
permit the Issuer thereof to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if the Issuer
would agree to do so.
(c) The Pledgors further agree to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgors further agree that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Agent and the Lenders, that
the Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against the Pledgors, and the Pledgors
hereby waive and agree not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the Credit Agreement.
<PAGE> 233
8
10. Irrevocable Authorization and Instruction to Issuer. The Pledgors
hereby authorize and instruct the Issuer to comply with any instruction received
by it from the Agent in writing that (a) states that an Event of Default has
occurred and (b) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from the Pledgors, and the Pledgors
agree that the Issuer shall be fully protected in so complying.
11. Agent's Appointment as Attorney-in-Fact. (a) The Pledgors hereby
irrevocably constitute and appoint the Agent and any officer or agent of the
Agent, with full power of substitution, as their true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Pledgors and in the name of the Pledgors or in the Agent's own
name, from time to time in the Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer.
(b) The Pledgors hereby ratify all that said attorneys shall lawfully
do or cause to be done pursuant to the power of attorney granted in subsection
11(a). All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
12. Duty of Agent. The Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it in the same
manner as the Agent deals with similar securities and property for its own
account, except that the Agent shall have no obligation to invest funds held in
any Collateral Account and may hold the same as demand deposits. Neither the
Agent, any Lender nor any of their respective directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of the Pledgors or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.
13. Execution of Financing Statements. Pursuant to Section 9-402 of the
Code, the Pledgors authorize the Agent to file financing statements with respect
to the Collateral without the signature of the Pledgors in such form and in such
filing offices as the Agent reasonably determines appropriate to perfect the
security interests of the Agent under this Agreement. A carbon, photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement for filing in any jurisdiction.
14. Authority of Agent. The Pledgors acknowledge that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between
<PAGE> 234
9
the Agent and the Pledgors, the Agent shall be conclusively presumed to be
acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and neither the Pledgors nor the Issuer shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
15. Notices. All notices, requests and demands to or upon the Agent or
the Pledgors to be effective shall be in writing (or by telex, fax or similar
electronic transfer confirmed in writing) and shall be deemed to have been duly
given or made (i) when delivered by hand or (ii) if given by mail, when
deposited in the mails by certified mail, return receipt requested, or (iii) if
by telex, fax or similar electronic transfer, when sent and receipt has been
confirmed, addressed to the Agent or the Pledgors at their address or
transmission number for notices provided on the signature page hereto. The Agent
and the Pledgors may change their addresses and transmission numbers for notices
by notice in the manner provided in this Section.
16. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
17. Return of Documents; Cooperation. When this Agreement is terminated
and the security interests created hereby are released, the Agent shall (i)
execute and deliver to the Pledgors such documents of assignment as are
reasonably necessary to terminate the Agent's security interest in the
Collateral and (ii) return to the Pledgors the documents delivered to the Agent
as provided in Section 3. If any part of the Collateral is released in
connection with any disposition thereof expressly permitted under the terms of
the Credit Agreement, and the corresponding security interests created hereby
are released, the Agent shall take the actions under clauses (i) and (ii) as
appropriate, with respect to such release.
18. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Pledgors
and the Agent, provided that any provision of this Agreement may be waived by
the Agent and the Lenders in a letter or agreement executed by the Agent or by
telex or facsimile transmission from the Agent.
(b) Neither the Agent nor any Lender shall by any act (except by a
written instrument pursuant to subsection 18(a) hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
or such Lender would otherwise have on any future occasion.
<PAGE> 235
10
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
19. Section Headings. The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
20. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Pledgors and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
22. Guarantee. (a) Subject to the provisions of paragraph 22(b) below,
the Pledgors hereby unconditionally and irrevocably guarantee to the Agent, for
the ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations.
(b) The Pledgors shall have no personal liability for payment of the
Obligations, and in any action or suit to collect the Obligations the Agent and
the Lenders, for themselves and their respective successors, indorsees,
transferees and assigns, agree that under no circumstances shall any of them
seek, nor shall the Pledgors be subject to, any in personam judgment against the
Pledgors or any judgment for a deficiency but shall look solely to the security
interests hereunder and the collateral described herein for payment of the
Obligations. Nothing contained in this Section shall be construed to impair the
validity of the Obligations or this Agreement or, except as expressly set forth
above, affect or impair in any way the right of the Agent and the Lenders to
exercise their rights and remedies under the Credit Agreement, the Notes and any
other Loan Documents in accordance with their terms.
23. Regulatory Approval. (a) Notwithstanding anything herein to the
contrary, to the extent this Agreement or any other Loan Document purports to
require any Loan Party to grant to the Agent, on behalf of Lenders, a security
interest in the FCC Licenses of any Loan Party now owned or hereafter acquired,
as the case may be, the Agent, on behalf of Lenders, shall only have a security
interest in such FCC Licenses at such times and to the extent that a security
interest in such licenses is permitted under applicable law. Notwithstanding
anything to the contrary set forth herein, the Agent, on behalf of Lenders,
agrees that to the extent prior FCC approval is required pursuant to the
Communications Act for (a) the operation and effectiveness of any grant, right
or remedy hereunder or under the Security Agreements or (b) taking any action
that may be taken by the Agent hereunder or under the Security Agreements, such
grant, right, remedy or actions will be subject to such prior FCC approval
having been obtained by or in favor of the Agent, on behalf of Lenders. The
Borrower agrees that, upon an Event of Default and at the Agent's request, the
Borrower will, and will cause its Subsidiaries to, immediately file, or cause to
be filed, such applications for approval
<PAGE> 236
11
and shall take all other and further actions reasonably required by the Agent,
on behalf of Lenders, to obtain such FCC approvals or consents as are necessary
to transfer ownership and control to the Agent, on behalf of Lenders, or their
successors, assigns or designees of the FCC Licenses held by the Borrower, its
License Subsidiaries or any of its other Subsidiaries. To enforce the provisions
of this subsection, the Agent is empowered to request the appointment of a
receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the FCC an involuntary transfer of control of any such
FCC License for the purpose of seeking a bona fide purchaser to whom control
will ultimately be transferred. The Borrower hereby agrees to authorize, and to
cause each of its Subsidiaries to authorize, such an involuntary transfer of
control upon the request of the receiver so appointed, and, if the Borrower
shall refuse to authorize or cause any of its Subsidiaries to so authorize the
transfer, its approval may be required by the court. Upon the occurrence and
continuance of an Event of Default, and at the request of the Agent, the
Borrower shall further use its best efforts to assist in obtaining approval of
the FCC, if required, for any action or transactions contemplated by this
Agreement or the other Loan Documents, including, without limitation, the
preparation, execution and filing with the FCC of the assignor's or transferor's
portion of any application or applications for consent to the assignment of any
FCC License or transfer of control necessary or appropriate under the FCC's
rules and regulations for approval of the transfer or assignment of any portion
of the Collateral, together with any FCC License or other authorization.
(b) The Borrower acknowledges that the assignment or transfer of such
FCC Licenses is integral to the Lenders' realization of the value of the
Collateral, that there is no adequate remedy at law for failure by the Borrower
to comply with the provisions of this Section 24 and that such failure would not
be adequately compensable in damages, and therefore agrees that the agreements
contained in this Section 24 may be specifically enforced.
<PAGE> 237
12
(c) Notwithstanding anything to the contrary contained in this
Agreement or any other Loan Document, neither the Agent nor any Lender shall,
without first obtaining the approval of the FCC, take any action pursuant to
this Agreement or any other Loan Document which would constitute or result in
any assignment of an FCC License or any change of control of the Borrower or any
of its Subsidiaries if such assignment or change in control would require, under
then existing law (including the written rules and regulations promulgated by
the FCC), the prior approval of the FCC.
<PAGE> 238
13
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
By: /s/ Lowell W. Paxson
-----------------------------------
Lowell W. Paxson
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
SECOND CRYSTAL DIAMOND
LIMITED PARTNERSHIP
By: PAXSON ENTERPRISES, INC.,
a Nevada corporation, as managing
general partner
By: /s/ Lowell W. Paxson
-----------------------------
Lowell W. Paxson,
President
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
<PAGE> 239
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Pledge
Agreement dated July 11, 1997 made by Lowell W. Paxson and Second Crystal
Diamond Limited Partnership for the benefit of Union Bank of California, N.A.,
as Agent (the "Pledge Agreement"). The undersigned agrees for the benefit of the
Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in subsection 5(a) of the Pledge
Agreement.
3. The terms of subsection 9(c) of the Pledge Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 9 of the Pledge Agreement.
PAXSON COMMUNICATIONS CORPORATION
By: /s/
-----------------------------
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
<PAGE> 240
SCHEDULE 1
TO PAXSON
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
<TABLE>
<CAPTION>
Stock Certificate
Issuer Class of Stock* No. No. of Shares
- ----------------------------------------- -------------------- ------------------------ --------------------
<S> <C> <C> <C>
Paxson Communications Common 0733 207,624
Corporation
Paxson Communications Common PCC1097 2,000,000
Corporation
Paxson Communications Common PCC1100 1,000,000
Corporation
Paxson Communications Common 472,376(1)
Corporation
</TABLE>
- --------
(1) Additional pledge of 472,376 shares to be consummated post-closing. The
Agent may complete the missing information regarding "Stock Certificate No."
after such additional pledge takes place.
<PAGE> 241
FORM OF PCUH PLEDGE AGREEMENT
PCUH PLEDGE AGREEMENT, dated as of July 11, 1997, made by
Paxson Communications Unrestricted Holdings, Inc., a Delaware corporation (the
"Pledgor"), in favor of Union Bank of California, N.A., as Agent (in such
capacity, the "Agent") for the Lenders parties to the Credit Agreement, dated as
of July 11, 1997, (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Travel Channel Acquisition Corporation (the
"Borrower"), the Agent and such Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Pledgor is the legal and beneficial owner of the shares of
Pledged Stock (as hereinafter defined) issued by the Issuers (as hereinafter
defined); and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Pledgor shall have executed and delivered this Pledge Agreement to the Agent
for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans under the Credit Agreement, the Pledgor
hereby agrees with the Agent, for the ratable benefit of the Lenders, as
follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in effect in the
State of New York.
"Collateral": the Pledged Stock and all Proceeds.
<PAGE> 242
2
"Collateral Account": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders only as provided in
subsection 8(a).
"Issuers": the collective reference to the companies identified on
Schedule 1 attached hereto as the issuers of the Pledged Stock; individually,
each an "Issuer."
"Pledged Stock": the shares of capital stock listed on Schedule 1
hereto, together with all stock certificates, options or rights of any nature
whatsoever that may be issued or granted by any Issuer to the Pledgor in respect
of the Pledged Stock while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1)
of the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Stock, collections thereon or distributions with
respect thereto.
"Secured Obligations": the collective reference to (a) the Obligations
and (b) all obligations and liabilities of the Pledgor which may arise under or
in connection with this Agreement or any other Loan Document to which the
Pledgor is a party, whether on account of reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Agent or to the Lenders that are
required to be paid by the Pledgor pursuant to the terms of this Agreement or
any other Loan Document to which the Pledgor is a party).
"Securities Act": the Securities Act of 1933, as amended.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. The Pledgor hereby delivers to
the Agent, for the ratable benefit of the Lenders, all the Pledged Stock and
hereby grants to Agent, for the ratable benefit of the Lenders, a first security
interest in the Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
3. Stock Powers. (a) Concurrently with the delivery to the Agent of
each certificate representing one or more shares of Pledged Stock to the Agent,
the Pledgor shall deliver an undated stock power covering such certificate, duly
executed in blank by the Pledgor with, if the Agent so requests, signature
guaranteed.
<PAGE> 243
3
(b) The Pledgor shall deliver to the Agent an Acknowledgement and
Consent, substantially in the form of Exhibit A to this Agreement, duly executed
by the Issuer of such Pledged Stock.
4. Representations and Warranties. The Pledgor represents and warrants
that:
(a) The shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the capital stock of each Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) The Pledgor is the record and beneficial owner of, and has good and
marketable title to, the Pledged Stock, free of any and all Liens or options in
favor of, or claims of, any other Person, except the security interest created
by this Agreement.
(d) Upon delivery to the Agent of the stock certificates evidencing the
Pledged Stock, the security interest created pursuant to this Agreement will
constitute a valid, perfected first priority security interest in the
Collateral, enforceable in accordance with its terms against all creditors of
the Pledgor and any Persons purporting to purchase any Collateral from the
Pledgor, except in each case as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(e) The Pledgor has obtained from each Issuer and has delivered to the
Agent an Acknowledgement and Consent, substantially in the form attached hereto
as Exhibit A, executed by each such Issuer.
(f) The Pledgor is 100% owned by PCC.
5. Covenants. The Pledgor covenants and agrees with the Agent and the
Lenders that, from and after the date of this Agreement until this Agreement is
terminated and the security interests created hereby are released:
(a) If the Pledgor shall, as a result of its ownership of the Pledged
Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
the Pledgor shall accept the same as the agent of the Agent and the Lenders,
hold the same in trust for the Agent and the Lenders and deliver the same
forthwith to the Agent in the exact form received, duly indorsed by the Pledgor
to the Agent, if required, together with an
<PAGE> 244
4
undated stock power covering such certificate duly executed in blank by the
Pledgor and with, if the Agent so requests, signature guaranteed, to be held by
the Agent, subject to the terms hereof, as additional collateral security for
the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the
liquidation or dissolution of any Issuer shall be paid over to the Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Pledged Stock or any property shall be distributed upon or with respect to the
Pledged Stock pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall be delivered to the Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Stock shall be
received by the Pledgor, the Pledgor shall, until such money or property is paid
or delivered to the Agent, hold such money or property in trust for the Lenders,
segregated from other funds of the Pledgor, as additional collateral security
for the Obligations.
(b) Without the prior written consent of the Agent (or except as
expressly permitted under the terms of the Credit Agreement), the Pledgor will
not (i) vote to enable, or take any other action to permit, any Issuer to issue
any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Collateral, (iii) create, incur or permit to exist any Lien or
option in favor of, or any claim of any Person with respect to, any of the
Collateral, or any interest therein, except for the security interests created
by this Agreement or (iv) enter into any agreement or undertaking restricting
the right or ability of the Pledgor or the Agent to sell, assign or transfer any
of the Collateral.
(c) The Pledgor shall maintain the security interest created by this
Agreement as a first, perfected security interest and shall defend such security
interest against claims and demands of all Persons other than the Agent. At any
time and from time to time, upon the written request of the Agent, and at the
sole expense of the Pledgor, the Pledgor will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
the Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the Agent,
duly endorsed if necessary in a manner satisfactory to the Agent, to be held as
Collateral pursuant to this Agreement.
(d) The Pledgor shall pay, and save the Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes and any and all
recording and filing fees which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
<PAGE> 245
5
(e) The Pledgor will not take or omit to take any action, the taking or
the omission of which would result in an alteration or impairment of the
Collateral or the security of this Agreement, except as otherwise expressly
permitted under the terms of the Credit Agreement.
(f) The Pledgor will not enter into any agreement amending or
supplementing the Collateral, except as otherwise expressly permitted under the
terms of the Credit Agreement.
(g) The Pledgor will not waive or release any obligation of any party
to the Collateral, except as otherwise expressly permitted under the terms of
the Credit Agreement.
(h) Unless directed otherwise by the Agent, the Pledgor will exercise
promptly and diligently each and every material right which it may have under
the Collateral (except the right to release or cancel).
(i) The Pledgor will not take or omit to take any action or suffer or
permit any action to be omitted or taken, the taking or omission of which would
result in any right of offset against sums payable under the Collateral.
(j) Upon the occurrence and continuance of an Event of Default, the
Pledgor will give the Agent copies of all material notices (including notices of
default) given or received with respect to the Collateral, promptly after giving
or receiving such notices.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall have
occurred and be continuing and the Agent shall have given notice to the Pledgor
of the Agent's intent to exercise its corresponding rights pursuant to Section 7
below, the Pledgor shall be permitted to receive all cash dividends paid in the
normal course of business of the Issuers and consistent with past practice, to
the extent permitted in the Credit Agreement, in respect of the Pledged Stock
and to exercise all voting and corporate rights with respect to the Pledged
Stock; provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in the Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, the Notes, this Agreement or
any other Loan Document.
7. Rights of the Lenders and the Agent. (a) All money Proceeds received
by the Agent hereunder shall be held by the Agent for the benefit of the Lenders
in a Collateral Account. All Proceeds while held by the Agent in a Collateral
Account (or by the Pledgor in trust for the Agent and the Lenders) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in subsection 8(a).
(b) If an Event of Default shall occur and be continuing and the Agent
shall give notice of its intent to exercise such rights to the Pledgor, (i) the
Agent shall have the right to receive any and all cash dividends paid in respect
of the Pledged Stock and make application thereof to the Obligations in such
order as the Agent may determine, and (ii) all shares of the
<PAGE> 246
6
Pledged Stock shall be registered in the name of the Agent or its nominee, and
the Agent or its nominee may thereafter exercise (A) all voting, corporate and
other rights pertaining to such shares of the Pledged Stock at any meeting of
shareholders of any Issuer or otherwise and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options
pertaining to such shares of the Pledged Stock as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by the Pledgor or the Agent of any right, privilege
or option pertaining to such shares of the Pledged Stock, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Stock
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Agent may determine), all without
liability except to account for property actually received by it, but the Agent
shall have no duty to the Pledgor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.
8. Remedies. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations in
such order as the Agent may elect.
(b) If an Event of Default shall have occurred and be continuing, the
Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of the
foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Pledgor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker's board or office of the Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in the Pledgor, which right
or equity is hereby waived or released. The Agent shall apply any Proceeds from
time to time held by it and the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred in respect thereof or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements of counsel to
the Agent, to the
<PAGE> 247
7
payment in whole or in part of the Obligations, in such order as the Agent may
elect, and only after such application and after the payment by the Agent of any
other amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the Code, need the Agent account for the surplus, if any,
to the Pledgor. To the extent permitted by applicable law, the Pledgor waives
all claims, damages and demands it may acquire against the Agent or any Lender
arising out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition. The Pledgor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of Collateral are
insufficient to pay the Obligations and the fees and disbursements of any
attorneys employed by the Agent or any Lender to collect such deficiency.
(c) The Pledgor waives and agrees not to assert any rights or
privileges which it may acquire solely under Section 9-112 of the Code. The
Pledgor shall remain liable for any deficiency if the proceeds of any sale or
other disposition of Collateral are insufficient to pay the Secured Obligations
and the fees and disbursements of any attorneys employed by the Agent or any
Lender to collect such deficiency.
9. Registration Rights; Private Sales. (a) If the Agent shall determine
to exercise its right to sell any or all of the Pledged Stock pursuant to
Section 8(b) hereof, and if in the opinion of the Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the Pledgor will cause
the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Agent, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act,
(ii) to use its best efforts to cause the registration statement relating
thereto to become effective and to remain effective for a period of one year
from the date of the first public offering of the Pledged Stock, or that portion
thereof to be sold, and (iii) to make all amendments thereto and/or to the
related prospectus which, in the opinion of the Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto. The Pledgor agrees to cause such Issuer to comply with the provisions
of the securities or "Blue Sky" laws of any and all jurisdictions which the
Agent shall designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) The Pledgor recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that
<PAGE> 248
8
any such private sale may result in prices and other terms less favorable than
if such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Agent shall be under no obligation to delay a sale of any
of the Pledged Stock for the period of time necessary to permit the Issuer
thereof to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if such Issuer would agree to do
so.
(c) The Pledgor further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgor further agrees that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Agent and the Lenders, that
the Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against the Pledgor, and the Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
10. Irrevocable Authorization and Instruction to Issuer. The Pledgor
hereby authorizes and instructs each Issuer to comply with any instruction
received by it from the Agent in writing that (a) states that an Event of
Default has occurred and (b) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from the Pledgor, and the
Pledgor agrees that each Issuer shall be fully protected in so complying.
11. Agent's Appointment as Attorney-in-Fact. (a) The Pledgor hereby
irrevocably constitutes and appoints the Agent and any officer or agent of the
Agent, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of the Pledgor
and in the name of the Pledgor or in the Agent's own name, from time to time in
the Agent's discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
(b) The Pledgor hereby ratifies all that said attorneys shall lawfully
do or cause to be done pursuant to the power of attorney granted in subsection
11(a). All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
12. Duty of Agent. The Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it in the same
manner as the Agent deals with similar
<PAGE> 249
9
securities and property for its own account, except that the Agent shall have no
obligation to invest funds held in any Collateral Account and may hold the same
as demand deposits. Neither the Agent, any Lender nor any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
13. Execution of Financing Statements. Pursuant to Section 9-402 of the
Code, the Pledgor authorizes the Agent to file financing statements with respect
to the Collateral without the signature of the Pledgor in such form and in such
filing offices as the Agent reasonably determines appropriate to perfect the
security interests of the Agent under this Agreement. A carbon, photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement for filing in any jurisdiction.
14. Authority of Agent. The Pledgor acknowledges that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and the Pledgor, the Agent shall be conclusively presumed to be acting as
agent for the Lenders with full and valid authority so to act or refrain from
acting, and neither the Pledgor nor any Issuer shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
15. Notices. All notices, requests and demands to or upon the Agent or
the Pledgor to be effective shall be in writing (or by telex, fax or similar
electronic transfer confirmed in writing) and shall be deemed to have been duly
given or made (i) when delivered by hand or (ii) if given by mail, when
deposited in the mails by certified mail, return receipt requested, or (iii) if
by telex, fax or similar electronic transfer, when sent and receipt has been
confirmed, addressed to the Agent or the Pledgor at its address or transmission
number for notices provided on the signature page hereto. The Agent and the
Pledgor may change their addresses and transmission numbers for notices by
notice in the manner provided in this Section.
16. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
17. Return of Documents; Cooperation. (a) When this Agreement is
terminated and the security interests created hereby are released, the Agent
shall (i) execute and deliver to the
<PAGE> 250
10
Pledgor such documents of assignment as are reasonably necessary to terminate
the Agent's security interest in the Collateral and (ii) return to the Pledgor
the documents delivered to the Agent as provided in Section 3. If any part of
the Collateral is released in connection with any disposition thereof expressly
permitted under the terms of the Credit Agreement, and the corresponding
security interests created hereby are released, the Agent shall take the actions
under clauses (i) and (ii) as appropriate, with respect to such release.
18. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Pledgor and
the Agent, provided that any provision of this Agreement may be waived by the
Agent and the Lenders in a letter or agreement executed by the Agent or by telex
or facsimile transmission from the Agent.
(b) Neither the Agent nor any Lender shall by any act (except by a
written instrument pursuant to subsection 18(a) hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
or such Lender would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
19. Section Headings. The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
20. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
22. Guarantee. (a) Subject to the provisions of paragraph 22(b) below,
the Pledgor hereby unconditionally and irrevocably guarantees to the Agent, for
the ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations.
<PAGE> 251
11
(b) The Pledgor shall have no personal liability for payment of the
Obligations, and in any action or suit to collect the Obligations the Agent and
the Lenders shall not seek any in personam judgment against the Pledgor or any
judgment for a deficiency but shall look solely to the security interests
hereunder and the collateral described herein for payment of the Obligations.
Nothing contained in this Section shall be construed to impair the validity of
the Obligations or this Agreement or affect or impair in any way the right of
the Agent and the Lenders to exercise their rights and remedies under the Credit
Agreement, the Notes and any other Loan Documents in accordance with their
terms.
<PAGE> 252
12
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
PAXSON COMMUNICATIONS
UNRESTRICTED HOLDINGS, INC.
By: /s/ William L. Watson
--------------------------------------
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
<PAGE> 253
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Pledge
Agreement dated July 11, 1997 made by Paxson Communications Unrestricted
Holdings, Inc. for the benefit of Union Bank of California, N.A., as Agent (the
"Pledge Agreement"). The undersigned agrees for the benefit of the Agent and the
Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in subsection 5(a) of the Pledge
Agreement.
3. The terms of subsection 9(c) of the Pledge Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 9 of the Pledge Agreement.
TRAVEL CHANNEL ACQUISITION CORPORATION
By: /s/ William L. Watson
----------------------------------
Address for Notices:
601 Clearwater Park Road
West Palm Beach, FL 33401
Fax: (561) 659-4252
<PAGE> 254
SCHEDULE 1
TO PCUH
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
<TABLE>
<CAPTION>
Stock Certificate
Issuer Class of Stock* No. No. of Shares
- ----------------------------------------- --------------- ------------------ -------------
<S> <C> <C> <C>
Travel Channel Common ($.01 2 1,000
Acquisition Corporation par value)
</TABLE>
- ------------------------------------
*Stock is assumed to be common stock unless otherwise indicated.
<PAGE> 255
BORROWER SECURITY AGREEMENT
BORROWER SECURITY AGREEMENT, dated as of July 11, 1997, made by Travel
Channel Acquisition Corporation, a Delaware corporation, (the "Borrower") in
favor of Union Bank of California, N.A., as Agent (in such capacity, the
"Agent") for the Lenders parties to the Credit Agreement, dated as of July 11,
1997, (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the Agent and such Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Borrower shall have executed and delivered this Security Agreement to the
Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce the
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans to the Borrower, the Borrower hereby
agrees with the Agent, for the ratable benefit of the Lenders, as follows:
1. Defined Terms.
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement, and the following terms which are defined in
the Uniform Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Accounts, Chattel Paper, Documents,
Equipment, Farm Products, General Intangibles, Instruments, Inventory and
Proceeds.
(b) The following terms shall have the following meanings:
"Agreement": this Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
<PAGE> 256
2
"Collateral": as defined in Section 2.
"Collateral Account": any collateral account established by
the Agent as provided in subsection 5.3 or subsection 9.2.
"Contracts": all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which the Borrower is
a party or under which the Borrower has any right, title or interest
or to which the Borrower or any property of the Borrower is subject,
as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (a) all rights of
the Borrower to receive moneys due and to become due to it thereunder
or in connection therewith, (b) all rights of the Borrower to damages
arising out of, or for, breach or default in respect thereof and (c)
all rights of the Borrower to perform and to exercise all remedies
thereunder, except, in each case to the extent the grant by the
Borrower of a security interest pursuant to this Agreement in its
right, title and interest in such contract, agreement, instrument or
indenture (i) is prohibited by such contract, agreement, instrument or
indenture without the consent of any other party thereto, (ii) would
give any other party to such contract, agreement, instrument or
indenture the right to terminate its obligations thereunder, or (iii)
is permitted with consent if all necessary consents to such grant of a
security interest have not been obtained from the other parties
thereto (it being understood that the foregoing shall not be deemed to
obligate the Borrower to obtain such consents) (the contracts,
agreements, instruments or indentures referred to in clauses (i), (ii)
and (iii) which, if terminated could reasonably be expected to result
in a Material Adverse Effect, are specified on Schedule 1 attached
hereto); provided, that the foregoing limitation shall not affect,
limit, restrict or impair the grant by the Borrower of a security
interest pursuant to this Agreement in any Account or any money or
other amounts due or to become due under any such contract, agreement,
instrument or indenture.
"Patents": (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Schedule 2, and (b) all
applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any thereof referred to in
Schedule 2.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to the Borrower of any right to
manufacture, use or sell any invention covered by a Patent, including,
without limitation, any thereof referred to in Schedule 2.
"Receivable": any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
<PAGE> 257
3
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 3, and (b) all renewals thereof.
"Trademark License" means any agreement, written or oral,
providing for the grant by or to the Borrower of any right to use any
Trademark, including, without limitation, any thereof referred to in
Schedule 3.
"Vehicles" means all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of
title law of any state.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, subsection and Schedule
references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations, the Borrower hereby grants to
the Agent for the ratable benefit of the Lenders a security interest in all of
the following property now owned or at any time hereafter acquired by the
Borrower or in which the Borrower now has or at any time in the future may
acquire any right, title or interest (collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments, other than Excluded Investments;
<PAGE> 258
4
(h) all Inventory;
(i) all Patents;
(j) all Patent Licenses;
(k) all Trademarks;
(l) all Trademark Licenses;
(m) all Vehicles;
(n) all books, records, ledgercards, files, correspondence,
computer programs, tapes, disks, and related data processing software (owned by
the Borrower or in which it has an interest) that at any time evidence or
contain information relating to any Collateral or are otherwise necessary or
helpful on the collection thereof or realization thereupon; and
(o) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
3. Representations and Warranties. The Borrower hereby represents
and warrants that:
3.1 Title; No Other Liens. Except for the security interest granted
to the Agent for the ratable benefit of the Lenders pursuant to this Agreement
and the other Liens permitted to exist on the Collateral pursuant to the Credit
Agreement, the Borrower owns each item of the Collateral free and clear of any
and all Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Agent, for the ratable benefit of the Lenders, pursuant to this Agreement or as
are permitted pursuant to the Credit Agreement.
3.2 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 5 will constitute perfected security interests in the
Collateral (other than Vehicles) in favor of the Agent, for the ratable benefit
of the Lenders, as collateral security for the Obligations and (b) are prior to
all other Liens on the Collateral in existence on the date hereof.
3.3 Inventory and Equipment. The Inventory and the Equipment are
kept at the locations listed on Schedule 6.
<PAGE> 259
5
3.4 Chief Executive Office. The chief executive office of the
Borrower is located at:
Travel Channel Acquisition Corporation
c/o Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, Florida 33401
3.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4. Covenants. The Borrower covenants and agrees with the Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full and the Commitments shall have expired
or otherwise been terminated:
4.1 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Agent, duly indorsed in a manner satisfactory to
the Agent, to be held as Collateral pursuant to this Agreement.
4.2 Maintenance of Insurance. The Borrower will maintain insurance
on the Collateral as required under the Credit Agreement.
4.3 Maintenance of Perfected Security Interest; Further
Documentation. (a) The Borrower shall maintain the security interest created
by this Agreement as a perfected security interest having at least the priority
described in subsection 3.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) At any time and from time to time, upon the written request of
the Agent, and at the sole expense of the Borrower, the Borrower will promptly
and duly execute and deliver such further instruments and documents and take
such further actions as the Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the security interests created
hereby.
4.4 Changes in Locations, Name, etc. The Borrower will not:
(a) permit any of the Inventory or Equipment to be kept at a location
other than those listed on Schedule 6; or
(b) change the location of its chief executive office from that
specified in subsection 3.4, unless it shall have given the Agent and the
Lenders at least 30 days' prior written notice of such change;
<PAGE> 260
6
(c) change its name, identity or corporate structure to such an extent
that any financing statement filed by the Agent in connection with this
Agreement would become seriously misleading, unless it shall have given the
Agent and the Lenders at least 30 days' prior written notice of such change.
4.5 Further Identification of Collateral. The Borrower will furnish
to the Agent and the Lenders from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Agent may reasonably request, all in reasonable
detail.
4.6 Notices. The Borrower will advise the Agent and the Lenders
promptly, in reasonable detail, at their respective addresses for notices
provided for in the Credit Agreement of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5. Provisions Relating to Receivables.
5.1 Borrower Remains Liable under Receivables. Anything herein to
the contrary notwithstanding, the Borrower shall remain liable under each of
the Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise to each such Receivable. Neither the Agent nor any
Lender shall have any obligation or liability under any Receivable (or any
agreement giving rise thereto) by reason of or arising out of this Agreement or
the receipt by the Agent or any Lender of any payment relating to such
Receivable pursuant hereto, nor shall the Agent or any Lender be obligated in
any manner to perform any of the obligations of the Borrower under or pursuant
to any Receivable (or any agreement giving rise thereto), to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party under any
Receivable (or any agreement giving rise thereto), to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
5.2 Analysis of Receivables. Upon the occurrence and continuance of
an Event of Default: (a) The Agent shall have the right to make test
verifications of the Receivables in any manner and through any medium that it
reasonably considers advisable, and each Borrower shall furnish all such
assistance and information as the Agent may require in connection with such
test verifications; (b) upon the Agent's request and at the expense of such
Borrower, such Borrower shall cause independent public accountants or others
satisfactory to the Agent to furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables; and (c) the Agent in its own name
<PAGE> 261
7
or in the name of others may communicate with the obligors on the Receivables
to verify with them to the Agent's satisfaction the existence, amount and terms
of any Receivables.
5.3 Collections on Receivables. (a) The Agent hereby authorizes the
Borrower to collect the Receivables, subject to the Agent's direction and
control, and the Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default. If
required by the Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by the Borrower, (i) shall be forthwith (and, in any event, within two Business
Days) deposited by the Borrower in the exact form received, duly indorsed by
the Borrower to the Agent if required, in a Collateral Account maintained under
the sole dominion and control of the Agent, subject to withdrawal by the Agent
for the account of the Lenders only as provided in subsection 9.3, and (ii)
until so turned over, shall be held by the Borrower in trust for the Agent and
the Lenders, segregated from other funds of the Borrower.
(b) Each such deposit of Proceeds of Receivables shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(c) Upon the occurrence and continuance of an Event of Default, at
the Agent's request, the Borrower shall deliver to the Agent all original and
other documents evidencing, and relating to, the agreements and transactions
which gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.
5.4 Representations and Warranties. (a) No amount payable to the
Borrower under or in connection with any Receivable is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Agent.
(b) None of the obligors on any Receivables is a Governmental
Authority.
(c) The amounts represented by the Borrower to the Lenders from time
to time (upon the Agent's request) as owing to the Borrower in respect of the
Receivables will at such times be accurate in all material respects.
5.5 Covenants. (a) Other than in the ordinary course of business
consistent with its past practice, the Borrower will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable, (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof or (vi) fail to exercise promptly and diligently each and every
material right which it may have under each agreement giving rise to a
Receivable (other than any right of termination).
(b) The Borrower will deliver to the Agent a copy of each material
demand, notice or document received by it that questions the validity or
enforceability of more than 5% of the aggregate amount of the then outstanding
Receivables.
<PAGE> 262
8
6. Provisions Relating to Contracts.
6.1 Borrower Remains Liable under Contracts. Anything herein to the
contrary notwithstanding, the Borrower shall remain liable under each of the
Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of such Contract. Neither the Agent nor any Lender
shall have any obligation or liability under any Contract by reason of or
arising out of this Agreement or the receipt by the Agent or any such Lender of
any payment relating to such Contract pursuant hereto, nor shall the Agent or
any Lender be obligated in any manner to perform any of the obligations of the
Borrower under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party under any Contract, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
6.2 Communication With Contracting Parties. Upon the occurrence and
continuance of an Event of Default, the Agent in its own name or in the name of
others may communicate with parties to the Contracts to verify with them to the
Agent's satisfaction the existence, amount and terms of any Contracts.
6.3 Representations and Warranties. (a) No consent of any party
(other than the Borrower) to any Contract is required, or purports to be
required, in connection with the execution, delivery and performance of this
Agreement other than any consent that has been received.
(b) Each Contract is in full force and effect and constitutes a valid
and legally enforceable obligation of the parties thereto, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or
general in nature.
(d) Neither the Borrower nor (to the best of the Borrower's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof in any manner that, in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
<PAGE> 263
9
(e) The right, title and interest of the Borrower in, to and under
the Contracts are not subject to any defenses, offsets, counterclaims or claims
that, in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(f) The Borrower has made available to the Agent a complete and
correct copy of each Contract, including all amendments, supplements and other
modifications thereto.
(g) No amount payable to the Borrower under or in connection with any
Contract is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Agent.
(h) None of the parties to any Contract is a Governmental Authority.
Schedule 1 accurately specifies all contracts, agreements, instruments or
indentures referred to in clauses (i), (ii) and (iii) of the definition of
"Contracts" in subsection 1.1.
6.4 Covenants. Except as otherwise provided in the Credit Agreement:
(a) The Borrower will perform and comply in all material respects with all its
obligations under the Contracts.
(b) The Borrower will not amend, modify, terminate or waive any
provision of any Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral.
(c) The Borrower will exercise promptly and diligently each and every
material right which it may have under each Contract (other than any right of
termination).
(d) The Borrower will deliver to the Agent a copy of each material
demand, notice or document received by it relating in any way to any Contract
that questions the validity or enforceability of such Contract.
7. Provisions Relating to Patents and Trademarks.
7.1 Representations and Warranties. (a) Schedule 2 includes all
material Patents and Patent Licenses owned by the Borrower in its own name on
the date hereof.
(b) Schedule 3 includes all material Trademarks and Trademark
Licenses owned by the Borrower in its own name on the date hereof.
(c) To the best of the Borrower's knowledge, each such Patent and
Trademark is on the date hereof valid, subsisting, unexpired, enforceable and
has not been abandoned.
(d) Except as set forth in either Schedule 2 or Schedule 3, none of
such Patents and Trademarks is on the date hereof the subject of any licensing
or franchise agreement.
(e) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of
any Patent or Trademark in any respect that could reasonably be expected to
have a Material Adverse Effect.
<PAGE> 264
10
(f) No action or proceeding is pending on the date hereof (i) seeking
to limit, cancel or question the validity of any Patent or Trademark, or (ii)
which, if adversely determined, would have a material adverse effect on the
value of any Patent or Trademark.
7.2 Covenants.
(a) The Borrower (either itself or through licensees) will (i)
continue to use each material Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force
free from any claim of abandonment for non-use, (ii) maintain as in the past
the quality of products and services offered under such Trademark, (iii) employ
such Trademark with the appropriate notice of registration, (iv) not adopt or
use any mark which is confusingly similar or a colorable imitation of such
Trademark unless the Agent, for the ratable benefit of the Lenders, shall
obtain a perfected security interest in such mark pursuant to this Agreement,
and (v) not (and not permit any licensee or sublicensee thereof to) do any act
or knowingly omit to do any act whereby such Trademark may become invalidated.
(b) The Borrower will not do any act, or omit to do any act, whereby
any material Patent may become abandoned or dedicated.
(c) The Borrower will notify the Agent and the Lenders immediately if
it knows, or has reason to know, that any application or registration relating
to any material Patent or Trademark may become abandoned or dedicated, or of
any adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office or any court or tribunal in any
country) regarding the Borrower's ownership of any material Patent or Trademark
or its right to register the same or to keep and maintain the same.
(d) Whenever the Borrower, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Patent or Trademark with the United States Patent and Trademark Office
or any similar office or agency in any other country or any political
subdivision thereof, the Borrower shall report such filing to the Agent and the
Lenders within five Business Days after the last day of the fiscal quarter in
which such filing occurs. Upon request of the Agent, the Borrower shall
execute and deliver any and all agreements, instruments, documents, and papers
as the Agent may request to evidence the Agent's and the Lenders' security
interest in any Patent or Trademark and the goodwill and general intangibles of
the Borrower relating thereto or represented thereby.
(e) The Borrower will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the material Patents and Trademarks, including, without
limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
<PAGE> 265
11
(f) In the event that any Patent or Trademark is infringed,
misappropriated or diluted by a third party, the Borrower shall (i) take such
actions as the Borrower shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark and (ii) if such Patent or
Trademark is of material economic value, promptly notify the Agent and the
Lenders after it learns thereof and sue for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover any and
all damages for such infringement, misappropriation or dilution.
8. Provisions Relating to Vehicles.
8.1 Representation and Warranty. Upon the occurrence and continuance
of an Event of Default, upon the request of the Agent, the Borrower shall
provide within 20 days of such request a complete and correct list of all
Vehicles owned by the Borrower on such date.
8.2 Covenants.
(a) Upon the occurrence and continuance of an Event of Default, no
Vehicle shall be removed from the state which has issued the certificate of
title/ownership therefor for a period in excess of 30 days.
(b) Within 30 days of the date of the Agent's request, all
applications for certificates of title/ownership indicating the Agent's first
priority security interest in the Vehicle covered by such certificate, and any
other necessary documentation, shall be filed in each office in each
jurisdiction which the Agent shall deem advisable to perfect its security
interests in the Vehicles.
9. Remedies.
9.1 Notice to Obligors and Contract Parties. Upon the request of the
Agent at any time after the occurrence and during the continuance of an Event
of Default, the Borrower shall notify obligors on the Receivables and parties
to the Contracts that the Receivables and the Contracts have been assigned to
the Agent for the ratable benefit of the Lenders and that payments in respect
thereof shall be made directly to the Agent.
9.2 Proceeds to be Turned Over To Agent. In addition to the rights
of the Agent and the Lenders specified in subsection 5.3 with respect to
payments of Receivables, if an Event of Default shall occur and be continuing,
upon written notice from the Agent, all Proceeds received by the Borrower
consisting of cash, checks and other near-cash items shall be held by the
Borrower in trust for the Agent and the Lenders, segregated from other funds of
the Borrower, and shall, forthwith upon receipt by the Borrower, be turned over
to the Agent in the exact form received by the Borrower (duly indorsed by the
Borrower to the Agent, if required) and held by the Agent in a Collateral
Account maintained under the sole dominion and control of the Agent. All
Proceeds while held by the Agent in a Collateral Account (or by the Borrower in
trust for the Agent and the Lenders) shall continue to be held as collateral
security for all the Obligations and shall not constitute payment thereof until
applied as provided in subsection 9.3.
<PAGE> 266
12
9.3 Application of Proceeds. At such intervals as may be agreed upon
by the Borrower and the Agent, or, if an Event of Default shall have occurred
and be continuing, at any time at the Agent's election, the Agent may apply all
or any part of Proceeds held in any Collateral Account in payment of the
Obligations in such order as the Agent may elect, and any part of such funds
which the Agent elects not so to apply and deems not required as collateral
security for the Obligations shall be paid over from time to time by the Agent
to the Borrower or to whomsoever may be lawfully entitled to receive the same.
Any balance of such Proceeds remaining after the Obligations shall have been
paid in full and the Commitments shall have expired or otherwise been
terminated shall be paid over to the Borrower or to whomsoever may be lawfully
entitled to receive the same.
9.4 Code Remedies. If an Event of Default shall occur and be
continuing, the Agent, on behalf of the Lenders may exercise, in addition to
all other rights and remedies granted to them in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, the Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Borrower or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Agent or any Lender or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Agent or any
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in the Borrower, which right or equity is hereby waived or released.
The Borrower further agrees, at the Agent's request, to assemble the Collateral
and make it available to the Agent at places which the Agent shall reasonably
select, whether at the Borrower's premises or elsewhere. The Agent shall apply
the net proceeds of any action taken by it pursuant to this subsection, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Agent
and the Lenders hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the Obligations,
in such order as the Agent may elect, and only after such application and after
the payment by the Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the Agent
account for the surplus, if any, to the Borrower. To the extent permitted by
applicable law, the Borrower waives all claims, damages and demands it may
acquire against the Agent or any Lender arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
<PAGE> 267
13
10. Agent's Appointment as Attorney-in-Fact; Agent's Performance of
Borrower's Obligations.
10.1 Powers. The Borrower hereby irrevocably constitutes and
appoints the Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Borrower and in the name of
the Borrower or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, the Borrower hereby gives the Agent the power and right, on behalf
of the Borrower, without notice to or assent by the Borrower, to do any or all
of the following:
(a) in the name of the Borrower or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Agent for the purpose of collecting any and all
such moneys due under any Receivable or Contract or with respect to
any other Collateral whenever payable;
(b) in the case of any Patent or Trademark, execute and
deliver any and all agreements, instruments, documents and papers as
the Agent may request to evidence the Agent's and the Lenders'
security interest in such Patent or Trademark and the goodwill and
general intangibles of the Borrower relating thereto or represented
thereby;
(c) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(d) execute, in connection with any sale provided for in
subsection 9.4, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(e) (i) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Agent or as the Agent shall direct;
(ii) ask or demand for, collect, receive payment of and receipt for,
any and all moneys, claims and other amounts due or to become due at
any time in respect of or arising out of any Collateral; (iii) sign
and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of
the Collateral; (iv) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (v) defend any suit, action or
proceeding brought against the Borrower with respect to
<PAGE> 268
14
any Collateral; (vi) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, to give such
discharges or releases as the Agent may deem appropriate; (vii) assign
any Patent or Trademark (along with the goodwill of the business to
which any such Patent or Trademark pertains), throughout the world for
such term or terms, on such conditions, and in such manner, as the
Agent shall in its sole discretion determine; and (viii) generally,
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Agent were the absolute owner thereof for all purposes, and
do, at the Agent's option and the Borrower's expense, at any time, or
from time to time, all acts and things which the Agent deems necessary
to protect, preserve or realize upon the Collateral and the Agent's
and the Lenders' security interests therein and to effect the intent
of this Agreement, all as fully and effectively as the Borrower might
do.
Anything in this subsection to the contrary notwithstanding, the Agent
agrees that it will not exercise any rights under the power of attorney
provided for in this subsection unless an Event of Default shall have occurred
and be continuing.
10.2 Performance by Agent of Borrower's Obligations. If the Borrower
fails to perform or comply with any of its agreements contained herein, the
Agent, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement.
10.3 Borrower's Reimbursement Obligation. The expenses of the Agent
incurred in connection with actions undertaken as provided in this Section,
together with interest thereon at a rate per annum equal to the rate per annum
at which interest would then be payable on past due Base Rate Loans under the
Credit Agreement, from the date of payment by the Agent to the date reimbursed
by the Borrower, shall be payable by the Borrower to the Agent on demand.
10.4 Ratification; Power Coupled With An Interest. The Borrower
hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
11. Duty of Agent. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Agent deals with similar property for its own
account. Neither the Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Borrower or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Agent and the Lenders hereunder are solely to protect the
Agent's and the Lenders' interests in the Collateral and shall not impose any
duty upon
<PAGE> 269
15
the Agent or any Lender to exercise any such powers. The Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Borrower for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
12. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, the Borrower authorizes the Agent to file financing statements with
respect to the Collateral without the signature of the Borrower in such form
and in such filing offices as the Agent reasonably determines appropriate to
perfect the security interests of the Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
13. Authority of Agent. The Borrower acknowledges that the rights
and responsibilities of the Agent under this Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Borrower, the Agent shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act
or refrain from acting, and the Borrower shall be under no obligation, or
entitlement, to make any inquiry respecting such authority.
14. Notices. All notices, requests and demands to or upon the Agent
or the Borrower hereunder shall be effected in the manner provided for in
subsection 9.2 of the Credit Agreement.
15. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Amendments in Writing; No Waiver; Cumulative Remedies.
16.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by
a written instrument executed by the Borrower and the Agent, provided that any
provision of this Agreement imposing obligations on the Borrower may be waived
by the Agent in a written instrument executed by the Agent.
16.2 No Waiver by Course of Conduct. Neither the Agent nor any
Lender shall by any act (except by a written instrument pursuant to subsection
16.1), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in
<PAGE> 270
16
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Agent or such Lender would otherwise have on any future
occasion.
16.3 Remedies Cumulative. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive
of any other rights or remedies provided by law.
17. Section Headings. The Section and subsection headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
18. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Borrower and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns.
19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
<PAGE> 271
17
IN WITNESS WHEREOF, the undersigned has caused this Security Agreement
to be duly executed and delivered as of the date first above written.
TRAVEL CHANNEL ACQUISITION
CORPORATION
By: /s/
-----------------------------
<PAGE> 272
SCHEDULE I
TO BORROWER'S SECURITY AGREEMENT
CONTRACTS
None.
<PAGE> 273
SCHEDULE II
TO BORROWER'S SECURITY AGREEMENT
PATENTS AND PATENT LICENSES
None.
<PAGE> 274
SCHEDULE III
TO BORROWER'S SECURITY AGREEMENT
TRADEMARKS AND TRADEMARK LICENSES
See Attached.
<PAGE> 275
Copyrights in all episodes of the following programs:
1. "Designs on Travel"
2. "Etc. . . Etc"
3. "The World Through Celebrities Eyes"
4. "First Impressions"
5. "Great Getaway Game"
6. "Inside Travel"
7. "The Perfect Trip"
8. "Sense of Place"
9. "United States"
10. "Arthur Frommer's Almanac of Travel"
11. "Countries of the World"
12. "On the Agenda"
<PAGE> 276
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 1
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
AMERICAN ROAD TRIPS T07626 74/082821 1681684 WSB Sec. 8 Deadline 31-Mar-1998
Registered 30-Jul-1990 31-Mar-1992 JSP Renewal Earliest Date 30-Sep-2001
United States of America Owner: The Travel Channel, Inc. WXB Next Renewal 31-Mar-2002
Classes: 041 Grace Period Ends 30-Jun-2002
Goods: Entertainment services in the nature of a television program
series featuring travel information
Remarks: Additional Attorney(s): THD THD
First Use In Commerce: 11/26/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Natn-1 Class(es): 107
Service Mark; Supplemental Register
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
DESIGNS ON TRAVEL T07621 74/082822 1692008 WSB Sec. 8 Deadline 09-Jun-1998
Registered 30-Jul-1990 09-Jun-1992 JSP Renewal Earliest Date 09-Dec-2001
United States of America Owner: The Travel Channel, Inc. LJL Next Renewal 09-Jun-2002
Classes: 041 Grace Period Ends 09-Sep-2002
Goods: Entertainment services in the nature of a televised program
series featuring travel information
Remarks: Disclaimer: "travel"
First Use In Commerce: 4/18/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 277
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 2
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ETC...ETC... T07624 74/084643 1651090 WSB Sec. 8 Deadline 16-Jul-1997
Registered 03-Aug-1990 16-Jul-1991 JSP Renewal Earliest Date 16-Jan-2001
United States of America Owner: The Travel Channel, Inc. WXB Next Renewal 16-Jul-2001
Classes: 041 Grace Period Ends 16-Oct-2001
Goods: Entertainment services in the nature of a televised program
series concerning travel
Remarks: Additional Attorney(s): THD THD
First Use In Commerce: 4/1/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
FIRST IMPRESSIONS T07627 74/209918 1741812 WSB Sec. 8/15 Earliest Dt. 22-Dec-1997
Registered 07-Oct-1991 22-Dec-1992 JSP Sec 8 Deadline 22-Dec-1998
United States of America Owner: The Travel Channel, Inc. WXB Renewal Earliest 22-Jun-2002
Classes: 041 Next Renewal 22-Dec-2002
Grace Period Ends 22-Mar-2003
Goods: Entertainment services in the nature of a televised program
series featuring travel information
Remarks: Additional Attorney(s): THD THD
First Use In Commerce: 10/1/90
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Natn-1 Class(es): 107
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 278
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 3
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
NAVIGATOR T07924 74/727084 1985853 WSB Sec. 8/15 Earliest Dt. 09-Jul-2001
Registered 11-Sep-1990 09-Jul-1996 JSP Sec. 8 Deadline 09-Jul-2002
THD Renewal Earliest Date 09-Jan-2006
United States of America Owner: The Travel Channel, Inc. Next Renewal 09-Jul-2006
Classes: 16 Grace Period Ends 09-Oct-2006
Goods: Monthly television program guide
Remarks:
Client: 7242 The Travel Channel, Inc.
Registrant: The Travel Channe1, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
THE PERFECT TRIP T07625 73/832207 1669767 WSB Sec. 8 Deadline 24-Dec-1997
Registered 18-Oct-1989 24-Dec-1991 JSP Renewal Earliest Date 24-Jun-2001
United States of America Owner: The Travel Channel, Inc. THD Next Renewal 24-Dec-2002
Classes: 041 Grace Period Ends 24-Mar-2002
Goods: Entertainment services in the nature of a travel,tourism and
adventure programs
Remarks: Additional Attorney(s): LJL LJL
First Use In Commerce: 3/19/87
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Natn-1 Class(es):107
Service Mark
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 279
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 4
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
THE TRAVEL CHANNEL T07815 74/688681 1982443 JSP Sec. 8/15 Earliest Dt. 25-Jun-2001
Registered 14-Jun-1995 25-Jun-1996 JSP Sec. 8 Deadline 25-Jun-2002
United States of America Owner: The Travel Channel, Inc. THD Renewal Earliest Date 25-Dec-2005
Classes: 038 & 041 Next Renewal 25-Jun-2006
Grace Period Ends 25-Sep-2006
Goods: Cable television broadcasting services (C1.38); producing
television programs (C1.41)
Remarks: Disclaimer: "channel"
First Use In Commerce: 10/13/86
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
THE TRAVEL CHANNEL T07622 73/308959 1205086 WSB Renewal Earliest Date 10-Feb-2002
Registered 06-May-1981 10-Aug-1982 JSP Next Renewal 10-Aug-2002
United States of America Owner: The Travel Channel, Inc. WXB Grace Period Ends 10-Nov-2002
Classes: 038
Goods: Broadcasting services to cable television systems by the
way of satellite
Remarks: Disclaimer: "channel"
First Use In Commerce: 4/1/81
Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
Service Mark; Supplemental Register
Client: T242 The Travel Channel, Inc.
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 280
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page: 5
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
THE TRAVEL CHANNEL & DESIGN T07814 74/688684 1980990 JSP Sec. 8/15 Earliest Dt. 18-Jun-2001
Registered 14-Jun-1995 18-Jun-1996 JSP Sec. 8 Deadline 18-Jun-2002
United States of America Owner: The Travel Channel, Inc. THD Renewal Earliest Date 18-Dec-2005
Classes: 038 & 041 Next Renewal 18-Jun-2006
Grace Period Ends 18-Sep-2006
Goods: Cable television broadcasting services (C1.38); produciing
television programs (C1.41)
Remarks: Disclaimer: "channel"
First Use In Commerce: 5/1/93
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
THE TRAVEL CHANNEL & DESIGN 081990 73/684289 1522924 WSB Renewal Earliest Date 31-Jul-2008
Registered 14-Sep-1987 31-Jan-1989 JSP Next Renewal 31-Jan-2009
United States of America Owner: The Travel Channel, Inc. WXB Grace Period Ends 30-Apr-2009
Classes: 38, 39, 41 & 42
Goods: Cable television/broadcasting(C1.38); travel agency
services (C1.39); producing tv programs...(C1.41); tv
shopping services(C1.42)
Remarks: Reel/Frame/Date: 1220/0311; 9/21/94
Assign./Owner Change: From Travel Marketing Corporation
</TABLE>
<PAGE> 281
<TABLE>
====================================================================================================================================
Monday, June 09, 1997 Client Status Report Page:6
Client: T242 The Travel Channel, Inc.
<CAPTION>
Case Number Application Registration
Trademark Name Status Number/Date Number/Date Attorney(s) Next Action(s) Due Date(s)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ULTIMATE WORLD TOUR T07995 74/578712 1918300 WSB Sec. 8/15 Earliest Dt. 12-Sep 2000
Registered 26-Sep-1994 12-Sep-1995 JSP Sec. 8 Deadline 12-Sep-2001
United States of America Owner: The Travel Channel, Inc. Renewal Earliest Date 12-Mar-2005
Classes: 35 Next Renewal 12-Sep-2005
Goods: Promoting the sale of goods and services of others by Grace Period Ends 12-Dec-2005
conducting an incentive program
Remarks: First Use In Commerce: 9/1/94
Natn-1 Class(es): 100, 101, 102
Client: T242 The Travel Channel
Registrant: The Travel Channel, Inc.
</TABLE>
<PAGE> 282
SCHEDULE IV
TO BORROWER'S SECURITY AGREEMENT
VEHICLES
Not Applicable.
<PAGE> 283
SCHEDULE V
TO BORROWER'S SECURITY AGREEMENT
FILING AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
a. File in the following:
Georgia-Secretary of State and Dekalb County
b. Precautionary Statement - Should file in the
following:
Virginia - Secretary of State and City of Norfolk
Florida - Secretary of State
Patent and Trademark Filings
See Attached.
Other Actions
<PAGE> 284
SCHEDULE VI
TO BORROWER'S SECURITY AGREEMENT
INVENTORY AND EQUIPMENT
Inventory and Equipment located in the following places:
1. The Travel Channel, Inc.
2690 Cumberland Parkway
Suite 500
Atlanta, GA 30339
2. Crawford Communications, Inc.
535 Plasamour Drive
Atlanta, GA 30324
<PAGE> 285
Paxson Communications Corporation
[LOGO] 601 Clearwater Park Road
West Palm Beach, Florida 33401-6233
(561)659-4122 - FAX (561)655-7246
July 11, 1997
Union Bank of California, N.A., as Agent,
and
The Lenders Party to the Credit Agreement
Referred to Below
Re: Credit Agreement, dated as of July 11, 1997, among Travel
Channel Acquisition Corporation, Union Bank of California,
N.A., as agent, and the Lenders parties thereto
Ladies and Gentlemen:
I am General Counsel to Paxson Communications Corporation, a Delaware
corporation ("PCC") Travel Channel Acquisition Corporation, a Delaware
corporation (the "Borrower"), and Paxson Communications Unrestricted Holdings,
Inc., a Delaware corporation ("Pledgor" and collectively with the Borrower, the
"Loan Parties"), with respect to the loans to be made to the Borrower pursuant
to the Credit Agreement. dated as of July 11, 1997, among the Borrower, Union
Bank of California, N.A. as agent, and the Lenders parties thereto (the
"Credit Agreement"). I am providing this opinion to you at the request of the
Loan Parties and pursuant to Section 4.1 of the Credit Agreement. Capitalized
terms used but not defined herein shall have the meanings assigned to such
terms in the Credit Agreement.
In connection with rendering this opinion, I have examined and am
relying upon copies of the final forms of the following instruments and
documents:
1. The Credit Agreement;
2. The Notes;
3. The Borrower Security Agreement;
4. The PCUH Pledge Agreement;
5. The Paxson Pledge Agreement (collectively with the PCUH Pledge
Agreement, the "Pledge Agreements");
<PAGE> 286
Union Bank of California N.A., as Agent,
and The Lenders Party to the Credit Agreement
July 11, 1997
Page 2
6. Stock Powers executed in blank in connection with the Pledge
Agreements (the "Pledge Stock Powers"); and
7. The Certificate of Incorporation and Bylaws of the Loan
Parties, as amended through the date hereof;
8. Certain records of proceedings of the Boards of Directors of
the Loan Parties; and
9. The Letter Agreement dated July 11, 1997 between PCC and you.
Although documents (1) through (6) are sometimes referred to below
collectively as the "Loan Documents", they do not constitute all of the loan
documents utilized in connection with the transaction. The opinions expressed
below relate solely to the documents listed above and not to any other
documents that are referred to in, incorporated by reference into, or listed as
attachments, exhibits, or schedules to any of the documents listed above,
except as may be otherwise specifically noted.
With respect to factual matters, I have examined and am relying upon
and assume the completeness and accuracy of Borrower's representations and
warranties made in the Loan Documents. I have assumed that each Loan Party
qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified except where the failure
to be so qualified would not, singly or in the aggregate, have a Material
Adverse Effect. I have made such further inquiry of the Loan Parties or
investigation of the books, records, files, or other business papers of the
Loan Parties (other than any independent investigation in any court, agency,
governmental office, or elsewhere) with respect to factual matters as I have
deemed reasonably necessary in connection therewith. To the extent that any
opinion expressed below is given "to my current actual knowledge," such opinion
is based solely upon such representations, warranties, and certificates of the
Loan Parties (as to matters of fact only), and my current actual knowledge and
does not (i) include constructive or assumed notice or knowledge of matters or
information or (ii) imply that I have undertaken any independent investigation
with any persons other than those described above. Furthermore, such references
mean only that I do not know of any fact or circumstance contradicting the
statement which follows.
Based upon the foregoing and subject to the qualifications stated
herein, I am of the opinion that:
<PAGE> 287
Union Bank of California, N.A., as Agent,
and The Lenders Party to the Credit Agreement
July 11, 1997
Page 3
1. Each Loan Party has obtained all requisite consents, approvals
authorizations and filings of any New York or federal
authority that I have in the exercise of customary
professional diligence, recognized as directly applicable to
the Loan Parties or to transactions of the type contemplated
by the Credit Agreement or for each Loan Party to own and
operate its property and assets and to transact the business
in which it is engaged except for those consents, approvals,
authorizations and filings which have been obtained or which,
if not obtained, would not reasonably be expected to have a
Material Adverse Effect.
2. Each of the Loan Documents constitutes the legal, valid and
binding obligation of each of the Loan Parties which is a
party thereto, enforceable in accordance with its terms. The
Letter Agreement constitutes the legal valid and binding
obligation of PCC enforceablein accordance with its terms.
3. The Borrower Security Agreement (other than with respect to
the security interests in the Patent, Trademarks and
Copyrights (each as defined in each of the Borrower Security
Agreement) as to which I express no opinion) constitutes a
valid and binding obligation of each Loan Party thereto and
creates in favor of the Agent a valid and binding security
interest in the collateral described therein, enforceable
against each Loan Party thereto in accordance with its terms.
4. The execution, delivery and performance by each Loan Party of
each of the terms and conditions of each Loan Document to
which it is a party, and the consummation of each of the
transactions contemplated thereby, will not (i) conflict with
any law, rule, or regulation of the State of New York which,
in my experience, are normally applicable to transactions of
the type contemplated by the Loan Documents, but without my
having made any special investigation concerning any other
law, rule, or regulation or (ii) result in any breach of any
of the terms, covenants, conditions or provisions of, or
constitute a default (including any default arising with the
giving of notice or the passage of time, or both) under, or
(other than pursuant to the Borrower Security Agreement)
result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets
of any Loan Party pursuant to the terms of any Contractual
Obligation to which any Loan Party is a party or by which it
or any of its property or assets if bound or to which it may
be subject, except where such
<PAGE> 288
Union Bank of California. N.A., as Agent,
and The Lenders Party to the Credit Agreement
July 11, 1997
Page 4
contravention, conflict. breach. default, creation imposition or
obligation would not, singly or in the aggregate with all such other
events have a Material Adverse Effect.
5. The Pledge Agreements together with the delivery of the certificates
representing the shares of stock delivered in pledge by the Pledgors
thereunder on the date hereof (as to all such parties, the "Initial
Pledged Shares") to the Agent in the State of New York, creates in
favor of the Agent a perfected security interest under the New York
UCC in the Initial Pledged Shares. Assuming the Agent and the other
Lenders acquire their interest in the Initial Pledged Shares in good
faith and without notice of any adverse claims, and that each Initial
Pledged Share is either in bearer form issued or endorsed in the name
of the Agent or in blank, the Agent's security interest in the Initial
Pledged Shares is subject to no equal or prior security interest which
must be perfected by possession or filing under the New York UCC.
6. There is no proceeding pending or, to my current actual knowledge,
threatened against or affecting any Loan Party (other than any
proceeding affecting the broadcasting industry generally) or any of
their properties or assets that would, singly or in the aggregate with
all such Proceedings, have a Material Adverse Effect.
7. No third-party consent (other than third-party consents that have been
obtained and are in full force and effect), is required to authorize
or is required in connection with (i) the execution, delivery and full
and timely performance of any of the terms and provisions of, or
consummation of any of the transactions contemplated by any Loan
Document or the Letter Agreement or (ii) the legality, validity,
binding effect or enforceability of any Loan Document or the Letter
Agreement.
My opinions in paragraphs 1, 2 and 4 above are subject to (a) bankruptcy.
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
affecting creditors' rights generally, (b) general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific performance
or injunctive relief, regardless of whether considered in a proceeding in
equity or at law, (c) public policy considerations or court decisions which may
limit the rights of the Lenders or the Agents to obtain indemnification, (d)
the unenforceability under certain circumstances of rights of set-off
<PAGE> 289
Union Bank of California. N.A., as Agent,
and The Lenders Party to the Credit Agreement
July 11, 1997
Page 5
with respect to extensions of credit under the Credit Agreement in which
participation have been granted purported to be provided for in the Loan
Documents. and (e) the unenforceability of provisions prohibiting transfers to
the extent they include transfers described in Section 9-311 of the UCC in the
State of New York. I further advise you that certain provisions of the Loan
Documents are or may be unenforceable in whole or in part, but the inclusion of
such provisions does not affect the validity of any of the remaining provisions
of the Loan Documents and such limitations and unenforceability do not make the
rights and remedies provided in or contemplated by the Loan Documents
inadequate for the practical realization of the rights and benefits afforded
thereby.
In rendering the opinions in paragraphs 4 and 5 I have assumed (a)
that each Loan Party has, or will have as of the relevant times, rights in the
Collateral in which such Loan Party has granted a security interest to Agent
within the meaning of Section 9-203(1)(c) of the UCC of the State of New York.
(b) that "value" has been given within the meaning of 9-203(1)(b) of the UCC
in the State of New York, (c) that none of the Collateral arises out of any
transaction described in Section 9-104 of the UCC in the State of New York.
(d) the sufficiency and adequacy for purposes of the UCC of the State of New
York of the signature of the secured party and (e) that no agreements or
understanding exists between any Agent or any Lender, on the one hand, and any
Loan Party or third parties, on the other hand, that would modify, release or
terminate the security interests granted to the Agent pursuant to the Security
Documents. I express no opinion with respect to the validity, creation or
perfection of the security interests granted to the Agent pursuant to the
Security Documents in any Collateral to the extent that such Collateral
includes or may include trademarks, service marks, trade names, copyrights,
patents, trade secrets, "know-how" or the like. I also call your attention to
the fact that under certain circumstances described in Section 9-306 of the
UCC in the State of New York, the right of a secured party to enforce its
security interests in proceeds of Collateral may be limited.
My opinion in paragraphs 3 and 5 should be interpreted in accordance
with the Special Report by the TriBar Opinion Committee: U.C.C. Security
Interest Opinions, 49 Bus. Law. 359 (1993). Insofar as my opinion in paragraph
5 relates to the enforceability of the Pledge Agreements with respect to the
Pledged Shares pledged thereunder as of the Closing Date, such opinion is given
only to the extent that (y) New York law is applicable thereto and (z) each
Pledged Share constitutes a "certificated security" within the meaning of
Section 8-102(1)(a) of the New York UCC.
<PAGE> 290
Union Bank of California. N.A., as Agent,
and The Lenders Party to the Credit Agreement
July 11, 1997
Page 6
Insofar as the Security Documents create security interests in
after-acquired property, such security interests may be subject to Sections 547
and 552 of the Bankruptcy Code.
To the extent that the obligations of any Loan Party may be dependent
upon such matters, I assume for purposes of this opinion that the Loan
Documents have been duly authorized, executed and delivered by the Loan
Parties, Agent and the Lenders which are parties to such Loan Documents and
constitute the legally valid and binding obligations of the Agent and such
Lenders, enforceable against the Agent and such Lenders in accordance with
their respective terms subject to bankruptcy, insolvency, reorganization.
fraudulent conveyance, moratorium or similar laws affecting creditors' rights
generally and general principles of equity. I am not expressing any opinion as
to the effect of compliance by any Agent or any Lender with any state or
Federal laws or regulations applicable to the transactions contemplated by the
Loan Documents because of the nature of any Agent's or any such Lender's
business.
My opinions set forth herein are limited to the federal laws of the
United States of America (other than the Communications Act) and the internal
laws of the State of New York and I express no opinion as to the laws of any
other jurisdiction. With respect to the opinions expressed herein that relate
to the Paxson Pledge Agreement, including paragraphs 2, 5 and 7 hereof I have
relied upon the opinion of Beckley, Singleton, Jemison & List, Chtd., dated as
of the date hereof, a copy of which has been delivered to you, as to matters of
Nevada law.
This opinion is rendered pursuant to your request, is intended solely
for your benefit and can be relied on solely by you and any successors and
assigns in connection with the Loan Documents. This opinion is not to be
furnished, quoted, or referred, to any other party or to any governmental
agency, except for any participants, or used for any other purpose without my
prior written consent.
Very truly yours,
/s/ Anthony L. Morrison, Esq.
-----------------------------
Anthony L. Morrison, Esq.
General Counsel
<PAGE> 291
[DOW, LOHNES & ALBERTSON, PLLC LETTERHEAD]
As of July 11, 1997
Union Bank of California, N.A.
445 South Figueroa Street
Los Angeles, California 90071
Re: Credit Agreement, dated as of July 11, 1997, among Travel
Channel Acquisition Corporation, Union Bank of California,
N.A., as agent, and the Lenders parties thereto
Dear Sirs:
We have acted as special counsel to Travel Channel Acquisition
Corporation, a Delaware corporation (the "Borrower"), and Paxson Communications
Unrestricted Holdings, Inc., a Delaware corporation ("Pledgor"), with respect
to the loans to be made to the Borrower pursuant to the Credit Agreement, dated
as of July 11, 1997, among the Borrower, Union Bank of California, N.A., as
agent, and the Lenders parties thereto (the "Credit Agreement"). We have been
asked by the Borrower to deliver this opinion to you in connection with loans
to be made by you to the Borrower pursuant to the Credit Agreement. Capitalized
terms that are not defined in this Agreement but are defined in the Credit
Agreement have the meanings assigned to them in the Credit Agreement.
In connection with this opinion, we have examined the following
documents:
1. The Certificate of Incorporation of the Borrower, in the form
certified by the Secretary of State of the State of Delaware to have been filed
on June 11, 1997, and certified by an officer of the Borrower to be in full
force and effect, without amendment or modification, on the effective date of
this opinion.
2. The By-laws of the Borrower, in the form certified by an officer of
the Borrower to be in full force and effect, without amendment or modification,
on the effective date of this opinion.
3. The Certificate of Incorporation of the Pledgor, in the form
certified by the Secretary of State of the State of Delaware to have been filed
on July 10, 1997 and certified by an officer of the Pledgor to be in full force
and effect, without amendment or modification, on the effective date of this
opinion.
<PAGE> 292
Union Bank of California, N.A.
As of July 11, 1997
Page 2
4. The By-laws of the Pledgor, in the form certified by an officer of
the Pledgor to be in full force and effect, without amendment or modification,
the effective date of this opinion.
5. Resolutions of the Board of Directors of the Borrower, in the form
certified by an officer of the Borrower to have been duly adopted and to be in
full force and effect, without revocation, rescission, amendment, or
modification, on the effective date of this opinion.
6. Resolutions of the Board of Directors of the Pledgor, in the form
certified by an officer of the Pledgor to have been duly adopted and to be in
full force and effect, without revocation, rescission, amendment, or
modification, on the effective date of this opinion.
7. A Certificate of Good Standing with respect to the Borrower, issued
by the Secretary of State of the State of Delaware on July 11, 1997.
8. A Certificate of Existence and a Certificate of Authority to
Transact Business with respect to the Borrower, each issued by the Secretary of
State of the State of Georgia on July 9, 1997.
In connection with this opinion, we have also examined unexecuted
drafts of the following documents (the "Loan Documents"):
1. The Credit Agreement.
2. The Borrower Security Agreement.
3. The PCUH Pledge Agreement.
4. The Revolving Credit Note.
5. The Term Note.
We have assumed the genuineness of all signatures; the authenticity of
all documents submitted to us as originals; the conformity with the original
documents of all documents submitted to us as certified, conformed, or
photostatic copies; the legal capacity of all natural persons; and that all
documents reviewed by us (including each of the Loan Documents) were are
binding upon and enforceable against the parties thereto. For those of the Loan
Documents received and reviewed by us in the form of unexecuted drafts, we have
assumed
<PAGE> 293
Union Bank of California, N.A.
As of July 11, 1997
Page 3
that those documents, as executed, conform to the drafts we have reviewed in
every respect material to our opinions herein. The opinions expressed in this
letter are based solely upon our review of those documents that are
specifically referred to in this letter as having been reviewed by us. We have
not examined any other documents, instruments, or corporate records in
connection with this opinion.
As to questions of fact material to our opinions, we have relied
solely, without any inquiry or verification by us, upon the representations and
warranties of the parties in the Loan Documents and upon representations of
officers or representatives of the Borrower and the Pledgor.
This opinion is limited to the General Corporation Law of the State of
Delaware and the Uniform Commercial Code as in effect in the State of Georgia
("Georgia UCC"). We do not purport to be experts in the law of the State of
Delaware. We express no opinion as to conflicts of law rules or the laws of any
states or jurisdictions other than as explicitly specified above.
Based on the foregoing and subject to the qualifications, limitations,
and assumptions set forth herein, it is our opinion that:
1. Each of the Borrower and the Pledgor is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware. The Borrower is qualified to do business as a foreign corporation
in the State of Georgia.
2. The execution, delivery, and performance by the Borrower and the
Pledgor of the Loan Documents to which each is a party, (a) are within the
corporate power of the Borrower and the Pledgor, as the case may be, which is a
party thereto, (b) have been duly authorized by all necessary corporate action,
and (c) are not in contravention of any provision of the Certificate of
Incorporation or By-laws of either the Borrower or the Pledgor or any provision
of the General Corporation Law of the State of Delaware.
3. The Borrower Security Agreement is in form sufficient to create
valid security interests in favor of the Agent (as defined in the Borrower
Security Agreement) in any rights of the Borrower in the collateral described
in the Borrower Security Agreement to the extent such collateral is personal
property in which a security interest may be created under Article 9 of the
Georgia UCC and perfected by the filing of a financing statement under Article
9 of the Georgia UCC and which is located in the State of Georgia and, as to
proceeds, to the extent a security interest can be created under Article 9 of
the Georgia UCC in such proceeds, as security for the obligations recited in
the Borrower Security Agreement to be
<PAGE> 294
Union Bank of California, N.A.
As of July 11, 1997
Page 4
secured thereby. The filing of financing statements in appropriate form, signed
by the Borrower, in the office of the Clerk of the Superior Court of DeKalb
County, Georgia, will perfect such security interests in such of the collateral
as to which perfection is accomplished by the filing of a financing statement,
except that perfection of the Agent's security interest in proceeds will be
limited to the extent provided in Section 9-306 of the Georgia UCC.
The opinions set forth above are subject to the following additional
qualifications:
1. We express no opinion with respect to any authorization, consent,
or approval of, or other action by, or notice to or filing with any
governmental agency or authority or any other person that may be required in
connection with exercise by any party of any rights or remedies under any of
the Loan Documents.
2. We have made no examination of, and express no opinion as to, title
to any of the property described in the Loan Documents. We express no opinion
as to security interests in fixtures or as to the priority of any liens or
security interests in any collateral. Except as expressly stated above, no
opinion is expressed herein regarding the creation or perfection of any
security interest or other lien or encumbrance under any state, federal, or
foreign law, statute, regulation, or registration system.
This opinion is as of the effective date hereof, and we expressly
disclaim any duty to update this opinion in the future in the event there are
any changes in fact or law that may affect any matter addressed herein.
This letter is solely for your benefit in connection with your loans
to the Borrower pursuant to the Credit Agreement. This letter may not be relied
upon for any other purpose whatsoever or by any other person. This letter may
not be quoted in whole or in part or otherwise referred to in any financial
statements or other public releases, nor may it be filed with any governmental
agency or other person without the prior written consent of this firm
Very truly yours,
DOW, LOHNES & ALBERTSON, PLLC
By: /s/ David D. Wild
----------------------------------
David D. Wild, Member
<PAGE> 295
[BECKLEY, SINGLETON, JEMISON & LIST, CHTD. LETTERHEAD]
July 11, 1997
Union Bank of California, N.A., for itself and as Agent for
the Lenders
Re: Credit Agreement: Travel Channel Acquisition Corporation
("Travel")/ Union Bank of California. N.A. ("Union Bank")
Ladies and Gentlemen:
We have acted as special Nevada counsel for Second Crystal Diamond
Limited Partnership, a Nevada limited partnership ("Second Crystal"), in
connection with (i) the Credit Agreement dated July 11, 1997 (the "Travel
Credit Agreement") among Travel, a Delaware corporation (the "Borrower"), the
Lenders referred to therein (the "Lenders"), and you, as Agent for the Lenders
(the "Agent"), concerning the Paxson Pledge Agreement executed and delivered by
Second Crystal as required under the Travel Credit Agreement.
Our client has directed us to provide this opinion to you in
connection with the first Loans under the Travel Credit Agreement. Except as
otherwise specified herein, capitalized terms used in this opinion which are
defined in the Travel Credit Agreement have the same meanings herein as
therein.
We have not participated in the negotiation nor preparation of any of
the Loan Documents. We have examined only undated, unsigned copies of (i) the
Credit Agreement; (ii) the Subsidiaries Guarantee; (iii) the Subsidiaries
Pledge Agreement; (iv) the Subsidiaries Security Agreement; (v) the Borrowing
Certificate; (vi) the Assignment and Acceptance; (vii) the Paxson Pledge
Agreement; (viii) the PCUH Pledge Agreement; (ix) the Borrower Pledge
Agreement; and (x) Borrower Security Agreement
As to matters of fact necessary to render this opinion, we have relied
solely upon information obtained from (i) Certificate of Existence of Paxson
Enterprises, Inc. (the managing general partner of Second Crystal) executed by
the Secretary of State of the State of Nevada, dated April 23, 1997 and dated
down by computer reference as of July 11, 1997; (ii) Certificate of Existence
of Second Crystal Diamond Limited Partnership executed by the Secretary of
State of the State of Nevada, dated April 23, 1997 and dated down by computer
reference as of July
<PAGE> 296
BECKLEY, SINGLETON, JEMISON & LIST, CHTD.
A PROFESSIONAL LAW CORPORATION
July 11, 1997
Page 2
11, 1997; (iii) the recitals, representations and warranties contained in the
Loan Documents: (iv) the Written Consent In Lieu Of A Special Meeting Of The
Board Of Directors Of Paxson Enterprises, Inc.; and (v) the Written Actions of
General Partners Of Second Crystal Diamond Limited Partnership.
In rendering this opinion, we have assumed the conformity to original
documents of all documents submitted to us as photostatic copies, and the
accuracy of the documents made available to us. We have also assumed that you
have the power and authority to execute, deliver and perform all agreements and
documents executed by you; that you have duly and validly executed and
delivered such agreements and documents; and that such agreements and documents
are legally valid and binding on and enforceable against you.
Based upon and subject to the foregoing, and subject to the further
qualifications set forth at the end of this opinion, we are of the opinion
that:
1. Second Crystal is a limited partnership duly organized validly
existing and in good standing under the laws of Nevada; has the power and
authority to own its properties and to carry on its business as now being
conducted and as presently contemplated; and has the power and authority to
execute and deliver, and perform its obligations under the Paxson Pledge
Agreement.
2. Paxson Enterprises, Inc., the managing general partner of
Second Crystal, is a corporation duly organized, validity existing and in good
standing under the laws of Nevada and has the power and authority to execute
the Paxson Pledge Agreement on behalf of Second Crystal.
3. When is has been executed and delivered, the Paxson Pledge
Agreement will be a legal, valid and binding documents enforceable against
Second Crystal except as such enforcement may be limited by bankruptcy,
reorganization, and other laws of general application relating to or affecting
the enforcement of creditor's requests.
4. The execution and delivery of, and performance by, Second
Crystal of its obligations under the Paxson Pledge Agreement have been duly
authorized by all requisite action and will not violate any provision of law,
the partnership agreement of Second Crystal nor the corporate charter or
by-laws of Paxson Enterprises, Inc. or, to our knowledge, any order,
<PAGE> 297
BECKLEY, SINGLETON, JEMISON & LIST, CHTD.
A PROFESSIONAL LAW CORPORATION
July 11, 1997
Page 3
judgment or decree of court or agency of government, any indenture, agreement
or other instrument to which either Second Crystal or Paxson Enterprise, Inc.
is a party, or by which any such entity is bound.
5. Neither Second Crystal nor Paxson Enterprises, Inc. is
required to obtain any consent, approval or authorization from, or to file any
declaration or statement with, any governmental instrumentality or other agency
or any other person in connection with or as a condition to the execution,
delivery, performance or enforceability of the Paxson Pledge Agreement.
6. To our knowledge, there is no action, suit or proceeding at
law or in equity or by or before any governmental instrumentality or other
agency, including any arbitration board or tribunal, pending or threatened (a)
which questions the validity of the Paxson Pledge Agreement or any action taken
or to be taken pursuant thereto, or (b) against or affecting Second Crystal or
Paxson Enterprises, Inc. which, if adversely determined, either in any case or
in the aggregate. could have a material adverse affect on the business,
operations, properties, assets or condition financial or otherwise, of either
Second Crystal or Paxson Enterprises, Inc.
Our opinions herein contained are subject to the following
qualifications:
(i) The enforceability of obligations under any agreement or
document is subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the rights and remedies of creditors generally or the
application of principles of equity whether in an action in law or a proceeding
in equity. In addition we express no opinion regarding the availability of the
remedy of specific performance or of any other equitable remedy or relief to
enforce any right under any agreement or document.
(ii) We are qualified to practice law in the State of Nevada,
and render no opinion herein except as to Nevada law. We specifically advise
you that we have not undertaken any analysis of security matters or issues,
understanding that you rely on other counsel for such analysis, and we express
no opinion on such matters. It is our opinion that the choice of law provisions
contained in the Guaranty Documents would be upheld under the laws of the State
of Nevada, assuming that the State of New York has a substantial relationship
to the transaction.
<PAGE> 298
BECKLEY, SINGLETON, JEMISON & LIST, CHTD.
A PROFESSIONAL LAW CORPORATION
July 11, 1997
Page 4
This Opinion is delivered only to you in connection with the
transaction referred to above and may not be relied upon, by any person, other
than the Agents, the Lenders from time to time under the Credit Agreements, and
their respective counsel. This Opinion may not be quoted in whole or in part or
furnished to any entities or persons other than your auditors, any governmental
regulatory agency having jurisdiction over you or any of your Affiliates and
any subsequent Lenders or participants in the Loans, without the prior written
consent of this firm. However, this Opinion may be relied upon by Anthony L.
Morrison, Esq., General Counsel of Borrower.
Very truly yours,
BECKLEY, SINGLETON, JEMISON
& LIST, CHTD.
By: /s/
----------------------------------
<PAGE> 299
BORROWING CERTIFICATE
TRAVEL CHANNEL ACQUISITION CORPORATION
AND
LOAN PARTIES
Pursuant to Section 4.1(c) of the Credit Agreement dated as of July
11, 1997 (the "Credit Agreement"; terms defined therein being used herein as
therein defined), among Travel Channel Acquisition Corporation, the several
banks and other financial institutions from time to time parties thereto, and
Union Bank of California, N.A., as Agent:
The undersigned Assistant Secretary of each of Travel Channel Acquisition
Corporation and Paxson Communications Unrestricted Holdings, Inc. (each a
"Certifying Loan Party") as follows:
1. The representations and warranties of the Certifying Loan Party set
forth in each of the Loan Documents to which it is a party or which
are contained in any certificate furnished by or on behalf of the
Certifying Loan Party pursuant to or in connection with any of the
Loan Documents to which it is a party are true and correct in all
material respects on and as of the date hereof with the same effect as
if made on the date hereof except for representations and warranties
expressly stated to relate to a specific earlier date, in which case
such representations and warranties are true and correct in all
material respects as of such earlier date;
2. No Default or Event of Default shall have occurred and be continuing
as of the date hereof or after giving effect to the Loans to be made
on the date hereof;
3. There are no liquidation or dissolution proceedings pending or to my
knowledge threatened against the Certifying Loan Party, nor has any
other event occurred adversely affecting or threatening the continued
existence of the Certifying Loan Party after the date hereof;
4. Each Certifying Loan Party is a corporation duly incorporated, validly
existing, and in good standing under the laws of the jurisdiction of
its organization;
5. Attached hereto as Annex 1-A and Annex 1-B are the correct and
complete copies of resolutions duly adopted by the Board of Directors
of such Certifying Loan Party on July 11, 1997, authorizing (i) the
execution, delivery and performance of the Loan Documents to which it
is a party and (ii) the transactions contemplated by the Loan
Documents to which it is
<PAGE> 300
a party; such resolutions have not in any way been amended, modified,
revoked, or rescinded and have been in full force and effect since
their adoption to and including the date hereof and are now in full
force and effect; such resolutions are the only corporate proceedings
of the Certifying Loan Party now in force relating to or affecting the
matters referred to therein (other than corporate proceedings
authorizing any acquisition); attached hereto as Annex 2-A and Annex
2-B is a correct and complete copy of the Certificate of Incorporation
of the respective Certifying Loan Party as in effect at all times
since July 11, 1997 to and including the date hereof, and such
Certificate or Articles have not been amended, repealed, modified, or
restated; and attached hereto as Annex 3-A and Annex 3-B is a correct
and complete copy of the By-Laws of the respective Certifying Loan
Party as in effect at all times since July 11, 1997 to and including
the date hereof, and such By-Laws have not been amended, repealed,
modified, or restated; and
6. The following persons are now duly elected and qualified officers of
the Certifying Loan Party holding the offices indicated next to their
respective names therein, and such officers have held such offices
with the Certifying Loan Party at all times since the dates indicated
next to their respective titles to and including the date hereof, and
the signatures appearing opposite their respective names below are the
true and genuine signatures of such officers, and each of such
officers is duly authorized to execute and deliver on behalf of the
Certifying Loan Party each of the Loan Documents to which it is a
party, and each of such officers is duly authorized to execute and
deliver on behalf of the Certifying Loan Party any certificate or
other document to be delivered by the Certifying Loan Party pursuant
to the Loan Documents to which it is a party.
<TABLE>
<CAPTION>
Name Office Signature
- ---- ---------- ---------
<S> <C> <C>
Lowell W. Paxson, Chairman (since 7/11/97) N/A
---------------------------------------
Arthur Tek, Vice President /s/ Arthur Tek
& Treasurer (since 7/11/97) ---------------------------------------
Anthony L. Morrison Vice President & Assistant /s/ Anthony L. Morrison
Secretary (since 7/11/97) ---------------------------------------
William L. Watson Secretary (since 7/11/97) /s/ William L. Watson
---------------------------------------
</TABLE>
2
<PAGE> 301
IN WITNESS WHEREOF, the undersigned have hereunto set our names as of
the date set forth below.
Date: July 11, 1997
/s/ Anthony L. Morrison
---------------------------
Anthony L. Morrison
Assistant Secretary
/s/ Arthur D. Tek
---------------------------
Arthur D. Tek
Vice President & Treasurer
The undersigned Secretary of Travel Channel Acquisition Corporation and Paxson
Communications Unrestricted Holdings, Inc. hereby certifies with respect to
each of the Certifying Loan Parties as follows:
Each of Anthony L. Morrison and Arthur Tek is, and at all times since
the date set forth under paragraph 6 above has been, the duly elected and
qualified Vice President and Assistant Secretary and vice President and
Treasurer, respectively, of each of the Loan Parties and the signature set
forth for such officer above is such officer's true and genuine signature.
IN WITNESS WHEREOF, the undersigned have hereunto set our names as of
the date set forth below.
Date: July 11, 1997
/s/ William L. Watson
--------------------------
William L. Watson
Secretary
3
<PAGE> 302
ANNEX 1-A
<PAGE> 303
WRITTEN CONSENT
OF THE SOLE DIRECTOR OF
TRAVEL CHANNEL ACQUISITION CORPORATION
The undersigned, being the sole Director of Travel Channel Acquisition
Corporation, a Delaware corporation (the "Corporation"), by this consent in
writing in accordance with Section 141(f) of the Delaware General Corporation
Law, does hereby waive all notice of the time, place and purposes of a meeting
of the Corporation's Board of Directors and hereby, consents to the adoption of
the following preambles and resolutions with the same force and effect as if
they had been adopted at a duly convened meeting of the Board of Directors of
the Corporation:
WHEREAS, Paxson Communications Corporation ("PCC") has entered into an
Asset Acquisition Agreement (the "Acquisition Agreement"), dated as of June 13,
1997, by and among Landmark Communications, Inc., The Travel Channel, Inc.
("TTC") and PCC, pursuant to which the Corporation, as the designated affiliate
of PCC, shall acquire substantially all of the assets owned or rights held by
TTC for use in the business or operations of "The Travel Channel" (the "Travel
Channel Acquisition");
WHEREAS, it has been proposed that, in connection with the Travel
Channel Acquisition, the Corporation execute and deliver a Credit Agreement (the
"Credit Agreement"), by and between the Corporation and Union Bank of
California, N.A., as Agent, pursuant to which, among other things, the
Corporation will obtain (i) a bridge term loan in an aggregate principal amount
of $22,000,000 to be used by the Corporation to finance, in part, the Travel
Channel Acquisition and interest thereon; and (ii) a bridge revolving credit
facility in the aggregate principal amount of $1,000,000 to finance the working
capital needs of the Corporation;
WHEREAS, it has been proposed that the Corporation execute and deliver
the other respective Loan Documents (as that
<PAGE> 304
term is defined in the Credit Agreement) contemplated by the Credit Agreement;
WHEREAS, the Credit Agreement and various other respective Loan
Documents (as that term is defined in the Credit Agreement) have been presented
to the sole Director of the Board of Directors of the Corporation (such Credit
Agreement and any other Loan Documents or agreements executed pursuant thereto
are referred to herein collectively as the Loan Documents);
WHEREAS, based on a review of the Loan Documents, the sole Director of
the Board of Directors deems it advisable for business reasons and in the best
interests of the Corporation that the Corporation enter into the transactions
contemplated by the Loan Documents and that the Corporation's officers be
authorized and directed to execute and deliver and to take all actions in
accordance with and pursuant to the terms of the Loan Documents, along with any
other agreements, certificates and instruments that any of such officers deems
desirable, necessary or appropriate in connection therewith.
NOW, THEREFORE, BE IT
RESOLVED, that the form, terms and provisions of the Loan Documents be,
and they hereby are, authorized and approved in each and every respect, and that
the transactions contemplated therein shall be consummated substantially in
accordance with the terms contained therein;
FURTHER RESOLVED, that any of the officers of the Corporation be, and
each hereby is, authorized, empowered and directed to execute, deliver and
perform the Loan Documents substantially in the form presented to the sole
Director of the Corporation, together with any and all such other loan
documents, agreements, certificates and instruments necessary or appropriate in
connection therewith, along with other agreements or certificates, with any such
modifications or amendments thereto, that any of such officers deems desirable,
necessary or appropriate in connection therewith;
FURTHER RESOLVED, that any of the officers of the Corporation, be, and
each hereby is, authorized, empowered, and directed to do and perform all such
further acts and things, to execute and deliver in the name of the Corporation,
to pay all such fees, costs and expenses in the name of the Corporation, and
where necessary or appropriate, to file with the appropriate governmental
authorities all such further certificates, instruments, or other documents as in
their judgment shall be
<PAGE> 305
necessary or advisable in order to effectuate the intent and purposes of the
foregoing resolutions, and any or all of the transactions contemplated therein;
and
FURTHER RESOLVED, that all actions previously taken by any of the
officers of the Corporation, in the capacities set forth above, and of any
person designated and authorized to act by any officer of the Corporation, in
connection with the matters set forth in the foregoing resolutions, which
actions would have been authorized by the foregoing resolutions, be, and they
hereby are, authorized, approved, ratified and confirmed as being the actions of
the Corporation.
<PAGE> 306
IN WITNESS WHEREOF, the undersigned has executed this Written Consent of the
Sole Director as of this 11 day of July, 1997.
/s/ Lowell W. Paxson
--------------------------
Lowell W. Paxson
<PAGE> 307
ANNEX 1-B
<PAGE> 308
WRITTEN CONSENT
OF THE SOLE DIRECTOR OF
TRAVEL CHANNEL ACQUISITION CORPORATION
The undersigned, being the sole Director of Paxson Communications
Unrestricted Holding, Inc., a Delaware corporation (the "Corporation"), by this
consent in writing in accordance with Section 141(f) of the Delaware General
Corporation Law, does hereby waive all notice of the time, place and purposes of
a meeting of the Corporation's Board of Directors and hereby, consents to the
adoption of the following preambles and resolutions with the same force and
effect as if they had been adopted at a duly convened meeting of the Board of
Directors of the Corporation:
WHEREAS, the Corporation owns all of the issued and outstanding
capital stock of Travel Channel Acquisition Corporation, a Delaware corporation
("TCAC");
WHEREAS, Paxson Communications Corporation ("PCC") has entered into an
Asset Acquisition Agreement (the "Acquisition Agreement"), dated as of June 13,
1997, by and among Landmark Communications, Inc., The Travel Channel, Inc.
("TTC") and PCC, pursuant to which TCAC as the designated affiliate of PCC,
shall acquire substantially all of the assets owned or rights held by TTC for
use in the business or operations of "The Travel Channel" (the "Travel Channel
Acquisition");
WHEREAS, it has been proposed that, in connection with the Travel
Channel Acquisition, TCAC execute and deliver a Credit Agreement (the "Credit
Agreement"), by and between the Corporation and Union Bank of California, N.A.,
as Agent, pursuant to which, among other things, TCAC will obtain (i) a bridge
term loan in an aggregate principal amount of $22,000,000 to be used by TCAC to
finance, in part, the Travel Channel Acquisition and interest thereon; and (ii)
a bridge revolving credit facility in the aggregate principal amount of
$1,000,000 to finance the working capital needs of TCAC;
<PAGE> 309
WHEREAS, it has been proposed that the Corporation execute and deliver
the other respective Loan Documents (as that term is defined in the Credit
Agreement) to which the Corporation is a party as contemplated by the Credit
Agreement;
WHEREAS, the Credit Agreement and various other respective Loan
Documents (as that term is defined in the Credit Agreement) have been presented
to the sole Director of the Board of Directors of the Corporation (such Credit
Agreement and any other Loan Documents or agreements executed pursuant thereto
are referred to herein collectively as the Loan Documents);
WHEREAS, based on a review of the Loan Documents to which the
Corporation is a party, the sole Director of the Board of Directors deems it
advisable for business reasons and in the best interests of the Corporation that
the Corporation enter into the transactions contemplated by the Loan Documents
as applicable, and that the Corporation's officers be authorized and directed to
execute and deliver and to take all actions in accordance with and pursuant to
the terms of the Loan Documents to which it is a party, along with any other
agreements, certificates and instruments that any of such officers deems
desirable, necessary or appropriate in connection therewith.
NOW, THEREFORE, BE IT
RESOLVED, that the form, terms and provisions of the Loan Documents,
to which the Corporation is a party be, and they hereby are, authorized and
approved in each and every respect, and that the transactions contemplated
therein shall be consummated substantially in accordance with the terms
contained therein;
FURTHER RESOLVED, that any of the officers of the Corporation be, and
each hereby is, authorized, empowered and directed to execute, deliver and
perform the Loan Documents substantially in the form presented to the sole
Director of the Corporation, together with any and all such other loan
documents, agreements, certificates and instruments necessary or appropriate in
connection therewith, along with other agreements or certificates, with any such
modifications or amendments thereto, that any of such officers deems desirable,
necessary or appropriate in connection therewith;
FURTHER RESOLVED, that any of the officers of the Corporation, be, and
each hereby is, authorized, empowered, and directed to do and perform all such
further acts and things, to
<PAGE> 310
execute and deliver in the name of the Corporation, to pay all such fees, costs
and expenses in the name of the Corporation, and where necessary or appropriate,
to file with the appropriate governmental authorities all such further
certificates, instruments, or other documents as in their judgment shall be
necessary or advisable in order to effectuate the intent and purposes of the
foregoing resolutions, and any or all of the transactions contemplated therein;
and
FURTHER RESOLVED, that all actions previously taken by any of the
officers of the Corporation, in the capacities set forth above, and of any
person designated and authorized to act by any officer of the Corporation, in
connection with the matters set forth in the foregoing resolutions, which
actions would have been authorized by the foregoing resolutions, be, and they
hereby are, authorized, approved, ratified and confirmed as being the actions of
the Corporation.
<PAGE> 311
IN WITNESS WHEREOF, the undersigned has executed this Written Consent of the
Sole Director as of this 11 day of July, 1997.
/s/ Lowell W. Paxson
--------------------------
Lowell W. Paxson
<PAGE> 312
ANNEX 2-A
<PAGE> 313
Office of the Secretary of State PAGE 1
------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "TRAVEL CHANNEL ACQUISITION CORPORATION", FILED IN THIS OFFICE
ON THE ELEVENTH DAY OF JUNE, A.D. 1997, AT 2 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ Edward J. Freel
<PAGE> 314
CERTIFICATE OF INCORPORATION
OF
TRAVEL CHANNEL ACQUISITION CORPORATION
FIRST. The name of the corporation is Travel Channel Acquisition
Corporation.
SECOND. Its registered office in the State of Delaware is located
at 1209 Orange Street, City of Wilmington, County of New Castle, DE 19801. The
registered agent in charge thereof is The Corporation Trust Company.
THIRD. The purpose or purposes of the corporation is to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware, and to have and exercise all
the powers conferred by the laws of the State of Delaware upon corporations
formed under the General Corporation Law of the State of Delaware.
FOURTH. The amount of the total authorized capital stock of this
corporation shall be ten thousand (10,000) shares, par value one cent ($0.01)
per share.
FIFTH. The name and mailing address of the incorporator is as
follows:
Sarah J. Welch
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036-6802
SIXTH. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors of the corporation shall have the
following powers:
(a) To adopt, and to alter or amend the Bylaws and to fix the
amount to be reserved as working capital: and
(b) With the consent in writing or pursuant to a vote of the
holders of a majority of the capital stock issued and outstanding, to dispose
of, in any manner, all or substantially all of the property of this
corporation.
SEVENTH. The stockholders and directors shall have the power to
hold their meetings and keep the books, documents and papers of the corporation
within or outside the State of Delaware and at such place or places as may be
from time to time designated by the Bylaws or by resolution of the stockholders
or
<PAGE> 315
directors, except as otherwise required by the laws of the State of Delaware.
EIGHTH. The objects, purposes and powers specified in any clause
or paragraph of this Certificate of Incorporation shall be in no way limited or
restricted by reference to or inference from the terms of any other clause or
paragraph of this Certificate of Incorporation. The objects, purposes and
powers in each of the clauses and paragraphs of this Certificate of
Incorporation shall be regarded as independent objects, purposes and powers.
The objects, purposes and powers specified in this Certificate of Incorporation
are in furtherance and not in limitation of the objects, purposes and powers
conferred by statute.
NINTH. The corporation shall have the power to indemnify its
officers, directors, employees and agents, and such other persons as may be
designated as set forth in the Bylaws, to the full extent permitted by the laws
of the State of Delaware. A director shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duties as a director, provided that the liability of a director (i) for any
breach of the director's loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of Title 8 of
the Delaware Code, or (iv) for any transaction from which the director derived
an improper personal benefit shall not be eliminated or limited hereby.
TENTH. The corporation shall have perpetual existence.
The undersigned, Sarah J. Welch, for the purpose of forming a
corporation under the laws of the State of Delaware, does hereby make, file and
record this Certificate of Incorporation and does hereby certify that the facts
herein stated are true, and has accordingly hereunto set her hand and seal.
/s/ Sarah J. Welch
--------------------------------
Sarah J. Welch, Incorporator
Dated: June 11, 1997
<PAGE> 316
ANNEX 2-B
<PAGE> 317
State of Delaware
Office of the Secretary of State Page 1
------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "PAXSON COMMUNICATIONS UNRESTRICTED HOLDINGS, INC.", FILED IN
THIS OFFICE ON THE TENTH DAY OF JULY, A.D. 1997, AT 1 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
[SEAL] /s/ Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8552494
DATE: 07-10-97
<PAGE> 318
CERTIFICATE OF INCORPORATION
OF
TRAVEL CHANNEL ACQUISITION CORPORATION
FIRST. The name of the corporation is Paxson Communications
Unrestricted Holdings, Inc.
SECOND. Its registered office in the State of Delaware is located
at 1209 Orange Street, City of Wilmington, County of New Castle, DE 19801. The
registered agent in charge thereof is The Corporation Trust Company.
THIRD. The purpose or purposes of the corporation is to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware, and to have and exercise all
the powers conferred by the laws of the State of Delaware upon corporations
formed under the General Corporation Law of the State of Delaware.
FOURTH. The amount of the total authorized capital stock of this
corporation shall be ten thousand (10,000) shares, par value one cent ($0.01)
per share.
FIFTH. The name and mailing address of the incorporator is as
follows:
Lisa M. Simpkins
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036-6802
SIXTH. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors of the corporation shall have the
following powers:
(a) To adopt, and to alter or amend the Bylaws and to fix the
amount to be reserved as working capital; and
(b) With the consent in writing or pursuant to a vote of the
holders of a majority of the capital stock issued and outstanding, to dispose
of, in any manner, all or substantially all of the property of this
corporation.
SEVENTH. The stockholders and directors shall have the power to
hold their meetings and keep the books, documents and papers of the corporation
within or outside the State of Delaware and at such place or places as may be
from time to time designated by the Bylaws or by resolution of the stockholders
or directors, except as otherwise required by the laws of the State of Delaware.
<PAGE> 319
EIGHTH. The objects, purposes and powers specified in any clause
or paragraph of this Certificate of Incorporation shall be in no way limited or
restricted by reference to or inference from the terms of any other clause or
paragraph of this Certificate of Incorporation. The objects, purposes and
powers in each of the clauses and paragraphs of this Certificate of
Incorporation shall be regarded as independent objects, purposes and powers.
The objects, purposes and powers specified in this Certificate of Incorporation
are in furtherance and not in limitation of the objects, purposes and powers
conferred by statute.
NINTH. The corporation shall have the power to indemnify its
officers, directors, employees and agents, and such other persons as may be
designated as set forth in the Bylaws, to the full extent permitted by the laws
of the State of Delaware. A director shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duties as a director, provided that the liability of a director (i) for any
breach of the director's loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of Title 8 of
the Delaware Code, or (iv) for any transaction from which the director derived
an improper personal benefit shall not be eliminated or limited hereby.
TENTH. The corporation shall have perpetual existence.
The undersigned, Lisa M. Simpkins, for the purpose of forming a
corporation under the laws of the State of Delaware, does hereby make, file and
record this Certificate of Incorporation and does hereby certify that the facts
herein stated are true, and has accordingly hereunto set her hand and seal.
/s/ Lisa M. Simpkins
--------------------------------
Lisa M. Simpkins, Incorporator
Dated: June 10, 1997
<PAGE> 320
ANNEX 3-A
<PAGE> 321
BYLAWS
OF
TRAVEL CHANNEL ACQUISITION CORPORATION
ARTICLE I
OFFICES
Section 1. The registered office shall be located at
1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801.
Section 2. The corporation may also have offices at such
other places both within and without the State of Delaware and the United
States as the Board of Directors may from time to time determine or as the
business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All annual meetings of the stockholders for the
election of directors shall be held at such place either within or without the
State of Delaware or the United States, as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting or in a
duly executed waiver of the notice thereof. Meetings of stockholders for any
other purpose may be held at such time and place, within or without the State
of Delaware or the United States, as shall be stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of the stockholders shall be held on
such date and at such time as shall be designated from time to time by the
Board of Directors. At the annual meeting, the stockholders shall elect the
Board of Directors and shall transact such other business as may properly be
brought before the meeting.
Section 3. Written notice of the annual meeting stating the
place, date and time of the meeting shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each stockholder
entitled to vote at such meeting.
Section 4. Special meetings of the stockholders for any purpose
or purposes, unless otherwise provided by statute, the Certificate of
Incorporation or these Bylaws, may be called by the President and shall be
called by the President or Secretary at the request in writing of a majority of
the Board of Directors or at the request in writing of stockholders owning a
majority of the entire capital stock of the corporation issued and outstanding
and entitled to vote. Such requests shall state the purpose or purposes of the
proposed meeting.
<PAGE> 322
Section 5. Written notice of a special meeting shall state the
place, date and time of the meeting and the purpose or purposes for which the
meeting is called and shall be given not less than ten (10) nor more than sixty
(60) days before the date of the meeting to each stockholder entitled to vote
at such meeting.
Section 6. Business transacted at any special meeting of the
stockholders shall be limited to the purpose or purposes stated in the notice,
unless the holders of a majority of the issued and outstanding shares entitled
to vote otherwise consent thereto either at the special meeting or in writing
executed subsequent to the meeting,
Section 7. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten (10) days before every annual
or special meeting of the stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to examination by any stockholder for
any purpose germane to the meeting during ordinary business hours, and for a
period of at least ten (10) days prior to the meeting either at a place within
the city where the meeting is to be held (which place shall be specified in the
notice of the meeting) or (if not so specified) at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place
of the meeting during the whole time thereof and may be inspected by any
stockholder who is present at the meeting.
Section 8. The holders of a majority of the issued and
outstanding shares entitled to vote thereat, who are present in person or
represented by proxy at the meeting, shall constitute a quorum at all annual
and special meetings of the stockholders for the transaction of business,
unless otherwise provided by statute, the Certificate of Incorporation or these
Bylaws. If, however, such quorum shall not be present or represented at any
meeting of the stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have the power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned meeting, at which a
quorum shall be present or represented, any business may be transacted that
might have been transacted at the meeting as originally described in the notice
to the stockholders. If the adjournment is for more than thirty (30) days or
if after the adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
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Section 9. When a quorum is present at any annual or special
meeting, the vote of the holders of a majority of the stock having voting power
present in person or represented by proxy at the meeting shall decide any
question brought before such meeting, unless the question is one upon which by
express provision of statute, the Certificate of Incorporation or these Bylaws
a different vote is required, in which case such express provision shall govern
and control the decision of such question.
Section 10. Unless otherwise provided by statute, the Certificate
of Incorporation or these Bylaws, each stockholder shall at every annual or
special meeting of the stockholders be entitled to one vote in person or by
proxy for each share of the capital stock having voting power held by such
stockholder, but no proxy shall be voted or acted upon after a period of three
years from its date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided by statute, the Certificate
of Incorporation or these Bylaws, any action required or permitted to be taken
at any annual or special meeting of the stockholders may be taken without a
meeting, without prior not ice and without a vote if a consent in writing,
setting forth the action so taken, is signed by the holders of outstanding
stock of the corporation having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted. Such consent shall be
filed with the Secretary of the corporation. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors that constitutes the Board of
Directors shall be at least one (1) and not more than ten (10). The first Board
of Directors shall initially consist of the number of directors as shall be
specified at the organizational meeting of the Corporation. Thereafter, within
the limits above specified, the number of directors shall be determined by
resolution of the Board of Directors or by the stockholders of the Common Stock
at the annual meeting. The directors shall be elected at the annual meeting of
the stockholders, except as provided in Section 2 of this Article. Each
director shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director. The
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directors so chosen shall hold office until the next annual election and until
their successors are duly elected and qualified, unless sooner displaced. If
there are no directors in office, then an election of directors may be held
in the manner provided by statute.
Section 3. The business of the corporation shall be managed by
its Board of Directors, which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute, the Certificate
of Incorporation or these Bylaws directed or required to be exercised or done
by the stockholders.
ARTICLE IV
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. The Board of Directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware or the United States.
Section 2. The first meeting of each newly elected Board of
Directors shall be held at such time and place as shall be fixed by the vote of
she stockholders at the annual meeting. No notice of such meeting to the newly
elected directors shall be necessary in order legally to constitute the
meeting, provided a quorum shall be present. If the stockholders fail to fix
the time or place of the first meeting of the newly elected Board of Directors
or if this meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors or as shall be specified in a written waiver signed by all
of the directors.
Section 3. Regular meetings of the Board of Directors may be
held without notice at such time and place as shall from time to time be
determined by the Board of Directors.
Section 4. Special meetings of the Board of Directors may be
called by the President on three (3) days notice to each director, either
personally, by mail, by telegram or by telecopy. Such meetings shall be called
by the President or Secretary in like manner and on like notice on the written
request of a majority of the directors.
Section 5. At all regular and special meetings of the Board of
Directors, a simple majority of the directors shall constitute a quorum for the
transaction of business, and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors, unless otherwise specifically provided by statute, the Certificate
of Incorporation or these Bylaws. If a quorum is not present at any
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meeting of the Board of Directors the directors present thereat may adjourn the
meeting from time to time, without notice other than an announcement at the
meeting, until a quorum shall be present.
Section 6. Unless otherwise provided by statute, the Certificate
of Incorporation or these Bylaws, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if all members of the Board or the committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of the proceedings of the Board of Directors.
ARTICLE V
COMMITTEES OF DIRECTORS
Section 1. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committee, each consisting
of two or more directors of the corporation. The Board may designate one or
more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the absence
or disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member.
Section 2. Except as provided below, any committee, to the
extent provided in the resolutions of the Board of Directors and in these
Bylaws, shall have and may exercise all of the powers and authority of the
Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers that may require it. No committee, however, shall have the power or
authority to amend the Certificate of Incorporation; to adopt an agreement of
merger or consolidation; to recommend to the stockholders the sale, lease,
exchange or other disposition of all or substantially all of the corporation's
property and assets; to recommend to the stockholders a dissolution of the
corporation or a revocation of a dissolution; or to amend these Bylaws;
further, unless a resolution of the Board of Directors, these Bylaws, or the
Certificate of Incorporation expressly so provides, no committee shall have the
power or authority to declare a dividend, to authorize the issuance of stock,
or to adopt a certificate of ownership and merger.
Section 3. A committee or committees shall have such name or
names an may be determined from time to time by resolution adopted by the Board
of Directors.
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Section 4. Each committee shall keep regular minutes of its
meetings and shall file them with the minutes of the proceedings of the Board
of Directors when required.
ARTICLE VI
COMPENSATION OF DIRECTORS
Section 1. Unless otherwise provided by statute, the Certificate
of Incorporation or these Bylaws, the Board of Directors shall have the
authority to fix the compensation of the directors.
Section 2. The directors may be paid their expenses, if any, of
attending meetings of the Board of Directors. Such payments may take the form
of a fixed sum for attendance at each meeting or a stated salary as a director.
Members of committees may be allowed like compensation for attending committee
meetings.
Section 3. No payment permitted under this Article VI shall
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor.
ARTICLE VII
OFFICERS
Section 1. The officers of the corporation shall be chosen by
the Board of Directors and shall be a Chairman, a President, a Secretary and a
Treasurer. The Board of Directors may also choose additional Vice Presidents,
and one or more Assistant Secretaries and Assistant Treasurers. Any number of
offices may be held by the same person, unless otherwise provided by statute,
the Certificate of Incorporation or these Bylaws.
Section 2. The officers of the corporation shall be elected by
the Board of Directors at the Board's first meeting after each annual meeting of
stockholders.
Section 3. The officers of the corporation shall hold office
until their successors are chosen and qualified. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors whenever in its
judgment the best interests of the corporation will be served thereby. Any
vacancy occurring in any office of the corporation shall be filled by the Board
of Directors.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors.
Section 5. The Chairman shall be the Chief Executive Officer of
the corporation, shall preside at all meetings of the
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shareholders and the Board of Directors, shall have general and active
management of the business of the corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. He shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the corporation.
Section 6. The President, subject to the Chairman, shall be the
Chief Operating Officer of the corporation, in the absence of the President
shall preside at all meetings of the shareholders and the Board of Directors,
shall have general and active management of the business of the corporation and
shall see that all orders and resolutions of the Board of Directors are carried
into effect. He shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to
some other officer or agent of the corporation.
Section 7. In the absence of the President or in the event of
his inability or refusal to act, the Vice President (or in the event there are
more than one, the Vice Presidents in the order designated, or in the absence
of any designation, then in the order of their election) shall perform the
duties of the President and, when so acting, shall have all the powers of and
be subject to all the restrictions upon the President. The Vice President shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
Section 8. The Secretary shall attend all meetings of the Board
of Directors and all meetings of the stockholders and record all of the
proceedings of the meetings of the corporation and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for any
committees when required. The Secretary shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the Board of
Directors and shall perform such other duties as may be prescribed by the Board
of Directors or the President, under whose supervision he shall be. The
Secretary shall have custody of the corporate seal of the corporation, and he,
or an Assistant Secretary, shall have the authority to affix the same to any
instrument requiring it, and (when so affixed) it may be attested by his
signature or by the signature of such Assistant Secretary. The Board of
Directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his signature.
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Section 9. The Assistant Secretary, or if there are more than
one, the Assistant Secretaries in the order determined by the Board of
Directors (or if there is no such determination, then in the order of their
election), shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 10. The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the Board of
Directors.
Section 11. The Treasurer shall disburse the funds of the
corporation as may be ordered by the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the President, and the Board of
Directors at the Board's regular meetings or when the Board so requires, an
account of all his transactions as Treasurer and of the financial condition of
the corporation.
Section 12. If required by the Board of Directors, the Treasurer
shall give the corporation a bond (which shall be renewed every six years) in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of his office and for
the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control
belonging to the corporation.
Section 13. The Assistant Treasurer, or if there are more than
one, the Assistant Treasurers in the order determined by the Board of Directors
(or if there is no such determination, then in the order Of their election),
shall, in the absence of the Treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the Treasurer and
shall perform such ocher duties and have such other powers as the Board of
Directors may from time to time prescribe.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statute, the
Certificate of Incorporation or these Bylaws, notice is required to be given to
any director or stockholder, it shall not be construed to mean solely personal
notice, but such notice may be given in writing by mail addressed to such
director or stockholder at his address as it appears on the records of the
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corporation with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same is deposited in the United States mail. Notice
to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of statute, the Certificate of Incorporation or these Bylaws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE IX
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by the Chairman or Vice Chairman of the
Board of Directors, or the President or a Vice President, and by the Secretary
or an Assistant Secretary, or the Treasurer or an Assistant Treasurer,
certifying the number of shares owned by the stockholder in the corporation.
Section 2. Any or all of the signatures on the certificate may
be a facsimile if the certificate is manually signed on behalf of a transfer
agent or a registrar (other than the corporation itself or an employee of the
corporation). in case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, the certificate may be issued by the corporation with the same
effect as if he were such officer, transfer agent of registrar at the date of
issue.
Section 3. The Board of Directors may direct that a new
certificate or certificates be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of Directors may, in
its discretion and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed certificate or certificates or his
legal representative to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares
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duly endorsed or accompanied by the proper evidence of succession, assignment
or authority to transfer, the corporation shall issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction
upon its books.
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of the
stockholders or any adjournment thereof, or entitled to express consent to
corporate action in writing without a meeting, or entitled to receive payment
of any dividend or other distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date that shall not be more than sixty (60) nor less
than ten (10) days before the date of such meeting, nor more than sixty (60)
days prior to any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board of Directors
may fix a new date for the adjourned meeting.
Section 6. The corporation shall be entitled to recognize the
exclusive rights of a person registered on its books as the owner of shares to
receive dividends and to vote as such owner. The corporation shall be entitled
to hold liable for calls and assessments a person registered on its books as
the owner of shares. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, regardless of whether the corporation shall have express or
other notice thereof, unless otherwise provided by statute, the Certificate of
Incorporation or these Bylaws.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, unless otherwise provided by statute, the Certificate of
Incorporation or these Bylaws, may be declared by the Board of Directors at any
regular or special meeting, pursuant to law. Dividends may be paid in cash,
property, or in shares of stock, unless otherwise provided by statute, the
Certificate of Incorporation or these Bylaws. Before payment of any dividend,
there may be get aside out of any funds of the corporation available for
dividends such sum or sums as the Board of Directors from time to time, in
their absolute discretion, may think proper as a reserve or reserves for
contingencies, equalizing dividends, repairing or maintaining any property of
the corporation, or for much other purpose or purposes as the Board of
Directors shall think conducive to the interests of the
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corporation, and the Board of Directors may modify or abolish any such reserve
in the manner in which it was created.
Section 2. Annual Statements. The Board of Directors shall
present at each annual meeting, and at any special meeting of the stockholders
when called for by vote of the stockholders, a full and clear statement of the
business and condition of the corporation.
Section 3. Checks. All checks or demands for money and notes of
the corporation. shall be signed by such officer or officers or such other
person or persons as She Board of Directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the corporation shall
be designated by resolution of the Board of Directors.
Section 5. Indemnification. The corporation shall have the power
to indemnify its officers, directors, employees and agents of the Corporation,
and such other persons as designated by the Board of Directors, to the full
extent as permitted under the laws of she State of Delaware.
Section 6. Seal. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization, and the name of the
State of Delaware. The seal may be used by causing it or a facsimile thereof to
be impressed, affixed or otherwise reproduced.
Section 7. Amendments. Unless such power is reserved to the
stockholders by statute, the Certificate of Incorporation or these Bylaws,
these Bylaws may be altered, amended or repealed or new Bylaws adopted either
by the stockholders or the Board of Directors (when such power is conferred
upon the Board of Directors by the Certificate of Incorporation, and subject to
repeal or change by action of the stockholders) at any annual meeting of the
stockholders or regular meeting of the Board of Directors, or at any special
meeting of the stockholders or the Board of Directors (if notice of such
alteration, amendment, repeal or adoption of new Bylaws is contained in the
notice of such special meeting), by a vote of a majority of the holders of
stock having voting power present in person or represented by proxy at such
meeting at which there is a quorum, or by a vote of a majority of the directors
present at such meeting at which there is a quorum (whichever is applicable).
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ANNEX 3-B
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BYLAWS
OF
PAXSON COMMUNICATIONS UNRESTRICTED HOLDINGS, INC.
ARTICLE I
OFFICES
Section 1. The registered office shall be located at
1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801.
Section 2. The corporation may also have offices at such
other places both within and without the State of Delaware and the United
States as the Board of Directors may from time to time determine or as the
business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All annual meetings of the stockholders for the
election of directors shall be held at such place either within or without the
State of Delaware or the United States, as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting or in a
duly executed waiver of the notice thereof. Meetings of stockholders for any
other purpose may be held at such time and place, within or without the State
of Delaware or the United States, as shall be stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of the stockholders shall be held on
such date and at such time as shall be designated from time to time by the
Board of Directors. At the annual meeting, the stockholders shall elect the
Board of Directors and shall transact such other business as may properly be
brought before the meeting.
Section 3. Written notice of the annual meeting stating the
place, date and time of the meeting shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each stockholder
entitled to vote at such meeting.
Section 4. Special meetings of the stockholders for any purpose
or purposes, unless otherwise provided by statute, the Certificate of
Incorporation or these Bylaws, may be called by the President and shall be
called by the President or Secretary at the request in writing of a majority of
the Board of Directors or at the request in writing of stockholders owning a
majority of the entire capital stock of the corporation issued and outstanding
and entitled to vote. Such requests shall state the purpose or purposes of the
proposed meeting.
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Section 5. Written notice of a special meeting shall state the
place, date and time of the meeting and the purpose or purposes for which the
meeting is called and shall be given not less than ten (10) nor more than sixty
(60) days before the date of the meeting to each stockholder entitled to vote
at such meeting.
Section 6. Business transacted at any special meeting of the
stockholders shall be limited to the purpose or purposes stated in the notice,
unless the holders of a majority of the issued and outstanding shares entitled
to vote otherwise consent thereto either at the special meeting or in writing
executed subsequent to the meeting,
Section 7. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten (10) days before every annual
or special meeting of the stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to examination by any stockholder for
any purpose germane to the meeting during ordinary business hours, and for a
period of at least ten (10) days prior to the meeting either at a place within
the city where the meeting is to be held (which place shall be specified in the
notice of the meeting) or (if not so specified) at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place
of the meeting during the whole time thereof and may be inspected by any
stockholder who is present at the meeting.
Section 8. The holders of a majority of the issued and
outstanding shares entitled to vote thereat, who are present in person or
represented by proxy at the meeting, shall constitute a quorum at all annual
and special meetings of the stockholders for the transaction of business,
unless otherwise provided by statute, the Certificate of Incorporation or these
Bylaws. If, however, such quorum shall not be present or represented at any
meeting of the stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have the power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned meeting, at which a
quorum shall be present or represented, any business may be transacted that
might have been transacted at the meeting as originally described in the notice
to the stockholders. If the adjournment is for more than thirty (30) days or
if after the adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
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Section 9. When a quorum is present at any annual or special
meeting, the vote of the holders of a majority of the stock having voting power
present in person or represented by proxy at the meeting shall decide any
question brought before such meeting, unless the question is one upon which by
express provision of statute, the Certificate of Incorporation or these Bylaws
a different vote is required, in which case such express provision shall govern
and control the decision of such question.
Section 10. Unless otherwise provided by statute, the Certificate
of Incorporation or these Bylaws, each stockholder shall at every annual or
special meeting of the stockholders be entitled to one vote in person or by
proxy for each share of the capital stock having voting power held by such
stockholder, but no proxy shall be voted or acted upon after a period of three
years from its date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided by statute, the Certificate
of Incorporation or these Bylaws, any action required or permitted to be taken
at any annual or special meeting of the stockholders may be taken without a
meeting, without prior not ice and without a vote if a consent in writing,
setting forth the action so taken, is signed by the holders of outstanding
stock of the corporation having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted. Such consent shall be
filed with the Secretary of the corporation. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors that constitutes the Board of
Directors shall be at least one (1) and not more than ten (10). The first Board
of Directors shall initially consist of the number of directors as shall be
specified at the organizational meeting of the Corporation. Thereafter, within
the limits above specified, the number of directors shall be determined by
resolution of the Board of Directors or by the stockholders of the Common Stock
at the annual meeting. The directors shall be elected at the annual meeting of
the stockholders, except as provided in Section 2 of this Article. Each
director shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director. The
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directors so chosen shall hold office until the next annual election and until
their successors are duly elected and qualified, unless sooner displaced. If
there are no directors in office, then an election of directors may be held
in the manner provided by statute.
Section 3. The business of the corporation shall be managed by
its Board of Directors, which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute, the Certificate
of Incorporation or these Bylaws directed or required to be exercised or done
by the stockholders.
ARTICLE IV
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. The Board of Directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware or the United States.
Section 2. The first meeting of each newly elected Board of
Directors shall be held at such time and place as shall be fixed by the vote of
the stockholders at the annual meeting. No notice of such meeting to the newly
elected directors shall be necessary in order legally to constitute the
meeting, provided a quorum shall be present. If the stockholders fail to fix
the time or place of the first meeting of the newly elected Board of Directors
or if this meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors or as shall be specified in a written waiver signed by all
of the directors.
Section 3. Regular meetings of the Board of Directors may be
held without notice at such time and place as shall from time to time be
determined by the Board of Directors.
Section 4. Special meetings of the Board of Directors may be
called by the President on three (3) days notice to each director, either
personally, by mail, by telegram or by telecopy. Such meetings shall be called
by the President or Secretary in like manner and on like notice on the written
request of a majority of the directors.
Section 5. At all regular and special meetings of the Board of
Directors, a simple majority of the directors shall constitute a quorum for the
transaction of business, and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors, unless otherwise specifically provided by statute, the Certificate
of Incorporation or these Bylaws. If a quorum is not present at any
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meeting of the Board of Directors the directors present thereat may adjourn the
meeting from time to time, without notice other than an announcement at the
meeting, until a quorum shall be present.
Section 6. Unless otherwise provided by statute, the Certificate
of Incorporation or these Bylaws, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if all members of the Board or the committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of the proceedings of the Board of Directors.
ARTICLE V
COMMITTEES OF DIRECTORS
Section 1. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committee, each consisting
of two or more directors of the corporation. The Board may designate one or
more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the absence
or disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member.
Section 2. Except as provided below, any committee, to the
extent provided in the resolutions of the Board of Directors and in these
Bylaws, shall have and may exercise all of the powers and authority of the
Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers that may require it. No committee, however, shall have the power or
authority to amend the Certificate of Incorporation; to adopt an agreement of
merger or consolidation; to recommend to the stockholders the sale, lease,
exchange or other disposition of all or substantially all of the corporation's
property and assets; to recommend to the stockholders a dissolution of the
corporation or a revocation of a dissolution; or to amend these Bylaws;
further, unless a resolution of the Board of Directors, these Bylaws, or the
Certificate of Incorporation expressly so provides, no committee shall have the
power or authority to declare a dividend, to authorize the issuance of stock,
or to adopt a certificate of ownership and merger.
Section 3. A committee or committees shall have such name or
names as may be determined from time to time by resolution adopted by the Board
of Directors.
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Section 4. Each committee shall keep regular minutes of its
meetings and shall file them with the minutes of the proceedings of the Board
of Directors when required.
ARTICLE VI
COMPENSATION OF DIRECTORS
Section 1. Unless otherwise provided by statute, the Certificate
of Incorporation or these Bylaws, the Board of Directors shall have the
authority to fix the compensation of the directors.
Section 2. The directors may be paid their expenses, if any, of
attending meetings of the Board of Directors. Such payments may take the form
of a fixed sum for attendance at each meeting or a stated salary as a director.
Members of committees may be allowed like compensation for attending committee
meetings.
Section 3. No payment permitted under this Article VI shall
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor.
ARTICLE VII
OFFICERS
Section 1. The officers of the corporation shall be chosen by
the Board of Directors and shall be a Chairman, a President, a Secretary and a
Treasurer. The Board of Directors may also choose additional Vice Presidents,
and one or more Assistant Secretaries and Assistant Treasurers. Any number of
offices may be held by the same person, unless otherwise provided by statute,
the Certificate of Incorporation or these Bylaws.
Section 2. The officers of the corporation shall be elected by
the Board of Directors at the Board's first meeting after each annual meeting of
stockholders.
Section 3. The officers of the corporation shall hold office
until their successors are chosen and qualified. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors whenever in its
judgment the best interests of the corporation will be served thereby. Any
vacancy occurring in any office of the corporation shall be filled by the Board
of Directors.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors.
Section 5. The Chairman shall be the Chief Executive Officer of
the corporation, shall preside at all meetings of the
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shareholders and the Board of Directors, shall have general and active
management of the business of the corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. He shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the corporation.
Section 6. The President, subject to the Chairman, shall be the
Chief Operating Officer of the corporation, in the absence of the President
shall preside at all meetings of the shareholders and the Board of Directors,
shall have general and active management of the business of the corporation and
shall see that all orders and resolutions of the Board of Directors are carried
into effect. He shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to
some other officer or agent of the corporation.
Section 7. In the absence of the President or in the event of
his inability or refusal to act, the Vice President (or in the event there are
more than one, the Vice Presidents in the order designated, or in the absence
of any designation, then in the order of their election) shall perform the
duties of the President and, when so acting, shall have all the powers of and
be subject to all the restrictions upon the President. The Vice President shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
Section 8. The Secretary shall attend all meetings of the Board
of Directors and all meetings of the stockholders and record all of the
proceedings of the meetings of the corporation and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for any
committees when required. The Secretary shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the Board of
Directors and shall perform such other duties as may be prescribed by the Board
of Directors or the President, under whose supervision he shall be. The
Secretary shall have custody of the corporate seal of the corporation, and he,
or an Assistant Secretary, shall have the authority to affix the same to any
instrument requiring it, and (when so affixed) it may be attested by his
signature or by the signature of such Assistant Secretary. The Board of
Directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his signature.
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Section 9. The Assistant Secretary, or if there are more than
one, the Assistant Secretaries in the order determined by the Board of
Directors (or if there is no such determination, then in the order of their
election), shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 10. The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the Board of
Directors.
Section 11. The Treasurer shall disburse the funds of the
corporation as may be ordered by the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the President, and the Board of
Directors at the Board's regular meetings or when the Board so requires, an
account of all his transactions as Treasurer and of the financial condition of
the corporation.
Section 12. If required by the Board of Directors, the Treasurer
shall give the corporation a bond (which shall be renewed every six years) in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of his office and for
the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control
belonging to the corporation.
Section 13. The Assistant Treasurer, or if there are more than
one, the Assistant Treasurers in the order determined by the Board of Directors
(or if there is no such determination, then in the order Of their election),
shall, in the absence of the Treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the Treasurer and
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statute, the
Certificate of Incorporation or these Bylaws, notice is required to be given to
any director or stockholder, it shall not be construed to mean solely personal
notice, but such notice may be given in writing by mail addressed to such
director or stockholder at his address as it appears on the records of the
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corporation with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same is deposited in the United States mail. Notice
to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of statute, the Certificate of Incorporation or these Bylaws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE IX
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by the Chairman or Vice Chairman of the
Board of Directors, or the President or a Vice President, and by the Secretary
or an Assistant Secretary, or the Treasurer or an Assistant Treasurer,
certifying the number of shares owned by the stockholder in the corporation.
Section 2. Any or all of the signatures on the certificate may
be a facsimile if the certificate is manually signed on behalf of a transfer
agent or a registrar (other than the corporation itself or an employee of the
corporation). In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, the certificate may be issued by the corporation with the same
effect as if he were such officer, transfer agent or registrar at the date of
issue.
Section 3. The Board of Directors may direct that a new
certificate or certificates be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of Directors may, in
its discretion and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed certificate or certificates or his
legal representative to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by the proper evidence of
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succession, assignment or authority to transfer, the corporation shall issue a
new certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of the
stockholders or any adjournment thereof, or entitled to express consent to
corporate action in writing without a meeting, or entitled to receive payment
of any dividend or other distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date that shall not be more than sixty (60) nor less
than ten (10) days before the date of such meeting, nor more than sixty (60)
days prior to any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board of Directors
may fix a new date for the adjourned meeting.
Section 6. The corporation shall be entitled to recognize the
exclusive rights of a person registered on its books as the owner of shares to
receive dividends and to vote as such owner. The corporation shall be entitled
to hold liable for calls and assessments a person registered on its books as
the owner of shares. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, regardless of whether the corporation shall have express or
other notice thereof, unless otherwise provided by statute, the Certificate of
Incorporation or these Bylaws.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, unless otherwise provided by statute, the Certificate of
Incorporation or these Bylaws, may be declared by the Board of Directors at any
regular or special meeting, pursuant to law. Dividends may be paid in cash,
property, or in shares of stock, unless otherwise provided by statute, the
Certificate of Incorporation or these Bylaws. Before payment of any dividend,
there may be get aside out of any funds of the corporation available for
dividends such sum or sums as the Board of Directors from time to time, in
their absolute discretion, may think proper as a reserve or reserves for
contingencies, equalizing dividends, repairing or maintaining any property of
the corporation, or for such other purpose or purposes as the Board of
Directors shall think conducive to the interests of the corporation, and the
Board of Directors may modify or abolish any such reserve in the manner in
which it was created.
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Section 2. Annual Statements. The Board of Directors shall
present at each annual meeting, and at any special meeting of the stockholders
when called for by vote of the stockholders, a full and clear statement of the
business and condition of the corporation.
Section 3. Checks. All checks or demands for money and notes of
the corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the corporation shall
be designated by resolution of the Board of Directors.
Section 5. Indemnification. The corporation shall have the power
to indemnify its officers, directors, employees and agents of the Corporation,
and such other persons as designated by the Board of Directors, to the full
extent as permitted under the laws of the State of Delaware.
Section 6. Seal. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization, and the name of the
State of Delaware. The seal may be used by causing it or a facsimile thereof to
be impressed, affixed or otherwise reproduced.
Section 7. Amendments. Unless such power is reserved to the
stockholders by statute, the Certificate of Incorporation or these Bylaws,
these Bylaws may be altered, amended or repealed or new Bylaws adopted either
by the stockholders or the Board of Directors (when such power is conferred
upon the Board of Directors by the Certificate of Incorporation, and subject to
repeal or change by action of the stockholders) at any annual meeting of the
stockholders or regular meeting of the Board of Directors, or at any special
meeting of the stockholders or the Board of Directors (if notice of such
alteration, amendment, repeal or adoption of new Bylaws is contained in the
notice of such special meeting), by a vote of a majority of the holders of
stock having voting power present in person or represented by proxy at such
meeting at which there is a quorum, or by a vote of a majority of the directors
present at such meeting at which there is a quorum (whichever is applicable).
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EXHIBIT 10.181
===============================================================================
ASSET PURCHASE AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS OF
FAYETTEVILLE-62, INC.,
FAYETTEVILLE-CUMBERLAND TELECASTERS, INC.,
FAYETTEVILLE-CUMBERLAND TELECASTERS, INC.,
DEBTOR-IN-POSSESSION,
AND
POPLAR APARTMENTS LIMITED PARTNERSHIP.
FOR
TELEVISION STATION WFAY,
FAYETTEVILLE, NORTH CAROLINA
* * *
AUGUST 29, 1997
===============================================================================
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS...........................................................................................1
"Accounts Receivable"....................................................................................1
"Assets".................................................................................................1
"Assumed Contracts"......................................................................................1
"Closing"................................................................................................2
"Closing Date"...........................................................................................2
"Consents"...............................................................................................2
"Contracts"..............................................................................................2
"Escrow Agent"...........................................................................................2
"Escrow Agreement".......................................................................................2
"FCC"....................................................................................................2
"FCC Consent"............................................................................................2
"FCC Licenses"...........................................................................................2
"Final Order"............................................................................................2
"Intangibles"............................................................................................3
"Licenses"...............................................................................................3
"Purchase Price".........................................................................................3
"Real Property"..........................................................................................3
"Tangible Personal Property".............................................................................3
SECTION 2. PURCHASE AND SALE OF ASSETS...........................................................................3
2.1 Agreement to Sell and Buy.......................................................................3
2.2 Excluded Assets.................................................................................4
2.3 Purchase Price..................................................................................4
2.4 Payment of Purchase Price.......................................................................5
2.5 Assumption of Liabilities and Obligations.......................................................5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER..............................................................6
3.1 Organization, Standing, and Authority...........................................................6
3.2 Authorization and Binding Obligation............................................................6
3.3 Absence of Conflicting Agreements...............................................................6
3.4 Governmental Licenses...........................................................................7
3.5 Title to and Condition of Real Property.........................................................7
3.6 Title to and Condition of Tangible Personal Property............................................8
3.7 Contracts.......................................................................................8
3.8 Consents........................................................................................9
3.9 Intangibles.....................................................................................9
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3.10 Insurance.......................................................................................9
3.11 Reports........................................................................................10
3.12 Personnel......................................................................................10
3.13 Taxes..........................................................................................12
3.14 Claims and Legal Actions.......................................................................12
3.15 Environmental Matters..........................................................................12
3.16 Compliance with Laws...........................................................................14
3.17 Conduct of Business in Ordinary Course.........................................................14
3.18 Transactions with Affiliates...................................................................15
3.19 Broker.........................................................................................15
3.20 Full Disclosure................................................................................15
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER..............................................................15
4.1 Organization, Standing, and Authority..........................................................15
4.2 Authorization and Binding Obligation...........................................................15
4.3 Absence of Conflicting Agreements..............................................................16
4.4 Broker.........................................................................................16
4.5 Full Disclosure................................................................................16
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING...........................................................16
5.1 Generally......................................................................................16
5.2 Compensation...................................................................................16
5.3 Contracts......................................................................................16
5.4 Disposition of Assets..........................................................................17
5.5 Encumbrances...................................................................................17
5.6 Licenses.......................................................................................17
5.7 Rights.........................................................................................17
5.8 No Inconsistent Action.........................................................................17
5.9 Access to Information..........................................................................17
5.10 Maintenance of Assets..........................................................................18
5.11 Insurance......................................................................................18
5.12 Consents.......................................................................................18
5.13 Books and Records..............................................................................18
5.14 Notification...................................................................................18
5.15 Financial Information..........................................................................18
5.16 Compliance with Laws...........................................................................19
5.17 Financing Leases...............................................................................19
5.18 Programming....................................................................................19
5.19 Preservation of Business.......................................................................19
5.20 Collection of Accounts Receivable..............................................................19
5.21 Personnel Recommendations......................................................................19
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SECTION 6. SPECIAL COVENANTS AND AGREEMENTS....................................................................19
6.1 FCC Consent....................................................................................19
6.2 Control of the Station.........................................................................20
6.3 Risk of Loss...................................................................................21
6.4 Confidentiality................................................................................21
6.5 Environmental Audit............................................................................21
6.6 Engineering Study..............................................................................21
6.7 Cooperation....................................................................................22
6.8 Bulk Sales Law.................................................................................22
6.9 Sales Tax Filings..............................................................................22
6.10 Access to Books and Records....................................................................22
6.11 Appraisal......................................................................................22
6.12 Noncompetition Agreement.......................................................................22
6.13 Tower Space Consent............................................................................23
6.14 Microwave Transmission Site....................................................................23
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING.....................................................................................23
7.1 Conditions to Obligations of Buyer.............................................................23
7.2 Conditions to Obligations of Seller............................................................24
SECTION 8. CLOSING AND CLOSING DELIVERIES......................................................................24
8.1 Closing........................................................................................24
8.2 Deliveries by Seller...........................................................................25
8.3 Deliveries by Buyer............................................................................26
SECTION 9. TERMINATION.........................................................................................27
9.1 Termination by Seller..........................................................................27
9.2 Termination by Buyer...........................................................................27
9.3 Rights on Termination..........................................................................28
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES............................................................29
10.1 Representations and Warranties.................................................................29
10.2 Indemnification by Seller......................................................................29
10.3 Indemnification by Buyer.......................................................................30
10.4 Procedure for Indemnification..................................................................30
10.5 Specific Performance...........................................................................31
10.6 Attorneys' Fees................................................................................32
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SECTION 11. MISCELLANEOUS.......................................................................................32
11.1 Fees and Expenses..............................................................................32
11.2 Arbitration....................................................................................32
11.3 Notices........................................................................................33
11.4 Benefit and Binding Effect.....................................................................33
11.5 Further Assurances.............................................................................34
11.6 Governing Law..................................................................................34
11.7 Headings.......................................................................................34
11.8 Gender and Number..............................................................................34
11.9 Entire Agreement...............................................................................34
11.10 Waiver of Compliance; Consents.................................................................34
11.11 Press Release..................................................................................35
11.12 Counterparts...................................................................................35
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LIST OF SCHEDULES
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Schedule 2.2 - Excluded Property
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.5 - Real Property
Schedule 3.6 - Tangible Personal Property
Schedule 3.7 - Assumed Contracts
Schedule 3.9 - Intangibles
Schedule 3.10 - Insurance Policies
Schedule 3.12 - Employee Matters
Schedule 6.12 - Noncompetition Agreement
Schedule 8.2(i) - Form of Opinion of Seller's Counsel
Schedule 8.3(d) - Form of Opinion of Buyer's Counsel
</TABLE>
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the 29th day of August,
1997, by and among PAXSON COMMUNICATIONS OF FAYETTEVILLE-62, INC., a Florida
corporation ("Buyer"), FAYETTEVILLE-CUMBERLAND TELECASTERS, INC., a North
Carolina corporation ("Fayetteville"), FAYETTEVILLE-CUMBERLAND TELECASTERS,
INC., DEBTOR-IN-POSSESSION, a North Carolina corporation ("Fayetteville
Debtor"), and POPLAR APARTMENTS LIMITED PARTNERSHIP, a North Carolina limited
partnership ("Poplar" and together with Fayetteville and Fayetteville Debtor,
"Seller").
R E C I T A L S
A. Seller is the licensee of and owns and operates television station
WFAY(TV), Fayetteville, North Carolina (the "Station") pursuant to licenses
issued by the Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer desires to buy, substantially all
the assets that are used or useful in the business or operations of the Station,
for the price and on the terms and conditions set forth in this Agreement.
A G R E E M E N T S
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, Buyer and Seller, intending to be bound
legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings
set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising time run on the Station by Seller prior to the Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7 that
are specifically designated on Schedule 3.7 as Contracts that are to be assumed
by Buyer upon its purchase of the Station, (ii) any Contracts entered into by
Seller between the date of this
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Agreement and the Closing Date that Buyer agrees in writing to assume, and (iii)
time sales contracts entered into by Seller in compliance with Section 5.3, but
shall not include any programming agreements.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer or
otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which Seller is a party or which are binding upon Seller and which
relate to or affect the Assets or the business or operations of the Station, and
(i) which are in effect on the date of this Agreement or (ii) which are entered
into by Seller between the date of this Agreement and the Closing Date.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement dated as of the date
hereof among Buyer, Seller and the Escrow Agent.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
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"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment warranties,
and other similar intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or owned by Seller
or under which Seller is licensed or franchised and which are used or useful in
the business and operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations issued
by the FCC, the Federal Aviation Administration, or any other federal, state, or
local governmental authorities to Seller in connection with the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon, and other real property interests which are used or
useful in the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts, and other tangible personal property which is used or useful in the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to sell, transfer, and deliver to
Buyer on the Closing Date, and Buyer agrees to purchase, all of the tangible and
intangible assets used or useful in connection with the conduct of the business
or operations of the Station, together with any additions thereto between the
date of this Agreement and the Closing Date, but excluding the assets described
in Section 2.2, free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges, or encumbrances of any nature
whatsoever (except for liens for current taxes not yet due and payable),
including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
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(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Seller
relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) All choses in action of Seller relating to the Station;
and
(h) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following assets:
(a) Seller's cash on hand as of the Closing and all other cash
in any of Seller's bank or savings accounts; any insurance policies, letters of
credit, or other similar items and cash surrender value in regard thereto; and
any stocks, bonds, certificates of deposit and similar investments;
(b) Accounts Receivable;
(b) All books and records that Seller is required by law to
retain and that pertain to Seller's corporate organization;
(c) Any pension, profit-sharing, or employee benefit plans,
and any collective bargaining agreements; and
(d) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets and the covenants
of James Thrash set forth in the Noncompetition Agreement referred to in Section
6.12 shall be FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS ($4,500,000) adjusted
as provided below:
<PAGE> 11
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(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied against
the Assets, property and equipment rentals, applicable copyright or other fees,
sales and service charges, taxes (except Seller shall be solely responsible for
all federal, state and local sales or transfer taxes arising from the transfer
of the Assets to Buyer under this Agreement), FCC annual regulatory fees and
similar prepaid and deferred items, shall be prorated between Buyer and Seller
in accordance with the principle that Seller shall be responsible for all
expenses, costs, and liabilities allocable to the period prior to the Closing
Date, and Buyer shall be responsible for all expenses, costs, and obligations
allocable to the period on and after the Closing Date. Notwithstanding the
preceding sentence, there shall be no adjustment for, and Seller shall remain
solely liable with respect to, any Contracts not included in the Assumed
Contracts and any other obligation or liability not being assumed by Buyer in
accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments will,
insofar as feasible, be determined and paid on the Closing Date, with final
settlement and payment by the appropriate party occurring no later than ninety
(90) days after the Closing Date or such other date as the parties shall
mutually agree upon. Seller shall prepare and deliver to Buyer not later than
five (5) days before the Closing Date a preliminary settlement statement which
shall set forth Seller's good faith estimate of the adjustments to the Purchase
Price under Section 2.3(a). The preliminary settlement statement (i) shall
contain all information reasonably necessary to determine the adjustments to the
Purchase Price under Section 2.3(a), to the extent such adjustments can be
determined or estimated as of the date of the preliminary settlement statement,
and such other information as may be reasonably requested by Buyer, and (ii)
shall be certified by Seller to be true and complete in all material respects as
of the date thereof.
2.4 Payment of Purchase Price. The Purchase Price, as adjusted, shall
be paid by Buyer to Seller at Closing by wire transfer of same-day funds
pursuant to wire instructions which shall be delivered by Seller to Buyer, at
least two (2) days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing Date,
Buyer shall assume and undertake to pay, discharge, and perform all obligations
and liabilities of Seller under the Licenses and the Assumed Contracts insofar
as they relate to the time on and after the Closing Date, and arise out of
events related to Buyer's ownership of the Assets or its operation of the
Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or proceedings
relating to the operation of the Station prior to the Closing, (iv) any
obligations or liabilities arising under capitalized leases or other financing
<PAGE> 12
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agreements, (v) any obligations or liabilities arising under agreements entered
into other than in the ordinary course of business, (vi) any obligations or
liabilities of Seller under any employee pension, retirement, health and welfare
or other benefit plans or collective bargaining agreements, (vii) any obligation
to any employee of the Station for severance benefits, vacation time, or sick
leave accrued prior to the Closing Date, or (viii) any obligations or
liabilities caused by, arising out of, or resulting from any action or omission
of Seller prior to the Closing, and all such obligations and liabilities shall
remain and be the obligations and liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Each of Fayetteville and
Fayetteville Debtor is a corporation duly organized, validly existing, and in
good standing under the laws of the State of North Carolina and Poplar is a
limited partnership duly organized, validly existing, and in good standing under
the laws of the State of North Carolina. Seller has all requisite power and
authority (i) to own, lease, and use the Assets as now owned, leased, and used,
(ii) to conduct the business and operations of the Station as now conducted, and
(iii) to execute and deliver this Agreement, the Escrow Agreement and the
documents contemplated hereby and thereby, and to perform and comply with all of
the terms, covenants, and conditions to be performed and complied with by Seller
hereunder and thereunder. Seller is not a participant in any joint venture or
partnership with any other person or entity with respect to any part of the
operations of the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement and the Escrow Agreement by Seller have been duly
authorized by all necessary actions on the part of Seller and its shareholders
or partners, as applicable. This Agreement and the Escrow Agreement have been
duly executed and delivered by Seller and constitute the legal, valid, and
binding obligations of Seller, enforceable against it in accordance with their
respective terms except as the enforceability of this Agreement and the Escrow
Agreement may be affected by judicial discretion in the enforcement of equitable
remedies. No federal or state bankruptcy laws or judicial orders or plans or
other similar matters restrict the right of Seller to enter into this Agreement
and to consummate the transactions contemplated hereby.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the Escrow Agreement and the documents contemplated hereby
and thereby (with or without the giving of notice, the lapse of time, or both):
(i) do not require the consent of any third party; (ii) will not conflict with
any provision of the organizational documents of Seller; (iii) will not conflict
with, result in a breach of, or constitute a default under, any law, judgment,
order,
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ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; (iv) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Seller is a party or
by which Seller may be bound; and (v) will not create any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and complete
list of the Licenses. Seller has delivered to Buyer true and complete copies of
the Licenses (including any amendments and other modifications thereto). The
Licenses have been validly issued, and Fayetteville Debtor is the authorized
legal holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station in the manner and to the full extent they are now conducted, and
none of the Licenses is subject to any restriction or condition that would limit
the full operation of the Station as now operated. The Licenses are in full
force and effect, and the conduct of the business and operations of the Station
is in accordance therewith. Seller has no reason to believe that any of the
Licenses would not be renewed by the FCC or other granting authority in the
ordinary course. The Station's city of license, as determined by the FCC, is
located within the Raleigh-Durham, North Carolina Area of Dominant Influence as
defined by the 1991-1992 Area of Dominant Influence Market Guide published by
The Arbitron Co. and the Raleigh-Durham, North Carolina Designated Market Area
as defined by the 1995 United States Television Household Estimates published by
Nielsen Media Research. On or before October 1, 1996, Seller made a valid
election of must carry with respect to each cable system set forth on Schedule
3.4. No cable system has advised Seller of any signal quality or copyright
indemnity or other prerequisite to cable carriage of the Station's signal, and
no cable system has declined or threatened to decline such carriage or failed to
respond to a request for carriage or sought any form of relief from carriage
from the FCC.
3.5 Title to and Condition of Real Property. Schedule 3.5 contains a
complete and accurate description of all the Real Property and Seller's
interests therein (including street address, legal description, owner, and use
and the location of all improvements thereon). The Real Property listed on
Schedule 3.5 comprises all real property interests necessary to conduct the
business and operations of the Station as now conducted. Seller has good and
marketable fee simple title, insurable at standard rates, to all fee estates
(including the improvements thereon) included in the Real Property, free and
clear of all liens, mortgages, pledges, covenants, easements, restrictions,
encroachments, leases, charges, and other claims and encumbrances of any nature
whatsoever, and without reservation or exclusion of any mineral, timber, or
other rights or interests, except for liens for real estate taxes not yet due
and payable and liens disclosed on Schedule 3.5. With respect to each leasehold
or
<PAGE> 14
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subleasehold interest included in the Real Property being conveyed under this
Agreement so long as Seller fulfills its obligations under the lease therefor,
Seller has enforceable rights to nondisturbance and quiet enjoyment, and no
third party holds any interest in the leased premises with the right to
foreclose upon Seller's leasehold or subleasehold interest. All towers, guy
anchors, and buildings and other improvements included in the Assets are located
entirely on the Real Property listed in Schedule 3.5. Seller has delivered to
Buyer true and complete copies of all deeds pertaining to the Real Property. All
Real Property (including the improvements thereon) (i) is in good condition and
repair consistent with its present use, (ii) is available for immediate use in
the conduct of the business and operations of the Station, and (iii) complies
with all applicable building or zoning codes and the regulations of any
governmental authority having jurisdiction. Seller has full legal and practical
access to the Real Property. All easements, rights-of-way, and real property
licenses have been properly recorded in the appropriate public recording
offices. The parties hereto acknowledge that the leasehold interests described
in Schedule 3.5 is the only Real Property being conveyed by Seller to Buyer
hereunder. The shopping center lease described in Schedule 3.5 does not require
that Seller or any assignee thereof pay any "Percentage Rent" as defined therein
and expires on February 28, 1998.
3.6 Title to and Condition of Tangible Personal Property. Schedule 3.6
lists all material items of Tangible Personal Property. The Tangible Personal
Property listed on Schedule 3.6 comprises all material items of tangible
personal property necessary to conduct the business and operations of the
Station as now conducted. Except as described in Schedule 3.6, Seller owns and
has good title to each item of Tangible Personal Property, and none of the
Tangible Personal Property owned by Seller is subject to any security interest,
mortgage, pledge, conditional sales agreement, or other lien or encumbrance,
except for liens for current taxes not yet due and payable. Each item of
Tangible Personal Property is available for immediate use in the business and
operations of the Station. All items of transmitting and studio equipment
included in the Tangible Personal Property (i) have been maintained in a manner
consistent with generally accepted standards of good engineering practice, and
(ii) will permit the Station and any auxiliary broadcast facilities related to
the Station to operate in accordance with the terms of the FCC Licenses and the
rules and regulations of the FCC, and with all other applicable federal, state,
and local statutes, ordinances, rules, and regulations.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts except contracts with advertisers for the sale of advertising time on
the Station for cash at prevailing rates and which have not been prepaid and
which may be canceled by the Station without penalty on not more than thirty
days' notice. Seller has delivered to Buyer true and complete copies of all
written Contracts, true and complete memoranda of all oral Contracts (including
any amendments and other modifications to such Contracts), and a schedule
summarizing Seller's obligations under trade and barter agreements relating to
the Station. Other than the Contracts listed on Schedule 3.7 and cash
programming contracts, Seller requires no
<PAGE> 15
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contract, lease, or other agreement to enable it to carry on its business as now
conducted. All of the Assumed Contracts are in full force and effect, and are
valid, binding, and enforceable in accordance with their terms. Each party to
the Contracts has complied in all material respects with all of the terms and
conditions of the Contracts and there is not under any Contract any default by
any party thereto or any event that, after notice or lapse of time or both,
could constitute a default. Seller is not aware of any intention by any party to
any Assumed Contract (i) to terminate such contract or amend the terms thereof,
(ii) to refuse to renew the Assumed Contract upon expiration of its term, or
(iii) to renew the Assumed Contract upon expiration only on terms and conditions
which are more onerous than those now existing. Except for the need to obtain
the Consents listed in Schedule 3.3, Seller has full legal power and authority
to assign its rights under the Assumed Contracts to Buyer in accordance with
this Agreement, and such assignment will not affect the validity,
enforceability, or continuation of any of the Assumed Contracts. Buyer shall
assume the existing studio/tower lease agreement with the provision that the
lessor, Lumber Bridge Limited Partnership, will have the right to sublet or
authorize use of the studio facilities by others so long as such subletting or
other authorized use of the studio facilities does not interfere with Buyer's
use of the studio facilities in connection with Buyer's operation of the
Station.
3.8 Consents. Except for the FCC Consent provided for in Section 6.1
and the other Consents described in Schedule 3.3, no consent, approval, permit,
or authorization of, or declaration to or filing with any governmental or
regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby, (ii) to permit Seller
to assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct
the business and operations of the Station in essentially the same manner as
such business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Seller has delivered to Buyer copies of
all documents establishing or evidencing all Intangibles. Seller is not
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and there
is no claim or action pending, or to the knowledge of Seller threatened, with
respect thereto. The Intangibles listed on Schedule 3.9 comprise all intangible
property interests necessary to conduct the business and operations of the
Station as now conducted.
3.10 Insurance. Schedule 3.10 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.10 are in full
force and effect. The insurance policies listed in Schedule 3.10 are adequate in
amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Station
<PAGE> 16
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against all customary and foreseeable risks. During the past three years, no
insurance policy of Seller on the Assets or the Station has been canceled by the
insurer and no application of Seller for insurance has been rejected by any
insurer.
3.11 Reports. All returns, reports, and statements that the Station is
currently required to file with the FCC or with any other governmental agency
have been filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction over Seller and the Station have
been complied with. All of such returns, reports, and statements are
substantially complete and correct as filed. Seller has timely paid to the FCC
all annual regulatory fees payable with respect to the FCC Licenses.
3.12 Personnel.
(a) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.12, and complete and accurate copies of
any such written Employee Plans and Compensation Arrangements (or related
insurance policies) have been furnished to Buyer, along with copies of any
employee handbooks or similar documents describing such Employee Plans and
Compensation Arrangements. Descriptions of any unwritten Employee Plans or
Compensation Arrangements also are provided in Schedule 3.12. Schedule 3.12 also
contains a true and complete list of all employees of the Station, their job
description, date of hire, salary and amount and date of last salary increase.
(b) Each Employee Plan and Compensation Arrangement has been
administered in compliance with its own terms and in material compliance with
the provisions of ERISA, the Code, the Age Discrimination in Employment Act and
any other applicable Federal or state laws. Seller is not aware of the existence
of any governmental audit or examination of any Employee Plan or Compensation
Arrangement or of any facts which would lead it to believe that any such audit
or examination is pending or threatened. There exists no action, suit or claim
(other than routine claims for benefits) with respect to any Employee Plan or
Compensation Arrangement pending or, to the best knowledge of Seller, threatened
against any of such plans or arrangements, and Seller possesses no knowledge of
any facts which could give rise to any such action, suit or claim.
(c) Seller does not contribute to and is not required to
contribute to any Multi-employer Plan with respect to the employees of the
Station, and neither Seller nor any other trade or business under common control
with Seller (within the meaning of Sections 414(b), (c), (m) or (o) of the Code)
has incurred or reasonably expects to incur any "withdrawal liability," as
defined under Section 4201 et seq. of ERISA.
(d) Except as described in Schedule 3.12, neither Seller nor
any other trade or business under common control with Seller (within the meaning
of Sections 414(b), (c), (m) or (o) of the Code) sponsors, maintains or
contributes to any Employee Plan or
<PAGE> 17
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Compensation Arrangement that provides retiree medical or retiree life insurance
coverage to former employees of Seller at the Station.
(e) Except as described in Schedule 3.12, with respect to each
Employee Plan and, to the extent applicable, each Compensation Arrangement: (i)
each Employee Plan that is intended to be tax-qualified, and each amendment
thereto, is the subject of a favorable determination letter, and no plan
amendment that is not the subject of a favorable determination letter would
affect the validity of an Employee Plan's letter; (ii) no prohibited
transaction, within the definition of section 4975 of the Code or Title 1, Part
4 of ERISA, has occurred which would subject Seller to any liability; and (iii)
all contributions, premiums or payments accrued, in whole or in part, under each
Employee Plan or Compensation Arrangement or with respect thereto as of the
Closing will be paid by the Seller prior to the Closing, including, but not
limited to, contributions thereto with respect to the plan year ending
immediately prior to the Closing.
(f) For purposes of this Agreement, the following terms shall
have the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan as
defined in Section 3(3) of ERISA to which Seller or any entity related to Seller
(under the terms of Section 414(b), (c), (m) or (o) of the Code) contributes or
to which Seller or any entity related to Seller (under the terms of Sections
414(b), (c), (m) or (o) of the Code) sponsors, maintains or otherwise is bound
which provides benefits to persons employed or previously employed at the
Station; (ii) "Code" shall mean the Internal Revenue Code of 1986, as amended,
any successor thereto and any regulations promulgated thereunder; (iii)
"Compensation Arrangement" shall mean any plan or compensation arrangement other
than an Employee Plan, whether written or unwritten, which provides to
employees, former employees, officers, directors and shareholders of Seller or
any entity related to Seller (under the terms of Section 414(b), (c), (m) or (o)
of the Code) employed or previously employed at the Station any compensation or
other benefits, whether deferred or not, in excess of base salary or wages,
including, but not limited to, any bonus or incentive plan, stock rights plan,
deferred compensation arrangement, life insurance, stock purchase plan,
severance pay plan and any other employee fringe benefit plan; (iv) "ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as amended, any
successor thereto and any regulations promulgated thereunder; and (v)
"Multi-employer Plan" means a plan, as defined in ERISA Section 3(37), to which
Seller or any entity related to Seller (under the terms of Section 414(b) or (c)
of the Code) contributes or is required to contribute.
(g) Seller is not a party to or subject to any collective
bargaining agreements with respect to the Station. Seller has no written or oral
contracts of employment with any employee of the Station, other than those
listed in Schedule 3.7. Seller has complied with all laws, rules, regulations
and agreements relating to the employment of
<PAGE> 18
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labor, including those related to wages, hours, collective bargaining,
occupational safety, discrimination, and the payment of social security and
other payroll related taxes, and Seller has not received any notice alleging
that it has failed to comply in any material respect with any such laws, rules,
regulations or agreements. No controversies, disputes, or proceedings are
pending or, to the best of Seller's knowledge, threatened, between Seller and
any employee (singly or collectively) of the Station. No labor union or other
collective bargaining unit represents or claims to represent any of the
employees of the Station. To the best of Seller's knowledge, there is no union
campaign being conducted to represent any employees of the Station or to solicit
cards from employees to authorize a union to request a National Labor Relations
Board certification election with respect to any employees at the Station.
3.13 Taxes. Seller has filed or caused to be filed all federal income
tax returns and all other federal, state, county, local, or city tax returns
which are required to be filed, and it has paid or caused to be paid all taxes
shown on those returns or on any tax assessment received by it to the extent
that such taxes have become due, or has set aside on its books adequate reserves
(segregated to the extent required by generally accepted accounting principles)
with respect thereto. There are no governmental investigations or other legal,
administrative, or tax proceedings pursuant to which Seller is or could be made
liable for any taxes, penalties, interest, or other charges, the liability for
which could extend to Buyer as transferee of the business of the Station, and no
event has occurred that could impose on Buyer any transferee liability for any
taxes, penalties, or interest due or to become due from Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry, there is no claim,
legal action, counterclaim, suit, arbitration, governmental investigation or
other legal, administrative, or tax proceeding, nor any order, decree or
judgment, in progress or pending, or to the knowledge of Seller threatened,
against or relating to Seller with respect to its ownership or operation of the
Station or otherwise relating to the Assets or the business or operations of the
Station, nor does Seller know or have reason to be aware of any basis for the
same. In particular, but without limiting the generality of the foregoing, there
are no applications, complaints or proceedings pending or, to the best of its
knowledge, threatened (i) before the FCC relating to the business or operations
of the Station other than rule making proceedings which affect the television
industry generally, (ii) before any federal or state agency relating to the
business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.15 Environmental Matters.
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(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
(b) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis related to the past or present operations,
properties, or facilities of Seller for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand against
Seller giving rise to any such liability) under any law, rule, or regulation of
any federal, state, or local government (or agency thereof) concerning release
or threatened release of hazardous substances, public health and safety, or
pollution or protection of the environment.
(c) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and Seller has not handled or disposed of any substance,
arranged for the disposal of any substance, or owned or operated any property or
facility in any manner that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to any statute) against Seller giving
rise to any such liability) for damage to any site, location, or body of water
(surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
against Seller giving rise to any such liability) under any law, rule, or
regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and Seller has not exposed any employee to any substance or
condition that could form the basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand (under the
common law or pursuant to statute) against Seller giving rise to any such
liability) for any illness or personal injury to any employee.
(f) In connection with its ownership or operation of the
Station, Seller has obtained and been in compliance in all material respects
with all of the terms and conditions of all permits, licenses, and other
authorizations which are required under, and has complied with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
<PAGE> 20
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obligations, schedules, and timetables which are contained in, all federal,
state, and local laws, rules, and regulations (including all codes, plans,
judgments, orders, decrees, stipulations, injunctions, and charges thereunder)
relating to public health and safety, worker health and safety, and pollution or
protection of the environment, including laws relating to emissions, discharges,
releases, or threatened releases of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes into ambient air, surface
water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes.
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, after due investigation, by any other party on any Real
Property.
3.16 Compliance with Laws. Seller has complied in all material respects
with the Licenses and all federal, state, and local laws, rules, regulations,
and ordinances applicable or relating to the ownership and operation of the
Station. Neither the ownership or use of the properties of the Station nor the
conduct of the business or operations of the Station conflicts with the rights
of any other person or entity.
3.17 Conduct of Business in Ordinary Course. Seller has conducted the
business and operations of the Station only in the ordinary course and has not:
(a) Suffered any material adverse change in the business, assets,
or properties of the Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct of the business of the
Station;
(b) Made any material increase in compensation payable or to
become payable to any of the employees of the Station, or any bonus payment made
or promised to any employee of the Station, or any material change in personnel
policies, employee benefits, or other compensation arrangements affecting the
employees of the Station;
(c) Made any sale, assignment, lease, or other transfer of any
of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(d) Canceled any debts owed to or claims held by Seller with
respect to the Station, except in the normal and usual course of business;
<PAGE> 21
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(e) Suffered any material write-down of the value of any Assets
or any material write-off as uncollectible of any accounts receivable of the
Station; or
(f) Transferred or granted any right under, or entered into any
settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or modified any
existing right relating to the Station.
3.18 Transactions with Affiliates. Except for the lease described on
Schedule 3.5 hereto, Seller has not been involved in any business arrangement or
relationship relating to the Station with any affiliate of Seller, and no
affiliate of Seller owns any property or right, tangible or intangible, which is
used in the business of the Station. As used in this paragraph, "affiliate" has
the meaning set forth in Rule 12b-2 promulgated under the Securities and
Exchange Act of 1934.
3.19 Broker. Neither Seller nor any person acting on Seller's behalf
has incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
3.20 Full Disclosure. No representation or warranty made by Seller in
this Agreement or in any certificate, document, or other instrument furnished or
to be furnished by Seller pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
and required to make any statement made herein or therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Florida and at Closing will be duly qualified to conduct business as a foreign
corporation in the State of North Carolina. Buyer has all requisite power and
authority to execute and deliver this Agreement and the Escrow Agreement and the
documents contemplated hereby and thereby, and to perform and comply with all of
the terms, covenants, and conditions to be performed and complied with by Buyer
hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement and the Escrow Agreement by Buyer have been duly
authorized by all necessary actions on the part of Buyer. This Agreement and the
Escrow Agreement have been duly executed and delivered by Buyer and constitute
the legal, valid, and binding obligations of Buyer, enforceable against Buyer in
accordance with their respective terms except as the enforceability of this
Agreement and the Escrow Agreement
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may be affected by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally and by judicial discretion in the enforcement of equitable
remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the Escrow Agreement and the documents contemplated hereby and thereby (with
or without the giving of notice, the lapse of time, or both): (i) do not require
the consent of any third party; (ii) will not conflict with the Articles of
Incorporation or Bylaws of Buyer; (iii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or accelerate
or permit the acceleration of any performance required by the terms of, any
agreement, instrument, license, or permit to which Buyer is a party or by which
Buyer may be bound, such that Buyer could not acquire or operate the Assets.
4.4 Broker. Neither Buyer nor any person acting on Buyer's behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5 Full Disclosure. No representation or warranty made by Buyer in
this Agreement or in any certificate, document, or other instrument furnished or
to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
and required to make any statement made herein or therein not misleading.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this Agreement
and the Closing Date, Seller shall operate the Station diligently in the
ordinary course of business in accordance with its past practices (except where
such conduct would conflict with the following covenants or with Seller's other
obligations under this Agreement), and in accordance with the other covenants in
this Section 5.
5.2 Compensation. Seller shall not increase the compensation, bonuses,
or other benefits payable or to be payable to any person employed in connection
with the conduct of the business or operations of the Station, except in
accordance with past practices.
5.3 Contracts. Seller will not enter into any contract or commitment
relating to the Station or the Assets, or amend or terminate any Contract (or
waive any material right thereunder), or incur any obligation (including
obligations relating to the borrowing of money or the guaranteeing of
indebtedness) that will be binding on Buyer after Closing, except for cash time
sales agreements made in the ordinary course of business. Prior to the Closing
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Date, Seller shall deliver to Buyer a list of all Contracts entered into between
the date of this Agreement and the Closing Date, together with copies of such
Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease, or
otherwise transfer or dispose of any of the Assets, except where no longer used
or useful in the business or operations of the Station or in connection with the
acquisition of replacement property of equivalent kind and value.
5.5 Encumbrances. Seller shall not create, assume or permit to exist
any claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance
of any nature whatsoever upon the Assets, except for (i) liens disclosed on
Schedule 3.5 and Schedule 3.6, which shall be removed prior to the Closing Date,
(ii) liens for current taxes not yet due and payable, and (iii) mechanics' liens
and other similar liens, which shall be removed prior to the Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any act or failure
to act, any of the Licenses to expire or to be revoked, suspended, or modified,
or take any action that could cause the FCC or any other governmental authority
to institute proceedings for the suspension, revocation, or adverse modification
of any of the Licenses. Seller shall not fail to prosecute with due diligence
any applications to any governmental authority in connection with the operation
of the Station.
5.7 Rights. Seller shall not waive any right relating to the Station or
any of the Assets. Seller shall not cause, by any act or failure to act, any
cable system located within the Station's Area of Dominant Influence to refuse
to carry the Station's signal.
5.8 No Inconsistent Action. Seller shall not take any action that is
inconsistent with its obligations under this Agreement or that could hinder or
delay the consummation of the transactions contemplated by this Agreement.
5.9 Access to Information. Seller shall give Buyer and its counsel,
accountants, engineers, and other authorized representatives reasonable access
to the Assets and to all other properties, equipment, books, records, Contracts,
and documents relating to the Station for the purpose of audit and inspection,
including inspections incident to the environmental study described in Section
6.5 and the engineering study described in Section 6.6, and will furnish or
cause to be furnished to Buyer or its authorized representatives all information
with respect to the affairs and business of the Station that Buyer may
reasonably request (including any financial reports and operations reports
produced with respect to the affairs and business of the Station). Without
limiting the generality of the foregoing, Seller shall give Buyer and its
counsel, accountants and other authorized representatives reasonable access to
Seller's financial records and Seller's employees, counsel, accountants and
other representatives for the purpose of preparing and auditing such financial
statements as Buyer
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determines, in its sole judgment, are required or advisable to comply with
federal or state securities laws and the rules and regulations of securities
markets as a result of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
5.10 Maintenance of Assets. Seller shall use its best efforts and take
all reasonable actions to maintain all of the Assets in good condition (ordinary
wear and tear excepted), and use, operate, and maintain all of the Assets in a
reasonable manner and in accordance with the terms of the FCC Licenses, all
rules and regulations of the FCC and generally accepted standards of good
engineering practice. Seller shall maintain inventories of spare parts and
expendable supplies at levels consistent with past practices. If any loss,
damage, impairment, confiscation, or condemnation of or to any of the Assets
occurs, Seller shall repair, replace, or restore the Assets to their prior
condition as represented in this Agreement as soon thereafter as possible, and
Seller shall use the proceeds of any claim under any insurance policy solely to
repair, replace, or restore any of the Assets that are lost, damaged, impaired,
or destroyed.
5.11 Insurance. Seller shall maintain the existing insurance policies
on the Station and the Assets.
5.12 Consents. Seller shall obtain the Consents and the estoppel
certificates described in Section 8.2(b), without any change in the terms or
conditions of any Contract or License that could be less advantageous to the
Station than those pertaining under the Contract or License as in effect on the
date of this Agreement. Seller shall promptly advise Buyer of any difficulties
experienced in obtaining any of the Consents and of any conditions proposed,
considered, or requested for any of the Consents. Upon Buyer's request, Seller
shall cooperate with Buyer and use it best efforts to obtain from the lessors
under each Real Property lease such estoppel certificates and consents to the
collateral assignment of the lessee's interest under each such lease as Buyer's
senior lenders may request.
5.13 Books and Records. Seller shall maintain its books and records
relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in writing of any
unusual or material developments with respect to the business or operations of
the Station, and of any material change in any of the information contained in
Seller's representations and warranties contained in Section 3 of this
Agreement.
5.15 Financial Information. Seller shall furnish to Buyer such
financial information (including information on payables and receivables) as
Buyer may reasonably request. All financial information delivered by Seller to
Buyer pursuant to this Section shall accurately reflect the books, records, and
accounts of the Station, shall be complete and correct in all
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material respects, and shall present fairly the financial condition of the
Station as at their respective dates and the results of operations for the
periods then ended.
5.16 Compliance with Laws. Seller shall comply in all material respects
with all laws, rules, and regulations applicable or relating to the ownership
and operation of the Station.
5.17 Financing Leases. Seller will satisfy at or prior to Closing all
outstanding obligations under capital and financing leases with respect to any
of the Assets and obtain good title to the Assets leased by Seller pursuant to
those leases so that those Assets shall be transferred to Buyer at Closing free
of any interest of the lessors. Seller shall provide evidence reasonably
satisfactory to Buyer prior to Closing that Seller has complied with this
covenant.
5.18 Programming. Seller shall not make any material changes in the
broadcast hours or in the percentages of types of programming broadcast by the
Station, or make any other material change in the Station's programming
policies, except such changes as in the good faith judgment of the Seller are
required by the public interest.
5.19 Preservation of Business. Seller shall use its best efforts to
preserve the business and organization of the Station and use its best efforts
to keep available to the Station its present employees and to preserve the
audience of the Station and the Station's present relationships with suppliers,
advertisers, and others having business relations with it, to the end that the
business, operations, and prospects of the Station shall be unimpaired at the
Closing Date. The ordinary and customary operating, marketing, promotional,
sales, and advertising practices of the Station shall be maintained.
5.20 Collection of Accounts Receivable. Seller shall collect the
accounts receivable of the Station only in the ordinary course consistent with
its past practices and will not take any action designed or likely to accelerate
the collection of its accounts receivable.
5.21 Personnel Recommendations. Seller shall promptly notify Buyer as
personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC.
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(b) Seller and Buyer shall promptly prepare an appropriate
application for the FCC Consent and shall file the application with the FCC
within five (5) business days of the execution of this Agreement. The parties
shall prosecute the application with all reasonable diligence and otherwise use
their best efforts to obtain a grant of the application as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by the
FCC Consent, except that no party shall be required to comply with a condition
if (1) the condition was imposed on it as the result of a circumstance the
existence of which does not constitute a breach by the party of any of its
representations, warranties, or covenants under this Agreement, and (2)
compliance with the condition would have a material adverse effect upon it.
Buyer and Seller shall oppose any requests for reconsideration or judicial
review of the FCC Consent. If the Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and neither party shall
have terminated this Agreement under Section 9, the parties shall jointly
request an extension of the effective period of the FCC Consent. No extension of
the FCC Consent shall limit the exercise by either party of its rights under
Section 9.
(c) Seller has represented herein that on the date hereof
Fayetteville Debtor is the holder of the FCC Licenses. As an accommodation to
Seller, Buyer has agreed that Fayetteville Debtor shall have the right to
transfer the FCC Licenses to Fayetteville prior to the Closing and in the case
of such transfer, Fayetteville will be the transferor of the FCC Licenses to
Buyer at the Closing. In order for Fayetteville Debtor to exercise its right to
transfer the FCC Licenses to Fayetteville under this Section 6.1(c),
Fayetteville and Fayetteville Debtor must file within five days of the date
hereof an appropriate application with the FCC for its consent to assign the FCC
Licenses to Fayetteville. Fayetteville and Fayetteville Debtor shall use their
best efforts to prosecute such application and within 5 days of the grant of
such application by the FCC, Fayetteville Debtor shall transfer the FCC Licenses
to Fayetteville without waiting for a Final Order. If the filing of the
assignment application pursuant to this Section 6.1(c) in any way delays or is
likely to delay the grant of the FCC Consent or the Closing, Seller shall take
all actions that Buyer may request to expedite the Closing hereunder, including
if requested by Buyer, the abandonment of its plan to transfer the FCC Licenses
from Fayetteville Debtor to Fayetteville and/or the extension of the upset date
or other termination date set forth in Section 9.1. Upon request of Buyer,
Seller hereby expressly consents to the extension of the upset date or other
termination date set forth in Section 9.1 if the Closing hereunder is delayed or
prevented as a result of the filing of the FCC application contemplated by this
Section 6.1(c). Seller shall indemnify and hold Buyer harmless from any and all
liabilities, costs and expenses, including legal fees, incurred by Buyer as a
result of matters relating to the filing of the assignment application permitted
by this Section 6.1(c).
6.2 Control of the Station. Prior to Closing, Buyer shall not, directly
or indirectly, control, supervise, direct, or attempt to control, supervise, or
direct, the operations of the Station; such operations, including complete
control and supervision of all
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of the Station programs, employees, and policies, shall be the sole
responsibility of Seller until the Closing.
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment, confiscation, or
condemnation of any of the Assets from any cause whatsoever shall be borne by
Seller at all times prior to the Closing.
(b) If any damage or destruction of the Assets or any other event
occurs which (i) causes the Station to cease broadcasting operations for a
period of three or more days or (ii) prevents in any material respect signal
transmission by the Station in the normal and usual manner and Seller fails to
restore or replace the Assets so that normal and usual transmission is resumed
within seven days of the damage, destruction or other event, Buyer, in its sole
discretion, may (x) terminate this Agreement forthwith without any further
obligations hereunder upon written notice to Seller, in which event all funds
held by the Escrow Agent pursuant to the Escrow Agreement, including all
interest and other proceeds from the investment of such funds, shall be
immediately returned to Buyer, or (y) proceed to consummate the transaction
contemplated by this Agreement and complete the restoration and replacement of
the Assets after the Closing Date, in which event Seller shall deliver to Buyer
all insurance proceeds received in connection with such damage, destruction or
other event.
6.4 Confidentiality. Except as necessary for the consummation of the
transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and expense, retain
an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey of the properties of the Station. If the survey discloses
any material environmental hazard or material possibility of future liability
for environmental damages or clean-up costs, Buyer shall so notify Seller as
soon as practicable.
6.6 Engineering Study. Buyer may, at its option and expense, retain an
engineering firm to conduct a proof of performance study of the Station and to
prepare a report on the Station's compliance with customary engineering
practices and all applicable FCC rules, regulations, prescribed practices, and
technical standards. If the survey discloses
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any material deficiencies in the operations or equipment of the Station, Buyer
shall so notify Seller as soon as practicable.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each other
and their respective counsel and accountants in connection with any actions
required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds to obtain any of the Consents or (ii) to agree to any adverse change in
any License or Assumed Contract to obtain a Consent required with respect
thereto.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the State of
North Carolina shall be complied with by Seller. Any loss, liability,
obligation, or cost suffered by Seller or Buyer as the result of the failure of
Seller or Buyer to comply with the provisions of any bulk sales law applicable
to the transfer of the Assets as contemplated by this Agreement shall be borne
by Seller.
6.9 Sales Tax Filings. Seller shall continue to file North Carolina
sales tax returns with respect to the Station in accordance with Seller's past
practices and shall concurrently deliver copies of all such returns to Buyer.
6.10 Access to Books and Records. Seller shall provide Buyer access and
the right to copy for a period of three years from the Closing Date any books
and records relating to the Assets that are not included in the Assets. Buyer
shall provide Seller access and the right to copy for a period of three years
from the Closing Date any books and records relating to the Assets.
6.11 Appraisal. Buyer and Seller agree to allocate the Purchase Price
for tax and recording purposes in accordance with an appraisal to be conducted
by an appraisal firm selected and paid for by Buyer with experience in the
valuation and appraisal of television station assets. The appraisal shall be
reasonably acceptable to Seller. If Buyer and Seller are unable to reasonably
agree on such appraisal, neither party shall be bound by such appraisal.
6.12 Noncompetition Agreement. At Closing, Seller shall cause James
Thrash, a principal of Seller, to enter into a Noncompetition Agreement with
Buyer in the form of Schedule 6.12 and $90,000 of the Purchase Price shall be
allocated to the covenants of James Thrash set forth therein on the Closing
Date.
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6.13 Tower Space Consent. Seller shall obtain, prior to Closing, the
consent of the landlord of the tower site to reserve space on the tower and in
the transmitter building for Buyer to install its digital transmission equipment
on terms and conditions acceptable to Buyer provided that, if Buyer's use of the
tower for transmission or reception of High Definition Television requires
strengthening of the tower, Buyer shall be solely responsible for any necessary
construction to the tower for this purpose and the lessor shall not be required
to remove any existing tower appurtenances as a result of said construction. The
tower lease shall also be amended prior to Closing to permit Buyer to install
and maintain standby generators, microwave dishes and receive only satellite
dishes.
6.14 Microwave Transmission Site. Seller shall obtain, prior to
Closing, a microwave transmission site on terms and conditions acceptable to
Buyer that will enable Buyer to deliver or receive television signals from the
Raleigh-Durham market.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at the
Closing are subject at Buyer's option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Seller contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
(b) Covenants and Conditions. Seller shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied with
by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Seller shall be the holder of
all Licenses and there shall not have been any modification of any License that
could have an adverse effect on the Station or the conduct of its business and
operations. Upon the transfer of the Licenses by Seller to Buyer on the Closing
Date, Buyer shall be the valid holder of the
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Licenses and the Licenses shall be in full force and effect. No proceeding shall
be pending or threatened the effect of which could be to revoke, cancel, fail to
renew, suspend, or modify adversely any License.
(f) Deliveries. Seller shall have made or stand willing to
make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement and the
Closing Date, there shall have been no material adverse change in the business,
assets, or properties of the Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct of the business of the
Station.
(h) Bankruptcy. Buyer shall have received evidence reasonably
satisfactory to Buyer that Seller has the right under all bankruptcy laws,
orders, stipulations, agreements, settlements and plans to consummate the
transactions contemplated by this Agreement in accordance with its terms.
7.2 Conditions to Obligations of Seller. All obligations of Seller at
the Closing are subject at Seller's option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
(b) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to make
all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
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(a) Closing Date. Subject to the satisfaction or waiver of all
of the conditions precedent to the Closing, the Closing shall take place at
10:00 a.m. on a date, to be set by Buyer on at least five days' written notice
to Seller, (i) not earlier than the first business day after the FCC Consent is
effective, and (2) not later than ten business days following the date upon
which the FCC Consent has become a Final Order. If Buyer fails to specify the
date for Closing prior to the fifth business day after the date upon which the
FCC Consent becomes a Final Order, the Closing shall take place on the tenth
business day after the date upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the offices of
Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800, Washington,
D.C. 20036, or any other place that is agreed upon by Buyer and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller shall
deliver to Buyer the following, in form and substance reasonably satisfactory to
Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of sale
(including, where necessary, Bills of Sale executed by Poplar Apartments Limited
Partnership), deeds, motor vehicle titles, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer, free and clear of all claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges or encumbrances,
except for liens for current taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are designated to indicate that estoppel
certificates are required under this paragraph;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Seller by an officer of Seller, certifying
(1) that the representations and warranties of Seller contained in this
Agreement are true and complete in all material respects as of the Closing Date
as though made on and as of that date; and (2) that Seller has in all material
respects performed and complied with all of its obligations, covenants, and
agreements set forth in this Agreement to be performed and complied with on or
prior to the Closing Date;
(e) Tax, Lien, and Judgment Searches. Results of a search for
tax, lien, and judgment filings in the Secretary of State's records of the State
of North Carolina as well
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as the records of those counties in North Carolina in which any of the Assets
are located, such searches having been made no earlier than fifteen days prior
to the Closing Date;
(f) Licenses, Contracts, Business Records, Etc. Copies of all
Licenses, Assumed Contracts, blueprints, schematics, working drawings, plans,
projections, engineering records, and all files and records used by Seller in
connection with its operations;
(g) Accounts Receivable. A complete and accurate list of the
Station's accounts receivable as of a date no more than five business days prior
to the Closing Date, including, with respect to each of the accounts receivable,
the account number, date of issuance, name and address of account debtor,
aggregate amount, and balance due;
(h) Opinion of Counsel. An Opinion of Seller's counsel dated
as of the Closing Date, substantially in the form of Schedule 8.2(i) hereto;
(i) Noncompetition Agreement. The Noncompetition Agreement in
the form as Schedule 6.12, duly executed by James Thrash; and
(j) Lenders Certificates. Such certificates and confirmations
to Buyer's senior lenders as Buyer may reasonably request in connection with
obtaining financing for the performance of its payment obligations hereunder.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall
deliver to Seller the following, in form and substance reasonably satisfactory
to Seller and its counsel:
(a) Purchase Price. The Purchase Price as provided in Section
2.3;
(b) Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform Seller's
obligations under the Licenses and Assumed Contracts insofar as they relate to
the time on and after the Closing Date and arise out of events related to
Buyer's ownership of the Assets or its operation of the Station on or after the
Closing Date;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by an officer of Buyer, certifying (1)
that the representations and warranties of Buyer contained in this Agreement are
true and complete in all material respects as of the Closing Date as though made
on and as of that date, and (2) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to the
Closing Date;
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(d) Opinion of Counsel. An opinion of Buyer's counsel dated as
of the Closing Date, substantially in the form of Schedule 8.3(d) hereto.
(e) Noncompetition Agreement. The Noncompetition Agreement in
the form of Schedule 6.12 duly executed by Buyer and the payment of $90,000 of
the Purchase Price to James Thrash thereunder; provided that in no event shall
the payment of the Purchase Price for the Assets and the payment required by the
Noncompetition Agreement exceed in the aggregate $4,500,000, as adjusted under
Section 2.3(a).
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Seller set
forth in this Agreement have not been satisfied or waived in writing by Seller.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by one
year after the date of this Agreement.
(d) Breach. Without limiting Seller's rights under the other
provisions of this Section 9.1, if Buyer has failed to cure any material breach
of any of its representations, warranties or covenants under this Agreement
within fifteen days after Buyer received written notice of such breach from
Seller.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement have not been satisfied or waived in writing by Buyer.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
<PAGE> 34
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(c) Upset Date. If the Closing shall not have occurred by one year
after the date of this Agreement.
(d) Interruption of Service. If any event shall have occurred that
prevented signal transmission of the Station in the normal and usual manner
for a continuous period of three days.
(e) Environmental Hazards. Buyer shall have notified Seller of
material environmental hazards or the material possibility of environmental
damages or clean-up costs, as indicated in the environmental study described in
Section 6.5, within 30 days prior to the Closing Date, and the cause thereof
shall not have been remedied prior to the Closing Date.
(f) Technical Deficiencies. Buyer shall have notified Seller of
material deficiencies in the operations or equipment of the Station, as
indicated in the engineering study described in Section 6.6, within 30 days
prior to the Closing Date, and the cause thereof shall not have been remedied
prior to the Closing Date.
(g) Breach. Without limiting Buyer's rights under the other
provisions of this Section 9.2, if Seller has failed to cure any material breach
of any of its representations, warranties or covenants under this Agreement
within fifteen days after Seller received written notice of such breach from
Buyer.
9.3 Rights on Termination. If this Agreement is terminated pursuant to
Section 9.1 or Section 9.2 and neither party is in material breach of this
Agreement, the parties hereto shall not have any further liability to each other
with respect to the purchase and sale of the Assets. If this Agreement is
terminated by Seller due to Buyer's material breach of this Agreement, then the
payment to Seller of $225,000 pursuant to Section 9.4 below shall be liquidated
damages and shall constitute full payment and the exclusive remedy for any
damages suffered by Seller by reason of Buyer's material breach of this
Agreement. Seller and Buyer agree in advance that actual damages would be
difficult to ascertain and that the amount of $225,000 is a fair and equitable
amount to reimburse Seller for damages sustained due to Buyer's material breach
of this Agreement. If this Agreement is terminated by Buyer due to Seller's
material breach of this Agreement, Buyer shall have all rights and remedies
available at law or equity.
9.4 Escrow Deposit. Buyer has deposited with the Escrow Agent the sum
of $225,000 in accordance with the Escrow Agreement. All such funds deposited
with the Escrow Agent shall be held and disbursed in accordance with the terms
of the Escrow Agreement and the following provisions:
<PAGE> 35
- 29 -
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section 9.1 or
9.2 and Buyer is not in material breach of this Agreement, all amounts held by
the Escrow Agent pursuant to the Escrow Agreement, including any interest or
other proceeds from the investment of funds held by the Escrow Agent, shall be
disbursed to or at the direction of Buyer.
(c) If this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement, then $225,000 of the amount held by the
Escrow Agent pursuant to the Escrow Agreement shall be disbursed to or at the
direction of Seller as liquidated damages under Section 9.3 above and any
interest or other proceeds from the investment of funds held by the Escrow Agent
shall be disbursed by the Escrow Agent to or at the direction of Buyer.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and warranties
contained in this Agreement shall be deemed continuing representations and
warranties and shall survive the Closing for a period of eighteen months. Any
investigations by or on behalf of any party hereto shall not constitute a waiver
as to enforcement of any representation, warranty, or covenant contained in this
Agreement. No notice or information delivered by Seller shall affect Buyer's
right to rely on any representation or warranty made by Seller or relieve Seller
of any obligations under this Agreement as the result of a breach of any of its
representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or any
information Buyer may have, Seller hereby agrees to indemnify and hold Buyer
harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting from
any untrue representation, breach of warranty, or nonfulfillment of any covenant
by Seller contained in this Agreement or in any certificate, document, or
instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by Buyer
pursuant to this Agreement, including any liabilities arising at any time under
any Contract not included in the Assumed Contracts.
<PAGE> 36
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(c) Any loss, liability, obligation, or cost resulting from
the failure of the parties to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting from
the operation or ownership of the Station prior to the Closing, including any
liabilities arising under the Licenses or the Assumed Contracts which relate to
events occurring prior the Closing Date.
(e) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting from
any untrue representation, breach of warranty, or nonfulfillment of any covenant
by Buyer contained in this Agreement or in any certificate, document, or
instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting from
the operation or ownership of the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for indemnification
shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim. If
the claim relates to an action, suit, or proceeding
<PAGE> 37
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filed by a third party against Claimant, such notice shall be given by Claimant
within five days after written notice of such action, suit, or proceeding was
given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration provisions
of this Agreement, as applicable.
(c) With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense, to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party, subject to reimbursement for actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the Indemnifying
Party. If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense. If the Indemnifying Party does not
elect to assume control or otherwise participate in the defense of any third
party claim, it shall be bound by the results obtained by the Claimant with
respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2 and
10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other remedies
that may be available, including money damages, to obtain specific performance
of the terms of this Agreement. If any
<PAGE> 38
- 32 -
action is brought by Buyer to enforce this Agreement, Seller shall waive the
defense that there is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party which
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or transfer
tax arising in connection with the conveyance of the Assets by Seller to Buyer
pursuant to this Agreement shall be paid by Seller. Buyer and Seller shall each
pay one-half of any fees payable to the Escrow Agent and all filing fees
required by the FCC in connection with the FCC Consent. Except as otherwise
provided in this Agreement, each party shall pay its own expenses incurred in
connection with the authorization, preparation, execution, and performance of
this Agreement, including all fees and expenses of counsel, accountants, agents,
and representatives.
11.2 Arbitration. Except as otherwise provided to the contrary below,
any dispute arising out of or related to this Agreement that Seller and Buyer
are unable to resolve by themselves shall be settled by arbitration by a panel
of three (3) neutral arbitrators who shall be selected in accordance with the
procedures set forth in the commercial arbitration rules of the American
Arbitration Association. The persons selected as arbitrators shall have prior
experience in the broadcasting industry but need not be professional
arbitrators, and persons such as lawyers, accountants, brokers and bankers shall
be acceptable. Before undertaking to resolve the dispute, each arbitrator shall
be duly sworn faithfully and fairly to hear and examine the matters in
controversy and to make a just award according to the best of his or her
understanding. The arbitration hearing shall be conducted in accordance with the
commercial arbitration rules of the American Arbitration Association in
Washington, D.C. The written decision of a majority of the arbitrators shall be
final and binding on Seller and Buyer. The costs and expenses of the arbitration
proceeding shall be assessed between Seller and Buyer in a manner to be decided
by a majority of the arbitrators, and the assessment shall be set forth in the
decision and award of the arbitrators. Judgment on the award, if it is not paid
within thirty days, may be entered in any court having jurisdiction over the
matter. No action at law or suit in equity based upon any claim arising out of
or related to this Agreement shall be instituted in any court by Seller or Buyer
against the other except (i) an action to compel arbitration pursuant to this
Section, (ii) an action to enforce the award of the arbitration panel rendered
in accordance with this Section, or (iii) a suit for specific performance
pursuant to Section 10.5.
<PAGE> 39
- 33 -
11.3 Notices. All notices, demands, and requests required or permitted
to be given under the provisions of this Agreement shall be (a) in writing, (b)
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
If to Seller: James Thrash, President
Fayetteville-Cumberland Telecasters, Inc.
Drawer 62
Intersection of Highways 71 & 20
Lumber Bridge, NC 28357
With a copy to: James A. Koerner, Esq.
Baraff, Koerner & Olender, P.C.
3 Bethesda Metro Center
Suite 640
Bethesda, MD 20814
If to Buyer: Lowell W. Paxson, Chairman
Paxson Communications of Fayetteville-62, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign this
Agreement without the prior written consent of the other party hereto; provided,
however, that Buyer may assign its rights and obligations under this Agreement,
in whole or in part, to one or more subsidiaries or commonly controlled
affiliates of Buyer without seeking or obtaining Seller's prior approval in
which event Buyer shall have no further obligation hereunder and Buyer may
collaterally assign its rights and interests hereunder to its senior lenders
without seeking or obtaining Seller's prior approval. Upon any permitted
assignment by Buyer or Seller in accordance with this Section 11.4, all
references to"Buyer" herein shall be deemed to be references to Buyer's assignee
and all references to "Seller" herein shall be deemed to
<PAGE> 40
- 34 -
be references to Seller's assignee, as the case may be. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and execute
any other documents that may be necessary or desirable to the implementation and
consummation of this Agreement, including, in the case of Seller, any additional
bills of sale, deeds, or other transfer documents that, in the reasonable
opinion of Buyer, may be necessary to ensure, complete, and evidence the full
and effective transfer of the Assets to Buyer pursuant to this Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for ease of
reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender, masculine, feminine, or neuter, and any other number, singular
or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and all
documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
<PAGE> 41
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in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 11.10.
11.11 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgement be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
11.12 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS OF
FAYETTEVILLE-62, INC.
By: /s/ Anthony L. Morrison
----------------------------
Name: Anthony L. Morrison
Title: Vice President
FAYETTEVILLE-CUMBERLAND
TELECASTERS, INC.
By: /s/ James Thrash
---------------------------
Name:
Title:
FAYETTEVILLE-CUMBERLAND
TELECASTERS, INC., DEBTOR-IN-
POSSESSION
By: /s/ James Thrash
---------------------------
Name:
Title:
POPLAR APARTMENTS LIMITED
PARTNERSHIP
By: /s/ Robinson O. Everett
----------------------------
Name: Robinson O. Everett
Title: General Partner
<PAGE> 1
EXHIBIT 10.182
- -------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
BY AND AMONG
CHANNEL 29 OF CHARLESTON, INC.,
PAXSON COMMUNICATIONS OF CHARLESTON-29, INC.
AND
MOUNTAINEER BROADCASTING CORP.
AND
WILLIAM L. KEPPER
* * *
September 2, 1997
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE 1. CERTAIN DEFINITIONS.............................................................................2
Section 1.1 Terms Defined in this Section..........................................................2
Section 1.2 Clarifications.........................................................................4
ARTICLE 2. THE INITIAL CLOSING.............................................................................5
Section 2.1 The Initial Closing....................................................................5
Section 2.2 Sale of Initial Shares.................................................................5
Section 2.3 Purchase Price.........................................................................5
ARTICLE 3. ACTIONS TO BE TAKEN PRIOR TO THE INITIAL CLOSING................................................5
Section 3.1 Organization of the Company............................................................5
Section 3.2 Tower Site.............................................................................5
Section 3.3 Pro Forma FCC Consent..................................................................5
Section 3.4 Assignment of Construction Permit......................................................6
Section 3.5 Conduct Pending the Initial Closing....................................................6
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING
THE INITIAL CLOSING.............................................................................6
Section 4.1 Organization and Standing..............................................................6
Section 4.2 Power and Authority....................................................................6
Section 4.3 Conflicts..............................................................................7
Section 4.4 Investment.............................................................................7
Section 4.5 Disclosure.............................................................................7
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE
COMPANY REGARDING THE INITIAL CLOSING...........................................................7
Section 5.1 Organization and Standing..............................................................7
Section 5.2 Power and Authority....................................................................8
Section 5.3 Conflicts..............................................................................8
Section 5.4 Exchange Act; Investment Company Act...................................................8
Section 5.5 Capitalization.........................................................................8
Section 5.6 Assets and Liabilities of the Company. ...............................................9
Section 5.7 Broker.................................................................................9
Section 5.8 Construction Permit....................................................................9
Section 5.9 Tower Site.............................................................................9
Section 5.10 Consents..............................................................................10
Section 5.11 Claims and Legal Actions..............................................................10
Section 5.12 Disclosure............................................................................10
ARTICLE 6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT
THE INITIAL CLOSING............................................................................10
</TABLE>
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<PAGE> 3
<TABLE>
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Section 6.1 Representations and Warranties........................................................10
Section 6.2 Covenants and Conditions..............................................................10
Section 6.3 Approvals for Tower Site..............................................................10
Section 6.4 Contribution..........................................................................10
Section 6.5 Tower Site............................................................................11
Section 6.6 Deliveries. .........................................................................11
Section 6.7 Construction Permit; Adverse Proceedings..............................................12
Section 6.8 No Liabilities........................................................................12
Section 6.9 TBA...................................................................................12
Section 7.1 Representations and Warranties........................................................12
Section 7.2 Covenants and Conditions..............................................................13
Section 7.3 Deliveries............................................................................13
Section 7.4 Adverse Proceedings...................................................................13
Section 7.5 TBA...................................................................................14
ARTICLE 8. CONSTRUCTION AND OPERATION OF THE STATION......................................................14
Section 8.1 General...............................................................................14
Section 8.2 FCC Consent...........................................................................14
Section 8.3 Employee Benefit Plans................................................................15
Section 8.4 Labor Relations.......................................................................15
Section 8.5 Licenses..............................................................................15
Section 8.6 Compliance with Laws..................................................................15
Section 8.7 Notification..........................................................................15
Section 8.8 Preservation of Business..............................................................15
Section 8.9 Performance of Agreements.............................................................15
Section 8.10 Cable Carriage........................................................................16
ARTICLE 9. THE OPTION AND THE SECOND CLOSING..............................................................16
Section 9.1 Option................................................................................16
Section 9.2 The Second Closing....................................................................16
Section 9.3 Sale of Option Shares.................................................................17
Section 9.4 Purchase Price for Option Shares......................................................17
ARTICLE 10. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING
THE SECOND CLOSING...........................................................................18
ARTICLE 11. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY AND SELLER REGARDING THE SECOND CLOSING
............................................................................................18
Section 11.1 Contracts.............................................................................18
</TABLE>
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<PAGE> 4
<TABLE>
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<S> <C> <C>
Section 11.2 Copyrights, Trademarks and Similar Rights.............................................18
Section 11.3 Governmental Authorizations...........................................................18
Section 11.4 Title to and Condition of Real Property...............................................19
Section 11.5 Title to and Condition of Tangible Personal Property..................................19
Section 11.6 Compliance With Laws..................................................................19
Section 11.7 Reports...............................................................................19
Section 11.8 Public Inspection File................................................................19
Section 11.9 Taxes.................................................................................19
Section 11.10 Dividends and Redemptions.............................................................20
Section 11.11 Notices; Condemnation.................................................................20
Section 11.12 Liabilities of the Company............................................................20
Section 11.13 Disclosure............................................................................20
ARTICLE 12. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT
THE SECOND CLOSING...........................................................................21
Section 12.1 Representations and Warranties........................................................21
Section 12.2 Covenants and Conditions..............................................................21
Section 12.3 FCC Consent...........................................................................21
Section 12.4 Consents..............................................................................21
Section 12.5 Deliveries. .........................................................................21
Section 12.6 Adverse Proceedings...................................................................22
Section 12.7 TBA. ................................................................................22
Section 12.8 Adverse Change........................................................................22
Section 12.9 Tower Site............................................................................23
ARTICLE 13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
AND THE COMPANY AT THE SECOND CLOSING........................................................23
Section 13.1 Representations and Warranties........................................................23
Section 13.2 Covenants and Conditions..............................................................23
Section 13.3 FCC Consent...........................................................................23
Section 13.4 Consents..............................................................................23
Section 13.5 Deliveries. .........................................................................23
Section 13.6 TBA...................................................................................24
Section 13.7 Adverse Proceedings...................................................................24
ARTICLE 14. JOINT COVENANTS..............................................................................24
Section 14.1 Confidentiality.......................................................................24
Section 14.2 Cooperation...........................................................................24
Section 14.3 Governmental Consents.................................................................25
Section 14.4 Station Operation and Contracts.......................................................25
</TABLE>
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<PAGE> 5
<TABLE>
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<S> <C>
ARTICLE 15. TRANSFER TAXES; FEES AND EXPENSES............................................................25
Section 15.1 Transfer Taxes........................................................................25
Section 15.2 Filing Fees...........................................................................25
Section 15.3 Expenses..............................................................................25
ARTICLE 16. RISK OF LOSS.................................................................................25
Section 16.1 Risk of Loss..........................................................................25
Section 16.2 Postponement of the Second Closing Date...............................................26
Section 16.3 Option to Terminate...................................................................26
ARTICLE 17. TERMINATION RIGHTS...........................................................................26
Section 17.1 Termination by the Parties............................................................26
Section 17.2 Termination by Buyer..................................................................27
ARTICLE 18. SPECIFIC PERFORMANCE.........................................................................27
ARTICLE 19. INDEMNIFICATION..............................................................................28
Section 19.1 Seller's, MBC's and the Company's Indemnification.....................................28
Section 19.2 Buyer's Indemnification...............................................................28
Section 19.3 Notice of Claim.......................................................................28
Section 19.4 Assumption and Defense of Third-Party Action..........................................29
Section 19.5 Limitation Period.....................................................................29
ARTICLE 20. OTHER PROVISIONS.............................................................................29
Section 20.1 Survival of Representations, Warranties and Covenants.................................29
Section 20.2 Press Releases........................................................................29
Section 20.3 Further Assurances....................................................................30
Section 20.4 Benefit and Assignment................................................................30
Section 20.5 Entire Agreement......................................................................30
Section 20.6 Headings..............................................................................30
Section 20.7 Governing Law.........................................................................30
Section 20.8 Notices...............................................................................31
Section 20.9 Counterparts..........................................................................31
Section 20.10 Guaranty..............................................................................32
</TABLE>
EXHIBITS AND SCHEDULES TO
STOCK PURCHASE AGREEMENT
EXHIBITS
EXHIBIT A -- Construction Agreement
EXHIBIT B -- Shareholders Agreement
- iv -
<PAGE> 6
SCHEDULES
Schedule 5.6 -- Assets
Schedule 5.9 -- Transmitter Site
Schedule 6.7(f) -- Opinions of Counsel to Seller and the Company
(Initial Closing)
Schedule 7.3(d) -- Opinion of Counsel to Buyer (Initial Closing)
Schedule 12.5(h) -- Opinions of Counsel to Seller and the Company
(Second Closing)
Schedule 13.5(d) -- Opinion of Counsel to Buyer (Second Closing)
- v -
<PAGE> 7
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is dated as of the 2nd
day of September, 1997, by and among MOUNTAINEER BROADCASTING CORP., a Delaware
corporation ("MBC"); WILLIAM L. KEPPER ("Seller"); CHANNEL 29 OF CHARLESTON,
INC., a Delaware corporation (the "Company"); and PAXSON COMMUNICATIONS OF
CHARLESTON-29, INC., a Florida corporation ("Buyer").
W I T N E S S E T H
WHEREAS, MBC is the holder of a construction permit, File No. BMPCT-
891031KI, as extended,` ("Construction Permit"), issued by the Federal
Communications Commission ("FCC") for new television station WKRP-TV, Channel
29, Charleston, West Virginia (the "Station");
WHEREAS, Seller owns all the stock of MBC;
WHEREAS, subject to obtaining the FCC's consent to the pro forma
assignment of the Construction Permit from MBC to the Company, Seller will cause
MBC to convey the Construction Permit to the Company and in exchange thereof
Seller will be issued all of the outstanding common stock of the Company;
WHEREAS, Buyer desires to purchase from Seller, following the
acquisition of the Construction Permit by the Company, forty-nine percent (49%)
of the outstanding common stock of the Company, subject to the terms and
conditions set forth herein;
WHEREAS, Seller desires to grant to Buyer an option to purchase the
remaining fifty-one percent (51%) of the outstanding common stock of the
Company, subject to the terms and conditions set forth herein; and
WHEREAS, in connection with the foregoing transactions, (a) Buyer,
Seller and the Company desire to enter into a Shareholders Agreement setting
forth, among other things, certain restrictions relating to the issuance and
sale of the capital stock of the Company and (b) Buyer and the Company desire to
enter into a Construction Agreement, pursuant to which Buyer agrees to provide
certain services in connection with the construction of the Station.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants, conditions and promises contained herein, and for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, agree as follows:
<PAGE> 8
ARTICLE 1. CERTAIN DEFINITIONS
Section 1.1 Terms Defined in this Section. The following terms, as used
in this Agreement, have the meanings set forth in this Section:
"Closings" means the collective reference to the Initial Closing and
the Second Closing.
"Common Stock" means all of the issued and outstanding shares of
capital stock of the Company, consisting of 1,000 shares of voting common stock,
par value $.01 per share.
"Communications Act" means the Communications Act of 1934, as amended,
the Telecommunications Act of 1996 and the rules and regulations promulgated
thereunder.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Construction
Permit to the Company and to transfer the Common Stock to Buyer or otherwise to
consummate the transactions contemplated by this Agreement.
"Construction Agreement" means the Construction Agreement to be entered
into by Buyer and the Company, substantially in the form of Exhibit A.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which the Company is a party or that are binding upon the Company,
and (a) that are in effect on the date of this Agreement or (b) that are entered
into by the Company between the date of this Agreement and the Second Closing
Date.
"FCC Consent" means action by the FCC granting its consent to the
transfer of control of the Company as contemplated by this Agreement.
"FCC Licenses" means those licenses, permits, and authorizations issued
by the FCC in connection with the business and operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"High Mountain" means High Mountain Broadcast Associates, L.L.C., a
Delaware limited liability company.
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"Initial Closing" means the consummation of the purchase and sale of
the Initial Shares pursuant to this Agreement in accordance with the provisions
of Article 2.
"Initial Closing Date" means the date on which the Initial Closing
occurs, as determined pursuant to Section 2.1.
"Initial Shares" means 490 shares of the voting common stock, par value
$.01 per share, of the Company representing 49% of the issued and outstanding
shares of the capital stock of the Company.
"Initial Shares Purchase Price" has the meaning set forth in Section
2.3.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment warranties,
and other similar intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or owned by the
Company or under which the Company is licensed or franchised and that are used
or useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Second Closing
Date.
"Licenses" means all licenses, permits, construction permits, and other
authorizations issued as of the date hereof by the FCC, the Federal Aviation
Administration, or any other federal, state, or local governmental authorities
for the construction or operation of the Station, together with any additions
thereto between the date of this Agreement and the Second Closing Date.
"Option Price" shall have the meaning set forth in Section 9.4.
"Option Shares" means 510 shares of the voting common stock, par value
$.01 per share, of the Company representing 51% of the issued and outstanding
shares of the capital stock of the Company.
"Pro Forma FCC Consent" means the action by the FCC granting its
consent to the pro forma assignment of the Construction Permit from MBC to the
Company.
"Real Property" means all interests in real property, including fee
estates, leaseholds and subleaseholds, purchase options, easements, licenses,
rights to access, and rights of way, and all buildings and other improvements
thereon, owned or held by the Company that are used or useful in the business or
operations of the Station, together with any additions thereto between the date
of this Agreement and the Second Closing Date.
"Second Closing" means the consummation of the purchase and sale of the
Option Shares pursuant to this Agreement in accordance with the provision of
Article 9.
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"Second Closing Date" means the date on which the Second Closing
occurs, as determined pursuant to Section 9.2.
"Shareholders Agreement" means the Shareholders Agreement to be entered
into upon the Initial Closing among Buyer, Seller and the Company, substantially
in the form of Exhibit B.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts, and other tangible personal property owned or held by the Company
that is used or useful in the conduct of the business or operations of the
Station, together with any additions thereto between the date of this Agreement
and the Second Closing Date.
"Taxes" (and, with correlative meaning, "Taxes" and "Taxable") means
all federal, state, local or foreign income, gross receipts, windfall profits,
severance, property, production, sales, use, license, excise, franchise,
capital, transfer, employment, withholding and other taxes and assessments,
together with any interest, additions or penalties with respect thereto and any
interest in respect of such additions or penalties, and "Tax" means any one of
such Taxes.
"Tax Returns" means all federal, state, local and foreign income,
franchise, sales, use, occupation, property, excise, alternative or add-on
minimum, social security, employees' withholding, unemployment, disability,
transfer, capital stock and other tax returns and tax reports, and "Tax Return"
means any one of such Tax Returns.
"TBA" means the Time Brokerage Agreement dated July 9, 1996 between MBC
and High Mountain.
"Transaction Documents" means the Construction Agreement and
Shareholders Agreement.
Section 1.2 Clarifications. Words used herein, regardless of the gender
and number specifically used, shall be deemed and construed to include any other
gender and any other number as the context requires. Use of the word "including"
herein shall be deemed and construed to mean "including but not limited to."
Except as specifically otherwise provided in this Agreement in a particular
instance, a reference to a Section, Exhibit or Schedule is a reference to a
Section of this Agreement or a Schedule or an Exhibit hereto, and the terms
"hereof," "herein" and other like terms refer to this Agreement as a whole,
including the Schedules and Exhibits hereto, and not solely to any particular
part hereof.
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ARTICLE 2. THE INITIAL CLOSING
Section 2.1 The Initial Closing. The Initial Closing shall take place
at 10:00 a.m., Washington, D.C. time, on a date to be set by Buyer on no less
than five (5) days' written notice to Seller, which date shall not be sooner
than the first business day after the date on which the Pro Forma FCC Consent
has been granted by the FCC and shall not be later than the tenth business day
after the date on which the Pro Forma FCC Consent has become a Final Order,
subject to the satisfaction of all other conditions precedent to the holding of
the Initial Closing. The Initial Closing shall take place at the offices of Dow,
Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800, Washington, D.C.
20036, or such other place as the parties shall mutually agree. If Buyer fails
to specify the date for Initial Closing prior to the fifth business day after
the date upon which the Pro Forma FCC Consent has become a Final Order, the
Initial Closing shall take place on the tenth business day after the date upon
which the Pro Forma FCC Consent has become a Final Order.
Section 2.2 Sale of Initial Shares. Subject to the terms and conditions
set forth in this Agreement, Seller hereby agrees to sell, transfer and deliver
to Buyer on the Initial Closing Date, and Buyer agrees to purchase, the Initial
Shares, free and clear of any claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges or encumbrances of any nature
whatsoever.
Section 2.3 Purchase Price. The purchase price for the Initial Shares
(the "Initial Shares Purchase Price") shall be $98,000. The Purchase Price shall
be paid at the Initial Closing by Buyer to Seller, in accordance with written
instructions provided by Seller to Buyer no less than two (2) business days
prior to the Initial Closing Date, by wire transfer of immediately available
federal funds.
ARTICLE 3. ACTIONS TO BE TAKEN PRIOR TO THE INITIAL CLOSING
Section 3.1 Organization of the Company. Seller shall cause the
incorporation of the Company and shall cause it to be duly qualified to conduct
business in the State of West Virginia.
Section 3.2 Tower Site. Prior to the Initial Closing, Seller shall
prepare and file with the FCC and any other federal, state or local government
authorities such applications, notices or other documents as may be necessary or
advisable to permit the construction and operation of the Station's transmission
facilities at the Tower Site (as described below).
Section 3.3 Pro Forma FCC Consent. Seller, MBC and the Company shall
prepare and, within five (5) business days after the date of this Agreement,
file with the FCC an appropriate application for the Pro Forma FCC Consent.
Seller, MBC and the Company shall thereafter prosecute the application for the
Pro Forma FCC Consent with all diligence and otherwise use their best efforts to
obtain a grant of the application for the Pro Forma FCC Consent as expeditiously
as possible.
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Section 3.4 Assignment of Construction Permit. Upon the grant of the
Pro Forma FCC Consent, Seller shall cause MBC to contribute the Construction
Permit to the Company in exchange for all of the shares of Common Stock pursuant
to conveyancing documents in form and substance acceptable to Buyer.
Section 3.5 Conduct Pending the Initial Closing. Between the date
hereof and the Initial Closing Date, unless Buyer shall otherwise consent in
writing, Seller, MBC and the Company covenant and agree:
(a) to perform all acts necessary to carry out the
transactions contemplated by this Agreement and not to: (i) sell, transfer or
encumber the Common Stock or the Construction Permit other than as contemplated
herein; (ii) perform or suffer any acts within their control that are
inconsistent with their representations, warranties, covenants and agreements
set forth herein and (iii) amend the Certificate of Incorporation or Bylaws of
the Company; and
(b) to notify Buyer promptly of (i) any adverse development
with respect to the Pro Forma FCC Consent or (ii) the commencement or threat of
any claim; suit; action; arbitration; legal, administrative or other proceeding;
governmental investigation; or tax audit against Seller, MBC or the Company or
affecting the Station; and
(c) to cooperate fully with Buyer in taking any and all
actions necessary or desirable for the consummation of the transactions
contemplated by this Agreement; and
(d) that the Company shall not create, incur, assume or
guarantee any indebtedness, obligation or liability.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING THE INITIAL CLOSING
As an inducement to Seller, MBC and the Company to enter into this
Agreement and consummate the transactions contemplated to occur upon the Initial
Closing, Buyer represents and warrants to Seller, MBC and the Company as
follows:
Section 4.1 Organization and Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Florida and shall be, on or before the Initial Closing Date, duly qualified
to conduct business as a foreign corporation in the State of West Virginia.
Section 4.2 Power and Authority. Buyer has full corporate power and
authority to enter into this Agreement and the other documents contemplated
hereby, and to perform and comply with the terms, covenants and conditions to be
performed or complied with by Buyer hereunder and thereunder. This Agreement
constitutes, and any other instrument
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contemplated hereby when executed and delivered by Buyer at the Initial Closing,
will constitute, the legal, valid and binding obligations of Buyer, enforceable
in accordance with their terms, except as such enforceability may be affected by
bankruptcy, insolvency or similar laws and by court-applied equitable
principles.
Section 4.3 Conflicts. The execution and delivery of this Agreement and
the instruments or documents to be delivered by Buyer pursuant to this Agreement
at the Initial Closing, the consummation of the transactions contemplated by
this Agreement at the Initial Closing, and compliance with the terms, conditions
and provisions of this Agreement at the Initial Closing by Buyer, with or
without the giving of notice or the passage of time, or both, do not and will
not: (i) contravene any provision of Buyer's Articles of Incorporation or
Bylaws; (ii) conflict with or result in a breach of or constitute a default
under any of the terms, conditions or provisions of any indenture, mortgage,
loan or credit agreement or any other agreement or instrument to which Buyer is
a party or by which it or its assets may be bound or affected, or any decree,
judgment or order of any court or governmental department, commission, board,
agency or instrumentality, domestic or foreign, or any applicable law,
ordinance, rule or regulation, including but not limited to the Communications
Act; or (iii) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of Buyer's assets or give to
others any interests or rights therein.
Section 4.4 Investment. Buyer will acquire the Initial Shares for its
own account for investment and not with a present view to distribute or resell
the same.
Section 4.5 Disclosure. No representation or warranty by Buyer in this
Agreement, and no schedule, document, statement, certificate furnished or to be
furnished by Buyer to Seller or the Company pursuant hereto, contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements or facts contained herein or
therein not misleading
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY REGARDING
THE INITIAL CLOSING
As an inducement to Buyer to enter into this Agreement and consummate
the transactions contemplated to occur upon the Initial Closing, Seller, MBC and
the Company jointly and severally represent and warrant to Buyer as follows:
Section 5.1 Organization and Standing. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and shall be, on or before the Initial Closing, duly qualified
to conduct business in the State of West Virginia. MBC is a corporation duly
organized validly existing and in good standing under the laws of the State of
Delaware. Seller is an individual and a resident of Illinois. Seller and MBC
have delivered to Buyer true and complete copies of the Certificate of
Incorporation and By-laws of the Company and of MBC.
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<PAGE> 14
Section 5.2 Power and Authority. Each of Seller, MBC and the Company
has full power and authority to enter into this Agreement and the other
documents contemplated hereby, and to perform and comply with the terms,
covenants and conditions to be performed or complied with by Seller, MBC or the
Company hereunder or thereunder. This Agreement constitutes, and any other
instrument contemplated hereby, when executed and delivered by Seller, MBC or
the Company at the Initial Closing, will constitute, the legal, valid and
binding obligations of Seller, MBC and the Company, enforceable in accordance
with their terms, except as such enforceability may be affected by bankruptcy,
insolvency or similar laws and by court-applied equitable principles.
Section 5.3 Conflicts. The execution and delivery of this Agreement and
the instruments or documents to be delivered by Seller, MBC or the Company
pursuant to this Agreement at the Initial Closing, the consummation of the
transactions contemplated by this Agreement at the Initial Closing, and
compliance with the terms, conditions and provisions of this Agreement at the
Initial Closing by Seller, MBC and the Company, with or without the giving of
notice or the passage of time, or both, do not and will not: (i) contravene any
provision of the Certificate of Incorporation or By-laws of the Company or of
MBC, (ii) conflict with or result in a breach of or constitute a default under
any of the terms, conditions or provisions of any indenture, mortgage, loan or
credit agreement or any other agreement or instrument to which Seller or the
Company is a party or by which Seller, MBC or the Company or any of their
respective assets may be bound or affected, or any decree, judgment or order of
any court or governmental department, commission, board, agency or
instrumentality, domestic or foreign, or any applicable law, ordinance, rule or
regulation, including but not limited to the Communications Act; or (iii) result
in the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the assets of Seller, MBC or the Company or the Common
Stock or give to others any interests or rights therein.
Section 5.4 Exchange Act; Investment Company Act. No securities of the
Company are required to be registered under Section 12 of the Securities and
Exchange Act of 1934, as amended. Neither Seller, MBC nor the Company is an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
Section 5.5 Capitalization. The Company's capital stock consists solely
of One Thousand (1,000) shares of duly authorized voting common stock, with a
par value of $.01 per share, of which One Hundred (100) shares are issued and
outstanding on the date hereof (the "Outstanding Stock"). The Outstanding Stock
is and, as of the Initial Closing, the remaining shares of Common Stock will be,
validly issued and outstanding, fully paid and nonassessable. The Outstanding
Stock constitutes on the date hereof all of the issued and outstanding capital
stock of the Company and on the Initial Closing Date, the Common Stock will
constitute all of the issued and outstanding capital stock of the Company. There
are no outstanding securities convertible into or exchangeable for, and no
outstanding options, warrants or other rights to purchase or to subscribe for,
any shares of capital stock or other securities of the Company, other than as
set forth herein. There are no outstanding
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<PAGE> 15
agreements, arrangements, commitments or understandings of any kind affecting or
relating to the voting, issuance, purchase, redemption, repurchase or transfer
of any of the capital stock of the Company, other than as set forth herein or in
the Shareholders Agreement. Except as provided herein, there are no options,
warrants, rights or any other agreement or instrument giving any person any
right under any circumstances to acquire any shares of capital stock of the
Company. Seller has good and valid marketable title to the Outstanding Stock and
the sole right to vote, sell, transfer and deliver the Outstanding Stock and on
the Closing Date, Seller will have good and marketable title to the Common Stock
and the sole right to vote, sell, transfer and deliver the Common Stock. Except
as contemplated by this Agreement, neither the Company nor Seller has agreed
with any person to sell, transfer or deliver the Outstanding Stock or other
capital stock of the Company. Upon the sale of the Initial Shares to Buyer
hereunder, Buyer shall have good and valid marketable title thereto, free and
clear of all liens, encumbrances, security interests and restrictions of any
kind and such Initial Shares shall represent 49% of the issued and outstanding
shares of the Company.
Section 5.6 Assets and Liabilities of the Company. As of the Initial
Closing Date, the Company shall own and have good and marketable title to the
assets and properties listed on Schedule 5.6, including, without limitation, the
Construction Permit, the Tower Lease and the TBA that MBC shall assign to the
Company with the consent of High Mountain and shall have no debts, obligations
or liabilities of any kind whatsoever, whether accrued, contingent or otherwise,
except those arising under this Agreement, the Transaction Documents, the Tower
Lease, the TBA and the Communications Act.
Section 5.7 Broker. Neither MBC or Seller or any person acting on their
behalf has incurred any liability for any finder's or broker's fees or
commissions in connection with the transactions contemplated by this Agreement.
Section 5.8 Construction Permit. The Construction Permit has been
validly issued and on the date hereof, MBC is the authorized legal holder
thereof and on the Initial Closing Date, the Company will be the authorized
legal holder thereof. The Construction Permit is in full force and effect and is
not subject to any restriction or condition that would delay or adversely affect
the construction of the Station. Seller, MBC and the Company are in compliance
in all material respects with the Construction Permit and all laws, regulations,
and rules, including the Communications Act. Each of Seller, MBC and the Company
have filed all returns, reports and statements required to be filed in
connection with the Construction Permit.
Section 5.9 Tower Site. On the Initial Closing Date, the Company shall
have a valid and enforceable lease for the site specified in the Station's
Construction Permit as described on Schedule 5.9 hereto (the "Tower Site"). The
Company shall have become the Lessee under the Agreement of Lease, dated
November 5, 1995 by and between Poca River Hunting, Fishing & Recreation Club,
Inc. (the "Landlord") and John B. Tupper (the "Tower Lease") and the Tower Lease
shall have been amended substantially incorporating the changes as set forth in
Schedule 5.9 hereto.
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Section 5.10 Consents. Except for the Pro Forma FCC Consent, no
consent, approval, permit or authorization of, or filing with, any governmental
authority or other party is required to consummate the transactions contemplated
by this Agreement at or before the Initial Closing.
Section 5.11 Claims and Legal Actions. There is no claim, legal action,
suit, arbitration, counterclaim, governmental investigation or other proceeding,
nor any order, decree or judgment, in progress or pending, or to the knowledge
of Seller or MBC, threatened against Seller, MBC or the Company.
Section 5.12 Disclosure. No representation or warranty by Seller, MBC
or the Company in this Agreement, and no schedule, document, statement,
certificate furnished or to be furnished by Seller, MBC or the Company to Buyer
pursuant hereto, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements or facts contained herein or therein not misleading.
ARTICLE 6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT THE INITIAL
CLOSING
The obligations of Buyer at the Initial Closing are subject to the
fulfillment prior to or at the Initial Closing of the following conditions (any
one or more of which may be waived in whole or in part by Buyer at Buyer's
option):
Section 6.1 Representations and Warranties. The representations and
warranties of Seller, MBC and the Company contained in this Agreement relating
to the Initial Closing shall be true and correct in all material respects on and
as of the Initial Closing Date, with the same force and effect as though made on
and as of such date.
Section 6.2 Covenants and Conditions. Seller, MBC and the Company shall
have performed in all material respects all of their respective obligations and
agreements and complied with all of their respective covenants and conditions
contained in this Agreement to be performed or complied with by Seller, MBC and
the Company on or before the Initial Closing Date.
Section 6.3 Approvals for Tower Site. Seller, MBC and the Company shall
have obtained all necessary governmental consents or approvals required for the
construction and operation of the Station at the Tower Site, and any such
construction shall have been conducted in accordance with the terms of such
consents or approvals and with any applicable laws, rules and regulations of any
governmental authority, including, without limitation, the FCC, any municipality
or the Federal Aviation Administration.
Section 6.4 Contribution. The Pro Forma FCC Consent shall have been
granted and shall have become a Final Order, and Seller shall have caused MBC to
contribute the
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Construction Permit to the Company in accordance with Section 3.5, free and
clear of any claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges or encumbrances of any nature whatsoever.
Section 6.5 Tower Site. The Company shall have a valid and enforceable
lease for the Tower Site and the Company shall be a party to the Tower Lease as
the Lessee thereunder and the Tower Lease, as amended as set forth in Schedule
5.9, shall be a valid and binding obligation of the parties thereto, enforceable
by the Company against the Landlord in accordance with its terms.
Section 6.6 Deliveries. Seller, MBC and the Company shall have
delivered to Buyer the following, in form and substance reasonably satisfactory
to Buyer and Buyer's Counsel:
(a) Initial Shares. Certificates representing the Initial
Shares, which shall be either duly endorsed or accompanied by stock powers duly
executed in favor of Buyer.
(b) Certificate of Incorporation. A copy of the Certificate of
Incorporation of the Company, certified as of a date not earlier than ten (10)
days prior to the Initial Closing Date by the Secretary of State of Delaware.
(c) Bylaws. A copy of the Bylaws of the Company, certified as
of the Initial Closing Date by the Secretary or an Assistant Secretary of the
Company.
(d) Resolutions. Copies of resolutions adopted by the Board of
Directors and shareholders of the Company and MBC authorizing and approving the
execution and delivery of this Agreement and the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, certified by
the Secretary or an Assistant Secretary of the Company and MBC, respectively, as
being true and complete on the Initial Closing Date.
(e) Certificates. Certificates, dated as of the Initial
Closing Date, executed on behalf of Seller, MBC and the Company by Seller and an
officer of the Company and MBC respectively, each certifying: (1) that the
representations and warranties of Seller, MBC and the Company contained in this
Agreement are true and complete in all material respects as of the Initial
Closing Date as though made on and as of that date; and (2) that Seller, MBC and
the Company have performed in all material respects all of their respective
obligations and agreements under this Agreement to be performed and complied
with by Seller, MBC and the Company on or before the Initial Closing Date.
(f) Opinions of Counsel. Opinions of Seller's, MBC's and the
Company's counsel and communications counsel dated as of the Initial Closing
Date, substantially in the form of Schedule 6.7(f) hereto.
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(g) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent.
(h) Transaction Documents. Copies of the Transaction Documents
duly executed by Seller and the Company.
(i) Additional Instruments. Such additional instruments and
documents as may be required to consummate the transactions contemplated hereby.
Section 6.7 Construction Permit; Adverse Proceedings. The Company shall
be the legal and valid holder of the Construction Permit and the Construction
Permit shall be in full force and effect without any modification thereto. There
shall not be any order, decree or judgment in effect or any lawsuit, claim,
legal action, proceeding or investigation pending or threatened before any
court, administrative agency or arbitrator which is reasonably likely to
adversely affect the construction, business, property, assets or condition
(financial or otherwise) of the Station or the Company or which seeks to enjoin
or prohibit, or otherwise questions the validity of, any action taken or to be
taken pursuant to or in connection with this Agreement.
Section 6.8 No Liabilities. The Company shall have no debts,
obligations or liabilities of any kind whatsoever, whether accrued, contingent
or otherwise except for this Agreement, the Transaction Documents, the TBA, the
Tower Lease and the Communications Act.
Section 6.9 TBA. Buyer and High Mountain shall have entered into the
Time Brokerage Purchase Agreement of even date herewith (the "TBA Purchase
Agreement") providing initially for the license and thereafter the sale by High
Mountain to Buyer of the TBA and effective upon the Initial Closing, High
Mountain shall have licensed to Buyer all of High Mountain's rights and
obligations under the TBA. MBC shall have assigned to the Company all of MBC's
rights and obligations under the TBA, the TBA shall be the valid and binding
obligation of the Company, enforceable by Buyer against the Company in
accordance with its terms. The TBA Purchase Agreement shall be a valid and
binding agreement of the parties thereto, enforceable in accordance with its
terms.
ARTICLE 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER, MBC AND THE
COMPANY AT THE INITIAL CLOSING
The obligations of Seller, MBC and the Company at the Initial Closing
are subject to the fulfillment prior to or at the Initial Closing of the
following conditions (any one or more of which may be waived in whole or in part
by Seller, MBC and the Company at their option):
Section 7.1 Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement relating to the Initial Closing
shall be true and correct in
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all material respects on and as of the Initial Closing Date, with the same force
and effect as though made on and as of such date.
Section 7.2 Covenants and Conditions. Buyer shall have performed in all
material respects all of its obligations and agreements and complied with all of
its covenants and conditions contained in this Agreement to be performed or
complied with by Buyer on or before the Initial Closing Date.
Section 7.3 Deliveries. Buyer shall have delivered to Seller, MBC and
the Company the following in form and substance reasonably satisfactory to
Seller, MBC, the Company and their Counsel:
(a) Purchase Price. The Initial Shares Purchase Price
described in Section 2.3.
(b) Resolutions. Copies of resolutions adopted by the Board of
Directors of Buyer, authorizing and approving the execution of this Agreement
and the consummation of the transactions contemplated hereby, certified by its
Secretary as being true and correct on the Initial Closing Date.
(c) Officer's Certificate. A certificate, dated as of the
Initial Closing Date, executed on behalf of Buyer by an officer of Buyer,
certifying (1) that the representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects as of the Initial
Closing Date as though made on and as of that date, and (2) that Buyer has
performed in all material respects all of its obligations and agreements under
this Agreement to be performed and complied with by Buyer on or before the
Initial Closing Date.
(d) Opinion of Counsel. An opinion of Buyer's counsel dated as
of the Initial Closing Date, substantially in the form of Schedule 7.3(d)
hereto.
(e) Transaction Documents. Copies of the Transaction Documents
duly executed by Buyer.
(f) Additional Instruments. Such additional instruments and
documents as may be required to consummate the transactions contemplated hereby.
Section 7.4 Adverse Proceedings. Other than any action filed by or at
the request of Seller, the Company, MBC or any affiliate thereof, there shall
not be any order, decree or judgment in effect or any lawsuit, claim, legal
action, proceeding or investigation pending or threatened before any court,
administrative agency or arbitrator which seeks to enjoin or prohibit, or
otherwise questions the validity of, any action taken or to be taken pursuant to
or in connection with this Agreement.
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Section 7.5 TBA. The TBA Purchase Agreement shall have been duly
executed by Buyer. The TBA Purchase Agreement shall be a valid and binding
obligation of the parties thereto, enforceable in accordance with its terms.
ARTICLE 8. CONSTRUCTION AND OPERATION OF THE STATION
Section 8.1 General. Following the date hereof and prior to the Second
Closing Date without Buyer's prior written consent: (i) neither the Company nor
Seller shall enter into any contracts or agreements creating any security
interests, mortgages, liens or encumbrances on the assets of the Company or the
Station; (ii) Seller shall not enter into any contract or agreement creating any
liens or security interests in any shares of capital stock of the Company; (iii)
the Company shall be operated in a prudent and businesslike manner and in
accordance with the other covenants in this Article 8; (iv) the Company shall
not amend its Certificate of Incorporation or By-Laws; and (v) neither Seller
nor the Company shall take or permit, or agree to take or permit, any action
within Seller's or the Company's control that is inconsistent with the proper
performance of their obligations under this Agreement, including but not limited
to, the issuance or sale of any capital stock of the Company or the granting to
any person or entity, other than Buyer, an option or similar right to purchase
any of the Company's capital stock.
Section 8.2 FCC Consent.
(a) The conveyance of the Option Shares by Seller to Buyer as
contemplated by this Agreement is subject to the prior consent and approval of
the FCC.
(b) Seller and Buyer shall prepare and, within five (5)
business days after Seller's receipt of the Option Notice (as defined below),
shall file with the FCC an appropriate application for the FCC Consent. Seller
and Buyer shall thereafter prosecute the application for the FCC Consent with
all diligence and otherwise use their respective best efforts to obtain a grant
of the application for the FCC Consent as expeditiously as possible. Each party
agrees to comply with any condition imposed on it by the FCC Consent, except
that no party shall be required to comply with a condition if (i) the condition
was imposed on it as the result of a circumstance the existence of which does
not constitute a breach by that party of any of its representations, warranties,
or covenants hereunder, and (ii) compliance with the condition would have a
material adverse effect upon it. Buyer and Seller shall oppose any petitions to
deny or other objections filed with respect to the application for the FCC
Consent and any requests for reconsideration or judicial review of the FCC
Consent.
(c) If the Second Closing shall not have occurred for any
reason within the original effective period of the FCC Consent and neither party
shall have terminated this Agreement under Article 17, the parties shall jointly
request one or more extensions of the effective period of the FCC Consent. No
extension of the effective period of the FCC Consent shall limit the exercise by
either party of its right to terminate the Agreement under Article 17.
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Section 8.3 Employee Benefit Plans. Except as may be consented to in
writing by Buyer, the Company will not adopt any employee benefit plans or
arrangements applicable to the employees of the Company, including, without
limitation, pension or thrift plans, individual or supplemental pension or
accrued compensation arrangements, incentive plans, or bonus and termination
arrangements; provided, however, that nothing herein shall prevent the Company
from adopting reasonable policies on vacation and sick leave for its employees
or offering them participation in employer-paid group health plans or any other
benefits required by law.
Section 8.4 Labor Relations. Neither the Seller nor the Company (i)
will enter into any collective bargaining agreement with respect to the Station;
(ii) will enter into any written or oral contracts of employment; (iii) will
incur any fixed or contingent liabilities or obligations with respect to any
person employed at the Station; and (iv) will fail to comply in all material
respects with applicable laws, rules and regulations relating to the employment
of labor including, without limitation, those related to wages, hours,
collective bargaining, occupational safety, discrimination, and the payment of
social security and other payroll related taxes.
Section 8.5 Licenses. Neither the Seller nor the Company shall cause,
or fail to take any action necessary to prevent, (i) any License to expire, be
surrendered or modified; (ii) any governmental authority to institute
proceedings for the suspension, revocation, or adverse modification of any
License; and (iii) any governmental authority to dismiss or deny any pending
application concerning the construction or operation of the Station.
Section 8.6 Compliance with Laws. The Seller and the Company shall
construct and operate the Station in all material respects in accordance with
all applicable laws, rules and regulations and the terms of all Licenses.
Section 8.7 Notification. Seller and the Company shall give Buyer
prompt written notice of any material change in any of the information contained
in the representations and warranties of Seller and the Company set forth in
this Agreement or in the Schedules hereto.
Section 8.8 Preservation of Business. Seller and the Company shall
preserve the business and organization of the Station intact and use their best
efforts to keep available to the Station its employees and to preserve the
Station's relationships with suppliers, advertisers and others having business
relations with it, to the end that the business, operations, and prospects of
the Station shall be unimpaired at the Second Closing.
Section 8.9 Performance of Agreements. The Company and Seller shall
perform their respective obligations under this Agreement, the Shareholders
Agreement and the Construction Agreement, in each case in accordance with the
terms thereof.
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Section 8.10 Cable Carriage. Consistent with the rules and regulations
of the FCC, the Company shall notify the cable operators within the Charleston,
West Virginia Designated Market Area of the Station's election to be carried on
a "must-carry" basis on such cable operators' cable television systems. The
Company shall use its best efforts to provide such notices on the date that is
sixty (60) days prior to commencing operations pursuant to program test
authority as defined by FCC rules and regulations, but in no event shall such
notices be provided later than thirty (30) days after the commencement of such
operations.
ARTICLE 9. THE OPTION AND THE SECOND CLOSING
Section 9.1 Option.
(a) In consideration of Buyer's undertakings herein and in the
Transaction Documents, the receipt and sufficiency of which are hereby
acknowledged by Seller, Seller hereby grants to Buyer an exclusive and
irrevocable option to purchase from Seller the Option Shares (the "Option"),
free and clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges or encumbrances of any nature whatsoever.
(b) Buyer may give written notice to Seller of Buyer's
intention to exercise the Option (the "Option Notice") at any time during the
ninety (90) day period beginning on the date the Station commences operations
pursuant to program test authority (the "Option Period"). In the event that
Buyer fails to give Seller the Option Notice prior to the end of the Option
Period, then the Option shall expire.
(c) Within five (5) business days of Seller's receipt of the
Option Notice, Seller and Buyer shall file with the FCC the application for the
FCC Consent and shall file such notices with, and obtain such approvals of, any
other governmental authorities that are required for the acquisition by Buyer of
the Option Shares and shall diligently and expeditiously prosecute such filings.
Section 9.2 The Second Closing. The Second Closing shall take place at
10:00 a.m., Washington, D.C. time, on a date to be set by Buyer on no less than
five (5) days' written notice to Seller, which date shall not be sooner than the
first business day after the date on which the FCC Consent is granted and shall
not be later than the tenth business day after the date on which the FCC Consent
has become a Final Order, subject to the satisfaction of all other conditions
precedent to the holding of the Second Closing. The Second Closing shall take
place at the offices of Dow, Lohnes & Albertson, 1200 New Hampshire Avenue,
N.W., Suite 800, Washington, D.C. 20036, or such other place as the parties
shall mutually agree. If Buyer fails to specify the date for Second Closing
prior to the fifth business day after the date upon which the FCC Consent has
become a Final Order, the Second Closing shall take place on the tenth business
day after the date upon which the FCC Consent has become a Final Order.
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Section 9.3 Sale of Option Shares. Subject to the terms and conditions
set forth in this Agreement, including exercise by Buyer of the Option, Seller
hereby agrees to sell, transfer and deliver to Buyer on the Second Closing Date,
and Buyer agrees to purchase, the Option Shares, free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions, charges
or encumbrances of any nature whatsoever.
Section 9.4 Purchase Price for Option Shares.
(a) The purchase price for the Option Shares (the "Option
Price") shall be the lesser of (i) an amount equal to Fifty One Percent (51%) of
the Fair Market Value of the Company, as determined utilizing the procedures set
forth in subsection (b) and (ii) $102,000. The Option Price shall be paid at the
Second Closing by Buyer or Buyer's designee to Seller by wire transfer of
immediately available federal funds or other means mutually satisfactory to
Buyer and Seller in accordance with written instructions provided by Seller to
Buyer no less than two (2) business days prior to the Second Closing Date. If
Fifty One Percent (51%) of the Fair Market Value of the Company as determined
utilizing the procedures set forth in Subsection (b) is less than $102,000,
Buyer shall not have the right to exercise the Option; provided, however, that
the Option shall remain in full force for the Option Period and be exercisable
by Buyer upon obtaining a satisfactory appraisal.
(b) Fair Market Value of the Company shall be determined by an
appraisal, in accordance with the following provisions:
(1) The Fair Market Value of the Company shall be
equal to the appraised value of the assets of the Company as of the date of the
Option Notice exclusive of any broker's fee, less the amount of any outstanding
debt of the Company.
(2) The appraisal will be conducted in conformity
with standard appraisal techniques in use at the time of the appraisal, applying
the market and economic factors then relevant.
(3) The appraisal will be conducted by a qualified
appraiser with experience in the television broadcasting industry to be agreed
upon by Seller and Buyer; provided that, if the parties fail to agree on an
appraiser, any party may apply to the American Arbitration Association for the
appointment of an appraiser, who shall be a qualified appraiser with experience
in the television broadcasting industry.
(4) The value of the assets of the Company arrived at
by the appraiser shall, absent manifest error, be conclusive and binding on the
relevant parties.
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ARTICLE 10. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING THE SECOND CLOSING
All of the representations and warranties of Buyer set forth in Article
4 hereof shall be true and correct in all material respects as of the Second
Closing Date, with the same force and effect as though made on and as of the
Second Closing Date, except as otherwise contemplated by the express terms of
this Agreement. For the purpose of this Article 10, each reference in Article 4
hereof to the "Initial Closing," "Initial Shares" and the "Initial Closing Date"
shall be deemed to be a reference to the Second Closing, Option Shares and the
Second Closing Date, respectively.
ARTICLE 11. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY AND SELLER
REGARDING THE SECOND CLOSING
All of the representations and warranties of the Company and Seller set
forth in Article 5 hereof shall be true and correct in all material respects as
of the Second Closing Date, with the same force and effect as though made on and
as of the Second Closing Date, except as otherwise contemplated by the express
terms of this Agreement. For the purpose of this Article 11, each reference in
Article 5 hereof to the "Initial Closing" and the "Initial Closing Date" shall
be deemed to be a reference to the Second Closing and the Second Closing Date,
respectively, and each reference to the "Initial Shares" shall be deemed to be a
reference to the Option Shares. Each of Seller and the Company further jointly
and severally represent, warrant and covenant to Buyer as follows:
Section 11.1 Contracts. Within ten (10) days after Seller receives the
Option Notice, Seller shall deliver to Buyer a true and complete list and copies
of the Contracts. The Contracts shall be valid and binding agreements of the
Company enforceable in accordance with their terms. The Company shall have
complied with the Contracts in all material respects, and the Company shall not
be in default under any of the Contracts.
Section 11.2 Copyrights, Trademarks and Similar Rights. Within ten (10)
days after Seller receives the Option Notice, Seller shall deliver to Buyer a
true and complete list and copies of all Intangibles.
Section 11.3 Governmental Authorizations. Within ten (10) days after
Seller receives the Option Notice, Seller shall deliver to Buyer a true and
complete list and copies of the Licenses. The Company shall be the authorized
legal holder of the Licenses. The Licenses shall comprise all of the licenses,
permits and other authorizations required from governmental and regulatory
authorities for the lawful conduct of the business and operations of the Station
in the manner and to the full extent they are conducted on the Second Closing
Date and for the lawful broadcasting by the Company from the Tower Site as
contemplated by the Construction Permit, and none of the Licenses shall be
subject to any restriction or condition which would limit the full operation of
the Station. The Licenses shall be in full force and effect, and the operation
of the Station shall be in accordance therewith. Seller has
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no knowledge of any events or conditions relating to Seller or Seller's
ownership and control of the Company that could prevent the FCC from approving
the transfer of control of the Company to Buyer.
Section 11.4 Title to and Condition of Real Property. The Tower Lease
shall be in full force and effect and there shall be no defaults thereunder or
any event that could constitute an event of default thereunder upon the giving
of any notice or the passage of time. The Tower Site (including the improvements
thereon) (i) shall be in good condition and repair consistent with its present
use, (ii) shall be available for immediate use in the conduct of the business
and operations of the Station, and (iii) shall comply with all applicable
building or zoning codes and the regulations of any governmental authority
having jurisdiction.
Section 11.5 Title to and Condition of Tangible Personal Property.
Within ten (10) days after Seller receives the Option Notice, Seller shall
deliver to Buyer a true and complete list of all material items of Tangible
Personal Property. The Company shall own and have good title to each item of
Tangible Personal Property or shall lease such Tangible Personal Property and
none of the Tangible Personal Property shall be subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for liens for current taxes not yet due and payable. All
items of transmitting and studio equipment included in the Tangible Personal
Property (i) shall have been maintained in a manner consistent with generally
accepted standards of good engineering practice, and (ii) shall permit the
Station to operate in accordance with the terms of the FCC Licenses and the
rules and regulations of the FCC, and with all other applicable federal, state,
and local statutes, ordinances, rules, and regulations.
Section 11.6 Compliance With Laws. The Company shall be in compliance
in all material respects with all laws, regulations and governmental orders
applicable to the ownership or use of its assets and the conduct of the business
and operations of the Station.
Section 11.7 Reports. All returns, reports and statements which the
Station is required to file with the FCC or with any other governmental agency
shall have been filed and shall be complete and correct in all material
respects.
Section 11.8 Public Inspection File. The Station's public inspection
file shall be located at the Station's main studio and shall contain, in all
material respects, the original or copies of all applications, reports and other
documents and records relating to the operation of the Station that are required
to be in such file under the rules and regulations of the FCC.
Section 11.9 Taxes.
(a) The Company shall have filed all Tax Returns and shall
have paid all Taxes shown on such Tax Returns on any assessment received by the
Company, provided
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that the Company shall not be required to pay any Tax the validity of which is
being contested by the Company in good faith and pursuant to appropriate
proceedings;
(b) such reports and Tax Returns shall have been prepared in
accordance with applicable provisions of the Internal Revenue Code of 1986, as
amended, and the rules and regulations thereunder and with applicable provisions
of state laws, rules and regulations concerning taxation; and
(c) the Company shall not have waived any statute of
limitations with respect to the payment of any taxes.
Section 11.10 Dividends and Redemptions. The Company shall not have
made at any time any declaration, set aside or payment of any dividend or other
distribution in respect of any shares of capital stock of the Company, or any
direct or indirect redemption, purchase or other acquisition of such stock.
Section 11.11 Notices; Condemnation.
(a) Neither the Company nor Seller shall have received any
written notice or order by any governmental or other public authority, any
insurance company that has issued a policy of insurance with respect to the
Station's assets or business, or any board of fire underwriters or other body
exercising similar functions that relates to material violations of building,
safety, fire or other ordinances or regulations by the Station or requests the
performance of any significant repairs, alterations or other work to the assets
of the Station; and
(b) there will not be any pending or threatened condemnation,
expropriation, eminent domain, zoning or similar proceeding materially affecting
all or any portion of the assets of the Station.
Section 11.12 Liabilities of the Company. The Company shall have no
liabilities or obligations of any sort whatsoever, except those arising under
the Licenses, those arising under this Agreement, the Tower Lease, the TBA, the
Transaction Documents and those consented to in writing by Buyer.
Section 11.13 Disclosure. No representation or warranty by Seller or
the Company in this Agreement, and no schedule, document, statement, certificate
furnished or to be furnished to Buyer pursuant hereto, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading.
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ARTICLE 12. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT THE SECOND
CLOSING
The obligations of Buyer under this Agreement at the Second Closing are
subject to the fulfillment prior to or at the Second Closing of the following
conditions (any one or more of which may be waived in whole or in part by Buyer
at Buyer's option):
Section 12.1 Representations and Warranties. The representations and
warranties of Seller and the Company contained in this Agreement relating to the
Second Closing shall be true and correct in all material respects on and as of
the Second Closing Date, with the same force and effect as though such
representations and warranties had been made on as of such date.
Section 12.2 Covenants and Conditions. Seller and the Company shall
have performed in all material respects all of their respective obligations and
agreements and complied with all of their respective covenants and conditions
contained in this Agreement to be performed or complied with by Seller and the
Company on or before the Second Closing Date.
Section 12.3 FCC Consent. The FCC Consent shall have been granted and
shall have become a Final Order. The Company shall be the holder of all of the
FCC Licenses necessary for the operation of the Station and such FCC Licenses
shall be in full force and effect.
Section 12.4 Consents. All material consents and approvals of all other
governmental authorities, bodies or agencies necessary for the consummation of
the transactions contemplated by this Agreement to occur at the Second Closing,
shall have been obtained, all without any conditions which would be unduly
burdensome on, or have a material adverse effect upon Buyer or the Company.
Section 12.5 Deliveries. Seller and the Company shall have delivered to
Buyer the following, in form and substance reasonably satisfactory to Buyer and
Buyer's Counsel:
(a) Option Shares. Certificates representing the Option
Shares, which shall be either duly endorsed or accompanied by stock powers duly
executed in favor of Buyer.
(b) Certificate of Incorporation. A copy of the Certificate of
Incorporation of the Company, certified as of a date not earlier than ten (10)
days prior to the Second Closing Date by the Secretary of State of Delaware.
(c) Bylaws. A copy of the Bylaws of the Company, certified as
of the Second Closing Date, by the Secretary or Assistant Secretary of the
Company.
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(d) Resolutions. Copies of resolutions adopted by the Board of
Directors of the Company, authorizing and approving the execution and delivery
of this Agreement and the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby, certified by the Secretary or
Assistant Secretary of the Company, respectively, as being true and complete on
the Second Closing Date.
(e) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent.
(f) Estoppel Certificates. Estoppel Certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property Interests.
(g) Certificates. Certificates, dated as of the Second Closing
Date, executed on behalf of Seller and the Company by Seller and an officer of
the Company, respectively, each certifying: (1) that the representations and
warranties of Seller and the Company contained in this Agreement are true and
complete in all material respects as of the Second Closing Date as though made
on and as of that date; and (2) that Seller and the Company have performed in
all material respects all of their respective obligations and agreements in this
Agreement to be performed and complied with by Seller and the Company on or
before the Second Closing Date.
(h) Opinions of Counsel. Opinions of Seller's and the
Company's counsel and communications counsel dated as of the Second Closing
Date, substantially in the form of Schedule 12.5(h) hereto.
(i) Additional Instruments. Such additional instruments and
documents as may be required to consummate the transactions contemplated hereby.
Section 12.6 Adverse Proceedings. There shall not be any order, decree
or judgment in effect or any lawsuit, claim, legal action, proceeding or
investigation pending or threatened before any court, administrative agency or
arbitrator which is reasonably likely to adversely affect the construction,
business, property, assets or condition (financial or otherwise) of the Station
or which seeks to enjoin or prohibit, or otherwise questions the validity of,
any action taken or to be taken pursuant to or in connection with this
Agreement.
Section 12.7 TBA. The TBA shall be in full force and effect, and the
Company shall have complied in all material respects with its obligations
thereunder. The closing under the TBA Purchase Agreement (the "TBA Closing")
shall have occurred simultaneously with the Closing hereunder and upon the TBA
Closing, High Mountain shall no longer have any rights under the TBA and Buyer
and the Company shall be the only parties with any rights or obligations
thereunder.
Section 12.8 Adverse Change. Between the date of this Agreement and the
Second Closing Date, there shall have been no material adverse change in the
business, assets,
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properties or financial condition of the Station, including any unrestored or
uninsured damage, destruction, or loss affecting any assets that are material to
the conduct of the business of the Station.
Section 12.9 Tower Site. The Company shall hold a valid and enforceable
lease for the Tower Site pursuant to the Tower Lease, as amended as provided in
Schedule 5.9.
ARTICLE 13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER AND THE COMPANY
AT THE SECOND CLOSING
The obligations of Seller and the Company at the Second Closing under
this Agreement are subject to the fulfillment prior to or at the Second Closing
of the following conditions (any one or more of which may be waived in whole or
in part by Seller or the Company at their option):
Section 13.1 Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement relating to the Second Closing
shall be true and correct in all material respects on and as of the Second
Closing Date, with the same force and effect as though such representations and
warranties had been made on and as of such date.
Section 13.2 Covenants and Conditions. Buyer shall have performed in
all material respects all of its obligations and agreements and complied with
all of its covenants and conditions contained in the Agreement to be performed
or completed with on or before the Second Closing Date.
Section 13.3 FCC Consent. The FCC shall have granted the FCC Consent.
Section 13.4 Consents. All material consents and approvals of all other
governmental authorities, bodies or agencies necessary for the consummation of
the transactions contemplated by this Agreement to occur at the Second Closing,
the failure to obtain of which could have a material adverse effect on Seller,
shall have been obtained, all without any conditions which would be unduly
burdensome on, or have a material adverse effect upon Seller.
Section 13.5 Deliveries. Buyer shall have delivered the following, in
form and substance reasonably satisfactory to Seller, the Company and their
Counsel:
(a) Option Price. The Option Price described in Section 9.4;
and
(b) Resolutions. Copies of resolutions adopted by the Board of
Directors of Buyer, authorizing and approving the execution of this Agreement
and the consummation of the transactions contemplated hereby, certified by its
Secretary as being true and correct on the Second Closing Date.
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(c) Officer's Certificate. A certificate, dated as of the
Second Closing Date, executed on behalf of Buyer by an officer of Buyer,
certifying (1) that the representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects as of the Second
Closing Date as though made on and as of that date, and (2) that Buyer has
performed in all material respects all of its obligations and agreements in this
Agreement to be performed and complied with by Buyer on or prior to the Second
Closing Date.
(d) Opinion of Counsel. An opinion of Buyer's counsel dated as
of the Second Closing Date, substantially in the form of Schedule 13.5(d)
hereto.
Section 13.6 TBA. The TBA shall be in full force and effect, and Buyer
shall have complied in all material respects with its obligations hereunder. The
TBA Closing shall have occurred simultaneously with the Closing hereunder.
Section 13.7 Adverse Proceedings. Other than any action filed by or at
the request of Seller, the Company, MBC or any affiliate thereof, there shall
not be any order, decree or judgment in effect or any lawsuit, claim, legal
action, proceeding or investigation pending or threatened before any court,
administrative agency or arbitrator which seeks to enjoin or prohibit, or
otherwise questions the validity of, any action taken or to be taken pursuant to
or in connection with this Agreement.
ARTICLE 14. JOINT COVENANTS
Section 14.1 Confidentiality. Buyer, on the one hand, and Seller, MBC
and the Company, on the other hand, shall each keep confidential all
confidential information obtained by it with respect to the other in connection
with this Agreement (except for such disclosure to attorneys, bankers,
underwriters, and investors, as may be appropriate in the furtherance of the
transactions contemplated by this Agreement or as may be required by law,
including by the securities laws or the rules and regulations of any security
exchange), and if the transactions contemplated hereby are not consummated for
any reason, each shall, to the extent reasonably possible, return to the other,
without retaining a copy thereof, any confidential schedules, documents or other
written information obtained from the other in connection with this Agreement
and the transactions contemplated hereby.
Section 14.2 Cooperation. Buyer, Seller, MBC and the Company shall
cooperate fully with each other and their respective counsels and accountants in
connection with any actions required to be taken as part of their obligations
under this Agreement, and the parties will use their commercially reasonable
efforts to consummate the transactions contemplated hereby and to fulfill their
obligations hereunder. No party shall take any action that is inconsistent with
its obligations under this Agreement, that would render any of its
representations or warranties herein untrue or incomplete or that could hinder
or delay the consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing, and except as otherwise expressed in this
Agreement, Buyer shall have no
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obligation (a) to expend funds to obtain any of the Consents or (b) to agree to
any adverse change in any License or Contract in order to obtain a Consent
required with respect thereto.
Section 14.3 Governmental Consents. If any governmental consent
required for the consummation of the transactions contemplated hereby or the
satisfaction of any condition contained herein includes any condition, the party
upon which such condition is imposed shall use its best efforts to comply
therewith before the respective Closing to which such consent relates; provided,
however, that no party hereto shall be required to comply with any condition
that would be unduly burdensome or would have a material adverse effect upon
such party.
Section 14.4 Station Operation and Contracts. Buyer and Seller
specifically acknowledge that, as of the Initial Closing Date, the Station will
not have commenced broadcast operations. Seller, Buyer and the Company shall
cooperate and use their respective best efforts to complete construction of the
Station and commence broadcast operations at the Station as expeditiously as
possible. Seller, Buyer and the Company shall file such applications with the
FCC and other governmental authorities as are necessary to enable the Station to
operate in compliance with FCC and other applicable rules and regulations.
ARTICLE 15. TRANSFER TAXES; FEES AND EXPENSES
Section 15.1 Transfer Taxes. Buyer and Seller shall each pay one-half
of all transfer and documentary taxes or fees incurred in connection with the
transfer of the Initial Shares and Option Shares; provided, however, that Seller
shall be responsible for the payment of any federal, state or local income tax
applicable to Seller, MBC or the Company in connection with the transaction
contemplated by this Agreement.
Section 15.2 Filing Fees. Buyer and Seller shall each pay one-half of
all FCC filing fees and any other filing fee imposed by any other governmental
authority in connection with the transactions contemplated hereby.
Section 15.3 Expenses. Each party hereto shall be solely responsible
for all costs and expenses incurred by it in connection with the negotiation,
preparation and performance of and compliance with this Agreement.
ARTICLE 16. RISK OF LOSS
Section 16.1 Risk of Loss. The risk of any loss, damage or impairment,
confiscation or condemnation of any of the assets of Seller, MBC or the Company
from any cause whatsoever shall be borne by Seller and MBC. In the event of any
such loss, damage or impairment, confiscation or condemnation, the proceeds of,
or any claim for any loss payable under, any insurance policy, judgment or award
with respect thereto shall be applied
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to repair, replace or restore such assets to their prior condition as soon as
possible after such loss, impairment, condemnation or confiscation.
Section 16.2 Postponement of the Second Closing Date. If any damage or
destruction of the Company's assets occurs and such assets cannot be restored or
replaced on or before the Second Closing Date, the Second Closing Date shall be
postponed, the exact date and time of such postponed closing date to be such
date and time within the effective period of the FCC Consent as shall be as
agreed to by Seller, Buyer and the Company. If such assets cannot be restored or
replaced within the effective period of the FCC Consent, the parties shall join
in requesting an extension of the effective period of such consent for a period
not to exceed an additional one hundred eighty (180) days from the date of FCC
Consent.
Section 16.3 Option to Terminate. In the event of any damage or
destruction of the assets, if such assets have not been restored or replaced
within the effective period of the FCC Consent as extended, Buyer may, at its
option, proceed to close this Agreement and complete the restoration and
replacement of such damaged assets after the Second Closing Date, in which event
Seller shall deliver to Buyer all insurance proceeds payable to it or the
Company and received in connection with such damage or destruction of the assets
without limitation as to the costs and expenses arising in connection with such
restoration and replacement or terminate this Agreement.
ARTICLE 17. TERMINATION RIGHTS
Section 17.1 Termination by the Parties. This Agreement may be
terminated by either Buyer, on the one hand, or Seller and the Company, on the
other hand, if not then in material default, upon written notice to the other
upon the occurrence of any of the following:
(a) If the purchase of the Initial Shares or the Option Shares
by Buyer pursuant to this Agreement shall not have occurred on or prior to
September 2, 1998 (the "Upset Date"), provided that the Upset Date shall be
extended for an additional period of six months if the "Upset Date" in the TBA
Purchase Agreement is extended for an additional period of six months pursuant
to Section 12.1(a) of such Agreement;
(b) If the other party defaults in the observance or in the
due and timely performance of any of its material covenants or agreements
contained herein and such default has not been cured within fifteen (15) days
after notice by that party not in default;
(c) If on the date of either of the Closings, any of the
conditions precedent to the obligations of the terminating party set forth in
this Agreement as to that Closing have not been satisfied or waived and such
condition shall remain unsatisfied ten (10) days after notice thereof by the
terminating party to the other party;
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<PAGE> 33
(d) If there shall be in effect on the date of either of the
Closings any final judgment, decree or order that would prevent or make unlawful
the actions to be taken at such Closing;
(e) Following the expiration of the Option Period, if Buyer
has not delivered to Seller an Option Notice indicating its intention to
exercise the Option; or
(f) If the TBA Purchase Agreement is terminated.
Each party hereto shall have an additional thirty (30) days to cure any
default or nonsatisfaction of a condition under Section 17.1(b) or (c) if such
party is diligently pursuing such cure and such extension does not have a
material adverse effect on the other party.
(g) If the Agreement is terminated, Buyer and Seller hereby
agree that Buyer shall sell, transfer and deliver to Seller the Initial Shares,
free and clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges or encumbrances of any nature whatsoever, on the
tenth (10th) business day following such termination (the "Repurchase Closing
Date"). The purchase price for the Initial Shares payable by Seller to Buyer
(the "Repurchase Price") shall be the Purchase Price paid by Buyer to Seller at
the Initial Closing. In addition, on the Repurchase Closing Date, Seller shall
purchase from Buyer the Station's equipment then being leased to the Company by
Buyer for a cash price equal to (i) if this Agreement is terminated as a result
of a material breach of this Agreement by Seller, MBC or the Company or if this
Agreement is terminated pursuant to Subsection (f) above as a result of a breach
by High Mountain under the TBA Purchase Agreement, one hundred percent (100%) of
Buyer's cost to purchase the equipment or (ii) if this Agreement is terminated
for any other reason, fifty percent (50%) of Buyer's cost to purchase the
equipment.
Section 17.2 Termination by Buyer. This Agreement may be terminated by
Buyer, if not then in material default, upon written notice to Seller and the
Company, if the FCC denies the Pro Forma FCC Consent.
ARTICLE 18. SPECIFIC PERFORMANCE
Seller, MBC and the Company agree that the Initial Shares and the
Option Shares are unique and valuable properties such that Buyer shall be
entitled to sue for specific performance of the terms of this Agreement in the
event of a breach by Seller, MBC or the Company with respect to either the
Initial Closing or the Second Closing, in which case Seller, MBC and the Company
shall waive the defense that there is an adequate remedy at law.
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<PAGE> 34
ARTICLE 19. INDEMNIFICATION
Section 19.1 Seller's, MBC's and the Company's Indemnification. Seller,
MBC and the Company shall jointly and severally indemnify, defend and hold Buyer
harmless from and against any and all loss, cost, liability, damage and expense
(including legal and other expenses incident thereto) of every kind, nature or
description, arising out of: (a) the breach of any representation or warranty of
Seller, MBC or the Company set forth in this Agreement or in any schedule or
certificate delivered to Buyer pursuant hereto; (b) the breach of any of their
covenants or other agreements contained in or arising out of this Agreement or
the transactions contemplated hereby; or (c) the ownership of the Initial Shares
prior to the Initial Closing, and the conduct of the business and operations of
the Station and the ownership of the Option Shares prior to the Second Closing,
including, but not limited to, any liability, judgment or damages against Buyer,
its officers, directors, employees or agents, as a result of litigation
involving the Company, Seller or MBC or the operation of the Station prior to
each of the Closings. Buyer shall have the right to enforce its indemnification
rights hereunder against Seller, MBC or the Company at its option. Following the
Initial Closing, Seller and MBC shall not have any right of contribution against
the Company for any indemnification payment made by Seller or MBC hereunder and
each of Seller and MBC hereby waives any such right that it may have.
Section 19.2 Buyer's Indemnification. Buyer shall indemnify, defend and
hold Seller, MBC and the Company harmless from and against any and all loss,
cost, liability, damage and expense (including legal and other expenses incident
thereto) of every kind, nature or description, arising out of: (a) the breach of
any representation or warranty of Buyer set forth in this Agreement or in any
Schedule or certificate delivered to Seller, MBC or the Company pursuant hereto;
(b) the breach of any of Buyer's covenants and other agreements contained in or
arising out of this Agreement or the transactions contemplated hereby; or (c)
the ownership of the Common Stock after the Second Closing and the conduct of
the business and operations of the Station after the Second Closing, including,
but not limited to, any liability, judgment or damages against Seller, its
employees or agents, as a result of litigation involving Buyer or the operation
of the Station after the Second Closing.
Section 19.3 Notice of Claim. Buyer, on the one hand, and Seller, MBC
and the Company, on the other hand, upon discovery of the breach of any of the
representations, warranties and covenants of the other under this Agreement,
shall give to the other prompt written notice of the discovery of such breach.
If any action, suit or proceeding shall be commenced against, or any claim or
demand be asserted against Buyer, Seller, MBC or the Company, as the case may
be, in respect of which such party proposes to seek indemnification from the
other under this Article 19, then such party (hereinafter the "Claimant") shall
notify the party from whom indemnification is sought (hereinafter the
"Indemnifying Party") to that effect in writing with reasonable promptness and
in any event, if such claim arises out of a claim by a person or entity other
than the Claimant, then within fifteen (15) days after written notice of such
claim was given to the Claimant.
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<PAGE> 35
Section 19.4 Assumption and Defense of Third-Party Action. If any claim
hereunder arises of out a claim against the Claimant by a third party, the
Indemnifying Party shall have the right, at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall fully
cooperate with the Indemnifying Party subject to reimbursement for actual
out-of-pocket expenses incurred as the result of a request by the Indemnifying
Party. If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense. If a claim requires immediate action,
the parties will make every effort to reach a decision with respect thereto as
expeditiously as possible. If the Indemnifying Party does not elect to assume
control or otherwise participate in the defense of any third-party claim, it
shall be bound by the results obtained by the Claimant with respect to such
claim. In no event shall the Indemnifying Party have the right to agree to a
settlement which is binding upon Claimant without Claimant's prior consent which
shall not be unreasonably withheld.
Section 19.5 Limitation Period. No party shall be entitled to
indemnification hereunder with respect to the breach of any representation,
warranty or covenant contained herein unless such claim for indemnification is
asserted in writing to the party from whom indemnification is sought within six
(6) months after the Second Closing, except that any claim for indemnification
related to a claim by a third party, including claims by the Internal Revenue
Service against the Company, Seller or MBC shall be made within the statute of
limitations period applicable to such third-party claim.
ARTICLE 20. OTHER PROVISIONS
Section 20.1 Survival of Representations, Warranties and Covenants. The
representations, warranties, covenants, indemnities and agreements contained
herein are and will be deemed and construed to be continuing representations,
warranties, covenants, indemnities and agreements and will survive the
respective Closings as to which breach or claim is asserted until the
termination of the limitation period set forth in Section 19.5 hereof. Any
investigations by or on behalf of any party hereto prior to or after the
Closings shall not constitute a waiver as to enforcement of any representation,
warranty, covenant or agreement contained herein.
Section 20.2 Press Releases. Buyer, Seller, MBC and the Company shall
jointly prepare, and determine the timing of, any press release or other
announcement relating to the transactions contemplated by the Agreement. No
party will issue any press release or make any other public announcement
relating to the transactions contemplated by the Agreement without the prior
consent of the other parties, except that any party may make any disclosure
required to be made by it under applicable law (including the federal securities
laws) or by this Agreement if it determines in good faith that it is appropriate
to do so and provided further that it gives prior notice of any such disclosure
to the other party hereto.
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<PAGE> 36
Section 20.3 Further Assurances. At and after each of the Closings,
Buyer, Seller, MBC and the Company will, without further consideration, execute
and deliver such further instruments and documents and do such other acts and
things as the other parties may reasonably request in order to effect or confirm
the transactions contemplated by this Agreement.
Section 20.4 Benefit and Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. No party hereto may assign, transfer, encumber or
otherwise convey its interest under this Agreement without the prior written
consent of the other parties hereto; provided, however, that Buyer may assign
its rights and interests under this Agreement to its lenders as collateral
security for Buyer's obligations to such lenders.
Section 20.5 Entire Agreement. This Agreement and the schedules
attached hereto embody the entire agreement and understanding of the parties and
supersedes any and all prior agreements, arrangements and understandings
relating to matters provided for herein. No amendment, waiver of compliance with
any provision or condition hereof, or consent pursuant to this Agreement will be
effective unless evidenced by an instrument in writing signed by the party
against whom enforcement of any waiver, amendment, extension or discharge is
sought.
Section 20.6 Headings. The headings are for convenience only and will
not control or affect the meaning or construction of the provisions of this
Agreement.
Section 20.7 Governing Law. The construction and performance of this
Agreement will be governed by the laws of the State of Florida (except for the
choice of law provisions thereof). Seller, MBC and the Company (a) hereby
irrevocably submit to the jurisdiction of the state courts of the State of
Florida for the Palm Beach County and to the jurisdiction of the United States
District Court for the Southern District of Florida, for the purpose of any
suit, action, or other proceeding arising out of or based upon this Agreement,
the Construction Agreement or the Shareholders Agreement or the subject matter
hereof or thereof brought by Buyer or its successors or assigns and (b) hereby
waive, and agree not to assert, by way of motion, as a defense, or otherwise, in
any such suit, action, or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the suit, action, or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement, the Construction
Agreement, or Shareholders Agreement or the subject matter hereof or thereof may
not be enforced in or by such court, and (c) hereby waives and agrees not to
seek any review by any court of any jurisdiction other than Florida or the
United States which may be called upon to grant an enforcement of the judgment
of any such Florida State or Federal Court. Seller, MBC and the Company hereby
consent to service of process by certified or registered mail at the address to
which notices are to be given. Seller, MBC or the Company agree that its
submission to jurisdiction and its consent to service of process by mail is made
for the express benefit of
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<PAGE> 37
Buyer. Final judgment against Seller, MBC and the Company in any such action,
suit or proceeding may be enforced in other jurisdictions by suit, action, or
proceeding on the judgment, or in any other manner provided by or pursuant to
the laws of such other jurisdiction; provided, however, that Buyer may at its
option bring suit, or institute other judicial proceedings, against Seller, MBC
and the Company or any of its assets in any state or federal court of the United
States or of any country or place where Seller, MBC and the Company or such
assets, may be found.
Section 20.8 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed to
have been given on the date of personal delivery or the date set forth in the
records of the delivery service or on the return receipt, and (d) addressed as
follows:
To Buyer: Paxson Communications of Charleston-29, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attention: Lowell W. Paxson
With a copy (which shall John R. Feore, Jr., Esq.
not constitute notice) to: Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
To Company, MBC and Channel 29 of Charleston, Inc.
Seller: Mountaineer Broadcasting Corp.
1121 Chestnut Street
Wilmette, Illinois 60091
Attention: William L. Kepper
With a copy (which shall John D. Viener, Esq.
not constitute notice) to: Christy & Viener
620 Fifth Avenue
New York, NY 10020-2457
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 20.8.
Section 20.9 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
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<PAGE> 38
Section 20.10 Guaranty. Paxson Communications Corporation hereby
guarantees the full, complete and timely performance by Buyer of its obligations
under this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Purchase Agreement as of the date first above written.
CHANNEL 29 OF CHARLESTON, INC.
By:/s/ William L. Kepper
-----------------------------------
William L. Kepper
President
MOUNTAINEER BROADCASTING CORP.
By:/s/ William L. Kepper
-----------------------------------
William L. Kepper
President
WILLIAM L. KEPPER
/s/ William L. Kepper
--------------------------------------
PAXSON COMMUNICATIONS OF
CHARLESTON-29, INC.
By: /s/ Lowell W. Paxson
-----------------------------------
Name: Lowell W. Paxson
Title: Chairman
FOR PURPOSES OF SECTION 20.10 ONLY:
PAXSON COMMUNICATIONS
CORPORATION
By: /s/ Lowell W. Paxson
-----------------------------------
Name: Lowell W. Paxson
Title: Chairman
<PAGE> 40
EXHIBIT A
CONSTRUCTION AGREEMENT
<PAGE> 41
- --------------------------------------------------------------------------------
CONSTRUCTION AGREEMENT
BY AND BETWEEN
CHANNEL 29 OF CHARLESTON, INC.
AND
PAXSON COMMUNICATIONS OF CHARLESTON-29, INC.
FOR
TELEVISION STATION WKRP-TV
CHARLESTON, WEST VIRGINIA
* * *
____________, 1997
- --------------------------------------------------------------------------------
<PAGE> 42
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. DEFINITIONS .................................................... 1
SECTION 2. THE WORK ....................................................... 2
SECTION 3. COMPLETION OF THE WORK ......................................... 3
SECTION 4. COST OF THE WORK ............................................... 3
SECTION 5. BUDGET ......................................................... 3
SECTION 6. CONTRACTOR'S CONSTRUCTION OBLIGATIONS .......................... 3
SECTION 7. SUBCONTRACTORS ................................................. 4
SECTION 8. PROTECTION OF PERSONS AND PROPERTY ............................. 5
SECTION 9. INSURANCE ...................................................... 5
SECTION 10. DAMAGES ........................................................ 6
SECTION 11. TERMINATION .................................................... 6
SECTION 12. MISCELLANEOUS PROVISIONS ....................................... 6
SECTION 13. COUNTERPARTS ................................................... 8
SECTION 14. GUARANTY ....................................................... 8
</TABLE>
<PAGE> 43
CONSTRUCTION AGREEMENT
THIS CONSTRUCTION AGREEMENT (the "Agreement") is entered into as of
this _____ day of _____ 1997, by and between PAXSON COMMUNICATIONS OF
CHARLESTON-29, INC., a Florida corporation ("Contractor"), and CHANNEL 29 OF
CHARLESTON, INC., a Delaware corporation ("Permittee").
W I T N E S S E T H
WHEREAS, Permittee holds a Construction Permit issued by the Federal
Communications Commission ("FCC") for new television station WKRP-TV, Channel
29, Charleston, West Virginia, FCC File No. BMPCT-891031KI (the "Construction
Permit");
WHEREAS, Permittee, Contractor, Mountaineer Broadcasting Corp. and
William L. Kepper have entered into a Stock Purchase Agreement dated as of
September 2, 1997 (the "Purchase Agreement"); and
WHEREAS, the Purchase Agreement provides that Contractor and Permittee
shall enter into this Agreement in order to permit Contractor to specify the
materials and equipment required to construct the facilities proposed in the
Construction Permit for new television station WKRP-TV, Channel 29, Charleston,
West Virginia (the "Station"), and to undertake, following consultation with
Permittee, such construction.
NOW THEREFORE, in consideration of the above and of the mutual promises
covenants contained herein, the parties, intending to be legally bound, agree as
follows:
SECTION 1. DEFINITIONS. In addition to the terms which are elsewhere
defined in this Agreement, the following terms shall have the respective
meanings hereinafter set forth:
A. "Budget" shall mean the preliminary budget as agreed to by
Permittee and Contractor, as described in Schedule A attached hereto, as such
Budget may be amended in accordance with Section 6 of this Agreement.
B. "Contract Documents" shall mean this Agreement, all
authorizations issued to the Permittee for the Station's operation and
construction, the Plans and Specifications and the Budget.
C. "Plans and Specifications" shall mean the plans and
specifications described in Schedule B attached hereto, and as supplemented from
time to time with the agreement of Contractor and Permittee.
<PAGE> 44
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D. "Work" shall mean all labor, materials and equipment
necessary or appropriate for the construction of the facilities described in the
Plans and Specifications as authorized in the Construction Permit.
SECTION 2. THE WORK.
A. Contractor agrees to do the following at Contractor's
expense:
(i) In consultation with Permittee, specify for purchase
by Contractor and lease by Permittee pursuant to the Lease Agreement (as defined
below) of the equipment, supplies and materials necessary or appropriate for the
construction and installation of the facilities described in the Plans and
Specifications and as authorized in the Construction Permit; and
(ii) With the concurrence of the Permittee, construct
and/or install the facilities described in the Plans and Specifications in
accordance with the Construction Permit and all applicable zoning, building or
other governmental laws, ordinances or regulations.
B. Permittee has done or agrees to do the following:
(i) Maintain in effect the Construction Permit, as it may
be modified, including the filing, if necessary, of an application to extend the
expiration date of the Construction Permit.
(ii) File with the FCC or any other governmental agency
and prosecute to the full extent any amendments to the Construction Permit and
any other applications which may be necessary for the implementation of the
Construction Permit, the construction of the Station, and the commencement and
continuation of the Station's operations as proposed in the Construction Permit;
(iii) Prepare and timely file with the FCC an application
for license for the constructed facilities in accordance with the rules and
regulations of the FCC; and
(iv) Cooperate with Contractor in timely filing and
obtaining any zoning, building and other permits that are required in connection
with the Plans and Specifications and the Work and execute the necessary
documents and agreements provided by Contractor in accordance with its
obligations hereunder and maintain in full force and effect the lease for the
Station's transmitter site.
<PAGE> 45
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SECTION 3. COMPLETION OF THE WORK.
A. The Work shall be commenced upon the execution of this
Agreement and shall be substantially completed in accordance with the buildout
schedule attached hereto as Exhibit D; provided, however, that the parties agree
that the dates set forth in such buildout schedule shall be extended by reason
of strikes, labor troubles, inability to procure material, failure of power,
governmental actions or inactions, riots, insurrection, war, weather conditions
or other reasons beyond the control of the parties.
B. The Work shall be deemed to be substantially complete when
(i) construction is sufficiently complete, in accordance with the Contract
Documents, so that the Station may begin operating pursuant to Program Test
Authority under FCC rules using the facilities proposed in the Construction
Permit and (ii) all permits, modifications of permits, authorizations and
licenses necessary to operate such facilities have been obtained. Any Work
required by the Contract Documents which remains to be completed after the date
of substantial completion shall, if reasonably feasible, be completed by
Contractor within ninety (90) days after the date of substantial completion.
C. Upon substantial completion of the construction of the
Station as specified above, Contractor and Permittee shall enter into a Lease
Agreement (the "Lease Agreement") which is attached hereto as Schedule C.
SECTION 4. COST OF THE WORK. Contractor shall be responsible for the
entire cost of the Work.
SECTION 5. BUDGET. Permittee and Contractor acknowledge and agree that
the Budget represents the estimated cost of the Work. Promptly after the date
hereof, Contractor shall obtain firm bids from responsible manufacturers,
suppliers, and contractors approved by Permittee for the performance of the Work
or portions thereof, and shall supply copies of all bids to Permittee. Upon
receipt of the bids and upon the agreement by Permittee and Contractor to accept
those bids, Contractor shall accept the bids and the Budget shall be adjusted to
conform to the bids.
SECTION 6. CONTRACTOR'S CONSTRUCTION OBLIGATIONS.
A. Contractor shall supervise and direct the Work, using its
best skill and attention and, subject to the concurrence of Permittee, shall be
responsible for all construction means, methods, techniques, sequences and
procedures and for coordinating all portions of the Work under this Agreement.
<PAGE> 46
- 4 -
B. Contractor shall be responsible to the Permittee for the
acts and omissions of Contractor's employees, contractors, subcontractors and
other persons providing or performing any of the Work.
C. Unless otherwise provided in the Contract Documents,
Contractor shall provide all labor, materials, equipment, tools, construction,
equipment and machinery, water, heat, utilities, transportation and other
facilities and services necessary for the proper execution and completion of the
Work, whether temporary or permanent and whether or not incorporated or to be
incorporated in the Work.
D. Contractor shall at all times enforce strict discipline and
good order among any person working at the construction site.
E. Contractor warrants to Permittee that all materials and
equipment furnished under this Contract will be new, unless otherwise specified
in Exhibit A, and that all Work will be of good quality, free from faults and
defects and in conformance with the Contract Documents.
F. Contractor shall comply in all material respects with all
laws, ordinances, rules, regulations and lawful orders of any public authority
bearing on the performance of the Work.
G. Contractor shall prepare and submit to Permittee an
estimated progress schedule for the Work. The progress schedule shall be related
to the entire project to the extent required by the Contract Documents and shall
provide for expeditious and practicable completion of the Work.
H. Contractor at all times shall keep the construction site
free from accumulation of waste material or rubbish caused by the Work. At the
completion of the Work, Contractor shall remove or cause to be removed all waste
materials and rubbish from and about the construction site and tools,
construction equipment, machinery and surplus materials.
SECTION 7. SUBCONTRACTORS. By an appropriate written agreement,
Contractor shall require each subcontractor retained by Contractor to be bound
by the terms of the Contract Documents, and to assume all the obligations and
responsibilities which Contractor, by those documents, assumes toward Permittee.
<PAGE> 47
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SECTION 8. PROTECTION OF PERSONS AND PROPERTY.
A. Contractor shall take all reasonable precautions for the
safety of, and shall provide all reasonable protection to prevent damage, injury
or loss to:
(i) all individuals employed to perform the Work;
(ii) all materials and equipment to be used in the Work,
whether in storage, on or off the site, under the care, custody or control of
Contractor or any of its subcontractors; and
(iii) other property at the site or adjacent thereto.
B. Contractor shall give all notices and comply in all
material respects with all applicable laws, ordinances, rules, regulations and
lawful orders of any public authority bearing on the safety of persons or
property or their protection from damage, injury or loss.
SECTION 9. INSURANCE.
A. Contractor shall purchase and maintain or cause to be
purchased and maintained such insurance as will protect Contractor and Permittee
from claims set forth below which may arise out of or result from the Work,
whether such operations be by Contractor or by any subcontractor or by anyone
directly or indirectly employed by any of them, or by anyone for whose acts any
of them may be liable:
(i) claims under workmen's compensation, disability
benefit and other similar employee benefit acts;
(ii) claims for damages because of bodily injury,
occupational sickness or disease, or death;
(iii) claims for damages insured by usual personal injury
liability coverage which are sustained (1) by any person as a result of an
offense directly or indirectly related to the employment of such person by
Contractor, or (2) by any other person;
(iv) claims for damages, other than to the Work itself,
because of injury to or destruction of tangible property; and
<PAGE> 48
- 6 -
(v) claims for damages because of bodily injury or death or
any property damage arising out of the ownership, maintenance or use of any
motor vehicle in respect of the Work.
B. The insurance required by this Section shall be written for
not less than the limits of liability agreed to by Contractor and Permittee or
required by law, whichever is greater.
C. Certificates of Insurance acceptable to Permittee and
Contractor shall be delivered to Permittee prior to commencement of the Work.
These Certificates shall contain a provision that coverage afforded under the
policies will not be canceled until at least thirty (30) days' prior written
notice has been given to the Permittee.
D. Permittee shall purchase and maintain property insurance
upon the entire Work to the full insurable value thereof. This insurance shall
insure against the perils of fire and extended coverage, shall include "all
risk" insurance for physical loss or damage including, without duplication of
coverage, theft, vandalism and malicious mischief and shall provide that all
proceeds from such insurance shall go to Contractor.
SECTION 10. DAMAGES. In the event of a default by Contractor of its
obligations under this Agreement or the failure of Contractor to complete the
Work, Contractor shall not be liable to Permittee for any consequential damages
as a result of such failure or delay. The sole liability of Contractor to
Permittee shall be for the full cost and expense of completing the Work in
accordance with the Contract Documents and the Plans and Specifications.
SECTION 11. TERMINATION. This Agreement shall terminate, and neither
party shall have any further obligation hereunder, upon the earlier to occur of
(a) the completion of the Work, (b) the Second Closing (as defined in the
Purchase Agreement) or (c) the termination of the Purchase Agreement in
accordance with its terms. This Agreement may also be terminated by either
Contractor or Permittee (the "Terminating Party") upon a material breach of this
Agreement by the other party hereto (the "Defaulting Party") if (i) the
Defaulting Party has not cured such breach within fifteen (15) days following
written notice of such breach by the Terminating Party to the Defaulting Party
and (ii) the Terminating Party is not in material breach of this Agreement or
the Purchase Agreement; provided that such cure period shall be extended for a
period of thirty days if the Defaulting Party is diligently attempting to cure
such breach and such extension will not have a material adverse effect on the
Terminating Party.
<PAGE> 49
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SECTION 12. MISCELLANEOUS PROVISIONS.
A. The Contract shall be governed by the laws of the State of
Florida applicable to contracts made and to be performed there, without
reference to the principles of the conflicts of law.
B. Permittee and Contractor each binds itself and its
successors, assigns and legal representatives to the other party hereto and to
the successors, assigns and legal representatives of such other party with
respect to all covenants, agreements and obligations contained in the Contract
Documents.
C. The parties hereto agree to cooperate fully with each other
in preparing, filing, prosecuting, advocating grant, and taking any other
actions necessary with respect to any applications or actions which are or may
be necessary to obtain the consent of the FCC or of any other governmental
instrumentality, or any third party to, or are or may be necessary or helpful in
order to accomplish the transactions contemplated by this Agreement.
D. All notices, demands and requests required or permitted to
be given under the provisions of this Agreement shall be (i) in writing, (ii)
delivered by personal delivery or sent by commercial delivery service or
certified mail, return receipt requested, (iii) deemed to have been given on the
date of personal delivery, the date set forth in the records of the delivery
service or on the return receipt, and (iv) addressed as follows::
If to Permittee: Channel 29 of Charleston, Inc.
1121 Chestnut Street
Wilmette, Illinois 60091
Attention: William L. Kepper
If to Contractor: Mr. Lowell W. Paxson
Paxson Communications of Charleston-29, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
or to any such other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
12.D.
E. No action or failure to act by Permittee or Contractor
shall constitute a waiver of any right or duty afforded any of them under this
Agreement, nor shall any such
<PAGE> 50
- 8 -
action or failure to act constitute an approval of or acquiescence in any breach
thereunder, except as may be specifically agreed in writing.
F. If the Contract Documents, laws, ordinances, rules,
regulations or orders or any public authority having jurisdiction require any
portion of the Work to be inspected, tested or approved, Contractor shall give
Permittee timely notice of its readiness so Permittee may observe such
inspection, testing or approval.
G. Licensee's and Contractor's respective obligations
hereunder are unique and valuable and not readily subject to compensation by
money damages alone. Accordingly, in the event either party should breach its
obligations under this Agreement, the other party shall be entitled to an order
directing specific performance from a court of competent jurisdiction, in
addition to all other remedies at law or in equity.
SECTION 13. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures on all counterparts were
upon the same instrument.
SECTION 14. GUARANTY. Paxson Communications Corporation hereby
guarantees the full, complete and timely performance by Contractor of its
obligations under this Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 51
IN WITNESS WHEREOF, Permittee and Contractor have executed this
Construction Agreement as of the date first above written.
PAXSON COMMUNICATIONS OF
CHARLESTON-29, INC.
By:
---------------------------------------
Name:
Title:
CHANNEL 29 OF CHARLESTON, INC.
By:
--------------------------------------
William L. Kepper
President
FOR PURPOSES OF SECTION 14 ONLY:
PAXSON COMMUNICATIONS
CORPORATION
By:
---------------------------------------
Name:
Title:
<PAGE> 52
SCHEDULE A
BUDGET
<PAGE> 53
<TABLE>
<CAPTION>
WKRP CH29 CHARLESTON WV
AUTOMATED ???
<S> <C> <C> <C> <C>
1 TRANSMITTER BUILDING ESTIMATE $286,000
1 LAND ESTIMATE $0
1 500 FT TOWER ESTIMATE $403,822
1 TOWER FOUNDATIONS ESTIMATE $200,000
1 EXCAVATION ESTIMATE $50,000
Sub-Total $939,822
Corp 1 TRANSMITTER COMARK 80 KW 10T $820,000 $820,000
Corp 1 VOLTAGE REGULATOR $20,000 $20,000
1 SURGE PROTECTOR $9,000 $9,000
Corp 1 DIELECTRIC 6 1/8 INCH COAX $89,120 $89,120
Corp 1 DIELECTRIC SIDE MOUNT ANTENNA WITH RADOM $132,000 $132,000
Corp 1 SHIPPING $12,000 $12,000
Corp 1 MOSELEY MRC2 REMOTE CONTROL $31,460 $31,460
600 400 GALLON OF DISTILLED WATER FOR COOLANT $8 $4,800
1 GLYCOL & DISPOSAL $2,000 $2,000
Corp 1 ORBAN 6182A-U75 OPTIMOD $5,812 $5,812
Corp 1 ORBAN 8185A STEREO GENERATOR $6,621 $6,621
1 FIRST AIR & SAFETY DEVICES $1,000 $1,000
1 MISC. HAND & POWER TOOLS $2,000 $2,000
1 MISC. SUPPLIES, HARDWARE AND WIRING $5,000 $5,000
Sub-Total $920,822
Corp 1 MRC 7 GIG 1 HOP HOT STANDBY MICROWAVE $96,000 $96,000
1 INSTALLATION $20,000 $20,000
Sub-Total $116,000
Corp 3 ADC CC-1074G 2' VIDEO PATCH CORD $23 $68
Corp 4 ADC PJ-82 2' AUDIO PATCH CORD $23 $92
Corp 3 ADC PPA3-18MK11-NS AUDIO PRO-PATCH $634 $1,802
Corp 2 ADC PPI-2224RS-75N VIDEO PATCH PANEL $983 $1,926
Corp 1 BELAR TVM-100 MODULATION MONITOR $5,337 $5,337
Corp 1 BELAR TVM-230 DIGITAL BTSC STERIO MONITOR/ANALYZER $6,573 $6,673
Corp 1 CHYRON/TFT EAS 911T/MASTER CG PACKAGE $9,239 $9,239
Corp 1 CLEAR-COM 2-CHANNEL STEREO MONITOR SPEAKER $531 $531
Corp 1 CROWN D-70 SERIES AMPLIFIER $421 $421
Corp 0 DNF ST-60-S/DRN DUAL INTERFACE FOR UVW-1800 $882 $0
Corp 1 DNF ST-100-S REMOTE CONTROL $750 $750
Corp 0 DNF 1X8 RS-422 SWITCHER $838 $0
Corp 0 DNF SMARTER SWITCHER OPTION $132 $0
Corp 0 DNF CUE OPTION $132 $0
Corp 2 DORROUGH 40-A2 VU METER $427 $854
Corp 1 DORROUGH 40-D1 DUAL RACKMOUNT FOR 40-A $40 $40
Corp 1 DPS 2200-2S DUAL CHANNEL MICROSYNCH RACK SYSTEM $2,749 $2,749
Corp 1 DPS DPS-235 SINGLE CHANNEL TBC $1,570 $1,570
Corp 0 ESE ES-161AP 0.55" DISPLAY/RACK MOUNT $248 $0
Corp 1 ESE ES-185 GPS MASTER CLOCK WITH SMPTE TIME CODE OUT $2,383 $2,383
Corp 1 ESE ES-993AP 2.2" DISPLAY/RACK MOUNT $597 $597
Corp 1 GRASS VALLEY 7510N PROC AMP $1,664 $1,664
Corp 1 GRASS VALLEY 7510T1-115 1RU FRAME $754 $754
Corp 2 JBL CONTROL 1 MONITOR SPEAKER $98 $197
</TABLE>
Page 1 8/25/97
<PAGE> 54
<TABLE>
<S> <C> <C> <C> <C>
Corp 1 LEITCH MGI-1302N-8VC NTSC MOTION LOGO GENERATOR $7,187 $7,187
Corp 0 MATTHEY NV-180 SWITCHABLE DELAY LINE WITH TRIM $336 $0
Corp 1 ORBAN 8200ST STEREO COMPRESSOR/LIMITER $1,400 $1,400
Corp 2 SONY MB-5028 RACK FRAME FOR PVM 1354Q $154 $308
Corp 1 SONY PAC-8041Q DUAL 8" COLOR MONITOR W/RACKMOUNT $2,006 $2,006
Corp 2 SONY PVM-1354Q MONITOR $1,067 $2,135
Corp 2 SONY PVM-411 4" QUADRUPLE MONOCHROME MONITOR $1,618 $3,238
Corp 3 SONY RMM-130 UVW SERIES RACKMOUNT $167 $472
Corp 3 SONY UVR-60 REMOTE CONTROL FOR TBC $634 $1,801
Corp 3 SONY UVW-1800 EDITING BETACAM SP VCR $8,300 $24,900
Corp 4 STANTRON RACK ASSEMBLIES $782 $3,170
Corp 4 STANTRON CONSOLE ASSEMBLIES AND TABLE $1,528 $8,110
Corp 1 TEKTRONIX 1700F05 SIDE-BY-SIDE RACK ADAPTER $230 $230
Corp 1 TEKTRONIX 1700F05 BLANK PANEL FOR 1700F05 $55 $55
Corp 1 TEKTRONIX 1780R VIDEO TEST MEASUREMENT SET $10,130 $10,130
Corp 1 TEKTRONIX 760A STEREO AUDIO MONITOR $2,303 $2,303
Corp 1 TEKTRONIX ECO-170A SYNC GENERATOR CHANGE-OVER UNIT $2,303 $2,303
Corp 1 TEKTRONIX SPG-170A NTSC SYNC GENERATOR $3,202 $3,202
Corp 1 TEKTRONIX SPG-170A OPTION 01 COLOR BAR PLUS AUDIO TONE $921 $921
Corp 1 TEKTRONIX TSG-170A NTSC TEST GENERATOR $4,837 $4,837
Corp 1 TEKTRONIX TSG-170A OPTION 01 COLOR BAR PLUS AUDIO TONE $921 $921
Corp 1 TEKTRONIX TVGF11A RACK ASSEMBLY FOR VITS 100 $92 $92
Corp 1 TEKTRONIX VITS-100 $2,211 $2,211
Corp 0 UTAH PS-18 REDUNDANT POWER SUPPLY/MC-501 $600 $0
Corp 0 UTAH PS-50 REDUNDANT POWER SUPPLY/SPS-8 $489 $0
Corp 8 UTAH ADA-4X28 AUDIO DA $280 $2,240
Corp 1 UTAH AVS2-B VAA-60/10 10X10 VIDEO/STEREO AUDIO ROUTER $10,701 $10,701
Corp 0 UTAH BPS-8S 8X1 BYPASS SWITCHER $2,888 $0
Corp 1 UTAH CS-1 REDUNDANT POWER SUPPLY/AVS-2 $641 $641
Corp 1 UTAH OSP-16160/4 CONTROL PANEL $1,500 $1,500
Corp 1 UTAH CSP-40/4 CONTROL PANEL $750 $750
Corp 0 UTAH MC-601C-SLM MCR SWITCHER (20 INPUTS) WITH MG0-500 $18,806 $0
Corp 2 UTAH PS-50BA AUDIO POWER SUPPLY $304 $608
Corp 2 UTAH PS-50BV VIDEO POWER SUPPLY $304 $608
Corp 2 UTAH RF50B RACK FRAME $384 $768
Corp 1 UTAH SC-1 REDUNDANT CONTROL/MEMORY CARD/AVS-2 $641 $641
Corp 8 UTAH VDA-4X25 VIDEO DA $324 $2,592
Corp 1 VIDEOTEK DM-154 HIGH PERFORMANCE TV DEMODULATOR $4,209 $4,209
Corp 3 WKHIRLWIND AUDIO MIXERS $262 $755
Corp 1 TEKTRONIX PROFILE DISK BASED SYSTEM $82,681 $82,681
Corp 1 LOUTH AUTOMATION SYSTEM $84,875 $84,875
Corp 1 MAGNI WVM-720 $5,110 $5,110
Sub-Total $285,336
Corp 1 SCITEX VSCS-9 VIDEOSPHERE WITH DVSFX EFFECTS $49,386 $49,386
Corp 1 SCITEX VIDEOSPHERE PLATINUM WARRANTY $3,750 $3,750
Corp 1 SONY UVW-1800 TAPE MACHINE $8,300 $8,300
Corp 1 SONY UVR-60 REMOTE CONTROL FOR TBC $534 $534
Corp 1 TEKTRONIX 1740A WFM/VECTORSCOPE $4,141 $4,141
Corp 1 VIDEOTEK PTC-1 1740 CASE $138 $138
Corp 1 WINSTEAD E4583 84" WIDE CONSOLE $1,309 $1,309
Corp 1 COMPACT DISK PLAYER $3,000 $3,000
Corp 1 SONY DAT RECORD/PLAYER $3,000 $3,000
Corp 1 TAPE BACKUP $4,500 $4,500
Sub-Total $78,057
Corp 1 K&H PRODUCTS MO8044 MONITOR CASE FOR PVM-8041Q $116 $116
Corp 1 K&H PRODUCTS MOVA500 CASE FOR VA-300 $67 $67
</TABLE>
Page 2 8/25/97
<PAGE> 55
<TABLE>
<S> <C> <C> <C> <C>
Corp 1 K&H PRODUCTS PC101 MEDIUM CAPACITY PRODUCTION CASE $153 $153
Corp 1 K&H PRODUCTS PC2 LARGE CAPACITY CASE $261 $261
Corp 1 K&H PRODUCTS SC837AP3 SHOULDER CASE DXC 837A/PVV-3 $238 $238
Corp 1 K&H PRODUCTS TM MUMMY CASE FOR SACHTLER TRIPOD $195 $195
Corp 1 LOWEL TO-98 LIGHT KIT (SOLO KIT) $2,242 $2,242
Corp 1 SENNHEISER ME66 SHORT SHOTGUN MIC $209 $209
Corp 3 SENNHEISER MKE2-60 LAVALIER MIC W/POWER ADAPTOR $445 $1,334
Corp 1 SHURE FP-32A PORTABLE STEREO MIXER $1,345 $1,345
Corp 1 SONY AC-550 AC ADAPTOR $718 $718
Corp 1 SONY BC-1WD BATTERY CHARGER $607 $607
Corp 1 SONY CANON YJ17X9.58KRS 17:1 ZOOM LENS $2,770 $2,770
Corp 1 SONY DXC-D30L CAMERA SYSTEM $12,135 $12,135
Corp 12 SONY NP-18 NICAD BATTERY, 12V, 2.3A/H $93 $1,114
Corp 1 SONY FVM-5041Q 8" PORTABLE COLOR MONITOR $927 $927
Corp 1 SONY PVV-3 BETACAM SP DOCKABLE RECORDER $8,798 $8,798
Corp 1 SONY VA-300 PLAYBACK ADAPTOR $1,966 $1,966
Corp 1 TELEX FMR-150 LAPEL WIRELESS MICROPHONE SYSTEM $739 $739
Corp 1 VINTEN 3D-12M FLUID HEAD/2-STAGE TRIPOD/SPREADER $4,912 $4,912
Sub-Total $40,848
Corp 1 COMTECH 5.0 METER MOTORIZED ANT & CTI EC8 CONTROLLER $22,443 $22,443
Corp 0 COMTECH 5.0 METER FIXED DISH W/C&Ku BAND 4 POLE $8,689 $0
Corp 1 PARACLIPSE 3.8 METER FIXED DISH (4 POLE) FOR XMTR $1,666 $1,666
Corp 2 STANDARD COMMUNICATIONS MT-830BR-PKG SATELITE REC. $3,332 $8,664
Corp 2 SCIENTIFIC ATLANTA MPEG2 PAXNET RECEIVER $1,676 $3,350
Corp 4 CLNB15-G500 16 DEGREE "C" LNB (NOR8120) $391 $1,563
Corp 4 KLNB 8-D500 .8dB "Ku"LNB (NOR4108A) $299 $1,195
Sub-Total $38,882
Corp 4 ADC CC1074G 2' VIDEO PATCH CORD $23 $90
Corp 5 ADO PJ82 2' AUDIO PATCH CORD $23 $138
Corp 1 ADC PPA3-18MK11-NS AUDIO PRO PATCH, NORMALS STRAPPED $834 $834
Corp 1 ADC PPI-2224RS-75N VIDEO PATCH PANEL $983 $983
Corp 1 CROWN D-75 SERIES AMPLIFIER $421 $421
Corp 2 ELECTRO-VOICE SENTRY 100A MONITOR SPEAKER $327 $854
Corp 1 GRASS VALLEY 7510N PROC AMP $1,684 $1,684
Corp 1 GRASS VALLEY 7510T1-115 1RU FRAME $754 $754
Corp 1 SONY MB-502B RACK FRAME FOR PVM-1354Q $154 $154
Corp 1 SONY PVM-1364Q MONITOR $1,067 $1,067
Corp 2 STANTRON D60078LLH, LOUVERED BACK DOOR $138 $271
Corp 1 STANTRON H100KITZ, BLACK 10X-32X5/8 BAG OF 100 $22 $22
Corp 2 STANTRON P28L, TOP PANEL, LOUVERED $29 $57
Corp 2 STANTRON PM4051C, 6' PLUGMOLD (12 OUTLET-15A/125V) $88 $178
Corp 2 STANTRON SF2007830, RACK (19"HPS,78"VPS,30"D) $437 $874
Corp 2 STANTRON SS2007830, SIDE PANEL, SQ, 76"VPS,30"D $140 $280
Corp 1 TEKTRONIX 1700F05 SIDE BY SIDE RACK ADAPTOR $230 $230
Corp 1 TEKTRONIX 1700F06 BLANK PANEL $55 $55
Corp 1 TEKTRONIX 1780F05 SHELF FOR TV-1350 $169 $169
Corp 1 TEKTRONIX 1780R VIDEO TEST MEASUREMENT SET $10,130 $10,130
Corp 1 TEKTRONIX 760A STEREO AUDIO MONITOR $2,303 $2,303
Corp 1 TEKTRONIX ZZA931 TV-1350 RACK RAILS $83 $83
Corp 1 TEKTRONIX TV-1350 TV DEMODULATOR $21,145 $21,145
Corp 1 TEKTRONIX 1910 TEST GENERATOR $7,838 $7,838
Corp 2 UTAH ADA-4X2B AUDIO DA $280 $560
Corp 2 UTAH PS-50BA AUDIO POWER SUPPLY $304 $608
Corp 2 UTAH PS-608V VIDEO POWER SUPPLY $304 $608
Corp 2 UTAH RF-50B RACK FRAME $384 $768
Corp 1 UTAH VDA-4X2B VIDEO DA $324 $324
</TABLE>
Page 3 8/25/97
<PAGE> 56
SCHEDULE B
PLANS AND SPECIFICATIONS
CONSTRUCTION PERMIT
<PAGE> 57
[SEAL] United States of America
FEDERAL COMMUNICATIONS COMMISSION
TELEVISION BROADCAST STATION
CONSTRUCTION PERMIT
Authorizing Official:
Official Mailing Address: /s/ Clay C. Pendarvis
- ------------------------- ---------------------
Clay C. Pendarvis
WKRP-TV, INC. Chief, TV Branch
835 Hillcrest Drive Video Services Division
CHARLESTON, WV 25311 Mass Media Bureau
- -------------------------
Current Date:
Call Sign: WKRP-TV ???? 1996
This permit expires 3:00 a.m.
local time, 6 months after
grant date specified above.
Permit File No.: BMPCT-891031KI
This Permit Modifies Permit No.: 870121KN
Subject to the provision of the Communications Act of 1934, as amended,
subsequent acts and treaties, and all regulations heretofore or hereafter made
by this Commission, and further subject to the conditions set forth in this
permit, the permittee is hereby authorized to construct the radio transmitting
apparatus herein described. Installation and adjustment of equipment not
specifically set forth herein shall be in accordance with representations
contained in the permittee's application for construction permit except for such
modifications as are presently permitted, without application, by the
Commission's Rules.
This permit shall be automatically forfeited if the station is not ready for
operation within the time specified (date of expiration) or within such further
time as the Commission may allow, unless completion of the station is prevented
by causes not under the control of the permittee. See Sections 73.3598,
73.3599 and 73.3534 of the Commission's Rules.
Equipment and program tests shall be conducted only pursuant to Sections
73.1610 and 73.1620 of the Commission's Rules.
Name of Permittee:
P.S.A., INC.
Station Location:
WV-CHARLESTON
Frequency (MHz): 560.0 - 566.0
FCC Form 352-A October 21, 1985 Page 1
<PAGE> 58
Carrier Frequency: (MHz): 561.25 Visual 565.75 Aural
Channel: 029
Hours of Operation: Unlimited
Transmitter location (address or description):
Poco River hnt, fsh, rec Club, inc., grnds Putnam Co., WV.
Transmitter: Type Accepted. See Sections 73.1660, 73.1665 and 73.1670
of the Commission's Rules.
Antenna type: (direction or non-directional): Directional
Description: DIELECTRIC TFU-33JSM/R-C170
Beam Tilt: .50 Degrees Electrical
Major lobe directions (degrees true): 119.0 261.0
Antenna Coordinates: North Latitude : 38 28 12
West Longitude: 81 46 35
Transmitter output power...............: As required to achieve authorized ERP
Maximum effective radiated power (PEAK): 1580.0 kW
: 32.0 DBK
Height of radiation center above ground...........: 141 Meters
Height of radiation center above mean sea level...: 452 Meters
Height of radiation center above average terrain..: 212 Meters
Antenna structure registration number: none
Overall height of antenna structure above ground
(including obstruction lighting if any)........: 152 Meters
Obstruction marking and lighting specifications for antenna structure:
It is to be expressly understood that the issuance of these specifications is
in no way to be considered as precluding additional or modified marking or
lighting as may hereafter be required under the provisions of Section 303(q) of
the Communications Act of 1934, as amended.
PARAGRAPH 01.0, FCC FORM 715 (OCTOBER 1985):
Antenna structures shall be painted throughout their height with alternate bands
of aviation surface orange and white, terminating with aviation surface orange
bands at both top and bottom. The width of the bands shall be equal and
approximately one-seventh the height of the
FCC Form 352-A October 21, 1985 Page 2
<PAGE> 59
structure, provided however, that the bands shall not be more than 100 feet
nor less than 1 and 1 2 feet in width. All towers shall be cleaned and
repainted as often as necessary to maintain good visibility.
PARAGRAPH 03.0, FCC FORM 715 (APRIL 1985):
There shall be installed at the top of the structure one 300 m/m electric code
beacon equipped with two 620- or 700-watt lamps (PS-40, Code Beacon type), both
lamps to burn simultaneously, and equipped with aviation red color filters.
Where a rod or other construction of not more than 20 feet in height and
incapable of supporting this beacon is mounted on top of the structure and it
is determined that this additional construction does not permit unobstructed
visibility of the code beacon from aircraft at any normal angle of approach,
there shall be installed two such beacons positioned so as to insure
unobstructed visibility of at least one of the beacons from aircraft at any
normal angle of approach. The beacons shall be equipped with a flashing
mechanism producing not more than 40 flashes per minute nor less than 12
flashes per minute with a period of darkness equal to approximately one-half of
the luminous period.
PARAGRAPH 04.0, FCC FORM 715 (APRIL 1985):
At approximately one-half of the overall height of the tower one similar
flashing 300 m/m electric code beacon shall be installed in such position
within the tower proper that the structural members will not impair the
visibility of this beacon from aircraft at any normal angle of approach. In
the event this beacon cannot be installed in a manner to insure unobstructed
visibility of it from aircraft at any normal angle of approach, there shall be
installed two such beacons. Each beacon shall be mounted on the outside of the
tower of the prescribed height.
PARAGRAPH 13.0, FCC FORM 715 (APRIL 1985):
On levels at approximately three-fourths and one-fourth of the over-all height
of the tower, at least one 116- or 125-watt lamp (A21/TS) enclosed in an
aviation red obstruction light globe shall be installed on each outside corner
of the structure.
PARAGRAPH 21.0, FCC FORM 715 (APRIL 1985):
All lighting shall burn continuously or shall be controlled by a light
sensitive devise adjusted so that the lights will be turned on at a north sky
light intensity level of about 35 foot candles and turned off at a north sky
light intensity level of about 58 foot candles.
PARAGRAPH 22.0, FCC FORM 715 (APRIL 1985):
During construction of an antenna structure, for which obstruction lighting is
required, at least two 116- or 125-watt lamps (A21/TS) enclosed in aviation red
obstruction light globes, shall be installed at the uppermost point of the
structure. In addition, as the height of the structure exceeds each level at
which permanent obstruction lights will be required, two similar lights shall
be displayed nightly from sunset to sunrise until the permanent obstruction
lights have been installed and placed in operation, and shall be positioned so
as to insure unobstructed visibility of at least one of the lights at any
normal angle of approach. In lieu of the above temporary warning
FCC Form 352-A October 21, 1985 Page 3
<PAGE> 60
lights, the permanent obstruction lighting fixtures may be installed and
operated at each required level as each such level is exceeded in height during
construction.
Special operating conditions or restrictions:
1. Grant of this authorization is conditioned on the outcome of the digital
television (DTV, rule making proceeding in MM Docket No. 87-268. To the
extent that the station's Grade B contour or potential for causing
interference is extended into new areas by this authorization, the
Commission may require the facilities authorized herein to be reduced or
modified.
*** END OF AUTHORIZATION ***
FCC Form 352-A October 21, 1985 Page 4
<PAGE> 61
SCHEDULE C
LEASE AGREEMENT
<PAGE> 62
SCHEDULE C
- --------------------------------------------------------------------------------
FACILITY
LEASE AGREEMENT
BY AND BETWEEN
CHANNEL 29 OF CHARLESTON, INC.
AND
PAXSON COMMUNICATIONS OF
CHARLESTON-29, INC.
FOR
TELEVISION STATION WKRP-TV
CHARLESTON, WEST VIRGINIA
* * *
__________ __, 199_
- --------------------------------------------------------------------------------
<PAGE> 63
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. TERM............................................................................................... 1
(a) Initial and Renewal Term................................................................... 1
(b) Holding Over............................................................................... 2
(c) Automatic Termination...................................................................... 2
SECTION 2. RENT AND TAXES..................................................................................... 2
(a) Rent for Initial and Renewal Terms......................................................... 2
(b) Security Deposit........................................................................... 3
(c) Taxes...................................................................................... 3
(d) Payment.................................................................................... 3
SECTION 3. USE OF ASSETS...................................................................................... 3
SECTION 4. UTILITIES.......................................................................................... 4
SECTION 5. ALTERATIONS........................................................................................ 4
SECTION 6. MAINTENANCE AND REPAIRS............................................................................ 5
SECTION 7. INDEMNITY AND INDEMNITY INSURANCE.................................................................. 6
SECTION 8. ASSIGNMENT......................................................................................... 6
SECTION 9. CONDEMNATION....................................................................................... 6
SECTION 10. INTERFERENCE AND RF RADIATION..................................................................... 7
(a) General.................................................................................... 7
(b) Interference to Lessee..................................................................... 7
(c) Interference Defined....................................................................... 8
(d) Dispute as to Interference................................................................. 8
(e) RF Radiation............................................................................... 8
SECTION 11. FORCE MAJEURE..................................................................................... 8
SECTION 12. MECHANICS' LIENS.................................................................................. 8
SECTION 13. LESSOR'S LIEN..................................................................................... 9
SECTION 14. QUIET ENJOYMENT................................................................................... 9
</TABLE>
<PAGE> 64
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 15. DEFAULT........................................................................................... 9
SECTION 16. SURRENDER OF LEASED FACILITIES.................................................................... 9
SECTION 17. NOTICES........................................................................................... 10
SECTION 18. PROPERTY INSURANCE................................................................................ 10
SECTION 19. TAXES............................................................................................. 11
SECTION 20. CAPTIONS.......................................................................................... 11
SECTION 21. COVENANTS TO BIND AND BENEFIT RESPECTIVE PARTIES.................................................. 11
SECTION 22. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS......................................................................................... 11
SECTION 23. COUNTERPARTS...................................................................................... 11
SECTION 24. ATTORNEYS FEES.................................................................................... 11
SECTION 25. MISCELLANEOUS..................................................................................... 11
SECTION 26. ENTIRE AGREEMENT.................................................................................. 12
SECTION 27. WAIVER OF JURY TRIAL.............................................................................. 12
</TABLE>
(ii)
<PAGE> 65
SCHEDULE C
FACILITY
LEASE AGREEMENT
THIS FACILITY LEASE is made and entered into as of this __________ day
of ________, ____, by and between PAXSON COMMUNICATIONS OF CHARLESTON-29, INC.,
a Florida corporation (hereinafter referred to as "Lessor"), and CHANNEL 29 OF
CHARLESTON, INC., a Delaware corporation (hereinafter referred to as "Lessee").
STATEMENT OF FACTS
A. Lessor, Lessee, Mountaineer Broadcasting Corp. and William L. Kepper
have entered into a Stock Purchase Agreement dated as of September 2, 1997
("Purchase Agreement").
B. Pursuant to the Purchase Agreement, Lessor and Lessee have entered
into a Construction Agreement, dated as of _______, 199_, which provides that
Lessor and Lessee shall enter into a Lease Agreement pursuant to which Lessor
shall lease to Lessee certain premises and assets used or useful in the
operation of new television station WKRP-TV, Channel 29, Charleston, West
Virginia (the "Station").
C. Lessor and Lessee desire to set forth herein the terms and
conditions of such Lease.
NOW, THEREFORE, in consideration of the terms and conditions set forth
in this Lease, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. TERM.
(a) Initial and Renewal Term. Lessee shall have the right to
use the premises and assets described in Attachment A hereto (the "Leased
Facilities") for an Initial Term commencing on the date hereof (the
"Commencement Date") and expiring at 12:00 Midnight on a date which is five
years from the date hereof (the "Initial Term"), unless this Lease is sooner
terminated as hereinafter provided. This Lease may be renewed for one additional
one-year term (the "Renewal Term"), unless at least 90 days prior to the
expiration of the Initial Term Lessor or Lessee shall have provided written
notice to the other stating that it does not intend to renew this Lease for a
Renewal Term. The Initial Term and Renewal Term shall be subject to all of the
terms and conditions set forth in this Lease.
<PAGE> 66
- 2 -
(b) Holding Over. If Lessee or anyone claiming under Lessee
shall remain in possession of the Leased Facilities or any part thereof after
the expiration of the Initial Term or the Renewal Term without any agreement in
writing between the Lessor and Lessee with respect thereto, prior to acceptance
of rent by Lessor, the person remaining in possession shall be deemed a holdover
lessee, and, after acceptance of rent by Lessor, the party remaining in
possession of the Leased Facilities shall be deemed a lessee from
month-to-month, subject to the provisions of this Lease. The rental during any
such period shall equal one hundred twenty-five percent (125%) of the rental in
effect immediately preceding such expiration.
(c) Automatic Termination. Notwithstanding anything in this
Lease to the contrary, this Lease shall automatically terminate upon the earlier
to occur of the Second Closing (as defined in the Purchase Agreement) or the
termination of the Purchase Agreement pursuant to its terms, and neither Lessor
nor Lessee shall have any further obligations hereunder, except as provided in
Section 3(b) and except that Lessee shall be responsible for any unpaid Rent.
SECTION 2. RENT AND TAXES.
(a) Rent for Initial and Renewal Terms. Lessee covenants and
agrees to pay Lessor for the use of the Leased Facilities during the Initial
Term and the Renewal Term the amounts set forth below (the "Rent"):
(1) On or before the last day of the month in which the
Commencement Date falls, Lessee shall pay as Rent for each day of the period
beginning on the Commencement Date and ending on the last day of such month the
sum of Seven Hundred Thirty Dollars ($730) per day.
(2) Lessee shall pay to Lessor monthly Rent in the amount
of Twenty-Two Thousand Dollars ($22,000) (the "Base Rent") for the period
beginning with the first full calendar month following the Commencement Date and
continuing until the termination of this Lease.
(3) In the event that this Lease is renewed, the Rent to
be paid by Lessee to Lessor during the Renewal Term shall be equal to the sum of
the Base Rent plus the amount determined by multiplying the Base Rent by the
percentage increase, if any, in the U.S. Department of Labor, Bureau of Labor
Statistics, Revised All-Cities Consumer Price Index for the Charleston, West
Virginia metropolitan area (the "CPI") published immediately prior to the last
day of the Initial Term over the CPI published immediately
<PAGE> 67
- 3 -
prior to the Commencement Date. In no event shall the Rent to be paid by Lessee
during the Renewal Term be less than the Base Rent.
(4) If the CPI ceases to exist or is substantially
changed, Lessor shall substitute a similar index. Except as otherwise
specifically provided herein, installments of Rent during the Initial Term and
the Renewal Term shall be paid in advance in United States Dollars (without
prior notice or invoice by Lessor) on or before the first of the month and any
amounts which are payable when invoiced hereunder shall be due within twenty
(20) days after Lessee's receipt of such invoice.
(b) Security Deposit. As security for the timely performance
of Lessee's obligations hereunder, Lessee shall pay to Lessor on the
Commencement Date the amount of One Thousand Dollars ($1,000) which shall be
held by Lessor as a security deposit for the Initial Term and the Renewal Term.
Lessor shall be permitted to apply the security deposit to satisfy Lessee's
obligations hereunder.
(c) Taxes. Lessee shall pay to Lessor, when invoiced, any and
all taxes and assessments levied or assessed on or against the use of the Leased
Facilities and/or the rental payments due hereunder.
(d) Payment. All monthly payments of rent or other sums due
Lessor hereunder shall be sent to or made at the offices of Lessor designated in
Section 16 hereof, or such other place as may be designated by Lessor from time
to time.
SECTION 3. USE OF ASSETS.
(a) Lessee shall have the right to use the Leased Facilities
only for the purpose of constructing and operating the Station and for the
construction and operation of transmit and receive towers, satellite receivers
and associated equipment related to Lessee's operation of the Station.
(b) Lessee accepts the Leased Facilities in their present
condition ("as is") and agrees that it will take good care of the Leased
Facilities, subject to reasonable wear and tear, and that Lessee will return the
Leased Facilities to Lessor in the same condition as said Leased Facilities were
in at the time control was turned over to Lessee, subject to reasonable wear and
tear, and damage done by Lessor, if any. Furthermore, at Lessor's option, Lessee
at its sole cost and expense shall remove or change all alterations made
pursuant to Section 4(a) hereof so as to return said Leased Facilities to Lessor
in said same condition, subject to this subsection 3(b). Lessee agrees that it
will comply with all laws, ordinances, orders,
<PAGE> 68
- 4 -
rules, regulations or requirements of all governmental authorities which are
applicable to its use of the Leased Facilities.
(c) Lessee, at its own cost and expense, shall obtain and
maintain in effect any and all permits, licenses and approvals that are or may
be required with respect to the construction or operation of the Station by each
governmental authority having jurisdiction over such construction or operation.
(d) Lessee shall have a right of access to the Studio Building
(i) as may be necessary or appropriate to operate the Station and (ii) at all
reasonable times for inspection, repair, maintenance and replacement of its
equipment, provided, however, that such access and activities shall not
interfere with the use of the Leased Facilities by Lessor or any other tenant of
Lessor, or interrupt or otherwise adversely affect the continued broadcast
operation or equipment of any other tenant of Lessor. Lessor shall have a right
of access to the Leased Facilities at all reasonable times, for examination,
inspection, emergency repair or replacement of Lessee's equipment, provided,
however, that (except as may be provided elsewhere in this Lease) Lessor shall
take reasonable efforts to see that such access and activity by Lessor does not
interfere with the use of the Leased Facilities by Lessee or any other tenant,
or interrupt or otherwise adversely affect the continued broadcast operation of
the Station.
SECTION 4. UTILITIES. Lessee shall be responsible for the furnishing of
heat, water, electricity or other utilities to the Leased Facilities for the
benefit of Lessor.
SECTION 5. ALTERATIONS.
(a) Subject to Lessor's approval, which approval shall not be
unreasonably withheld, Lessee, at its own expense and subject to the provisions
of Subsection 5(b) hereof, may make such alterations, additions, changes and
improvements (herein called "Alterations") to the Leased Facilities as Lessee
may deem necessary or desirable, provided that said Alterations shall not lessen
the value of the Leased Facilities.
(b) Before Lessee may make any Alterations to the Leased
Facilities in accordance with the rights granted by Subsection 5(a) hereof,
Lessee shall submit to Lessor written specifications for such Alterations that
are proposed for Lessor's approval. Lessor, within thirty (30) days after
receipt by it of the written specifications, shall notify Lessee whether it
approves such Alterations. If Lessor fails to notify Lessee in writing within
such thirty (30) day period that it disapproves of such Alterations, Lessee may
proceed to cause the Alterations to be made.
<PAGE> 69
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SECTION 6. MAINTENANCE AND REPAIRS.
(a) Lessor shall be responsible for the repair and maintenance
of the Leased Facilities. In the event that Lessee reasonably determines that a
repair or replacement is needed and Lessor after written notice does not make
said repair or replacement within a reasonable period of time, Lessee shall
notify Lessor in writing that it considers said repair or replacement necessary
and that it is contemplating making said repair. Lessee may then, at its option,
make such repair or replacement and charge the reasonable cost incurred to
Lessor. It is agreed that nothing in the foregoing shall relieve Lessor from
full performance of its obligations and that the remedy referred to above is in
addition to any other remedy available to Lessee.
(b) If the Leased Facilities shall be partially damaged by
fire or other cause without the fault or neglect of Lessee or its employees,
agents, visitors or licensees, the Lessor shall proceed forthwith to replace or
to repair the Leased Facilities with reasonable diligence at the expense of
Lessor; provided, if the Leased Facilities are to be replaced or repaired and
are unusable in whole or in part following such damage, the rent payable
hereunder during the period in which they are unusable shall be adjusted
equitably; provided further, however, if the Leased Facilities are totally
damaged or rendered wholly unusable by fire or other cause, including, but not
limited to, condemnation, and Lessor shall decide not to replace the same, then,
within ninety (90) days after such fire, casualty or condemnation, Lessor may
give Lessee notice in writing of the decision not to replace, whereupon the
Initial Term or Renewal Term of this Lease shall terminate, Lessee shall
surrender the Leased Facilities to Lessor, and rent shall be abated for the
unexpired portion of this Lease, effective as of the date of said written notice
from Lessor, and Lessor shall have no further obligation or liability to Lessee.
It is agreed that nothing in this Subsection 6(b) shall require Lessor to
replace or to repair any or all Alterations.
(c) Lessor will maintain the Leased Facilities so as to comply
with existing rules and regulation imposed by any governmental authority having
jurisdiction over the construction or operation of the Station, and make any
repairs and modifications reasonably necessary to maintain the Leased Facilities
in good condition and in compliance with good broadcast engineering practices.
In performance of its obligation to maintain and repair the Leased Facilities,
it may be necessary from time to time for Lessor to request that Lessee
temporarily cease its broadcast operation, turn off electrical power and/or make
other adjustments to its equipment and operations. Lessor agrees to schedule
such work, as far as reasonably possible, from 1:00 A.M. to 5:00 A.M., and
Lessor will not cause any temporary interruption of Lessee's broadcast operation
under this provision unless such interruption is required by and consistent with
good engineering practices. Lessee agrees to cooperate with Lessor and to comply
with and honor Lessor's reasonable requests for temporary cessation of
<PAGE> 70
- 6 -
its broadcast operation, to turn off electrical power and/or to make other
adjustments to its equipment or operation, as necessary, to allow Lessor to
perform such work in an orderly and timely manner.
SECTION 7. INDEMNITY AND INDEMNITY INSURANCE.
(a) Lessee shall indemnify and hold harmless Lessor from any
and all claims, expenses or liabilities, including reasonable attorneys' fees
and court costs, for injuries to or death of persons, or damage to property
arising out of or in connection with Lessee's use of the Leased Facilities.
Lessee further agrees to defend on behalf of Lessor all legal actions, if any,
arising out of any such claim for such damages. Lessor shall not be liable for
loss or damage sustained by Lessee by reason of business interruption resulting
from any or all acts or omissions of Lessor or violations by Lessor of any or
all terms, covenants or conditions of this Lease.
(b) Lessee agrees that it will, at its expense, obtain and
maintain during the Initial Term or Renewal Term public liability insurance
against claims of injury to or death of persons, or damage to property arising
out of or in connection with Lessee's use of the Leased Facilities, naming
Lessee and Lessor as insured persons. Such public liability insurance shall be
with an insurer that Lessor finds reasonably satisfactory and shall have limits
of not less than One Million Dollars ($1,000,000) with respect to claims of
injury to or death of any number of persons in any one occurrence and not less
than Two Hundred Thousand Dollars ($200,000) for property damage in any one
occurrence. Lessee agrees to name Lessor as a co-insured party on any and all
such public liability insurance policies. Satisfactory evidence of such coverage
shall be submitted by Lessee to Lessor.
SECTION 8. ASSIGNMENT.
(a) Lessee's Right to Assign. Neither this Lease nor any of
the rights, interests or obligations of Lessee hereunder shall be assigned,
encumbered, hypothecated, subleased or otherwise transferred without the prior
written consent of Lessor.
(b) This Lease shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
SECTION 9. CONDEMNATION.
(a) If during the Initial Term or Renewal Term of this Lease
the Leased Facilities or any portion thereof shall be appropriated by any
corporation or authority having the right of eminent domain, or if access to the
Leased Facilities is restricted by action of
<PAGE> 71
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any such corporation or authority and reasonably comparable access is not made
available to the Leased Facilities, this Lease and all obligations of Lessor and
Lessee hereunder shall cease and terminate as of the date the appropriating
corporation or authority takes possession thereof or materially restricts access
to the Leased Facilities. All obligations of Lessee to pay any rents or other
charges whatsoever under the terms of this Lease shall be apportioned as of such
date in the same manner as if the Lease had expired on such date according to
its terms.
(b) Whenever used herein, the terms "appropriated" or
"appropriation" shall include any voluntary transfer of the Leased Facilities or
any part thereof to any corporation or authority having the right of eminent
domain as a result of a settlement of a threatened or pending appropriation
action.
(c) In the event of the appropriation of the whole or any part
of the Leased Facilities, the amount received as compensation for the
appropriation (including in the case of an appropriation of part of the Leased
Facilities, any amount allowed as damages to the remainder) shall be paid in
full to Lessor, subject, however, to any right of Lessee to receive any
additional or specific award from the appropriating corporation or authority to
which it might be entitled.
(d) In any appropriation of the Leased Facilities, Lessee
shall have the right to prove in the proceeding and to receive any award which
may be for damages to or condemnation of Lessee's movable trade fixtures,
equipment, furniture and furnishings and for moving and relocation expenses.
SECTION 10. INTERFERENCE AND RF RADIATION.
(a) General. Lessee will conduct its activities in accordance
with applicable requirements of the FCC and sound electronic and engineering
practice and will cooperate with Lessor and other tenants and potential tenants
so as to anticipate and prevent interference to the broadcast operations or
equipment of Lessor or any other tenant. If any engineering statement presented
to or by the Lessor confirms that Lessee's broadcast operation, transmission or
other activities on or around any portion of the Leased Facilities are causing,
or are reasonably expected to cause, interference to the broadcast operation,
transmission or other activities of Lessor or any other tenant, Lessee shall, at
its sole expense, promptly correct or modify the conditions causing such
interference.
(b) Interference to Lessee. Upon determination that any other
tenant is causing interference to Lessee's broadcast operation, transmission or
other activities in or around any portion of the Leased Facilities, Lessor will
use its reasonable best efforts to
<PAGE> 72
- 8 -
modify or correct promptly, or cause such other tenant to modify or correct
promptly, the condition causing such interference.
(c) Interference Defined. As used in this Lease, interference
to a broadcast operation, transmission or other similar activity shall mean a
condition or anticipated condition which constitutes or would constitute
interference within the meaning of the provisions of the recommended practices
of the Electronics Industries Association and the rules and regulations of the
FCC then in effect.
(d) Dispute as to Interference. Any dispute as to whether
interference is being caused or expected to be caused, or as to who is causing
such interference, which remains unresolved for longer than seven (7) calendar
days, shall be submitted to a consulting electronic engineer who is not retained
or otherwise employed by Lessor, Lessee or any other tenant whose antenna is
located on the Tower, and the determination of such consulting electronic
engineer shall be final and binding on all parties. The consulting engineer
shall be jointly selected by Lessor and Lessee.
(e) RF Radiation. Lessee shall, at Lessee's expense, take all
actions required to ensure that Lessee's broadcast operation does not expose
workers or the general public to levels of radio frequency radiation in excess
of the "Radio Frequency Protection Guides" recommended in the American National
Standard Safety Levels with Respect to Human Exposure to Radio Frequency
Electromagnetic Fields, 300 kHz to 100 GHz (ANSI C95.1-1982) issued by the
American National Standards Institute.
SECTION 11. FORCE MAJEURE. Neither Lessor nor Lessee shall be required
to perform any term, condition or covenant in this Lease so long as such
performance is delayed or prevented by force majeure, which shall mean Acts of
God, strikes, lockouts, material or labor restrictions by any governmental
authority, civil riots, floods, and any other cause not reasonably within the
control of Lessor or Lessee and which by the exercise of due diligence Lessor or
Lessee is unable, wholly or in part, to prevent or to overcome; provided,
however, force majeure shall not excuse Lessee from its obligation to pay rent
or other sums hereunder and Lessee shall be required to pay any and all rent and
such other sums as provided by this Lease.
SECTION 12. MECHANICS' LIENS. Lessee shall not suffer or permit any
mechanics' liens to be filed against the Leased Facilities by reason of work,
labor or materials supplied or claimed to have been supplied to Lessee that are
not removed or for which adequate bond has not been provided within thirty (30)
days of such filing. Furthermore, if any such lien at any time shall be filed
against the Leased Facilities, Lessee
<PAGE> 73
- 9 -
shall proceed with due diligence to cause the same to be discharged of record by
payment, deposit, bond, order of court or otherwise.
SECTION 13. LESSOR'S LIEN. Lessor shall have a first lien upon every
right and interest of Lessee to and in the Leased Facilities for the payment of
rent and all other sums payable by Lessee hereunder and as security for the
performance and observance of the agreements, conditions, and obligations of
this Lease by and between Lessor and Lessee, dated the date hereof, which
agreements, conditions, and obligations are to be performed and observed by
Lessee.
SECTION 14. QUIET ENJOYMENT. Lessor covenants that, upon payment by
Lessee of all rents and the performance by Lessee of all obligations pursuant to
this Lease, Lessee shall and may peaceably and quietly have and enjoy the Leased
Facilities for and during the Initial Term and any Renewal Term of this Lease,
pursuant to the terms hereof, free from any hindrance from any person or persons
whomsoever claiming by, through or under Lessor.
SECTION 15. DEFAULT. If the Lessee defaults in fulfilling any of its
material covenants or obligations hereunder, or if the Lessee does not fully
make all payments of rent when due under this Lease, Lessor at its option may
terminate and end this Lease and recover the Leased Facilities provided that
Lessee has been given written notice by Lessor and that Lessee has not made full
payment of the rent and cured all other such defaults, if any, within fifteen
(15) days following such notice. Furthermore, if Lessee fails to make a payment
of Rent hereunder when due, Lessee shall be liable for and pay to Lessor a late
payment charge at the rate of eighteen percent (18%) per annum, computed from
the date said payment was due until the date said payment is actually made. In
the event of a default hereunder, other than the nonpayment of rent or other
monetary obligation, the Lessor shall have the right to terminate this Lease if
Lessee does not cure such default within thirty (30) days of written notice from
Lessor. In the event of said defaults, in addition to said termination rights,
Lessor shall have all other rights and remedies to which it may be entitled. A
waiver by the Lessor of any breach of this Lease or any terms, conditions or
promises herein contained must be in writing to be effective and shall not be or
construed to be a waiver of any subsequent breach of the same or any other term,
condition or promise herein and the payment by the Lessee and acceptance by the
Lessor of rent hereunder shall not be construed to be a waiver of any breach of
terms or conditions herein except as to the particular installment of rent so
paid and accepted.
SECTION 16. SURRENDER OF LEASED FACILITIES. Lessee, upon the expiration
of the Initial Term or Renewal Term of this Lease or the earlier termination of
<PAGE> 74
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this Lease, shall surrender to Lessor the Leased Facilities in accordance with
the terms and conditions provided for in Subsection 3(b) hereof.
SECTION 17. NOTICES. All notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be (i) in
writing, delivered by personal delivery, or sent by commercial delivery service
or certified mail, return receipt requested, (ii) deemed to have been given the
date of personal delivery, or the date set forth in the records of the delivery
service or on the return receipt, and (iii) addressed as follows:
If to Lessor: Paxson Communications of Charleston-29, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attention: Lowell W. Paxson
with a copy Dow, Lohnes & Albertson
(which shall A Professional Limited Liability Company
not constitute 1200 New Hampshire Avenue, N.W.
notice) to: Suite 800
Washington, D.C. 20036-6802
Attention: John R. Feore, Jr., Esq.
If to Lessee: Channel 29 of Charleston, Inc.
1121 Chestnut Street
Wilmette, Illinois 60091
Attention: William L. Kepper
with a copy John D. Viener, Esq.
(which shall Christy & Viener
not constitute 620 Fifth Avenue
notice) to: New York, NY 10020-2457
or to any such other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
16.
SECTION 18. PROPERTY INSURANCE.
(a) Lessor shall, at its expense, obtain and maintain during
the Initial Term and Renewal Term of this Lease, "All Risk", hazard insurance on
the Leased Facilities. Such insurance shall cover at least all risks customarily
insured against in the broadcasting industry, subject to standard deductibles.
<PAGE> 75
- 11 -
(b) Lessee hereby releases Lessor from and holds Lessor
harmless against any and all claims that Lessee may hereafter have for loss,
theft, disappearance, damage or destruction of the Leased Facilities, regardless
of the cause thereof. Notwithstanding the generality of the foregoing, this
release shall not apply to any grossly negligent, willful or wanton act of the
Lessor, its employees, agents or representatives. In the event that insurance on
the Leased Facilities was in force at the time of such loss, theft,
disappearance, damage or destruction, Lessee agrees to take all necessary action
to make this release effective and binding upon its insurance carriers so that
such carriers specifically waive all right of subrogation, if any, that such
carriers might otherwise have against Lessor and its employees, agents or
contractors.
SECTION 19. TAXES. During the term hereof, Lessor agrees to pay all
personal property taxes assessed against the Leased Facilities within thirty
(30) days of its receipt of a true and correct statement.
SECTION 20. CAPTIONS. The captions or headings of sections in this
Lease are inserted for convenience only and shall not be considered in
construing the provisions hereof.
SECTION 21. COVENANTS TO BIND AND BENEFIT RESPECTIVE PARTIES. This
Lease shall inure to the benefit of and be binding upon the successors and
assigns of Lessor and Lessee.
SECTION 22. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Any
and all representations, warranties and covenants contained in this Lease shall
survive the execution of the Lease and shall continue in full force and effect
during the Initial Term and any Renewal Term hereof.
SECTION 23. COUNTERPARTS. More than one counterpart of this Lease may
be executed by the parties hereto and each duly executed counterpart shall be
deemed an original.
SECTION 24. ATTORNEYS FEES. In the event an action is brought to
enforce or construe any of the terms or conditions of this Lease, the prevailing
party shall be entitled to reasonable attorneys' fees and costs.
SECTION 25. MISCELLANEOUS.
(a) This Lease shall be governed by the laws of the State of
Florida and may be modified or amended only by a writing, signed by the party
against whom the amendment or modification is sought to be enforced.
<PAGE> 76
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(b) Failure of either party to exercise its rights hereunder
shall not operate as a waiver of the future exercise of such right.
SECTION 26. ENTIRE AGREEMENT. This Lease, including the exhibits
hereto, sets forth the entire understanding of the parties hereto at the time of
execution and delivery hereof with respect to the subject matter hereof.
SECTION 27. WAIVER OF JURY TRIAL. To the extent they may lawfully do
so, the parties hereto irrevocably waive all rights to a trial by jury in any
proceeding hereinafter instituted by or against either party in respect of this
Lease.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 77
- 13 -
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first set forth above.
CHANNEL 29 OF CHARLESTON, INC.
By:
---------------------------------------
William L. Kepper
President
PAXSON COMMUNICATIONS OF CHARLESTON-29, INC.
By:
---------------------------------------
Name:
Title:
<PAGE> 78
ATTACHMENT A
Leased Facilities
(1) Leased Premises. The right to occupy the premises to be
used as the studio site for the Station.
(2) STL Antenna. The right to install and utilize associated
auxiliary equipment, earth stations, Studio Transmitter Link Towers,
transmission lines, Studio Transmitter Links, etc.
(3) Access. The right, in common with others, to use the
roadways and parking spaces on the leased premises for ingress and egress.
(4) Equipment. The equipment described on the Attachment
hereto.
All of the space, premises, rights and equipment granted under
this Exhibit A are hereinafter referred to as the "Leased Facilities."
<PAGE> 79
SCHEDULE D
BUILDOUT SCHEDULE
<PAGE> 80
WKRP Buildout Schedule
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Task Name Duration Start End 1997 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WKRP Buildout Schedule 5.06 m 25/Sep/97 05/Mar/98 ----------------------------------
Transmitter site 4.38 m 25/Sep/97 12/Feb/98 ------------------------------
Building Construction 3.23 m 25/Sep/97 07/Jan/98 ------------------------
Permit 2.00 w 25/Sep/97 08/Oct/97 ----
Excavation 2.00 w 09/Oct/97 22/Oct/97 ---
Structure 3.00 m 02/Oct/97 07/Jan/98 -----------------------
Electrical 3.00 w 05/Dec/97 26/Dec/97 -----
Trans. Delivery 3.00 m 25/Sep/97 30/Dec/97 ----------------------
Trans. Install &
Proof 4.00 w 30/Dec/97 29/Jan/98 -------
Terminal & Remote
Control 2.00 w 29/Jan/98 12/Feb/98 -----
Tower 4.05 m 27/Oct/97 05/Mar/98 ---------------------------
Tower Foundations 1.00 m 27/Oct/97 26/Nov/97 --------
Tower Delivery 5.00 d 08/Dec/97 12/Dec/97 --
Tower Erection 45.00 d 15/Dec/97 18/Feb/98 --------------
Antenna Delivery 3.00 d 05/Jan/98 07/Jan/98 --
Antenna Install 2.00 w 20/Feb/98 05/Mar/98 ----
STL Install 5.00 d 20/Feb/98 26/Feb/98 --
Studio 3.38 m 03/Nov/97 20/Feb/98 ------------------------
Studio Renovation 2.00 m 03/Nov/97 07/Jan/98 ----------------
STL Tower Permits &
Install 3.00 m 03/Nov/97 09/Feb/98 ------------------------
MCR Equipment
Delivery 2.00 m 03/Nov/97 07/Jan/98 ----------------
MCR Construction 3.00 w 07/Jan/98 29/Jan/98 ------
MCR Installation 5.00 d 12/Feb/98 20/Feb/98 ---
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Printed: 25/Aug/97
Page 1
<PAGE> 81
EXHIBIT B
SHAREHOLDERS AGREEMENT
<PAGE> 82
- --------------------------------------------------------------------------------
SHAREHOLDERS AGREEMENT
BY AND AMONG
WILLIAM L. KEPPER
PAXSON COMMUNICATIONS
OF CHARLESTON-29, INC.
AND
CHANNEL 29 OF CHARLESTON, INC.
DATED AS OF
___________, 199_
- --------------------------------------------------------------------------------
<PAGE> 83
SHAREHOLDERS AGREEMENT
This SHAREHOLDERS AGREEMENT (the "Agreement") is made as of the ____
day of _______ 199_, by and among PAXSON COMMUNICATIONS OF CHARLESTON-29, INC.,
a Florida corporation ("Paxson"), CHANNEL 29 OF CHARLESTON, INC., a Delaware
corporation (the "Company"), and WILLIAM L. KEPPER ("WLK") (WLK and Paxson are
sometimes referred to herein individually as "Shareholder" and collectively as
"Shareholders").
R E C I T A L S
A. The Company holds a construction permit issued by the Federal
Communications Commission ("FCC") for new television station WKRP-TV, Channel
29, Charleston, West Virginia (the "Station").
B. The Company's authorized capital stock consists of one thousand
(1,000) shares of voting common stock, all of which shares are issued and
outstanding (the "Common Stock").
C. WLK holds 510 shares of Common Stock (the "WLK Stock") and, on the
date hereof, WLK has conveyed to Paxson 490 shares of Common Stock (the "Paxson
Stock").
D. The parties hereto desire to set forth certain understandings and
agreements relating to, among other things, the issuance and transfer of the
capital stock of the Company.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
undertakings contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, WLK, Paxson and the
Company, intending to be legally bound, agree as follows:
ARTICLE I. RESTRICTIONS
Section 1.1 Scope of Agreement. This Agreement shall apply to (i) any
transfer of shares of Common Stock (now owned or hereafter acquired) and any
other shares of capital stock of the Company, whether or not outstanding on the
date hereof, by either Shareholder or any transferee or successor of either
Shareholder, whether by sale, exchange, assignment, disposition, bequest, gift,
pledge, mortgage, hypothecation or otherwise, whether voluntary, involuntary or
by operation of law, whether resulting from death, bankruptcy, insolvency or
otherwise, and (ii) the issuance or transfer by the Company of any shares of
capital stock of the Company, whether or not authorized or outstanding on the
date hereof, or any options, warrants or any form of debt or equity presently or
hereinafter convertible into shares of capital stock of the Company (any and all
such transfers in clauses (i) or (ii) are referred to hereinafter as a
"Transfer").
<PAGE> 84
-2-
Section 1.2 Transfer Restrictions.
(a) Neither WLK, Paxson nor the Company shall agree to, cause
or permit any Transfer, unless the Transfer complies with the requirements of
Section 1.3 hereof.
(b) The restriction in Section 1.2(a) above shall not apply to
(i) any sale, transfer, assignment or disposition to a person or entity that
controls, is controlled by or is under common control with WLK or Paxson, as the
case may be, (ii) any sale, transfer, assignment or disposition of the Paxson
Stock resulting from the sale or transfer of all of the issued and outstanding
stock of Paxson or any entity that owns or controls Paxson, (iii) the pledge of
the Paxson Stock to a lender of Paxson as collateral security, (iv) any sale of
the WLK Stock to Paxson pursuant to the Stock Purchase Agreement, dated as of
September 2, 1997, by and among the parties hereto (the "Purchase Agreement"),
or (v) any sale, transfer or disposition of the WLK Stock resulting from the
death of WLK.
(c) No Transfer shall be effective unless a Transfer is made
pursuant to the terms of this Agreement, and the successors or assigns of WLK or
Paxson as a result of any Transfer permitted by the terms of this Agreement
shall have duly executed a document evidencing their agreement to be bound by
the terms of this Agreement.
Section 1.3 Right of First Refusal.
(a) In the event either Shareholder (the "Sale Shareholder")
enters into an agreement (including a letter of intent) contemplating a sale of
all or a portion of its Common Stock (a "Sale"), the Sale Shareholder will
deliver a written notice (the "Sale Notice") to the other Shareholder (the
"Other Shareholder"). The Sale Notice will disclose in reasonable detail the
identity of the prospective transferee(s) and the terms and conditions of the
proposed Sale and will be accompanied by the agreement(s) relating thereto. No
Sale shall be consummated until 30 days after the Sale Notice has been delivered
to the Other Shareholder, unless prior thereto the Other Shareholder shall have
waived in writing its rights under this Section 1.3 (the date of the first to
occur of such events is referred to herein as the "Sale Authorization Date").
(b) The Other Shareholder may elect to purchase all (but not
less than all) of the Sale Shareholder's Common Stock upon the same terms and
conditions as those set forth in the Sale Notice by delivering written notice
(the "Purchase Notice") of such election to the Sale Shareholder within thirty
(30) days after the receipt of the Sale Notice by the Other Shareholder. If the
Other Shareholder exercises its right of first refusal set forth in this
subsection (b), the closing of such purchase and sale shall be in accordance
with Section 1.4. If the Other Shareholder does not exercise its right of first
refusal set forth in this subsection (b), (i) the Sale may be consummated at a
price and on terms no more favorable
<PAGE> 85
-3-
to the named transferee(s) of the Common Stock than specified in the Sale Notice
during the 90-day period immediately following the Sale Authorization Date, (ii)
the Other Shareholder will consent to and raise no objections against the Sale,
and (iii) the Other Shareholder will take all reasonably necessary and desirable
actions in connection with the consummation of the Sale. Any Sale which is not
consummated within such 90-day period following the Sale Authorization Date will
again be subject to the provisions of this Section 1.3.
(c) In the event the Other Shareholder exercises its rights
under this Section 1.3, no Sale to the prospective transferee(s) shall be
consummated and the agreement relating thereto shall be terminated.
(d) WLK shall not have the right to become a Sale Shareholder
hereunder while the Purchase Agreement is in full force and effect.
Section 1.4 Closing.
(a) The closing of the purchase and sale of any Common Stock
pursuant to the right of first refusal set forth in Section 1.3 shall take place
at Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, on the date of closing set forth in the Sale Notice or,
if the Sale Notice does not specify a closing date, a date mutually acceptable
to the Shareholders, subject to obtaining any consent
of the FCC that may be required for a Sale.
(b) At the closing, the Sale Shareholder shall deliver to the
Other Shareholder (i) certificates representing the shares of the Common Stock
being transferred, duly endorsed or accompanied by duly executed stock powers,
(ii) a certificate, reasonably acceptable to the Other Shareholder, representing
that the Common Stock being sold is free and clear of all liens, charges,
security interests, rights of first refusal, restrictions and other encumbrances
and that the Sale Shareholder has the absolute right to transfer such Common
Stock, and (iii) such other documentation as reasonably requested by the Other
Shareholder.
(c) At the closing, the Other Shareholder shall wire transfer
immediately available funds to a U.S. bank account designated by the Sale
Shareholder in an amount equal to the price for the shares being sold.
Section 1.5 Legends or Certificates. In order to effectuate this
Agreement, and to avoid any transfer of shares in violation of the Securities
Act of 1933 or of the securities laws of any state, each certificate
representing any share of capital stock of the Company shall bear legends in
substantially the following form:
The Shares represented by this Certificate are subject to an Agreement
dated _______, 1997, entered into in order, inter alia, to restrict the
transferability
<PAGE> 86
-4-
of such Shares. Said Agreement is automatically binding upon any person
who acquires the Shares. Any transfer or acquisition in violation of
such Agreement is null and void. A copy of the Agreement is available
for inspection at the principal office of the Company.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY
NOT BE TRANSFERRED OR SOLD UNLESS SO REGISTERED OR UNLESS AN EXEMPTION
IS AVAILABLE.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of WLK. WLK hereby
represents, warrants and agrees as follows:
(a) WLK is an individual resident in the State of Illinois.
(b) WLK has the power and authority to enter into this
Agreement and carry out its obligations hereunder. The consummation of the
transactions contemplated hereby, and all previous actions taken by WLK with
respect to such transactions, have been duly and validly authorized by WLK. No
other acts or proceedings on the part of WLK are necessary to authorize this
Agreement or the consummation of the transactions contemplated hereby, or any
previous actions taken by WLK with respect to such transactions, and when duly
executed and delivered by the parties hereto, this Agreement will constitute a
valid and legally binding obligation of WLK, enforceable against WLK in
accordance with its terms.
(c) Neither the execution and delivery by WLK of this
Agreement, the consummation by WLK of the transactions contemplated hereby, any
previous actions taken by WLK with respect to such transactions, nor compliance
by WLK with any provision hereof, will violate or conflict with, or result in a
breach of any provision or any of the terms, conditions or provisions of any
contracts, agreements or obligations of WLK or by which WLK is bound.
Section 2.2 Representations and Warranties of the Company. The Company
hereby represents, warrants and agrees as follows:
(a) The Company is duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) The Company has the corporate power and authority to enter
into this Agreement and carry out its obligations hereunder. The consummation of
the transactions
<PAGE> 87
-5-
contemplated hereby, and all previous actions taken by the Company with respect
to such transactions, have been duly and validly authorized by the Company's
Board of Directors. No other corporate acts or proceedings on the part of the
Company are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby, or any previous actions taken by the Company
with respect to such transactions, and when duly executed and delivered by the
parties hereto, this Agreement will constitute a valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(c) Neither the execution and delivery by the Company of this
Agreement, the consummation by the Company of the transactions contemplated
hereby, any previous actions taken by the Company with respect to such
transactions, nor compliance by the Company with any provision hereof, will
violate or conflict with, or result in a breach of any provision or any of the
terms, conditions or provisions of, the Certificate of Incorporation or the
Bylaws of the Company or any other contracts, agreements or obligations of the
Company or by which the Company is bound.
Section 2.3 Representations and Warranties of Paxson. Paxson hereby
represents, warrants and agrees as follows:
(a) Paxson is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida.
(b) Paxson has the corporate power and authority to enter into
this Agreement and carry out its obligations hereunder. The consummation of the
transactions contemplated hereby, and all previous actions taken by Paxson with
respect to such transactions, have been duly and validly authorized by Paxson's
Board of Directors. No other corporate acts or proceedings on the part of Paxson
are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby, or any previous actions taken by Paxson with
respect to such transactions, and when duly executed and delivered by the
parties hereto, this Agreement will constitute a valid and legally binding
obligation of Paxson, enforceable against Paxson in accordance with its terms.
(c) Neither the execution and delivery by Paxson of this
Agreement, the consummation by Paxson of the transactions contemplated hereby,
any previous actions taken by Paxson with respect to such transactions, nor
compliance by Paxson with any provision hereof, will violate or conflict with,
or result in a breach of any of the terms, conditions, or provisions of, the
Articles of Incorporation or Bylaws of Paxson or any contracts, agreements or
obligations of Paxson or by which Paxson is bound.
ARTICLE 3. BOARD OF DIRECTORS.
<PAGE> 88
-6-
(a) The Board of Directors of the Company (the "Board") shall
have full discretion and authority with respect to the management, business and
affairs of the Company. The Board shall have full right, power and authority in
the management of the business and affairs of the Company and to do or cause to
be done any and all acts deemed by the Board to be necessary or appropriate to
effectuate the purposes of the Company.
(b) Until such time as WLK no longer holds the WLK Stock, the
Board shall have three members, and WLK shall be entitled to designate two
members of the Board and their replacements or successors, if any, and Paxson
shall be entitled to designate one member of the Board and his replacements or
successors, if any. At such time as Paxson acquires the WLK Stock, the Board
shall have one member, and Paxson shall be entitled to designate such member of
the Board and his replacements or successors, if any. Each member of the Board
shall have one vote. A quorum of the Board shall be deemed present for the
purpose of taking any action required to be taken by the Board if there are
present, in person, or by video or audio conferencing, one member of the Board
designated by WLK and the member of the Board designated by Paxson. Any action
taken by the Board shall be valid if approved by a majority of the Board members
present at any meeting of the Board at which a quorum is present.
(c) Regular meetings of the Board regarding any matters shall
be held quarterly. Meetings of the Board may be called by any member of the
Board by giving the other members written notice of the time, date, place and
purpose of the meeting at least five days in advance thereof, or by giving
telephonic notice of the same at least seventy-two hours in advance thereof. Any
Board member participating in a meeting of the Board shall be deemed to have
waived notice of such meeting. Any meeting of the Board shall be held at such
location as the Board may deem appropriate; provided, however, that any
representative of the Board may, at its option, participate by video or audio
conferencing or other comparable communications equipment. Any action required
or permitted to be taken at any meeting of the Board may be taken without a
meeting if a written consent to such action is signed by all members of the
Board and such written consent is filed with the minutes of its proceedings. Any
member of the Board may appoint a proxy to act on his behalf at any meeting,
provided that he delivers notice thereof to the other members of the Board prior
to the commencement of such meeting. The Board may adopt such other procedural
rules with respect to the meetings and other conduct of the Board as it may deem
desirable.
(d) WLK hereby designates William L. Kepper and John D. Viener
as his initial representatives, and Paxson hereby designates Lowell W. Paxson as
its initial representative. Each Shareholder may, at its sole discretion, change
its respective designee or designees to the Board by giving written notice of
such change to the other Shareholder.
<PAGE> 89
-7-
ARTICLE 4. OPERATIONAL PROVISIONS. While this Agreement is in effect, the
following actions may be taken with respect to the Company only with the consent
of each Shareholder:
(a) any fundamental change in the nature of the business
conducted by it;
(b) a reorganization of its capital, a reclassification of its
interests or the consolidation or merger of it with another entity;
(c) any sale of all or a substantial portion of its assets;
(d) any transaction with an affiliate (as defined in the rules
under the Securities Act of 1933) of either Shareholder on terms less favorable
to it than the terms available from an unrelated third party;
(e) entering into any contract or agreement or related
contracts or agreements that involve over the term of the contract or agreement
or related contracts or agreements an aggregate expenditure by it of $10,000 or
more;
(f) any individual capital expenditure in excess of $10,000 or
any series of related capital expenditures in excess of $20,000;
(g) incurring any indebtedness for money borrowed in excess of
$10,000 or any increase, modification or extension of any indebtedness for
borrowed money in excess of $10,000;
(h) settling any litigation that requires solely a cash
payment by the Company in excess of $10,000 or settling any litigation that
requires a remedy other than solely a cash payment if that remedy could have a
material adverse effect on the Company or the Station;
(i) guaranteeing any obligation of any person in excess of
$10,000;
(j) doing any act in contravention of this Agreement, the
Delaware Corporation Law or the Certificate of Incorporation or By-laws of the
Company or amending the Certificate of Incorporation or By-laws of the Company;
(k) doing any act that would make it impossible to carry on
its business except upon its dissolution and liquidation;
(l) confessing a judgement against it if the result thereof
could have a material adverse effect on it, the Station or any Shareholder;
<PAGE> 90
-8-
(m) using any assets of the Station other than for its
benefit;
(n) approving all capital and operating budgets of the
Company;
(o) hiring and terminating employees of the Company and
establishing and modifying the compensation and benefits provided to such
employees;
(p) entering into time brokerage, affiliation or other
agreements regarding programs to be broadcast on the Station; or
(q) entering into agreements for the sale of advertising or
program time on the Station for consideration other than cash.
ARTICLE 5. TERMINATION. This Agreement shall terminate and all rights and
obligations hereunder shall cease upon the occurrence of any of the following
events:
(a) The consummation of the sale of the WLK Stock to Paxson
pursuant to the Purchase Agreement;
(b) The agreement in writing to terminate this Agreement
executed by each Shareholder; or
(c) The voluntary or involuntary dissolution of the Company.
This Agreement shall terminate with respect to any Shareholder upon the
disposition by such Shareholder of all of its Common Stock in accordance with
the terms of this Agreement; provided, however, that this Agreement shall
survive such termination and continue to be binding upon every Shareholder which
is or will become a party hereto.
ARTICLE 6. MISCELLANEOUS
Section 6.1 Binding Effect. This Agreement shall be binding upon the
parties hereto and their successors and assigns. Each of the parties to this
Agreement shall execute and deliver or cause to be executed and delivered any
and all documents or legal instruments necessary to carry out the provisions
hereof.
Section 6.2 Enforceability. In the event any provision of this
Agreement is found to be unenforceable or invalid, such provisions shall be
severable from this Agreement to the extent that it is a provision which is not
essential and the absence of which would not have prevented the parties from
entering into this Agreement. The unenforceability or invalidity of a provision
which has been performed shall not be grounds for invalidation of this
<PAGE> 91
-9-
Agreement under circumstances in which the true controversy between the parties
does not involve such provision.
Section 6.3 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware.
Section 6.4 Modifications. This Agreement may not be modified,
amended, altered or supplemented except by a written agreement or other
instrument signed by the parties hereto.
Section 6.5 Headings. Headings in this Agreement are for convenience
or reference only and shall not affect the construction or interpretation of
this Agreement.
Section 6.6 Entire Agreement. This Agreement represents the only
agreements and understandings between the parties hereto with respect to the
subject matter hereof.
Section 6.7 Attorneys' Fees. In the event any legal action is required
by a party to this Agreement to enforce the provisions hereof against one of the
other parties hereto, the prevailing party shall be entitled to recover its
costs of legal action, including reasonable attorneys' fees, from the other
party involved in such action.
Section 6.8 Specific Performance. Each party hereto acknowledges that
there will be no adequate remedy at law if any other party hereto fails to
perform any of its obligations hereunder and that each party will be irreparably
harmed by any such failure. Accordingly, each party hereto agrees that each
party, in addition to any other remedy to which it may be entitled at law or in
equity, shall be entitled to compel specific performance of the obligations of
the other party or parties under this Agreement.
Section 6.9 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
Section 6.10 Notices. All notices provided by this Agreement shall be
in writing and shall be given by certified mail (return receipt requested), by
overnight delivery, shipment prepaid, or by personal delivery, by one party to
another, addressed to such other party or parties at the applicable address set
forth below:
<PAGE> 92
-10-
To the Company or WLK at:
Channel 29 of Charleston, Inc.
1121 Chestnut Street
Wilmette, Illinois 60091
Attention: William L. Kepper
with copy to:
John D. Viener, Esq.
Christy & Viener
620 Fifth Avenue
New York, NY 10020-2457
To Paxson at:
Paxson Communications of Charleston-29, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Lowell W. Paxson
with copy to:
John R. Feore, Jr.
Dow, Lohnes & Albertson,
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or any replacement address of which WLK, the Company or Paxson gives the other
parties notice under this section.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 93
-11-
IN WITNESS WHEREOF, WLK, Paxson and the Company have each caused this
Agreement to be executed by a duly authorized officer thereof, as of the date
first above written.
The Company:
CHANNEL 29 OF CHARLESTON, INC.
By:
-----------------------------------------
William L. Kepper
President
WILLIAM L. KEPPER
By:
-----------------------------------------
PAXSON COMMUNICATIONS OF
CHARLESTON-29, INC.
By:
-----------------------------------------
Name:
Title:
<PAGE> 94
SCHEDULE 5.6
ASSETS
Time Brokerage Agreement by and between High Mountain Broadcast
Associates and Mountaineer Broadcasting Corp. (July 9, 1996).
Construction Permit.
Tower Lease.
<PAGE> 95
SCHEDULE 5.9
TRANSMITTER SITE
See attached description of tower site in the Construction Permit.
See attached amendments to the Tower Lease.
<PAGE> 96
United States of America
FEDERAL COMMUNICATIONS COMMISSION
TELEVISION BROADCAST STATION
CONSTRUCTION PERMIT
Official Mailing Address: Authorizing Official
/s/ Clay C. Pendarvis
- -------------------------- ----------------------------
Clay C. Pendarvis
WKRP-TV, INC. Chief, TV Branch
835 HILLCREST DRIVE Video Services Division
CHARLESTON, WV 25311 Mass Media Bureau
- --------------------------
Grant Date:
Call Sign: WKRP-TV This permit expires 3:00 a.m.
local time, 6 months after
grant date specified above.
Permit File No.: BMPCT-891031KI
This Permit Modifies Permit No.: 870121KN
Subject to the provisions of the Communications Act of 1934, as amended,
subsequent acts and treaties, and all regulations heretofore or hereafter made
by this Commission, and further subject to the conditions set forth in this
permit, the permittee is hereby authorized to construct the radio transmitting
apparatus herein described. Installation and adjustment of equipment not
specifically set forth herein shall be in accordance with representations
contained in the permittee's application for construction permit except for
such modifications as are presently permitted, without application, by the
Commission's Rules.
This permit shall be automatically forfeited if the station is not ready for
operation within the time specified (date of expiration) or within such further
time as the Commission may allow, unless completion of the station is prevented
by causes not under the control of the permittee. See Sections 73.3598, 73.3599
and 73.3534 of the Commission's Rules.
Equipment and program tests shall be conducted only pursuant to Sections
73.1610 and 73.1620 of the Commission's Rules.
Name of Permittee:
P.S.A., INC.
Station Location:
WV-CHARLESTON
Frequency (MHz): 560.0 - 566.0
<PAGE> 97
Carrier Frequency (MHz): 561.25 Visual 565.75 Aural
Channel: 029
Hours of Operation: Unlimited
Transmitter location (address or description:
Poco River hnt,fsh,rec Club, Inc., grnds Putnam Co., WV
Transmitter: Type Accepted. See Sections 73.1660, 73.1665 and 73.1670
of the Commission's Rules.
Antenna type: (directional or non-directional): Directional
Description: DIELECTRIC TFU-33JSM/R-C170
Beam Tilt: .50 Degrees Electrical
Major lobe directions (degrees true): 119.0 261.0
Antenna Coordinates: North Latitude: 38 28 12
West Longitude: 81 46 35
Transmitter output power...........: As required to achive authorized ERP
Maximum effective radiated power (PEAK): 1580.0 kw
: 32.0 DBK
Height of radiation center above ground............: 141 Meters
Height of radiation center above mean sea level....: 452 Meters
Height of radiation center above average terrain : 212 Meters
Antenna structure registration number: none
Overall height of antenna structure above ground
(including obstruction lighting if any)..........: 152 Meters
Obstruction marking and lighting specifications for antenna structure:
It is to be expressly understood that the issuance of these specifications is in
no way to be considered as precluding additional or modified marking or
lighting as may hereafter be required under the provisions of Section 303(q) of
the Communications Act of 1934, as amended.
PARAGRAPH 0.10, FCC FORM 715 (OCTOBER 1985):
Antenna structures shall be painted throughout their height with alternate bands
of aviation surface orange and white, terminating with aviation surface orange
bands at both top and bottom. The width of the bands shall be equal and
approximately one-seventh the height of the
<PAGE> 98
structure, provided however that the bands shall not be more than 100 feet nor
less than 1 and 1/2 feet in width. All towers shall be cleaned and repainted
as often as necessary to maintain good visibility.
PARAGRAPH 03.0, FCC FOR _15 (APRIL 1985):
The shall be installed at the top of the structure one 300 m/m electric code
beacon equipped with two 620- or 700-watt lamps (PS-40, Code Beacon type), both
lamps to burn simultaneously, and equipped with aviation red color filters.
Where a rod or other construction of not more than 20 feet in height and
incapable of supporting this beacon is mounted on top of the structure and it
is determined that this additional construction does not permit unobstructed
visibility of the code beacon from aircraft at any normal angle of approach,
there shall be installed two such beacons positioned so as to insure
unobstructed visibility of at least one of the beacons from aircraft at any
normal angle of approach. The beacons shall be equipped with a flashing
mechanism producing not more than 40 flashes per minute nor less than 12
flashers per minute with a period of darkness equal to approximately one-half
of the luminous period.
PARAGRAPH 04.0, FCC FORM _15 (APRIL 1985):
At approximately one-half of the overall height of the tower one similar
flashing 300 m/m electric code beacon shall be installed in such position within
the tower proper that the structural members will not impair the visibility of
this beacon from aircraft at any normal angle of approach. In the event this
beacon cannot be installed in a manner to insure unobstructed visibility of it
from aircraft at any normal angle of approach, there shall be installed two
such beacons. Each beacon shall be mounted on the outside of the tower at the
prescribed height.
PARAGRAPH 13.0, FCC FOR 715 (APRIL 1985):
On levels at approximately three-fourths and one-fourth of the over-all height
of the tower, at least one 116- or 125-watt lamp (A21/TS) enclosed in an
aviation red obstruction light globe shall be installed on each outside corner
of the structure.
PARAGRAPH 211.0 FCC FORM 715 (APRIL 1985):
All lighting shall burn continuously or shall be controlled by a light
sensitive device adjusted so that the light will be turned on at a north sky
light intensity level of about 35 foot candles and turned off at a north sky
light intensity level of about 58 foot candles.
PARAGRAPH 22.0, FCC FOR 715 (April)
During construction of an antenna structure, for which obstruction lighting is
required, at least two 116- or 125-watt lamps (A21/TS) enclosed in aviation red
obstruction light globes, shall be installed at the uppermost point of the
structure. In addition, as the height of the structure exceeds each level at
which permanent obstruction lights will be required, two similar lights shall be
displayed nightly from sunset to sunrise until the permanent obstruction lights
have been installed and placed in operation, and shall be positioned so as to
insure unobstructed visibility of at least one of the light at any normal angle
of approach. In lieu of the above temporary warning
FCC Form 352-A October 21, 1985 Page 3
<PAGE> 99
lights, the permanent obstruction lighting fixtures may be installed and
operated at each required level as each such level is exceeded in height during
construction.
Special operating conditions or restrictions.
1. Grant of this authorization is conditioned on the outcome of the digital
television (DTV) rule making proceeding in MM Docket No. 87-268. To the
extent that the station's Grade B contour or potential for causing
interference is extended into new areas by this authorization, the
Commission may require the facilities authorized herein to be reduced
or modified.
***END OF AUTHORIZATION***
<PAGE> 100
PAXSON COMMUNICATIONS CORPORATION
601 Clearwater Park Road
West Palm Beach, Florida 33401-6233
(407) 659-4122 - FAX (407) 655-9424
TO: Bud Paxson
FROM: Bill Watson
SUBJECT: WKRP-TV, Charleston, West Virginia, Tower Agreement
DATE: August 26, 1997
- --------------------------------------------------------------------------------
Here are the points to be considered and presented to the sellers with regard to
their November 5, 1995 Tower Lease Agreement.
1. In the opening "WHEREAS" clause, we need to increase the square footage
of the transmitter building and clarify the transmitter building and
towers' location. I have suggested language on the document.
2. The coordinates given in paragraph 1 need to conform to the
construction permit and I have marked the necessary changes on the
document.
3. My addition on page 2 clarifies that we will have the right to add a
stand-by generator, a receive-only satellite dish and microwave antenna
and tower on the subject property.
4. The last sentence of paragraph 1 on page 2 refers to conditions and
restrictions on the Landlord's deed. We need to see these.
5. In paragraph 3(d), at the top of page 4, I have added the word
"reasonably" to describe the obligations to maintain the tower site's
access road.
6. Note the minor changes to paragraph 7 on page 5.
7. On paragraph 10, page 6, the additional language is to clarify and
limit our responsibility.
<PAGE> 101
8. Subparagraph 11(a) on page 6 has already been satisfied and its
continued presence in the Lease may not be necessary.
9. My addition to paragraph 11(b) clarifies the mechanics of the default
notice.
10. My addition to the end of paragraph 12 simply provides that this Lease
may be assigned to Newco without the Landlord's prior consent.
<PAGE> 102
THIS AGREEMENT OF LEASE, made this 5 day of November, 1995 by and
between POCA RIVER HUNTING, FISHING & RECREATION CLUB, INC., a corporation under
and by virtue of the code of West Virginia, and hereinafter referred to as
"Hunting Club", and John B. Tupper, and any successors to Tupper, as lessee.
W I T N E S S E T H
THAT WHEREAS Tupper is in the process of becoming the owner and
operator of a television Station in the Putnam/Kanawha County, West Virginia
area and desires to make use of the hereinafter described parcel of land and
access thereto including the unimproved road to the property owned by Hunting
Club for purpose of location of directional antennae, ground systems,
transmitter station and necessary appurtenance including a support building of
1500 square feet or less. The tower and building locations are shown on Exhibit
A attached hereto.
NOW, THEREFORE, in consideration of the promises and terms herein set
forth, the parties hereto stipulate, covenant and agree as follows:
1. Hunting Club does hereby LEASE, LET, and DEMISE unto lessee,
for a term of twenty-five (25) years, beginning on the first day of the month
following receipt by lessee of the necessary approvals from the Federal Aviation
Administration and the Federal Communications Commission to operate said
television station, the surface area of all that certain tract or parcel of
land, together with the rights of ingress and egress to and from the same over
and upon adjoining lands owned by Hunting Club, situate, lying and being an area
of land lying at the top a hill generally described as bearing the coordinates,
N38 degrees, 28'12", West 81 degrees, 46' 36". The area
<PAGE> 103
included in this lease is the minimum surface area necessary for lessee to erect
a television transmission tower of 1000 feet together with fencing around the
tower, and support wires for the tower and any other appurtenances necessary to
maintain the tower in compliance with applicable requirements. Fencing around
the tower shall include only a minimum area necessary to comply with applicable
requirements or otherwise ensure the safety of the tower. Need the right to
construct a 1500 square foot transmitter building, standby generator,
receive-only satellite dish & microwave antenna on the Tower. The property
subject to this lease is a part of tracts of land conveyed to Hunting Club's
predecessor, Dupont Hunting, Fishing, and Recreation Club, by ____________, by
deeds recorded in the Office of the Clerk of the County Court of said Putnam
County, in Deed Book 125, at page 199; Deed Book 207, at page 594; and Deed Book
142 at page 568. Hunting Club covenants that it has good title to the demised
premises and the right to lease the same and that Lessee, on paying the rent and
keeping, observing and performing all the other terms, covenants, provisions and
agreements herein contained on the part of Lessee shall, during the term of this
lease, peaceably and quietly have, hold and enjoy the said premises for the full
term of years in this lease.
The rights of Lessee hereunder are subject to any conditions and
restrictions contained in the said deeds.
2. In consideration for the promises and undertakings by the
Hunting Club as described herein, lessee agrees to pay to Hunting Club rent in
the amount of $900.00 per month, payable on the first of every month, at 901
West Dupont Avenue, Belle, West Virginia. Should lessee fail to pay the
aforesaid monthly rental amount on or before the 5th day after the same is due,
lessee shall
- 2 -
<PAGE> 104
paved road known Dupont Road as reasonably necessary for lessee's use and
will not damage or diminish the Hunting Club's use of existing roads. Lessee
will make a $100.00 per month contribution into an escrow account up to
$5,000.00 to secure this provision.
4. The said demised premises shall be used and occupied by lessee
for no other purpose than for the installation, operation, maintenance and
removal of antennae, ground systems, transmitter station, telephone, electricity
and transmission lines and other broadcasting equipment and appurtenances
needful for a broadcasting station used in television transmission.
5. This lease shall be renewable at the option of lessee for an
additional period of ten (10) years, provided lessee shall notify Hunting Club
in writing on or before ninety (90) days prior to the scheduled termination of
the lease of lessees desire to so renew. This lease may also be renewable for a
second additional period of ten (10) years provided lessee shall notify Hunting
Club in writing on or before ninety (90) days prior to the scheduled termination
of the first ten (10) year renewal, which second renewal request shall be
subject to the approval of Hunting Club provided that such approval will not be
unreasonably denied.
6. Upon the termination of the term of this lease, or the renewal
thereof, if renewed, lessee shall quit and surrender to Hunting Club the said
demised premises and shall remove all of its property therefrom. Upon failure of
lessee to remove any or all of its property therefrom within a period of ninety
(90) days following the termination of the term, or renewal thereof, such
- 4 -
<PAGE> 105
property as shall exist on the premises shal1 become the property of Hunting
Club.
7. Lessee covenants and agrees that it will at all times during
the term of this lease pay for all labor and materials used in improvements made
by lessee on the premises and will save Hunting Club harmless by reason of any
claim in the nature of mechanic's lien claims for services or materials
heretofore performed or delivered upon the demised premises at the instance and
request of Lessee. Lessee covenants and agrees that he will promptly pay all
taxes, ad valorem or others (but not income taxes) which can be or become a lien
against the leased premises, or any improvements thereof, and that he will pay
any taxes which may be levied or assessed against Hunting Club by reason of the
exercise of the rights under this lease. Lessee agrees that it is not the agent
of the Hunting Club with respect to any improvements made on the leased
premises, its travel over other property of the Hunting Club to reach the leased
premises, or of the exercise of any rights under this lease.
8. Lessee covenants that he will accomplish the direction and
installation of improvements upon the leased premises with due care for the use
of the remainder of the property of Hunting Club and of persons thereon with
Hunting Clubs permission, and that it will cause the antennae, ground systems
and other structures and equipment to be installed with due care and in
conformity with Federal Communications Commission and Federal Aviation
Administration rules, laws of the State of West Virginia, and any other
applicable laws. Lessee shall not use chemical defoliants to construct or
maintain its facilities.
- 5 -
<PAGE> 106
9. Lessee covenants that during the term of this lease it will
promptly provide and pay for all utilities serving it upon the demised premises.
10. Lessee shall make Hunting Club whole for any damages suffered
resulting from actions of the lessee during the lease on account of any
equipment, building or structure erected or maintained by it upon the leased
premises, or lessee's exercise of its leasehold rights, and lessee assumes all
risks to persons or property due to the exercise by lessee of its leasehold
rights. Lessee shall carry general liability insurance in the amount of at least
three million dollars, and defend Hunting Club against any and all liabilities,
including attorney fees and court costs.
11. Notwithstanding any other provision of this lease. Hunting
Club may at its option terminate this lease in the event that:
b. Payments, once begun, are delinquent for any three month
period after written ??? thereof to lessee. Such events shall be just cause for
Hunting Club at its option to terminate this agreement and declare forfeited to
it all property of lessee situated on the leased premises, and no failure of
Hunting Club to exercise such privilege shall estop it from such exercise
thereafter.
- 6 -
<PAGE> 107
c. Lessee may terminate this lease at any time with sixty
(60) days notice to Hunting Club upon the payment of $10,000.00 and removal of
a11 property from the premises.
12. Lessee shall not sublet or contract with others for the use of
its tower or other facilities which are the subject of this lease agreement
without the written consent of Hunting Club. Consent will not be unreasonably
withheld and lessee will pay Hunting Club 10% of the rental income in additional
to the other requirements herein. Provided, however, that lessee may assign this
lease to Channel 29 of Charleston, Inc., its affiliates and its lenders for
security purposes without lessor's prior consent.
13. This lease shall be governed by the laws of the State of West
Virginia.
14. Any dispute arising under this lease be submitted to final and
binding arbitration.
IN WITNESS WHEREOF, the said POCA RIVER HUNTING, FISHING & RECREATION
CLUB has caused its corporate name to be signed hereunto by James Ashley, its
president hereunto duly authorized, and Lessee has caused his name to be signed
hereunto.
POCA RIVER HUNTING, FISHING
RECREATION CLUB, INC.
(Lessor)
By /s/ James Ashby
-----------------------------
Its President
/s/ John B. Tupper
-------------------------------
John B. Tupper
(Lessee)
- 7 -
<PAGE> 108
SCHEDULE 6.7(F)
OPINIONS OF COUNSEL TO SELLER AND THE COMPANY
(INITIAL CLOSING)
<PAGE> 109
SCHEDULE 6.7(f)
FORM OF OPINION OF COUNSEL TO SELLER
AND THE COMPANY TO BE DELIVERED AT INITIAL CLOSING
___________________, 1997
Paxson Communications of Charleston-29, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Re: Stock Purchase Agreement dated as of August __, 1997 (the
"Purchase Agreement"), by and among Channel 29 of Charleston,
Inc., a Delaware corporation (the "Company"), Paxson
Communications of Charleston-29, Inc., a Florida corporation
("Buyer"), William L. Kepper, an individual ("Seller"), and
Mountaineer Broadcasting Corp., a Delaware corporation
("MBC").
Ladies and Gentlemen:
We have acted as counsel for Seller, the Company and MBC in connection
with the transactions contemplated by the Purchase Agreement. This opinion is
being delivered to you pursuant to Section 6.7(f) of the Purchase Agreement. All
capitalized terms not defined in this opinion shall have the meanings set forth
in the Purchase Agreement.
In rendering this opinion, we have reviewed the following documents:
1. the Purchase Agreement;
2. the Construction Agreement;
3. the Time Brokerage Agreement;
4. the Shareholders Agreement;
5. the Tower Lease;
6. the Assignment and Assumption Agreements of Construction
Permit, Tower Lease and Time Brokerage Agreement, each
dated ___________, 1997 between MBC and the Company (the
"Assignments"); and
7. the stock power dated as of the date hereof from Seller to
Buyer for the Initial Shares (the "Stock Power").
<PAGE> 110
Paxson Communications of Charleston-29, Inc.
___________________, 1997
Page 2
The documents referred to in clauses 1 through 7 shall be referred to
herein as the "Transaction Documents."
In our examination of documents and records, we have assumed, without
investigation, the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity with originals of all documents submitted to us as telecopied,
certified, photostatic or reproduced copies and the authenticity of all such
documents.
In rendering this opinion, we have also assumed that (i) all parties to
the Transaction Documents (other than Seller, MBC and the Company) are duly
organized, validly existing, and in good standing under the laws of their
respective jurisdictions of organization and have the requisite power to enter
into and perform the Transaction Documents, (ii) the execution and delivery of
the Transaction Documents have been duly authorized by all necessary actions and
proceedings on the part of all parties thereto other than Seller, MBC and the
Company, (iii) the Transaction Documents have been duly executed and delivered
by all parties thereto other than Seller, MBC and the Company, and (iv) the
Transaction Documents constitute legal, valid, binding and enforceable
obligations of all parties thereto other than Seller, MBC and the Company.
With respect to questions of fact, we have relied, without independent
inquiry or verification by us, solely upon (a) the representations and
warranties set forth in the Transaction Documents, (b) representations of Seller
and of officers of the Company and MBC and (c) certificates of public officials.
Our opinion is limited to matters arising under the laws of the State
of New York, the General Corporation Law of the State of Delaware and the United
States of America, including the Communications Act of 1934 and the rules and
regulations of the FCC, insofar as such laws apply. We express no opinion
whatsoever as to any other laws or regulations or as to laws relating to choice
of law or conflicts of law principles. We note that the "governing law"
provision in the Transaction Documents provides that the law of the State of
Florida is to govern. We have not examined the law of the State of Florida. Our
opinion is, therefore, based upon the assumption that the law governing all
provisions of the Transaction Documents is identical to the substantive law of
the State of New York.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, we are of the opinion that:
1. Each of the Company and MBC is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and is
qualified to conduct
<PAGE> 111
Paxson Communications of Charleston-29, Inc.
__________________, 1997
Page 3
business as a foreign corporation in West Virginia and is in good standing under
the laws of West Virginia. Each of Seller, MBC and the Company has all requisite
power and authority to execute and deliver the Transaction Documents and to
perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by it thereunder.
2. The execution, delivery and performance of the Transaction
Documents by the Company and MBC have been duly and validly authorized by all
necessary corporate actions on the part of the Company and MBC.
3. The Transaction Documents have been duly executed and
delivered by Seller, MBC and the Company and constitute legal, valid and binding
obligations of Seller, MBC and the Company, enforceable against them in
accordance with their terms, except that such enforcement may be subject to
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and to limitations on the availability of equitable remedies.
4. The execution, delivery and performance by Seller, MBC and the
Company of the Transaction Documents and the transactions contemplated thereby
will not violate, conflict with or cause a default under: (a) any provision of
the Certificate of Incorporation and By-Laws of the Company and MBC; (b) any
statute, law, regulation or rule or any judgment, decree or order binding upon
Seller, MBC or the Company; or (c) to the best of our knowledge, any contract,
agreement or commitment to which Seller, MBC or the Company is a party or by
which it is bound.
5. To our knowledge, there is no judgment, award, order, writ,
injunction, arbitration decision or decree materially and adversely affecting
the conduct of the business of the Station, or any litigation, proceeding or
investigation pending or threatened against the Company or MBC, except as
specifically identified in Attachment A hereto and except for proceedings of
general applicability to the broadcast industry.
6. Based on our review of information publicly available at the
FCC and our internal files and records and inquiry to Seller and officers of the
Company and MBC, (a) the Company is the holder of the Construction Permit, (b)
the Construction Permit is in full force and effect, and (c) the Construction
Permit is not subject to any condition or requirement, other than conditions or
requirements that appear on the face of the Construction Permit or pertain under
generally applicable rules or policies of the FCC.
7. The Pro Forma FCC Consent has been obtained, is in full force
and effect and no requests have been filed for administrative or judicial
review, reconsideration, anneal or stay of the Pro Forma FCC Consent.
<PAGE> 112
Paxson Communications of Charleston-29, Inc.
____________________, 1997
Page 4
8. Pursuant to the Assignments, the Company has been assigned all
of the rights and the Company has assumed all of the obligations of the "Lessee"
under the Tower Lease and the "Permittee" under the Time Brokerage Agreement.
9. Based on a review of the minute books and stock ledger of the
Company, the authorized capital stock of the Company consists of 1,000 shares of
voting common stock, all of which are issued and outstanding. All such shares
have been validly issued and are fully paid and nonassessable. Upon delivery to
Buyer of the stock certificate representing the Initial Shares, the Stock Power
is in form sufficient to convey good and marketable title to Buyer to the
Initial Shares.
The information set forth herein is as of the date hereof. We assume no
obligation to advise you of changes which may thereafter may be brought to our
attention. Our opinions are based on statutory and judicial decisions in effect
at the date hereof, and we do not opine with respect to any law, regulation,
rule or governmental policy which may be enacted or adopted after the date
hereof, nor assume any responsibility to advise you of future changes in our
opinions.
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Transaction Documents and
is not to be quoted in whole or in part or otherwise referred to in any of your
financial statements or public releases, nor is it to be filed with any
governmental agency or other person without the prior written consent of a
partner of this firm.
Very truly yours,
[ ]
By:
--------------------------------
, Partner
---------------
<PAGE> 113
SCHEDULE 7.3(D)
OPINION OF COUNSEL TO BUYER
(INITIAL CLOSING)
<PAGE> 114
Schedule 7.3(d)
Form of Buyer's Opinion
To Be Delivered at Initial Closing
, 1997
----------------------
Channel 29 of Charleston, Inc.
William L. Kepper
803 North Front Street
McHenry, Illinois 60050
Re: Stock Purchase Agreement dated as of August _, 1997 (the "Purchase
Agreement"), by and among Channel 29 of Charleston, Inc., a Delaware
corporation (the "Company"), Paxson Communications of Charleston-29,
Inc., a Florida corporation ("Buyer"), William L. Kepper, an
individual ("Seller"), and Mountaineer Broadcasting Corp., a Delaware
corporation ("MBC").
Dear Ladies and Gentlemen:
We have acted as special counsel for Buyer in connection with the
transactions contemplated by the Purchase Agreement. This opinion is being
delivered to you pursuant to Section 7.3(d) of the Purchase Agreement. All
capitalized terms not defined in this opinion shall have the meanings set forth
in the Purchase Agreement.
In rendering this opinion, we have reviewed the following documents:
1. the Purchase Agreement;
2. the Construction Agreement;
3. the Shareholders Agreement;
4. a certificate dated as of ______________ from the Secretary of State
of Florida relating to the good standing of Buyer (the "Florida Good
Standing Certificate");
5. a certificate dated as of ______________ from the Secretary of State
of West Virginia relating to the good standing of Buyer (the "West
Virginia Good Standing Certificate");
6. the Articles of Incorporation and the Bylaws of Buyer, each in the
form certified to us by the Secretary of Buyer to be true and
complete and in effect on the date of this opinion; and
<PAGE> 115
Channel 29 of Charleston, Inc.
William L, Kepper
Page 2
7. resolutions of the Board of Directors of Buyer certified to us by the
Secretary of Buyer to be true and complete, to have been duly adopted
by the Board of Directors of Buyer, and to be in full force and
effect (without having been modified or rescinded) on the date of
this opinion.
The documents referred to in clauses 1 through 3 shall be referred to
herein as the "Transaction Documents.
In our examination of documents and records, we have assumed, without
investigation, the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity with originals of all documents submitted to us as telecopied,
certified, photostatic or reproduced copies and the authenticity of all such
documents.
In rendering this opinion, we have also assumed that (i) all parties to
the Transaction Documents (other than Buyer) are duly organized, validly
existing, and in good standing under the laws of their respective jurisdictions
of organization and have the requisite power to enter into and perform the
Transaction Documents, (ii) the execution and delivery of the Transaction
Documents have been duly authorized by all necessary action and proceedings on
the part of all parties thereto other than Buyer, (iii) the Transaction
Documents have been duly executed and delivered by all parties thereto other
than Buyer, and (iv) the Transaction Documents constitute legal, valid, binding
and enforceable obligations of all parties thereto other than Buyer.
With respect to questions of fact, we have relied, without independent
inquiry or verification by us, solely upon (a) the representations and
warranties set forth in the Transaction Documents, (b) representations of
officers of Buyer and (c) certificates of public officials.
This opinion is limited to the law of the District of Columbia, the Florida
Business Corporation Act and the federal law of the United States of America,
insofar as such laws apply (collectively, "Applicable Law"), except that
Applicable Law includes only those laws and regulations that a lawyer
exercising customary professional diligence would reasonably recognize as being
directly applicable to the transactions contemplated by the Transaction
Documents and excludes those set forth in Section 19 of the Legal Opinion
Accord of the American Bar Association Section of Business Law (1991). We do
not purport to be experts in the laws of the State of Florida, nor are we
familiar with judicial interpretations of the laws of Florida, including the
Florida Business Corporation Act. We
<PAGE> 116
CHANNEL 29 OF CHARLESTON, INC.
WILLIAM L, KEPPER
Page 3
have reviewed the text of the Florida Business Corporation Act and applied it
to the transactions described herein in light of our knowledge of the law of
other jurisdictions. We note that the Transaction Documents by their terms
provide that they are to be governed by the laws of the State of Florida. Our
opinion in paragraph 3 is given as if the Transaction Documents were to be
governed by the laws of the District of Columbia rather than the laws of the
State of Florida or the laws of any other state. We express no opinion as to
conflicts of law rules, or the laws of any states or jurisdictions other than
as specified above. Additional limitations are set forth in the text of the
opinion.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, we are of the opinion that:
1. Based solely upon a review of the Florida Good Standing Certificate,
Buyer is a corporation duly organized and in good standing under the laws of
the State of Florida and based solely upon a review of the West Virginia Good
Standing Certificate, Buyer is duly qualified to do business as a foreign
corporation in the State of West Virginia and is in good standing under the
laws of the State of West Virginia.
2. Buyer has full corporate power and authority under the Florida Business
Corporation Act, its Articles of Incorporation and its Bylaws to execute,
deliver and perform the Purchase Agreement and the other Transaction Documents.
Buyer's execution, delivery and performance of the Purchase Agreement and the
other Transaction Documents have been duly and validly authorized by all
necessary corporate action on the part of Buyer under the Florida Business
Corporation Act, its Articles of Incorporation and its Bylaws.
3. The Purchase Agreement and each of the other Transaction Documents have
been duly executed and delivered by Buyer and constitute the valid and binding
obligation of Buyer, enforceable against Buyer in accordance with their
respective terms subject to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws now or hereinafter in effect relating to
creditors' rights and (ii) certain equitable defenses and the discretion of the
court before which any proceeding therefor may be brought.
4. The execution, delivery and performance by Buyer of the Purchase
Agreement and the other Transaction Documents (a) do not violate any provisions
of Buyer's Articles of Incorporation or Bylaws and (b) do not violate any
Applicable Law or any judgment, order, injunction or decree which is applicable
to Buyer and known to us.
<PAGE> 117
Channel 29 of Charleston, Inc.
William L, Kepper
Page 4
The information set forth herein is as of the date hereof. We assume no
obligation to advise you of changes which may hereafter be brought to our
attention. Our opinions are based on statutory provisions and judicial
decisions in effect at the date hereof, and we do not opine with respect to any
law, regulation, rule or governmental policy which may be enacted or adopted
after the date hereof nor assume any responsibility to advise you of future
changes in our opinions.
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Purchase Agreement and is
not to be quoted in whole or in part or otherwise referred to in any of your
financial statements or public releases, nor is it to be filed with any
governmental agency or other person without the prior written consent of a
member of this firm. This opinion may not be relied upon by any person or
entity other than the person to whom it is addressed.
Very truly yours,
DOW, LOHNES & ALBERTSON, PLLC
By:
-----------------------------------
John R. Feore, Jr., Member
<PAGE> 118
SCHEDULE 12.5(H)
OPINIONS OF COUNSEL TO SELLER AND THE COMPANY
(SECOND CLOSING)
<PAGE> 119
SCHEDULE 12.5(h)
FORM OF OPINION OF COUNSEL TO SELLER
AND THE COMPANY TO BE DELIVERED AT SECOND CLOSING
______________________, ___________
Paxson Communications of Charleston-29, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Re: Stock Purchase Agreement dated as of August __, 1997 (the
"Purchase Agreement"), by and among Channel 29 of Charleston,
Inc., a Delaware corporation (the "Company"), Paxson
Communications of Charleston-29, Inc., a Florida corporation
("Buyer"), William L. Kepper, an individual ("Seller"), and
Mountaineer Broadcasting Corp., a Delaware corporation
("MBC").
Ladies and Gentlemen:
We have acted as counsel for Seller and the Company in connection with
the transactions contemplated by the Purchase Agreement. This opinion is being
delivered to you pursuant to Section 12.5(h) of the Purchase Agreement. All
capitalized terms not defined in this opinion shall have the meanings set forth
in the Purchase Agreement.
In rendering this opinion, we have reviewed the following documents:
1. the Purchase Agreement;
2. the stock power dated as of the date hereof from Seller to
Buyer for the Option Shares (the "Stock Power"); and
3. the Tower Lease.
The documents referred to in clauses 1 through 3 shall be referred to
herein as the "Transaction Documents."
In our examination of documents and records, we have assumed, without
investigation, the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity with originals of all
<PAGE> 120
Paxson Communications of Charleston-29, Inc.
_________________, _____
Page 2
documents submitted to us as telecopied, certified, photostatic or reproduced
copies and the authenticity of all such documents.
In rendering this opinion, we have also assumed that (i) all parties to
the Transaction Documents (other than Seller and the Company) are duly
organized, validly existing, and in good standing under the laws of their
respective jurisdictions of organization and have the requisite power to enter
into and perform the Transaction Documents, (ii) the execution and delivery of
the Transaction Documents have been duly authorized by all necessary actions and
proceedings on the part of all parties thereto other than Seller and the
Company, (iii) the Transaction Documents have been duly executed and delivered
by all parties thereto other than Seller and the Company, and (iv) the
Transaction Documents constitute legal, valid, binding and enforceable
obligations of all parties thereto other than Seller and the Company.
With respect to questions of fact, we have relied, without independent
inquiry or verification by us, solely upon (a) the representations and
warranties set forth in the Transaction Documents, (b) representations of Seller
and of officers of the Company and (c) certificates of public officials.
Our opinion is limited to matters arising under the laws of the State
of New York, the General Corporation Law of the State of Delaware and the United
States of America, including the Communications Act of 1934 and the rules and
regulations of the FCC, insofar as such laws apply. We express no opinion
whatsoever as to any other laws or regulations or as to laws relating to choice
of law or conflicts of law principles. We note that the "governing law"
provision in the Transaction Documents provides that the law of the State of
Florida is to govern. We have not examined the law of the State of Florida. Our
opinion is, therefore, based upon the assumption that the law governing all
provisions of the Transaction Documents is identical to the substantive law of
the State of New York.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and is qualified to conduct business as
a foreign corporation in West Virginia and is in good standing under the laws of
West Virginia. Each of Seller and the Company has all requisite power and
authority to execute and deliver the Transaction Documents and to perform and
comply with all of the terms, covenants, and conditions to be performed and
complied with by it thereunder.
<PAGE> 121
Paxson Communications of Charleston-29, Inc.
_________________, _____
Page 3
2. The execution, delivery and performance of the Transaction Documents
by the Company have been duly and validly authorized by all necessary corporate
actions on the part of the Company.
3. The Transaction Documents have been duly executed and delivered by
Seller and the Company and constitute legal, valid and binding obligations of
Seller and the Company, enforceable against them in accordance with their terms,
except that such enforcement may be subject to bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and to limitations
on the availability of equitable remedies.
4. The execution, delivery and performance by Seller and the Company of
the Transaction Documents and the transactions contemplated thereby will not
violate, conflict with or cause a default under: (a) any provision of the
Company's Certificate of Incorporation and By-Laws; (b) any statute, law,
regulation or rule or any judgment, decree or order binding upon Seller or the
Company; or (c) to the best of our knowledge, any contract, agreement or
commitment to which Seller or the Company is a party or by which it is bound.
5. To our knowledge, there is no judgment, award, order, writ,
injunction, arbitration decision or decree materially and adversely affecting
the conduct of the business of the Station, or any litigation, proceeding or
investigation pending or threatened against the Company, except as specifically
identified in Attachment A hereto and except for proceedings of general
applicability to the broadcast industry.
6. Based on our review of information publicly available at the FCC and
our internal files and records and inquiry to Seller and officers of the
Company, (a) the Company is the holder of the FCC licenses set forth on
Attachment A hereto (the "FCC Licenses"), (b) the FCC Licenses are in full force
and effect, and (c) the FCC Licenses are not subject to any condition or
requirement, other than conditions or requirements that appear on the face of
the FCC Licenses or pertain under generally applicable rules or policies of the
FCC.
7. The FCC Consent has been obtained, is in full force and effect and
no requests have been filed for administrative or judicial review,
reconsideration, appeal or stay of the FCC Consent.
8. Based on a review of the minute books and stock ledger of the
Company, the authorized capital stock of the Company consists of 1,000 shares of
voting common stock, all of which are issued and outstanding. All such shares
have been validly
<PAGE> 122
Paxson Communications of Charleston-29, Inc.
_________________, _____
Page 4
issued and are fully paid and nonassessable. Upon delivery to Buyer of the stock
certificate representing the Option Shares, the Stock Power is in form
sufficient to convey good and marketable title to Buyer to the Option Shares.
The information set forth herein is as of the date hereof. We assume no
obligation to advise you of changes which may thereafter may be brought to our
attention. Our opinions are based on statutory and judicial decisions in effect
at the date hereof, and we do not opine with respect to any law, regulation,
rule or governmental policy which may be enacted or adopted after the date
hereof, nor assume any responsibility to advise you of future changes in our
opinions.
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Transaction Documents and
is not to be quoted in whole or in part or otherwise referred to in any of your
financial statements or public releases, nor is it to be filed with any
governmental agency or other person without the prior written consent of a
partner of this firm.
Very truly yours,
[ ]
By:
----------------------------------------
, Partner
--------------------
<PAGE> 123
SCHEDULE 13.5(D)
OPINION OF COUNSEL TO BUYER
(SECOND CLOSING)
<PAGE> 124
Schedule 13.5(d)
Form of Buyer's Opinion
To Be Delivered at Second Closing
__________________, ____
Channel 29 of Charleston, Inc.
William L. Kepper
803 North Front Street
McHenry, Illinois 60050
Re: Stock Purchase Agreement dated as of August
_, 1997 (the "Purchase Agreement"), by and
among Channel 29 of Charleston, Inc., a
Delaware corporation (the "Company"), Paxson
Communications of Charleston-29, Inc., a
Florida corporation ("Buyer"), William L.
Kepper, an individual ("Seller"), and
Mountaineer Broadcasting Corp., a Delaware
corporation ("MBC").
Dear Ladies and Gentlemen:
We have acted as special counsel for Buyer in connection
with the transactions contemplated by the Purchase Agreement. This opinion is
being delivered to you pursuant to Section 13.5(d) of the Purchase Agreement.
All capitalized terms not defined in this opinion shall have the meanings set
forth in the Purchase Agreement.
In rendering this opinion, we have reviewed the following documents:
1. the Purchase Agreement;
2. a certificate dated as of ____________ from
the Secretary of State of Florida relating to
the good standing of Buyer (the "Florida Good
Standing Certificate");
3. a certificate dated as of ____________ from
the Secretary of State of West Virginia
relating to the good standing of Buyer (the
"West Virginia Good Standing Certificate");
4. the Articles of Incorporation and the Bylaws
of Buyer, each in the form certified to us by
the Secretary of Buyer to be true and
complete and in effect on the date of this
opinion; and
5. resolutions of the Board of Directors of
Buyer certified to us by the Secretary of
Buyer to be true and complete, to have been
duly adopted
<PAGE> 125
Channel 29 of Charleston, Inc.
William L. Kepper
Page 2
by the Board of Directors of Buyer, and to be
in full force and effect (without having been
modified or rescinded) on the date of this
opinion.
In our examination of documents and records, we have
assumed, without investigation, the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity with originals of all documents submitted to us as
telecopied, certified, photostatic or reproduced copies and the authenticity of
all such documents.
In rendering this opinion, we have also assumed that (i)
all parties to the Purchase Agreement (other than Buyer) are duly organized,
validly existing, and in good standing under the laws of their respective
jurisdictions of organization and have the requisite power to enter into and
perform the Purchase Agreement, (ii) the execution and delivery of the Purchase
Agreement has been duly authorized by all necessary action and proceedings on
the part of all parties thereto other than Buyer, (iii) the Purchase Agreement
has been duly executed and delivered by all parties thereto other than Buyer,
and (iv) the Purchase Agreement constitutes the legal, valid, binding and
enforceable obligations of all parties thereto other than Buyer.
With respect to questions of fact, we have relied,
without independent inquiry or verification by us, solely upon (a) the
representations and warranties set forth in the Purchase Agreement, (b)
representations of officers of Buyer and (c) certificates of public officials..
This opinion is limited to the law of the District of
Columbia, the Florida Business Corporation Act and the federal law of the
United States of America, insofar as such laws apply (collectively, "Applicable
Law"), except that Applicable Law includes only those laws and regulations that
a lawyer exercising customary professional diligence would reasonably recognize
as being directly applicable to the transactions contemplated by the Purchase
Agreement and excludes those set forth in Section 19 of the Legal Opinion
Accord of the American Bar Association Section of Business Law (1991). We do
not purport to be experts in the laws of the State of Florida, nor are we
familiar with judicial interpretations of the laws of Florida, including the
Florida Business Corporation Act. We have reviewed the text of the Florida
Business Corporation Act and applied it to the transactions described herein in
light of our knowledge of the law of other jurisdictions. We note that the
Purchase Agreement by its terms provides that it is to be governed by the laws
of the State of Florida. Our opinion in paragraph 3 is given as if the Purchase
Agreement were to be governed by the laws of the District of Columbia rather
than the laws of the State of Florida or the laws
<PAGE> 126
Channel 29 of Charleston, Inc.
William L. Kepper
Page 3
of any other state. We express no opinion as to conflicts of law rules, or the
laws of any states or jurisdictions other than as specified above. Additional
limitations are set forth in the text of the opinion.
Based upon the foregoing, subject to the assumptions,
limitations and exceptions contained herein, we are of the opinion that:
1. Based solely upon a review of the Florida
Good Standing Certificate, Buyer is a corporation duly organized and in good
standing under the laws of the State of Florida and based solely upon a review
of the West Virginia Good Standing Certificate, Buyer is duly qualified to do
business as a foreign corporation in the State of West Virginia and is in good
standing under the laws of the State of West Virginia.
2. Buyer has full corporate power and authority
under the Florida Business Corporation Act, its Articles of Incorporation and
its Bylaws to execute, deliver and perform the Purchase Agreement. Buyer's
execution, delivery and performance of the Purchase Agreement have been duly
and validly authorized by all necessary corporate action on the part of Buyer
under the Florida Business Corporation Act, its Articles of Incorporation and
its Bylaws.
3. The Purchase Agreement has been duly executed
and delivered by Buyer and constitutes the valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its respective terms
subject to (i) bankruptcy, insolvency, reorganization, moratorium and other
similar laws now or hereinafter in effect relating to creditors' rights and
(ii) certain equitable defenses and the discretion of the court before which
any proceeding therefor may be brought.
4. The execution, delivery and performance by
Buyer of the Purchase Agreement (a) do not violate any provisions of Buyer's
Articles of Incorporation or Bylaws and (b) do not violate any Applicable Law
or any judgment, order, injunction or decree which is applicable to Buyer and
known to us.
The information set forth herein is as of the date
hereof. We assume no obligation to advise you of changes which may hereafter be
brought to our attention. Our opinions are based on statutory provisions and
judicial decisions in effect at the date hereof, and we do not opine with
respect to any law, regulation, rule or governmental policy which may be
enacted or adopted after the date hereof nor assume any responsibility to
advise you of future changes in our opinions.
<PAGE> 127
Channel 29 of Charleston, Inc.
William L. Kepper
Page 4
This letter is solely for your information in connection
with the consummation of the transactions contemplated by the Purchase
Agreement and is not to be quoted in whole or in part or otherwise referred to
in any of your financial statements or public releases, nor is it to be filed
with any governmental agency or other person without the prior written consent
of a member of this firm. This opinion may not be relied upon by any person or
entity other than the person to whom it is addressed.
Very truly yours,
DOW, LOHNES & ALBERTSON, PLLC
By:
-----------------------------
John R. Feore, Jr., Member
<PAGE> 1
EXHIBIT 10.183
================================================================================
STOCK PURCHASE AGREEMENT
BY AND AMONG
CHANNEL 46 OF TUCSON, INC.,
PAXSON COMMUNICATIONS OF TUCSON-46, INC.
AND
SUNGILT CORPORATION, INC.
* * *
SEPTEMBER 9, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 1. CERTAIN DEFINITIONS.............................................................................2
Section 1.1 Terms Defined in this Section..........................................................2
Section 1.2 Clarifications.........................................................................5
ARTICLE 2. THE INITIAL CLOSING.............................................................................5
Section 2.1 The Initial Closing....................................................................5
Section 2.2 Sale of Initial Shares.................................................................5
Section 2.3 Purchase Price.........................................................................6
ARTICLE 3. ACTIONS TO BE TAKEN PRIOR TO THE INITIAL CLOSING................................................6
Section 3.1 Organization of the Company............................................................6
Section 3.2 Tower Site.............................................................................6
Section 3.3 Extension Application..................................................................6
Section 3.4 Pro Forma FCC Consent..................................................................6
Section 3.5 Assignment of Construction Permit......................................................6
Section 3.6 Conduct Pending the Initial Closing....................................................6
Section 3.7 Loan Documents.........................................................................7
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING
THE INITIAL CLOSING.............................................................................7
Section 4.1 Organization and Standing..............................................................7
Section 4.2 Power and Authority....................................................................7
Section 4.3 Conflicts..............................................................................8
Section 4.4 Investment.............................................................................8
Section 4.5 Disclosure.............................................................................8
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE
COMPANY REGARDING THE INITIAL CLOSING...........................................................8
Section 5.1 Organization and Standing..............................................................8
Section 5.2 Power and Authority....................................................................8
Section 5.3 Conflicts..............................................................................9
Section 5.4 Exchange Act; Investment Company Act...................................................9
Section 5.5 Capitalization.........................................................................9
Section 5.6 Assets and Liabilities of the Company. ..............................................10
Section 5.7 Broker................................................................................10
Section 5.8 Construction Permit...................................................................10
Section 5.9 Tower Site............................................................................10
Section 5.10 Consents..............................................................................10
Section 5.11 Claims and Legal Actions..............................................................10
Section 5.12 Disclosure............................................................................11
</TABLE>
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<TABLE>
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ARTICLE 6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT
THE INITIAL CLOSING............................................................................11
Section 6.1 Representations and Warranties........................................................11
Section 6.2 Covenants and Conditions..............................................................11
Section 6.3 Extension Application.................................................................11
Section 6.4 Approvals for Tower Site..............................................................11
Section 6.5 Contribution..........................................................................11
Section 6.6 Tower Site............................................................................12
Section 6.7 Deliveries. .........................................................................12
Section 6.8 Construction Permit; Adverse Proceedings..............................................13
Section 6.9 No Liabilities........................................................................13
Section 6.10 Loan Documents........................................................................13
ARTICLE 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
AND THE COMPANY AT THE INITIAL CLOSING.........................................................13
Section 7.1 Representations and Warranties........................................................13
Section 7.2 Covenants and Conditions..............................................................13
Section 7.3 Deliveries............................................................................13
Section 7.4 Adverse Proceedings...................................................................14
ARTICLE 8. CONSTRUCTION AND OPERATION OF THE STATION......................................................14
Section 8.1 General...............................................................................14
Section 8.2 FCC Consent...........................................................................15
Section 8.3 Employee Benefit Plans................................................................15
Section 8.4 Labor Relations.......................................................................15
Section 8.5 Licenses..............................................................................16
Section 8.6 Compliance with Laws..................................................................16
Section 8.7 Notification..........................................................................16
Section 8.8 Preservation of Business..............................................................16
Section 8.9 Performance of Agreements.............................................................16
Section 8.10 Cable Carriage........................................................................16
ARTICLE 9. THE OPTION AND THE SECOND CLOSING..............................................................16
Section 9.1 Call Option...........................................................................16
Section 9.2 Put Option.
.................................................................................................................17
Section 9.3 The Second Closing....................................................................18
Section 9.4 Sale of Option Shares.................................................................18
Section 9.5 Purchase Price for Option Shares......................................................18
</TABLE>
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<TABLE>
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ARTICLE 10. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING
THE SECOND CLOSING.............................................................................19
ARTICLE 11. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY AND SELLER REGARDING THE SECOND CLOSING
..............................................................................................19
Section 11.1 Contracts.............................................................................19
Section 11.2 Copyrights, Trademarks and Similar Rights.............................................19
Section 11.3 Governmental Authorizations...........................................................20
Section 11.4 Title to and Condition of Real Property...............................................20
Section 11.5 Title to and Condition of Tangible Personal Property..................................20
Section 11.6 Compliance With Laws..................................................................21
Section 11.7 Reports...............................................................................21
Section 11.8 Public Inspection File................................................................21
Section 11.9 Taxes.................................................................................21
Section 11.10 Dividends and Redemptions.............................................................21
Section 11.11 Notices; Condemnation.................................................................21
Section 11.12 Liabilities of the Company............................................................22
Section 11.13 Disclosure............................................................................22
ARTICLE 12. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT
THE SECOND CLOSING.............................................................................22
Section 12.1 Representations and Warranties........................................................22
Section 12.2 Covenants and Conditions..............................................................22
Section 12.3 FCC Consent...........................................................................22
Section 12.4 Consents..............................................................................22
Section 12.5 Deliveries. .........................................................................23
Section 12.6 Adverse Proceedings...................................................................23
Section 12.7 Time Brokerage Agreement..............................................................24
Section 12.8 Adverse Change........................................................................24
ARTICLE 13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
AND THE COMPANY AT THE SECOND CLOSING..........................................................24
Section 13.1 Representations and Warranties........................................................24
Section 13.2 Covenants and Conditions..............................................................24
Section 13.3 FCC Consent...........................................................................24
Section 13.4 Consents..............................................................................24
Section 13.5 Deliveries. .........................................................................24
Section 13.6 Time Brokerage Agreement..............................................................25
</TABLE>
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<TABLE>
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Section 13.7 Adverse Proceedings...................................................................25
ARTICLE 14. JOINT COVENANTS................................................................................25
Section 14.1 Confidentiality.......................................................................25
Section 14.2 Cooperation...........................................................................25
Section 14.3 Governmental Consents.................................................................26
Section 14.4 Station Operation and Contracts.......................................................26
ARTICLE 15. TRANSFER TAXES; FEES AND EXPENSES..............................................................26
Section 15.1 Transfer Taxes........................................................................26
Section 15.2 Filing Fees...........................................................................26
Section 15.3 Expenses..............................................................................26
ARTICLE 16. ESCROW DEPOSIT.................................................................................27
Section 16.1 Escrow Deposit........................................................................27
ARTICLE 17. RISK OF LOSS...................................................................................28
Section 17.1 Risk of Loss..........................................................................28
Section 17.2 Postponement of the Second Closing Date...............................................28
Section 17.3 Option to Terminate...................................................................28
ARTICLE 18. TERMINATION RIGHTS.............................................................................28
Section 18.1 Termination by the Parties............................................................28
Section 18.2 Termination by Buyer..................................................................29
ARTICLE 19. SPECIFIC PERFORMANCE...........................................................................29
ARTICLE 20. INDEMNIFICATION................................................................................29
Section 20.1 Seller's and the Company's Indemnification............................................29
Section 20.2 Buyer's Indemnification...............................................................30
Section 20.3 Notice of Claim.......................................................................30
Section 20.4 Assumption and Defense of Third-Party Action..........................................30
Section 20.5 Limitation Period.....................................................................31
ARTICLE 21. OTHER PROVISIONS...............................................................................31
Section 21.1 Survival of Representations, Warranties and Covenants.................................31
Section 21.2 Press Releases........................................................................31
Section 21.3 Further Assurances....................................................................31
Section 21.4 Benefit and Assignment................................................................31
Section 21.5 Entire Agreement......................................................................31
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C> <C>
Section 21.6 Headings..............................................................................32
Section 21.7 Governing Law.........................................................................32
Section 21.8 Notices...............................................................................32
Section 21.9 Counterparts..........................................................................33
Section 21.10 PCC Guaranty..........................................................................33
Section 21.11 Shareholders Guaranty.................................................................33
</TABLE>
EXHIBITS AND SCHEDULES TO
STOCK PURCHASE AGREEMENT
EXHIBITS
EXHIBIT A -- Time Brokerage Agreement
EXHIBIT B -- Construction Agreement
EXHIBIT C -- Shareholders Agreement
EXHIBIT D -- Escrow Agreement
SCHEDULES
Schedule 5.6 -- Assets
Schedule 5.9 -- Transmitter Site
Schedule 6.7(f) -- Opinions of Counsel to Seller and
the Company (Initial Closing)
Schedule 7.3(d) -- Opinion of Counsel to Buyer
(Initial Closing)
Schedule 12.5(h) -- Opinions of Counsel to Seller and
the Company (Second Closing)
Schedule 13.5(d) -- Opinion of Counsel to Buyer (Second
Closing)
- v -
<PAGE> 7
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is dated as of the 9th
day of September, 1997, by and among SUNGILT CORPORATION, INC. a __________
corporation ("Seller"); CHANNEL 46 OF TUCSON, INC., a Delaware corporation (the
"Company"); and PAXSON COMMUNICATIONS OF TUCSON-46, INC., a Florida corporation
("Buyer").
W I T N E S S E T H
WHEREAS, Seller is the holder of a construction permit, File No.
BMPCT-960801LM ("Construction Permit"), issued by the Federal Communications
Commission ("FCC") for new television station KXGR, Channel 46, Green Valley,
Arizona (the "Station") and has pending before the FCC an application to extend
the Construction Permit, File No. BMPCT-970424KF (the "Extension Application").
WHEREAS, subject to the pro forma assignment of the Construction
Permit from Seller to the Company, Seller intends to convey the Construction
Permit to the Company in exchange for all of the outstanding common stock of
the Company;
WHEREAS, Buyer desires to purchase from Seller, following the
acquisition of the Construction Permit by the Company, forty-nine percent (49%)
of the outstanding common stock of the Company, subject to the terms and
conditions set forth herein;
WHEREAS, Buyer desires to grant to Seller an option to require Buyer
to purchase the remaining fifty-one percent (51%) of the outstanding common
stock of the Company, and Seller desires to grant to Buyer an option to
purchase such stock, subject to the terms and conditions set forth herein; and
WHEREAS, in connection with the foregoing transactions, (a) Buyer,
Seller and the Company desire to enter into a Shareholders Agreement setting
forth, among other things, certain restrictions relating to the issuance and
sale of the capital stock of the Company, (b) Buyer and the Company desire to
enter into a Construction Agreement, pursuant to which Buyer agrees to provide
certain services in connection with the construction of the Station; (c) Buyer
and the Company desire to enter into a Lease Agreement pursuant to which Buyer
agrees to lease to the Company certain assets used or useful in the business
and operations of the Station; and (d) Buyer and the Company desire to enter
into a Time Brokerage Agreement, pursuant to which, upon completion of
construction of the Station and commencement of broadcast operations, Buyer
shall provide programming for broadcast on the Station, subject to the rules,
regulations and policies of the FCC.
<PAGE> 8
NOW, THEREFORE, in consideration of these premises and the mutual
covenants, conditions and promises contained herein, and for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, agree as follows:
ARTICLE 1. CERTAIN DEFINITIONS
Section 1.1 Terms Defined in this Section. The following terms, as
used in this Agreement, have the meanings set forth in this Section:
"Call" means the requirement of Seller to convey the Option Shares to
Buyer in the manner described in Section 9.1.
"Call Notice" means the written notice sent by Buyer to Seller
requiring Seller to convey all of the Option Shares to Buyer in the manner
described in Section 9.1.
"Closings" means the collective reference to the Initial Closing and
the Second Closing.
"Common Stock" means all of the issued and outstanding shares of
capital stock of the Company, consisting of 1,000 shares of voting common
stock, par value $.01 per share.
"Communications Act" means the Communications Act of 1934, as amended,
the Telecommunications Act of 1996 and the rules and regulations promulgated
thereunder.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Construction
Permit to the Company and to transfer the Common Stock to Buyer or otherwise to
consummate the transactions contemplated by this Agreement.
"Construction Agreement" means the Construction Agreement to be
entered into by Buyer and the Company, substantially in the form of Exhibit B.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which the Company is a party or that are binding upon
the Company, and (a) that are in effect on the date of this Agreement or (b)
that are entered into by the Company between the date of this Agreement and the
Second Closing Date.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement to be entered into among
Buyer, Seller, the Company and the Escrow Agent, substantially in the form of
Exhibit D.
- 2 -
<PAGE> 9
"Escrow Deposit" means $100,000 in cash deposited by Buyer with the
Escrow Agent pursuant to the Escrow Agreement.
"FCC Consent" means action by the FCC granting its consent to the
transfer of control of the Company as contemplated by this Agreement.
"FCC Licenses" means those licenses, permits, and authorizations
issued by the FCC in connection with the business and operations of the
Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Initial Closing" means the consummation of the purchase and sale of
the Initial Shares pursuant to this Agreement in accordance with the provisions
of Article 2.
"Initial Closing Date" means the date on which the Initial Closing
occurs, as determined pursuant to Section 2.1.
"Initial Shares" means 490 shares of the voting common stock, par
value $.01 per share, of the Company representing 49% of the issued and
outstanding shares of the capital stock of the Company.
"Initial Shares Purchase Price" has the meaning set forth in Section
2.3.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by the Company or under which the Company is licensed or franchised and that
are used or useful in the business and operations of the Station, together with
any additions thereto between the date of this Agreement and the Second Closing
Date.
"Licenses" means all licenses, permits, construction permits, and
other authorizations issued as of the date hereof by the FCC, the Federal
Aviation Administration, or any other federal, state, or local governmental
authorities for the construction or operation of the Station, together with any
additions thereto between the date of this Agreement and the Second Closing
Date.
"Option Price" shall have the meaning set forth in Section 9.5.
- 3 -
<PAGE> 10
"Option Shares" means 510 shares of the voting common stock, par value
$.01 per share, of the Company representing 51% of the issued and outstanding
shares of the capital stock of the Company.
"Pro Forma FCC Consent" means the action by the FCC granting its
consent to the pro forma assignment of the Construction Permit from Seller to
the Company.
"Put" means the requirement of Buyer to purchase the Option Shares
from Seller in the manner described in Section 9.2.
"Put Notice" means the written notice sent by Seller to Buyer
requiring Buyer to purchase from Seller the Option Shares in the manner
described in Section 9.2.
"Real Property" means all interests in real property, including fee
estates, leaseholds and subleaseholds, purchase options, easements, licenses,
rights to access, and rights of way, and all buildings and other improvements
thereon, owned or held by the Company that are used or useful in the business
or operations of the Station, together with any additions thereto between the
date of this Agreement and the Second Closing Date.
"Second Closing" means the consummation of the purchase and sale of
the Option Shares pursuant to this Agreement in accordance with the provision
of Article 9.
"Second Closing Date" means the date on which the Second Closing
occurs, as determined pursuant to Section 9.3.
"Shareholders Agreement" means the Shareholders Agreement to be
entered into upon the Initial Closing among Buyer, Seller and the Company,
substantially in the form of Exhibit C.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property owned or held by
the Company that is used or useful in the conduct of the business or operations
of the Station, together with any additions thereto between the date of this
Agreement and the Second Closing Date.
"Taxes" (and, with correlative meaning, "Taxes" and "Taxable") means
all federal, state, local or foreign income, gross receipts, windfall profits,
severance, property, production, sales, use, license, excise, franchise,
capital, transfer, employment, withholding and other taxes and assessments,
together with any interest, additions or penalties with respect thereto and any
interest in respect of such additions or penalties, and "Tax" means any one of
such Taxes.
"Tax Returns" means all federal, state, local and foreign income,
franchise, sales, use, occupation, property, excise, alternative or add-on
minimum, social security,
- 4 -
<PAGE> 11
employees' withholding, unemployment, disability, transfer, capital stock and
other tax returns and tax reports, and "Tax Return" means any one of such Tax
Returns.
"Time Brokerage Agreement" means the Time Brokerage Agreement to be
entered into by Buyer and the Company, substantially in the form of Exhibit A.
"Transaction Documents" means the Construction Agreement, Time
Brokerage Agreement and Shareholders Agreement.
Section 1.2 Clarifications. Words used herein, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender and any other number as the context requires. Use of the word
"including" herein shall be deemed and construed to mean "including but not
limited to." Except as specifically otherwise provided in this Agreement in a
particular instance, a reference to a Section, Exhibit or Schedule is a
reference to a Section of this Agreement or a Schedule or an Exhibit hereto,
and the terms "hereof," "herein" and other like terms refer to this Agreement
as a whole, including the Schedules and Exhibits hereto, and not solely to any
particular part hereof.
ARTICLE 2. THE INITIAL CLOSING
Section 2.1 The Initial Closing. The Initial Closing shall take place
at 10:00 a.m., Washington, D.C. time, on a date to be set by Buyer on no less
than five (5) days' written notice to Seller, which date shall not be sooner
than the first business day after the date on which the Pro Forma FCC Consent
has been granted by the FCC and shall not be later than the tenth business day
after the date on which the Pro Forma FCC Consent has become a Final Order,
subject to the satisfaction of all other conditions precedent to the holding of
the Initial Closing. The Initial Closing shall take place at the offices of
Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or such other place as the parties shall mutually
agree. If Buyer fails to specify the date for Initial Closing prior to the
fifth business day after the date upon which the Pro Forma FCC Consent has
become a Final Order, the Initial Closing shall take place on the tenth
business day after the date upon which the Pro Forma FCC Consent has become a
Final Order.
Section 2.2 Sale of Initial Shares. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer
and deliver to Buyer on the Initial Closing Date, and Buyer agrees to purchase,
the Initial Shares, free and clear of any claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges or encumbrances of
any nature whatsoever.
Section 2.3 Purchase Price. The purchase price for the Initial Shares
(the "Initial Shares Purchase Price") shall be Two Hundred Sixty-Five Thousand
Dollars ($265,000). Fifteen Thousand Dollars ($15,000) of the Initial Shares
Purchase Price shall be paid on the date of execution of this Agreement and the
remaining portion of the Initial Shares Purchase Price shall be paid at the
Initial Closing by Buyer to Seller, in accordance with written
- 5 -
<PAGE> 12
instructions provided by Seller to Buyer no less than two (2) business days
prior to the Initial Closing Date, by wire transfer of immediately available
federal funds.
ARTICLE 3. ACTIONS TO BE TAKEN PRIOR TO THE INITIAL CLOSING
Section 3.1 Organization of the Company. Seller shall cause the
Company to be formed in the State of Delaware and to be duly qualified to
conduct business in the State of Arizona.
Section 3.2 Tower Site. Prior to the Initial Closing, Seller shall
cause the Company to enter into a Tower Lease, acceptable to Buyer, providing
for the construction and operation of the Station's transmission facilities at
the Tower Site specified in the Construction Permit.
Section 3.3 Extension Application. Seller shall vigorously prosecute
the Extension Application before the FCC. Seller shall promptly file following
the date hereof a request with the FCC for a special temporary authority (the
"Special Temporary Authority") to operate the Station at a minimum power level
of 10 kilowatts. Such request shall be in form reasonably acceptable to Buyer.
Seller and the Company shall consult with Buyer with respect to its content and
any actions to be taken with respect thereto. Seller shall vigorously prosecute
the Special Temporary Authority before the FCC.
Section 3.4 Pro Forma FCC Consent. Seller and the Company shall
prepare and, within five (5) business days after the date of this Agreement,
file with the FCC an appropriate application for the Pro Forma FCC Consent.
Seller and the Company shall thereafter prosecute the application for the Pro
Forma FCC Consent with all diligence and otherwise use its best efforts to
obtain a grant of the application for the Pro Forma FCC Consent as
expeditiously as possible.
Section 3.5 Assignment of Construction Permit. Upon the grant of the
Pro Forma FCC Consent, Seller shall contribute the Construction Permit to the
Company in exchange for all of the shares of Common Stock not then owned by
Seller, pursuant to conveyancing documents in form and substance acceptable to
Buyer.
Section 3.6 Conduct Pending the Initial Closing. Between the date
hereof and the Initial Closing Date, unless Buyer shall otherwise consent in
writing, Seller and the Company covenant and agree:
(a) to perform all acts necessary to carry out the
transactions contemplated by this Agreement and not to: (i) sell, transfer or
encumber the Common Stock or the Construction Permit other than as contemplated
herein; (ii) perform or suffer any acts within their control that are
inconsistent with their representations, warranties, covenants and agreements
set forth herein and (iii) amend the Certificate of Incorporation or Bylaws of
the Company; and
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(b) to notify Buyer promptly of (i) any adverse development
with respect to the Extension Application or the Pro Forma FCC Consent or (ii)
the commencement or threat of any claim; suit; action; arbitration; legal,
administrative or other proceeding; governmental investigation; or tax audit
against Seller or the Company or affecting the Station; and
(c) to cooperate fully with Buyer in taking any and all
actions necessary or desirable for the consummation of the transactions
contemplated by this Agreement; and
(d) that the Company shall not create, incur, assume or
guarantee any indebtedness, obligation or liability.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING
THE INITIAL CLOSING
As an inducement to Seller and the Company to enter into this
Agreement and consummate the transactions contemplated to occur upon the
Initial Closing, Buyer represents and warrants to Seller and the Company as
follows:
Section 4.1 Organization and Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Florida and shall be, on or before the Initial Closing Date, duly qualified
to conduct business as a foreign corporation in the State of Arizona.
Section 4.2 Power and Authority. Buyer has full corporate power and
authority to enter into this Agreement and the other documents contemplated
hereby, and to perform and comply with the terms, covenants and conditions to
be performed or complied with by Buyer hereunder and thereunder. This Agreement
constitutes, and any other instrument contemplated hereby when executed and
delivered by Buyer at the Initial Closing, will constitute, the legal, valid
and binding obligations of Buyer, enforceable in accordance with their terms,
except as such enforceability may be affected by bankruptcy, insolvency or
similar laws and by court-applied equitable principles.
Section 4.3 Conflicts. The execution and delivery of this Agreement
and the instruments or documents to be delivered by Buyer pursuant to this
Agreement at the Initial Closing, the consummation of the transactions
contemplated by this Agreement at the Initial Closing, and compliance with the
terms, conditions and provisions of this Agreement at the Initial Closing by
Buyer, with or without the giving of notice or the passage of time, or both, do
not and will not: (i) contravene any provision of Buyer's Articles of
Incorporation or Bylaws; (ii) conflict with or result in a breach of or
constitute a default under any of the terms, conditions or provisions of any
indenture, mortgage, loan or credit agreement or any other agreement or
instrument to which Buyer is a party or by which it or its assets may be bound
or affected, or any decree, judgment or order of any court or governmental
department,
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commission, board, agency or instrumentality, domestic or foreign, or any
applicable law, ordinance, rule or regulation, including but not limited to the
Communications Act; or (iii) result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any of Buyer's assets or
give to others any interests or rights therein.
Section 4.4 Investment. Buyer will acquire the Initial Shares for its
own account for investment and not with a present view to distribute or resell
the same.
Section 4.5 Disclosure. No representation or warranty by Buyer in this
Agreement, and no schedule, document, statement, certificate furnished or to be
furnished by Buyer to Seller or the Company pursuant hereto, contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements or facts contained herein or
therein not misleading
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE
COMPANY REGARDING THE INITIAL CLOSING
As an inducement to Buyer to enter into this Agreement and consummate
the transactions contemplated to occur upon the Initial Closing, Seller and the
Company jointly and severally represent and warrant to Buyer as follows:
Section 5.1 Organization and Standing. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and shall be, on or before the Initial Closing, duly
qualified to conduct business in the State of Arizona. Seller is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of _______ and is duly qualified to conduct business in the State of
Arizona. Seller has delivered to Buyer true and complete copies of (a) the
Articles of Incorporation and By-laws of Seller and (b) the Certificate of
Incorporation and By-laws of the Company.
Section 5.2 Power and Authority. Each of Seller and the Company has
full power and authority to enter into this Agreement and the other documents
contemplated hereby, and to perform and comply with the terms, covenants and
conditions to be performed or complied with by Seller or the Company hereunder
or thereunder. This Agreement constitutes, and any other instrument
contemplated hereby, when executed and delivered by Seller or the Company at
the Initial Closing, will constitute, the legal, valid and binding obligations
of Seller and the Company, enforceable in accordance with their terms, except
as such enforceability may be affected by bankruptcy, insolvency or similar
laws and by court-applied equitable principles.
Section 5.3 Conflicts. The execution and delivery of this Agreement
and the instruments or documents to be delivered by Seller or the Company
pursuant to this Agreement at the Initial Closing, the consummation of the
transactions contemplated by this Agreement at the Initial Closing, and
compliance with the terms, conditions and provisions of
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<PAGE> 15
this Agreement at the Initial Closing by Seller and the Company, with or
without the giving of notice or the passage of time, or both, do not and will
not: (i) contravene any provision of the Certificate of Incorporation or
By-laws of the Company or Seller, (ii) conflict with or result in a breach of
or constitute a default under any of the terms, conditions or provisions of any
indenture, mortgage, loan or credit agreement or any other agreement or
instrument to which Seller or the Company is a party or by which Seller or the
Company or any of their respective assets may be bound or affected, or any
decree, judgment or order of any court or governmental department, commission,
board, agency or instrumentality, domestic or foreign, or any applicable law,
ordinance, rule or regulation, including but not limited to the Communications
Act; or (iii) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the assets of Seller or the
Company or the Common Stock or give to others any interests or rights therein.
Section 5.4 Exchange Act; Investment Company Act. No securities of the
Company are required to be registered under Section 12 of the Securities and
Exchange Act of 1934, as amended. Neither Seller nor the Company is an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
Section 5.5 Capitalization. The Company's capital stock consists
solely of One Thousand (1,000) shares of duly authorized voting common stock,
with a par value of $.01 per share, of which One Hundred (100) shares are
issued and outstanding on the date hereof (the "Outstanding Stock"). The
Outstanding Stock is and, as of the Initial Closing, the remaining shares of
Common Stock will be, validly issued and outstanding, fully paid and
nonassessable. The Outstanding Stock constitutes on the date hereof all of the
issued and outstanding capital stock of the Company and on the Initial Closing
Date, the Common Stock will constitute all of the issued and outstanding
capital stock of the Company. There are no outstanding securities convertible
into or exchangeable for, and no outstanding options, warrants or other rights
to purchase or to subscribe for, any shares of capital stock or other
securities of the Company, other than as set forth herein. There are no
outstanding agreements, arrangements, commitments or understandings of any kind
affecting or relating to the voting, issuance, purchase, redemption, repurchase
or transfer of any of the capital stock of the Company, other than as set forth
herein or in the Shareholders Agreement. Except as provided herein, there are
no options, warrants, rights or any other agreement or instrument giving any
person any right under any circumstances to acquire any shares of capital stock
of the Company. Seller has good and valid marketable title to the Outstanding
Stock and the sole right to vote, sell, transfer and deliver the Outstanding
Stock and on the Closing Date, Seller will have good and marketable title to
the Common Stock and the sole right to vote, sell, transfer and deliver the
Common Stock. Except as contemplated by this Agreement, neither the Company nor
Seller has agreed with any person to sell, transfer or deliver the Outstanding
Stock or other capital stock of the Company. Upon the sale of the Initial
Shares to Buyer hereunder, Buyer shall have good and valid marketable title
thereto, free and clear of all liens, encumbrances, security interests and
restrictions of any kind and such Initial Shares shall represent 49% of the
issued and outstanding shares of the Company.
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<PAGE> 16
Section 5.6 Assets and Liabilities of the Company. As of the Initial
Closing Date, the Company shall own and have good and marketable title to the
assets and properties listed on Schedule 5.6, including, without limitation,
the Construction Permit, and shall have no debts, obligations or liabilities of
any kind whatsoever, whether accrued, contingent or otherwise, except those
arising under this Agreement, the Transaction Documents, the Tower Lease and
the Communications Act.
Section 5.7 Broker Neither Seller, the Company nor any person acting
on their behalf has incurred any liability for any finder's or broker's fees or
commissions in connection with the transactions contemplated by this Agreement,
except for such fees and commissions owed equally by Seller and Buyer to
Patrick Communications Corporation, which fees and commissions total $117,500.
Section 5.8 Construction Permit. The Construction Permit has been
validly issued and on the date hereof, Seller is the authorized legal holder
thereof and on the Initial Closing Date, the Company will be the authorized
legal holder thereof. The Construction Permit is in full force and effect and
is not subject to any restriction or condition that would delay or adversely
affect the construction of the Station. Seller and the Company are in
compliance in all material respects with the Construction Permit and all laws,
regulations, and rules, including the Communications Act. Each of Seller and
the Company have filed all returns, reports and statements required to be filed
in connection with the Construction Permit.
Section 5.9 Tower Site. On the Initial Closing Date, Company shall
have valid and enforceable lease for the site described on Schedule 5.9 hereto
(the "Tower Site").
Section 5.10 Consents. To the best of Seller's knowledge, except for
the Pro Forma FCC Consent and the grant of the Extension Application, no
consent, approval, permit or authorization of, or filing with, any governmental
authority or other party is required to consummate the transactions
contemplated by this Agreement at or before the Initial Closing.
Section 5.11 Claims and Legal Actions. There is no claim, legal
action, suit, arbitration, counterclaim, governmental investigation or other
proceeding, nor any order, decree or judgment, in progress or pending, or to
the knowledge of Seller, threatened against Seller or the Company.
Section 5.12 Disclosure. No representation or warranty by Seller or
the Company in this Agreement, and no schedule, document, statement,
certificate furnished or to be furnished by Seller or the Company to Buyer
pursuant hereto, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements or facts contained herein or therein not misleading.
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<PAGE> 17
ARTICLE 6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT
THE INITIAL CLOSING
The obligations of Buyer at the Initial Closing are subject to the
fulfillment prior to or at the Initial Closing of the following conditions (any
one or more of which may be waived in whole or in part by Buyer at Buyer's
option):
Section 6.1 Representations and Warranties. The representations and
warranties of Seller and the Company contained in this Agreement relating to
the Initial Closing shall be true and correct in all material respects on and
as of the Initial Closing Date, with the same force and effect as though made
on and as of such date.
Section 6.2 Covenants and Conditions. Seller and the Company shall
have performed in all material respects all of their respective obligations and
agreements and complied with all of their respective covenants and conditions
contained in this Agreement to be performed or complied with by Seller and the
Company on or before the Initial Closing Date.
Section 6.3 Extension Application. The FCC shall have granted either
the Extension Application or the Special Temporary Authority without any
material adverse conditions and such grant shall have become a Final Order.
Section 6.4 Approvals for Tower Site. Seller and the Company shall
have obtained all necessary governmental consents or approvals required for the
construction and operation of the Station at the Tower Site, and any such
construction shall have been conducted in accordance with the terms of such
consents or approvals and with any applicable laws, rules and regulations of
any governmental authority, including, without limitation, the FCC, any
municipality or the Federal Aviation Administration.
Section 6.5 Contribution. The Pro Forma FCC Consent shall have been
granted and shall have become a Final Order, and Seller shall have contributed
the Construction Permit to the Company in accordance with Section 3.5, free and
clear of any claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges or encumbrances of any nature whatsoever.
Section 6.6 Tower Site. Company shall have a valid and enforceable
lease for the Tower Site.
Section 6.7 Deliveries. Seller and the Company shall have delivered to
Buyer the following, in form and substance reasonably satisfactory to Buyer and
Buyer's Counsel:
(a) Initial Shares. Certificates representing the Initial
Shares, which shall be either duly endorsed or accompanied by stock powers duly
executed in favor of Buyer.
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<PAGE> 18
(b) Certificate of Incorporation. A copy of the Certificate
of Incorporation of the Company, certified as of a date not earlier than ten
(10) days prior to the Initial Closing Date by the Secretary of State of
Delaware.
(c) Bylaws. A copy of the Bylaws of the Company, certified as
of the Initial Closing Date by the Secretary or an Assistant Secretary of the
Company.
(d) Resolutions. Copies of resolutions adopted by the Board
of Directors and shareholders of the Company, authorizing and approving the
execution and delivery of this Agreement and the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, certified by
the Secretary or an Assistant Secretary of the Company, respectively, as being
true and complete on the Initial Closing Date.
(e) Certificates. Certificates, dated as of the Initial
Closing Date, executed on behalf of Seller and the Company by Seller and an
officer of the Company, respectively, each certifying: (1) that the
representations and warranties of Seller and the Company contained in this
Agreement are true and complete in all material respects as of the Initial
Closing Date as though made on and as of that date; and (2) that Seller and the
Company have performed in all material respects all of their respective
obligations and agreements under this Agreement to be performed and complied
with by Seller and the Company on or before the Initial Closing Date.
(f) Opinions of Counsel. Opinions of Seller's and the
Company's counsel and communications counsel dated as of the Initial Closing
Date, substantially in the form of Schedule 6.7(f) hereto.
(g) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent.
(h) Transaction Documents. Copies of the Transaction
Documents duly executed by Seller and the Company.
(i) Additional Instruments. Such additional instruments and
documents as may be required to consummate the transactions contemplated
hereby.
Section 6.8 Construction Permit; Adverse Proceedings. The Company
shall be the legal and valid holder of the Construction Permit and the
Construction Permit shall be in full force and effect without any modification
thereto other than as set forth in the Extension Application. Except for
proceedings relating to the television broadcast industry generally, there
shall not be any order, decree or judgment in effect or any lawsuit, claim,
legal action, proceeding or investigation pending or threatened before any
court, administrative agency or arbitrator which is reasonably likely to
adversely affect the construction, business, property, assets or condition
(financial or otherwise) of the Station or the Company or which seeks to
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<PAGE> 19
enjoin or prohibit, or otherwise questions the validity of, any action taken or
to be taken pursuant to or in connection with this Agreement.
Section 6.9 No Liabilities The Company shall have no debts,
obligations or liabilities of any kind whatsoever, whether accrued, contingent
or otherwise except for this Agreement, the Transaction Documents and the
Communications Act.
ARTICLE 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
AND THE COMPANY AT THE INITIAL CLOSING
The obligations of Seller and the Company at the Initial Closing are
subject to the fulfillment prior to or at the Initial Closing of the following
conditions (any one or more of which may be waived in whole or in part by
Seller and the Company at their option):
Section 7.1 Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement relating to the Initial Closing
shall be true and correct in all material respects on and as of the Initial
Closing Date, with the same force and effect as though made on and as of such
date.
Section 7.2 Covenants and Conditions. Buyer shall have performed in
all material respects all of its obligations and agreements and complied with
all of its covenants and conditions contained in this Agreement to be performed
or complied with by Buyer on or before the Initial Closing Date.
Section 7.3 Deliveries. Buyer shall have delivered to Seller and the
Company the following in form and substance reasonably satisfactory to Seller,
the Company and their Counsel:
(a) Purchase Price. The Initial Shares Purchase Price
described in Section 2.3.
(b) Resolutions. Copies of resolutions adopted by the Board
of Directors of Buyer, authorizing and approving the execution of this
Agreement and the consummation of the transactions contemplated hereby,
certified by its Secretary as being true and correct on the Initial Closing
Date.
(c) Officer's Certificate. A certificate, dated as of the
Initial Closing Date, executed on behalf of Buyer by an officer of Buyer,
certifying (1) that the representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects as of the Initial
Closing Date as though made on and as of that date, and (2) that Buyer has
performed in all material respects all of its obligations and agreements under
this Agreement to be performed and complied with by Buyer on or before the
Initial Closing Date.
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<PAGE> 20
(d) Opinion of Counsel. An opinion of Buyer's counsel dated
as of the Initial Closing Date, substantially in the form of Schedule 7.3(d)
hereto.
(e) Transaction Documents. Copies of the Transaction
Documents duly executed by Buyer.
(f) Additional Instruments. Such additional instruments and
documents as may be required to consummate the transactions contemplated
hereby.
Section 7.4 Adverse Proceedings. There shall not be any order, decree
or judgment in effect or any lawsuit, claim, legal action, proceeding or
investigation pending or threatened before any court, administrative agency or
arbitrator which seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken pursuant to or in connection with
this Agreement.
ARTICLE 8. CONSTRUCTION AND OPERATION OF THE STATION
Section 8.1 General. Following the date hereof and prior to the Second
Closing Date without Buyer's prior written consent: (i) neither the Company nor
Seller shall enter into any contracts or agreements creating any security
interests, mortgages, liens or encumbrances on the assets of the Company or the
Station; (ii) Seller shall not enter into any contract or agreement creating
any liens or security interests in any shares of capital stock of the Company;
(iii) the Company shall be operated in a prudent and businesslike manner and in
accordance with the other covenants in this Article 8; (iv) the Company shall
not amend its Certificate of Incorporation or By-Laws; and (v) neither Seller
nor the Company shall take or permit, or agree to take or permit, any action
within Seller's or the Company's control that is inconsistent with the proper
performance of their obligations under this Agreement, including but not
limited to, the issuance or sale of any capital stock of the Company or the
granting to any person or entity, other than Buyer, an option or similar right
to purchase any of the Company's capital stock.
Section 8.2 FCC Consent.
(a) The conveyance of the Option Shares by Seller to Buyer as
contemplated by this Agreement is subject to the prior consent and approval of
the FCC.
(b) Seller and Buyer shall prepare and, within five (5)
business days after the first to occur of Buyer's receipt of the Put Notice (as
defined below) or Seller's receipt of the Call Notice (as defined below), shall
file with the FCC an appropriate application for the FCC Consent. Seller and
Buyer shall thereafter prosecute the application for the FCC Consent with all
diligence and otherwise use their respective best efforts to obtain a grant of
the application for the FCC Consent as expeditiously as possible. Each party
agrees to comply with any condition imposed on it by the FCC Consent, except
that no party shall be required to comply with a condition if (i) the condition
was imposed on it as the result of a
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<PAGE> 21
circumstance the existence of which does not constitute a breach by that party
of any of its representations, warranties, or covenants hereunder, and (ii)
compliance with the condition would have a material adverse effect upon it.
Buyer and Seller shall oppose any petitions to deny or other objections filed
with respect to the application for the FCC Consent and any requests for
reconsideration or judicial review of the FCC Consent.
(c) If the Second Closing shall not have occurred for any
reason within the original effective period of the FCC Consent and neither
party shall have terminated this Agreement under Article 18, the parties shall
jointly request one or more extensions of the effective period of the FCC
Consent. No extension of the effective period of the FCC Consent shall limit
the exercise by either party of its right to terminate the Agreement under
Article 18.
Section 8.3 Employee Benefit Plans. Except as may be consented to in
writing by Buyer, the Company will not adopt any employee benefit plans or
arrangements applicable to the employees of the Company, including, without
limitation, pension or thrift plans, individual or supplemental pension or
accrued compensation arrangements, incentive plans, or bonus and termination
arrangements; provided, however, that nothing herein shall prevent the Company
from adopting reasonable policies on vacation and sick leave for its employees
or offering them participation in employer-paid group health plans or any other
benefits required by law.
Section 8.4 Labor Relations. Neither the Seller nor the Company (i)
will enter into any collective bargaining agreement with respect to the
Station; (ii) will enter into any written or oral contracts of employment;
(iii) will incur any fixed or contingent liabilities or obligations with
respect to any person employed at the Station; and (iv) will fail to comply in
all material respects with applicable laws, rules and regulations relating to
the employment of labor including, without limitation, those related to wages,
hours, collective bargaining, occupational safety, discrimination, and the
payment of social security and other payroll related taxes.
Section 8.5 Licenses. Neither the Seller nor the Company shall cause,
or fail to take any action necessary to prevent, (i) any License to expire, be
surrendered or modified; (ii) any governmental authority to institute
proceedings for the suspension, revocation, or adverse modification of any
License; and (iii) any governmental authority to dismiss or deny any pending
application concerning the construction or operation of the Station.
Section 8.6 Compliance with Laws. The Company shall construct and
operate the Station in all material respects in accordance with all applicable
laws, rules and regulations and the terms of all Licenses.
Section 8.7 Notification. Seller and the Company shall give Buyer
prompt written notice of any material change in any of the information
contained in the representations and warranties of Seller and the Company set
forth in this Agreement or in the Schedules hereto.
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<PAGE> 22
Section 8.8 Preservation of Business. Seller and the Company shall
preserve the business and organization of the Station intact and use their best
efforts to keep available to the Station its employees and to preserve the
Station's relationships with suppliers, advertisers and others having business
relations with it, to the end that the business, operations, and prospects of
the Station shall be unimpaired at the Second Closing.
Section 8.9 Performance of Agreements. The Company and Seller shall
perform their respective obligations under this Agreement, Shareholders
Agreement, Time Brokerage Agreement, Construction Agreement and Lease
Agreement, in each case in accordance with the terms thereof.
Section 8.10 Cable Carriage. Consistent with the rules and regulations
of the FCC, the Company shall notify the cable operators within the Tucson,
Arizona Designated Market Area of the Station's election to be carried on a
"must-carry" basis on such cable operators' cable television systems. The
Company shall use its best efforts to provide such notices on the date that is
sixty (60) days prior to commencing operations pursuant to program test
authority as defined by FCC rules and regulations, but in no event shall such
notices be provided later than thirty (30) days after the commencement of such
operations.
ARTICLE 9. THE OPTION AND THE SECOND CLOSING
Section 9.1 Call Option.
(a) In consideration of Buyer's undertakings herein and in
the Transaction Documents, the receipt and sufficiency of which are hereby
acknowledged by Seller, Seller hereby grants to Buyer, subject to the
provisions of Article 18 hereof, an exclusive and irrevocable option to
purchase from Seller the Option Shares (the "Call Option"), free and clear of
any claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges or encumbrances of any nature whatsoever; provided,
however, that the Call Option shall not be exercisable by Buyer in the event
that an amount that is fifty-one one-hundredths (51/100) of the Fair Market
Value of the Company, as determined by utilizing the procedures set forth in
Section 9.5(b), is less than the purchase price for the Option Interest set
forth in Section 9.5(a)(ii).
(b) Buyer may give written notice to Seller of Buyer's
intention to exercise the Call Option (the "Call Notice") at any time during
the six (6) month period beginning on the date the Station commences operations
pursuant to program test authority (the "Option Period") or if the FCC imposes
a holding period on the Seller then during the six (6) month period following
the first anniversary of the Station's commencement of broadcast operations. In
the event that Buyer fails to give Seller the Call Notice prior to the end of
the Option Period, the Call Option shall expire. If Buyer timely gives Seller
the Call Notice but the Call Option is not exercisable due to the limitation
set forth in the provision to Section
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<PAGE> 23
9.1(a) hereof, then Buyer's Call Option shall remain in full force and effect
for the remainder of the Option Period.
(c) Within five (5) business days of Seller's receipt of the
Call Notice, Seller and Buyer shall file with the FCC the application for the
FCC Consent and shall file such notices with, and obtain such approvals of, any
other governmental authorities that are required for the acquisition by Buyer
of the Option Shares and shall diligently and expeditiously prosecute such
filings.
Section 9.2 Put Option.
(a) In consideration of Sellers's and the Company's
undertakings herein and in the Transaction Documents, the receipt and
sufficiency of which are hereby acknowledged by Buyer, Buyer hereby grants to
Seller an exclusive and irrevocable option to require Buyer to purchase from
Seller the Option Shares (the "Put Option"), free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions, charges
or encumbrances of any nature whatsoever.
(b) Seller may give written notice to Buyer of Seller's
intention to exercise the Put Option (the "Put Notice") at any time during six
(6) month period beginning on the date the Station commences operation pursuant
to Program Test Authority (the "Option Period") or if the FCC imposes a holding
period on the Seller then during the six (6) month period following the first
anniversary of the Station's commencement of broadcast operations.
(c) Within five (5) business days of Seller's receipt of the
Call Notice, Seller and Buyer shall file with the FCC the application for the
FCC Consent and shall file such notices with, and obtain such approvals of, any
other governmental authorities that are required for the acquisition by Buyer
of the Option Shares and shall diligently and expeditiously prosecute such
filings.
Section 9.3 The Second Closing. The Second Closing shall take place at
10:00 a.m., Washington, D.C. time, on a date to be set by Buyer on no less than
five (5) days' written notice to Seller, which date shall not be sooner than
the first business day after the date on which the FCC Consent is granted and
shall not be later than the tenth business day after the date on which the FCC
Consent has become a Final Order, subject to the satisfaction of all other
conditions precedent to the holding of the Second Closing. The Second Closing
shall take place at the offices of Dow, Lohnes & Albertson, 1200 New Hampshire
Avenue, N.W., Suite 800, Washington, D.C. 20036, or such other place as the
parties shall mutually agree. If Buyer fails to specify the date for Second
Closing prior to the fifth business day after the date upon which the FCC
Consent has become a Final Order, the Second Closing shall take place on the
tenth business day after the date upon which the FCC Consent has become a Final
Order.
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Section 9.4 Sale of Option Shares. Subject to the terms and conditions
set forth in this Agreement, including exercise by Buyer of the Option, Seller
hereby agrees to sell, transfer and deliver to Buyer on the Second Closing
Date, and Buyer agrees to purchase, the Option Shares, free and clear of any
claims, liabilities, security interests, mortgages, liens, pledges, conditions,
charges or encumbrances of any nature whatsoever.
Section 9.5 Purchase Price for Option Shares.
(a) The purchase price for the Option Interest (the "Option
Price") shall be the lesser of (i) an amount equal to fifty-one one hundredths
(51/100) of the Fair Market Value of the Company, as determined utilizing the
procedures set forth in subsection (b) hereof and (ii) $3,735,000. The Option
Price shall be paid at the Second Closing by Buyer or Buyer's designee to
Seller by wire transfer of immediately available federal funds or other means
mutually satisfactory to Buyer and Seller in accordance with written
instructions provided by Seller to Buyer no less than two (2) business days
prior to the Second Closing Date.
(b) Fair Market Value of the Company shall be determined by
an appraisal, in accordance with the following provisions:
(1) The Fair Market Value of the Company shall be
equal to the appraised value of the assets of the Company as of the date of the
Option Notice exclusive of any broker's fee, less the amount of any outstanding
debt of the Company.
(2) The appraisal will be conducted in conformity
with standard appraisal techniques in use at the time of the appraisal,
applying the market and economic factors then relevant.
(3) The appraisal will be conducted by a qualified
appraiser with experience in the television broadcasting industry to be agreed
upon by Seller and Buyer; provided that, if the parties fail to agree on an
appraiser, any party may apply to the American Arbitration Association for the
appointment of an appraiser, who shall be a qualified appraiser with experience
in the television broadcasting industry.
(4) The value of the assets of the Company arrived at by
the appraiser shall, absent manifest error, be conclusive and binding on the
relevant parties.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES OF BUYER REGARDING
THE SECOND CLOSING
All of the representations and warranties of Buyer set forth in
Article 4 hereof shall be true and correct in all material respects as of the
Second Closing Date, with the same force and effect as though made on and as of
the Second Closing Date, except as otherwise contemplated by the express terms
of this Agreement. For the purpose of this Article 10,
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each reference in Article 4 hereof to the "Initial Closing," "Initial Shares"
and the "Initial Closing Date" shall be deemed to be a reference to the Second
Closing, Option Shares and the Second Closing Date, respectively.
ARTICLE 11. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY AND SELLER REGARDING THE SECOND CLOSING
All of the representations and warranties of the Company and Seller
set forth in Article 5 hereof shall be true and correct in all material
respects as of the Second Closing Date, with the same force and effect as
though made on and as of the Second Closing Date, except as otherwise
contemplated by the express terms of this Agreement. For the purpose of this
Article 11, each reference in Article 5 hereof to the "Initial Closing" and the
"Initial Closing Date" shall be deemed to be a reference to the Second Closing
and the Second Closing Date, respectively, and each reference to the "Initial
Shares" shall be deemed to be a reference to the Option Shares. Each of Seller
and the Company further jointly and severally represent, warrant and covenant
to Buyer as follows:
Section 11.1 Contracts. Within ten (10) days after Seller receives the
Call Notice or Buyer receives the Put Notice, Seller shall deliver to Buyer a
true and complete list and copies of the Contracts. The Contracts shall be
valid and binding agreements of the Company enforceable in accordance with
their terms. The Company shall have complied with the Contracts in all material
respects, and the Company shall not be in default under any of the Contracts.
Section 11.2 Copyrights, Trademarks and Similar Rights. Within ten
(10) days after Seller receives the Call Notice or Buyer receives the Put
Notice, Seller shall deliver to Buyer a true and complete list and copies of
all Intangibles.
Section 11.3 Governmental Authorizations. Within ten (10) days after
Seller receives the Call Notice or Buyer receives the Put Notice, Seller shall
deliver to Buyer a true and complete list and copies of the Licenses. The
Company shall be the authorized legal holder of the Licenses. The Licenses
shall comprise all of the licenses, permits and other authorizations required
from governmental and regulatory authorities for the lawful conduct of the
business and operations of the Station in the manner and to the full extent
they are conducted on the Second Closing Date and for the lawful broadcasting
by the Company from the Tower Site as contemplated by the Construction Permit,
as modified by the Modification Application, and none of the Licenses shall be
subject to any restriction or condition which would limit the full operation of
the Station. The Licenses shall be in full force and effect, and the operation
of the Station shall be in accordance therewith. Seller has no knowledge of any
events or conditions relating to Seller or Seller's ownership and control of
the Company that could prevent the FCC from approving the transfer of control
of the Company to Buyer.
Section 11.4 Title to and Condition of Real Property. Within ten (10)
days after Seller receives the Call Notice or Buyer receives the Put Notice,
Seller shall deliver to Buyer
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a true and complete description of all the Real Property and the Company's
interests therein. The Real Property shall comprise all real property interests
necessary to conduct the business and operations of the Station as then
conducted and for the lawful broadcasting by the Company from the Tower Site as
contemplated by the Construction Permit, as modified by the Modification
Application. The Company shall have good and marketable fee simple title,
insurable at standard rates, to all fee estates (including the improvements
thereon) included in the Real Property, free and clear of all liens, mortgages,
pledges, covenants, easements, restrictions, encroachments, leases, charges,
and other claims and encumbrances of any nature whatsoever, and without
reservation or exclusion of any mineral, timber, or other rights or interests,
except for liens for real estate taxes not yet due and payable. All Real
Property (including the improvements thereon) (i) shall be in good condition
and repair consistent with its present use, (ii) shall be available for
immediate use in the conduct of the business and operations of the Station, and
(iii) shall comply with all applicable building or zoning codes and the
regulations of any governmental authority having jurisdiction.
Section 11.5 Title to and Condition of Tangible Personal Property.
Within ten (10) days after Seller receives the Call Notice or Buyer receives
the Put Notice, Seller shall deliver to Buyer a true and complete list of all
material items of Tangible Personal Property. The Tangible Personal Property
shall comprise all material items of tangible personal property necessary to
conduct the business and operations of the Station as then conducted and for
the lawful broadcasting by the Company from the Tower Site as contemplated by
the Construction Permit. The Company shall own and have good title to each item
of Tangible Personal Property, and none of the Tangible Personal Property shall
be subject to any security interest, mortgage, pledge, conditional sales
agreement, or other lien or encumbrance, except for liens for current taxes not
yet due and payable. All items of transmitting and studio equipment included in
the Tangible Personal Property (i) shall have been maintained in a manner
consistent with generally accepted standards of good engineering practice, and
(ii) shall permit the Station to operate in accordance with the terms of the
FCC Licenses and the rules and regulations of the FCC, and with all other
applicable federal, state, and local statutes, ordinances, rules, and
regulations.
Section 11.6 Compliance With Laws. The Company shall be in compliance
in all material respects with all laws, regulations and governmental orders
applicable to the ownership or use of its assets and the conduct of the
business and operations of the Station.
Section 11.7 Reports. All returns, reports and statements which the
Station is required to file with the FCC or with any other governmental agency
shall have been filed and shall be complete and correct in all material
respects.
Section 11.8 Public Inspection File. The Station's public inspection
file shall be located at the Station's main studio and shall contain, in all
material respects, the original or copies of all applications, reports and
other documents and records relating to the operation of the Station that are
required to be in such file under the rules and regulations of the FCC.
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Section 11.9 Taxes.
(a) The Company shall have filed all Tax Returns and shall
have paid all Taxes shown on such Tax Returns on any assessment received by the
Company, provided that the Company shall not be required to pay any Tax the
validity of which is being contested by the Company in good faith and pursuant
to appropriate proceedings;
(b) such reports and Tax Returns shall have been prepared in
accordance with applicable provisions of the Internal Revenue Code of 1986, as
amended, and the rules and regulations thereunder and with applicable
provisions of state laws, rules and regulations concerning taxation; and
(c) the Company shall not have waived any statute of
limitations with respect to the payment of any taxes.
Section 11.10 Dividends and Redemptions. The Company shall not have
made at any time any declaration, set aside or payment of any dividend or other
distribution in respect of any shares of capital stock of the Company, or any
direct or indirect redemption, purchase or other acquisition of such stock.
Section 11.11 Notices; Condemnation.
(a) Neither the Company nor Seller shall have received any
written notice or order by any governmental or other public authority, any
insurance company that has issued a policy of insurance with respect to the
Station's assets or business, or any board of fire underwriters or other body
exercising similar functions that relates to material violations of building,
safety, fire or other ordinances or regulations by the Station or requests the
performance of any significant repairs, alterations or other work to the assets
of the Station; and
(b) there will not be any pending or threatened condemnation,
expropriation, eminent domain, zoning or similar proceeding materially
affecting all or any portion of the assets of the Station.
Section 11.12 Liabilities of the Company. The Company shall have no
liabilities or obligations of any sort whatsoever, except those arising under
the Licenses, those arising under this Agreement, the Tower Lease, the
Transaction Documents and those consented to in writing by Buyer.
Section 11.13 Disclosure. No representation or warranty by Seller or
the Company in this Agreement, and no schedule, document, statement,
certificate furnished or to be furnished to Buyer pursuant hereto, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements or facts contained
herein or therein not misleading.
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ARTICLE 12. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AT
THE SECOND CLOSING
The obligations of Buyer under this Agreement at the Second Closing
are subject to the fulfillment prior to or at the Second Closing of the
following conditions (any one or more of which may be waived in whole or in
part by Buyer at Buyer's option):
Section 12.1 Representations and Warranties. The representations and
warranties of Seller and the Company contained in this Agreement relating to
the Second Closing shall be true and correct in all material respects on and as
of the Second Closing Date, with the same force and effect as though such
representations and warranties had been made on as of such date.
Section 12.2 Covenants and Conditions. Seller and the Company shall
have performed in all material respects all of their respective obligations and
agreements and complied with all of their respective covenants and conditions
contained in this Agreement to be performed or complied with by Seller and the
Company on or before the Second Closing Date.
Section 12.3 FCC Consent. The FCC Consent shall have been granted and
shall have become a Final Order.
Section 12.4 Consents. All material consents and approvals of all
other governmental authorities, bodies or agencies necessary for the
consummation of the transactions contemplated by this Agreement to occur at the
Second Closing, shall have been obtained, all without any conditions which
would be unduly burdensome on, or have a material adverse effect upon Buyer or
the Company.
Section 12.5 Deliveries. Seller and the Company shall have delivered
to Buyer the following, in form and substance reasonably satisfactory to Buyer
and Buyer's Counsel:
(a) Option Shares. Certificates representing the Option
Shares, which shall be either duly endorsed or accompanied by stock powers duly
executed in favor of Buyer.
(b) Certificate of Incorporation. A copy of the Certificate
of Incorporation of the Company, certified as of a date not earlier than ten
(10) days prior to the Second Closing Date by the Secretary of State of
Delaware.
(c) Bylaws. A copy of the Bylaws of the Company, certified as
of the Second Closing Date, by the Secretary or Assistant Secretary of the
Company.
(d) Resolutions. Copies of resolutions adopted by the Board
of Directors of both Seller and the Company, authorizing and approving the
execution and delivery of this Agreement and the Transaction Documents and the
consummation of the transactions
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contemplated hereby and thereby, certified by the Secretary or Assistant
Secretary of Seller and the Company, respectively, as being true and complete
on the Second Closing Date.
(e) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent.
(f) Estoppel Certificates. Estoppel Certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property Interests.
(g) Certificates. Certificates, dated as of the Second
Closing Date, executed on behalf of Seller and the Company by Seller and an
officer of the Company, respectively, each certifying: (1) that the
representations and warranties of Seller and the Company contained in this
Agreement are true and complete in all material respects as of the Second
Closing Date as though made on and as of that date; and (2) that Seller and the
Company have performed in all material respects all of their respective
obligations and agreements in this Agreement to be performed and complied with
by Seller and the Company on or before the Second Closing Date.
(h) Opinions of Counsel. Opinions of Seller's and the
Company's counsel and communications counsel dated as of the Second Closing
Date, substantially in the form of Schedule 12.5(h) hereto.
(i) Additional Instruments. Such additional instruments and
documents as may be required to consummate the transactions contemplated
hereby.
Section 12.6 Adverse Proceedings. Except for proceedings relating to
the television broadcast industry generally, there shall not be any order,
decree or judgment in effect or any lawsuit, claim, legal action, proceeding or
investigation pending or threatened before any court, administrative agency or
arbitrator which is reasonably likely to adversely affect the construction,
business, property, assets or condition (financial or otherwise) of the Station
or which seeks to enjoin or prohibit, or otherwise questions the validity of,
any action taken or to be taken pursuant to or in connection with this
Agreement.
Section 12.7 Time Brokerage Agreement. The Time Brokerage Agreement
shall be in full force and effect, and the Company shall have complied in all
material respects with its obligations thereunder.
Section 12.8 Adverse Change. Between the date of this Agreement and
the Second Closing Date, there shall have been no material adverse change in
the business, assets, properties, financial condition, or business prospects of
the Station, including any unrestored damage, destruction, or loss affecting
any assets that are material to the conduct of the business of the Station.
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ARTICLE 13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
AND THE COMPANY AT THE SECOND CLOSING
The obligations of Seller and the Company at the Second Closing under
this Agreement are subject to the fulfillment prior to or at the Second Closing
of the following conditions (any one or more of which may be waived in whole or
in part by Seller or the Company at their option):
Section 13.1 Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement relating to the Second Closing
shall be true and correct in all material respects on and as of the Second
Closing Date, with the same force and effect as though such representations and
warranties had been made on and as of such date.
Section 13.2 Covenants and Conditions. Buyer shall have performed in
all material respects all of its obligations and agreements and complied with
all of its covenants and conditions contained in the Agreement to be performed
or completed with or before the Second Closing Date.
Section 13.3 FCC Consent. The FCC shall have granted the FCC Consent.
Section 13.4 Consents. All material consents and approvals of all
other governmental authorities, bodies or agencies necessary for the
consummation of the transactions contemplated by this Agreement to occur at the
Second Closing, shall have been obtained, all without any conditions which
would be unduly burdensome on, or have a material adverse effect upon Seller.
Section 13.5 Deliveries. Buyer shall have delivered the following, in
form and substance reasonably satisfactory to Seller, the Company and their
Counsel:
(a) Option Price. The Option Price described in Section 9.5;
and
(b) Resolutions. Copies of resolutions adopted by the Board
of Directors of Buyer, authorizing and approving the execution of this
Agreement and the consummation of the transactions contemplated hereby,
certified by its Secretary as being true and correct on the Second Closing
Date.
(c) Officer's Certificate. A certificate, dated as of the
Second Closing Date, executed on behalf of Buyer by an officer of Buyer,
certifying (1) that the representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects as of the Second
Closing Date as though made on and as of that date, and (2) that Buyer has
performed in all material respects all of its obligations and agreements in
this Agreement to be performed and complied with by Buyer on or prior to the
Second Closing Date.
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(d) Opinion of Counsel. An opinion of Buyer's counsel dated
as of the Second Closing Date, substantially in the form of Schedule 13.5(d)
hereto.
Section 13.6 Time Brokerage Agreement. The Time Brokerage Agreement
shall be in full force and effect, and Buyer shall have complied in all
material respects with its obligations thereunder.
Section 13.7 Adverse Proceedings. There shall not be any order, decree
or judgment in effect or any lawsuit, claim, legal action, proceeding or
investigation pending or threatened before any court, administrative agency or
arbitrator which seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken pursuant to or in connection with
this Agreement.
ARTICLE 14. JOINT COVENANTS
Section 14.1 Confidentiality. Buyer, on the one hand, and Seller and
the Company, on the other hand, shall each keep confidential all confidential
information obtained by it with respect to the other in connection with this
Agreement (except for such disclosure to attorneys, bankers, underwriters, and
investors, as may be appropriate in the furtherance of the transactions
contemplated by this Agreement or as may be required by law, including by the
securities laws or the rules and regulations of any security exchange), and if
the transactions contemplated hereby are not consummated for any reason, each
shall, to the extent reasonably possible, return to the other, without
retaining a copy thereof, any confidential schedules, documents or other
written information obtained from the other in connection with this Agreement
and the transactions contemplated hereby.
Section 14.2 Cooperation. Buyer, Seller and the Company shall
cooperate fully with each other and their respective counsels and accountants
in connection with any actions required to be taken as part of their
obligations under this Agreement, and the parties will use their commercially
reasonable efforts to consummate the transactions contemplated hereby and to
fulfill their obligations hereunder. No party shall take any action that is
inconsistent with its obligations under this Agreement, that would render any
of its representations or warranties herein untrue or incomplete or that could
hinder or delay the consummation of the transactions contemplated by this
Agreement. Notwithstanding the foregoing, and except as otherwise expressed in
this Agreement, Buyer shall have no obligation (a) to expend funds to obtain
any of the Consents or (b) to agree to any adverse change in any License or
Contract in order to obtain a Consent required with respect thereto.
Section 14.3 Governmental Consents. If any governmental consent
required for the consummation of the transactions contemplated hereby or the
satisfaction of any condition contained herein includes any condition, the
party upon which such condition is imposed shall use its best efforts to comply
therewith before the respective Closing to which such consent relates;
provided, however, that no party hereto shall be required to comply with any
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condition that would be unduly burdensome or would have a material adverse
effect upon such party.
Section 14.4 Station Operation and Contracts. Buyer and Seller
specifically acknowledge that, as of the Initial Closing Date, the Station will
not have commenced broadcast operations. Buyer, Seller and the Company shall
cooperate and use their respective best efforts to complete construction of the
Station and commence broadcast operations at the Station as expeditiously as
possible. Seller and the Company shall file such applications with the FCC and
other governmental authorities as are necessary to enable the Station to
operate in compliance with FCC and other applicable rules and regulations.
ARTICLE 15. TRANSFER TAXES; FEES AND EXPENSES
Section 15.1 Transfer Taxes. Buyer and Seller shall each pay one-half
of all transfer and documentary taxes or fees incurred in connection with the
transfer of the Initial Shares and Option Shares; provided, however, that
Seller shall be responsible for the payment of any federal, state or local
income tax applicable to Seller or the Company in connection with the
transaction contemplated by this Agreement.
Section 15.2 Filing Fees. Buyer and Seller shall each pay one-half of
all FCC filing fees and any other filing fee imposed by any other governmental
authority in connection with the transactions contemplated hereby.
Section 15.3 Expenses. The Company shall be solely responsible for all
costs and expenses incurred in connection with the negotiation, preparation and
performance of and compliance with this Agreement. In connection with the FCC
application for the transfer of the Option Shares to Buyer at the Second
Closing, Seller shall be responsible for the payment of any costs or expenses
that are incurred as a result of the filing of an objection to such FCC
application based upon the qualifications of Seller or the Company, or the acts
or omissions of Seller or the Company with respect to the acquisition or
construction of the Station, and Buyer shall be responsible for the payment of
any costs or expenses that are incurred as a result of the filing of an
objection to such FCC application based upon the qualifications of Buyer or the
acts or omissions of Buyer with respect to the acquisition or construction of
the Station. Buyer and Seller shall have each paid Patrick Communications
Corporation on or before the Second Closing Date one-half of the broker's fees
and commissions due in connection with the transactions contemplated by this
Agreement.
ARTICLE 16. ESCROW DEPOSIT
Section 16.1 Escrow Deposit. Simultaneously with the execution and
delivery of this Agreement, Buyer has deposited the Escrow Deposit with the
Escrow Agent in accordance with an Escrow Agreement. All funds and documents
deposited with or otherwise held by the Escrow Agent shall be held and
disbursed in accordance with the terms of the Escrow Agreement and the
following provisions:
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(a) At the Second Closing, Buyer, Seller and the Company
shall jointly instruct the Escrow Agent to disburse all funds held by the
Escrow Agent pursuant to the Escrow Agreement, including any interest or other
proceeds from the investment of funds held by the Escrow Agent, to or at the
direction of Buyer.
(b) If this Agreement is terminated pursuant to Article 18
and Buyer is not in material breach of this Agreement, Buyer, Seller and the
Company shall jointly instruct the Escrow Agent to disburse all funds held by
the Escrow Agent pursuant to the Escrow Agreement, including any interest or
other proceeds from the investment of funds held by the Escrow Agent, to or at
the direction of Buyer.
(c) If this Agreement is terminated by Buyer due to Seller's
material breach of this Agreement, then Buyer, Seller and the Company shall
jointly instruct the Escrow Agent to disburse the Escrow Deposit to or at the
direction of Buyer, and to disburse all other funds held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, to or at the direction of
Buyer.
(d) If this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement, then the payment to Seller of the Escrow
Deposit pursuant to this Section shall be liquidated damages and shall
constitute full payment and the exclusive remedy for any damages suffered by
Seller by reason of Buyer's material breach of this Agreement. Seller and Buyer
agree in advance that actual damages would be difficult to ascertain and that
the amount of the Escrow Deposit is a fair and equitable amount to compensate
Seller for Buyer's material breach of this Agreement.
ARTICLE 17. RISK OF LOSS
Section 17.1 Risk of Loss. The risk of any loss, damage or impairment,
confiscation or condemnation of any of the assets of Seller or the Company from
any cause whatsoever shall be borne by Seller. In the event of any such loss,
damage or impairment, confiscation or condemnation, the proceeds of, or any
claim for any loss payable under, any insurance policy, judgment or award with
respect thereto shall be applied to repair, replace or restore such assets to
their prior condition as soon as possible after such loss, impairment,
condemnation or confiscation.
Section 17.2 Postponement of the Second Closing Date. If any damage or
destruction of the Company's assets occurs and such assets cannot be restored
or replaced on or before the Second Closing Date, the Second Closing Date shall
be postponed, the exact date and time of such postponed closing date to be such
date and time within the effective period of the FCC Consent as shall be as
agreed to by Seller, Buyer and the Company. If such assets cannot be restored
or replaced within the effective period of the FCC Consent, the parties shall
join in requesting an extension of the effective period of such consent for a
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period not to exceed an additional one hundred eighty (180) days from the date
of FCC Consent.
Section 17.3 Option to Terminate. In the event of any damage or
destruction of the assets, if such assets have not been restored or replaced
within the effective period of the FCC Consent as extended, Buyer may, at its
option, proceed to close this Agreement and complete the restoration and
replacement of such damaged assets after the Second Closing Date, in which
event Seller shall deliver to Buyer all insurance proceeds payable to it or the
Company and received in connection with such damage or destruction of the
assets without limitation as to the costs and expenses arising in connection
with such restoration and replacement.
ARTICLE 18. TERMINATION RIGHTS
Section 18.1 Termination by the Parties. This Agreement may be
terminated by either Buyer, on the one hand, or Seller and the Company, on the
other hand, if not then in material default, upon written notice to the other
upon the occurrence of any of the following:
(a) If the purchase of the Initial Shares and Option Shares
by Buyer pursuant to this Agreement shall not have occurred on or prior to
December 31, 1998;
(b) If the other party defaults in the observance or in the
due and timely performance of any of its material covenants or agreements
contained herein and such default has not been cured within fifteen (15) days
after notice by that party not in default;
(c) If on the date of either of the Closings, any of the
conditions precedent to the obligations of a party set forth in this Agreement
as to that Closing have not been satisfied or waived by the other party and
such condition shall remain unsatisfied ten (10) days after notice thereof by
the other party;
(d) If there shall be in effect on the date of either of the
Closings any final judgment, decree or order that would prevent or make
unlawful the actions to be taken at such Closing; or
(e) Following the expiration of the Option Period, if Buyer
has not delivered to Seller an Option Notice indicating its intention to
exercise the Option.
(f) If the Agreement is terminated pursuant to Subsection (e)
hereof, Buyer agrees to sell, transfer and deliver to Seller without any
payment by Seller the Initial Shares, free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions, charges
or encumbrances of any nature whatsoever, on the tenth (10th) business day
following such termination (the "Repurchase Closing Date").
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Section 18.2 Termination by Buyer. This Agreement may be terminated by
Buyer, if not then in material default, upon written notice to Seller and the
Company, if the FCC denies the Extension Application or the application for the
Pro Forma FCC Consent.
ARTICLE 19. REMEDIES
Section 19.1 Specific Performance. Seller and the Company agree that
the Initial Shares and the Option Shares are unique and valuable properties
such that Buyer shall be entitled to sue for specific performance of the terms
of this Agreement in the event of a breach by Seller or the Company with
respect to either the Initial Closing or the Second Closing, in which case
Seller and the Company shall waive the defense that there is an adequate remedy
at law.
Section 19.2 Arbitration. Except as set forth in Section 19.1, any
dispute arising out of or related to this Agreement that the parties hereto are
unable to resolve by themselves shall be settled by arbitration in Washington,
D.C. by a panel of three arbitrators. Buyer, on the one hand, and Seller and
Company, on the other hand, shall each designate one disinterested arbitrator
and the two arbitrators designed shall select the third arbitrator. The persons
selected as arbitrators need not be professional arbitrators, and persons such
as lawyers, accountants and bankers shall be acceptable. Before undertaking to
resolve a dispute, each arbitrator shall be duly sworn faithfully and fairly to
hear and examine the matters in controversy and to make a just award according
to the best of his or her understanding. The arbitration hearing shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association. The written decision of a majority of the arbitrators
shall be final and binding on the parties hereto. The party substantially
prevailing in such arbitration shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses in an amount not to
exceed in the aggregate under all agreements between the parties relating to
the Station in excess of the amount set forth in Section 21.7 of this
Agreement. Judgment on the award, if it is not paid within thirty days, may be
entered in any court having jurisdiction over the matter. No action at law or
in equity based upon any claim arising out of or related to this Agreement
shall be instituted in any court by any party hereto against any other party
except: (i) an action to compel arbitration pursuant to this Section; (ii) an
action to enforce the award of the arbitration panel rendered in accordance
with this Section; or (iii) as provided in Section 19.1.
ARTICLE 20. INDEMNIFICATION
Section 20.1 Seller's and the Company's Indemnification. Seller and
the Company shall jointly and severally indemnify, defend and hold Buyer
harmless from and against any and all loss, cost, liability, damage and expense
(including legal and other expenses incident thereto) of every kind, nature or
description, arising out of: (a) the breach of any representation or warranty
of Seller or the Company set forth in this Agreement or in any schedule or
certificate delivered to Buyer pursuant hereto; (b) the breach of any of their
covenants or other agreements contained in or arising out of this Agreement or
the
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transactions contemplated hereby; or (c) the ownership of the Initial Shares
prior to the Initial Closing, and the conduct of the business and operations of
the Station and the ownership of the Option Shares prior to the Second Closing,
including, but not limited to, any liability, judgment or damages against the
Company or Seller, their officers, directors, employees or agents, as a result
of litigation involving the Company, Seller or the operation of the Station
prior to each of the Closings. Buyer shall have the right to enforce its
indemnification rights hereunder against either Seller or the Company at its
option. Following the Initial Closing, Seller shall not have any right of
contribution against the Company for any indemnification payment made by Seller
hereunder and Seller hereby waives any such right that it may have.
Section 20.2 Buyer's Indemnification. Buyer shall indemnify, defend
and hold Seller and the Company and their respective officers, directors,
employees, or agents, harmless from and against any and all loss, cost,
liability, damage and expense (including legal and other expenses incident
thereto) of every kind, nature or description, arising out of: (i) the breach
of any representation or warranty of Buyer set forth in this Agreement
(including the Schedules hereto); (ii) the ownership or operation of the
Station after the Second Closing, or (iii) the breach of any of its other
agreements contained in or arising out of this Agreement or the transactions
contemplated hereby.
Section 20.3 Notice of Claim. Buyer, on the one hand, and Seller and
the Company, on the other hand, upon discovery of the breach of any of the
representations, warranties and covenants of the other under this Agreement,
shall give to the other prompt written notice of the discovery of such breach.
If any action, suit or proceeding shall be commenced against, or any claim or
demand be asserted against Buyer, Seller or the Company, as the case may be, in
respect of which such party proposes to seek indemnification from the other
under this Article 20, then such party (hereinafter the "Claimant") shall
notify the party from whom indemnification is sought (hereinafter the
"Indemnifying Party") to that effect in writing with reasonable promptness and
in any event, if such claim arises out of a claim by a person or entity other
than the Claimant, then within fifteen (15) days after written notice of such
claim was given to the Claimant.
Section 20.4 Assumption and Defense of Third-Party Action. If any
claim hereunder arises of out a claim against the Claimant by a third party,
the Indemnifying Party shall have the right, at its own expense, to participate
in or assume control of the defense of such claim, and the Claimant shall fully
cooperate with the Indemnifying Party subject to reimbursement for actual
out-of-pocket expenses incurred as the result of a request by the Indemnifying
Party. If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense. If a claim requires immediate action,
the parties will make every effort to reach a decision with respect thereto as
expeditiously as possible. If the Indemnifying Party does not elect to assume
control or otherwise participate in the defense of any third-party claim, it
shall be bound by the results obtained by the Claimant with respect to such
claim. In no event shall the Indemnifying Party have the right to agree to a
settlement which
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<PAGE> 37
is binding upon Claimant without Claimant's prior consent which shall not be
unreasonably withheld.
Section 20.5 Limitation Period. No party shall be entitled to
indemnification hereunder with respect to the breach of any representation,
warranty or covenant contained herein unless such claim for indemnification is
asserted in writing to the party from whom indemnification is sought within six
(6) months after the Second Closing, except that any claim for indemnification
related to a claim by a third party, including claims by the Internal Revenue
Service against the Company or Seller, shall be made within the statute of
limitations period applicable to such third-party claim.
ARTICLE 21. OTHER PROVISIONS
Section 21.1 Survival of Representations, Warranties and Covenants.
The representations, warranties, covenants, indemnities and agreements
contained herein are and will be deemed and construed to be continuing
representations, warranties, covenants, indemnities and agreements and will
survive the respective Closings as to which breach or claim is asserted until
the termination of the limitation period set forth in Section 20.5 hereof. Any
investigations by or on behalf of any party hereto prior to or after the
Closings shall not constitute a waiver as to enforcement of any representation,
warranty, covenant or agreement contained herein.
Section 21.2 Press Releases. Buyer, Seller and the Company shall
jointly prepare, and determine the timing of, any press release or other
announcement relating to the transactions contemplated by the Agreement. No
party will issue any press release or make any other public announcement
relating to the transactions contemplated by the Agreement without the prior
consent of the other parties, except that any party may make any disclosure
required to be made by it under applicable law (including the federal
securities laws) or by this Agreement if it determines in good faith that it is
appropriate to do so and provided further that it gives prior notice of any
such disclosure to the other party hereto.
Section 21.3 Further Assurances. At and after each of the Closings,
Buyer, Seller and the Company will, without further consideration, execute and
deliver such further instruments and documents and do such other acts and
things as the other parties may reasonably request in order to effect or
confirm the transactions contemplated by this Agreement.
Section 21.4 Benefit and Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. No party hereto may assign, transfer, encumber or
otherwise convey its interest under this Agreement without the prior written
consent of the other parties hereto; provided, however, that Buyer may assign
its rights and interests under this Agreement to its lenders as collateral
security for Buyer's obligations to such lenders.
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<PAGE> 38
Section 21.5 Entire Agreement. This Agreement and the schedules
attached hereto embody the entire agreement and understanding of the parties
and supersedes any and all prior agreements, arrangements and understandings
relating to matters provided for herein. No amendment, waiver of compliance
with any provision or condition hereof, or consent pursuant to this Agreement
will be effective unless evidenced by an instrument in writing signed by the
party against whom enforcement of any waiver, amendment, extension or discharge
is sought.
Section 21.6 Headings. The headings are for convenience only and will
not control or affect the meaning or construction of the provisions of this
Agreement.
Section 21.7 Governing Law. The construction and performance of this
Agreement will be governed by the laws of the State of Delaware (except for the
choice of law provisions thereof). All proceedings brought against any party
hereto arising out of or relating to this Agreement or the transactions
contemplated hereby shall be brought in a forum located in the District of
Columbia. The party substantially prevailing in any proceeding shall be
entitled to reimbursement from the other party of its reasonable legal fees and
expenses in an amount not to exceed $50,000 in the aggregate under all
agreements among the parties relating to the Station.
Section 21.8 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
To Buyer: Paxson Communications of Tucson-46, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attention: Lowell W. Paxson
With a copy (which shall John R. Feore, Jr., Esq.
not constitute notice) to: Dow, Lohnes & Albertson, PLLC
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
To Company and Seller: Sungilt Corporation, Inc.
2309 N. Hampton Street
Tucson, Arizona 85719
Attention: Arlene Stevens
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<PAGE> 39
With a copy (which shall Booker Wade, Esquire
not constitute notice) to: One Market Plaza
Stewart Street Tower, 9th Floor
San Francisco, California 94107
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
21.8.
Section 21.9 Counterparts. This Agreement may be signed in
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.
Section 21.10 PCC Guaranty. In consideration of the execution and
delivery of this Agreement by Seller and the Company and their agreement to
perform the transactions contemplated hereby, Paxson Communications
Corporation, a Florida corporation ("PCC"), hereby guarantees Buyer's full,
complete and timely performance of and compliance with all of its covenants,
agreements and obligations set forth herein and in the Construction and Lease
Agreement and Time Brokerage Agreement. PCC agrees that no formal change,
amendment, modification or waiver of any term or condition hereof or thereof,
no extension in whole or in part of the time for the performance by Buyer of
any of its obligations hereunder or thereunder, and no settlement, compromise,
release, surrender, modification or impairment of, or exercise or failure to
exercise any claim, right or remedy of any kind or nature in connection
herewith or therewith, shall affect, impair or discharge, in whole or in part,
the liability of PCC for the full and prompt and unconditional performance of
the obligations of Buyer under this Agreement or the Construction and Lease
Agreement or Time Brokerage Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Purchase Agreement as of the date first above written.
CHANNEL 46 OF TUCSON, INC.
By: /s/ Arlene D. Stevens
------------------------------
Name: Arlene D. Stevens
Title: President
SUNGILT CORPORATION, INC.
By: /s/ Arlene D. Stevens
------------------------------
Name: Arlene D. Stevens
Title: President
PAXSON COMMUNICATIONS OF
TUCSON-46, INC.
By:/s/ Lowell W. Paxson
------------------------------
Name:
Title:
FOR PURPOSES OF SECTION 21.10 ONLY:
PAXSON COMMUNICATIONS
CORPORATION
By:/s/ Lowell W. Paxson
------------------------------
Name:
Title:
<PAGE> 41
EXHIBIT A
<PAGE> 42
EXHIBIT A
================================================================================
TIME BROKERAGE AGREEMENT
BY AND BETWEEN
CHANNEL 46 OF TUCSON, INC.
AND
PAXSON COMMUNICATIONS OF TUCSON-46, INC.
FOR
TELEVISION STATION KXGR
GREEN VALLEY, ARIZONA
* * *
_______, 1997
================================================================================
<PAGE> 43
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
SECTION 1. LEASE OF STATION AIR TIME.............................................................................1
1.1 Representations.................................................................................1
1.2 Effective Date; Term............................................................................1
1.3 Scope...........................................................................................2
1.4 Option to Renew.................................................................................2
1.5 Consideration...................................................................................2
1.6 Licensee Operation of Station...................................................................2
1.7 Licensee Representations and Warranties.........................................................3
1.8 Programmer Responsibility.......................................................................4
1.9 Contracts.......................................................................................4
SECTION 2. STATION OBLIGATIONS TO ITS COMMUNITY OF LICENSE.......................................................4
2.1 Licensee Authority..............................................................................4
2.2 Additional Licensee Obligations.................................................................4
2.3 Responsibility for Employees and Expenses.......................................................5
SECTION 3. STATION PROGRAMMING POLICIES..........................................................................5
3.1 Broadcast Station Programming Policy Statement..................................................5
3.2 Licensee Control of Programming.................................................................5
3.3 Programmer Compliance with Copyright Act........................................................6
3.4 Sales...........................................................................................6
3.5 Children's Television Advertising...............................................................6
3.6 Payola..........................................................................................6
3.7 Cooperation on Programming......................................................................6
3.8 Staffing Requirements...........................................................................7
SECTION 4. INDEMNIFICATION.......................................................................................7
4.1 Programmer's Indemnification....................................................................7
4.2 Licensee's Indemnification......................................................................7
4.3 Limitation......................................................................................8
4.4 Time Brokerage Challenge........................................................................8
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE
..................................................................................................................8
5.1 Confidential Review.............................................................................8
5.2 Political Advertising...........................................................................8
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT.................................................................9
6.1 Termination.....................................................................................9
6.2 Termination Procedures..........................................................................9
</TABLE>
<PAGE> 44
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<TABLE>
<S> <C> <C>
6.3 Force Majeure..................................................................................10
6.4 Other Agreements...............................................................................10
SECTION 7. MISCELLANEOUS........................................................................................10
7.1 Assignment.....................................................................................10
7.2 Call Letters...................................................................................10
7.3 Counterparts...................................................................................10
7.4 Entire Agreement...............................................................................10
7.5 Taxes..........................................................................................11
7.6 Headings.......................................................................................11
7.7 Governing Law..................................................................................11
7.8 Notices........................................................................................11
7.9 Severability...................................................................................12
7.10 Arbitration....................................................................................12
7.11 No Joint Venture...............................................................................12
</TABLE>
<PAGE> 45
EXHIBIT A
TIME BROKERAGE AGREEMENT
TIME BROKERAGE AGREEMENT, made this _____ day of _____, 1997, by and
between Channel 46 of Tucson, Inc., a Delaware corporation (the "Licensee"), and
Paxson Communications of Tucson-46, Inc., a Florida corporation (the
"Programmer").
WHEREAS, Licensee, Programmer and Sungilt Corporation, Inc. have
entered into a Stock Purchase Agreement dated as of September __, 1997 (the
"Purchase Agreement");
WHEREAS, the Purchase Agreement provides that Licensee and Programmer
shall enter into this Time Brokerage Agreement, pursuant to which the Programmer
shall provide programming for television station KXGR, Channel 46, Green Valley,
Arizona (the "Station"), that is in conformity with Station policies and
procedures, Federal Communications Commission ("FCC") policies for time
brokerage arrangements, and the provisions hereof, upon completion of
construction of the Station and commencement of broadcast operations pursuant to
program test authority ("PTA");
WHEREAS, Programmer agrees to use the Station to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Licensee's full authority to manage and
control the operation of the Station; and
WHEREAS, Programmer and Licensee agree to cooperate to make this Time
Brokerage Agreement work to the benefit of the public and both parties and as
contemplated in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and mutual
promises and covenants contained herein, the parties, intending to be legally
bound, agree as follows:
SECTION 1. LEASE OF STATION AIR TIME
1.1 Representations. Both Licensee and Programmer represent that they
are legally qualified, empowered and able to enter into this Agreement and that
the execution, delivery, and performance hereof shall not constitute a breach or
violation of any material agreement, contract or other obligation to which
either party is subject or by which it is bound.
1.2 Effective Date; Term. This Agreement shall become immediately and
automatically effective upon completion of construction of the Station and
commencement of
<PAGE> 46
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broadcast operations pursuant to PTA, and this Agreement shall continue in force
for an initial term of five (5) years (the "Initial Term") from that date unless
otherwise extended or terminated as set forth below; provided, however, that
this Agreement shall terminate automatically upon the closing of the
transactions contemplated by the Second Closing (as defined in the Purchase
Agreement) under the Purchase Agreement.
1.3 Scope. During the term of this Agreement and any renewal thereof,
Licensee shall make available to Programmer broadcast time upon the Station as
set forth in this Agreement. Programmer shall deliver such programming, at its
expense, to the Station's transmitter facilities or other authorized remote
control points as reasonably designated by Licensee. Subject to Licensee's
reasonable approval, as set forth in this Agreement, Programmer shall provide
programming of Programmer's selection complete with commercial matter, news,
public service announcements and other suitable programming to the Licensee up
to one hundred sixty-two hours per week. Notwithstanding the foregoing, the
Licensee may designate such additional time as it may require without any
adjustment of the monthly consideration to be paid to Licensee under Section 1.5
for the broadcast of programming necessary for the Station to broadcast news,
public affairs, children's, religious and non-entertainment programming as
required by the FCC. All program time not reserved by or designated for Licensee
shall be available for use by Programmer and no other party. Programmer may, at
its option, produce the programming (including commercial announcements and
related production activities) to be provided pursuant to this Agreement from
Programmer's existing studio and production facilities.
1.4 Option to Renew. Subject to the termination provisions of Section 6
hereof, and if the transactions contemplated by the Purchase Agreement have not
been consummated prior to the expiration of the Initial Term, this Agreement may
be renewed for an additional term as mutually agreed upon by the Licensee and
the Programmer.
1.5 Consideration. As consideration for the air time made available
hereunder, Programmer shall make payments to Licensee as set forth in Attachment
I.
1.6 Licensee Operation of Station. Licensee will have full authority,
power and control over the management and operations of the Station during the
term of this Agreement and during any renewal of such term. Licensee will bear
all responsibility for Station's compliance with all applicable provisions of
the Communications Act of 1934, as amended (the "Act"), the rules, regulations
and policies of the FCC and all other applicable laws. Licensee shall be solely
responsible for and pay in a timely manner all operating costs of the Station,
including but not limited to maintenance of the studio and transmitting facility
and costs of electricity, except that Programmer shall be responsible for the
costs of its programming as provided in Sections 1.8 and 2.3 hereof. Licensee
shall employ at its
<PAGE> 47
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expense management level and other employees consisting of a General Manager and
such operational and other personnel as outlined in the budget previously
provided to Programmer, who will direct the day-to-day operations of the
Station, and who will report to and be accountable to the Licensee. Licensee
shall be responsible for the salaries, taxes, insurance and related costs for
all personnel employed by the Station and shall maintain insurance satisfactory
to Programmer covering the Station's transmission facilities. During the term of
the Agreement and any renewal hereof, Programmer agrees to perform, without
charge, routine monitoring of the Station's transmitter performance and tower
lighting by remote control, if and when requested by Licensee.
1.7 Licensee Representations and Warranties. Licensee represents and
warrants as follows:
(a) Licensee owns and holds or will hold all permits and other
authorizations necessary for the construction or operation of the Station, and
such permits and other authorizations are and will be in full force and effect
throughout the term of this Agreement. There is not now pending, or to
Licensee's best knowledge, threatened, any action by the FCC or by any other
party to revoke, cancel, suspend, refuse to renew or modify adversely any of
such licenses, permits or authorizations. Licensee is not in material violation
of any statute, ordinance, rule, regulation, policy, order or decree of any
federal, state or local entity, court or authority having jurisdiction over it
or the Station, which would have an adverse effect upon the Licensee, the
Station or upon Licensee's ability to perform this Agreement. Licensee shall not
take any action or omit to take any action which would have an adverse impact
upon the Licensee, the Station or upon Licensee's ability to perform this
Agreement. All reports and applications required to be filed with the FCC or any
other governmental body have been, and during the course of the term of this
Agreement or any renewal thereof, will be filed in a timely and complete manner.
During the term of this Agreement and any renewal thereof, Licensee shall not
dispose of, transfer, assign or pledge any of Licensee's assets and properties
except with the prior written consent of the Programmer, if such action would
adversely affect Licensee's performance hereunder or the business and operations
of Licensee or the Station permitted hereby.
(b) Licensee shall pay, in a timely fashion, all of the
expenses incurred in operating the Station including salaries and benefits of
its employees, lease payments, utilities, taxes, programming expenses, etc., as
set forth in Attachment II (except those for which a good faith dispute has been
raised with the vendor or taxing authority), and shall provide Programmer with a
certificate of such timely payment within thirty (30) days of the end of each
month.
<PAGE> 48
- 4 -
1.8 Programmer Responsibility. Programmer shall be solely responsible
for any expenses incurred in the origination and/or delivery of programming from
any remote location and for any publicity or promotional expenses incurred by
Programmer, including, without limitation, ASCAP and BMI music license fees for
all programming provided by Programmer. Such payments by Programmer shall be in
addition to any other payments to be made by Programmer under this Agreement.
1.9 Contracts. Programmer will enter into no third-party contracts,
leases or agreements which will bind Licensee in any way except with Licensee's
prior written approval.
SECTION 2. STATION OBLIGATIONS TO ITS COMMUNITY OF LICENSE
2.1 Licensee Authority. Notwithstanding any other provision of this
Agreement, Programmer recognizes that Licensee has certain obligations to
broadcast programming to meet the needs and interests of viewers in Green
Valley, Arizona, the Station's service area and the educational and
informational needs of children. From time to time, Licensee shall air specific
programming on issues of importance to the local community and educational and
informational programming for children. Nothing in this Agreement shall abrogate
the unrestricted authority of the Licensee to discharge its obligations to the
public and to comply with the Act and the rules and policies of the FCC.
2.2 Additional Licensee Obligations. Although both parties shall
cooperate in the broadcast of emergency information over the Station, Licensee
shall also retain the right to interrupt Programmer's programming in case of an
emergency or for programming which, in the good faith judgment of Licensee, is
of greater local or national public importance. Licensee shall also coordinate
with Programmer the Station's hourly station identification and any other
announcements required to be aired by FCC rules. Licensee shall continue to
maintain a main studio, as that term is defined by the FCC, within the Station's
principal community contour, shall maintain its local public inspection file in
accordance with FCC rules, regulations and policies, and shall prepare and place
in such inspection file or files in a timely manner all material required by
Section 73.3526 of the FCC's Rules, including without limitation the Station's
quarterly issues and program lists; information concerning the broadcast of
children's educational and informational programming; and documentation of
compliance with commercial limits applicable to certain children's television
programming. Programmer shall, upon request by Licensee, provide Licensee with
such information concerning Programmer's programs and advertising as is
necessary to assist Licensee in the preparation of such information. Licensee
shall also maintain the station logs, receive and respond to telephone
inquiries, and control and oversee any remote control point which may be
established for the Station.
<PAGE> 49
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2.3 Responsibility for Employees and Expenses. Programmer shall employ
and be solely responsible for the salaries, taxes, insurance and related costs
for all personnel used in the production of its programming (including, but not
limited to, salespeople, technical staff, traffic personnel, board operators and
programming staff). Licensee will provide and be responsible for the Station
personnel necessary for the broadcast transmission of its own programs
(including, without limitation, the Station's General Manager and such
operational and other personnel as may be necessary or appropriate), and will be
responsible for the salaries, taxes, benefits, insurance and related costs for
all the Licensee's employees used in the broadcast transmission of its programs
and necessary to other aspects of Station operation. Whenever on the Station's
premises, all personnel shall be subject to the overall supervision of
Licensee's General Manager.
SECTION 3. STATION PROGRAMMING POLICIES
3.1 Broadcast Station Programming Policy Statement. Licensee has
adopted and will enforce a Broadcast Station Programming Policy Statement (the
"Policy Statement"), a copy of which appears as Attachment III hereto and which
may be amended in a reasonable manner from time to time by Licensee upon notice
to Programmer. Programmer agrees and covenants to comply in all material
respects with the Policy Statement, to all rules and regulations of the FCC, and
to all changes subsequently made by Licensee or the FCC. Programmer shall
furnish or cause to be furnished the artistic personnel and material for the
programs as provided by this Agreement and all programs shall be prepared and
presented in conformity with the rules, regulations and policies of the FCC and
with the Policy Statement set forth in Attachment III hereto. All advertising
spots and promotional material or announcements shall comply with applicable
federal, state and local regulations and policies and shall be produced in
accordance with quality standards established by Programmer. If Licensee
determines that a program supplied by Programmer is for any reason, within
Licensee's sole discretion, unsatisfactory or unsuitable or contrary to the
public interest, or does not comply with the Policy Statement it may, upon prior
written notice to Programmer (to the extent time permits such notice), suspend
or cancel such program without liability to Programmer. Licensee will use
reasonable efforts to provide such written notice to Programmer prior to the
suspension or cancellation of such program.
3.2 Licensee Control of Programming. Programmer recognizes that the
Licensee has full authority to control the operation of the Station. The parties
agree that Licensee's authority includes but is not limited to the right to
reject or refuse such portions of the Programmer's programming which Licensee
believes to be unsatisfactory, unsuitable or contrary to the public interest.
Programmer shall have the right to change the programming supplied to Licensee
and shall give Licensee at least twenty-four (24) hours notice of substantial
and material changes in such programming.
<PAGE> 50
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3.3 Programmer Compliance with Copyright Act. Programmer represents and
warrants to Licensee that Programmer has full authority to broadcast its
programming on the Station, and that Programmer shall not broadcast any material
in violation of the Copyright Act. All music supplied by Programmer shall be:
(i) licensed by ASCAP, SESAC or BMI; (ii) in the public domain; or (iii) cleared
at the source by Programmer. Licensee will maintain ASCAP, BMI and SESAC
licenses as necessary. The right to use the programming and to authorize its use
in any manner shall be and remain vested in Programmer.
3.4 Sales. Programmer shall retain all of the Station's network
compensation revenues, any revenues received from any network or program
supplier with respect to affiliation or use of programming by Programmer, any
retransmission consent revenues and all revenues from the sale of advertising
time within the programming it provides to the Licensee. Programmer shall be
responsible for payment of the commissions due to any national sales
representative engaged by it for the purpose of selling national advertising
which is carried during the programming it provides to Licensee. Unless
otherwise agreed between the parties, Licensee shall retain all revenues from
the sale of Station's advertising during the hours each week in which the
Licensee airs its own programming pursuant to Section 1.3 hereof.
3.5 Children's Television Advertising. Programmer agrees that it will
not broadcast advertising within programs originally designed for children aged
12 years and under in excess of the amounts permitted under applicable FCC
rules, and will take all steps necessary to pre-screen children's programming
broadcast during the hours it is providing such programming, to establish that
advertising is not being broadcast in excess of the applicable FCC rules.
3.6 Payola. Programmer agrees that it will not accept any
consideration, compensation, gift or gratuity of any kind whatsoever, regardless
of its value or form, including, but not limited to, a commission, discount,
bonus, material, supplies or other merchandise, services or labor (collectively
"Consideration"), whether or not pursuant to written contracts or agreements
between Programmer and merchants or advertisers, unless the payer is identified
in the program for which Consideration was provided as having paid for or
furnished such Consideration, in accordance with the Act and FCC requirements.
Programmer agrees to annually, or more frequently at the request of the
Licensee, execute and provide Licensee with a Payola Affidavit from each of its
employees involved with the Station substantially in the form attached hereto as
Attachment IV.
3.7 Cooperation on Programming. Programmer and Licensee mutually
acknowledge their interest in ensuring that the Station serves the needs and
interests of
<PAGE> 51
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viewers in Green Valley and the surrounding service area and agree to cooperate
to provide such service. Licensee shall, on a regular basis, assess the issues
of concern to residents of Green Valley and the surrounding area and address
those issues in its public service programming. Programmer, in cooperation with
Licensee, will endeavor to ensure that programming responsive to the needs and
interests of the community of license and surrounding area is broadcast, in
compliance with applicable FCC requirements. Licensee will describe those issues
and the programming that is broadcast in response to those issues and place
issues/programs lists in the Station's public inspection file as required by FCC
rules. Further, Licensee may request, and Programmer shall provide, information
concerning such of Programmer's programs as are responsive to community issues
so as to assist Licensee in the satisfaction of its public service programming
obligations. Licensee shall also evaluate the local need for children's
educational and informational programming and shall inform Programmer of its
conclusions in that regard. Licensee, in cooperation with Programmer, will
ensure that educational and informational programming for children is broadcast
over the Station in compliance with applicable FCC requirements. Programmer
shall also provide Licensee upon request such other information necessary to
enable Licensee to prepare records and reports required by the Commission or
other local, state or federal government entities.
3.8 Staffing Requirements. Licensee will be in full compliance with the
main studio staff requirements as specified by the FCC.
SECTION 4. INDEMNIFICATION
4.1 Programmer's Indemnification. Programmer shall indemnify and hold
harmless Licensee from and against any and all claims, losses, costs,
liabilities, damages, forfeitures and expenses (including reasonable legal fees
and other expenses incidental thereto) of every kind, nature and description
(collectively, "Damages") resulting from (i) Programmer's breach of any
representation, warranty, covenant or agreement contained in this Agreement, or
(ii) any action taken by Programmer or its employees and agents with respect to
the Station, or any failure by Programmer or its employees and agents to take
any action with respect to the Station, including, without limitation, Damages
relating to violations of the Act or any rule, regulation or policy of the FCC,
slander, defamation or other claims relating to programming provided by
Programmer and Programmer's broadcast and sale of advertising time on the
Station.
4.2 Licensee's Indemnification. Licensee shall indemnify and hold
harmless Programmer from and against any and all claims, losses, consents,
liabilities, damages, FCC forfeitures and expenses (including reasonable legal
fees and other expenses incidental thereto) of every kind, nature and
description, arising out of Licensee's operations
<PAGE> 52
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and broadcasts to the extent permitted by law and any action taken by the
Licensee or its employees and agents with respect to the Station, or any failure
by Licensee or its employees and agents to take any action with respect to the
Station.
4.3 Limitation. Neither Licensee nor Programmer shall be entitled to
indemnification pursuant to this section unless such claim for indemnification
is asserted in writing delivered to the other party.
4.4 Time Brokerage Challenge. If this Agreement is challenged at the
FCC, whether or not in connection with the Station's license renewal
application, counsel for the Licensee and counsel for the Programmer shall
jointly defend the Agreement and the parties' performance thereunder throughout
all FCC proceedings at the sole expense of the Programmer. If portions of this
Agreement do not receive the approval of the FCC Staff, then the parties shall
reform the Agreement as necessary to satisfy the FCC Staff's concerns or, at
Programmer's option and expense, seek reversal of the Staff's decision and
approval from the full Commission or a court of law.
SECTION 5. ACCESS TO PROGRAMMER MATERIALS AND CORRESPONDENCE
5.1 Confidential Review. Prior to the commencement of any programming
by Programmer under this Agreement, Programmer shall acquaint the Licensee with
the nature and type of the programming to be provided. Licensee shall be
entitled to review at its discretion from time to time on a confidential basis
any of Programmer's programming material it may reasonably request. Programmer
shall promptly provide Licensee with copies of all correspondence and complaints
received from the public (including any telephone logs of complaints called in),
and copies of all program logs and promotional materials. However, nothing in
this section shall entitle Licensee to review the internal corporate or
financial records of the Programmer.
5.2 Political Advertising. Programmer shall cooperate with Licensee to
assist Licensee in complying with all rules of the FCC regarding political
broadcasting. Licensee shall promptly supply to Programmer, and Programmer shall
promptly supply to Licensee, such information, including all inquiries
concerning the broadcast of political advertising, as may be necessary to comply
with FCC rules and policies, including the lowest unit rate, equal
opportunities, reasonable access, political file and related requirements of
federal law. Licensee, in consultation with Programmer, shall develop a
statement which discloses its political broadcasting policies to political
candidates, and Programmer shall follow those policies and rates in the sale of
political programming and advertising. In the event that Programmer fails to
satisfy the political broadcasting requirements under the Act
<PAGE> 53
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and the rules and regulations of the FCC and such failure inhibits Licensee in
its compliance with the political broadcasting requirements of the FCC, then to
the extent reasonably necessary to assure such compliance, Programmer shall
either provide rebates to political advertisers or release broadcast time and/or
advertising availabilities to Licensee at no cost to Licensee.
SECTION 6. TERMINATION AND REMEDIES UPON DEFAULT
6.1 Termination. In addition to such other remedies as may be available
at law or equity, this Agreement may be terminated as set forth below by either
Licensee or Programmer by written notice to the other if the party seeking to
terminate is not then in material default or breach hereof, upon the occurrence
of any of the following:
(a) if, subject to the provisions of Section 7.9, this
Agreement is declared invalid or illegal in whole or substantial part by an
order or decree of an administrative agency or court of competent jurisdiction
and such order or decree has become final and no longer subject to further
administrative or judicial review;
(b) if the other party is in material breach of its
obligations hereunder and has failed to cure such breach within thirty (30) days
of notice from the non- breaching party;
(c) with the mutual consent of both parties;
(d) if there has been a material change in FCC rules, policies
or precedent that would cause this Agreement to be in violation thereof and such
change is in effect and not the subject of an appeal or further administrative
review and this Agreement cannot be reformed, in a manner acceptable to
Programmer and Licensee, to remove and/or eliminate the violation; and
(f) upon a termination of the Purchase Agreement or the Second
Closing thereunder in accordance with its terms.
6.2 Termination Procedures. During any period prior to the effective
date of any termination of this Agreement, Programmer and Licensee agree to
cooperate in good faith to ensure that Station operations will continue, to the
extent possible, in accordance with the terms of this Agreement and that the
termination of this Agreement is effected in a manner that will minimize, to the
extent possible, the resulting disruption of the Station's ongoing operations.
<PAGE> 54
- 10 -
6.3 Force Majeure. Any failure or impairment of the Station's
facilities or any delay or interruption in the broadcast of programs, or failure
at any time to furnish facilities, in whole or in part, for broadcast, due to
Acts of God, strikes, lockouts, material or labor restrictions by any
governmental authority, civil riot, floods and any other cause not reasonably
within the control of Licensee, or for power reductions necessitated for
maintenance of the Station or for maintenance of other stations located on the
tower from which the Station will be broadcasting, shall not constitute a breach
of this Agreement and Licensee will not be liable to Programmer for
reimbursement or reduction of the consideration owed to Licensee.
6.4 Other Agreements. During the term of this Agreement or any renewal
hereof, Licensee will not enter into any other agreement with any third party
that would conflict with or result in a material breach of this Agreement by
Licensee.
SECTION 7. MISCELLANEOUS
7.1 Assignment.
(a) Neither this Agreement nor any of the rights, interests or
obligations of either party hereunder shall be assigned, encumbered,
hypothecated or otherwise transferred without the prior written consent of the
other party, such consent not to be unreasonably withheld. Notwithstanding the
foregoing, Programmer shall have the right to assign its rights and interests
hereunder to its lenders as collateral security for Programmer's obligations to
such lenders.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
7.2 Call Letters. Upon request of Programmer, subject to the consent of
the Licensee, Licensee shall apply to the FCC for authority to change the call
letters of the Station (with the consent of the FCC) to such call letters that
Programmer shall reasonably designate. Licensee must coordinate with Programmer
any proposed changes to the call letters of the Station before taking any action
to change such letters.
7.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
7.4 Entire Agreement. This Agreement and the Attachments hereto
embodies the entire agreement and understanding of the parties relating to the
operation of
<PAGE> 55
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the Station. No amendment, waiver of compliance with any provision or condition
hereof, or consent pursuant to this Agreement will be effective unless evidenced
by an instrument in writing signed by the parties.
7.5 Taxes. Licensee and Programmer shall each pay its own ad valorem
taxes, if any, which may be assessed on such party's respective personal
property for the periods that such items are owned by such party. Programmer
shall pay all taxes, if any, to which the consideration specified in Section 1.5
herein is subject, provided that Licensee is responsible for payment of its own
income taxes.
7.6 Headings. The headings are for convenience only and will not
control or affect the meaning or construction of the provisions of this
Agreement.
7.7 Governing Law. The obligations of Licensee and Programmer are
subject to applicable federal, state and local law, rules and regulations,
including, but not limited to, the Act and the Rules and Regulations of the FCC.
The construction and performance of the Agreement will be governed by the laws
of the State of Delaware.
7.8 Notices. All notices, demands and requests required or permitted to
be given under the provisions of this Agreement shall be (i) in writing, (ii)
sent by telecopy (with receipt personally confirmed by telephone), delivered by
personal delivery, or sent by commercial delivery service or certified mail,
return receipt requested, (iii) deemed to have been given on the date telecopied
with receipt confirmed, the date of personal delivery, or the date set forth in
the records of the delivery service or on the return receipt, and (iv) addressed
as follows:
To Programmer: Paxson Communications of Tucson-46, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Telecopy: (407) 659-4252
Telephone: (407) 659-4122
Attention: Lowell W. Paxson
To Licensee: Channel 46 of Tucson, Inc.
2309 N. Hampton Street
Tucson, Arizona 085719
Telecopy: _____________
Telephone: _____________
<PAGE> 56
- 12 -
or to any such other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
7.8.
7.9 Severability. If any provision of this Agreement or the application
thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provision to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law. In the event that the FCC
alters or modifies its rules or policies in a fashion which would raise
substantial and material question as to the validity of any provision of this
Agreement, the parties hereto shall negotiate in good faith to revise any such
provision of this Agreement with a view toward assuring compliance with all then
existing FCC rules and policies which may be applicable, while attempting to
preserve, as closely as possible, the intent of the parties as embodied in the
provision of this Agreement which is to be so modified.
7.10 Arbitration. Any dispute arising out of or related to this
Agreement that Licensee and Programmer are unable to resolve by themselves shall
be settled by arbitration in Washington, D.C. by a panel of three arbitrators.
Licensee and Programmer shall each designate one disinterested arbitrator and
the two arbitrators designed shall select the third arbitrator. The persons
selected as arbitrators need not be professional arbitrators, and persons such
as lawyers, accountants and bankers shall be acceptable. Before undertaking to
resolve a dispute, each arbitrator shall be duly sworn faithfully and fairly to
hear and examine the matters in controversy and to make a just award according
to the best of his or her understanding. The arbitration hearing shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association. The written decision of a majority of the arbitrators
shall be final and binding on Licensee and Programmer. The costs and expenses of
the arbitration proceeding shall be assessed between Licensee and Programmer in
a manner to be decided by a majority of the arbitrators, and the assessment
shall be set forth in the decision and award of the arbitrators. Judgment on the
award, if it is not paid within thirty days, may be entered in any court having
jurisdiction over the matter. No action at law or in equity based upon any claim
arising out of or related to this Agreement shall be instituted in any court by
Licensee or Programmer against the other except: (i) an action to compel
arbitration pursuant to this Section; or (ii) an action to enforce the award of
the arbitration panel rendered in accordance with this Section.
<PAGE> 57
- 13 -
7.11 No Joint Venture. Nothing in this Agreement shall
be deemed to create a joint venture between the Licensee and the Programmer.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 58
IN WITNESS WHEREOF, the parties hereto have executed this Time
Brokerage Agreement the day and year first above written.
LICENSEE: CHANNEL 46 OF TUCSON, INC.
By:
----------------------------------------
Name:
Title:
PROGRAMMER: PAXSON COMMUNICATIONS
OF TUCSON-46, INC.
By:
----------------------------------------
Name:
Title:
<PAGE> 59
ATTACHMENT I
COMPENSATION SCHEDULE
Programmer shall reimburse Licensee on a monthly basis for Licensee's
payment of Station expenses listed on Attachment II upon receipt from the
Licensee of a certificate (with attached invoices, etc.) documenting payment of
those expenses.
Payments shall be made by delivery of a check to Licensee at an address
to be designated.
<PAGE> 60
ATTACHMENT II
STATION EXPENSES
(1) Tower Lease and Utility Payments
(2) Employee Salaries and Benefits (2)
(3) Property Insurance and Taxes
(4) Equipment Repair and Maintenance
(5) Programming Expenses
(6) Miscellaneous Reasonable and Necessary Station
Expenses
<PAGE> 61
ATTACHMENT III
BROADCAST STATION PROGRAMMING POLICY STATEMENT
The following sets forth the policies generally applicable to the
presentation of programming and advertising over Television Station KXGR, Green
Valley, Arizona. All programming and advertising broadcast by the station must
conform to these policies and to the provisions of the Communications Act of
1934, as amended [the "Act"], and the Rules and Regulations of the Federal
Communications Commission ["FCC"].
Station Identification
The station must broadcast a station identification announcement once an hour as
close to the hour as feasible in a natural break in the programming. The
announcement must include (1) the station's call letters (currently, [KXGR]);
followed immediately by (2) the station's city of license (Green Valley,
Arizona).
Broadcast of Telephone Conversations
Before recording a telephone conversation for broadcast or broadcasting such a
conversation simultaneously with its occurrent, any party to the call must be
informed that the call will be broadcast or will be recorded for later
broadcast, and the party's consent to such broadcast must be obtained. This
requirement does not apply to calls initiated by the other party which are made
in a context in which it is customary for the station to broadcast telephone
calls.
Sponsorship Identification
When money, service, or other valuable consideration is either directly or
indirectly paid or promised as part of an arrangement to transmit any
programming, the station at the time of broadcast shall announce (1) that the
matter is sponsored, either whole or in part; and (2) by whom or on whose behalf
the matter is sponsored. Products or services furnished to the station in
consideration for an identification of any person, product, service, trademark
or brand name shall be identified in this manner.
In the case of any political or controversial issue broadcast for which any
material or service is furnished as an inducement for its transmission, an
announcement shall be made at the beginning and conclusion of the broadcast
stating (1) the material or service that has been furnished; and (2) the
person(s) or association(s) on whose behalf the programming is transmitted.
However, if the broadcast is 5 minutes duration or less, the required
announcement need only be made either at its beginning or end.
Prior to any sponsored broadcast involving political matters or controversial
issues, the station shall obtain a list of the chief executive officers, members
of the executive committee
<PAGE> 62
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or board of directors of the sponsoring organization and shall place this list
in the station's public inspection file.
Payola/Plugola
The station, its personnel, or its programmers shall not accept or agree to
accept from any person any money, service, or other valuable consideration for
the broadcast of any matter unless such fact is disclosed to the station so that
all required station identification announcements can be made. All persons
responsible for station programming must, from time to time, execute such
documents as may be required by station management to confirm their
understanding of and compliance with the FCC's sponsorship identification
requirements.
Rebroadcasts
The station shall not rebroadcast the signal of any other broadcast station
without first obtaining such station's prior written consent to such
rebroadcast.
Fairness
Station shall seek to afford coverage to contrasting viewpoints concerning
controversial issues of public importance.
Personal Attacks
The station shall not air attacks upon the honesty, character, integrity or like
personal qualities of any identified person or group. If such an attack should
nonetheless occur during the presentation of views on a controversial issue of
public importance, those responsible for programming shall submit a tape or
transcript of the broadcast to station management and to the person attacked
within 48 hours, and shall offer the person attacked a reasonable opportunity to
respond.
Political Editorials
Unless specifically authorized by station management, the station shall not air
any editorial which either endorses or opposes a legally qualified candidate for
public office.
<PAGE> 63
- 3 -
Political Broadcasting
All "uses" of the station by legally qualified candidates for elective office
shall be in accordance with the Act and the FCC's Rules and policies, including
without limitation, equal opportunities requirements, reasonable access
requirements, lowest unit charge requirements and similar rules and regulations.
Obscenity and Indecency
The station shall not broadcast any obscene material. Material is deemed to be
obscene if the average person, applying contemporary community standards in the
local community, would find that the material, taken as a whole, appeals to the
prurient interest; depicts or describes in a patently offensive way sexual
conduct specifically defined by applicable state law; and taken as a whole,
lacks serious literary artistic, political or scientific value.
The station shall not broadcast any indecent material outside of the periods of
time prescribed by the Commission. Material is deemed to be indecent if it
includes language or material that, in context, depicts or describes, in terms
patently offensive as measured by contemporary community standards for the
broadcast medium, sexual or excretory activities or organs.
Billing
No entity which sells advertising for airing on the station shall knowingly
issue any bill, invoice or other document which contains false information
concerning the amount charged or the broadcast of advertising which is the
subject of the bill or invoice. No entity which sells advertising for airing on
the station shall misrepresent the nature or content of aired advertising, nor
the quantity, time of day, or day on which such advertising was broadcast.
Contests
Any contests conducted on the station shall be conducted substantially as
announced or advertised. Advertisements or announcements concerning such
contests shall fully and accurately disclose the contest's material terms. No
contest description shall be false, misleading or deceptive with respect to any
material term.
Hoaxes
The station shall not knowingly broadcast false information concerning a crime
or catastrophe.
<PAGE> 64
- 4 -
Children's Programming
The station shall broadcast reasonable amounts of educational and informational
programming designed for children aged 16 years and younger.
Children's Advertising
Programming designed for children aged 12 years and younger shall not include
more than 12 minutes of commercial matter per hour, Monday through Friday, and
shall not include more than 10.5 minutes of commercial matter per hour on
weekend programming. There shall be no host selling, as that term is defined by
the FCC, in children's programming on the station.
Emergency Information
Any emergency information which is broadcast by the station shall be transmitted
both aurally and visually or only visually.
Lottery
The station shall not advertise or broadcast any information concerning any
lottery (except the Arizona State Lottery and any other state lottery). The
station may advertise and provide information about lotteries conducted by
non-profit groups, governmental entities and in certain situations, by
commercial organizations, if and only if there is no state or local restriction
or ban on such advertising or information and the lottery is legal under state
or local law. Any and all lottery advertising must first be approved by station
management.
Advertising
Station shall comply with all federal, state and local laws concerning
advertising, including without limitation, all laws concerning misleading
advertising, and the advertising of alcoholic beverages.
Programming Prohibitions.
Knowing broadcast of the following types of programs and announcements is
prohibited:
False Claims. False or unwarranted claims for any product or service.
<PAGE> 65
- 5 -
Unfair Imitation. Infringements of another advertiser's rights through
plagiarism or unfair imitation of either program idea or copy, or any
other unfair competition.
Commercial Disparagement. Any unfair disparagement of competitors or
competitive goods.
Profanity. Any programs or announcements that are slanderous, obscene,
profane, vulgar, repulsive or offensive, as evaluated by station
management.
Violence. Any programs which are excessively violent.
Unauthenticated Testimonials. Any testimonials which cannot be
authenticated.
<PAGE> 66
ATTACHMENT IV
FORM OF PAYOLA AFFIDAVIT
City of )
------------------------ )
)
County of ) SS:
---------------------- )
)
State of )
----------------------
ANTI-PAYOLA/PLUGOLA AFFIDAVIT
____________________, being first duly sworn, deposes and says as follows:
1. He is ________________ for ________________.
Position
2. He has acted in the above capacity since ____ .
3. No matter has been broadcast by Station for which service, money or
other valuable consideration has been directly or indirectly paid, or
promised to, or charged, or accepted, by him from any person, which
matter at the time so broadcast has not been announced or otherwise
indicated as paid for or furnished by such person.
4. So far as he is aware, no matter has been broadcast by Station ____ for
which service, money, or other valuable consideration has been directly
or indirectly paid, or promised to, or charged, or accepted by Station
_____ or by any independent contractor engaged by Station _____ in
furnishing programs, from any person, which matter at the time so
broadcast has not been announced or otherwise indicated as paid for or
furnished by such person.
5. In future, he will not pay, promise to pay, request, or receive any
service, money, or any other valuable consideration, direct or
indirect, from a third party, in exchange for the influencing of, or
the attempt to influence, the preparation of presentation of broadcast
matter on Station _________.
6. Nothing contained herein is intended to, or shall prohibit receipt or
acceptance of anything with the expressed knowledge and approval of my
employer, but henceforth any such approval must be given in writing by
someone expressly authorized to give such approval.
<PAGE> 67
- 2 -
7. He, his spouse and his immediate family do not have any present
direct or indirect ownership interest in (other than an investment in a
corporation whose stock is publicly held), serve as an officer or
director of, whether with or without compensation, or serve as an
employee of, any person, firm or corporation engaged in:
1. The publishing of music;
2. The production, distribution (including wholesale and retail
sales outlets), manufacture or exploitation of music, films,
tapes, recordings or electrical transcriptions of any program
material intended for radio broadcast use;
3. The exploitation, promotion, or management or persons
rendering artistic, production and/or other services in the
entertainment field;
4. The ownership or operation of one or more radio or television
stations;
5. The wholesale or retail sale of records intended for public
purchase;
6. Advertising on Station , or any other station owned by its
licensee (excluding nominal stockholdings in publicly owned
companies).
8. The facts and circumstances relating to such interest are none _____ as
follows: _____:
_______________________________________________________________________
_______________________________________________________________________
-----------------------------
Affiant
Subscribed and sworn to before me
this _____ day of __________, 19___.
- ------------------------------------
Notary Public
My Commission expires: .
--------------
<PAGE> 68
EXHIBIT B
<PAGE> 69
EXHIBIT B
================================================================================
CONSTRUCTION AGREEMENT
BY AND BETWEEN
CHANNEL 46 OF TUCSON, INC.
AND
PAXSON COMMUNICATIONS OF
TUCSON-46, INC.
FOR
TELEVISION STATION KXGR
GREEN VALLEY, ARIZONA
* * *
________, 1997
================================================================================
<PAGE> 70
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 1. DEFINITIONS.................................................................................1
SECTION 2. THE WORK....................................................................................2
SECTION 3. COMPLETION OF THE WORK......................................................................3
SECTION 4. COST OF THE WORK............................................................................3
SECTION 5. BUDGET......................................................................................3
SECTION 6. CONTRACTOR'S CONSTRUCTION OBLIGATIONS.......................................................4
SECTION 7. SUBCONTRACTORS..............................................................................5
SECTION 8. PROTECTION OF PERSONS AND PROPERTY..........................................................5
SECTION 9. INSURANCE...................................................................................5
SECTION 10. DAMAGES.....................................................................................6
SECTION 11. TERMINATION.................................................................................6
SECTION 12. MISCELLANEOUS PROVISIONS....................................................................6
SECTION 13. COUNTERPARTS................................................................................8
</TABLE>
<PAGE> 71
EXHIBIT B
CONSTRUCTION AGREEMENT
THIS CONSTRUCTION AGREEMENT (the "Agreement") is entered into as of
this _____ day of _____ , 199_, by and between PAXSON COMMUNICATIONS OF TUCSON-
46, INC., a Florida corporation ("Contractor"), and CHANNEL 46 OF TUCSON, INC.,
a Delaware corporation ("Permittee").
W I T N E S S E T H
WHEREAS, Permittee holds a Construction Permit issued by the Federal
Communications Commission ("FCC") for new television station KXGR, Channel 46,
Green Valley, Arizona, FCC File No. BMPCT-960801LM (the "Construction Permit");
WHEREAS, Permittee, Contractor and Sungilt Corporation, Inc. have
entered into a Stock Purchase Agreement dated as of September __, 1997 (the
"Purchase Agreement"); and
WHEREAS, the Purchase Agreement provides that Contractor and Permittee
shall enter into this Agreement in order to permit Contractor to specify the
materials and equipment required to construct the facilities proposed in the
Construction Permit for new television station KXGR, Channel 46, Green Valley,
Arizona (the "Station"), and to undertake, following consultation with
Permittee, such construction.
NOW THEREFORE, in consideration of the above and of the mutual promises
covenants contained herein, the parties, intending to be legally bound, agree as
follows:
SECTION 1. DEFINITIONS. In addition to the terms which are elsewhere
defined in this Agreement, the following terms shall have the respective
meanings hereinafter set forth:
A. "Budget" shall mean the preliminary budget as agreed to by
Permittee and Contractor, as described in Exhibit 1 attached hereto, as such
Budget may be amended in accordance with Section 6 of this Agreement.
B. "Contract Documents" shall mean this Agreement, all
authorizations issued to the Permittee for the Station's operation and
construction, the Plans and Specifications and the Budget.
C. "Plans and Specifications" shall mean the plans and
specifications described in Exhibit 2 attached hereto, and as supplemented from
time to time with the agreement of Contractor and Permittee.
<PAGE> 72
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D. "Work" shall mean all labor, materials and equipment
necessary or appropriate for the construction of the facilities described in the
Plans and Specifications as authorized in the Construction Permit.
SECTION 2. THE WORK.
A. Contractor agrees to do the following at Contractor's
expense:
(i) In consultation with Permittee, specify for purchase
by Contractor and lease by Permittee pursuant to the Lease Agreement (as defined
below) of the equipment, supplies and materials necessary or appropriate for the
construction and installation of the facilities described in the Plans and
Specifications and as authorized in the Construction Permit; and
(ii) With the concurrence of the Permittee, construct
and/or install the facilities described in the Plans and Specifications in
accordance with the Construction Permit and all applicable zoning, building or
other governmental laws, ordinances or regulations.
B. Permittee has done or agrees to do the following:
(i) Maintain in effect the Construction Permit, as it may
be modified, including the filing, if necessary, of an application to extend the
expiration date of the Construction Permit and prosecuting such application
diligently;
(ii) File with the FCC or any other governmental agency
and prosecute to the full extent any amendments to the Construction Permit and
any other applications which may be necessary for the implementation of the
Construction Permit, the construction of the Station, and the commencement and
continuation of the Station's operations as proposed in the Construction Permit;
(iii) Prepare and timely file with the FCC an application
for license for the constructed facilities in accordance with the rules and
regulations of the FCC; and
(iv) Cooperate with Contractor in timely filing and
obtaining any zoning, building and other permits that are required in connection
with the Plans and Specifications and the Work, obtain and maintain in full
force and effect a lease for, or ownership of, the Station's transmitter and
antenna facilities, and execute the necessary
<PAGE> 73
- 3 -
documents and agreements provided by Contractor in accordance with its
obligations hereunder.
SECTION 3. COMPLETION OF THE WORK.
A. The Work shall be commenced upon the execution of this
Agreement and shall be substantially completed as promptly as reasonably
practicable; provided, however, that the parties agree that such date shall be
extended by reason of strikes, labor troubles, inability to procure material,
failure of power, governmental actions or inactions, riots, insurrection, war or
other reasons beyond the control of the parties.
B. The Work shall be deemed to be substantially complete when
(i) construction is sufficiently complete, in accordance with the Contract
Documents, so that the Station may begin operating pursuant to Program Test
Authority under FCC rules using the facilities proposed in the Construction
Permit and (ii) all permits, modifications of permits, authorizations and
licenses necessary to operate such facilities have been obtained. Any Work
required by the Contract Documents which remains to be completed after the date
of substantial completion shall, if reasonably feasible, be completed by
Contractor within ninety (90) days after the date of substantial completion.
C. Upon substantial completion of the construction of the
Station as specified above, Contractor and Permittee shall enter into a Lease
Agreement (the "Lease Agreement") which is attached hereto as Exhibit 3.
D. If the Special Temporary Authority (as defined in the
Purchase Agreement) is granted by the FCC, Contractor shall construct the
temporary facilities described in the application for the Special Temporary
Authority at its expense and upon substantial completion of the construction of
such temporary facilities, Contractor shall lease such facilities to Permittee
in accordance with the Lease Agreement.
SECTION 4. COST OF THE WORK. Contractor shall be responsible for the
entire cost of the Work. Upon execution of this Agreement, Contractor shall pay
the Permittee Two Thousand Five Hundred Dollars ($2,500) per month to cover the
antenna site lease for the Station specified in the Construction Permit and
Permittee shall provide Contractor with an executed copy of such lease.
SECTION 5. BUDGET. Permittee and Contractor acknowledge and agree that
the Budget represents the estimated cost of the Work. Promptly after the date
hereof, Contractor shall obtain firm bids from responsible manufacturers,
suppliers, and contractors approved by Permittee for the performance of the Work
or portions thereof, and shall supply copies of all
<PAGE> 74
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bids to Permittee. Upon receipt of the bids and upon the agreement by Permittee
and Contractor to accept those bids, Contractor shall accept the bids and the
Budget shall be adjusted to conform to the bids.
SECTION 6. CONTRACTOR'S CONSTRUCTION OBLIGATIONS.
A. Contractor shall supervise and direct the Work, using its
best skill and attention and, subject to the concurrence of Permittee, shall be
responsible for all construction means, methods, techniques, sequences and
procedures and for coordinating all portions of the Work under this Agreement.
B. Contractor shall be responsible to the Permittee for the
acts and omissions of Contractor's employees, contractors, subcontractors and
other persons providing or performing any of the Work.
C. Unless otherwise provided in the Contract Documents,
Contractor shall provide all labor, materials, equipment, tools, construction,
equipment and machinery, water, heat, utilities, transportation and other
facilities and services necessary for the proper execution and completion of the
Work, whether temporary or permanent and whether or not incorporated or to be
incorporated in the Work.
D. Contractor shall at all times enforce strict discipline and
good order among any person working at the construction site.
E. Contractor warrants to Permittee that all materials and
equipment furnished under this Contract will be new, unless otherwise specified
in Exhibit A, and that all Work will be of good quality, free from faults and
defects and in conformance with the Contract Documents.
F. Contractor shall comply in all material respects with all
laws, ordinances, rules, regulations and lawful orders of any public authority
bearing on the performance of the Work.
G. Contractor shall prepare and submit to Permittee for
Permittee's approval an estimated progress schedule for the Work. The progress
schedule shall be related to the entire project to the extent required by the
Contract Documents and shall provide for expeditious and practicable completion
of the Work.
H. Contractor at all times shall keep the construction site
free from accumulation of waste material or rubbish caused by the Work. At the
completion of the
<PAGE> 75
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Work, Contractor shall remove or cause to be removed all waste materials and
rubbish from and about the construction site and tools, construction equipment,
machinery and surplus materials.
SECTION 7. SUBCONTRACTORS. By an appropriate written agreement, Contractor
shall require each subcontractor retained by Contractor to be bound by the terms
of the Contract Documents, and to assume all the obligations and
responsibilities which Contractor, by those documents, assumes toward Permittee.
SECTION 8. PROTECTION OF PERSONS AND PROPERTY.
A. Contractor shall take all reasonable precautions for the safety of,
and shall provide all reasonable protection to prevent damage, injury or
loss to:
(i) all individuals employed to perform the Work;
(ii) all materials and equipment to be used in the Work,
whether in storage, on or off the site, under the care, custody or control of
Contractor or any of its subcontractors; and
(iii) other property at the site or adjacent thereto.
B. Contractor shall give all notices and comply in all material
respects with all applicable laws, ordinances, rules, regulations and lawful
orders of any public authority bearing on the safety of persons or property or
their protection from damage, injury or loss.
SECTION 9. INSURANCE.
A. Contractor shall purchase and maintain or cause to be purchased and
maintained such insurance as will protect Contractor and Permittee from claims
set forth below which may arise out of or result from the Work, whether such
operations be by Contractor or by any subcontractor or by anyone directly or
indirectly employed by any of them, or by anyone for whose acts any of them may
be liable:
(i) claims under workmen's compensation, disability benefit and
other similar employee benefit acts;
(ii) claims for damages because of bodily injury, occupational
sickness or disease, or death;
<PAGE> 76
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(iii) claims for damages insured by usual personal injury
liability coverage which are sustained (1) by any person as a result of an
offense directly or indirectly related to the employment of such person by
Contractor, or (2) by any other person;
(iv) claims for damages, other than to the Work itself,
because of injury to or destruction of tangible property; and
(v) claims for damages because of bodily injury or death or
any property damage arising out of the ownership, maintenance or use of any
motor vehicle in respect of the Work.
B. The insurance required by this Section shall be written for
not less than the limits of liability agreed to by Contractor and Permittee or
required by law, whichever is greater.
C. Certificates of Insurance acceptable to Permittee and
Contractor shall be delivered to Permittee prior to commencement of the Work.
These Certificates shall contain a provision that coverage afforded under the
policies will not be canceled until at least thirty (30) days' prior written
notice has been given to the Permittee.
D. Permittee shall purchase and maintain property insurance
upon the entire Work to the full insurable value thereof. This insurance shall
insure against the perils of fire and extended coverage, shall include "all
risk" insurance for physical loss or damage including, without duplication of
coverage, theft, vandalism and malicious mischief and shall provide that all
proceeds from such insurance shall go to Contractor.
SECTION 10. DAMAGES. In the event of a default by Contractor of its
obligations under this Agreement or the failure of Contractor to complete the
Work, Contractor shall not be liable to Permittee for any consequential damages
as a result of such failure or delay. The sole liability of Contractor to
Permittee shall be for the full cost and expense of completing the Work in
accordance with the Contract Documents and the Plans and Specifications.
SECTION 11. TERMINATION. This Agreement shall terminate, and neither
party shall have any further obligation hereunder, upon the earlier to occur of
(a) the completion of the Work or (b) the Second Closing (as defined in the
Purchase Agreement).
<PAGE> 77
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SECTION 12. MISCELLANEOUS PROVISIONS.
A. The Contract shall be governed by the laws of the State of
Delaware applicable to contracts made and to be performed there, without
reference to the principles of the conflicts of law.
B. Permittee and Contractor each binds itself and its
successors, assigns and legal representatives to the other party hereto and to
the successors, assigns and legal representatives of such other party with
respect to all covenants, agreements and obligations contained in the Contract
Documents.
C. The parties hereto agree to cooperate fully with each other
in preparing, filing, prosecuting, advocating grant, and taking any other
actions necessary with respect to any applications or actions which are or may
be necessary to obtain the consent of the FCC or of any other governmental
instrumentality, or any third party to, or are or may be necessary or helpful in
order to accomplish the transactions contemplated by this Agreement.
D. All notices, demands and requests required or permitted to
be given under the provisions of this Agreement shall be (i) in writing, (ii)
delivered by personal delivery or sent by commercial delivery service or
certified mail, return receipt requested, (iii) deemed to have been given on the
date of personal delivery, the date set forth in the records of the delivery
service or on the return receipt, and (iv) addressed as follows::
If to Permittee: Channel 46 of Tucson, Inc.
2309 Hampton Street
Tucson, Arizona 085719
If to Contractor: Mr. Lowell W. Paxson
Paxson Communications of Tucson-46, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
or to any such other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
12.D.
E. No action or failure to act by Permittee or Contractor
shall constitute a waiver of any right or duty afforded any of them under this
Agreement, nor shall any such action or failure to act constitute an approval of
or acquiescence in any breach thereunder, except as may be specifically agreed
in writing.
<PAGE> 78
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F. If the Contract Documents, laws, ordinances, rules,
regulations or orders or any public authority having jurisdiction require any
portion of the Work to be inspected, tested or approved, Contractor shall give
Permittee timely notice of its readiness so Permittee may observe such
inspection, testing or approval.
G. Licensee's and Contractor's respective obligations
hereunder are unique and valuable and not readily subject to compensation by
money damages alone. Accordingly, in the event either party should breach its
obligations under this Agreement, the other party shall be entitled to an order
directing specific performance from a court of competent jurisdiction, in
addition to all other remedies at law or in equity.
SECTION 13. COUNTERPARTS. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures on all counterparts
were upon the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 79
IN WITNESS WHEREOF, Permittee and Contractor have executed this
Construction Agreement as of the date first above written.
PAXSON COMMUNICATIONS OF
TUCSON-46, INC.
By:
-----------------------------------
Name:
Title:
CHANNEL 46 OF TUCSON, INC.
By:
-----------------------------------
Name:
Title:
t
<PAGE> 80
EXHIBIT 1
BUDGET
<PAGE> 81
EXHIBIT 3
LEASE AGREEMENT
<PAGE> 82
EXHIBIT 10.183
================================================================================
LEASE AGREEMENT
BY AND BETWEEN
CHANNEL 46 OF TUCSON, INC.
AND
PAXSON COMMUNICATIONS OF TUCSON-46, INC.
FOR
TELEVISION STATION KXGR
GREEN VALLEY, ARIZONA
* * *
__________ __, 1997
================================================================================
<PAGE> 83
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. TERM..................................................................................................1
(a) Initial and Renewal Term......................................................................1
(b) Holding Over..................................................................................1
(c) Automatic Termination.........................................................................2
SECTION 2. RENT AND TAXES........................................................................................2
(a) Rent for Initial and Renewal Terms............................................................2
(b) Security Deposit..............................................................................3
(c) Taxes.........................................................................................3
(d) Payment.......................................................................................3
SECTION 3. USE OF ASSETS.........................................................................................3
SECTION 4. ALTERATIONS...........................................................................................4
SECTION 5. MAINTENANCE AND REPAIRS...............................................................................4
SECTION 6. INDEMNITY AND INDEMNITY INSURANCE.....................................................................5
SECTION 7. ASSIGNMENT............................................................................................6
SECTION 8. CONDEMNATION..........................................................................................6
SECTION 9. INTERFERENCE AND RF RADIATION.........................................................................7
(a) General.......................................................................................7
(b) RF Radiation..................................................................................7
SECTION 10. FORCE MAJEURE........................................................................................7
SECTION 11. MECHANICS' LIENS.....................................................................................7
SECTION 12. LESSOR'S LIEN........................................................................................7
SECTION 13. QUIET ENJOYMENT......................................................................................8
SECTION 14. DEFAULT..............................................................................................8
SECTION 15. SURRENDER OF LEASED ASSETS...........................................................................8
</TABLE>
<PAGE> 84
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 16. NOTICES..............................................................................................8
SECTION 17. PROPERTY INSURANCE...................................................................................9
SECTION 18. TAXES...............................................................................................10
SECTION 19. CAPTIONS............................................................................................10
SECTION 20. COVENANTS TO BIND AND BENEFIT RESPECTIVE PARTIES....................................................10
SECTION 21. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS........................................................................................................10
SECTION 22. COUNTERPARTS........................................................................................10
SECTION 23. ATTORNEYS FEES......................................................................................10
SECTION 24. MISCELLANEOUS.......................................................................................10
SECTION 25. ENTIRE AGREEMENT....................................................................................10
SECTION 26. WAIVER OF JURY TRIAL................................................................................11
</TABLE>
(ii)
<PAGE> 85
LEASE AGREEMENT
THIS LEASE is made and entered into as of this __________ day of
________, ____, by and between PAXSON COMMUNICATIONS OF TUCSON-46, INC., a
Florida corporation (hereinafter referred to as "Lessor"), and CHANNEL 46 OF
TUCSON, INC., a Delaware corporation (hereinafter referred to as "Lessee").
STATEMENT OF FACTS
A. Lessor, Lessee and Sungilt Corporation, Inc. ("SC") have entered
into a Stock Purchase Agreement dated as of August ____, 1997 ("Purchase
Agreement").
B. Pursuant to the Purchase Agreement, Lessor and Lessee have entered
into a Construction Agreement, dated as of _____ __, 1997, which provides that
Lessor and Lessee shall enter into a Lease Agreement pursuant to which Lessor
shall lease to Lessee certain assets used or useful in the operation of new
television station KXGR, Channel 46, Green Valley, Arizona (the "Station").
C. Lessor and Lessee desire to set forth herein the terms and
conditions of such Lease.
NOW, THEREFORE, in consideration of the terms and conditions set forth
in this Lease, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. TERM.
(a) Initial and Renewal Term. Lessee shall have the right to use
the assets described in Exhibit A hereto (the "Leased Assets") for an Initial
Term commencing on the date hereof (the "Commencement Date") and expiring at
12:00 Midnight on a date which is five years from the date hereof (the "Initial
Term"), unless this Lease is sooner terminated as hereinafter provided and
provided further that this Lease shall terminate upon the Second Closing as
provided for in the Purchase Agreement or if SC is in default under the Purchase
Agreement. This Lease may be renewed for one additional one-year term (the
"Renewal Term"), unless at least 90 days prior to the expiration of the Initial
Term Lessor or Lessee shall have provided written notice to the other stating
that it does not intend to renew this Lease for a Renewal Term. The Initial Term
and Renewal Term shall be subject to all of the terms and conditions set forth
in this Lease.
<PAGE> 86
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(b) Holding Over. If Lessee or anyone claiming under Lessee
shall remain in possession of the Leased Assets or any part thereof after the
expiration of the Initial Term or the Renewal Term without any agreement in
writing between the Lessor and Lessee with respect thereto, prior to acceptance
of rent by Lessor, the person remaining in possession shall be deemed a holdover
lessee, and, after acceptance of rent by Lessor, the party remaining in
possession of the Leased Assets shall be deemed a lessee from month-to-month,
subject to the provisions of this Lease. The rental during any such period shall
equal one hundred twenty-five percent (125%) of the rental in effect immediately
preceding such expiration.
(c) Automatic Termination. Notwithstanding anything in this
Lease to the contrary, this Lease shall automatically terminate upon the earlier
to occur of the Second Closing (as defined in the Purchase Agreement) or the
termination of the Time Brokerage Agreement (as defined in the Purchase
Agreement), and neither Lessor nor Lessee shall have any further obligations
hereunder, except as provided in Section 3(b) and except that Lessee shall be
responsible for any unpaid Rent.
SECTION 2. RENT AND TAXES.
(a) Rent for Initial and Renewal Terms. Lessee covenants and
agrees to pay Lessor for the use of the Leased Assets during the Initial Term
and the Renewal Term the amounts set forth below (the "Rent"):
(1) On or before the last day of the month in which the
Commencement Date falls, Lessee shall pay as Rent for each day of the period
beginning on the Commencement Date and ending on the last day of such month the
sum of _________ Dollars ($________).
(2) Lessee shall pay to Lessor monthly Rent in the amount of
___________ Dollars ($________) (the "Base Rent") for the period beginning with
the first full calendar month following the Commencement Date and continuing
until the termination of this Lease.
(3) In the event that this Lease is renewed, the Rent to be
paid by Lessee to Lessor during the Renewal Term shall be equal to the sum of
the Base Rent plus the amount determined by multiplying the Base Rent by the
percentage increase, if any, in the U.S. Department of Labor, Bureau of Labor
Statistics, Revised All-Cities Consumer Price Index for the Tucson, Arizona
metropolitan area (the "CPI") published immediately prior to the last day of the
Initial Term over the CPI published immediately prior to the
<PAGE> 87
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Commencement Date. In no event shall the Rent to be paid by Lessee during the
Renewal Term be less than the Base Rent.
(4) If the CPI ceases to exist or is substantially changed,
Lessor shall substitute a similar index. Except as otherwise specifically
provided herein, installments of Rent during the Initial Term and the Renewal
Term shall be paid in advance in United States Dollars (without prior notice or
invoice by Lessor) on or before the first of the month and any amounts which are
payable when invoiced hereunder shall be due within twenty (20) days after
Lessee's receipt of such invoice.
(b) Security Deposit. As security for the timely performance
of Lessee's obligations hereunder, Lessee shall pay to Lessor on the
Commencement Date the amount of __________ Dollars ($_______) which shall be
held by Lessor as a security deposit for the Initial Term and the Renewal Term.
Lessor shall be permitted to apply the security deposit to satisfy Lessee's
obligations hereunder.
(c) Taxes. Lessee shall pay to Lessor, when invoiced, any and
all taxes and assessments levied or assessed on or against the use of the Leased
Assets and/or the rental payments due hereunder.
(d) Payment. All monthly payments of rent or other sums due
Lessor hereunder shall be sent to or made at the offices of Lessor designated in
Section 16 hereof, or such other place as may be designated by Lessor from time
to time.
SECTION 3. USE OF ASSETS.
(a) Lessee shall have the right to use the Leased Assets only
for the purpose of constructing and operating the Station and for the
construction and operation of transmit and receive towers, satellite receivers
and associated equipment related to Lessee's operation of the Station.
(b) Lessee accepts the Leased Assets in their present
condition ("as is") and agrees that it will take good care of the Leased Assets,
subject to reasonable wear and tear, and that Lessee will return the Leased
Assets to Lessor in the same condition as said Leased Assets were in at the time
control was turned over to Lessee, subject to reasonable wear and tear, and
damage done by Lessor, if any. Furthermore, at Lessor's option, Lessee at its
sole cost and expense shall remove or change all alterations made pursuant to
Section 4(a) hereof so as to return said Leased Assets to Lessor in said same
condition, subject to this subsection 3(b). Lessee agrees that it will comply
with all laws, ordinances, orders, rules, regulations
<PAGE> 88
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or requirements of all governmental authorities which are applicable to its use
of the Leased Assets.
(c) Lessee, at its own cost and expense, shall obtain and
maintain in effect any and all permits, licenses and approvals that are or may
be required with respect to the construction or operation of the Station by each
governmental authority having jurisdiction over such construction or operation.
SECTION 4. ALTERATIONS.
(a) Subject to Lessor's approval, which approval shall not be
unreasonably withheld, Lessee, at its own expense and subject to the provisions
of Subsection 4(b) hereof, may make such alterations, additions, changes and
improvements (herein called "Alterations") to the Leased Assets as Lessee may
deem necessary or desirable, subject to Lessor's approval, which approval shall
not be unreasonably withheld; provided that said Alterations shall not lessen
the value of the Leased Assets.
(b) Before Lessee may make any Alterations to the Leased
Assets in accordance with the rights granted by Subsection 4(a) hereof, Lessee
shall submit to Lessor written specifications for such Alterations that are
proposed for Lessor's approval. Lessor, within thirty (30) days after receipt by
it of the written specifications, shall notify Lessee whether it approves such
Alterations. If Lessor fails to notify Lessee in writing within such thirty (30)
day period that it disapproves of such Alterations, Lessee may proceed to cause
the Alterations to be made.
SECTION 5. MAINTENANCE AND REPAIRS.
(a) Lessor shall be responsible for the repair and maintenance
of the Leased Assets. In the event that Lessee reasonably determines that a
repair or replacement is needed and Lessor after written notice does not make
said repair or replacement within a reasonable period of time, Lessee shall
notify Lessor in writing that it considers said repair or replacement necessary
and that it is contemplating making said repair. Lessee may then, at its option,
make such repair or replacement and charge the reasonable cost incurred to
Lessor. It is agreed that nothing in the foregoing shall relieve Lessor from
full performance of its obligations and that the remedy referred to above is in
addition to any other remedy available to Lessee.
(b) If the Leased Assets shall be partially damaged by fire or
other cause without the fault or neglect of Lessee or its employees, agents,
visitors or licensees, the Lessor shall proceed forthwith to replace or to
repair the Leased Assets with reasonable
<PAGE> 89
- 5 -
diligence at the expense of Lessor; provided, if the Leased Assets are to be
replaced or repaired and are unusable in whole or in part following such damage,
the rent payable hereunder during the period in which they are unusable shall be
adjusted equitably; provided further, however, if the Leased Assets are totally
damaged or rendered wholly unusable by fire or other cause, including, but not
limited to, condemnation, and Lessor shall decide not to replace the same, then,
within ninety (90) days after such fire, casualty or condemnation, Lessor may
give Lessee notice in writing of the decision not to replace, whereupon the
Initial Term or Renewal Term of this Lease shall terminate, Lessee shall
surrender the Leased Assets to Lessor, and rent shall be abated for the
unexpired portion of this Lease, effective as of the date of said written notice
from Lessor, and Lessor shall have no further obligation or liability to Lessee.
It is agreed that nothing in this Subsection 5(b) shall require Lessor to
replace or to repair any or all Alterations.
(c) Lessor will maintain the Leased Assets so as to comply
with existing rules and regulation imposed by any governmental authority having
jurisdiction over the construction or operation of the Station, and make any
repairs and modifications reasonably necessary to maintain the Leased Assets in
good condition and in compliance with good broadcast engineering practices. In
performance of its obligation to maintain and repair the Leased Assets, it may
be necessary from time to time for Lessor to request that Lessee temporarily
cease its broadcast operation, turn off electrical power and/or make other
adjustments to its equipment and operations. Lessor agrees to schedule such
work, as far as reasonably possible, from 1:00 A.M. to 5:00 A.M., and Lessor
will not cause any temporary interruption of Lessee's broadcast operation under
this provision unless such interruption is required by and consistent with good
engineering practices. Lessee agrees to cooperate with Lessor and to comply with
and honor Lessor's reasonable requests for temporary cessation of its broadcast
operation, to turn off electrical power and/or to make other adjustments to its
equipment or operation, as necessary, to allow Lessor to perform such work in an
orderly and timely manner.
SECTION 6. INDEMNITY AND INDEMNITY INSURANCE.
(a) Lessee shall indemnify and hold harmless Lessor from any
and all claims, expenses or liabilities, including reasonable attorneys' fees
and court costs, for injuries to or death of persons, or damage to property
arising out of or in connection with Lessee's use of the Leased Assets. Lessee
further agrees to defend on behalf of Lessor all legal actions, if any, arising
out of any such claim for such damages. Lessor shall not be liable for loss or
damage sustained by Lessee by reason of business interruption resulting from any
or all acts or omissions of Lessor or violations by Lessor of any or all terms,
covenants or conditions of this Lease.
<PAGE> 90
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(b) Lessee agrees that it will, at its expense, obtain and
maintain during the Initial Term or Renewal Term public liability insurance
against claims of injury to or death of persons, or damage to property arising
out of or in connection with Lessee's use of the Leased Assets, naming Lessee
and Lessor as insured persons. Such public liability insurance shall be with an
insurer that Lessor finds reasonably satisfactory and shall have limits of not
less than One Million Dollars ($1,000,000) with respect to claims of injury to
or death of any number of persons in any one occurrence and not less than Two
Hundred Thousand Dollars ($200,000) for property damage in any one occurrence.
Lessee agrees to name Lessor as a co-insured party on any and all such public
liability insurance policies. Satisfactory evidence of such coverage shall be
submitted by Lessee to Lessor.
SECTION 7. ASSIGNMENT.
(a) Lessee's Right to Assign. Neither this Lease nor any of
the rights, interests or obligations of Lessee hereunder shall be assigned,
encumbered, hypothecated, subleased or otherwise transferred without the prior
written consent of Lessor.
(b) This Lease shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
SECTION 8. CONDEMNATION.
(a) If during the Initial Term or Renewal Term of this Lease
the Leased Assets or any portion thereof shall be appropriated by any
corporation or authority having the right of eminent domain, or if access to the
Leased Assets is restricted by action of any such corporation or authority and
reasonably comparable access is not made available to the Leased Assets, this
Lease and all obligations of Lessor and Lessee hereunder shall cease and
terminate as of the date the appropriating corporation or authority takes
possession thereof or materially restricts access to the Leased Assets. All
obligations of Lessee to pay any rents or other charges whatsoever under the
terms of this Lease shall be apportioned as of such date in the same manner as
if the Lease had expired on such date according to its terms.
(b) Whenever used herein, the terms "appropriated" or
"appropriation" shall include any voluntary transfer of the Leased Assets or any
part thereof to any corporation or authority having the right of eminent domain
as a result of a settlement of a threatened or pending appropriation action.
(c) In the event of the appropriation of the whole or any part
of the Leased Assets, the amount received as compensation for the appropriation
(including in the case of an appropriation of part of the Leased Assets, any
amount allowed as damages to the
<PAGE> 91
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remainder) shall be paid in full to Lessor, subject, however, to any right of
Lessee to receive any additional or specific award from the appropriating
corporation or authority to which it might be entitled.
(d) In any appropriation of the Leased Assets, Lessee shall
have the right to prove in the proceeding and to receive any award which may be
for damages to or condemnation of Lessee's movable trade fixtures, equipment,
furniture and furnishings and for moving and relocation expenses.
SECTION 9. INTERFERENCE AND RF RADIATION.
(a) General. Lessee will conduct its activities in accordance
with applicable requirements of the FCC and sound electronic and engineering
practice.
(b) RF Radiation. Lessee shall, at Lessee's expense, take all
actions required to ensure that Lessee's broadcast operation does not expose
workers or the general public to levels of radio frequency radiation in excess
of the "Radio Frequency Protection Guides" recommended in the American National
Standard Safety Levels with Respect to Human Exposure to Radio Frequency
Electromagnetic Fields, 300 kHz to 100 GHz (ANSI C95.1-1982) issued by the
American National Standards Institute.
SECTION 10. FORCE MAJEURE. Neither Lessor nor Lessee shall be required
to perform any term, condition or covenant in this Lease so long as such
performance is delayed or prevented by force majeure, which shall mean Acts of
God, strikes, lockouts, material or labor restrictions by any governmental
authority, civil riots, floods, and any other cause not reasonably within the
control of Lessor or Lessee and which by the exercise of due diligence Lessor or
Lessee is unable, wholly or in part, to prevent or to overcome; provided,
however, force majeure shall not excuse Lessee from its obligation to pay rent
or other sums hereunder and Lessee shall be required to pay any and all rent and
such other sums as provided by this Lease.
SECTION 11. MECHANICS' LIENS. Lessee shall not suffer or permit any
mechanics' liens to be filed against the Leased Assets by reason of work, labor
or materials supplied or claimed to have been supplied to Lessee that are not
removed or for which adequate bond has not been provided within thirty (30) days
of such filing. Furthermore, if any such lien at any time shall be filed against
the Leased Assets, Lessee shall proceed with due diligence to cause the same to
be discharged of record by payment, deposit, bond, order of court or otherwise.
<PAGE> 92
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SECTION 12. LESSOR'S LIEN. Lessor shall have a first lien upon every
right and interest of Lessee to and in the Leased Assets for the payment of rent
and all other sums payable by Lessee hereunder and as security for the
performance and observance of the agreements, conditions, and obligations of
this Lease by and between Lessor and Lessee, dated the date hereof, which
agreements, conditions, and obligations are to be performed and observed by
Lessee.
SECTION 13. QUIET ENJOYMENT. Lessor covenants that, upon payment by
Lessee of all rents and the performance by Lessee of all obligations pursuant to
this Lease, Lessee shall and may peaceably and quietly have and enjoy the Leased
Assets for and during the Initial Term and any Renewal Term of this Lease,
pursuant to the terms hereof, free from any hindrance from any person or persons
whomsoever claiming by, through or under Lessor.
SECTION 14. DEFAULT. If the Lessee defaults in fulfilling any of its
material covenants or obligations hereunder, or if the Lessee does not fully
make all payments of rent when due under this Lease, Lessor at its option may
terminate and end this Lease and recover the Leased Assets provided that Lessee
has been given written notice by Lessor and that Lessee has not made full
payment of the rent and cured all other such defaults, if any, within fifteen
(15) days following such notice. Furthermore, if Lessee fails to make a payment
of Rent hereunder when due, Lessee shall be liable for and pay to Lessor a late
payment charge at the rate of eighteen percent (18%) per annum, computed from
the date said payment was due until the date said payment is actually made. In
the event of a default hereunder, other than the nonpayment of rent or other
monetary obligation, the Lessor shall have the right to terminate this Lease if
Lessee does not cure such default within thirty (30) days of written notice from
Lessor. In the event of said defaults, in addition to said termination rights,
Lessor shall have all other rights and remedies to which it may be entitled. A
waiver by the Lessor of any breach of this Lease or any terms, conditions or
promises herein contained must be in writing to be effective and shall not be or
construed to be a waiver of any subsequent breach of the same or any other term,
condition or promise herein and the payment by the Lessee and acceptance by the
Lessor of rent hereunder shall not be construed to be a waiver of any breach of
terms or conditions herein except as to the particular installment of rent so
paid and accepted.
SECTION 15. SURRENDER OF LEASED ASSETS. Lessee, upon the expiration of
the Initial Term or Renewal Term of this Lease or the earlier termination of
this Lease, shall surrender to Lessor the Leased Assets in accordance with the
terms and conditions provided for in Subsection 3(b) hereof.
<PAGE> 93
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SECTION 16. NOTICES. All notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be (i) in
writing, delivered by personal delivery, or sent by commercial delivery service
or certified mail, return receipt requested, (ii) deemed to have been given the
date of personal delivery, or the date set forth in the records of the delivery
service or on the return receipt, and (iii) addressed as follows:
If to Lessor: Paxson Communications of Tucson-46, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attention: Lowell W. Paxson
with a copy Dow, Lohnes & Albertson
(which shall A Professional Limited Liability Company
not constitute 1200 New Hampshire Avenue, N.W.
notice) to: Suite 800
Washington, D.C. 20036-6802
Attention: John R. Feore, Jr., Esq.
If to Lessee: Channel 46 of Tucson, Inc.
2309 N. Hampton Street
Tucson, Arizona 85719
with a copy Booker Wade, Esquire
(which shall One Market Plaza
not constitute Stewart Street Tower, 9th Floor
notice) to: San Francisco, CA 94107
or to any such other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
16.
SECTION 17. PROPERTY INSURANCE.
(a) Lessor shall, at its expense, obtain and maintain during
the Initial Term and Renewal Term of this Lease, "All Risk", hazard insurance on
the Leased Assets. Such insurance shall cover at least all risks customarily
insured against in the broadcasting industry, subject to standard deductibles.
(b) Lessee hereby releases Lessor from and holds Lessor
harmless against any and all claims that Lessee may hereafter have for loss,
theft, disappearance, damage or
<PAGE> 94
- 10 -
destruction of the Leased Assets, regardless of the cause thereof.
Notwithstanding the generality of the foregoing, this release shall not apply to
any grossly negligent, willful or wanton act of the Lessor, its employees,
agents or representatives. In the event that insurance on the Leased Assets was
in force at the time of such loss, theft, disappearance, damage or destruction,
Lessee agrees to take all necessary action to make this release effective and
binding upon its insurance carriers so that such carriers specifically waive all
right of subrogation, if any, that such carriers might otherwise have against
Lessor and its employees, agents or contractors.
SECTION 18. TAXES. During the term hereof, Lessor agrees to pay all
personal property taxes assessed against the Leased Assets within thirty (30)
days of its receipt of a true and correct statement.
SECTION 19. CAPTIONS. The captions or headings of sections in this
Lease are inserted for convenience only and shall not be considered in
construing the provisions hereof.
SECTION 20. COVENANTS TO BIND AND BENEFIT RESPECTIVE PARTIES. This
Lease shall inure to the benefit of and be binding upon the successors and
assigns of Lessor and Lessee.
SECTION 21. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Any
and all representations, warranties and covenants contained in this Lease shall
survive the execution of the Lease and shall continue in full force and effect
during the Initial Term and any Renewal Term hereof.
SECTION 22. COUNTERPARTS. More than one counterpart of this Lease may
be executed by the parties hereto and each duly executed counterpart shall be
deemed an original.
SECTION 23. ATTORNEYS FEES. In the event an action is brought to
enforce or construe any of the terms or conditions of this Lease, the prevailing
party shall be entitled to reasonable attorneys' fees and costs.
SECTION 24. MISCELLANEOUS.
(a) This Lease shall be governed by the laws of the State of
Delaware and may be modified or amended only by a writing, signed by the party
against whom the amendment or modification is sought to be enforced.
<PAGE> 95
- 11 -
(b) Failure of either party to exercise its rights hereunder
shall not operate as a waiver of the future exercise of such right.
SECTION 25. ENTIRE AGREEMENT. This Lease, including the exhibits
hereto, sets forth the entire understanding of the parties hereto at the time of
execution and delivery hereof with respect to the subject matter hereof.
SECTION 26. WAIVER OF JURY TRIAL. To the extent they may lawfully do
so, the parties hereto irrevocably waive all rights to a trial by jury in any
proceeding hereinafter instituted by or against either party in respect of this
Lease.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 96
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first set forth above.
CHANNEL 46 OF TUCSON, INC.
By:
-----------------------------------
Name:
Title:
PAXSON COMMUNICATIONS OF TUCSON-46, INC.
By:
-----------------------------------
Name:
Title:
<PAGE> 97
EXHIBIT A
Leased Assets
<PAGE> 98
EXHIBIT C
<PAGE> 99
EXHIBIT C
================================================================================
SHAREHOLDERS AGREEMENT
BY AND AMONG
SUNGILT CORPORATION, INC.
PAXSON COMMUNICATIONS OF TUCSON-46, INC.
AND
CHANNEL 46 OF TUCSON, INC.
* * *
_____________, 1997
================================================================================
<PAGE> 100
SHAREHOLDERS AGREEMENT
This SHAREHOLDERS AGREEMENT (the "Agreement") is made as of the ____
day of __________, 199_, by and among Paxson Communications of Tucson-46, Inc.,
a Florida corporation ("Paxson"), Channel 46 of Tucson, Inc., a Delaware
corporation (the "Company"), and Sungilt Corporation, Inc.. an ____________
corporation ("SC"). SC and Paxson are sometimes referred to herein individually
as "Shareholder" and collectively as "Shareholders."
R E C I T A L S
A. The Company holds a construction permit issued by the Federal
Communications Commission ("FCC") for new television station KXGR, Channel 46,
Green Valley, Arizona (the "Station").
B. The Company's authorized capital stock consists of one thousand
(1,000) shares of voting common stock, all of which shares are issued and
outstanding (the "Common Stock").
C. SC holds 510 shares of Common Stock (the "SC Stock") and, on the
date hereof, SC has conveyed to Paxson 490 shares of Common Stock (the "Paxson
Stock").
D. Paxson, the Company and SC have entered into a Stock Purchase
Agreement ("Purchase Agreement") as of September __, 1997.
E. The parties hereto desire to set forth certain understandings and
agreements relating to, among other things, the issuance and transfer of the
capital stock of the Company.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
undertakings contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, SC, Paxson and the
Company, intending to be legally bound, agree as follows:
ARTICLE I. RESTRICTIONS
Section 1.1 Scope of Agreement. This Agreement shall apply to (i) any
transfer of shares of Common Stock (now owned or hereafter acquired) and any
other shares of capital stock of the Company, whether or not outstanding on the
date hereof, by any Shareholder or any transferee or successor of any
Shareholder, whether by sale, exchange, assignment, disposition, bequest, gift,
pledge, mortgage, hypothecation or otherwise, whether voluntary,
<PAGE> 101
involuntary or by operation of law, whether resulting from death, bankruptcy,
insolvency or otherwise, and (ii) the issuance or transfer by the Company of any
shares of capital stock of the Company, whether or not authorized or outstanding
on the date hereof, or any options, warrants or any form of debt or equity
presently or hereinafter convertible into shares of capital stock of the Company
(any and all such transfers in clauses (i) or (ii) are referred to hereinafter
as a "Transfer").
Section 1.2 Transfer Restrictions.
(a) Neither SC, Paxson nor the Company shall agree to, cause
or permit any Transfer.
(b) The restriction in Section 1.2(a) above shall not apply to
(i) any sale, transfer, assignment or disposition to a person or entity that
controls, is controlled by or is under common control with SC or Paxson, as the
case may be, or (ii) any sale, transfer, assignment or disposition of the Paxson
Stock resulting from the sale or transfer of all of the issued and outstanding
stock of Paxson or any entity that owns or controls Paxson, or (iii) any sale or
transfer of the SC Stock to Paxson pursuant to the terms of the Stock Purchase
Agreement dated as of March __, 1997, among the Company, Paxson and SC (the
"Purchase Agreement").
(c) No Transfer shall be effective unless a Transfer is made
pursuant to the terms of this Agreement, and the successors or assigns of SC or
Paxson as a result of any Transfer permitted by the terms of this Agreement
shall have duly executed a document evidencing their agreement to be bound by
the terms of this Agreement.
Section 1.3 Legends or Certificates. In order to effectuate this
Agreement, and to avoid any transfer of shares in violation of the Securities
Act of 1933 or of the securities laws of any state, each certificate
representing any share of capital stock of the Company shall bear legends in
substantially the following form:
The Shares represented by this Certificate are subject to an Agreement
dated August 20, 1996, entered into in order, inter alia, to restrict
the transferability of such Shares. Said Agreement is automatically
binding upon any person who acquires the Shares. Any transfer or
acquisition in violation of such Agreement is null and void. A copy of
the Agreement is available for inspection at the principal office of
the Company.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY
NOT BE
- 2 -
<PAGE> 102
TRANSFERRED OR SOLD UNLESS SO REGISTERED OR UNLESS AN EXEMPTION IS
AVAILABLE.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of SC. SC hereby represents,
warrants and agrees as follows:
(a) SC is a corporation duly organized, validly existing and
in good standing under the laws of the State of _______.
(b) SC has the corporate power and authority to enter into
this Agreement and carry out its obligations hereunder. The consummation of the
transactions contemplated hereby, and all previous actions taken by SC with
respect to such transactions, have been duly and validly authorized by SC's
Board of Directors. No other corporate acts or proceedings on the part of SC are
necessary to authorize this Agreement or the consummation of the transactions
contemplated hereby, or any previous actions taken by SC with respect to such
transactions, and when duly executed and delivered by the parties hereto, this
Agreement will constitute a valid and legally binding obligation of SC,
enforceable against SC in accordance with its terms.
(c) Neither the execution and delivery by SC of this
Agreement, the consummation by SC of the transactions contemplated hereby, any
previous actions taken by SC with respect to such transactions, nor compliance
by SC with any provision hereof, will violate or conflict with, or result in a
breach of any provision or any of the terms, conditions or provisions of, the
Articles of Incorporation or Bylaws of SC or any contracts, agreements or
obligations of SC or by which SC is bound.
Section 2.2 Representations and Warranties of the Company. The Company
hereby represents, warrants and agrees as follows:
(a) The Company is duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) The Company has the corporate power and authority to enter
into this Agreement and carry out its obligations hereunder. The consummation of
the transactions contemplated hereby, and all previous actions taken by the
Company with respect to such transactions, have been duly and validly authorized
by the Company's Board of Directors. No other corporate acts or proceedings on
the part of the Company are necessary to authorize this Agreement or the
consummation of the transactions contemplated hereby, or any previous actions
taken by the Company with respect to such transactions, and when duly executed
and delivered by the parties hereto, this Agreement will constitute a valid and
- 3 -
<PAGE> 103
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(c) Neither the execution and delivery by the Company of this
Agreement, the consummation by the Company of the transactions contemplated
hereby, any previous actions taken by the Company with respect to such
transactions, nor compliance by the Company with any provision hereof, will
violate or conflict with, or result in a breach of any provision or any of the
terms, conditions or provisions of, the Articles of Incorporation or the Bylaws
of the Company or any other contracts, agreements or obligations of the Company
or by which the Company is bound.
Section 2.3 Representations and Warranties of Paxson. Paxson hereby
represents, warrants and agrees as follows:
(a) Paxson is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida.
(b) Paxson has the corporate power and authority to enter into
this Agreement and carry out its obligations hereunder. The consummation of the
transactions contemplated hereby, and all previous actions taken by Paxson with
respect to such transactions, have been duly and validly authorized by Paxson's
Board of Directors. No other corporate acts or proceedings on the part of Paxson
are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby, or any previous actions taken by Paxson with
respect to such transactions, and when duly executed and delivered by the
parties hereto, this Agreement will constitute a valid and legally binding
obligation of Paxson, enforceable against Paxson in accordance with its terms.
(c) Neither the execution and delivery by Paxson of this
Agreement, the consummation by Paxson of the transactions contemplated hereby,
any previous actions taken by Paxson with respect to such transactions, nor
compliance by Paxson with any provision hereof, will violate or conflict with,
or result in a breach of any of the terms, conditions, or provisions of, the
Articles of Incorporation or Bylaws of Paxson or any contracts, agreements or
obligations of Paxson or by which Paxson is bound.
ARTICLE III. BOARD OF DIRECTORS.
(a) The Board of Directors of the Company (the "Board") shall
have full discretion and authority with respect to the management, business and
affairs of the Company. The Board shall have full right, power and authority in
the management of the business and affairs of the Company and to do or cause to
be done any and all acts deemed by the Board to be necessary or appropriate to
effectuate the purposes of the Company.
- 4 -
<PAGE> 104
(b) Until such time as SC no longer holds the SC Stock, the
Board shall have three members, and SC shall be entitled to designate two
members of the Board and their replacements or successors, if any, and Paxson
shall be entitled to designate one member of the Board and his replacements or
successors, if any. At such time as Paxson acquires the SC Stock, the Board
shall have one member, and Paxson shall be entitled to designate such member of
the Board and his replacements or successors, if any. Each member of the Board
shall have one vote. A quorum of the Board shall be deemed present for the
purpose of taking any action required to be taken by the Board if there are
present, in person, or by video or audio conferencing, one member of the Board
designated by SC and the member of the Board designated by Paxson. Any action
taken by the Board shall be valid if approved by a majority of the Board members
present at any meeting of the Board at which a quorum is present.
(c) Regular meetings of the Board regarding any matters shall
be held quarterly. Meetings of the Board may be called by any member of the
Board by giving the other members written notice of the time, date, place and
purpose of the meeting at least five days in advance thereof, or by giving
telephonic notice of the same at least seventy-two hours in advance thereof. Any
Board member participating in a meeting of the Board shall be deemed to have
waived notice of such meeting. Any meeting of the Board shall be held at such
location as the Board may deem appropriate; provided, however, that any
representative of the Board may, at its option, participate by video or audio
conferencing or other comparable communications equipment. Any action required
or permitted to be taken at any meeting of the Board may be taken without a
meeting if a written consent to such action is signed by all members of the
Board and such written consent is filed with the minutes of its proceedings. Any
member of the Board may appoint a proxy to act on his behalf at any meeting,
provided that he delivers notice thereof to the other members of the Board prior
to the commencement of such meeting. The Board may adopt such other procedural
rules with respect to the meetings and other conduct of the Board as it may deem
desirable.
(d) SC hereby designates Arlene Stevens and John Stevens as
its initial representatives, and Paxson hereby designates Lowell W. Paxson as
its initial representative. Each Shareholder may, at its sole discretion, change
its respective designee or designees to the Board by giving written notice of
such change to the other Shareholder.
ARTICLE IV. OPERATIONAL PROVISIONS. While this Agreement is in effect, the
following actions may be taken with respect to the Company only with the consent
of each Shareholder:
(a) any fundamental change in the nature of the business
conducted by it;
- 5 -
<PAGE> 105
(b) a reorganization of its capital, a reclassification of its
interests or the consolidation or merger of it with another entity;
(c) any sale of all or a substantial portion of its assets;
(d) any transaction with an affiliate (as defined in the rules
under the Securities Act of 1933) of either Shareholder on terms less favorable
to it than the terms available from an unrelated third party;
(e) entering into any contract or agreement, other than the
Time Brokerage Agreement, Lease Agreement, and Construction Agreement (as
defined in the Purchase Agreement), that involves over the term of the contract
or agreement an aggregate expenditure by it of $25,000 or more;
(f) any individual capital expenditure in excess of $25,000 or
any series of related capital expenditures in excess of $50,000;
(g) incurring any indebtedness for money borrowed in excess of
$25,000 or any increase, modification or extension of any indebtedness for
borrowed money in excess of $25,000;
(h) settling any litigation that requires solely a cash
payment by the Company in excess of $25,000 or settling any litigation that
requires a remedy other than solely a cash payment if that remedy could have a
material adverse effect on the Company or the Station;
(i) guaranteeing any obligation of any person in excess of
$10,000;
(j) doing any act in contravention of this Agreement, the
Delaware Corporation Law or the Certificate of Incorporation or By-laws of the
Company;
(k) doing any act that would make it impossible to carry on
its business except upon its dissolution and liquidation;
(l) confessing a judgement against it if the result thereof
could have a material adverse effect on it, the Station or any Shareholder;
(m) using any assets of the Station other than for its
benefit; or
(n) adopting an annual budget for the Station, provided that
the second annual budget shall equal the first annual budget plus CPI.
- 6 -
<PAGE> 106
ARTICLE V. TERMINATION. This Agreement shall terminate and all rights and
obligations hereunder shall cease upon the occurrence of any of the following
events:
(a) The consummation of the sale of the SC Stock to Paxson
pursuant to the Purchase Agreement;
(b) The agreement in writing to terminate this Agreement
executed by each Shareholder;
(c) The voluntary or involuntary dissolution of the Company.
This Agreement shall terminate with respect to any Shareholder upon the
disposition by such Shareholder of its Common Stock in accordance with the terms
of this Agreement; provided, however, that this Agreement shall survive such
termination and continue to be binding upon every Shareholder which is or will
become a party hereto; or
(d) Upon termination of the Purchase Agreement provided that
Paxson does not then own any common stock in the Company.
ARTICLE VI. MISCELLANEOUS
Section 6.1 Binding Effect. This Agreement shall be binding upon the
parties hereto and their successors and assigns. Each of the parties to this
Agreement shall execute and deliver or cause to be executed and delivered any
and all documents or legal instruments necessary to carry out the provisions
hereof.
Section 6.2 Enforceability. In the event any provision of this
Agreement is found to be unenforceable or invalid, such provisions shall be
severable from this Agreement to the extent that it is a provision which is not
essential and the absence of which would not have prevented the parties from
entering into this Agreement. The unenforceability or invalidity of a provision
which has been performed shall not be grounds for invalidation of this Agreement
under circumstances in which the true controversy between the parties does not
involve such provision.
Section 6.3 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware.
Section 6.4 Modifications. This Agreement may not be modified, amended,
altered or supplemented except by a written agreement or other instrument signed
by the parties hereto.
Section 6.5 Headings. Headings in this Agreement are for convenience or
reference only and shall not affect the construction or interpretation of this
Agreement.
- 7 -
<PAGE> 107
Section 6.6 Entire Agreement. This Agreement represents the only
agreements and understandings between the parties hereto with respect to the
subject matter hereof.
Section 6.7 Attorneys' Fees. In the event any legal action is required
by a party to this Agreement to enforce the provisions hereof against one of the
other parties hereto, the prevailing party shall be entitled to recover its
costs of legal action, including reasonable attorneys' fees, from the other
party involved in such action.
Section 6.8 Specific Performance. Each party hereto acknowledges that
there will be no adequate remedy at law if any other party hereto fails to
perform any of its obligations hereunder and that each party will be irreparably
harmed by any such failure. Accordingly, each party hereto agrees that each
party, in addition to any other remedy to which it may be entitled at law or in
equity, shall be entitled to compel specific performance of the obligations of
the other party or parties under this Agreement.
Section 6.9 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
Section 6.10 Notices. All notices provided by this Agreement shall be
in writing and shall be given by certified mail (return receipt requested), by
overnight delivery, shipment prepaid, or by personal delivery, by one party to
another, addressed to such other party or parties at the applicable address set
forth below:
To SC and the Company at:
Sungilt Corporation, Inc.
2309 N. Hampton Street
Tucson, AZ 85719
Attention: Arlene Stevens
with copy to: Booker Wade, Esquire
One Market Plaza
Stewart Street Tower, 9th Floor
San Francisco, CA 94107
- 8 -
<PAGE> 108
To Paxson at:
Paxson Communications of Tucson-46, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Lowell W. Paxson
with copy to:
John R. Feore, Jr.
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
or any replacement address of which SC, the Company or Paxson gives the other
parties notice under this section.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 9 -
<PAGE> 109
IN WITNESS WHEREOF, SC, Paxson and the Company have each caused this
Shareholders Agreement to be executed by a duly authorized officer thereof, as
of the date first above written.
CHANNEL 46 OF TUCSON, INC.
By:
----------------------------------------
Name:
Title:
SUNGILT CORPORATION
By:
----------------------------------------
Name:
Title:
PAXSON COMMUNICATIONS OF
TUCSON-46, INC.
By:
----------------------------------------
Name:
Title:
<PAGE> 110
EXHIBIT D
<PAGE> 111
EXHIBIT D
================================================================================
ESCROW AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS OF
TUCSON-46, INC.
SUNGILT CORPORATION, INC.
CHANNEL 46 OF TUCSON, INC.
AND
FIRST UNION NATIONAL BANK OF FLORIDA
* * *
SEPTEMBER __, 1997
================================================================================
<PAGE> 112
EXHIBIT D
ESCROW AGREEMENT
This ESCROW AGREEMENT is made and entered into this ___ day of
September, 1997, by and among CHANNEL 46 OF TUCSON, INC., a Delaware corporation
("Company"); PAXSON COMMUNICATIONS OF TUCSON-46, INC., a Florida corporation
("Buyer"); SUNGILT CORPORATION, INC. ("Seller"); and FIRST UNION NATIONAL BANK
OF FLORIDA ("Escrow Agent").
WHEREAS, Buyer, Seller and the Company have entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") providing for the purchase
by Buyer of the Stock of the Company owned by Seller.
WHEREAS, the Stock Purchase Agreement provides that Buyer shall deposit
in escrow with the Escrow Agent the sum of One Hundred Thousand Dollars
($100,000) (the "Escrow Fund") to be held and disbursed by the Escrow Agent as
provided in Article 16 of the Stock Purchase Agreement and the terms hereof.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF ESCROW AGENT
(a) Buyer and Seller each appoint First Union National Bank of Florida
as Escrow Agent to receive, hold, administer and deliver the Escrow Fund in
accordance with this Agreement and the Escrow Agent accepts such appointment,
all subject to and upon the terms and conditions set forth in this Agreement.
(b) The Escrow Agent shall invest and reinvest the Escrow Fund and the
interest earned thereon as directed by Buyer. Absent specific instructions from
Buyer, the Escrow Agent shall invest the Escrow Fund and the interest earned
thereon only in U.S. government obligations maturing not more than 90 days from
the date of purchase or in a money market account investing solely in U.S.
government obligations.
SECTION 2. GENERAL INTENTION
Buyer herewith deposits the Escrow Fund with the Escrow Agent, and the
Escrow Agent hereby acknowledges receipt of the Escrow Fund. The Escrow Agent
shall dispose of the Escrow Fund and the interest earned thereon in accordance
with the express provisions of this Agreement and, except as required by Section
3 of this Agreement, shall not make, be required to make or be liable in any
manner for its failure to make, any determination under the Stock Purchase
Agreement or any other agreement, including, without limitation, any
determination of whether Buyer or Seller have complied with the terms of the
Stock Purchase
<PAGE> 113
Agreement or are entitled to delivery of the Escrow Fund and the interest earned
thereon or to any other right or remedy thereunder.
SECTION 3. RELEASE OF ESCROW FUND
The Escrow Agent shall hold and disburse the Escrow Fund as provided in
this Section 3:
3.1 Seller's Demand. If the Escrow Agent receives a written notice
signed by Seller stating that Seller is entitled to any portion of the Escrow
Fund and certifying that a copy of the notice has been delivered to Buyer in a
manner specified in Section 6, the Escrow Agent shall deliver a copy thereof to
Buyer in a manner specified in Section 6 and, unless the Escrow Agent receives a
written objection from Buyer within ten business days after the date of delivery
of the notice to Buyer as provided in Section 6, the Escrow Agent shall deliver
to Seller the portion of the Escrow Fund claimed by Seller. If the Escrow Agent
receives a written objection from Buyer, the Escrow Agent shall continue to hold
the Escrow Fund and the interest earned thereon until it has received written
instructions signed by Seller and Buyer or a final, non-appealable order of a
court of competent jurisdiction directing delivery of the Escrow Fund, in which
case the Escrow Agent shall deliver the Escrow Fund and the interest earned
thereon in accordance with the instructions or order.
3.2 Buyer's Demand. If the Escrow Agent receives a written notice
signed by Buyer stating that Buyer is entitled to any portion of the Escrow Fund
and the interest earned thereon and certifying that a copy of the notice has
been delivered to Seller in a manner specified in Section 6, the Escrow Agent
shall deliver a copy thereof to Seller in a manner specified in Section 6 and,
unless the Escrow Agent receives a written objection from Seller within ten
business days after the date of delivery of the notice to Seller as provided in
Section 6, the Escrow Agent shall deliver to Buyer the portion of the Escrow
Fund and the interest earned thereon claimed by Buyer. If the Escrow Agent
receives a written objection from Seller, the Escrow Agent shall continue to
hold the Escrow Fund and the interest earned thereon until it has received
written instructions signed by Seller and Buyer or a final, non-appealable order
of a court of competent jurisdiction directing delivery of the Escrow Fund and
the interest earned thereon, in which case the Escrow Agent shall deliver the
Escrow Fund and the interest earned thereon in accordance with the instructions
or order.
3.3 Court Order or Joint Instructions. Notwithstanding anything to the
contrary in this Agreement:
(a) The Escrow Agent may deposit the Escrow Fund and the
interest earned thereon with the clerk of any court of competent jurisdiction
upon commencement of an action in the nature of interpleader or in the course of
any court proceedings involving the disbursement of the Escrow Fund and the
interest earned thereon.
2
<PAGE> 114
(b) If at any time the Escrow Agent receives a final,
non-appealable order of a court of competent jurisdiction or written
instructions signed by Seller and Buyer, directing delivery of the Escrow Fund
and the interest earned thereon, the Escrow Agent shall comply with the order or
instructions. Upon any delivery or deposit of the Escrow Fund and all interest
earned thereon as provided in this Section 3, the Escrow Agent shall and will
thereupon be released and discharged from any and all further obligations
arising in connection with this Agreement without further documents or action by
Buyer or Seller.
3.4 Partial Release of Escrow Fund. If the Escrow Agent disburses less
than all of the Escrow Fund pursuant to any demand, court order, or joint
instructions in accordance with this Agreement, that portion of the Escrow Fund
not disbursed shall continue to be held in escrow by the Escrow Agent subject to
the terms of this Agreement.
SECTION 4. ESCROW AGENT
4.1 Indemnification. The Escrow Agent shall not be liable under this
Agreement except for its own gross negligence or willful misconduct. Except with
respect to misconduct claims that are successfully asserted against the Escrow
Agent, Buyer and Seller jointly and severally shall indemnify and hold harmless
the Escrow Agent (and any successor Escrow Agent) from and against any and all
losses, liabilities, claims, actions, damages and expenses, including reasonable
attorneys' fees and disbursement, arising out of or in connection with this
Agreement.
4.2 Reliance. This Agreement expressly sets forth all of the duties of
the Escrow Agent with respect to any and all matters pertinent to this
Agreement. In performing its duties hereunder, the Escrow Agent shall be
entitled to rely upon any order, judgment, certification, demand, notice
instrument or other writing delivered to it under this Agreement without being
required to determine the authenticity or the correctness of any fact stated
therein or the propriety or validity of the service thereof. The Escrow Agent
may act in reliance upon any instrument or signature reasonably believed by it
to be genuine and may assume that any person signing such instrument or
purporting to give any notice hereunder has been duly authorized to do so.
4.3 Advice of Counsel. The Escrow Agent may act in good faith pursuant
to the advice of counsel with respect to any matter relating to this Agreement,
including without limitation, any determination that a court order is final and
non-appealable.
4.4 Resignation. The Escrow Agent may resign and be discharged from its
duties or obligations hereunder by giving written notice to Buyer and Seller of
such resignation, specifying a date when such resignation shall take effect. In
such case, Buyer and Seller shall mutually agree upon the selection of a
successor Escrow Agent hereunder.
3
<PAGE> 115
SECTION 5. TERMINATION
This Agreement shall be terminated (a) upon the disbursement or release
in accordance with this Agreement of the entire Escrow Fund and all interest
earned thereon, including the deposit of the Escrow Fund with the clerk of any
court of competent jurisdiction in accordance with Section 3 or (b) by written
consent signed by all parties. This Agreement shall not otherwise be terminated.
SECTION 6. NOTICES
All notices, demands, and requests required or permitted to be given
under the provisions of this Agreement shall be (a) in writing, (b) delivered by
personal delivery, or sent by commercial delivery service or registered or
certified mail, return receipt requested, (c) deemed to have been given on the
date of personal delivery or the date set forth in the records of the delivery
service or on the return receipt, and (d) addressed as follows:
If to Seller: Sungilt Corporation, Inc.
2309 N. Hampton Street
Tucson, Arizona 85719
Facsimile: ______________
Telephone: ______________
If to Buyer: Paxson Communications of Tucson-46, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Attention: Lowell W. Paxson
Facsimile: (561) 655-9424
Telephone: (561) 659-4122
If to Escrow Agent: First Union National Bank of Florida
Corporate Trust Department FL0122
225 Water Street, Third Floor
Jacksonville, FL 32202
Attention: Richard Hann
Facsimile: (904) 361-7735
Telephone: (904) 361-3160
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 6.
SECTION 7. ESCROW FEES
Buyer shall pay any fees due to the Escrow Agent for the services to be
rendered by the Escrow Agent under this Agreement. Buyer and Seller shall share
equally and pay for or
4
<PAGE> 116
reimburse the Escrow Agent upon request for all reasonable expenses, including
reasonable attorneys' fees, incurred by it in the performance of its duties
under this Agreement.
SECTION 8. BENEFIT AND ASSIGNMENT
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. No party hereto
may voluntarily or involuntarily assign its interests under this Agreement
without the prior written consent of the other parties hereto.
SECTION 9. GOVERNING LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Florida.
SECTION 10. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed an original but all of which together will constitute one
and the same instrument.
SECTION 11. ENTIRE AGREEMENT
This Agreement contains all the terms agreed upon by the parties with
respect to the subject matter hereof.
SECTION 12. AMENDMENTS
Except as provided in Section 5, this Agreement may only be modified or
terminated by a writing signed by all the parties hereto, and no waiver
hereunder shall be effective unless embodied in a writing signed by the party to
be charged.
SECTION 13. TAX REPORTING
For tax reporting purposes, all interest earned on the Escrow Fund
shall be deemed to be for the account of Buyer.
5
<PAGE> 117
IN WITNESS WHEREOF, the parties hereto have duly executed this Escrow
Agreement as of the date first above written.
PAXSON COMMUNICATIONS OF
TUCSON-46, INC.
By:
------------------------------------
Name:
Title:
SUNGILT CORPORATION, INC.
By:
------------------------------------
Name:
Title:
CHANNEL 46 OF TUCSON, INC.
By:
------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK OF
FLORIDA
By:
------------------------------------
Name:
Title:
<PAGE> 118
SCHEDULE 5.6
ASSETS
<PAGE> 119
SCHEDULE 5.9
TRANSMITTER SITE
<PAGE> 120
SCHEDULE 6.7(F)
OPINIONS OF COUNSEL TO SELLER AND THE COMPANY
(INITIAL CLOSING)
<PAGE> 121
SCHEDULE 6.7(f)
FORM OF OPINION OF COUNSEL TO SELLER
AND THE COMPANY TO BE DELIVERED AT INITIAL CLOSING
_______________, 1997
Paxson Communications of Tucson-46, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Re: Stock Purchase Agreement dated as of_______________, 1997 (the
"Purchase Agreement"), by and among Sungilt Corporation, Inc.,
a ______________________ corporation ("Seller"), Channel 46
of Tucson, Inc., a Delaware corporation (the "Company"), and
Paxson Communications of Tucson-46, Inc., a Florida
corporation ("Buyer").
Ladies and Gentlemen:
We have acted as counsel for Seller and the Company in connection with
the transactions contemplated by the Purchase Agreement. This opinion is being
delivered to you pursuant to Section 6.7(f) of the Purchase Agreement. All
capitalized terms not defined in this opinion shall have the meanings set forth
in the Purchase Agreement.
In rendering this opinion, we have reviewed the following documents:
1. the Purchase Agreement;
2. the Construction Agreement;
3. the Time Brokerage Agreement;
4. the Shareholders Agreement;
5. the Escrow Agreement;
6. the Loan Documents;
7. the Assignment of Construction Permit dated __________, 1997
between Seller and the Company;
8. the Tower Lease; and
9. the stock power dated as of the date hereof from Seller to
Buyer for the Initial Shares (the "Stock Power").
<PAGE> 122
Paxson Communications of Tucson-46, Inc.
___________________, 1997
Page 2
The documents referred to in clauses 1 through 9 shall be referred to
herein as the "Transaction Documents."
In our examination of documents and records, we have assumed, without
investigation, the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity with originals of all documents submitted to us as telecopied,
certified, photostatic or reproduced copies and the authenticity of all such
documents.
In rendering this opinion, we have also assumed that (i) all parties to
the Transaction Documents (other than Seller and the Company) are duly
organized, validly existing, and in good standing under the laws of their
respective jurisdictions of organization and have the requisite power to enter
into and perform the Transaction Documents, (ii) the execution and delivery of
the Transaction Documents have been duly authorized by all necessary actions and
proceedings on the part of all parties thereto other than Seller and the
Company, (iii) the Transaction Documents have been duly executed and delivered
by all parties thereto other than Seller and the Company, and (iv) the
Transaction Documents constitute legal, valid, binding and enforceable
obligations of all parties thereto other than Seller and the Company.
With respect to questions of fact, we have relied, without independent
inquiry or verification by us, solely upon (a) the representations and
warranties set forth in the Transaction Documents, (b) representations of
officers of the Company and Seller and (c) certificates of public officials.
Our opinion is limited to matters arising under the laws of the State
of California, the General Corporation Law of the State of Delaware and the
United States of America, including the Communications Act of 1934 and the rules
and regulations of the FCC, insofar as such laws apply. We express no opinion
whatsoever as to any other laws or regulations or as to laws relating to choice
of law or conflicts of law principles.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of Delaware and is qualified to conduct
business as a foreign corporation in Arizona and is in good standing under the
laws of Arizona. Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of ___________. Each of Seller and
the Company has all requisite power and authority to execute and deliver the
Transaction Documents and to perform and comply with
<PAGE> 123
Paxson Communications of Tucson-46, Inc.
___________________, 1997
Page 3
all of the terms, covenants, and conditions to be performed and complied with by
it thereunder.
2. The execution, delivery and performance of the Transaction
Documents by the Company and Seller have been duly and validly authorized by all
necessary corporate actions on the part of the Company and Seller.
3. The Transaction Documents have been duly executed and
delivered by Seller and the Company and constitute legal, valid and binding
obligations of Seller and the Company, enforceable against them in accordance
with their terms, except that such enforcement may be subject to bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and to
limitations on the availability of equitable remedies.
4. The execution, delivery and performance by Seller and the
Company of the Transaction Documents and the transactions contemplated thereby
will not violate, conflict with or cause a default under: (a) any provision of
the Certificate of Incorporation and By-Laws of the Company and Seller; (b) any
statute, law, regulation or rule or any judgment, decree or order binding upon
Seller or the Company; or (c) to the best of our knowledge, any contract,
agreement or commitment to which Seller or the Company is a party or by which it
is bound.
5. To our knowledge, there is no judgment, award, order, writ,
injunction, arbitration decision or decree materially and adversely affecting
the conduct of the business of the Station, or any litigation, proceeding or
investigation pending or threatened against the Company, except as specifically
identified in Attachment A hereto and except for proceedings of general
applicability to the broadcast industry.
6. Based on our review of information publicly available at the
FCC and our internal files and records and inquiry to Seller and officers of the
Company, (a) the Company is the holder of the Construction Permit, (b) the
Construction Permit is in full force and effect, and (c) the Construction Permit
is not subject to any condition or requirement, other than conditions or
requirements that appear on the face of the Construction Permit or pertain under
generally applicable rules or policies of the FCC. The Extension Application has
been granted and such grant has become a Final Order.
7. The Pro Forma FCC Consent has been obtained, is in full force
and effect and no requests have been filed for administrative or judicial
review, reconsideration, appeal or stay of the Pro Forma FCC Consent.
<PAGE> 124
Paxson Communications of Tucson-46, Inc.
___________________, 1997
Page 4
8. The Pledge Agreement included among the Loan Documents is in
form sufficient to create in favor of Buyer a perfected first priority security
interest in all of the capital stock of the Company owned by Seller as security
for the obligations of Seller under the promissory note dated as of the date
hereof from Seller to Buyer.
9. Based on a review of the minute books and stock ledger of the
Company, the authorized capital stock of the Company consists of 1,000 shares of
voting common stock, all of which are issued and outstanding. All such shares
have been validly issued and are fully paid and nonassessable. Upon delivery to
Buyer of the stock certificate representing the Initial Shares, the Stock Power
is in form sufficient to convey good and marketable title to Buyer to the
Initial Shares.
The information set forth herein is as of the date hereof. We assume no
obligation to advise you of changes which may thereafter may be brought to our
attention. Our opinions are based on statutory and judicial decisions in effect
at the date hereof, and we do not opine with respect to any law, regulation,
rule or governmental policy which may be enacted or adopted after the date
hereof, nor assume any responsibility to advise you of future changes in our
opinions.
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Transaction Documents and
is not to be quoted in whole or in part or otherwise referred to in any of your
financial statements or public releases, nor is it to be filed with any
governmental agency or other person without the prior written consent of a
partner of this firm.
Very truly yours,
[ ]
By:
--------------------------
, Partner
------------
<PAGE> 125
SCHEDULE 7.3(d)
Opinion of Counsel to Buyer
(Initial Closing)
<PAGE> 126
Schedule 7.3(d)
Form of Buyer's Opinion
To Be Delivered at Initial Closing
___________________, 1997
Sungilt Corporation, Inc.
2309 N. Hampton Street
Tucson, Arizona 85719
Re: Stock Purchase Agreement dated as of ____________________,
1997 (the "Purchase Agreement"), by and among Sungilt
Corporation, Inc., a ______________________ corporation
("Seller"), Channel 46 of Tucson, Inc., a Delaware corporation
(the "Company"), and Paxson Communications of Tucson-46, Inc.,
a Florida corporation ("Buyer").
Dear Ladies and Gentlemen:
We have acted as special counsel for Buyer in connection with the
transactions contemplated by the Purchase Agreement. This opinion is being
delivered to you pursuant to Section 7.3(d) of the Purchase Agreement. All
capitalized terms not defined in this opinion shall have the meanings set forth
in the Purchase Agreement.
In rendering this opinion, we have reviewed the following documents:
1. the Purchase Agreement;
2. the Construction Agreement;
3. the Time Brokerage Agreement;
4. the Shareholders Agreement;
5. the Escrow Agreement;
6. a certificate dated as of ____________ from the Secretary of
State of Florida relating to the good standing of Buyer (the
"Florida Good Standing Certificate");
7. a certificate dated as of _________________ from the Secretary
of State of Arizona relating to the good standing of Buyer
(the "Arizona Good Standing Certificate");
8. the Articles of Incorporation and the Bylaws of Buyer, each in
the form certified to us by the Secretary of Buyer to be true
and complete and in effect on the date of this opinion; and
<PAGE> 127
Sungilt Corporation, Inc.
Page 2
9. resolutions of the Board of Directors of Buyer certified to us
by the Secretary of Buyer to be true and complete, to have
been duly adopted by the Board of Directors of Buyer, and to
be in full force and effect (without having been modified or
rescinded) on the date of this opinion.
The documents referred to in clauses 1 through 5 shall be referred to
herein as the "Transaction Documents."
In our examination of documents and records, we have assumed, without
investigation, the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity with originals of all documents submitted to us as telecopied,
certified, photostatic or reproduced copies and the authenticity of all such
documents.
In rendering this opinion, we have also assumed that (i) all parties to
the Transaction Documents (other than Buyer) are duly organized, validly
existing, and in good standing under the laws of their respective jurisdictions
of organization and have the requisite power to enter into and perform the
Transaction Documents, (ii) the execution and delivery of the Transaction
Documents have been duly authorized by all necessary action and proceedings on
the part of all parties thereto other than Buyer, (iii) the Transaction
Documents have been duly executed and delivered by all parties thereto other
than Buyer, and (iv) the Transaction Documents constitute legal, valid, binding
and enforceable obligations of all parties thereto other than Buyer.
With respect to questions of fact, we have relied, without independent
inquiry or verification by us, solely upon (a) the representations and
warranties set forth in the Transaction Documents, (b) representations of
officers of Buyer and (c) certificates of public officials.
This opinion is limited to the law of the District of Columbia, the
Florida Business Corporation Act and the federal law of the United States of
America, insofar as such laws apply (collectively, "Applicable Law"), except
that Applicable Law includes only those laws and regulations that a lawyer
exercising customary professional diligence would reasonably recognize as being
directly applicable to the transactions contemplated by the Transaction
Documents and excludes those set forth in Section 19 of the Legal Opinion Accord
of the American Bar Association Section of Business Law (1991). We do not
purport to be experts in the laws of the State of Florida, nor are we familiar
with judicial interpretations of the laws of Florida, including the Florida
Business Corporation Act. We have reviewed the text of the Florida Business
Corporation Act and applied it to the
<PAGE> 128
Sungilt Corporation, Inc.
Page 3
transactions described herein in light of our knowledge of the law of other
jurisdictions. We note that the Transaction Documents by their terms provide
that they are to be governed by the laws of the State of Delaware. Our opinion
in paragraph 3 is given as if the Transaction Documents were to be governed by
the laws of the District of Columbia rather than the laws of the State of
Delaware or the laws of any other state. We express no opinion as to conflicts
of law rules, or the laws of any states or jurisdictions other than as specified
above. Additional limitations are set forth in the text of the opinion.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, we are of the opinion that:
1. Based solely upon a review of the Florida Good Standing
Certificate, Buyer is a corporation duly organized and in good standing under
the laws of the State of Florida and based solely upon a review of the Arizona
Good Standing Certificate, Buyer is duly qualified to do business as a foreign
corporation in the State of Arizona and is in good standing under the laws of
the State of Arizona.
2. Buyer has full corporate power and authority under the Florida
Business Corporation Act, its Articles of Incorporation and its Bylaws to
execute, deliver and perform the Purchase Agreement and the other Transaction
Documents. Buyer's execution, delivery and performance of the Purchase Agreement
and the other Transaction Documents have been duly and validly authorized by all
necessary corporate action on the part of Buyer under the Florida Business
Corporation Act, its Articles of Incorporation and its Bylaws.
3. The Purchase Agreement and each of the other Transaction
Documents have been duly executed and delivered by Buyer and constitute the
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with their respective terms subject to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereinafter in effect
relating to creditors' rights and (ii) certain equitable defenses and the
discretion of the court before which any proceeding therefor may be brought.
4. The execution, delivery and performance by Buyer of the
Purchase Agreement and the other Transaction Documents (a) do not violate any
provisions of Buyer's Articles of Incorporation or Bylaws and (b) do not violate
any Applicable Law or any judgment, order, injunction or decree which is
applicable to Buyer and known to us.
The information set forth herein is as of the date hereof. We assume no
obligation to advise you of changes which may hereafter be brought to our
attention. Our opinions are based on statutory provisions and judicial decisions
in effect at the date hereof,
<PAGE> 129
Sungilt Corporation, Inc.
Page 4
and we do not opine with respect to any law, regulation, rule or governmental
policy which may be enacted or adopted after the date hereof nor assume any
responsibility to advise you of future changes in our opinions.
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Purchase Agreement and is
not to be quoted in whole or in part or otherwise referred to in any of your
financial statements or public releases, nor is it to be filed with any
governmental agency or other person without the prior written consent of a
member of this firm. This opinion may not be relied upon by any person or entity
other than the person to whom it is addressed.
Very truly yours,
DOW, LOHNES & ALBERTSON, PLLC
By:
-----------------------------
John R. Feore, Jr., Member
<PAGE> 130
SCHEDULE 12.5(H)
OPINIONS OF COUNSEL TO SELLER AND THE COMPANY
(SECOND CLOSING)
<PAGE> 131
SCHEDULE 12.5(h)
FORM OF OPINION OF COUNSEL TO SELLER
AND THE COMPANY TO BE DELIVERED AT SECOND CLOSING
__________________, _____
Paxson Communications of Tucson-46, Inc.
601 Clearwater Park Road
West Palm Beach, FL 33401
Re: Stock Purchase Agreement dated as of ____________, 1997
(the "Purchase Agreement"), by and among Sungilt
Corporation, Inc., a ________________ corporation
("Seller"), Channel 46 of Tucson, Inc., a Delaware
corporation (the "Company"), and Paxson Communications of
Tucson-46, Inc., a Florida corporation ("Buyer").
Ladies and Gentlemen:
We have acted as counsel for Seller and the Company in connection
with the transactions contemplated by the Purchase Agreement. This opinion is
being delivered to you pursuant to Section 12.5(h) of the Purchase Agreement.
All capitalized terms not defined in this opinion shall have the meanings set
forth in the Purchase Agreement.
In rendering this opinion, we have reviewed the following documents:
1. the Purchase Agreement; and
2. the stock power dated as of the date hereof from Seller
to Buyer for the Option Shares (the "Stock Power").
The documents referred to in clauses 1 and 2 shall be referred to
herein as the "Transaction Documents."
In our examination of documents and records, we have assumed, without
investigation, the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity with originals of all documents submitted to us as telecopied,
certified, photostatic or reproduced copies and the authenticity of all such
documents.
<PAGE> 132
Paxson Communications of Tucson-46, Inc.
________________, ____
Page 2
In rendering this opinion, we have also assumed that (i) all parties
to the Transaction Documents (other than Seller and the Company) are duly
organized, validly existing, and in good standing under the laws of their
respective jurisdictions of organization and have the requisite power to enter
into and perform the Transaction Documents, (ii) the execution and delivery of
the Transaction Documents have been duly authorized by all necessary actions
and proceedings on the part of all parties thereto other than Seller and the
Company, (iii) the Transaction Documents have been duly executed and delivered
by all parties thereto other than Seller and the Company, and (iv) the
Transaction Documents constitute legal, valid, binding and enforceable
obligations of all parties thereto other than Seller and the Company.
With respect to questions of fact, we have relied, without
independent inquiry or verification by us, solely upon (a) the representations
and warranties set forth in the Transaction Documents, (b) representations of
Seller and of officers of the Company and (c) certificates of public officials.
Our opinion is limited to matters arising under the laws of the State
of California, the General Corporation Law of the State of Delaware and the
United States of America, including the Communications Act of 1934 and the
rules and regulations of the FCC, insofar as such laws apply. We express no
opinion whatsoever as to any other laws or regulations or as to laws relating
to choice of law or conflicts of law principles.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, we are of the opinion that:
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware and is qualified to
conduct business as a foreign corporation in Arizona and is in good standing
under the laws of Arizona. Seller is a corporation duly organized, validly
existing and in good standing under the laws of __________________________.
Each of Seller and the Company has all requisite power and authority to execute
and deliver the Transaction Documents and to perform and comply with all of
the terms, covenants, and conditions to be performed and complied with by it
thereunder.
2. The execution, delivery and performance of the
Transaction Documents by the Company and Seller have been duly and validly
authorized by all necessary corporate actions on the part of the Company and
Seller.
3. The Transaction Documents have been duly executed and
delivered by Seller and the Company and constitute legal, valid and binding
obligations of Seller and the
<PAGE> 133
Paxson Communications of Tucson-46, Inc.
_________________, ______
Page 3
Company, enforceable against them in accordance with their terms, except that
such enforcement may be subject to bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and to limitations on the
availability of equitable remedies.
4. The execution, delivery and performance by Seller and the
Company of the Transaction Documents and the transactions contemplated thereby
will not violate, conflict with or cause a default under: (a) any provision of
the Certificate of Incorporation and By-Laws of the Company or Seller; (b) any
statute, law, regulation or rule or any judgment, decree or order binding upon
Seller or the Company; or (c) to the best of our knowledge, any contract,
agreement or commitment to which Seller or the Company is a party or by which
it is bound.
5. To our knowledge, there is no judgment, award, order,
writ, injunction, arbitration decision or decree materially and adversely
affecting the conduct of the business of the Station, or any litigation,
proceeding or investigation pending or threatened against the Company, except
as specifically identified in Attachment A hereto and except for proceedings of
general applicability to the broadcast industry.
6. Based on our review of information publicly available at
the FCC and our internal files and records and inquiry to officers of the
Company and Seller, (a) the Company is the holder of the FCC licenses set forth
on Attachment A hereto (the "FCC Licenses"), (b) the FCC Licenses are in full
force and effect, and (c) the FCC Licenses are not subject to any condition or
requirement, other than conditions or requirements that appear on the face of
the FCC Licenses or pertain under generally applicable rules or policies of the
FCC.
7. The FCC Consent has been obtained, is in full force and
effect and no requests have been filed for administrative or judicial review,
reconsideration, appeal or stay of the FCC Consent.
8. Based on a review of the minute books and stock ledger of
the Company, the authorized capital stock of the Company consists of 1,000
shares of voting common stock, all of which are issued and outstanding. All
such shares have been validly issued and are fully paid and nonassessable. Upon
delivery to Buyer of the stock certificate representing the Option Shares, the
Stock Power is in form sufficient to convey good and marketable title to Buyer
to the Option Shares.
<PAGE> 134
Paxson Communications of Tucson-46, Inc.
__________________, _____
Page 4
The information set forth herein is as of the date hereof. We assume
no obligation to advise you of changes which may thereafter may be brought to
our attention. Our opinions are based on statutory and judicial decisions in
effect at the date hereof, and we do not opine with respect to any law,
regulation, rule or governmental policy which may be enacted or adopted after
the date hereof, nor assume any responsibility to advise you of future changes
in our opinions.
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Transaction Documents and
is not to be quoted in whole or in part or otherwise referred to in any of your
financial statements or public releases, nor is it to be filed with any
governmental agency or other person without the prior written consent of a
partner of this firm.
Very truly yours,
[ ]
By:
-----------------------------
, Partner
--------
<PAGE> 135
SCHEDULE 13.5(D)
OPINION OF COUNSEL TO BUYER
(SECOND CLOSING)
<PAGE> 136
Schedule 13.5(d)
Form of Buyer's Opinion
To Be Delivered at Second Closing
___________________, _____
Sungilt Corporation, Inc.
2309 N. Hampton Street
Tucson, Arizona 85719
Attention: Arlene Stevens
Re: Stock Purchase Agreement dated as of ______________, 1997 (the
"Purchase Agreement"), by and among Sungilt Corporation, Inc.,
a ___________________ corporation ("Seller"), Channel 46 of
Tucson, Inc., a Delaware corporation (the "Company"), and
Paxson Communications of Tucson-46, Inc., a Florida
corporation ("Buyer").
Dear Ladies and Gentlemen:
We have acted as special counsel for Buyer in connection with the
transactions contemplated by the Purchase Agreement. This opinion is being
delivered to you pursuant to Section 13.5(d) of the Purchase Agreement. All
capitalized terms not defined in this opinion shall have the meanings set forth
in the Purchase Agreement.
In rendering this opinion, we have reviewed the following documents:
1. the Purchase Agreement;
2. a certificate dated as of ________________ from the Secretary
of State of Florida relating to the good standing of Buyer
(the "Florida Good Standing Certificate");
3. a certificate dated as of ________________ from the
Secretary of State of Arizona relating to the good standing
of Buyer (the "Arizona Good Standing Certificate");
4. the Articles of Incorporation and the Bylaws of Buyer, each in
the form certified to us by the Secretary of Buyer to be true
and complete and in effect on the date of this opinion; and
5. resolutions of the Board of Directors of Buyer certified to us
by the Secretary of Buyer to be true and complete, to have
been duly adopted
<PAGE> 137
Sungilt Corporation, Inc
Page 2
by the Board of Directors of Buyer, and to be in full force
and effect (without having been modified or rescinded) on the
date of this opinion.
In our examination of documents and records, we have assumed, without
investigation, the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity with originals of all documents submitted to us as telecopied,
certified, photostatic or reproduced copies and the authenticity of all such
documents.
In rendering this opinion, we have also assumed that (i) all parties to
the Purchase Agreement (other than Buyer) are duly organized, validly existing,
and in good standing under the laws of their respective jurisdictions of
organization and have the requisite power to enter into and perform the Purchase
Agreement, (ii) the execution and delivery of the Purchase Agreement has been
duly authorized by all necessary action and proceedings on the part of all
parties thereto other than Buyer, (iii) the Purchase Agreement has been duly
executed and delivered by all parties thereto other than Buyer, and (iv) the
Purchase Agreement constitutes the legal, valid, binding and enforceable
obligations of all parties thereto other than Buyer.
With respect to questions of fact, we have relied, without independent
inquiry or verification by us, solely upon (a) the representations and
warranties set forth in the Purchase Agreement, (b) representations of officers
of Buyer and (c) certificates of public officials
This opinion is limited to the law of the District of Columbia, the
Florida Business Corporation Act and the federal law of the United States of
America, insofar as such laws apply (collectively, "Applicable Law"), except
that Applicable Law includes only those laws and regulations that a lawyer
exercising customary professional diligence would reasonably recognize as being
directly applicable to the transactions contemplated by the Purchase Agreement
and excludes those set forth in Section 19 of the Legal Opinion Accord of the
American Bar Association Section of Business Law (1991). We do not purport to be
experts in the laws of the State of Florida, nor are we familiar with judicial
interpretations of the laws of Florida, including the Florida Business
Corporation Act. We have reviewed the text of the Florida Business Corporation
Act and applied it to the transactions described herein in light of our
knowledge of the law of other jurisdictions. We note that the Purchase Agreement
by its terms provides that it is to be governed by the laws of the State of
Delaware. Our opinion in paragraph 3 is given as if the Purchase Agreement were
to be governed by the laws of the District of Columbia rather than the laws of
the State of Delaware or the laws of any other state. We express no opinion as
to conflicts of law rules,
<PAGE> 138
Sungilt Corporation, Inc
Page 3
or the laws of any states or jurisdictions other than as specified above.
Additional limitations are set forth in the text of the opinion.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, we are of the opinion that:
1. Based solely upon a review of the Florida Good Standing
Certificate, Buyer is a corporation duly organized and in good standing under
the laws of the State of Florida and based solely upon a review of the Arizona
Good Standing Certificate, Buyer is duly qualified to do business as a foreign
corporation in the State of Arizona and is in good standing under the laws of
the State of Arizona.
2. Buyer has full corporate power and authority under the Florida
Business Corporation Act, its Articles of Incorporation and its Bylaws to
execute, deliver and perform the Purchase Agreement. Buyer's execution, delivery
and performance of the Purchase Agreement have been duly and validly authorized
by all necessary corporate action on the part of Buyer under the Florida
Business Corporation Act, its Articles of Incorporation and its Bylaws.
3. The Purchase Agreement has been duly executed and delivered by
Buyer and constitutes the valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its respective terms subject to (i) bankruptcy,
insolvency, reorganization, moratorium and other similar laws now or hereinafter
in effect relating to creditors' rights and (ii) certain equitable defenses and
the discretion of the court before which any proceeding therefor may be brought.
4. The execution, delivery and performance by Buyer of the
Purchase Agreement (a) do not violate any provisions of Buyer's Articles of
Incorporation or Bylaws and (b) do not violate any Applicable Law or any
judgment, order, injunction or decree which is applicable to Buyer and known to
us.
The information set forth herein is as of the date hereof. We assume no
obligation to advise you of changes which may hereafter be brought to our
attention. Our opinions are based on statutory provisions and judicial decisions
in effect at the date hereof, and we do not opine with respect to any law,
regulation, rule or governmental policy which may be enacted or adopted after
the date hereof nor assume any responsibility to advise you of future changes in
our opinions.
<PAGE> 139
Sungilt Corporation, Inc
Page 4
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Purchase Agreement and is
not to be quoted in whole or in part or otherwise referred to in any of your
financial statements or public releases, nor is it to be filed with any
governmental agency or other person without the prior written consent of a
member of this firm. This opinion may not be relied upon by any person or entity
other than the person to whom it is addressed.
Very truly yours,
DOW, LOHNES & ALBERTSON, PLLC
By:
---------------------------------
John R. Feore, Jr., Member
<PAGE> 1
EXHIBIT 10.184
================================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PAXSON COMMUNICATIONS CORPORATION
AND
CHANNEL 49 ACQUISITION CORPORATION
FOR
TELEVISION STATION WJCB-TV
NORFOLK, VIRGINIA
* * *
OCTOBER 16, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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<S> <C>
SECTION 1. DEFINITIONS....................................................................................... 1
"Accounts Receivable"................................................................................ 1
"Assets"............................................................................................. 1
"Assumed Contracts".................................................................................. 1
"Closing"............................................................................................ 1
"Closing Date"....................................................................................... 2
"Consents"........................................................................................... 2
"Contracts".......................................................................................... 2
"Escrow Agent"....................................................................................... 2
"Escrow Agreement"................................................................................... 2
"FCC"................................................................................................ 2
"FCC Consent"........................................................................................ 2
"FCC Licenses"....................................................................................... 2
"Final Order"........................................................................................ 2
"Intangibles"........................................................................................ 2
"Licenses"........................................................................................... 3
"Modification Application"........................................................................... 3
"New WHRO Tower"..................................................................................... 3
"Purchase Price"..................................................................................... 3
"Real Property"...................................................................................... 3
"Tangible Personal Property"......................................................................... 3
"To the best of Seller's knowledge".................................................................. 3
SECTION 2. PURCHASE AND SALE OF ASSETS....................................................................... 3
2.1 Agreement to Sell and Buy................................................................... 3
2.2 Excluded Assets............................................................................. 4
2.3 Purchase Price.............................................................................. 5
2.4 Payment of Purchase Price................................................................... 6
2.5 Assumption of Liabilities and Obligations................................................... 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER.......................................................... 7
3.1 Organization, Standing, and Authority....................................................... 7
3.2 Authorization and Binding Obligation........................................................ 7
3.3 Absence of Conflicting Agreements........................................................... 7
3.4 Governmental Licenses....................................................................... 7
3.5 Title to and Condition of Real Property..................................................... 8
3.6 Title to and Condition of Tangible Personal Property........................................ 8
3.7 Contracts................................................................................... 9
3.8 Consents.................................................................................... 9
</TABLE>
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<PAGE> 3
<TABLE>
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<S> <C>
3.9 Intangibles.................................................................................... 9
3.10 Financial Statements........................................................................... 10
3.11 Insurance...................................................................................... 10
3.12 Reports........................................................................................ 10
3.13 Personnel...................................................................................... 11
3.14 Taxes.......................................................................................... 13
3.15 Claims and Legal Actions....................................................................... 13
3.16 Environmental Matters.......................................................................... 13
3.17 Compliance with Laws........................................................................... 15
3.18 Conduct of Business in Ordinary Course......................................................... 15
3.19 Transactions with Affiliates................................................................... 16
3.20 Broker......................................................................................... 16
3.21 Full Disclosure................................................................................ 16
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................. 16
4.1 Organization, Standing, and Authority.......................................................... 16
4.2 Authorization and Binding Obligation........................................................... 16
4.3 Absence of Conflicting Agreements.............................................................. 16
4.4 Broker......................................................................................... 17
4.5 Full Disclosure................................................................................ 17
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING........................................................... 17
5.1 Generally...................................................................................... 17
5.2 Compensation................................................................................... 18
5.3 Contracts...................................................................................... 18
5.4 Disposition of Assets.......................................................................... 18
5.5 Encumbrances................................................................................... 18
5.6 Licenses....................................................................................... 18
5.7 Rights......................................................................................... 18
5.8 No Inconsistent Action......................................................................... 18
5.9 Access to Information.......................................................................... 19
5.10 Maintenance of Assets.......................................................................... 19
5.11 Insurance...................................................................................... 19
5.12 Consents....................................................................................... 19
5.13 Books and Records.............................................................................. 20
5.14 Notification................................................................................... 20
5.15 Financial Information.......................................................................... 20
5.16 Compliance with Laws........................................................................... 20
5.17 Preservation of Business....................................................................... 20
5.18 Personnel Recommendations...................................................................... 20
</TABLE>
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<PAGE> 4
<TABLE>
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SECTION 6. SPECIAL COVENANTS AND AGREEMENTS..................................................................... 20
6.1 FCC Consent.................................................................................... 20
6.2 Control of the Station......................................................................... 21
6.3 Risk of Loss................................................................................... 21
6.4 Confidentiality................................................................................ 22
6.5 Environmental Audit............................................................................ 22
6.6 Engineering Study.............................................................................. 22
6.7 Cooperation.................................................................................... 22
6.8 Bulk Sales Law................................................................................. 22
6.9 Sales Tax Filings.............................................................................. 22
6.10 Access to Books and Records.................................................................... 23
6.11 Appraisal...................................................................................... 23
6.12 Noncompetition Agreement....................................................................... 23
6.13 Section 1031 Exchange.......................................................................... 23
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING..................................................................................... 24
7.1 Conditions to Obligations of Buyer............................................................. 24
7.2 Conditions to Obligations of Seller............................................................ 25
SECTION 8. CLOSING AND CLOSING DELIVERIES....................................................................... 25
8.1 Closing........................................................................................ 25
8.2 Deliveries by Seller........................................................................... 26
8.3 Deliveries by Buyer............................................................................ 27
SECTION 9. TERMINATION.......................................................................................... 27
9.1 Termination by Seller.......................................................................... 27
9.2 Termination by Buyer........................................................................... 28
9.3 Rights on Termination.......................................................................... 29
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES............................................................ 30
10.1 Representations and Warranties................................................................. 30
10.2 Indemnification by Seller...................................................................... 30
10.3 Indemnification by Buyer....................................................................... 31
10.4 Procedure for Indemnification.................................................................. 31
10.5 Specific Performance........................................................................... 32
10.6 Attorneys' Fees................................................................................ 32
10.7 Limitations.................................................................................... 32
</TABLE>
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<PAGE> 5
<TABLE>
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<S> <C>
SECTION 11. MISCELLANEOUS....................................................................................... 33
11.1 Fees and Expenses.............................................................................. 33
11.2 Arbitration.................................................................................... 33
11.3 Notices........................................................................................ 33
11.4 Benefit and Binding Effect..................................................................... 34
11.5 Further Assurances............................................................................. 34
11.6 Governing Law.................................................................................. 35
11.7 Headings....................................................................................... 35
11.8 Gender and Number.............................................................................. 35
11.9 Entire Agreement............................................................................... 35
11.10 Waiver of Compliance; Consents................................................................. 35
11.11 Press Release.................................................................................. 35
11.12 Counterparts................................................................................... 36
11.14 Time Brokerage Agreement....................................................................... 36
</TABLE>
LIST OF SCHEDULES
<TABLE>
<S> <C>
Schedule 2.2 -- Excluded Assets
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses and Cable Carriage
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Financial Statements
Schedule 3.11 -- Insurance
Schedule 3.13 -- Personnel
Schedule 3.19 -- Transactions with Affiliates
Schedule 6.12 -- Noncompetition Agreement
Schedule 8.2(i) -- Opinion of Seller's Counsel
Schedule 8.3(d) -- Opinion of Buyer's Counsel
Schedule 9.4 -- Escrow Agreement
</TABLE>
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<PAGE> 6
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the 16th day of October,
1997, by and between Paxson Communications Corporation, a Delaware corporation
("Buyer"), and Channel 49 Acquisition Corporation, a Virginia corporation
("Seller").
R E C I T A L S
A. Seller is the licensee of and owns and operates television station
WJCB-TV, Norfolk, Virginia (the "Station") pursuant to licenses issued by the
Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer desires to buy, substantially all
the assets that are used or useful in the business or operations of the Station,
for the price and on the terms and conditions set forth in this Agreement.
A G R E E M E N T S
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, Buyer and Seller, intending to be bound
legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings
set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising time run on the Station by Seller prior to the Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7 that
are specifically designated on Schedule 3.7 as Contracts that are to be assumed
by Buyer upon its purchase of the Station, (ii) any Contracts entered into by
Seller between the date of this Agreement and the Closing Date that Buyer agrees
in writing to assume, and (iii) time sales contracts entered into by Seller in
compliance with Section 5.3.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
<PAGE> 7
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"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer or
otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which Seller is a party or which are binding upon Seller and which
relate to or affect the Assets or the business or operations of the Station, and
(i) which are in effect on the date of this Agreement or (ii) which are entered
into by Seller between the date of this Agreement and the Closing Date.
"Escrow Agent" means First Union National Bank.
"Escrow Agreement" means the Escrow Agreement dated as of the date
hereof among Buyer, Seller and the Escrow Agent.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment warranties,
and other similar intangible property rights and interests (and any goodwill
associated with any of the foregoing) applied for, issued to, or owned by Seller
or under which Seller is licensed or franchised and which are used or useful in
the business and operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
<PAGE> 8
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"Licenses" means all licenses, permits, and other authorizations issued
by the FCC, the Federal Aviation Administration, or any other federal, state, or
local governmental authorities to Seller in connection with the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Modification Application" means the construction permit application
filed by Seller with the FCC on June 27, 1996 (FCC File No. BPCT-960627KK) and
amended on June 9, 1997 seeking authority to change the Station's ERP, HAAT, and
transmitter location.
"New WHRO Tower" means the television transmission tower located at the
site specified in the Modification Application.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon, and other real property interests which are used or
useful in the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts, and other tangible personal property which is used or useful in the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"To the best of Seller's knowledge" means to the actual knowledge of
James L. Lockwood, Jr., Pamela Lawson and Dave Hanna.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to sell, transfer, and deliver to
Buyer on the Closing Date, and Buyer agrees to purchase from Seller, all of the
tangible and intangible assets used or useful in connection with the conduct of
the business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding the
assets described in Section 2.2, free and clear of any claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges, or
encumbrances of any nature whatsoever (except for liens for current taxes not
yet due and payable), including the following:
<PAGE> 9
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(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Seller
relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) Except as provided in Section 2.2(e), all choses in action
of Seller relating to the Station; and
(h) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station, provided,
however, that Buyer shall provide Seller with reasonable access to such books
and records for a period of seven (7) years after the Closing Date as requested
by Seller in connection with tax or other government or regulatory matters.
2.2 Excluded Assets. The Assets shall exclude the following assets:
(a) Seller's cash on hand as of the Closing and all other cash
in any of Seller's bank or savings accounts; any insurance policies, letters of
credit, or other similar items and cash surrender value in regard thereto; and
any stocks, bonds, certificates of deposit and similar investments;
(b) All books and records that Seller is required by law to
retain;
(c) Any pension, profit-sharing, or employee benefit plans,
and any collective bargaining agreements;
(d) Seller's articles of incorporation, bylaws, minutes,
resolutions, stock ledger, and other corporate records;
<PAGE> 10
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(e) Any and all claims which Seller may have against Tidewater
Christian Communications Corporation ("TCCC") or any principal or representative
thereof; and any rights of Seller pursuant to that certain Asset Purchase
Agreement between Seller and TCCC dated as of March 4, 1997, or any agreement,
document, or instrument delivered pursuant to said Asset Purchase Agreement,
including without limitation that certain Escrow Agreement among Lockwood
Broadcasting, Inc., TCCC, and First Union National Bank of Virginia dated as of
April 2, 1997;
(f) Any and all Assets disposed of or consumed between the
date of this Agreement and the Closing in accordance with the terms of Section
5.4 hereof;
(g) Any claims of Seller against any officer, director,
principal, or shareholder of Seller;
(h) Sales, income and other tax refunds, and claims therefor,
relating to the period prior to the Closing;
(i) All records pertaining to Seller's financial relationship
with lenders or investors;
(j) Accounts Receivable; and
(k) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets and the covenants
of Seller set forth in the Noncompetition Agreement referred to in Section 6.12
shall be Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000)
adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied against
the Assets, property and equipment rentals, applicable copyright or other fees,
sales and service charges, taxes (except for taxes arising from the transfer of
the Assets under this Agreement), FCC annual regulatory fees and similar prepaid
and deferred items, shall be prorated between Buyer and Seller in accordance
with the principle that Seller shall be responsible for all expenses, costs, and
liabilities allocable to the period prior to the Closing Date, and Buyer shall
be responsible for all expenses, costs, and obligations allocable to the period
on and after the Closing Date. Notwithstanding the preceding sentence, there
shall be no adjustment for, and Seller shall remain solely liable with respect
to, any Contracts not included in the Assumed Contracts and any other obligation
or liability not being assumed by Buyer in accordance with Section 2.5.
<PAGE> 11
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(b) Manner of Determining Adjustments. Any adjustments will,
insofar as feasible, be determined and paid on the Closing Date, with final
settlement and payment by the appropriate party occurring no later than ninety
(90) days after the Closing Date or such other date as the parties shall
mutually agree upon. Seller shall prepare and deliver to Buyer not later than
five (5) days before the Closing Date a preliminary settlement statement which
shall set forth Seller's good faith estimate of the adjustments to the Purchase
Price under Section 2.3(a). The preliminary settlement statement (i) shall
contain all information reasonably necessary to determine the adjustments to the
Purchase Price under Section 2.3(a), to the extent such adjustments can be
determined or estimated as of the date of the preliminary settlement statement,
and such other information as may be reasonably requested by Buyer, and (ii)
shall be certified by Seller to be true and complete in all material respects as
of the date thereof.
2.4 Payment of Purchase Price. The Purchase Price, as adjusted, shall
be paid by Buyer to Seller at Closing by wire transfer of same-day funds
pursuant to wire instructions which shall be delivered by Seller to Buyer, at
least two (2) days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing Date,
Buyer shall assume and undertake to pay, discharge, and perform all obligations
and liabilities of Seller under the Licenses and the Assumed Contracts insofar
as they relate to the time on and after the Closing Date, and arise out of
events related to Buyer's ownership of the Assets or its operation of the
Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or proceedings
relating to the operation of the Station prior to the Closing, (iv) any
obligations or liabilities arising under capitalized leases or other financing
agreements, (v) any obligations or liabilities arising under agreements entered
into other than in the ordinary course of business, (vi) any obligations or
liabilities of Seller under any employee pension, retirement, health and welfare
or other benefit plans or collective bargaining agreements, (vii) any obligation
to any employee of the Station for severance benefits, vacation time, or sick
leave accrued prior to the Closing Date, or (viii) any obligations or
liabilities caused by, arising out of, or resulting from any action or omission
of Seller prior to the Closing, and all such obligations and liabilities shall
remain and be the obligations and liabilities solely of Seller. Notwithstanding
the foregoing, or any other provision in this Agreement to the contrary, Buyer
shall assume, effective as of the Closing Date, any and all liabilities of
Seller under Contracts entered into by Seller between the date of this Agreement
and the Closing Date at the direction or request of Buyer in Buyer's capacity as
Programmer under that certain Time Brokerage Agreement between Buyer and Seller
(the "TBA").
<PAGE> 12
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SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Virginia. Seller has all requisite power and authority (i) to own, lease, and
use the Assets as now owned, leased, and used, (ii) to conduct the business and
operations of the Station as now conducted, and (iii) to execute and deliver
this Agreement, the Escrow Agreement and the documents contemplated hereby and
thereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Seller hereunder and thereunder.
Seller is not a participant in any joint venture or partnership with any other
person or entity with respect to any part of the operations of the Station or
any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement and the Escrow Agreement by Seller have been duly
authorized by all necessary actions on the part of Seller and its shareholder.
This Agreement and the Escrow Agreement have been duly executed and delivered by
Seller and constitute the legal, valid, and binding obligations of Seller,
enforceable against it in accordance with their respective terms except as the
enforceability of this Agreement and the Escrow Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
and by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the Escrow Agreement and the documents contemplated hereby
and thereby (with or without the giving of notice, the lapse of time, or both):
(i) do not require the consent of any third party; (ii) will not conflict with
any provision of the Articles of Incorporation or Bylaws of Seller; (iii) will
not conflict with, result in a breach of, or constitute a default under, any
law, judgment, order, ordinance, injunction, decree, rule, regulation, or ruling
of any court or governmental instrumentality; (iv) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to which
Seller is a party or by which Seller may be bound; and (v) will not create any
claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance of
any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and complete
list of the Licenses. Seller has delivered to Buyer true and complete copies of
the Licenses (including any amendments and other modifications thereto). To the
best of Seller's knowledge, the Licenses have been validly issued. Seller is the
authorized legal holder of all Licenses. The Licenses listed on Schedule 3.4
comprise all of the licenses, permits, and other authorizations
<PAGE> 13
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required from any governmental or regulatory authority for the lawful conduct of
the business and operations of the Station in the manner and to the full extent
they are now conducted, and none of the Licenses is subject to any restriction
or condition that would limit the full operation of the Station as now operated.
The Licenses are in full force and effect and the conduct of the business and
operations of the Station is in accordance therewith. Seller has no reason to
believe that any of the Licenses issued by the FCC would not be renewed by the
FCC in the ordinary course. The Station's city of license, as determined by the
FCC, is located within the Norfolk-Portsmouth-Newport News-Hampton, Virginia
Area of Dominant Influence as defined by the 1991-1992 Area of Dominant
Influence Market Guide published by The Arbitron Co. and the
Norfolk-Portsmouth-Newport News, Virginia Designated Market Area as defined by
the 1996 United States Television Household Estimates published by Nielsen Media
Research. With respect to the period commencing on April 2, 1997 and, to the
best of Seller's knowledge, with respect to the period prior to April 2, 1997,
no cable system has advised Seller of any signal quality or copyright indemnity
or other prerequisite to cable carriage of the Station's signal, and no cable
system has declined or threatened to decline such carriage or failed to respond
to a request for carriage or sought any form of relief from carriage from the
FCC. Schedule 3.4 lists the cable systems carrying the Station.
3.5 Title to and Condition of Real Property. Seller owns no Real
Property. All Real Property consists of leasehold interests only. Schedule 3.5
contains a complete and accurate description of all Real Property and Seller's
interests therein (including street address, legal description, owner, and use
and the location of all improvements thereon). The Real Property listed on
Schedule 3.5 comprises all real property interests necessary to conduct the
business and operations of the Station as now conducted. With respect to each
leasehold or subleasehold interest included in the Real Property being conveyed
under this Agreement so long as Seller fulfills its obligations under the lease
therefor, Seller has enforceable rights to nondisturbance and quiet enjoyment,
and to the best of Seller's knowledge, no third party holds any interest in the
leased premises with the right to foreclose upon Seller's leasehold or
subleasehold interest. All towers, guy anchors, and buildings and other
improvements included in the Assets are located entirely on the Real Property
listed in Schedule 3.5. All Real Property (including the improvements thereon)
(i) is in good condition and repair consistent with its present use, (ii) is
available for immediate use in the conduct of the business and operations of the
Station, and (iii) complies in all material respects with all applicable
building or zoning codes and the regulations of any governmental authority
having jurisdiction. Seller has full legal and practical access to the Real
Property.
3.6 Title to and Condition of Tangible Personal Property. Schedule 3.6
lists all material items of Tangible Personal Property. The Tangible Personal
Property listed on Schedule 3.6 comprises all material items of tangible
personal property currently used by Seller to conduct the business and
operations of the Station as now conducted. Except as described in Schedule 3.6,
Seller owns and has good title to each item of Tangible Personal
<PAGE> 14
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Property, and none of the Tangible Personal Property owned by Seller is subject
to any security interest, mortgage, pledge, conditional sales agreement, or
other lien or encumbrance, except for liens for current taxes not yet due and
payable. Each item of Tangible Personal Property will be conveyed by Seller to
Buyer at Closing "as is/where is," and Seller makes no representations or
warranties regarding the condition of the Tangible Personal Property.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts except contracts with advertisers for the sale of advertising time on
the Station for cash at prevailing rates and which have not been prepaid and
which may be canceled by the Station without penalty on not more than thirty
days' notice. Seller has delivered to Buyer true and complete copies of all
written Contracts, true and complete memoranda of all oral Contracts (including
any amendments and other modifications to such Contracts), and a schedule
summarizing Seller's obligations under trade and barter agreements relating to
the Station. Other than the Contracts listed on Schedule 3.7 and cash
programming contracts, Seller requires no contract, lease, or other agreement to
enable it to carry on its business as now conducted. All of the Assumed
Contracts are in full force and effect, and are valid, binding, and enforceable
in accordance with their terms. There is not under any Assumed Contract any
default by Seller or, to the best of Seller's knowledge, any other party
thereto. Seller is not aware of any intention by any party to any Assumed
Contract (i) to terminate such contract or amend the terms thereof, (ii) to
refuse to renew the Assumed Contract upon expiration of its term, or (iii) to
renew the Assumed Contract upon expiration only on terms and conditions which
are more onerous than those now existing. Except for the need to obtain the
Consents listed in Schedule 3.3, Seller has full legal power and authority to
assign its rights under the Assumed Contracts to Buyer in accordance with this
Agreement, and such assignment will not affect the validity, enforceability, or
continuation of any of the Assumed Contracts. Buyer shall assume no programming
contracts. Seller is not a party to any capital or financing lease with respect
to any of the Assets.
3.8 Consents. Except for the FCC Consent provided for in Section 6.1
and the other Consents described in Schedule 3.3, no consent, approval, permit,
or authorization of, or declaration to or filing with any governmental or
regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby, (ii) to permit Seller
to assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct
the business and operations of the Station in essentially the same manner as
such business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and to the best of Seller's knowledge, uncontested. Seller
has delivered to Buyer copies of all documents establishing or evidencing all
Intangibles. To the best of Seller's knowledge, Seller is not infringing upon or
otherwise acting adversely to any trademarks, trade names,
<PAGE> 15
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service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and there
is no claim or action pending, or to the knowledge of Seller threatened, with
respect thereto. The Intangibles listed on Schedule 3.9 comprise all intangible
property interests necessary to conduct the business and operations of the
Station as now conducted.
3.10 Financial Statements. Schedule 3.10 hereto contains true and
complete copies of financial statements including balance sheets, statements of
operations and a statement of operating cash flow for the period ending August
31, 1997 (collectively, the "Financial Statements"). The Financial Statements
have been prepared from the books and records of Seller, accurately reflect, in
all material respects, the books, records, and accounts of the Station (which
books, records, and accounts are complete and correct), are complete and correct
in all material respects, and present fairly the financial condition of the
Station as at their respective dates and the results of operations for the
periods then ended. None of the Financial Statements materially understates the
true costs and expenses of conducting the business or operations of the Station,
fails to disclose any material contingent liabilities, or materially overstates
the revenues of the Station.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate in
amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Station against all customary and foreseeable risks. During the period
commencing on April 2, 1997, no insurance policy of Seller on the Assets or the
Station has been canceled by the insurer and no application of Seller for
insurance has been rejected by any insurer.
3.12 Reports. With respect to the period commencing on April 2, 1997
and, to the best of Seller's knowledge, with respect to the period prior to
April 2, 1997, all reports and statements that the Station is currently required
to file with the FCC have been filed, and all reporting requirements of the FCC
have been complied with. With respect to the period commencing on April 2, 1997
and, to the best of Seller's knowledge, with respect to the period prior to
April 2, 1997, all of such reports and statements are substantially complete and
correct as filed. Seller has timely paid to the FCC all annual regulatory fees
payable with respect to the FCC Licenses for the fiscal year 1997 (commencing
October 1, 1996 and ending September 30, 1997).
3.13 Personnel.
(a) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.13, and complete and accurate copies of
any such written Employee Plans and Compensation Arrangements (or related
insurance policies) have been furnished to
<PAGE> 16
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Buyer, along with copies of any employee handbooks or similar documents
describing such Employee Plans and Compensation Arrangements. Descriptions of
any unwritten Employee Plans or Compensation Arrangements also are provided in
Schedule 3.13. Schedule 3.13 also contains a true and complete list of all
employees of the Station, their job description, date of hire, salary and amount
and date of last salary increase.
(b) Each Employee Plan and Compensation Arrangement has been
administered in compliance with its own terms and in material compliance with
the provisions of ERISA, the Code, the Age Discrimination in Employment Act and
any other applicable Federal or state laws. Seller is not aware of the existence
of any governmental audit or examination of any Employee Plan or Compensation
Arrangement or of any facts which would lead it to believe that any such audit
or examination is pending or threatened. There exists no action, suit or claim
(other than routine claims for benefits) with respect to any Employee Plan or
Compensation Arrangement pending or, to the best of Seller's knowledge,
threatened against any of such plans or arrangements, and Seller possesses no
knowledge of any facts which could give rise to any such action, suit or claim.
(c) Seller does not contribute to and is not required to
contribute to any Multi-employer Plan with respect to the employees of the
Station, and neither Seller nor any other trade or business under common control
with Seller (within the meaning of Sections 414(b), (c), (m) or (o) of the Code)
has incurred or reasonably expects to incur any "withdrawal liability," as
defined under Section 4201 et seq. of ERISA.
(d) Except as described in Schedule 3.13, neither Seller nor
any other trade or business under common control with Seller (within the meaning
of Sections 414(b), (c), (m) or (o) of the Code) sponsors, maintains or
contributes to any Employee Plan or Compensation Arrangement that provides
retiree medical or retiree life insurance coverage to former employees of Seller
at the Station.
(e) Except as described in Schedule 3.13, with respect to each
Employee Plan and, to the extent applicable, each Compensation Arrangement: (i)
each Employee Plan that is intended to be tax-qualified, and each amendment
thereto, is the subject of a favorable determination letter, and no plan
amendment that is not the subject of a favorable determination letter would
affect the validity of an Employee Plan's letter; (ii) no prohibited
transaction, within the definition of section 4975 of the Code or Title 1, Part
4 of ERISA, has occurred which would subject Seller to any liability; and (iii)
all contributions, premiums or payments accrued, in whole or in part, under each
Employee Plan or Compensation Arrangement or with respect thereto as of the
Closing will be paid by the Seller prior to the Closing, including, but not
limited to, contributions thereto with respect to the plan year ending
immediately prior to the Closing.
<PAGE> 17
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(f) For purposes of this Agreement, the following terms shall
have the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan as
defined in Section 3(3) of ERISA to which Seller or any entity related to Seller
(under the terms of Section 414(b), (c), (m) or (o) of the Code) contributes or
to which Seller or any entity related to Seller (under the terms of Sections
414(b), (c), (m) or (o) of the Code) sponsors, maintains or otherwise is bound
which provides benefits to persons employed or previously employed at the
Station; (ii) "Code" shall mean the Internal Revenue Code of 1986, as amended,
any successor thereto and any regulations promulgated thereunder; (iii)
"Compensation Arrangement" shall mean any plan or compensation arrangement other
than an Employee Plan, whether written or unwritten, which provides to
employees, former employees, officers, directors and shareholders of Seller or
any entity related to Seller (under the terms of Section 414(b), (c), (m) or (o)
of the Code) employed or previously employed at the Station any compensation or
other benefits, whether deferred or not, in excess of base salary or wages,
including, but not limited to, any bonus or incentive plan, stock rights plan,
deferred compensation arrangement, life insurance, stock purchase plan,
severance pay plan and any other employee fringe benefit plan; (iv) "ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as amended, any
successor thereto and any regulations promulgated thereunder; and (v)
"Multi-employer Plan" means a plan, as defined in ERISA Section 3(37), to which
Seller or any entity related to Seller (under the terms of Section 414(b) or (c)
of the Code) contributes or is required to contribute.
(g) Seller is not a party to or subject to any collective
bargaining agreements with respect to the Station. Seller has no written or oral
contracts of employment with any employee of the Station, other than those
listed in Schedule 3.7. Seller has complied in all material respects with all
laws, rules, and regulations relating to the employment of labor, including
those related to wages, hours, collective bargaining, occupational safety,
discrimination, and the payment of social security and other payroll related
taxes, and Seller has not received any notice alleging that it has failed to
comply in any material respect with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the best of Seller's
knowledge, threatened, between Seller and any employee (singly or collectively)
of the Station. No labor union or other collective bargaining unit represents or
claims to represent any of the employees of the Station. To the best of Seller's
knowledge, there is no union campaign being conducted to represent any employees
of the Station or to solicit cards from employees to authorize a union to
request a National Labor Relations Board certification election with respect to
any employees at the Station.
3.14 Taxes. Seller has filed or caused to be filed all federal income
tax returns and all other federal, state, county, local, or city tax returns
which are required to be filed, and it has paid or caused to be paid all taxes
shown on those returns or on any tax assessment
<PAGE> 18
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received by it to the extent that such taxes have become due, or has set aside
on its books adequate reserves (segregated to the extent required by generally
accepted accounting principles) with respect thereto. There are no governmental
investigations or other legal, administrative, or tax proceedings pursuant to
which Seller is or could be made liable for any taxes, penalties, interest, or
other charges, the liability for which could extend to Buyer as transferee of
the business of the Station, and no event has occurred that could impose on
Buyer any transferee liability for any taxes, penalties, or interest due or to
become due from Seller.
3.15 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry, there is no claim,
legal action, counterclaim, suit, arbitration, governmental investigation or
other legal, administrative, or tax proceeding, nor any order, decree or
judgment, in progress or pending, or to the knowledge of Seller threatened,
against or relating to Seller with respect to its ownership or operation of the
Station or otherwise relating to the Assets or the business or operations of the
Station, nor does Seller know or have reason to be aware of any basis for the
same. In particular, but without limiting the generality of the foregoing, there
are no applications, complaints or proceedings pending or, to the best of
Seller's knowledge, threatened (i) before the FCC relating to the business or
operations of the Station other than rule making proceedings which affect the
television industry generally, (ii) before any federal or state agency relating
to the business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.16 Environmental Matters.
(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
(b) To the best of Seller's knowledge, Seller has no liability
relating to its operation of the Station (and there is no basis related to the
present operations, properties, or facilities of Seller for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand against Seller giving rise to any such liability) under any
law, rule, or regulation of any federal, state, or local government (or agency
thereof) concerning release or threatened release of hazardous substances,
public health and safety, or pollution or protection of the environment.
<PAGE> 19
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(c) To the best of Seller's knowledge, Seller has no liability
relating to its operation of the Station (and Seller has not handled or disposed
of any substance, arranged for the disposal of any substance, or owned or
operated any property or facility in any manner that could form the basis for
any present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand (under the common law or pursuant to any
statute) against Seller giving rise to any such liability) for damage to any
site, location, or body of water (surface of subsurface) or for illness or
personal injury.
(d) To the best of Seller's knowledge, Seller has no liability
relating to its operation of the Station (and there is no basis for any present
or future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand against Seller giving rise to any such liability) under any
law, rule, or regulation of any federal, state, or local government (or agency
thereof) concerning employee health and safety.
(e) To the best of Seller's knowledge, Seller has no liability
relating to its operation of the Station (and Seller has not exposed any
employee to any substance or condition that could form the basis for any present
or future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand (under the common law or pursuant to statute) against Seller
giving rise to any such liability) for any illness or personal injury to any
employee.
(f) In connection with its ownership or operation of the
Station, Seller has obtained, and been in compliance in all material respects
with all of the terms and conditions of, all permits, licenses, and other
authorizations which are required under, and has in all material respects
complied with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in, all federal, state, and local laws, rules, and regulations
(including all codes, plans, judgments, orders, decrees, stipulations,
injunctions, and charges thereunder) relating to public health and safety,
worker health and safety, and pollution or protection of the environment,
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.
<PAGE> 20
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(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in violation
of any federal, state, or local law, rule or regulation in connection with its
operation of the Station or, to the best of Seller's knowledge, by any other
party on any Real Property.
3.17 Compliance with Laws. Seller has complied in all material respects
with the Licenses and all federal, state, and local laws, rules, regulations,
and ordinances applicable or relating to the ownership and operation of the
Station. With respect to the period commencing on April 2, 1997 and, to the best
of Seller's knowledge, with respect to the period prior to April 2, 1997,
neither the ownership or use of the properties of the Station nor the conduct of
the business or operations of the Station conflicts with the rights of any other
person or entity.
3.18 Conduct of Business in Ordinary Course. Seller has conducted the
business and operations of the Station only in the ordinary course and has not:
(a) Suffered any material adverse change in the business,
assets, or properties of the Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct of the business of the
Station;
(b) Made any material increase in compensation payable or to
become payable to any of the employees of the Station, or any bonus payment made
or promised to any employee of the Station, or any material change in personnel
policies, employee benefits, or other compensation arrangements affecting the
employees of the Station;
(c) Made any sale, assignment, lease, or other transfer of any
of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(d) Canceled any debts owed to or claims held by Seller with
respect to the Station, except in the normal and usual course of business;
(e) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Station; or
(f) Transferred or granted any right under, or entered into
any settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or modified any
existing right relating to the Station.
3.19 Transactions with Affiliates. Except as set forth in Schedule
3.19, Seller has not been involved in any business arrangement or relationship
relating to the Station with any
<PAGE> 21
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affiliate of Seller, and no affiliate of Seller owns any property or right,
tangible or intangible, which is used in the business of the Station. As used in
this paragraph, "affiliate" has the meaning set forth in Rule 12b-2 promulgated
under the Securities and Exchange Act of 1934.
3.20 Broker. Neither Seller nor any person acting on Seller's behalf
has incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
3.21 Full Disclosure. No representation or warranty made by Seller in
this Agreement or in any certificate, document, or other instrument furnished or
to be furnished by Seller pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
and required to make any statement made herein or therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and, upon the comment of the TBA, will be duly qualified to conduct
business as a foreign corporation in the State of Virginia. Buyer has all
requisite power and authority to execute and deliver this Agreement and the
Escrow Agreement and the documents contemplated hereby and thereby, and to
perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement and the Escrow Agreement by Buyer have been duly
authorized by all necessary actions on the part of Buyer. This Agreement and the
Escrow Agreement have been duly executed and delivered by Buyer and constitute
the legal, valid, and binding obligations of Buyer, enforceable against Buyer in
accordance with their respective terms except as the enforceability of this
Agreement and the Escrow Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by judicial discretion in
the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the Escrow Agreement and the documents contemplated hereby and thereby (with
or without the giving of notice, the lapse of time, or both): (i) do not require
the consent of any third party; (ii) will not conflict with the Certificate of
Incorporation or Bylaws of Buyer; (iii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, injunction,
<PAGE> 22
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decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or accelerate
or permit the acceleration of any performance required by the terms of, any
agreement, instrument, license, or permit to which Buyer is a party or by which
Buyer may be bound, such that Buyer could not acquire or operate the Assets.
4.4 Broker. Neither Buyer nor any person acting on Buyer's behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5 Full Disclosure. No representation or warranty made by Buyer in
this Agreement or in any certificate, document, or other instrument furnished or
to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
and required to make any statement made herein or therein not misleading.
4.6 Qualification as FCC Licensee. Buyer knows of no fact or
circumstance which could, under the Communications Act of 1934, as amended, or
the rules, regulations, and policies of the FCC, reasonably be expected to
disqualify or preclude Buyer from assuming the FCC Licenses. To Buyer's
knowledge, there are no proceedings, complaints, notices of forfeiture, claims
or investigations pending or threatened against Buyer or any principal, officer,
or director, of Buyer that could reasonably be expected to prevent Buyer from
assuming the FCC Licenses.
4.7. Litigation. There are no actions, suits, or proceedings against
Buyer, including, without limitation arbitration proceedings, whether or not the
defense thereof or liabilities in respect thereof are covered by insurance,
pending, or to Buyer's knowledge threatened, which could reasonably be expected
to prevent the consummation of the transactions contemplated by this Agreement,
or which could reasonably be expected to, in any material respect, interfere
with Buyer's performance of its obligations under this Agreement, and Buyer
knows of no basis for any such action or proceeding.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this Agreement
and the Closing Date, and subject to the provisions of the TBA, Seller shall
operate the Station diligently in the ordinary course of business in accordance
with its past practices (except where such conduct would conflict with the
following covenants or with Seller's other obligations under this Agreement),
and in accordance with the other covenants in this Section 5.
<PAGE> 23
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5.2 Compensation. Seller shall not increase the compensation, bonuses,
or other benefits payable or to be payable to any person employed in connection
with the conduct of the business or operations of the Station, except in
accordance with past practices, provided, however, that Seller shall have the
right to pay bonuses and/or severance payments to its employees payable at
Closing.
5.3 Contracts. Seller will not enter into any contract or commitment
relating to the Station or the Assets, or amend or terminate any Contract (or
waive any material right thereunder), or incur any obligation (including
obligations relating to the borrowing of money or the guaranteeing of
indebtedness) that will be binding on Buyer after Closing, except for cash time
sales agreements made in the ordinary course of business, and except Contracts
entered into by Seller at Buyer's direction in accordance with the TBA. Prior to
the Closing Date, Seller shall deliver to Buyer a list of all Contracts entered
into between the date of this Agreement and the Closing Date, together with
copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease, or
otherwise transfer or dispose of any of the Assets, except where no longer used
or useful in the business or operations of the Station or in connection with the
acquisition of replacement property of equivalent kind and value.
5.5 Encumbrances. Seller shall not create, assume or permit to exist
any claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance
of any nature whatsoever upon the Assets, except for (i) liens disclosed on
Schedule 3.5 and Schedule 3.6, which shall be removed prior to the Closing Date,
(ii) liens for current taxes not yet due and payable, and (iii) mechanics' liens
and other similar liens, which shall be removed prior to the Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any act or failure
to act, any of the Licenses to expire or to be revoked, suspended, or modified,
or take any action that could cause the FCC or any other governmental authority
to institute proceedings for the suspension, revocation, or adverse modification
of any of the Licenses. Seller shall not fail to prosecute with due diligence
any applications to any governmental authority in connection with the operation
of the Station.
5.7 Rights. Seller shall not waive any right relating to the Station or
any of the Assets. Seller shall not cause, by any act or failure to act, any
cable system located within the Station's Area of Dominant Influence to refuse
to carry the Station's signal.
5.8 No Inconsistent Action. Seller shall not take any action that is
inconsistent with its obligations under this Agreement or that could materially
hinder or delay the consummation of the transactions contemplated by this
Agreement.
<PAGE> 24
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5.9 Access to Information. Seller shall give Buyer and its counsel,
accountants, engineers, and other authorized representatives reasonable access
to the Assets and to all other properties, equipment, books, records, Contracts,
and documents relating to the Station for the purpose of audit and inspection,
including inspections incident to the environmental study described in Section
6.5 and the engineering study described in Section 6.6, and will furnish or
cause to be furnished to Buyer or its authorized representatives all information
with respect to the affairs and business of the Station that Buyer may
reasonably request (including any financial reports and operations reports
produced with respect to the affairs and business of the Station). Without
limiting the generality of the foregoing, Seller shall give Buyer and its
counsel, accountants and other authorized representatives reasonable access to
Seller's financial records and Seller's employees, counsel, accountants and
other representatives for the purpose of preparing and auditing such financial
statements as Buyer determines, in its sole judgment, are required or advisable
to comply with federal or state securities laws and the rules and regulations of
securities markets as a result of the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
5.10 Maintenance of Assets. Seller shall use its best efforts and take
all reasonable actions to maintain all of the Assets in good condition (ordinary
wear and tear excepted), and use, operate, and maintain all of the Assets in a
reasonable manner and in accordance with the terms of the FCC Licenses, all
rules and regulations of the FCC and generally accepted standards of good
engineering practice. Seller shall maintain inventories of spare parts and
expendable supplies at levels consistent with past practices. If any loss,
damage, impairment, confiscation, or condemnation of or to any of the Assets
occurs, Seller shall repair, replace, or restore the Assets to their prior
condition as represented in this Agreement as soon thereafter as possible, and
Seller shall use the proceeds of any claim under any insurance policy solely to
repair, replace, or restore any of the Assets that are lost, damaged, impaired,
or destroyed.
5.11 Insurance. Seller shall maintain the existing insurance policies
on the Station and the Assets.
5.12 Consents. Seller shall diligently and in good faith seek to obtain
the Consents and the estoppel certificates described in Section 8.2(b), without
any change in the terms or conditions of any Contract or License that could be
less advantageous to the Station than those pertaining under the Contract or
License as in effect on the date of this Agreement. Seller shall promptly advise
Buyer of any difficulties experienced in obtaining any of the Consents and of
any conditions proposed, considered, or requested for any of the Consents. Upon
Buyer's request, Seller shall cooperate with Buyer and use it best efforts to
obtain from the lessors under each Real Property lease such estoppel
certificates and consents to the collateral assignment of the lessee's interest
under each such lease as Buyer's senior lenders may request.
<PAGE> 25
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5.13 Books and Records. Seller shall maintain its books and records
relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in writing of any
unusual or material developments with respect to the business or operations of
the Station, and of any material change in any of the information contained in
Seller's representations and warranties contained in Section 3 of this
Agreement.
5.15 Financial Information. Seller shall furnish to Buyer within twenty
days after the end of each month ending between the date of this Agreement and
the Closing Date a statement of income and expense and a statement of operating
cash flow for the month just ended and such other financial information
(including information on payables and receivables) as Buyer may reasonably
request. All financial information delivered by Seller to Buyer pursuant to this
Section shall be prepared from the books and records of Seller in accordance
with generally accepted accounting principles consistently applied, shall
accurately reflect, in all material respects, the books, records, and accounts
of the Station, shall be complete and correct in all material respects, and
shall, in all material respects, present fairly the financial condition of the
Station as at their respective dates and the results of operations for the
periods then ended.
5.16 Compliance with Laws. Seller shall comply in all material respects
with all laws, rules, and regulations applicable or relating to the ownership
and operation of the Station.
5.17 Preservation of Business. Except to the extent delegated to Buyer
pursuant to the TBA, Seller shall use its best efforts to preserve the business
and organization of the Station and use its best efforts to keep available to
the Station its present employees and to preserve the audience of the Station
and the Station's present relationships with suppliers, advertisers, and others
having business relations with it, to the end that the business, operations, and
prospects of the Station shall be unimpaired at the Closing Date.
5.18 Personnel Recommendations. Seller shall promptly notify Buyer as
personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC.
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(b) Seller and Buyer shall promptly prepare an appropriate
application for the FCC Consent and shall file the application with the FCC
within five (5) business days of the execution of this Agreement. The parties
shall prosecute the application with all reasonable diligence and otherwise use
their best efforts to obtain a grant of the application as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by the
FCC Consent, except that no party shall be required to comply with a condition
if (1) the condition was imposed on it as the result of a circumstance the
existence of which does not constitute a breach by the party of any of its
representations, warranties, or covenants under this Agreement, and (2)
compliance with the condition would have a material adverse effect upon it.
Buyer and Seller shall oppose any requests for reconsideration or judicial
review of the FCC Consent. If the Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and neither party shall
have terminated this Agreement under Section 9, the parties shall jointly
request an extension of the effective period of the FCC Consent. No extension of
the FCC Consent shall limit the exercise by either party of its rights under
Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not, directly
or indirectly, control, supervise, direct, or attempt to control, supervise, or
direct, the operations of the Station; such operations, including complete
control and supervision of all of the Station programs, employees, and policies,
shall be the sole responsibility of Seller until the Closing, provided, however,
that the parties acknowledge that certain programming rights have been granted
by Seller to Buyer pursuant to the TBA.
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment, confiscation, or
condemnation of any of the Assets from any cause whatsoever shall be borne by
Seller at all times prior to the Closing.
(b) If any damage or destruction of the Assets or any other
event occurs which (i) causes the Station to cease broadcasting operations for a
period of ten or more days or (ii) prevents in any material respect signal
transmission by the Station in the normal and usual manner and Seller fails to
restore or replace the Assets so that normal and usual transmission is resumed
within ten days of the damage, destruction or other event, Buyer, in its sole
discretion, may (x) terminate this Agreement forthwith without any further
obligations hereunder upon written notice to Seller, in which event all funds
held by the Escrow Agent pursuant to the Escrow Agreement, including all
interest and other proceeds from the investment of such funds, shall be
immediately returned to Buyer, or (y) proceed to consummate the transaction
contemplated by this Agreement and complete the restoration and replacement of
the Assets after the Closing Date, in which event Seller shall deliver to Buyer
all insurance proceeds received in connection with such damage, destruction or
other event.
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6.4 Confidentiality. Except as necessary for the consummation of the
transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and expense, retain
an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey of the properties of the Station. If the survey discloses
any material environmental hazard or material possibility of future liability
for environmental damages or clean-up costs, Buyer shall so notify Seller as
soon as practicable.
6.6 Engineering Study. Buyer may, at its option and expense, retain an
engineering firm to conduct a proof of performance study of the Station and to
prepare a report on the Station's compliance with customary engineering
practices and all applicable FCC rules, regulations, prescribed practices, and
technical standards. If the survey discloses any material deficiencies in the
operations or equipment of the Station, Buyer shall so notify Seller as soon as
practicable.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each other
and their respective counsel and accountants in connection with any actions
required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds to obtain any of the Consents or (ii) to agree to any adverse change in
any License or Assumed Contract to obtain a Consent required with respect
thereto.
6.8 Bulk Sales Law. Buyer hereby waives compliance by Seller with the
provisions of any applicable bulk sales laws. Seller shall indemnify and hold
harmless Buyer from and against any and all losses, costs, damages, and expenses
(including without limitation reasonable attorney's fees actually incurred)
pertaining to Seller's noncompliance with any applicable bulk sales laws.
6.9 Sales Tax Filings. Seller shall continue to file Virginia sales tax
returns with respect to the Station in accordance with Seller's past practices
and shall concurrently deliver copies of all such returns to Buyer.
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6.10 Access to Books and Records. Seller shall provide Buyer access and
the right to copy for a period of three years from the Closing Date any books
and records relating to the Assets that are not included in the Assets. Except
where a longer period of time has been agreed to elsewhere in the Agreement,
Buyer shall provide Seller access and the right to copy for a period of three
years from the Closing Date any books and records relating to the Assets.
6.11 Appraisal. Buyer and Seller agree to allocate the Purchase Price
for tax and recording purposes in accordance with an appraisal to be conducted
by Bond and Pecaro and the fee of such firm shall be paid for one-half by Buyer
and one-half by Seller.
6.12 Noncompetition Agreement. At Closing, Buyer and Seller shall enter
into a Noncompetition Agreement in the form of Schedule 6.12 and $295,000 of the
Purchase Price shall be allocated to the covenants of Seller set forth therein.
6.13 Section 1031 Exchange.
(a) Buyer and Seller shall cooperate in good faith to enable
Seller to effectuate the sale of the Assets as part of a like-kind exchange
pursuant to Section 1031 of the Internal Revenue Code, as amended, including
without limitation the assignment of Seller's rights under this Agreement to a
qualified intermediary, provided that such tax-free exchange does not impose any
material additional expenses upon Buyer. Buyer shall have no liability to Seller
based on any failure of this transaction to qualify for treatment under Section
1031. Without limiting the foregoing, Buyer agrees that Seller may assign its
rights under this Agreement to a qualified intermediary ("Seller's Qualified
Intermediary") with whom Seller may enter into an exchange agreement providing
for, inter alia, Seller's Qualified Intermediary's receipt of the Purchase
Price. Notwithstanding any such assignment by Seller to Seller's Qualified
Intermediary: (i) all representations, warranties, covenants, and agreements
made in this Agreement by Buyer for the benefit of Seller shall remain for the
benefit of, and shall be enforceable by, Seller; (ii) Buyer shall remain liable
to Seller for all of Buyer's obligations under this Agreement; (iii) such
assignment shall not deprive Buyer of rights or benefits, or relieve Seller of
any obligations or liabilities, under this agreement; (iv) Buyer shall not be
obligated to expend funds or incur obligations or liabilities in connection
therewith; (v) Seller shall indemnify and hold harmless Buyer from and against
any and all lost, liability, cost and expense arising and resulting from any
such transaction.
(b) Buyer and Seller shall cooperate in good faith to enable
Buyer to effectuate the purchase of the Assets as part of a like-kind exchange
pursuant to Section 1031 of the Internal Revenue Code, as amended, including
without limitation the assignment of Buyer's rights under this Agreement to a
qualified intermediary, provided that such tax-free exchange does not impose any
material additional expenses upon Seller. Seller shall have no liability to
Buyer based on any failure of this transaction to qualify for treatment under
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Section 1031. Without limiting the foregoing, Seller agrees that Buyer may
assign its rights under this Agreement to a qualified intermediary ("Buyer's
Qualified Intermediary") with whom Buyer may enter into an exchange agreement
providing for, inter alia, Buyer's Qualified Intermediary's disbursement of the
Purchase Price. Notwithstanding any such assignment by Buyer to Buyer's
Qualified Intermediary: (i) all representations, warranties, covenants, and
agreements made in this Agreement by Seller for the benefit of Buyer shall
remain for the benefit of, and shall be enforceable by, Buyer; (ii) Seller shall
remain liable to Buyer for all of Seller's obligations under this Agreement;
(iii) such assignment shall not deprive Seller of rights or benefits, or relieve
Buyer of any obligations or liabilities, under this agreement; (iv) Seller shall
not be obligated to expend funds or incur obligations or liabilities in
connection therewith; (v) Buyer shall indemnify and hold harmless Seller from
and against any and all lost, liability, cost and expense arising and resulting
from any such transaction.
6.14 Payment of FCC Regulatory Fees. Seller shall provide evidence,
reasonably satisfactory to Buyer, that all regulatory fees related to the FCC
Licenses have been paid and are current, or Seller shall make such payments
prior to Closing.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at the
Closing are subject at Buyer's option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Seller contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
(b) Covenants and Conditions. Seller shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied with
by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
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(e) Governmental Authorizations. Seller shall be the holder of
all Licenses and there shall not have been any modification of any License that
could have a material adverse effect on the Station or the conduct of its
business and operations. No proceeding shall be pending or threatened the effect
of which could be to revoke, cancel, fail to renew, suspend, or modify adversely
any License.
(f) Deliveries. Seller shall have made or stand willing to
make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement and the
Closing Date, there shall have been no material adverse change in the business,
assets, or properties of the Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct of the business of the
Station.
(h) Modification Application. Buyer shall have a reasonable
expectation that the Modification Application will be granted without conditions
unacceptable to Buyer.
(i) Tower Lease. Seller shall have entered into a tower lease
agreement with Hampton Roads Educational Telecommunications Corporation
("HRETC") for space on a tower to be constructed by HRETC for television station
WHRO (the "New WHRO Tower"), subject to and in accordance with the following:
(A) Buyer shall be solely responsible for negotiating the terms and provisions
of said lease agreement directly with HRETC and for preparing the documentation
of said lease agreement; (B) Buyer shall keep Seller informed of such
negotiations and shall permit Seller to be present at such negotiations; (C)
said lease agreement shall expressly provide that it is assignable by Seller to
Buyer and that upon such an assignment, HRETC shall release Seller from any and
all further obligations and liabilities arising thereunder; (D) Seller hereby
covenants to Buyer that at the Closing Seller shall assign said lease agreement
to Buyer; and (E) Buyer hereby covenants to Seller that at Closing Buyer shall
assume said lease agreement from Seller; and (F) said lease agreement shall
expressly provide that if the transactions contemplated by this Agreement are
not consummated, Seller, in its sole discretion, shall have the option to
terminate said lease agreement without penalty.
7.2 Conditions to Obligations of Seller. All obligations of Seller at
the Closing are subject at Seller's option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
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(b) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to make
all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00 a.m.
on a date, to be set by Buyer on at least five days' written notice to Seller,
that is (1) not earlier than the fifth business day after the FCC Consent is
granted, and (2) not later than ten business days following the date upon which
the FCC Consent has become a Final Order, subject to satisfaction or waiver of
all other conditions precedent to the holding of the Closing; provided, however,
that in no event shall the Closing take place earlier than January 2, 1998. If
Buyer fails to specify the date for Closing prior to the fifth business day
after the date upon which the FCC Consent becomes a Final Order, the Closing
shall take place on the tenth business day after the date upon which the FCC
Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the offices of
Dow, Lohnes & Albertson, 1200 New Hampshire Avenue, N.W., Suite 800, Washington,
D.C. 20036, or any other place that is agreed upon by Buyer and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller shall
deliver to Buyer the following, in form and substance reasonably satisfactory to
Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of sale,
deeds, motor vehicle titles, assignments, and other transfer documents which
shall be sufficient to vest good and marketable title to the Assets in the name
of Buyer, free and clear of all claims, liabilities, security interests,
mortgages, liens, pledges, conditions, charges or encumbrances, except for liens
for current taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of
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contracting parties to those Assumed Contracts listed in Schedule 3.7 that are
designated to indicate that estoppel certificates are required under this
paragraph;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Seller by an officer of Seller, certifying
(1) that the representations and warranties of Seller contained in this
Agreement are true and complete in all material respects as of the Closing Date
as though made on and as of that date; and (2) that Seller has in all material
respects performed and complied with all of its obligations, covenants, and
agreements set forth in this Agreement to be performed and complied with on or
prior to the Closing Date;
(e) Licenses, Contracts, Business Records, Etc. Copies of all
Licenses, Assumed Contracts, blueprints, schematics, working drawings, plans,
projections, engineering records, and all files and records used by Seller in
connection with its operations;
(f) Opinion of Counsel. An Opinion of Seller's counsel dated
as of the Closing Date, substantially in the form of Schedule 8.2(i) hereto;
(g) Noncompetition Agreement. The Noncompetition Agreement in
the form as Schedule 6.12, duly executed on behalf of Seller; and
(h) Lenders Certificates. Such certificates and confirmations
to Buyer's senior lenders as Buyer may reasonably request in connection with
obtaining financing for the performance of its payment obligations hereunder.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall
deliver to Seller the following, in form and substance reasonably satisfactory
to Seller and its counsel:
(a) Purchase Price. The Purchase Price as provided in Section
2.3;
(b) Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform Seller's
obligations under the Licenses and Assumed Contracts insofar as they relate to
the time on and after the Closing Date and arise out of events related to
Buyer's ownership of the Assets or its operation of the Station on or after the
Closing Date;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by an officer of Buyer, certifying (1)
that the representations
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and warranties of Buyer contained in this Agreement are true and complete in all
material respects as of the Closing Date as though made on and as of that date,
and (2) that Buyer has in all material respects performed and complied with all
of its obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel dated as
of the Closing Date, substantially in the form of Schedule 8.3(d) hereto.
(e) Noncompetition Agreement. The Noncompetition Agreement in
the form of Schedule 6.12 duly executed by Buyer and the payment of $295,000 to
Seller thereunder.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not the
in material default, upon written notice to Buyer, upon the occurrence of any of
the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Seller set
forth in this Agreement have not been satisfied or waived in writing by Seller.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
[insert date that is one year after the date of this Agreement].
(d) Breach. Without limiting Seller's rights under the other
provisions of this Section 9.1, if Buyer has failed to cure any material breach
of any of its representations, warranties or covenants under this Agreement
within fifteen days after Buyer received written notice of such breach from
Seller.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement have not been satisfied or waived in writing by Buyer.
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(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
[insert date that is one year after the date of this Agreement].
(d) Interruption of Service. If any event shall have occurred
that prevented signal transmission of the Station in the normal and usual manner
for a continuous period of ten days.
(e) Environmental Hazards. Buyer shall have notified Seller of
material environmental hazards or the material possibility of environmental
damages or clean-up costs, as indicated in the environmental study described in
Section 6.5, within 30 days prior to the Closing Date, and the cause thereof
shall not have been remedied prior to the Closing Date.
(f) Technical Deficiencies. Buyer shall have notified Seller
of material deficiencies in the operations or equipment of the Station, as
indicated in the engineering study described in Section 6.6, within 30 days
prior to the Closing Date, and the cause thereof shall not have been remedied
prior to the Closing Date.
(g) Breach. Without limiting Buyer's rights under the other
provisions of this Section 9.2, if Seller has failed to cure any material breach
of any of its representations, warranties or covenants under this Agreement
within fifteen days after Seller received written notice of such breach from
Buyer.
9.3 Rights on Termination. If this Agreement is terminated pursuant to
Section 9.1 or Section 9.2 and neither party is in material breach of this
Agreement, the parties hereto shall not have any further liability to each other
with respect to the purchase and sale of the Assets. If this Agreement is
terminated by Seller due to Buyer's material breach of this Agreement, then the
payment to Seller of $700,000 pursuant to Section 9.4 below shall be liquidated
damages and shall constitute full payment and the exclusive remedy for any
damages suffered by Seller by reason of Buyer's material breach of this
Agreement. Seller and Buyer agree in advance that actual damages would be
difficult to ascertain and that the amount of $700,000 is a fair and equitable
amount to reimburse Seller for damages sustained due to Buyer's material breach
of this Agreement. If this Agreement is terminated by Buyer due to Seller's
material breach of this Agreement, Buyer shall have all rights and remedies
available at law or equity.
9.4 Escrow Deposit. Buyer has deposited with the Escrow Agent the sum
of $700,000 in accordance with the Escrow Agreement in the form of Schedule 9.4
hereof. All
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such funds deposited with the Escrow Agent shall be held and disbursed in
accordance with the terms of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section 9.1 or
9.2 and Buyer is not in material breach of this Agreement, all amounts held by
the Escrow Agent pursuant to the Escrow Agreement, including any interest or
other proceeds from the investment of funds held by the Escrow Agent, shall be
disbursed to or at the direction of Buyer.
(c) If this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement, then $700,000 of the amount held by the
Escrow Agent pursuant to the Escrow Agreement shall be disbursed to or at the
direction of Seller as liquidated damages under Section 9.3 above and any
interest or other proceeds from the investment of funds held by the Escrow Agent
shall be disbursed by the Escrow Agent to or at the direction of Buyer.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and warranties
contained in this Agreement shall be deemed continuing representations and
warranties and shall survive the Closing for a period of eighteen months. Any
investigations by or on behalf of any party hereto shall not constitute a waiver
as to enforcement of any representation, warranty, or covenant contained in this
Agreement. No notice or information delivered by Seller shall affect Buyer's
right to rely on any representation or warranty made by Seller or relieve Seller
of any obligations under this Agreement as the result of a breach of any of its
representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or any
information Buyer may have, Seller hereby agrees to indemnify and hold Buyer
harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting from
any untrue representation, breach of warranty, or nonfulfillment of any covenant
by Seller contained in this Agreement or in any certificate, document, or
instrument delivered to Buyer under this Agreement.
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(b) Any and all obligations of Seller not assumed by Buyer
pursuant to this Agreement, including any liabilities arising at any time under
any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting from
the failure of the parties to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting from
the operation or ownership of the Station prior to the Closing, including any
liabilities arising under the Licenses or the Assumed Contracts which relate to
events occurring prior the Closing Date.
(e) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting from
any untrue representation, breach of warranty, or nonfulfillment of any covenant
by Buyer contained in this Agreement or in any certificate, document, or
instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting from
the operation or ownership of the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
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(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim. If
the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant within five days after
written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration provisions
of this Agreement, as applicable.
(c) With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense, to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party, subject to reimbursement for actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the Indemnifying
Party. If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense. If the Indemnifying Party does not
elect to assume control or otherwise participate in the defense of any third
party claim, it shall be bound by the results obtained by the Claimant with
respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2 and
10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary
<PAGE> 38
- 33 -
damages alone would not be adequate to compensate Buyer for its injury. Buyer
shall therefore be entitled, in addition to any other remedies that may be
available, including money damages, to obtain specific performance of the terms
of this Agreement. If any action is brought by Buyer to enforce this Agreement,
Seller shall waive the defense that there is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party which
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses.
10.7 Limitations. Notwithstanding any provision to the contrary in
Section 10 of this Agreement, or any provision to the contrary elsewhere in this
Agreement:
(a) An Indemnifying Party shall have no indemnification
obligation under Section 10 of this Agreement for the first Fifty Thousand
Dollars ($50,000) claimed by Claimant.
(b) Under no circumstances shall any party hereto have an
indemnification obligation under this Section 10 in an amount which, in the
aggregate, exceeds the Purchase Price.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or transfer
tax arising in connection with the conveyance of the Assets by Seller to Buyer
pursuant to this Agreement shall be paid by Seller. Buyer and Seller shall each
pay one-half of any fees payable to the Escrow Agent and all filing fees
required by the FCC in connection with the FCC Consent. Except as otherwise
provided in this Agreement, each party shall pay its own expenses incurred in
connection with the authorization, preparation, execution, and performance of
this Agreement, including all fees and expenses of counsel, accountants, agents,
and representatives. Each party shall be responsible for all fees or commissions
payable to any other finder, broker, advisor, or similar person retained by or
on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary below,
any dispute arising out of or related to this Agreement that Seller and Buyer
are unable to resolve by themselves shall be settled by arbitration by a panel
of three (3) neutral arbitrators who shall be selected in accordance with the
procedures set forth in the commercial arbitration rules of the American
Arbitration Association. The persons selected as arbitrators shall have prior
experience in the broadcasting industry but need not be professional
arbitrators, and persons such as lawyers, accountants, brokers and bankers shall
be acceptable. Before undertaking to resolve the dispute, each arbitrator shall
be duly sworn faithfully and fairly to hear and
<PAGE> 39
- 34 -
examine the matters in controversy and to make a just award according to the
best of his or her understanding. The arbitration hearing shall be conducted in
accordance with the commercial arbitration rules of the American Arbitration
Association in Washington, D.C. The written decision of a majority of the
arbitrators shall be final and binding on Seller and Buyer. The costs and
expenses of the arbitration proceeding shall be assessed between Seller and
Buyer in a manner to be decided by a majority of the arbitrators, and the
assessment shall be set forth in the decision and award of the arbitrators.
Judgment on the award, if it is not paid within thirty days, may be entered in
any court having jurisdiction over the matter. No action at law or suit in
equity based upon any claim arising out of or related to this Agreement shall be
instituted in any court by Seller or Buyer against the other except (i) an
action to compel arbitration pursuant to this Section, (ii) an action to enforce
the award of the arbitration panel rendered in accordance with this Section, or
(iii) a suit for specific performance pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or permitted
to be given under the provisions of this Agreement shall be (a) in writing, (b)
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
If to Seller: James L. Lockwood, Jr., CEO
Channel 49 Acquisition Corporation
220 Salters Creek Road
Hampton, Virginia 23661
With a copy to: Mark J. Prak, Esq.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P.
First Union Capitol Center, Suite 1600
Raleigh, North Carolina 27601
If to Buyer: Lowell W. Paxson, Chairman
Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, FL 33401
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
<PAGE> 40
- 35 -
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 11.3.
11.4 Benefit and Binding Effect. Except as otherwise expressly provided
herein, neither party hereto may assign this Agreement without the prior written
consent of the other party hereto; provided, however, that Buyer may assign its
rights and obligations under this Agreement, in whole or in part, to one or more
subsidiaries or commonly controlled affiliates of Buyer without seeking or
obtaining Seller's prior approval in which event Buyer shall have no further
obligation hereunder and Buyer may collaterally assign its rights and interests
hereunder to its senior lenders without seeking or obtaining Seller's prior
approval. Upon any permitted assignment by Buyer or Seller in accordance with
this Section 11.4, all references to"Buyer" herein shall be deemed to be
references to Buyer's assignee and all references to "Seller" herein shall be
deemed to be references to Seller's assignee, as the case may be. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and execute
any other documents that may be necessary or desirable to the implementation and
consummation of this Agreement, including, in the case of Seller, any additional
bills of sale, deeds, or other transfer documents that, in the reasonable
opinion of Buyer, may be necessary to ensure, complete, and evidence the full
and effective transfer of the Assets to Buyer pursuant to this Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for ease of
reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender, masculine, feminine, or neuter, and any other number, singular
or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and all
documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing
<PAGE> 41
- 36 -
that makes specific reference to this Agreement and which is signed by the party
against which enforcement of any such amendment, supplement, or modification is
sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 11.10.
11.11 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgement be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
11.12 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
11.13 Severability. If any provision of this Agreement is held by a
court or arbitrator of competent jurisdiction to be invalid, void, or
unenforceable, in whole or in part, the remainder of this Agreement shall
nevertheless remain in full force and effect.
11.14 Time Brokerage Agreement. The TBA provides, inter alia, that
Buyer shall provide programming for the Station, shall be responsible for the
employment of all personnel involved in the broadcast of such programming, shall
retain all revenues received form network and program suppliers and from the
sale of advertising within such programming, and shall have other rights and
obligations as are set forth in the TBA. Buyer and Seller hereby agree that
Seller shall not be in breach of or default under any representation, warranty,
covenant, obligation, or provision under this Agreement, nor shall Seller be
deemed to have failed to satisfy any condition of Closing under this Agreement,
to the extent that any such breach or default is a result of actions taken by
Buyer pursuant to the TBA.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
PAXSON COMMUNICATIONS
CORPORATION
By: /s/ Lowell W. Paxson
-------------------------------
Name: LOWELL W. PAXSON
Title: CHAIRMAN
CHANNEL 49 ACQUISITION CORPORATION
By:
-------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 10.185
ASSET PURCHASE AGREEMENT
BETWEEN
UNIVERSAL OUTDOOR, INC.
("BUYER")
AND
PAXSON COMMUNICATIONS CORPORATION
("SELLER")
OCTOBER 24, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
2. BASIC TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
(a) PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
(b) ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
(c) PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
(d) PRORATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
(e) THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
(f) DELIVERIES AT THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
(a) ORGANIZATION OF THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
(b) AUTHORIZATION OF TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
(c) NONCONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
(d) BROKERS' FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
(e) TITLE TO ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
(f) FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
(g) EVENTS SUBSEQUENT TO DECEMBER 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
(h) UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
(i) LEGAL COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
(j) LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
(k) TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
(l) EMPLOYMENT MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
(m) EMPLOYEE BENEFIT PLANS AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
(n) LEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
(o) DISPLAYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
(p) CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
(q) PERMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
(r) STATUS OF ACCOUNTS RECEIVABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
(s) UNBUILT LOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
(t) NO CONTINUING INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
(u) TANGIBLE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
(v) ENVIRONMENT, HEALTH, AND SAFETY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
(w) BARTERING/TRADE OUTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
(x) STRUCTURES ON I-75 AND HIGHWAY 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
(y) PERMANENT EASEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
(z) DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
(a) ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
(b) AUTHORIZATION AND ENFORCEABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
(c) NONCONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
(d) BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
(e) COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
(f) DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
5. PRE-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
(a) GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
(b) NOTICES AND CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
(c) NOTICES UNDER CONTRACTS AND LEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
(d) OPERATION OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
(e) PRESERVATION OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
(f) FULL ACCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
(g) NOTICE OF DEVELOPMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
(h) EXCLUSIVITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
6. POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
(a) GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
(b) TRANSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
(c) NON-INTERFERENCE AND CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
(d) CERTAIN TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
(e) SETTLEMENT OF LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
7. CONDITIONS TO OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
(a) CONDITIONS TO OBLIGATION OF THE BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
(b) CONDITIONS TO OBLIGATION OF THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
8. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
(a) BY SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
(b) BY BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
(c) CLAIMS PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
(d) OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
9. [INTENTIONALLY OMITTED.] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
(b) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
(c) NO THIRD PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
(d) ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
(e) SUCCESSION AND ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
(f) COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
(g) HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
(h) NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
(i) AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
(j) SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
(k) EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
(l) CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
(m) INCORPORATION OF EXHIBITS AND SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
(n) SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
(o) BULK TRANSFER LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
</TABLE>
EXHIBITS
EXHIBIT A-1 Form of Bill of Sale
EXHIBIT A-2 Form of Assignment and Assumption of Leases
EXHIBIT A-3 Form of Assignment and Assumption of Advertising Contracts
EXHIBIT A-4 Form of Assignment and Assumption of Permits
EXHIBIT B Form of Non-Interference and Non-Disclosure Agreement
EXHIBIT C Form of Settlement Agreement
iii
<PAGE> 5
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into on October 24, 1997, by and
between Universal Outdoor, Inc., an Illinois corporation (the "BUYER"), and
Paxson Communications Corporation, a Delaware corporation d/b/a Paxson Outdoor,
Inc. (the "SELLER"). The Buyer and the Seller are referred to collectively
herein as the "Parties."
This Agreement contemplates a transaction in which the Buyer will
purchase certain assets of the Seller in return for cash.
NOW, THEREFORE, in consideration of the mutual promises herein made,
and in further consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized words and phrases
shall have the following meanings:
(a) "ACQUIRED ASSETS" means all right, title, and interest in and
to all of the outdoor advertising sign assets and properties of the Seller
located in the Tampa, Florida metropolitan area, including all of the Displays,
Leases, Contracts, Permits, Unbuilt Locations and Other Assets of the Seller
located at or pertaining to the Locations, excluding those accounts receivable
arising under the Contracts regarding advertising services delivered or made
available by the Seller prior to the Effective Date.
(b) "ADVERSE CONSEQUENCES" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
(c) "ASSUMED LIABILITIES" means the Liabilities of the Seller
which arise or have arisen after the Effective Date in the Ordinary Course of
Business under the Leases, Contracts and Permits; provided, however, that the
"Assumed Liabilities" shall not include any Liability resulting from, arising
out of, relating to, in the nature of, or caused by any breach of contract,
breach of warranty, tort, infringement or violation of law. Except as
specifically set forth above, the term "Assumed Liabilities" shall not include
any other Liabilities of the Seller.
(d) "BASIS" means any past or present fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction that forms or could form the
basis for any specified consequence.
(e) "BUYER" has the meaning set forth in the preface above.
<PAGE> 6
(f) "CLOSING" means the exchange of executed agreements,
instruments and documents and the payment of the agreed-upon consideration with
respect to the transactions contemplated by this Agreement.
(g) "CLOSING DATE" has the meaning set forth in Section 2(e)
below.
(h) "CODE" means the Internal Revenue Code of 1986, as amended.
(i) "CONTRACTS" means and includes all of the advertising
contracts of the Seller for each of the Locations, including but not limited to
the Contracts listed on Schedule 1(i), attached hereto.
(j) "DISCLOSURE SCHEDULE" has the meaning set forth in Section 3
below.
(k) "DISPLAYS" means and includes all of the sign structures,
panels, light fixtures, electrical hook-ups, catwalks, communications
equipment, appurtenances and other personal property owned and used by the
Seller in the operation of the Seller's existing bulletin, junior poster,
eight-sheet painted walls and other outdoor advertising displays (including but
not limited to the outdoor advertising displays located at the Locations).
(l) "EFFECTIVE DATE" shall mean October 1, 1997.
(m) "ENVIRONMENTAL, HEALTH, AND SAFETY LAWS" means the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Resource Conversation and Recovery Act of 1976, and the Occupational Safety
and Health Act of 1970, each as amended, together with all other laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state and local
governments (and all agencies thereof) concerning pollution or protection of
the environment, public health and safety, or employee health and safety,
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.
(n) [INTENTIONALLY OMITTED.]
(o) "GAAP" means United States generally accepted accounting
principles as in effect from time to time.
(p) "KNOWLEDGE" means actual knowledge after reasonable
investigation.
(q) "LEASES" means and includes all of the rights, title,
easements, leases, leasehold interests, licenses, agreements, understandings,
interests and arrangements of the Seller
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regarding the rights of use of each of the Locations, including but not limited
to the Leases listed on Schedule 1(q), attached hereto and the easements listed
on Schedule 3(y), attached hereto.
(r) "LIABILITY" means any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
(s) "LOCATION(S)" means one or more of the existing or unbuilt
outdoor advertising display locations of the Seller, including those listed on
Schedule 1(s), attached hereto.
(t) [INTENTIONALLY OMITTED.]
(u) [INTENTIONALLY OMITTED.]
(v) [INTENTIONALLY OMITTED.]
(w) [INTENTIONALLY OMITTED.]
(x) "ORDINARY COURSE OF BUSINESS" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
(y) "OTHER ASSETS" means the motor vehicles, office equipment,
machinery, furniture, inventory, supplies, parts, customer lists, telephone
numbers and listings, business records and other assets and properties of the
Seller listed on Schedule 1(y), attached hereto.
(z) "PARTY" has the meaning set forth in the preface above.
(aa) "PERMITS" means the state and local permits, authorizations,
and governmental approvals required for the use and operation of the Displays
at the Locations, which Permits are listed on Schedule 1(aa), attached hereto.
(ab) "PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
(ac) "PRORATIONS" means the prorations and purchase price
adjustments referred to in Section 2(d) below and elsewhere in this Agreement.
(ad) "PURCHASE PRICE" has the meaning set forth in Section 2(c)
below.
(ae) "SECURITY INTEREST" means any mortgage, pledge, lien, claim,
encumbrance, charge or other security interest, other than liens for Taxes not
yet due and payable.
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(af) "SELLER" has the meaning set forth in the preface above. The
term "Seller" specifically includes without limitation Paxson Outdoor, Inc., a
Florida corporation which has been merged with and into the Seller.
(ag) "TAX" means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code #59A),
customs duties, capital stock franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property,
sales, use, transfer, registration, value-added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
(ah) "TAX RETURN" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
(ai) "UNBUILT LOCATIONS" means and includes any complete or
partially complete Displays and any Leases, Contracts or Permits, as well as
any right, title, interest or expectancy in any Location where the Seller has
planned, contemplated or worked upon the possibility of outdoor advertising at
any time prior to the date of this Agreement but which has not yet been
constructed or completed, including each of the Locations identified on
Schedule 1(ai), attached hereto.
2. BASIC TRANSACTION.
(a) PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the Buyer, all of
the Acquired Assets at the Closing for the consideration specified below in
this Section 2.
(b) ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become responsible
for the Assumed Liabilities at the Closing. The Seller expressly acknowledges,
agrees and understands that the Buyer will not assume or have any
responsibility with respect to any other Liability of the Seller not included
within the definition of Assumed Liabilities; rather, the Seller shall retain
any and all such Liabilities and shall pay, honor, perform, discharge, satisfy
and, if appropriate, defend and indemnify the Buyer against, the same in a
prompt and timely manner.
(c) PURCHASE PRICE. In consideration of the Buyer's purchase and
the Seller's sale of the Acquired Assets, the Buyer agrees to pay to the Seller
the sum of Four Million Five Hundred Thousand Dollars ($4,500,000), plus or
minus the Prorations (the "PURCHASE PRICE"), by delivery of cash in the amount
of Four Million Five Hundred Thousand Dollars ($4,500,000), plus or minus the
Prorations, at the Closing, payable to the Seller by wire transfer or delivery
of other immediately available funds. At the Closing, the Seller shall render
an accounting as
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<PAGE> 9
to the Prorations with respect to all periods through and including the
Effective Date (excluding October, 1997 receipts and rental payments) in
accordance with Section 2(d) below and the Purchase Price shall be adjusted
accordingly. Following the Closing, the Parties shall render a final
accounting as to the Prorations pertaining to October, 1997 receipts and
expenses in accordance with Section 2(d) below and the Purchase Price will be
further adjusted accordingly. Wire transfer instructions for payments to the
Seller hereunder are attached hereto as Schedule 2(c).
(d) PRORATIONS.
(i) ITEMS TO BE PRORATED. The Purchase Price is subject
to the following adjustments and prorations (the "PRORATIONS"): It is the
intention of the Parties that all items of income and expense relating to the
Acquired Assets will be prorated as of the Effective Date, with the Seller
benefitting or being liable (as the case may be) to the extent such items
relate to any time period up to and including the Effective Date and the Buyer
benefitting or being liable (as the case may be) to the extent such items
relate to periods on or subsequent to the Effective Date, including without
limitation (a) all rental payments under the Leases; (b) all invoices and
receipts regarding advertising billings under the Contracts; (c) other items
payable by or to the Seller under any Contract or Lease to be assigned to or
assumed by the Buyer hereunder; (d) personal property, real estate, occupancy
and water taxes, if any, on or with respect to the Acquired Assets; (e) the
amount of sewer rents and charges for water, telephone, electricity and other
utilities and fuel as to the Locations; (f) all rentals that are or would be
payable or have accrued pursuant to "percentage rental" lease provisions; (g)
all other items of income or expense to the extent not specifically referenced
in clauses (a) through (f) above which are normally prorated in connection with
similar transactions.
(ii) PAYMENTS UNDER CONTRACTS AND LEASES. The Seller has
issued bills to all advertisers under the Contracts for the month of October,
1997, which billings total $67,570.68 in the aggregate. The Seller has paid
all of the October, 1997 rental payments under the Leases, which rental
payments total $24,910.88 in the aggregate. Until such time as the Parties
complete the post-closing accounting provided for below, the Seller shall be
permitted to continue to collect, endorse and deposit all payments sent to the
Seller with respect to the October, 1997 billings; provided, however, the
Seller understands and acknowledges that such receipts are the property of the
Buyer and shall be credited to the Buyer as part of the post-closing
accounting. After completion of the post-closing accounting, any amounts
received by the Seller for October, 1997 billings (or billings for any
subsequent billing periods) promptly shall be forwarded to the Buyer in the
form received by the Seller, properly endorsed by the Seller to the extent
appropriate. Likewise, any amounts received by the Buyer for pre-October, 1997
billings promptly shall be forwarded to the Seller in the form received by the
Buyer, properly endorsed by the Buyer, to the extent appropriate. A list of
percentage Leases with the date of expiration is attached hereto as Schedule
2(d)(ii). No amounts are outstanding under any such percentage Leases for any
period(s) prior to the Effective Date, except as set forth on Schedule
2(d)(ii).
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<PAGE> 10
(iii) ACCOUNTING AT TIME OF CLOSING. At the Closing, the
Seller shall render an accounting as to the Seller's good faith estimate of the
Prorations, as of the Effective Date, except that (A) the Seller shall not
receive a credit at the Closing for any October, 1997 rental payments made by
the Seller on behalf of the Buyer in accordance herewith, and (B) the Buyer
shall not receive a credit at the Closing for any October,1997 billings
collected by the Seller on behalf of the Buyer in accordance herewith. To the
extent any amounts are due under any of the percentage Leases for any period of
time through the Effective Date, the Seller shall prorate the same and give the
Buyer an appropriate credit for the same at the Closing.
(iv) POST-CLOSING ACCOUNTING. Not less than sixty (60)
nor more than seventy-five (75) days after the Closing:
(A) The Seller shall account to the Buyer as to
all October, 1997 billings collected by the Seller. The Seller shall pay to
the Buyer at the time of such accounting an amount equal to the October, 1997
billings so collected less the aggregate amount of the October, 1997 rental
payments made by the Seller under the Leases (and any other proratable expenses
paid by the Seller which were not included in the Closing Prorations). To the
extent the billings collected by the Seller shall be less than the rental
payments made by the Seller, the Buyer shall pay the difference to the Seller
within ten (10) days after the Seller accounts to the Buyer. After the Seller
accounts to the Buyer as to all October, 1997 billings and October, 1997 rent,
the Seller shall no longer be permitted to collect the October, 1997 billings
(except for the limited purpose of endorsing and transmitting the same to the
Buyer).
(B) The Buyer shall render a final accounting
to the Seller as to any changes in the Prorations calculated by the Seller at
the Closing. To the extent either Party is determined to owe any amount to the
other Party as a result of such updated Prorations, such payment shall be made
within ten (10) days.
(v) ESTIMATES. If current payments with respect to items
to be prorated pursuant to this Section 2(d) are not ascertainable on or before
the date of the post-closing accounting referred to above, such payments shall
be prorated on the basis of the most recently ascertainable bill therefor and
shall be reprorated between the Seller and the Buyer when the current bills
with respect to such items have been issued and a cash settlement shall be made
within thirty (30) days thereafter.
(e) THE CLOSING. The Closing shall take place at the offices of
Universal Outdoor, Inc., Orlando, Florida commencing at 10:00 a.m. local time
on the second business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself), or such other date as the
Parties may mutually determine (the "CLOSING DATE").
(f) DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller
will deliver to the Buyer the various certificates, instruments and documents
referred to in Section 7(a) below; (ii) the
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<PAGE> 11
Buyer will deliver to the Seller the various certificates, instruments and
documents referred to in Section 7(b) below; (iii) the Seller will execute,
acknowledge (if appropriate), and deliver to the Buyer (A) bills of sale and
assignments in the forms attached hereto as Exhibits A-1 through A-4 and (B)
such other instruments of sale, transfer, conveyance and assignment as the
Buyer and its counsel reasonably may request, (iv) the Buyer will execute,
acknowledge (if appropriate), and deliver to the Seller (A) the assignment and
assumption agreements in the forms attached hereto as Exhibits A-2 through A-4,
and (B) such other instruments of assumption as the Seller and its counsel
reasonably may request, and (v) the Buyer will deliver to the Seller the
consideration specified in Section 2(c) above.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants to the Buyer that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3), except as set forth in the disclosure
schedule accompanying this Agreement and initialed by the Parties (the
"DISCLOSURE SCHEDULE"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Section
3.
(a) ORGANIZATION OF THE SELLER. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. Seller is legally qualified to transact
business in all other jurisdictions in which it currently conducts business
relative to the Acquired Assets. Seller has the full power and authority,
corporate and otherwise, to own, lease, and operate the Acquired Assets and to
conduct its business as currently conducted in the places where the Acquired
Assets are now located.
(b) AUTHORIZATION OF TRANSACTION. The Seller has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of the Seller has duly
authorized the execution, delivery and performance of this Agreement by the
Seller. This Agreement constitutes the valid and legally binding obligation of
the Seller, enforceable in accordance with its terms and conditions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Seller is subject or any
provision of the charter or by-laws of the Seller or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license, instrument,
or other arrangement to which any of the Seller is a party or by which it is
bound or to which any of the Acquired Assets is subject (including but not
limited to the Leases, Contracts and Permits).
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<PAGE> 12
(d) BROKERS' FEES. The Seller has no Liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(e) TITLE TO ASSETS. Paxson Outdoor, Inc., a Florida corporation
("Paxson Outdoor") has been merged with and into the Seller. Immediately prior
to the merger, Paxson Outdoor was the sole and exclusive owner of the Acquired
Assets. As a result of the merger, the Seller has good and marketable title
to, or a valid leasehold interest in, all of the Acquired Assets, free and
clear of any Security Interest or restrictions on transfer of any nature. If
and to the extent that after the Closing the Buyer discovers any Security
Interest or restriction on transfer as to any of the Acquired Assets, the
Seller will cause the same to be released, removed or otherwise resolved to the
Buyer's satisfaction in a prompt manner. The Acquired Assets constitute all of
the assets and properties of the Seller owned and/or used by the Seller in the
operation of the Seller's outdoor advertising business in the Tampa, Florida
metropolitan area.
(f) FINANCIAL INFORMATION. Attached hereto as Schedule 3(f) is
Seller's advertising billing and expense information for the twelve (12) month
period ended September 30, 1997, which billing information (a) is true, correct
and complete, (b) has been prepared in the ordinary course of Seller's business
and on a consistent basis throughout the periods covered thereby, (c) reflects
the most recent financial information regarding the Acquired Assets, (d)
includes all outdoor advertising revenues less agency expenses earned by
Seller, and (e) reflects all of Seller's expenses relating to the operation of
the Acquired Assets (including but not limited to all leasehold expenses,
utilities, production costs, maintenance costs and internal sales expenses).
(g) EVENTS SUBSEQUENT TO DECEMBER 31, 1996. Since December 31,
1996, there has not been any material adverse change in the business, financial
condition, operations, results of operations, or future prospects of the
Seller. Without limiting the generality of the foregoing, since that date:
(i) no party (including the Seller) has accelerated,
terminated, modified, or cancelled any of the Contracts, Leases, or
Permits;
(ii) the Seller has not delayed or postponed the payment
of any material expense;
(iii) the Seller has not imposed any Security Interest upon
any of the Acquired Assets;
(iv) the Seller has not granted any license or sublicense
of any rights under or with respect to any of the Acquired Assets;
(v) the Seller has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to any of
the Acquired Assets;
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(vi) there has not been any other material adverse
occurrence, event, incident, action, failure to act, or transaction
outside the Ordinary Course of Business involving the Seller or the
Acquired Assets; and
(vii) the Seller has not committed to any of the foregoing.
(h) UNDISCLOSED LIABILITIES. To Seller's Knowledge, the Seller
does not have any Liability (and there is no Basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against the Seller giving rise to any Liability) pertaining to the
Acquired Assets except for Liabilities arising in the Ordinary Course of
Business under the Contracts, Leases and Permits to be transferred hereunder
(none of which Liabilities has been caused by, relates to, has arisen from or
is in the nature of a breach or violation of any of such Contracts, Leases or
Permits, or a constitutes a tort, infringement or violation of the law or the
rights of any third party).
(i) LEGAL COMPLIANCE. The Seller and its affiliates have complied
in all material respects with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and
charges thereunder) of federal, state and local governments (and all agencies
thereof), in connection with the use of the Acquired Assets and the operation
of Seller's outdoor advertising business, and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand or notice has been
filed or commenced against any of them alleging any failure so to comply.
Without limiting the generality of the foregoing, Seller shall comply with all
requirements of the Delaware Corporation Law relative to this transaction, and
Seller will deliver to the Buyer, upon request, certified copies of resolutions
of Seller's directors authorizing the negotiation and consummation of this
transaction, whether or not required by applicable law.
(j) LITIGATION. There is no action, proceeding or investigation
pending or threatened against the Seller, or involving any of the Acquired
Assets, before any court or before any governmental department, commission,
board, agency or instrumentality, nor does the Seller know of any Basis for any
such action, proceeding or investigation which could result in any order,
injunction or decree against the Seller or otherwise involve or adversely
effect any of the Acquired Assets. The Seller agrees that it shall retain all
liability for any pending and/or threatened action, proceeding, investigation
or litigation, regardless of whether the same has been disclosed to the Buyer.
(k) TAX MATTERS. The Seller has filed all Tax Returns that it was
required to file. All such Tax Returns were correct and complete in all
respects. To Seller's Knowledge, all Taxes owed by the Seller (whether or not
shown on any Tax Return) have been paid. The Seller currently is the
beneficiary of no extension of time within which to file any Tax Return. No
claim has ever been made by an authority in a jurisdiction where the Seller
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the Acquired Assets
that arose or will arise in connection with any failure (or alleged failure) by
the Seller to pay any Tax. The Seller has withheld and paid all Taxes
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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. No director or officer (or employee responsible for Tax matters)
of the Seller expects any authority to assess any additional Taxes for any
period for which Tax Returns have been filed. There is no dispute or claim
concerning any Tax Liability of the Seller either (A) claimed or raised by any
authority in writing or (B) as to which any of the directors and officers (and
employees responsible for Tax matters) of the Seller has Knowledge.
(l) EMPLOYMENT MATTERS. There are no employment discrimination or
other claims by employees, or any unfair labor practice charges pending or
threatened against the Seller. The Seller has not engaged in any unfair or
discriminatory labor practices, and there is no strike, dispute, grievance,
request for representation or work stoppage pending or threatened against the
Seller, by or with respect to any of its current or former employees. The
Seller shall be responsible for terminating (or causing the termination of) all
employees and contractors who have any claim to continued business relations
with the Seller following the Closing and with providing any notice of layoff
or plant closing required in connection with the transaction contemplated
herein pursuant to any federal law, and any applicable state or local plant
closing notification statute. The Seller shall bear any liability or
obligation that may arise or accrue as the result of improper or untimely
notice of termination or that may arise from any person claiming wrongful
termination or change of employment as a result of the actions of the Seller
prior to Closing or of the terminations pursuant to this Section.
(m) EMPLOYEE BENEFIT PLANS AND POLICIES. The Buyer shall not
assume or otherwise become liable under any (i) of Seller's life, health,
accident or disability or any other "employee welfare benefit plans" as defined
in Section 3(l) of ERISA, or (ii) any of Seller's "employee pension benefit
plans" as defined in Section 3(2) of ERISA. If any employees of the Seller are
entitled to continuation coverage under applicable group health plans, Seller
shall be responsible to offer such coverage in accordance with applicable laws.
(n) LEASES. Schedule 1(q) lists and describes briefly all of the
Leases. The Seller has delivered to the Buyer correct and complete copies of
the Leases. With respect to each Lease listed in Schedule 1(q):
(i) the Lease is legal, valid, binding, enforceable in
accordance with its terms, and in full force and effect and is fully
transferable and permits the continued presence of any Display(s)
located thereon;
(ii) the Lease will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby (including
the assignments and assumptions referred to in Section 2 above);
(iii) all contractual Lease payments either have been or
will be made by the Seller through the Closing, Seller is not in
breach or default and, to Seller's Knowledge,
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no other party to the Lease is in breach or default, and no event has
occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification, or acceleration
thereunder;
(iv) neither Seller, nor to Seller's Knowledge, any other
party to the Lease has repudiated any provision thereof;
(v) there are no disputes, oral agreements, or
forbearance programs in effect as to the Lease;
(vi) the Seller has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold;
(vii) all leased locations have received all approvals of
governmental authorities (including licenses and permits) required in
connection with the operation thereof as presently conducted and have
been operated and maintained in accordance with applicable laws,
rules, and regulations;
(viii) all leased Locations are supplied with utilities and
other services necessary for their operation as currently operated;
and
(ix) to Seller's Knowledge, the owner of each leased
Location has good and marketable title to the parcel of real property,
free of restrictions which impair the current use, occupancy, or value
of the portion of such real estate leased to the Seller.
(o) DISPLAYS. The Displays are in good working order and repair,
ordinary wear and tear excepted, and comply in all material respects with all
applicable building codes, zoning and other regulations of entities having
jurisdiction over the construction and maintenance of the Displays, and are fit
for their intended purpose in accordance with industry standards. There are a
total of 81 Displays with a total of 178 advertising faces among the Assets
being purchased by the Buyer hereunder.
(p) CONTRACTS. The Contracts are legal, valid, binding and in
full force and effect and are fully transferable. Neither the Seller nor, to
the Seller's Knowledge, any advertiser is in default under any Contract.
Neither the execution nor consummation of this Agreement will cause the
termination or violation of any Contract to be assumed by the Buyer pursuant to
this Agreement.
(q) PERMITS. The Permits are the only permits and other federal,
state and local authorizations and approvals necessary to allow the continued
presence of the Displays where the same are located. All applicable fees for
such Permits have been paid through the Closing Date. All of the Permits are
valid and in full force and effect and are fully transferable. To the Seller's
Knowledge, neither the execution nor the consummation of this Agreement will
cause
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the termination of any Permit. The Seller agrees to cooperate fully with the
Buyer in renewing any Permit after the Closing.
(r) STATUS OF ACCOUNTS RECEIVABLE. The outstanding accounts
receivable of the Seller relating to advertising services delivered or made
available after the Effective Date, are current and collectible in the Ordinary
Course of Business. In accordance with Section 2(d) above, the Seller shall
continue its normal and customary collection efforts with regard to such
accounts receivable and shall not make any operational changes except as shall
be mutually agreed by the Buyer and the Seller. All of the accounts receivable
of the Seller arose out of bona fide transactions in the Ordinary Course of
Business and are not subject to any right of offset or counterclaim.
(s) UNBUILT LOCATIONS. Schedule 1(ai) contains a complete listing
of the Unbuilt Locations of the Seller.
(t) NO CONTINUING INTEREST. Following the Closing, neither the
Seller nor any other officer, director, shareholder or employee of the Seller
will have any direct, indirect or beneficial ownership or other financial
interest in any real or personal property which is in any way involved with or
related to the operation of any of the Locations or Displays being purchased by
the Buyer hereunder.
(u) TANGIBLE ASSETS. The Acquired Assets are free from material
defects (patent and latent), have been maintained in accordance with normal
industry practice, are in good operating condition and repair (subject to
normal wear and tear), and are suitable for the purposes for which they
presently are used. The inventory of the Seller consists of raw materials and
supplies, parts, goods in process, and finished goods, all of which are
merchantable and fit for the purpose for which they were procured or
manufactured.
(v) ENVIRONMENT, HEALTH, AND SAFETY. The Seller and affiliates
(and to Seller's Knowledge, its predecessors) have complied with all
Environmental, Health, and Safety Laws, and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply.
Without limiting the generality of the preceding sentence, the Seller and its
predecessors and affiliates have obtained and been in compliance in all
material respects with all of the terms and conditions of all permits,
licenses, and other authorizations which are required under, and has complied
with all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are contained in,
all Environmental, Health, and Safety Laws. The Seller does not have any
Liability (and neither the Seller, nor to Seller's Knowledge, any of its
predecessors and affiliates, has handled or disposed of any substance, arranged
for the disposal of any substance, exposed any employee or other individual to
any substance or condition, or owned or operated any property or facility in
any manner that could form the Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
the Seller giving rise to any Liability) for damage
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to any Location, for any illness of or personal injury to any employee or other
individual, or for any reason under any Environmental, Health, and Safety Law.
(w) BARTERING/TRADE OUTS. The Seller has not engaged in any
"bartering" or "lease trade outs" of accounts receivable or advertising space;
provided, however, it is agreed and understood that the Buyer shall provide the
Moody Bible Institute of Chicago ("Moody") with advertising space on a total of
ten (10) billboard faces, each for a period of up to 180 days, upon customary
terms and conditions, other than the payment of rent. Each billboard location
will be (i) in Pinellas, Pasco or Hernando County, Florida and (ii) provided to
Moody subject to availability as determined by Buyer in its sole discretion.
The Buyer may provide such billboards to Moody one at a time or concurrently at
multiple locations, all at the discretion of the Buyer.
(x) STRUCTURES ON I-75 AND HIGHWAY 50. With respect to the eight
(8) Displays located on I-75 and Highway 50, the Seller specifically represents
and warrants (without in any way limiting the generality of the other
representations and warranties in this Agreement) that it has no Knowledge of
any pending or threatened claim or dispute (and the Seller has not received
notice of any claim or dispute) which could have a material adverse affect on
the Buyer's ability to maintain, operate and use the Displays at those
Locations (including but not limited to any claim or dispute related to the
re-zoning of those Locations).
(y) PERMANENT EASEMENTS. Schedule 3(y) lists all easements with
respect to the Locations to be transferred to the Buyer hereunder. With
respect to each such easement: (i) the easement is legal, valid, binding,
enforceable in accordance with its terms and in full force and effect and is
fully transferrable and permits the continue presence of any Display(s) located
thereon; (ii) the easement will continue to be legal, valid, binding and
enforceable in accordance with its terms following the consummation of the
transactions contemplated hereby; (iii) the easement is perpetual in duration;
(iv) the easement has been properly recorded; (v) there are no disputes
concerning the easement; (vi) the Seller owns (and has not assigned, encumbered
or transferred any right to or interest in) the easement; and (vii) to the
Seller's Knowledge, the grantor of the easement was the owner of the parcel of
real property related thereto and had the full right, power and authority to
grant the easement at the time it was granted. As of the Closing Date, none of
the easements shall require any further payment(s) to maintain the easement in
force and effect (it being agreed that any and all remaining payments due or to
become due for any of the easements shall be paid by the Seller at or before
the Closing).
(z) DISCLOSURE. The representations and warranties contained in
this Section 3 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
The Buyer represents and warrants to the Seller that the statements
contained in this Section 4 are correct and complete as of the date of this
Agreement and will be correct and
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complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section
4), except as set forth in the Disclosure Schedule.
(a) ORGANIZATION. The Buyer is a corporation formed under the
laws of the State of Illinois. The Buyer has the full power and authority,
corporate and otherwise, to execute and deliver this Agreement and to perform
its obligations hereunder.
(b) AUTHORIZATION AND ENFORCEABILITY. The Buyer has the full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder. Without
limiting the generality of the foregoing, the board of directors of the Buyer
has duly authorized the execution, delivery and performance of this Agreement
by the Buyer. This Agreement constitutes the valid and legally binding
obligation of the Buyer, enforceable in accordance with its terms and
conditions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is subject or any
provision of the charter or by-laws of the Buyer or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license, instrument,
or other arrangement to which any of the Buyer is a party or by which it is
bound.
(d) BROKERS. The Buyer has no Liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
(e) COMPLIANCE WITH LAWS. The Buyer will comply with all of the
requirements and conditions of the Illinois Business Corporation Act relative
to its purchase of the Acquired Assets and will deliver to the Seller an
officer's certificate attesting to the authority of the Buyer to negotiate and
consummate this transaction, whether or not required by applicable law.
(f) DISCLOSURE. The representations and warranties contained in
this Section 4 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 4 not misleading.
5. PRE-CLOSING COVENANTS.
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing:
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(a) GENERAL. Each of the Parties will use its reasonable best
efforts to take all action and to do all things necessary, proper or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions
set forth in Section 7 below).
(b) NOTICES AND CONSENTS. The Seller will give any notices to
third parties, and the Seller will use its reasonable best efforts to obtain
any third party consents, that the Buyer reasonably may request. Each of the
Parties will give any notices to, make any filings with, and use their
reasonable best efforts to obtain any authorizations, consents, and approvals
of, governments and governmental agencies.
(c) NOTICES UNDER CONTRACTS AND LEASES. At the Closing, the
Seller shall deliver executed notices from the Seller to advertisers directing
such advertisers to make payment to the Buyer after the Closing of payments for
advertising services for all periods beginning on or after October 1, 1997, on
the Contracts conveyed. At the Closing, the Seller shall deliver executed
notices from Seller to each of the lessors of the Leases advising the lessors
that the Buyer has assigned and the Seller has assumed the Leases and that the
Seller's future rental obligations under the Leases have been assumed by the
Buyer effective as of October 1, 1997. All notices required by this Section
5(c) shall be in a form reasonably acceptable to the Buyer.
(d) OPERATION OF BUSINESS. The Seller will not engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business with respect to any of the Acquired Assets.
(e) PRESERVATION OF BUSINESS. The Seller will keep the Acquired
Assets intact, including relationships with lessors, licensors, suppliers,
customers and employees.
(f) FULL ACCESS. The Seller will permit representatives of the
Buyer to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Seller, to all premises,
Locations, properties, personnel, books, records (including Tax records),
Contracts, Leases, Permits, Displays and documents of or pertaining to the
Acquired Assets and the business of Seller.
(g) NOTICE OF DEVELOPMENTS. Each Party will give prompt written
notice to the other Party of any material adverse development causing a breach
of any of its own representations and warranties in Sections 3 and 4 above. No
disclosure by any Party pursuant to this Section 5(g), however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant.
(h) EXCLUSIVITY. The Seller will not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or any of the
Acquired Assets (including any acquisition structured as a merger,
consolidation, or share exchange) or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any
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other manner any effort or attempt by any Person to do or seek any of the
foregoing. The Seller will notify the Buyer immediately if any Person makes
any proposal, offer, inquiry, or contact with respect to any of the foregoing.
6. POST-CLOSING COVENANTS.
The Parties agree as follows with respect to the period following the
Closing:
(a) GENERAL. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other party
reasonably may request, all at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor
under Section 8 below). Seller acknowledges and agrees that, from and after
the Closing, the Buyer will be entitled to possession of all documents, books,
records (including Tax records), agreements, and financial data of any sort
relating to the Acquired Assets. To the extent Buyer, at any time after the
Closing, needs access to any documents pertaining to the Acquired Assets and
such documents have not been provided to Buyer, Seller will cooperate with
Buyer in attempting to locate such documents (and Seller will provide Buyer
access to any such documents in Seller's control).
(b) TRANSITION. The Seller will not take any action that is
designed or intended to have the effect of discouraging any lessor, lessee,
licensor, licensee, customer, supplier, employee, sales representative,
distributor, independent contractor or other business associate of the Seller
from maintaining the same business relationships with the Buyer after the
Closing as it maintained with the Seller prior to the Closing. Seller will
refer all customer inquiries relating to the businesses of the Seller to the
Buyer from and after the Closing.
(c) NON-INTERFERENCE AND CONFIDENTIALITY. At the Closing, the
Seller shall execute and deliver to the Buyer a Non-Interference and
Non-Disclosure Agreement substantially in the form of Exhibit B, attached
hereto.
(d) CERTAIN TAXES. The consideration payable to the Seller herein
is deemed to include all sales and other Taxes imposed with respect to the
transfer of assets contemplated herein. Without limiting the generality of the
foregoing, all gains, transfer, documentary, sales, use, stamp, registration
and other such Taxes and fees (including any penalties and interest) incurred
in connection with the execution and performance of this Agreement and the
consummation of the transactions contemplated herein, shall be paid by the
Seller when due, and the Seller will, at his own expense, file all necessary
tax returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and, if
required by applicable law, the Buyer will join in the execution of any such
tax returns and other documentation.
(e) SETTLEMENT OF LITIGATION. At the Closing, the Seller and all
of the Seller's affiliates shall execute and deliver to the Buyer a Settlement
Agreement of all claims arising
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from or pertaining to that certain cause of action entitled Universal Outdoor,
Inc. v. Paxson Communications Corporation, Case No. CI 96-8914.
7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the
Buyer to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) The Buyer shall have completed, prior to the Closing,
and to the Buyer's reasonable satisfaction, the Buyer's due diligence
inspection, investigation and audit of the assets, properties,
financial records and business of Seller, and the representations and
warranties of the Seller set forth in Section 3 above and elsewhere in
this Agreement shall remain true and correct in all material respects
at and as of the Closing Date.
(ii) The Seller shall have performed and complied with all
of its covenants hereunder in all material respects through the
Closing.
(iii) The Seller shall have procured all necessary and
appropriate third party and governmental consents (including any
necessary Justice Department approval).
(iv) No action, suit, or proceeding shall be pending or
threatened before any court or quasijudicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Buyer to own
the Acquired Assets, to operate the former businesses of the Seller
(and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect).
(v) The Seller shall have delivered to the Buyer a
certificate executed by an authorized officer of the Seller to the
effect that each of the conditions specified above in Sections
7(a)(i)-(iv) is satisfied in all respects.
(vi) The Buyer shall have received an original certificate
of good standing for Seller (issued by the Seller's state of
incorporation and each of the states in which Seller transacts
business relative to the Acquired Assets) and resolutions of the
directors of the Seller, authorizing the execution, delivery and
performance of this Agreement certified by the Secretary (or an
Assistant Secretary) of the Seller.
(vii) There shall not have been any material adverse change
in Seller's business, assets or condition (financial or otherwise),
including without limitation its relationships with customers,
suppliers, landlords or others, between the date of this Agreement,
and the Closing Date.
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(viii) The Seller shall have maintained all of the Acquired
Assets, including but not limited to the Displays, in at least as good
condition and repair as on the date of this Agreement and will not
voluntarily do or suffer anything to be done that will decrease the
value of the Acquired Assets, ordinary wear and tear excepted.
(ix) The Seller shall have executed and delivered to the
Buyer a bill(s) of sale and the instruments of assignments and
transfer in the form of Exhibits A-1 through A-4, attached hereto.
(x) Counsel for the Buyer shall have approved the form,
substance and sufficiency of all instruments to be delivered by the
Seller at or before the Closing.
(xi) The relevant parties shall have entered into
Non-Interference and Non-Disclosure Agreement(s) in form and substance
as set forth in Exhibit B attached hereto, and the same shall be in
full force and effect.
(xii) The Seller and its affiliates shall have executed and
delivered to the Buyer the Settlement Agreement referred to in
paragraph 6(e) above, which Settlement Agreement shall be in the form
of Exhibit C, attached hereto.
(xiii) The Seller shall have executed and delivered to the
Buyer an appropriate assignment as to each of the easements identified
on Schedule 3(y), attached hereto.
(xiv) At the time of the Closing, the Sellers shall deliver
to the Buyer all correspondence, notes, photographs, artwork,
sketches, pounce patterns, schematics, diagrams, engineering drawings,
surveys, books, records and other documents in the Sellers' possession
or under the Sellers' control, relating to the Acquired Assets,
including but not limited to the following: (a) all originals of the
Leases, Contracts and Permits; (b) all previous bills of sale,
assignments or documents reflecting or relating to any transfer of the
Acquired Assets; (c) all communications between the Sellers and any
lessors, advertisers, government authorities or third parties relating
to the Acquired Assets; and (d) all files and computer-generated
reports pertaining to the Displays and the Locations, including
statements of income and expenses and mailing addresses and phone
numbers for all ground lessors and advertising customers.
(xv) The Parties shall have prepared and agreed upon a
Closing Statement setting forth the Prorations and other adjustments
to be made at the Closing and identifying the amount(s) of the
payment(s) to be made at Closing.
(xvi) Communications Equity Associates shall have executed
and delivered to the Buyer a confidentiality agreement acceptable in
form and substance to the Buyer's counsel.
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(xvii) All actions to be taken by the Seller in connection
with consummation of the transactions contemplated hereby and all
certificates, instruments, and other documents required to effect the
transactions contemplated hereby shall be reasonably satisfactory in
form and substance to the Buyer.
The Buyer may waive any condition specified in this Section 7(a) if it executes
a writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) The representations and warranties of the Buyer set
forth in Section 4 above and elsewhere in this Agreement shall be true
and correct in all material respects at and as of the Closing Date.
(ii) The Buyer shall have performed and complied with all
of its covenants hereunder in all material respects through the
Closing.
(iii) No action, suit, or proceeding shall be pending or
threatened before any court or quasi- judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before
any arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect).
(iv) The Buyer shall have delivered to the Seller a
certificate executed by an authorized officer of the Buyer to the
effect that each of the conditions specified above in Section
7(b)(i)-(iii) is satisfied in all respects.
(v) The Buyer shall have received all other
authorizations, consents, and approvals of governments and
governmental agencies referred to in Sections 3(c) and 4(c) above
(including any necessary Justice Department approval).
(vi) The Buyer shall have executed and delivered to the
Seller the assumption agreements in the form of Exhibits A-2 through
A-4, attached hereto.
(vii) The relevant parties shall have entered into
Non-Interference and Non-Disclosure Agreement(s) in form and substance
as set forth in Exhibit B, attached hereto, and the same shall be in
full force and effect.
(viii) The relevant parties shall have entered into the
Settlement Agreement in the form of Exhibit C, attached hereto.
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(ix) The Parties shall have prepared and agreed upon a
Closing Statement setting forth the Prorations and other adjustments
to be made at the Closing and identifying the amount(s) of the
payment(s) to be made at Closing.
(x) All actions to be taken by the Buyer in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Seller.
The Seller may waive any condition specified in this Section 7(b) if it
executes a writing so stating at or prior to the Closing.
8. INDEMNIFICATION.
(a) BY SELLER. The Seller shall defend, indemnify and hold the
Buyer harmless from, against and in respect of any and all Adverse Consequences
occurring or arising from: (a) any breach of representation, warranty or
covenant, or the nonfulfillment of any agreement on the part of the Seller
under this Agreement; and (b) any liability or obligation of the Seller arising
out of any event or circumstances occurring prior to the Closing Date which is
not specifically assumed by the Buyer.
(b) BY BUYER. The Buyer shall defend, indemnify and hold the
Seller harmless from, against and in respect of any and all Adverse
Consequences occurring or arising from: (a) any breach of representation,
warranty or covenant, or the nonfulfillment of any agreement on the part of the
Buyer under this Agreement; and (b) any liability or obligation of the Seller
arising from or related to the Assumed Liabilities.
(c) CLAIMS PROCEDURES. The Buyer or the Seller (as the case may
be) shall, within a reasonable time of receiving notice of a claim, give
written notice to the other Party of any claim for which indemnification is
sought under Sections 8(a) or 8(b). The indemnitor shall have the right to
contest, defend, or litigate any matter in respect of which indemnification is
claimed. Any delay in or failure to give notice of a claim for indemnification
shall not relieve the indemnitor's obligation, except to the extent that the
indemnitor can demonstrate prejudice by such delay or failure. The indemnitor
shall have the exclusive right to settle, either before or after the initiation
of litigation, any matter in respect of which indemnification is claimed;
however, prior to any such settlement, written notice of its intention to do so
shall be given to the other party. In the event the indemnitor fails promptly
to defend any such claim as provided in Sections 8(a) or 8(b), as the case may
be, the other Party may do so and shall then have the right, in its sole
discretion, exercised in good faith and upon the advice of counsel, to settle,
either before or after the initiation of litigation, any matter in respect of
which indemnification is claimed.
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(d) OTHER REMEDIES. The foregoing indemnification provisions are
in addition to, and not in derogation of, any statutory, equitable, or common
law remedy any Party may have for breach of representation, warranty or
covenant.
9. [INTENTIONALLY OMITTED.]
10. MISCELLANEOUS.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Seller contained in Sections 3(a)-(e),
(k), (v) and (y) of this Agreement, and the representations and warranties of
the Buyer contained in Sections 4(a)-(d) of this Agreement, shall survive the
Closing and remain in full force and effect forever thereafter subject only to
applicable statutes of limitations. The remaining representations and
warranties of the Parties contained in this Agreement shall survive the Closing
and remain in full force and effect for a period of two (2) years thereafter
(the "Survival Period"). No claim for breach of representation or warranty may
be asserted by either Party unless reasonable notice of the same is provided to
the other Party on or prior to the last day of the Survival Period. Further,
notwithstanding anything to the contrary contained herein, all of the other
promises, agreements and covenants made in this Agreement shall survive the
Closing and continue in full force and effect forever thereafter, subject to
any limitations set forth herein and any applicable statutes of limitations
provided by law.
(b) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. Any press releases
or other public announcements of this transaction, other than any filing
required by law, shall be first approved by the Parties.
(c) NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(d) ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they are related in any way
to the subject matter hereof.
(e) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval
of the other Party; provided, however, that the Buyer may assign any or all of
its rights, interests and obligations hereunder to a wholly-owned subsidiary of
the Buyer without the need for any further approval or consent from the Seller.
(f) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
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(g) HEADINGS. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
(h) NOTICES. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand,
claim or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to the Seller:
Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, Florida 33401
Attn: William L. Watson
Fax: 561/655-9424
If to the Buyer: Copy to:
Universal Outdoor, Inc. Walter J. Starck, Esq.
Paul G. Simon Schwartz & Freeman
Brian T. Clingen 401 North Michigan Avenue
311 South Wacker Drive Suite 1900
Suite 6400 Chicago, Illinois 60611-4206
Chicago, Illinois 60606 Fax: 312/222-0818
Fax: 312/344-4171
Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
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(j) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) EXPENSES. The Parties will bear their own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(l) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. The Parties intend that each
representation, warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in
breach of the first representation, warranty, or covenant.
(m) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits,
Schedules and Disclosure Schedule identified in this Agreement are incorporated
herein by reference and made a part hereof.
(n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter, in addition to any other remedy
to which it may be entitled, at law or in equity.
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(o) BULK TRANSFER LAWS. The Buyer acknowledges that the Seller
will not comply with the provisions of any bulk transfer laws of any
jurisdiction in connection with the transactions contemplated by this
Agreement. The Seller accepts and assumes any and all liability and
responsibility for failure to comply with such laws and the Seller hereby
agrees to indemnify, defend and hold the Buyer harmless from all Adverse
Consequences arising from, related to, in the nature of or caused by such
failure.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
UNIVERSAL OUTDOOR, INC.
By: /s/ Paul S.
----------------------------------------
Title: Vice President
-------------------------------------
PAXSON OUTDOOR ADVERTISING, INC.
By: /s/ William Watson
----------------------------------------
Title: Secretary
-------------------------------------
-24-
<PAGE> 29
EXHIBIT A-1
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that Paxson Communications
Corporation, a Delaware corporation d/b/a Paxson Outdoor, Inc. ("Seller"),
pursuant to that certain Asset Purchase Agreement dated October ______, 1997
(the "Agreement'), for and in consideration of the sum of $10.00 and other
valuable consideration in hand paid by Universal Outdoor, Inc., an Illinois
corporation ("Buyer"), the receipt and sufficiency of which are hereby
acknowledged, does hereby grant, bargain, sell, transfer, assign and convey to
Buyer, its successors and assigns, the structures, light and electrical
fixtures, aprons, catwalks, panels and such other fixtures, appurtenances and
other personal property as now exists on all of the outdoor advertising
displays at the locations more fully described on Exhibit 1, attached hereto,
and the other assets and properties described on Exhibit 2, attached hereto, to
have and to hold the same forever.
Seller hereby incorporates all of the representations and warranties
made in the Agreement, subject to the terms, provisions and restrictions set
forth in the Agreement. Without limiting the generality of the foregoing,
Seller, for itself and its successors and assigns, does hereby represent,
covenant and agree to and with Buyer, and its successors and assigns that:
Seller is the lawful owner of all such goods, chattels and personal property,
and has full right, power and authority to sell the same; the same are free
from all liens, claims, charges, security interests and encumbrances; and
Seller will warrant and defend the sale of all such goods, chattels, and
personal property to Buyer, its successors and assigns, against all and every
person and persons whomever, lawfully claiming any rights, title or interest in
and to the same.
IN WITNESS WHEREOF, Seller has executed this Bill of Sale this
__________ day of October, 1997.
PAXSON COMMUNICATIONS CORPORATION D/B/A
PAXSON OUTDOOR, INC.
By:
--------------------------------
Its:
--------------------------------
<PAGE> 30
EXHIBIT A-2
ASSIGNMENT AND ASSUMPTION OF LEASES
KNOW ALL MEN BY THESE PRESENTS, that Paxson Communications
Corporation, a Delaware corporation d/b/a Paxson Outdoor, Inc. ("Assignor"),
pursuant to the terms of that certain Asset Purchase Agreement dated October
_____, 1997 (the "Agreement"), for and in consideration of the sum of $10.00
and other good and valuable consideration in hand paid by Universal Outdoor,
Inc., an Illinois corporation ("Assignee"), the receipt and sufficiency of
which are hereby acknowledged, assigns, transfers, and conveys to Assignee, all
of Assignor's right, title and interest in and to all of the leases for the
locations listed on Exhibit A (the "Leases"). Assignor hereby incorporates all
of the representations and warranties made by it in the Agreement, subject to
the terms, provisions and restrictions set forth in the Agreement. Without
limiting the generality of the foregoing:
ASSIGNOR REPRESENTS AND WARRANTS that it owns, free and clear of all
liens, claims, charges, security interests and encumbrances, the interest set
forth in the Leases and that such Leases are freely assignable without the
consent of any other party.
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns, with respect to each of the foregoing Leases for and during the
remainder of their respective terms, subject to the performance and observance
of any other covenants, conditions and stipulations set forth in those Leases.
By its acceptance of this assignment, Assignee assumes all of the obligations
of Assignor provided for under each Lease to the extent (and only to the
extent) such obligations arise subsequent to the Effective Date set forth in
the Agreement, subject to the terms, provisions and limitations set forth
therein.
IN WITNESS WHEREOF, Assignor has executed, and Assignee has accepted,
this Assignment, this _________ day of October 1997.
PAXSON COMMUNICATIONS CORPORATION D/B/A
PAXSON OUTDOOR, INC.
By:
-------------------------------
Its:
-------------------------------
ACCEPTED AND AGREED:
UNIVERSAL OUTDOOR, INC.
By:
-------------------------------------------
Its:
-------------------------------------------
<PAGE> 31
EXHIBIT A-3
ASSIGNMENT AND ASSUMPTION OF ADVERTISING CONTRACTS
KNOW ALL MEN BY THESE PRESENTS, that Paxson Communications
Corporation, a Delaware corporation d/b/a Paxson Outdoor, Inc. ("Assignor"),
pursuant to the terms of that certain Asset Purchase Agreement dated October
________, 1997 (the "Agreement"), for and in consideration of the sum of $10.00
and other good and valuable consideration in hand paid by Universal Outdoor,
Inc. ("Assignee"), the receipt and sufficiency of which are hereby
acknowledged, assigns, transfers, and conveys to Assignee, all of Assignor's
right, title and interest in and to all of Assignor's advertising contracts for
each of the locations listed on Exhibit 1, attached hereto (the "Advertising
Contracts"). Assignor hereby incorporates all of the representations and
warranties made by it in the Agreement, subject to the terms, provisions and
restrictions set forth in the Agreement. Without limiting the generality of
the foregoing:
ASSIGNOR REPRESENTS AND WARRANTS that it owns, free and clear of all
liens, claims, charges, security interests and encumbrances, the interest set
forth in the attached Advertising Contracts and that such Advertising Contracts
are freely assignable without the consent of any other party.
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns, with respect to each of the foregoing Advertising Contracts for and
during the remainder of their respective terms, subject to the performance and
observance of any other covenants, conditions and stipulations set forth in
those Advertising Contracts. By its acceptance of this assignment, Assignee
assumes all of the obligations of Assignor provided for under each Advertising
Contract to the extent (and only to the extent) such obligations arise
subsequent to the Effective Date set forth in the Agreement, subject to the
terms, provisions and limitations set forth therein.
IN WITNESS WHEREOF, Assignor has executed, and Assignee has accepted,
this assignment, this _________ day of October, 1997.
PAXSON COMMUNICATIONS CORPORATION D/B/A
PAXSON OUTDOOR, INC.
By:
------------------------------
Its:
------------------------------
ACCEPTED AND AGREED:
UNIVERSAL OUTDOOR, INC.
By:
-----------------------------
Its:
-----------------------------
<PAGE> 32
EXHIBIT A-4
ASSIGNMENT AND ASSUMPTION OF PERMITS
KNOW ALL MEN BY THESE PRESENTS, that Paxson Communications
Corporation, a Delaware corporation d/b/a Paxson Outdoor, Inc. ("Assignor"),
pursuant to the terms of that certain Asset Purchase Agreement dated October
________, 1997 (the "Agreement"), for and in consideration of the sum of $10.00
and other good and valuable consideration in hand paid by UNIVERSAL OUTDOOR,
INC., an Illinois corporation ("Assignee"), the receipt and sufficiency of
which are hereby acknowledged, assigns, transfers, and conveys to Assignee, all
of Assignor's right, title and interest in and to the existing permits,
authorizations and governmental approvals for the locations listed on and
attached to Exhibit 1 attached hereto (the "Permits"). Assignor hereby
incorporates all of the representations and warranties made by it in the
Agreement, subject to the terms, provisions and restrictions set forth in the
Agreement. Without limiting the generality of the foregoing:
ASSIGNOR REPRESENTS AND WARRANTS that it owns the Permits free and
clear of all liens, claims, charges, security interests and encumbrances and
that such Permits are freely assignable without the consent of any other party.
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns, with respect to each of the foregoing Permits for and during the
remainder of their respective terms, subject to the performance and observance
of any other covenants, conditions and stipulations set forth in those Permits.
By its acceptance of this assignment, Assignee assumes all of the obligations
of Assignor provided for under each Permit to the extent (and only to the
extent) such obligations arise subsequent to the Effective Date set forth in
the Agreement, subject to the terms, provisions and limitations set forth
therein.
IN WITNESS WHEREOF, Assignor has executed, and Assignee has accepted,
this assignment, this _________ day of October, 1997.
PAXSON COMMUNICATIONS CORPORATION D/B/A
PAXSON OUTDOOR, INC.
By:
-------------------------------
Its:
-------------------------------
ACCEPTED AND AGREED:
UNIVERSAL OUTDOOR, INC.
By:
------------------------------
Its:
------------------------------
<PAGE> 33
EXHIBIT B
FORM OF NON-INTERFERENCE AND NON-DISCLOSURE AGREEMENT
See Attached.
<PAGE> 34
NONINTERFERENCE AND NONDISCLOSURE AGREEMENT
THIS AGREEMENT is made and entered into as of this ____ day of
October, 1997, by and among Paxson Communications Corporation d/b/a Paxson
Outdoor, Inc. ("Seller"), John Jennings ("John"), Celua Jennings ("Celua"), and
Richard Smyer ("Richard"), on the one hand, and Universal Outdoor, Inc., an
Illinois corporation, on the other hand ("Buyer"). John, Celua, and Richard
are collectively referred to below as "Seller's Agents."
R E C I T A L S:
A. Seller is engaged, among other things, in the business of
outdoor advertising in the Tampa, Florida metropolitan area.
B. Seller's Agents have in the past provided assistance to Seller
with respect to identifying, securing, leasing, developing, maintaining and
operating sites for outdoor advertising structures in the Tampa, Florida market
area. Seller's Agents are, therefore, familiar with the assets and operations
of Seller in the Tampa, Florida market area.
C. Seller has entered into an Asset Purchase Agreement dated
October ____, 1997 with Buyer (the "Purchase Agreement") whereby Seller has
agreed to sell all of its outdoor advertising assets in the Tampa, Florida
metropolitan area to Buyer (the "Assets").
D. Seller will directly and indirectly benefit from the sale of
the Assets to Buyer pursuant to the Purchase Agreement. Buyer has conditioned
its purchase of the Assets upon Seller's delivery of this Noninterference and
Nondisclosure Agreement executed by the Seller and each of the Seller's Agents.
A G R E E M E N T S:
NOW, THEREFORE, in consideration of the purchase by Buyer of the
Assets from Seller, and the benefits inuring to Seller pursuant to thereto, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by Seller and Seller's Agents, the parties, on their
own behalf and on behalf of their respective Affiliates, agree as follows:
1. DEFINITIONS AND INTERPRETATION.
1.1 DEFINITIONS. In this Noninterference and Nondisclosure
Agreement (this "Agreement") the words and expressions defined below (unless
the context otherwise requires) shall have the following meanings:
<PAGE> 35
(a) "AFFILIATE": of any Person is a Person that directly
or indirectly owns or controls, is directly or indirectly owned or
controlled by, or is directly or indirectly under common ownership or
control with, the Person specified.
(b) "PERSON": means an individual, a partnership, a
corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or
any department, agency or political subdivision thereof).
(c) "PAXSON PARTIES": means and includes Seller,
Seller's Agents and each and every one of their respective Affiliates.
(d) "TRADE SECRETS": any trade secrets relative to the
Assets purchased or liabilities assumed by Buyer pursuant to the
Purchase Agreement, and all other secret or confidential information
concerning such Assets received during the transactions contemplated
thereby, including but not limited to: Tampa area customer and lessor
lists and data relating thereto; Tampa area business and contractual
arrangements; Tampa area financial, pricing and marketing information;
and any other information which gives or is reasonably expected to
give Buyer an opportunity to obtain economic value or competitive
advantages over its competitors in the Tampa area who do not know of
or use such information. "Trade Secrets" shall also encompass any
confidential information of Buyer received by or acquired by Seller,
or any Affiliate, during the transactions described herein.
Notwithstanding anything to the contrary contained herein, the term
"Trade Secrets" shall not be deemed to include information in public
domain, information which shall in the future be received or acquired
by Seller or Seller's Agents from any third party(ies) other than
through a breach of this Agreement and information generally available
to the public other than as a result of any disclosure by Seller or
Seller's Agents.
1.2 OTHER CAPITALIZED TERMS. Unless otherwise defined, the
capitalized terms used in this Agreement shall have the same meanings as those
used in the Purchase Agreement.
1.3 PRONOUNS. Unless the context otherwise requires, words
importing the singular only shall include the plural and vice versa, words
importing the masculine only shall include the feminine gender or neuter and
words importing natural persons shall also include corporations, unincorporated
associations and partnerships.
2. RESTRICTIVE COVENANTS.
For and in consideration of Buyer's purchase of the Assets from
Seller, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged and expressed, including but not limited
to the Covenant Payments set forth on Exhibit A, attached hereto, Seller and
Seller's Agents agree that:
-2-
<PAGE> 36
2.1 NON-INTERFERENCE WITH SPECIFIC LOCATIONS. With regard to the
real property, personal property and intangible property rights (including but
not limited to the Leases, Contracts and Permits) to operate Displays at the
Locations, the Seller and Seller's Agents agree that setting a definite term to
protect the legitimate expectations of Buyer is difficult because of the
sensitivity of the Trade Secrets, the expected or anticipated long-term nature
of the Leases, Contracts and Permits being purchased and the ongoing
uncertainty of the duration of such arrangements. Therefore, it is the express
intention and agreement of the Seller and the Seller's Agents that the Paxson
Parties shall not compete for the Leases, Contracts and Permits being sold
hereunder (and any renewals of such Leases, Contracts or Permits), and shall
not otherwise interfere with Buyer's rights to operate the Displays at the
Locations for a term of twenty (20) years from the date of execution of this
Agreement. Seller and Seller's Agents agree that twenty (20) years is a
reasonable restriction on the Paxson Parties' competition for the particular
Leases, Contracts and Permits (and renewals thereof) relating to the Locations.
However, Seller and Seller's Agents specifically agree that a court may modify,
reduce or extend the term or the restrictions set forth herein to ensure the
broadest and fullest enforceability of this Agreement and to afford the Buyer
the full benefits of its use, enjoyment and operation of the Assets purchased
by Buyer from Seller. Nothing contained herein shall preclude Seller's Agents
from owning, operating or being employed by any company engaged in the outdoor
advertising business within the Tampa, Florida market so long as Seller's
Agents do not directly or indirectly participate or engage in, or assist others
with, any activity which is in violation of the spirit or terms of this
Agreement.
2.2 NON-DISCLOSURE OF TRADE SECRETS. For so long as the Trade
Secrets continue to be of value to Buyer, Seller and Seller's Agents agree that
the Paxson Parties will keep secret and maintain the secrecy of the Trade
Secrets and further agree that the Paxson Parties shall not disclose to any
third party the knowledge of or any details relating to the Trade Secrets or
use the Trade Secrets for any purpose, without the express written permission
of Buyer, except to the extent the Paxson Parties are required by any court
order to disclose such information, or are otherwise required by law to
disclose such information. Seller and Seller's Agents represent and warrant,
to the best of their knowledge, that all originals and copies of the Leases,
Permits and Contracts (and all notes, correspondence and other documents
related thereto) have been delivered to Buyer and that, to the best of their
knowledge, no originals or copies of the same have been retained by any of the
Paxson Parties.
2.3 CONSIDERATION TO SELLER'S AGENTS. Seller's Agents acknowledge
receipt from Seller of the consideration set forth on Exhibit A, attached
hereto in payment for their execution of this Agreement. Seller's Agents
hereby acknowledge that the same is sufficient consideration for the
restrictions set forth herein.
3. REMEDIES.
Seller and Seller's Agents agree that damages cannot adequately
compensate Buyer in the event of a violation of any of the above restrictive
covenants, and that injunctive relief shall be essential for the protection of
Buyer, its Affiliates, and their respective successors and assigns.
Accordingly, Seller and Seller's Agents agree and consent that, in the event of
a violation or
-3-
<PAGE> 37
breach of any of said restrictive covenants, Buyer shall be entitled to obtain
injunctive relief against the Paxson Parties (or any one of them, as the case
may be), without bond, but upon due notice, in addition to such other relief as
may be available at law or in equity. Obtainment of such injunction by Buyer
shall not be considered an election of remedies or a waiver of any right to
assert any other remedies available at law or in equity. The restrictive
covenants contained herein shall be construed as agreements which are
independent of any other provisions of the Purchase Agreement or any other
understanding or agreement between the parties. The existence of any other
claim or cause of action of one or more of the Paxson Parties against Buyer
shall not constitute a defense to the enforcement by Buyer of the covenants set
forth herein in the particular jurisdiction in which such adjudication is made.
Further, to the extent any provision hereof is deemed unenforceable by virtue
of its scope in terms of territory, business activities or length of time, but
may be made enforceable by limitations thereon, Seller and Seller's Agents
agree that such reductions or limitations may be made so that the same shall be
enforceable to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought. The
parties agree that in the event of any litigation arising from or pertaining to
this Agreement, the prevailing party shall be entitled to recover from the
non-prevailing party any and all reasonable attorneys' fees, costs and expenses
incurred by the prevailing party in enforcing or defending such party's rights
under this Agreement.
4. MISCELLANEOUS.
4.1 ASSIGNMENT. It is hereby agreed and declared that the benefit
of this Agreement shall be assignable by Buyer to and the covenants herein
contained may be enforceable by any parent, subsidiary or affiliate of Buyer
following the Closing. Additionally, in the event that Buyer shall sell all or
substantially all of the Assets, then Buyer may assign this Agreement to the
party(ies) to whom such Assets are sold. Given the unique nature of Seller's
and Seller's Agents' obligations hereunder, Seller and Seller's Agents may not
assign this Agreement or any portion hereof.
4.2 WAIVER. The waiver by Buyer hereof of a breach of any of the
covenants on the part of Seller or Seller's Agents herein contained shall not
prevent the subsequent enforcement of any such covenant (as to any aspect which
has not been so waived) and shall not be deemed a waiver of any subsequent
breach thereof. No waiver of any breach or violation hereof shall be implied
from forbearance or failure by Buyer to take action thereon.
4.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts all of which when taken together shall constitute one and the same
instrument.
4.4 PROCEDURES FOR NOTICES. Any notice or demand required or
permitted under this Agreement shall be given in the same manner provided for
in the Purchase Agreement, except that all notices to Seller's Agents shall be
sent to:
John Jennings
8202 Silver Mist Place
Newport Richey, Florida 34655
-4-
<PAGE> 38
IN WITNESS WHEREOF, each of the parties hereto or their duly
authorized representatives have executed this Noninterference and Nondisclosure
Agreement, all as of the day and year first above written.
BUYER: SELLER:
UNIVERSAL OUTDOOR, INC. PAXSON COMMUNICATIONS
CORPORATION D/B/A PAXSON
OUTDOOR, INC.
By: By:
--------------------------- ---------------------------
Its: Its:
-------------------------- --------------------------
SELLER'S AGENTS:
------------------------------
John Jennings
------------------------------
Celua Jennings
------------------------------
Richard Smyer
-5-
<PAGE> 39
EXHIBIT A
COVENANT CONSIDERATION
<TABLE>
<CAPTION>
Name Amount
---- ------
<S> <C>
John Jennings $200
Celua Jennings $200
Richard Smyer $200
</TABLE>
<PAGE> 40
EXHIBIT C
FORM OF SETTLEMENT AGREEMENT
See Attached.
<PAGE> 41
SETTLEMENT AGREEMENT
THIS AGREEMENT made this ___________ day of October, 1997, between
UNIVERSAL OUTDOOR, INC. ("UNIVERSAL"), and PAXSON COMMUNICATIONS CORPORATION
AND PAXSON OUTDOOR, INC. (collectively, "Paxson").
WHEREAS, Universal is the plaintiff and Paxson is the defendant in
"Universal Outdoor, Inc. v. Paxson Communications Corporation, et al.", Case
No. CI 96-8914 in the Circuit Court of the Ninth Judicial Circuit, in and for
Orange County, Florida (the "Action"); and
WHEREAS, Universal and Paxson desire to amicably resolve and settle the
Action.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Universal and Paxson agree as follows:
1. Universal and Paxson shall file a joint stipulation and motion
through counsel to dismiss the Action with prejudice and to dissolve the notice
of lis pendens filed in the Action in the form attached hereto as Exhibit "A".
In connection with this dismissal, Universal and Paxson shall submit to the
court a final order of dismissal with prejudice in the form attached hereto as
Exhibit "B".
2. Universal and Paxson will each bear their own costs and attorneys'
fees incurred in the Action.
3. If the parties do not file the joint stipulation and motion within a
reasonable time of the execution of this Agreement, then the Action will be
dismissed with prejudice, each party to bear its own costs and attorneys' fees,
upon the motion of one party and the filing of a copy of this Agreement.
4. Universal hereby remises, releases, acquits, satisfies, and forever
discharges Paxson of and from any and all manner of action and actions, cause
and causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, executions, claims, and
demands whatsoever, at law or in equity, known or unknown, which Universal ever
had, now has, or which Universal or any successor or assign of Universal,
hereafter can, shall, or may have against Paxson for, by reason of, arising out
of, or connected with Paxson's acquisition of easements on the Anderson and
Bond parcels from Southern Land Investors, Ltd., any other subject matter that
was or could have been asserted in the Action, and the Action itself.
<PAGE> 42
5. Paxson hereby remises, releases, acquits, satisfies, and forever
discharges Universal of and from any and all manner of action and actions,
cause and causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, executions,
claims, and demands whatsoever, at law or in equity, known or unknown, which
Paxson ever had, now has, or which Paxson or any successor or Universal for, by
reason of, arising out of, or connected with Paxson's acquisition or easements
on the Anderson and Bond parcels from Southern Land Investors, Lt., and other
subject matter that was or could have been asserted in the Action, and the
Action itself.
6. This Settlement Agreement is being entered into as part of the
transactions contemplated by the Asset Purchase Agreement of even date between
Universal and Paxson. The parties acknowledge and agree that nothing contained
herein shall be deemed to waive, release, discharge, or otherwise affect the
right and obligations of Universal and Paxson set forth in the Asset Purchase
Agreement and related agreements and instruments.
7. Two counterparts of this Agreement will be fully executed by the
parties hereto, any one of which standing alone shall be deemed an original with
the full force and effect of a fully executed original.
8. This Agreement may not be altered, modified, or amended except by a
writing executed by the parties hereto.
9. This Agreement shall be construed and enforced under the laws of
Florida.
IN WITNESS WHEREOF, Universal and Paxson have caused this Agreement to be
executed on their behalf on the day and year first above written.
Witnessed by:
- ------------------------------- UNIVERSAL OUTDOOR, INC.,
- --------------------------(name) an Illinois corporation
By:
-----------------------------
- -------------------------------- ------------------------(name)
- --------------------------(name) -----------------------(title)
2
<PAGE> 43
PAXSON COMMUNICATIONS
CORPORATION,
- --------------------------- a Delaware corporation
- ---------------------(name)
By:
-------------------------------
- --------------------------- -------------------------(name)
- ---------------------(name) ------------------------(title)
PAXSON OUTDOOR, INC.,
- --------------------------- a Florida corporation
- ---------------------(name)
By:
-------------------------------
- --------------------------- -------------------------(name)
- ---------------------(name) ------------------------(title)
STATE OF ILLINOIS
COUNTY OF __________
The foregoing instrument was acknowledged before me this ______
day of _____________________, 1997 by ______________________,
as ____________ of Universal Outdoor, Inc. He is personally known to
me or has produced ______________ as identification and did not take
an oath.
------------------------------------
------------------------(print name)
Notary Public - State of Florida
STATE OF FLORIDA
COUNTY OF _______________
The foregoing instrument was acknowledged before me this ______
day of _________________, 1997 by __________________, as ___________
of Paxson Communications Corporation. He is personally known to me
or has produced ___________________ as identification and did not take
an oath.
------------------------------
------------------(print name)
Notary Public-State of Florida
3
<PAGE> 44
STATE OF FLORIDA
COUNTY OF ___________
The foregoing instrument was acknowledged before me this _____________
day of _________________, 1997 by __________________, as __________________
of Paxson Outdoor, Inc. He is personally known to me or has produced ______
______________ as identification and did not take an oath.
------------------------------
------------------(print name)
Notary Public-State of Florida
4
<PAGE> 45
IN THE CIRCUIT COURT OF THE
NINTH JUDICIAL CIRCUIT, IN AND
FOR ORANGE COUNTY, FLORIDA
CASE NO. CI 96-8914
UNIVERSAL OUTDOOR, INC., an
Illinois corporation,
Plaintiff,
vs.
PAXSON COMMUNICATIONS CORPORATION,
a Delaware corporation, and PAXSON
OUTDOOR, INC., A Florida corporation,
Defendants.
__________________________________/
JOINT STIPULATION AND MOTION FOR DISMISSAL WITH PREJUDICE
Plaintiff, UNIVERSAL OUTDOOR, INC., and Defendants, PAXSON COMMUNICATIONS
CORPORATION and PAXSON OUTDOOR, INC., jointly stipulate and move for entry of an
order dismissing the captioned action with prejudice, each party to bear its
own costs and attorneys' fees, and dissolving the notice of lis pendens filed
herein and as grounds therefore Plaintiff and Defendants would show that they
have resolved the dispute among them.
DATED this _______ day of October, 1997.
- --------------------------------- -----------------------------------
Richard F. Wall, Esq. Brian A. McDowell, Esq.
Fla. Bar No. 349518 Fla. Bar No. 765521
HARTLEY & WALL HOLLAND & KNIGHT LLP
Suite 2810, SunTrust Center 200 South Orange Avenue
200 S. Orange Avenue Suite 2600
Post Office Box 2168 Post Office Box 1526
Orlando, Florida 32802 Orlando, FL 32802
407/422-7992 407/425-8500
Counsel for Plaintiff Counsel for Defendants
EXHIBIT "A"
<PAGE> 46
IN THE CIRCUIT COURT OF THE
NINTH JUDICIAL CIRCUIT, IN AND
FOR ORANGE COUNTY, FLORIDA
CASE NO. CI 96-8914
UNIVERSAL OUTDOOR, INC., an
Illinois corporation
Plaintiff,
vs.
PAXSON COMMUNICATION CORPORATION
a Delaware corporation, and PAXSON
OUTDOOR, INC., a Florida corporation,
Defendants.
______________________________________/
FINAL ORDER OF DISMISSAL WITH PREJUDICE
THIS CAUSE came before the Court on the _________ day of October, 1997, on
the Joint Stipulation And Motion For Dismissal With Prejudice Of Plaintiff,
UNIVERSAL OUTDOOR, INC., and Defendants, PAXSON COMMUNICATION CORPORATION and
PAXSON OUTDOOR, INC., and the Court being fully advised in the premises and
finding that Plaintiff and Defendants have settled, it is herewith
ORDERED AND ADJUDGED, that:
1. The captioned action is dismissed with prejudice, Plaintiff takes
nothing by this action, and Defendants shall go hence without day.
2. The notice of lis pendens filed herein and recorded on June 9, 1997,
in Official Records Book 5269, page 3719, of the public records of Orange
County, Florida, regarding the following described real property located in
Orange County, Florida, is dissolved:
EXHIBIT "B"
<PAGE> 47
That part of Section 8, Township 23 South, Range 29 East, Orange County,
Florida, described as follows:
Commence at the Southeast corner of Section 8, Township 23 South, Range 29
East, and run 89 degrees 43 feet 15 inches W along the South line of the
Southeast 1/4 of said Section 8 for a distance of 326.02 feet; thence run N
00 degree 24 feet 40 inches E along the West line of the East 1/4 of the
Southeast 1/4 of the Southeast 1/4 of said Section 8 for a distance of 33.00
feet; thence run N 89 degrees 43 feet 15 inches W parallel with and 33.00 feet
Northerly of the South line of said Southeast 1/4 for a distance of 1672.67
feet to the Easterly Right-of-Way line of Interstate 4; thence run N 38 degrees
26 feet 05 inches E along said Right-of-Way line for a distance of 330.39 feet;
thence run S 51 degrees 33 feet 55 inches E for a distance of 26.00 feet to the
POINT OF BEGINNING; thence continue S 51 degrees 33 feet 55 inches E for a
distance of 10.00 feet; thence run N 38 degrees 26 feet 05 inches E for a
distance of 10.00 feet; thence run N 51 degrees 33 feet 55 inches W for a
distance of 10.00 feet; thence run S 38 degrees 26 feet 05 inches W for a
distance of 10.00 feet to the POINT OF BEGINNING.
and
That part of Section 8, Township 23 South, Range 29 East, Orange County,
Florida, described as follows:
Commence at the Southeast corner of Section 8, Township 23 South, Range 29
East, and run N 89 degrees 43 feet 15 inches W along the South line of the
Southeast 1/4 of said Section 8 for a distance of 326.02 feet; thence run N 00
degrees 24 feet 40 inches E along the West line of the East 1/4 of the
Southeast 1/4 of the Southeast 1/4 of said Section 8 for a distance of 33.00
feet; thence run N 89 degrees 43 feet 15 inches W parallel with and 33.00 feet
Northerly of the South line of said Southeast 1/4 for a distance of 1672.67
feet to the Easterly Right-of-Way line of Interstate 4; thence run N 38 degrees
26 feet 05 inches E along said Right-of-Way line for a distance of 1830.39
feet; thence run S 51 degrees 33 feet 55 inches E for a distance of 26.00 feet
to the POINT OF BEGINNING; thence continue S 51 degrees 33 feet 55 inches E
for a distance of 10.00 feet; thence run N 51 degrees 33 feet 55 inches E for a
distance of 10.00 feet; thence run S 38 degrees 26 feet 05 inches E for a
distance of 10.00 feet; thence run N 51 degrees 33 feet 55 inches W for a
distance of 10.00 feet; thence run S 38 degrees 26 feet 05 inches W for a
distance of 10.00 feet to the POINT OF BEGINNING.
and
That part of Section 9, Township 23 South, Range 29 East, Orange County,
Florida, described as follows:
Commence at the Southeast corner of Section 8, Township 23 South, Range 29
East, and run N 89 degrees 43 feet 15 inches W along the South line of the
Southeast 1/4 of said Section 8 for a
2
<PAGE> 48
distance of 326.02 feet; thence run 00 degrees 24 feet 40 inches E
along the West line of the East 1/4 the Southeast 1/4 of the
Southeast 1/4 of said Section 8 for a distance of 33.00 feet; thence
run N 89 degrees 43 feet 15 inches W parallel with and 33.00 feet
Northerly of the South line of said Southeast 1/4 for a distance of
1672.67 feet to the Easterly Right-of-Way line of Interstate 4;
thence run N 38 degrees 26 feet 05 inches E along said Right-of-way
line for a distance of 3330.25 feet; thence run S 51 degrees 33 feet
55 inches E for a distance of 26.00 feet to the POINT OF BEGINNING;
thence continue S 51 degrees 33 feet 55 inches E for a distance of
10.00 feet; thence run N 38 degrees 26 feet 05 inches E for a
distance of 10.00 feet; thence run S 38 degrees 26 feet 05 inches W
for a distance of 10.00 feet to the POINT OF BEGINNING.
3. Plaintiff and Defendants shall each bear their own costs and
attorneys' fees.
DONE AND ORDERED in Chambers at Orlando, Orange County, Florida, this
____ day of October, 1997.
----------------------------------
W. ROGERS TURNER
Circuit Judge
I HEREBY CERTIFY that a true and correct copy of the foregoing has
been furnished by U.S. Mail on this ____ day of October, 1997 to RICHARD F.
WALL, ESQ., Post Office Box 2168, Orlando, FL 32802; and BRIAN A. McDOWELL,
ESQ., Post Office Box 1526, Orlando, FL 32802.
----------------------------------
Judicial Assistant/Attorney
3
<PAGE> 49
SCHEDULE 1(I) - CONTRACTS
See Attached.
<PAGE> 50
September 25, 1997
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ADVERTISERS - BILLBOARDS
TAMPA MARKET
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<TABLE>
<CAPTION>
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BB# LOCATION CITY SIZE LIT BB ADVERTISER TERM EXP/DATE MONTHLY A/E/P COMMENTS RATE
COUNTY Y/N FACE RATE CARD
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<S> <C> <C> <C> <C><C> <C> <C> <C> <C> <C> <C> <C>
T-1 S/S Park Blvd. (7290), Pinellas 10.5'x36' Y A Badcock Furniture 12 Mos. 05-14-98 $520.00 $850.00
.1 of a mile W of Park B Mike Kashtan' 12 Mos. 07-15-98 $580.00 $850.00
Belcher Rd., Facing E/W Pinellas Superior Auto Sales
T-2 E/S Clearwater-Largo Clearwater 10.5'x36' Y A Available $550.00
Rd. (1699), 1.5 M/N of Pinellas B Tampa Gas Inc. 12 Mos. 05-21-98 $450.00 $550.00
W. Bay Dr., Facing N/S
T-3 E/S Park St. (5001), St. Petersburg 10.5'x36' Y A Robert Ohle/EM 12 Mos. 03-31-98 $475.00 $600.00
.5 of a M/N of Tyrone Pinellas Wells, Esq.
Blvd., Facing N/S B Steak N' Shake 12 Mos. 03-31-98 $500.00 $600.00
T-4 W/S 66th St. N (11980), St. Petersburg 10.5'x36' Y A McDonald's 12 Mos. 02-28-98 $437.75 $700.00
1 M/S of Ulmerton Rd., Pinellas (Juan lllas)
Facing N/S B Sonny's Real 12 Mos. 05-31-98 $468.00 $700.00
Pit B-Q
T-5 N/S Walsingham Rd. Largo 10'x30' Y A Stakeout Grill- 12 Mos. 12-31-97 $570.00 $700.00
(14461), .3 of a M/W of Pinellas Guppy's Restaurant
Indian Rocks Rd., B Denny's 36 Mos. 12-31-98 $428.00 INC. 1-1-98: $700.00
Facing E/W 3@$458
T-6 E/S Clearwater-Largo Largo 10'x30' Y A Available $550.00
Rd. (904), .5 of a M/N Pinellas B Largo Mall
of W. Bay Dr., Facing (Davis Adv.) 12 Mos. 02-05-98 $297.50 $550.00
N/S
T-7 S/S E. Bay Dr. (1995), Largo 10'x30' Y A Available $650.00
.2 of a M/W of Starkey Pinellas B Golf Terrace 24 Mos. 05-15-99 $459.00 Eff. 5-15-98: $650.00
Rd., Facing E/W Apartments $468.18
T-8 S/S Sunset Point Rd. Clearwater 10.5'x36 Y A Available $700.00
(1947), .2 of a M/W of Pinellas B Available $700.00
Hercules Rd., Facing
E/W
T-9 E/S Alt. US 19 (1743), Tarpon Springs 10.5'x36' Y A Morgan, Colling 12 Mos. 05-23-98 $550.00 $650.00
.4 of a M/N of Pinellas & Gilbert
Klosterman Rd., Facing B Celebrities 12 Mos. 09-06-98 $400.00 JL $650.00
N/S
T-10 N/S of SR 52 (10601), Hudson 14'x48' Y A A.R. Mander, 12 Mos. 10-09-97 $600.00 $700.00
.6 of a M/E of Hick Pasco Attorney $700.00
Rd., Facing E/W B Available
T-11 W/S Clearwater/Largo Largo 10'x30' Y A Available $550.00
Rd. (101), .1 of a M/N Pinellas B Available $550.00
of W. Bay Dr., Facing
N/S
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<TABLE>
<CAPTION>
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BB# LOCATION CITY SIZE LIT BB ADVERTISER TERM EXP/DATE MONTHLY A/E COMMENTS RATE
COUNTY Y/N FACE RATE /P CARD
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-12 S/S W. Bay D. (2261), Largo 10'x30' Y B Lauren Bower-Platte 12 Mos. 11-04-98 $ 425.00 $ 700.00
1 M/W of Clearwater- Pinellas (Re-Max Realtor)
Largo Rd., Facing E/W
T-13 N/S SR 54, .1 of a M/W Land 'O' 10.5'x36' Y A Wall to Wall Paper 24 Mos. 12-31-97 $ 300.00 1-1-98: $ 600.00
of Collier Parkway, Lakes B Lynn Smith- 12 Mos. 02-19-98 $ 428.00 Wendy's 12 $ 600.00
Facing E/W Pasco The Prudential @600.10 Net
T-14 N/S SR 54, .3 of a M/W Land 'O' 10.5'x36' Y A Mobile One-G.T.E. 12 Mos. 06-30-98 $ 530.00 $ 700.00
of Collier Parkway, Lakes B Lennar Homes 12 Mos. 08-31-98 $ 550.00 $ 700.00
Facing E/W Pasco
T-15 E/S Land 'O' Lakes Land 'O' 14'x48' Y A The Preserve at 12 Mos. 07-22-98 $ 400.00 $ 600.00
Blvd. (5400), 3 M/N of Lakes Lake Thomas
SR 54, Facing N/S Pasco B Available $ 600.00
T-16 E/S Land '0' Lakes Land 'O' 10.5'x36' Y A Caldwell Banker 12 Mos. 07-31-98 $ 350.00 $ 600.00
Blvd. (2914), US 41, Lakes Advantage
.5 M/N of SR 54, Pasco B Cole Henderson
Facing N/S Drake 12 Mos. 08-09-98 $ 450.00 $ 600.00
T-17 E/S Land 'O' Lakes Land 'O' 10.5'x36' Y A Debra Kubicsek, 12 Mos. 04-09-98 $ 420.00 $ 600.00
Blvd. (5710), 3.3 M/N Lakes Atty. at Law
of SR 54, Facing N/S Pasco B Available $ 600.00
T-18 E/S Cortez Blvd. Brooksville 10.5'x36' Y A Available $ 500.00
(18845), .4 of a M/S of Hernando B Cole Henderson
SR 50, Facing N/S Drake-Wendys 12 Mos. 12-31-97 $ 357.00 $ 500.00
T-19 E/S US Hwy. 19, 10.2 Unicorp 10.5'x36' Y A Available
M/N of SR 50 at Kelso Hernando B American Homes 12 Mos. TBP $ 375.00 P $ 500.00
Rd., Facing N/S
T-20 E/S US Hwy. 19 S. Clearwater 14'x48' Y A Tri-Country RV 12 Mos. TBP $1,000.00 P $1,300.00
(10815), .6 of a M/S Pinellas Sales
of 110th Ave., Facing B Bob's Carpet Mart MTM $ 700.00 $1,300.00
N/S
T-21 S/S E. Bay Dr. (2805), Largo 10'x30' Y A Available $100.00 $ 700.00
.3 of a M/E of Starkey Pinellas B Stampede Dance 12 Mos. 01-31-98 $350.00 $ 700.00
Rd., Facing E/W Hall & Saloon Inc. $ 850.00
T-22 N/S E. Bay Dr. (5200), Largo 10'x30' Y A Stakeout Grill- 12 Mos. 12-31-97 $570.00 $ 850.00
.2 of a M/W of US Hwy. Pinellas Guppy's Restaurant
19, Facing E/W B Computer Express 06 Mos. 10-09-98 $500.00 $ 850.00
T-23 N/S E. Bay Dr. (1198), Largo 10'x30' Y A Associates Field 12 Mos. 07-15-98 $400.00 $ 700.00
W of Highland Ave. Pinellas Services
Facing N/S B Available $ 700.00
T-24 E/S of US Hwy 19 S. Clearwater 14'x48' Y A Builder's Square 12 Mos. 07-01-98 $800.00 $1,300.00
(10925), at 110th Ave. Pinellas B Days Inn Gateway 12 Mos. 04-17-98 $840.00 $1,300.00
Facing N/S
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<TABLE>
<CAPTION>
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BB# LOCATION CITY SIZE LIT BB ADVERTISER TERM EXP/DATE MONTHLY A/E COMMENTS RATE
COUNTY Y/N FACE RATE /p CARD
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-25 W/S 34th St. (4550), St. 14'x48' Y A Angels Painting 24 Mos. 04-21-99 $800.00 Eff.3-98: $1,300.00
.6 of a M/N of 38th Petersburg B Badcock Furniture 12 Mos. 03-24-98 $800.00 2@$850 $1,300.00
Ave. N., Facing N/S Pinellas Inc.
T-26 W/S of 34th St. N. Pinellas 14'x48' Y A Animal House 12 Mos. 08-25-98 $900.00 $1,300.00
(6190), US Hwy. 19, at Park B Badcock Furniture 12 Mos. 03-24-98 $800.00 $1,300.00
62nd Ave., Facing N/S Pinellas Inc.
T-27 W/S Madison Ave. New Port 10.5'x36' Y A Dr. Clifford 12 Mos. 01-31-98 $400.00 $ 500.00
(4051), 300'N of SR 54 Richey Peters, Chriopractor
Facing N/S Pasco B Trinity 12 Mos. 10-24-97 $500.00 $ 500.00
Memorial Gardens
T-28 E/S US Hwy. 19 N. New Port 10'x20' Y A NAPA Auto Parts 60 Mos. 05-14-2001 $300.00 60 Mos.Paid $ 500.00
(7404), .1 of a M/S Richey B NAPA Auto Parts 60 Mos. 05-14-2001 $300.00 Ann. in
of Port Richey Bridge, Pasco Advance
Facing N/S 60 Mos.Paid $ 500.00
Ann. in
Advance
T-29 S/S of SR 54 (5226), New Port 14'x48' Y A Available $ 700.00
.6 of a M/E of US Hwy. Richey B Best Western 24 Mos. 06-30-99 $540.00 $ 700.00
19, Facing E/W Pasco Co. Tahitian
T-30 W/S of Land '0' Lakes Land 'O' 10.5'x36' Y A The Preserve at Lake 12 Mos. 07-24-98 $350.00 $ 500.00
Blvd. (6105), 3.7 M/N Lakes Thomas
of SR 54, Facing N/S Pasco B A.R. Mander,
Attorney 12 Mos. 10-09-97 $500.00 $ 500.00
T-31 E/S US Hwy. 19 (16642) Aripeka 14'x48' Y A Brewmasters, Inc. 24 Mos. 05-14-99 $408.00 Eff.5-14-98 $ 700.00
5.4 M/N of SR 52 Pasco B N.G. Development 12 Mos. 01-09-98 $425.00 2@$416 $ 700.00
Facing N/S
T-32 S/S Cortez Blvd. Brooksville 10.5'x36' Y A Available $ 600.00
(15430), 6.3 M/E of Hernando B Jim Quinlan Ford 12 Mos. 11-30-97 $400.00 $ 600.00
US Hwy. 19, Facing E/W
T-33 N/S Cortez Blvd. Brooksville 10.5'x36' Y A Topics RV Community 12 Mos. 04-30-98 $450.00 $ 550.00
(28363), 1.8 M/W of Hernando B Available $ 550.00
I-75 Facing E/W
T-34 E/S S. Missouri Ave. Clearwater 14'x48' Y A Available $ 700.00
(1535), .2 of a M/N Pinellas B Stacey's Buffet 12 Mos. 12-31-97 $500.00 $ 700.00
of Belleair Rd., Facing
N/S
T-35 E/S S. Missouri Ave. Clearwater 14'x48' Y A Bay Area Prosthetics 12 Mos. 02-28-98 $450.00 $ 700.00
(1477), .4 of a M/N Pinellas B Pac & Send, Inc. 12 Mos. 04-30-98 $420.00 $ 700.00
of Belleair Rd., Facing
N/S
T-36 W/S Clearwater-Largo Largo 12'x25' Y A Available $ 450.00
Rd. (1509), 1 M/N of Pinellas B Available $ 450.00
Belleair Rd., Facing
N/S
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<PAGE> 53
<TABLE>
<CAPTION>
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BB# LOCATION CITY SIZE LIT BB ADVERTISER TERM EXP/DATE MONTHLY A/E/P COMMENTS RATE
COUNTY Y/N FACE RATE CARD
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-37 N/S Walsingham Rd. Largo 10'x30' y A Pueblo Village 12 Mos. 01-31-98 $ 475.00 $ 600.00
(14385), .3 of a M/W of Pinellas B Available $ 600.00
Indian Rocks Rd.,
Facing E/W
T-38 S/S E. Bay Dr. (5105), Largo 10'x30' Y A Available $ 700.00
.3 of a M/W of US Hwy. Pinellas B-1 Available $ 700.00
19, Facing E/W B-2 Adoptions by Choice 06 Mos. 10-27-97 $ 300.00 $ 700.00
B-3 Available $ 700.00
T-39 N/S W. Bay Dr. (1400), Largo 10'x30' Y A Stakeout Grill - 12 Mos. 12-31-97 $ 420.00 $ 500.00
.5 of a M/W of Guppy's Restaurant
Clearwater-Lago Rd., Pinellas B Morgan, Colling & 12 Mos. 05-22-98 $ 400.00 $ 500.00
Facing E/W Gilbert.
T-40 E/S Gall Blvd. (7010), Zephyrhills 10.5'x36' Y A East Pasco Medical 12 Mos. 10-17-98 $ 750.00 $ 500.00
3 M/N of SR 54 (Gulf Center
Station), Facing N/S Pasco B FL Eyecare & 12 Mos. 09-30-98 $ 420.00 $ 500.00
Cataract Center
T-41 N/S of SR 52, 2.9 M/E Hudson 14'x48' Y A Sun Toyota 12 Mos. 12-14-97 $ 476.00 $ 600.00
of US Hwy. 19 Facing Pasco B Available $ 600.00
E/W
T-42 S/S of Walsingham Rd. Largo 10'x30' Y A Pizza Shack 12 Mos. 12-14-97 $ 600.00 $ 800.00
(14530), .3 of a M/W "Ristone"
of Indian Rocks Rd., Pinellas B DMA Marketing 60 Mos. 12-12-98 $1,000.00 Trivision $ 800.00
Facing E/W will be
owned at
Expiration
T-43 S/S of Walsingham Rd. Largo 10'x30' Y A Largo Mall, Inc. 12 Mos. 02-05-98 $ 556,75 $ 600.00
(14590), .3 of a M/W Pinellas B Captain's Table 12 Mos. 04-16-98 $ 550.00 $ 600.00
of Indian Rocks Rd.,
Facing E/W
T-44 W/S 4th St. N. (5590), St. 10'x30' Y A Placido Bayou 12 Mos. 11-03-97 $ 750.00 $ 700.00
.2 of a M/N of 54th Petersburg
Ave., Facing N/S Pinellas B Kissin Cuzzins 12 Mos. 01-31-98 $ 600.00 $ 700.00
T-45 E/S of 66th St. N. St.
(4801), N of 48th Ave. Petersburg 10.6'x36' Y A Clearwater Plumbing 12 Mos. 09-17-98 $ 550.00 Eff.7-30- $ 650.00
N. Facing N/S Pinellas B Available or sooner$ 650.00
T-46 E/S of US Hwy. 19 N. New Port
(4218), .3 of a M/N Richey 10.6'x36' Y A Harbor Behavorial 12 Mos. 12-31-97 $ 580.00 Cancel $ 700.00
of SR 54, Facing N/S Pasco B U.S. Homes
Corporation 12 Mos. TBP $ 595.00 $ 700.00
T-47 S/S of SR 580 (2321), Dunedin 14'x48' Y A Kissin's Cuzzins 12 Mos. 03-16-98 $ 840.00 $1,100.00
.3 of a M/W of US Hwy. Pinellas B Ryland Homes 12 Mos. 03-14-98 $1.200.00 $1,100.00
19, Facing E/W
T-48 W/S of US Hwy. 19 N. Tarpon 12'x42' Y A Happy Feet Plus 12 Mos. 11-10-97 $ 750.00 $ 900.00
(39310), .4 of a M/N Spring
of Klosterman Rd., Pinellas B Happy Feet Plus 12 Mos. 11-10-97 $ 750.00 $ 900.00
Facing N/S
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<TABLE>
<CAPTION>
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BB# LOCATION CITY SIZE LIT BB ADVERTISER TERM EXP/DATE MONTHLY A/E/P COMMENTS RATE
COUNTY Y/N FACE RATE CARD
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-49 W/S of 66th St. at St. 10'x28' Y A 66th St. Texaco 12 Mos. 03-09-98 $ 300.00 Eff.6-11-98: $ 500.00
Bryan Dairy Rd. Peterburg Food Mart 2@$383.25
Facing N/S Pinellas B Xero Cost Copier 24 Mos. 06-11-99 $ 350.00 $ 500.00
Center
T-50 S/S Bay Pines Blvd. St. 10'x36' Y A Cody's Original 12 Mos. 03-31-98 $ 475.00 $ 500.00
(8330), .3 of a M/W of Peterburg Road House
Park St., Facing E/W Pinellas B The Sports Bar & 12 Mos. 05-31-98 $ 412.00 $ 500.00
Grill
T-51 E/S US Hwy. 19 S. Clearwater 10'x28' Y A-T Volvo Village 12 Mos. 12-31-98 $ 460.00 $ 500.00
(12737), .5 of M/S of Pinellas A-L Ramada Limited 12 Mos. TBP $ 475.00 $ 600.00
Ulmerton Rd. @ 126th B-T Available $ 600.00
Ave. N., Facing N/S B-L Adoptions by 06 Mos. 10-27-97 $ 300.00 $ 600.00
Choice
T-52 W/S Seminole Blvd. Seminole 10'x40' Y A Clearwater 12 Mos. 09-17-98 $ 400.00 Eff.7-30 or $ 500.00
(10998), at 110th Ave. Plumbing Sooner
N., Facing N/S Pinellas B Morgan Colling 12 Mos. 05-22-98 $ 400.00 $ 500.00
Gillbert
T-53 W/S of 49th St. N. Clearwater 10'x28' Y A Rally Stores 12 Mos. 01-14-98 $ 456.00 $ 500.00
(12650), .4 of a M/S of Pinellas B Cole Henderson 12 Mos. 01-31-98 $ 420.00 $ 500.00
Ulmerton Rd., Facing Drake-Wendys
N/S 5'x15' Y C Gas Tech 12 Mos. 02-28-98 $ 150.00 N/A
T-54 W/S of 66th St. N. Clearwater 14'x48' Y A Available $1,000.00
(14444), .6 of a M/N of Pinellas B Florida Gators 03 Mos. 09-15-97 $ 650.00 $1,000.00
Ulmerton Rd., Facing
N/S
T-55 S/S of SR 52 (18950), Date City 10.5'x36'Y A DeWitt Advertising 07 Mos. MTM $1,000.00 $ 600.00
.1 of a M/E of US 41 (Lottery)
Facing E/W Pasco B Jim Ouinlan Ford 12 Mos. 01-31-98 $ 420.00 $ 600.00
T-56 W/S of US 41 (50th Tampa 10.5'x36'Y A Tampa Dist. Ctr. & 12 Mos. 09-05-98 $ 722.50 $1,100.00
St.), .5 of a M/N of Ctr. Point Bus.
Crosstown Expressway, Park
Facing N/S Hillsbor- B Tampa Dist. Ctr. & 12 Mos. 09-05-98 $ 722.50 $1,100.00
ough Ctr. Point Bus.
Park
TB-57 W/S of US 301, 2 M/N of Dade City 12'x25' Y AT Available $ 450.00
SR 52 Facing N/S Pasco AB Available $ 450.00
(16031 US 301) BT Available $ 450.00
BB Available $ 450.00
TB-58 E/S of US 301, 50'N of Dade City 12'x25' Y A AR Mander, 12 Mos. 10-09-97 $ 400.00 $ 600.00
Morningside Dr. Facing Attorney
N/S (1720 US 301) Pasco B Dade City 12 Mos. 08-15-98 $ 412.36 $ 600.00
Hospital
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<TABLE>
<CAPTION>
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BB# LOCATION CITY SIZE LIT BB ADVERTISER TERM EXP/DATE MONTHLY A/E/P COMMENTS RATE
COUNTY Y/N FACE RATE CARD
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-59 W/S of US 301, .1 of a Date City 12'x25' Y AT Dade City Hospital 12 Mos. 08-15-98 $ 283.66 $ 450.00
M/S of US 98 Facing Pasco AB Oliver Roberts 12 Mos. 09-04-98 $ 275.00 Eff. 9-1: $ 450.00
N/S (11131 Hwy. 301) Oliver
Roberts
12@$275
BT Dade City Hospital 12 Mos. 08-15-98 $ 283.66 $ 450.00
BB Oliver Roberts 07-17-98 $ 275.00 $ 450.00
TB-60 W/S of US 301, .3 of a Date City 12'x25' Y AT Edwinola Retirement 12 Mos. 10-24-97 $ 300.00 $ 450.00
M/S of US 98 Pasco AB Beef O' Brady's 12 Mos. 06-30-98 $ 289.00 $ 450.00
(11131 Hwy. 301) BT Peterson Insurance 12 Mos. 03-31-08 $ 288.00 $ 450.00
Agency
BB Golden Corral 12 Mos. TBP $ 400.00 JL $ 450.00
TB-61 S/S of SR 54, 100'E of Zephyrhills 12'x25' Y AT Oliver W. Roberts 12 Mos. 07-31-98 $ 210.00 $ 450.00
Allen Rd. Facing E/W Pasco AB Happy Day's R.V. 12 Mos. 11-18-97 $ 300.00 $ 450.00
Park
BT Oliver W. Roberts 12 Mos. 07-31-98 $ 315.00 $ 450.00
BB Available $ 450.00
TB-62 N/S of SR 54, 1 M/W of New Port 12'x25' Y AT Available $ 450.00
Seven Springs Blvd. Richey AB Little Europa 12 Mos. TBP $ 350.00 P $ 450.00
(just W of Thys Rd.) Pasco BT Available $ 450.00
Facing E/W BB Dr.Clifford Peters, 12 Mos. 01-31-98 $ 375.00 $ 450.00
Chiropractor
TB-63 N/S of SR 54, .4 of a Land 'O' 12'x25' Y AT All Fabrics 12 Mos. 03-09-98 $ 275.00 $ 450.00
M/E of US 41 at Raden Lakes Cleaners
Rd., Facing E/W Pasco AB Stevens Pools 12 Mos. 07-31-98 $ 275.00 $ 450.00
BT Nugent Homes 12 Mos. 09-04-98 $ 400.00 $ 450.00
BB Stevens Pools 12 Mos. 07-31-98 $ 275.00 $ 450.00
TB-64 N/S of SR 52, .3 of a 10.6'x36' Y A Texaco/Blimpie's 12 Mos. 12-31-97 $ 400.00 $ 750.00
M/E of I-75 Facing E/W Pasco B Available $ 750.00
TB-65 S/S of SR 50, .4 of a Brooksvill 10.6'x36 Y A Available $ 600.00
M/W of I-75 Facing E/W Hernando B Remington Ourpost 12 Mos. TBP $ 400.00 P $ 500.00
(30220 E. Cortez Blvd.)
TB-66 S/S of SR 50, at Brooksvill 10.6'x36 Y A Jim Ouinlan 12 Mos. 04-30-98 $ 610.00 $ 700.00
Junction of CR 570 and Hernando B Jim Ouinlan 12 Mos. 04-30-98 $ 610.00 $ 700.00
SR 50, Facing E/W
(15250 Cortez Blvd.)
TB-67 W/S of Dale Mabry, .2 Lutz 10.6'x36 Y A Available $ 700.00
M/S of US 41 Facing N/S Pasco B Available $ 700.00
(1635 Dale Mabry)
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</TABLE>
<PAGE> 56
<TABLE>
<CAPTION>
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BB# LOCATION CITY SIZE LIT BB ADVERTISER TERM EXP/DATE MONTHLY A/E/P COMMENTS RATE
COUNTY Y/N FACE RATE CARD
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-68 W/S of US Hwy. 19, 10'6x36' Y A Tri County RV Sales 12 Mos. TBP $ 500.00 JL $ 700.00
3 M/S of County Line Inc.
Rd. Facing N/S (16309 B Dunes Golf Club 12 Mos. TBP $ 400.00 P $ 600.00
US Hwy. 19) Pasco
TB-69 E/S of US Hwy. 19, .8 10'6x36' Y A George C. Psetas 12 Mos. 07-31-98 $ 850.00 RS $ 850.00
of a M/S of SR 52 P.A.
(11138 US Hwy. 19) B Available $ 850.00
Facing N/S Pasco
TB-70 E/S of US Hwy 19, 1.3 10'6x36' Y A Silverthorn 12 Mos. 04-30-98 $ 661.00 $ 850.00
M/S of SR 52 (10704 Port Richey B Pitt Boss BBQ 12 Mos. 01-15-98 $ 575.00 $ 850.00
US Hwy. 19) Facing N/S Pasco
TB-71 W/S of I-75, 1.2 M/S 10'6x36' Y A Marathon 12 Mos. 11-30-97 $ 800.00 $1,100.00
of SR 50 Facing N/S B Racetrac 36 Mos. 02-28-99 $ 650.00 $1,100.00
(4400 Lockhart Rd.) Hernando
TB-72 W/S of I-75, 1.8 M/S 10'6x36' Y A Florida Acquarium 12 Mos. 01-31-98 $ 765.00 $1,100.00
of SR 50 Facing N/S B Wendy's 12 Mos. 09-04-98 $1,100.00 BC $1,100.00
(4400 Lockhart Rd.) Hernando
TB-73 W/S of I-75, 2 M/S 10'6x36' Y A Big Top Flea Market 12 Mos. 12-01-97 $ 700.00 $1,100.00
of SR 50 Facing N/S B Glen Lakes 12 Mos. 06-30-98 $ 650.00 $1,100.00
(4400 Lockhart Rd.) Hernando
TB-74 W/S of I-75, 2.3 M/S 10'6x36' Y A N.G. Development 12 Mos. 01-09-98 $ 750.00 Cancel $1,100.00
of SR 50 Facing N/S /DBA River Ridge 12 Mos. 08-31-97 $ 630.00 8-31-97 $1,100.00
(4400 Lockhart Rd.) Hernando B Columbia Regional
Hospital
TB-75 W/S of I-75, .7 of a 10'6x36' Y A Available $1,100.00
M/S of SR 50 Facing N/S B Available $1,100.00
(5360 Lockhart Rd.) Hernando
TB-76 E/S of I-75, 2.3 M/S 10'6x36' Y A Sugar Mill Woods 12 Mos. 03-31-98 $ 735.00 $1,100.00
of SR 50 Facing N/S Comm.
(30107 Power Line Rd.) Hernando B Tri-County RV Sales 12 Mos. TBP $1,000.00 P $1,100.00
TB-77 E/S of I-75, 2.7 M/S 10'6x36' Y A Silverthorn 12 Mos. 06-15-98 $ 824.00 $1,100.00
of SR 50 Facing N/S B Comfort Inn 12 Mos. 11-07-97 $ 750.00 $1,100.00
(30107 Power Line Rd.) Hernando
TB-78 S/S of County Line 10'6x36' Y A Jim Quinlan Ford 12 Mos. 10-14-97 $ 500.00 $ 850.00
Rd., .5 M/W of Mariner B Available $ 850.00
Blvd., Facing E/W Spring Hill
(15718 County Line Rd.) Pasco
TB-79 W/S of I-75, 2.5 M/S of 10'6x36' Y A Murphco of Florida 36 Mos. 06-19-00 $1,000.00 Eff. $1,100.00
SR 50, Facing N/S B Cracker Barrel Old 12 Mos. 04-15-98 $ 900.00 6-19-98: $1,100.00
(4400 Lockhart Rd.) Hernando Country Store 2@$1000;
3@1100
Copy up
07-15-97
TB-80 N/S of E. Hillsborough 10'6x36' Y A Available $ 850.00
Ave. (4130), .2 M/E of Tampa B Available $ 850.00
40th St., Facing E/W Hillsborough
T-81 N/S of E. Hillsborough 10'6x36' Y A Morgan, Colling & 12 Mos. 05-23-98 $ 750.00 $ 850.00
Ave. (1042), .2 M/E of Tampa Gilbert
Nebraska, Facing E/W Hillsborough B Adoptions By 6 Mos. 10-27-97 $ 400.00 $ 850.00
Choice Inc.
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</TABLE>
Page 7
<PAGE> 57
SCHEDULE 1(Q) - LEASES
See Attached.
<PAGE> 58
- --------------------------------------------------------------------------------
TAMPA MARKET
BILLBOARD PROPERTIES/LEASES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-1 S/S Park Blvd. (7290), FL694 2 S 10.5'x36' Y Pinellas Fred Herbst $3,000.00 12-01/2003 10 Yrs. w/
.1 of a mile W of Florida N/A 10 Option
Belcher Rd., Facing E/W with notice
T-2 E/S Clearwater-Largo US19A 2 S 10.5'x36' Y Pinellas Luis Botelko $2,400.00 4-27/Yr to Year to Year
Rd. (1699), 1.5 M/N of Florida BL554-35 Yr Lease
W. Bay Dr., Facing N/S BL555-35
T-3 E/S Park St. (5001), CR 1 2 S 10.5'x36' Y Pinellas 226761 Gloria $2,400.00 6-12-2007 10 Yrs. w/
.5 of a M/N of Tyrone Florida N/A McCausland Automatic
Blvd., Facing N/S 10 Yr.
Renewal
T-4 W/S 66th St. N (11980), FL693 2 S 10.5'x36' Y Pinellas 246112 RCL $2,500.00 12-1/1998 5 Yrs. option
1 M/S of Ulmerton Rd., Florida N/A Enterprises to renew w/8%
Facing N/S Inc. rent increase
T-5 N/S Walsingham Rd. FL688 2 S 10'x30' y Largo N/A Larry R. $2,400.00 5-6/2008 10 Yrs. w/
(14461), .3 of a M/W of Florida Horden Automatic 10
Indian Rocks Rd., Yr. Renewal
Facing E/W
T-6 E/S Clearwater-Largo US19A 2 S 10'x30' Y Largo 0004026 Alvin J. $2,400.00 8-22/2008 10 Yrs. w/
Rd. (904), .5 of a M/N Florida N/A Smith Automatic 10
of W. Bay Dr., Facing Yr. Renewal
N/S
T-7 S/S E Bay Dr. (1995), FL686 2 S 10'x30' Y Largo Peter Feth $2,400.00 12-13/2008 10 Yrs. w/
.2 of a M/W of Starket Florida N/A Automatic 10
Rd., Facing E/W Yr. Renewal
T-8 S/S Sunset Point Rd. CR576 2 S 10.5'x36' Y Pinellas John $3,000.00 10-17/2008 10 Yrs. w/
(1947), .2 of a M/W of Florida N/A Gianfilippo Automatic 10
Hercules Rd., Facing Yr. Renewal
E/W (Clearwater)
T-9 E/S Alt. US 19 (1743), SR595 2 S 10.5'x36' Y Pinellas Russ & $2,400.00 6-9/2088 10 Yrs. w/
.4 of a M/N of Florida BM888-35 Brigitte Automatic 10
Klosterman Rd., Facing BM889-35 Britton Yr. Renewal
N/S (Tarpon Springs)
T-10 N/S of SR 52 (10601), SR52 2 S 10.5'x36' Y Pasco 228122 U-Haul $2,250.00 7-31/2006 20 Yrs.-8-1-
.6 of a M/E of Hick Florda BL116-35 Partnership 86/91@$1400;
Rd., Facing E/W BL117-35 91/96@1680
8-1-96/01@
$2250; 01/06
@$2820
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</TABLE>
Page 1 of 7
<PAGE> 59
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-11 W/S Clearwater/Largo Rd. US19A 2 S 10'x30' Y Largo Robert J. $2,800.00 4-27/2004 Ten Yr. Lease
(101),.1 of a M/N of W. Florida N/A McDermott
Bay Dr., Facing N/S
T-12 S/S W. Bay D. (2261), FL686 1 S 10'x30' Y Largo 5151 Ernest & $1,800.00 6-17/2004 5 Yrs. w/5
1 M/W of Clearwater- Single Pinellas N/A Thirza Yr. Auto
Largo Rd., Facing E/W B Mortham Renewal
T-13 N/S SR 54, .1 of a M/W FL54 2 S 10.5'x36' Y Pasco 120758 Todd Woods $2,500.00 12-1/2006 10 Yrs. w/5
of Collier Parkway, Florida BK983-35 Enterprises Yr. Auto
Facing E/W (Land 'O' BK984-35 Renewal
Lakes)
T-14 N/S SR 54, .3 of a M/W FL54 2 S 10x5'x36' Y Pasco 120758 Todd Woods $2,500.00 12-1/2006 10 Yrs. w/5
of Collier Parkway, Florida B1835-35 Enterprises Yr. Auto
Facing E/W B1836-35 Renewal
T-15 E/S Land 'O' Lakes US41 2 S 14'x48' Y Pasco 228914 J.E. Harvey $2,025.90 1-5/2005 5 Yrs. w/two
Blvd. (5400), 3 M/N of Florida BG-460-35 & Emma Lou 5 Yr. Renewals
SR 54, Facing N/S BG461-35 Harvey with written
request-3%
Ann. Increases
T-16 E/S Land '0' Lakes US41 2 S 10.5'x36' Y Pasco 260999 Phillip $2,086.70 3-2-2005 5 Yrs. w/two
Blvd. (2914), US 41, Florida BNA841-55 White 5 Yr. Renewals
.5 M/N of SR 54, BNA842-55 with written
Facing N/S request-3%
Ann. Increases
T-17 E/S Land 'O' Lakes US41 2 S 10.5'x36' Y Pasco 228915 Norman $1,800.00 5-15/2005 Two 5 Yr.
Blvd. (5710), 3.3 M/N Florida BCO97-35 Conaty options to
of SR 54, Facing N/S BCO98-35 renew with
(Land 'O' Lakes) 5% rent
increases
T-18 E/S Cortez Blvd. FL577 2 S 10.5'x36' Y Hernando 8704360 Vance $1,273.08 12-1/2007 Auto Renewal
(18845), .4 of a M/S of Florida BM809-35 Revennaugh Yr. to Yr. w/
SR 50, Facing N/S BM810-35 3% Inc. every
(Brooksville) other year
T-19 E/S US Hwy. 19, 10.2 US19 2 S 10.5'x36' Y Hernando Joseph $1,200.00 6-30-03 15 Yrs. w/ a
M/N of SR 50 at Kelso Florida AR840-35 D'Ettore 10 Yr. Option
Rd., Facing N/S AR841-35 to renew Same
Terms to 2013
T-20 E/S US Hwy. 19 S. US19 2 S 14'x48' Y Pinellas 2557 Butler $5,500.00 7-10/1099 $5500 or 16%
(10815), .6 of a M/S Florida AY601-35 Carpet net revenue
of 110th Ave., Facing AY602-35 Co.
N/S
T-21 S/S E. Bay Dr. (2805), FL686 2 S 10'x30' Y Largo 7794 Ralph Bran, $3,000.00 12-31/2003 Ten Yrs: Yrs.
.3 of a M/E of Starkey Florida N/A Braun 1-5@$3000 Ann.
Rd., Facing E/W Corporation & Yrs. 6-10
@3600 Ann.
T-22 N/S E. Bay Dr. (5200), FL686 2 S 10'x30' Y Largo 6691 Am South $3,600.00 2-14/2000 5 Yr. Option
.2 of a M/W of US Hwy. Pinellas N/A Bank to Renew
19, Facing E/W
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</TABLE>
Page 2 of 7
<PAGE> 60
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-23 N/S E Bay Dr. (1198), W FL686 2 S 10'x30' Y Largo 8449 Valerie L. $4,800.00 11-1/1999 10 Yrs. w/ 10 Yr.
of Highland Ave. Facing Florida N/A Ayers Option to renew to
N/S 2009 with conditions
T-24 E/S of US Hwy. 19 S US19 2 S 14'x48' Y Pinellas 6171 James T. $7,200.00 12-31-1999 10 Yr. Lease
(10925) at 110th Ave., Florida AY984-35 Paul
Facing N/S AY985-35
T-25 W/S 34th St. (4550), US19 2 S 14'x48' Y Pinellas 7641 Mark A. $4,500.00 9-14/2002 10 Yr. Lease
.6 of a M/N of 38th Florida AZ166-35 LaPrade
Ave. N., Facing N/S AZ167-35
T-26 W/S of 34th St. N. US19 2 S 14'x48' Y Pinellas Doug $5,903.57 12-1/1098 10 Yr. Lease w/ 3%
(6190), US Hwy. 19, at Florida B1363-35 Lowery & Ann. Increases
62nd Ave., Facing N/S B1364-35 Beth beginning at $4800
Sudduth or 15% gross
T-27 W/S Madison Ave. FL54 2 S 10.5'x36' Y Pasco Armstrong $2,737.32 8-1-/1997 8 Yr. Lease-no
(4051), 300'N of SR 54 Florida BQ153-55 Plaza for option for renewal
Facing N/S BQ154-55 Thomas
Daniel
T-28 E/S US Hwy. 19 N. US19 2 S 10'x20' Y Pasco Invesco $1,500.00 7-30/2007 10 Yrs. w/ 10 Yr.
(7404), .1 of a M/S of Florida B1517-35 New Port renewal option @
Port Richey Bridge, B1518-35 Richey same rent of $1500
Facing N/S Corp. or 15% Gr. Income
T-29 S/S of SR 54 (5226), FL54 2 S 14'x48' Y Pasco Dominick $3,646.52 8-31/2008 20 Yr. Lease w/ Yr.
.6 of a M/E of US Hwy. Florida B1573-35 Macaluso to Yr. Renewal Rent
19, Facing E/W B1574-35 $3000 w/ 5% ann.
increase
T-30 W/S of Land '0' Lakes US41 2 S 10.5'x36' Y Pasco 217551 Ridge $2,000.00 8-20/2006 20 Yr. Lease w/ Yr.
Blvd. (6105), 3.7 M/N Florida BD726-35 Manor to Yr. Renewal
of SR 54, Facing N/S BD727-35 Properties
T-31 E/S US Hwy. 19 (16642), US19 2 S 14'x48' Y Pasco Peter Wong $2,000.00 6-2/2007 10 Yrs. w/ 10 Yr.
5.4 M/N of SR 52 Florida B1365-35 & Gim Mar renewal option @
Facing N/S B1366-35 $2000 Ann. or 15%
Gross Income
T-32 S/S Cortez Blvd. FL50 2 S 10.5'x36' Y Hernando Thomas H. $1,311.27 10-31/2007 20 Yr. Lease w/ Yr.
(15430), 6.3 M/E of Florida AU153-35 White to Yr. Renewal at
US Hwy. 19, Facing E/W AU154-35 $1200 w/ 3% Inc.
every 2nd year.
T-33 N/S Cortez Blvd. FL50 2 S 10.5'x36' Y Hernando John Ames $1,445.14 12-31/2007 20 Yr. Lease w/ Yr.
(28363), 1.8 M/W of Florida BD438-35 to Yr. Renewal at
I-75 Facing E/W BD439-35 $1200 w/ 3% Inc.
every 2nd year.
T-34 E/S S. Missouri Ave. US19A 2 S 14'x48' Y Pinellas Robert $1,605.00 10-31/2003 Ten Yrs. from 11-1-
(1535), .2 of a M/N of Florida BL541-35 Keller 93: 1-5 @$1605; Yrs.
Belleair Rd., Facing BL542-35 6-10 @$2675 Ann.
N/S
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</TABLE>
Page 3 of 7
<PAGE> 61
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-35 E/S S. Missouri Ave. US19A 2 S 14'x48' Y Pinellas Ronald E. $2,000.00 11-28/2006 Ten Yrs. w/
(1477), .4 of a M/N of Florida BL543-35 Smith Ten Yr.
Belleair Rd., Facing BL544-35 renewal
N/S option
T-36 W/S Clearwater-Largo US19A 2 S 12'x25' Y Largo Lee & $1,500.00 1-30/2007 Ten Yrs. w/
Rd. (1509), 1 M/N of Florida N/A Karen Ten Yr.
Belleair Rd., Facing Johnson renewal
N/S option from
1-30-87 then
Yr. to Yr.
T-37 N/S Walsingham Rd. FL688 2 S 10'x30' Y Largo Joyce $1,500.00 5-24/2004 Ten Yrs. w/
(14385), .3 of a M/W of Pinellas N/A Westphal Ten Yr.
Indian Rocks Rd., renewal
Facing E/W option then
Yr. to Yr.
T-38 S/S E. Bay Dr. (5105), FL686 4 S 10'x30' Y Largo Lonnie $2,000.00 1-4/2004 10 Yrs. w/
.3 of a M/W of US Hwy. TRI B Pinellas N/A Orns 10 Yr.
19, Facing E/W Automotive Renewal
Realty Option then
Assoc. Yr. to Yr.
T-39 N/S W. Bay Dr. (1400), FL686 2 S 10'x30' Y Largo Ronald R. $1,605.00 5-12/2007 10 Yrs. w/
.5 of a M/W of Pinellas and Joan 10 Yr.
Clearwater-Largo Rd., A. Daniels Renewal
Facing E/W Option then
Yr. to Yr.
T-40 E/S Gall Blvd. (7010), US301 2 S 10.5'x36' Y Pasco 229939 William F. $3,180.00 MTM Month to
3 M/N of SR 54 (Gulf Florida B1369-35 Nye Month Lease
Station), Facing N/S, B1370-35 ABMM Inc.
Zephyrhillis
T-41 N/S of SR 52, 2.9 M/E FL52 2 S 14'x48' Y Pasco 209642 Permanent -0- N/A
of US Hwy. 19 Facing Florida B1361-35 Easement
E/W B1362-35
T-42 S/S of Walsingham Rd. FL688 2 S 10'x30' Y Largo 9063 Antoni & $3,600.00 4-7-2009 Ten Yrs. w/
(14530), .3 of a M/W Pinellas N/A Wincent Ten Yr.
of Indian Rocks Rd., Niewiarowski Renewal
Facing E/W Option
T-43 S/S of Walsingham Rd. FL688 2 S 10'x30' Y Largo 9062 Antoni & $3,600.00 4-7-2009 Ten Yrs. w/
(14590), .3 of a M/W Florida N/A Wincent Ten Yr.
of Indian Rocks Rd., Niewiarowski Renewal
Facing E/W Option
T-44 W/S 4th St. N. (5590), FL687 2 S 10'x30' Y St. 11219050 Cassie $2,400.00 10-12/2009 Ten Yrs. w/
.2 of a M/N of 54th Petersburg N/A Featherstone Ten Yr.
Ave., Facing N/S Florida Renewal
Option
T-45 E/S of 66th St. N. SR693 2 S 10.6'x36' Y Pinellas 13594 Warren Mack $3,210.00 5-31/1999 Ten Yrs.-
(4801), N of 48th Ave. Florida BA448-35 & Sally Mack Beginning
N. Facing N/S BA449-35 Weiner 6-1-92 Yrs.
1-2 @$2400;
3-5 @$3000;
6-8 @$3600
T-46 E/S of US Hwy. 19 N. US19 2 S 10.6'x36' Y Pasco 098273 Rent-A-Space $3,600.00 12-31-2002 9 Yrs.-7
(4218), .3 of a M/N Florida B1367-35 Corp. Yrs. @$300
of SR 54, Facing N/S B1368-35 Mo. & 2 Yrs.
@ $400 Mo.
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</TABLE>
Page 4 of 7
<PAGE> 62
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-47 S/S of SR 580 (2321), SR580 2 S 14'x48' Y Pinellas T8641 Sevald & $5,500.00 9-30/2006 to 2001:
.3 of a M/W of US Hwy. Florida BA948-35 Barabara $5500; to
19, Facing E/W BA949-35 Nielsen 2006: $6000
(Dunedin) 60 Day Notice
of Renewal
Yr. 2001
T-48 W/S of US Hwy. 19B, US19 2 S 12'x42' Y Pinellas Permanent N/A N/A
(39310), .4 of a M/N Florida Easement
of Klosterman Rd., AM944-10 Bradley
Facing N/S. Tarpon AM945-10 Plaza
Springs Assoc.
T-49 W/S of 66th St. at FL693 2 W 10'x28' Y Pinellas 245029 Dorothy R. $1,605.00 4-14/2008 10 Yrs. w/
Bryan Dairy Rd. Florida BM896-35 Mills, 10 Yr.
Facing N/S BM897-35 Trustee Renewal
Option
T-50 S/S Bay Pines Blvd. FL688 2 W 10'x36' Y Pinellas 20266 Anthony $3,852.00 Yr. to Yr.
(8330), .3 of a M/W of Florida BL552-35 Barbato
Park St., Facing E/W BL553-35
T-51 E/S US Hwy. 19 S. US19 4 W 10'x28' Y Clearwater 72225 Jacinto $5,018.65 9-22/2008 10 Yrs. w/
(12737), .5 of M/S of Stack A&B Pinellas AX816-35 Rodriques 10 Yr.
Ulmerton Rd. @ 126th AX817-35 Renewal
Ave. N., Facing N/S Option Yrs.
1-10 @$5%
ann. increase
T-52 W/S Seminole Blvd. FL595 2 W 10'x40' Y Seminole 22619 Lazzara $2,568.00 3-14-2001 3 Yrs. w/ 3
(10998), at 110th Ave. Pinellas BL539-35 Oil Co. Yrs. Renewal
N., Facing N/S BL540-35 Michael A. Option
Lazzara Beginning
3-14-95
T-53 W/S of 49th St. N. CR611 2 W 10'x28' Y Clearwater 254050 Marshall $2,675.00 2-1-1999 3 Yrs.-1@
(12650), .4 of a M/S of Pinellas Harris $2675; 2@
Ulmerton Rd., Facing $2808.75; 3
N/S @$2,949.19
1 Plastic 5'x15' N
T-54 W/S of 66th St. N. FL693 2 S 14'x48' Y Pinellas BNA839-55 The $2,400.00 1-1/2016 10 Yrs. w/ 10
(14444), .6 of a M/N of Florida BNA840-55 Christian Yr. Renewal
Ulmerton Rd., Facing Network Option
N/S
T-55 S/S of SR 52 (18950), FL52 2 S 10.5'x36' Y Pasco 238242 Anne T. $1,800.00 10-31/2015 10 Yrs. w/
.1 of a M/E of US 41 Florida BG758-35 Calhoun 10 Yr.
Facing E/W (Dade City) BG759-35 Renewal
Option 10
Yrs. @$150
Mo.; 10 Yrs.
@$200 Mo.
T-56 W/S of US 41 (50th US41 2 S 10.5'x36' Y Tampa 146682 Outdoor $1,597.50 Yr. to Yr. Yr. to Yr.
St.), .5 of a M/N of Hillsborough BL734-35 Systems 4-1/3-31 Lease @$1500
Crosstown Expressway, BL735-35 Adv. + 6.5% Tax
Facing N/S or 25% of
Gross
whichever
is greater
TB-57 W/S of US 301, 2 M/N of US301 4 S 12'x25' Y Pasco 224145 Sto-Ete $1,200.00 6-30/2005 5 Yrs. w/ 5
SR 52 Facing N/S Stack A&B Florida BK522-35 Storage Yr. Renewal
(16031 US 301) BK523-35 Option Rent
$1200 Ann
or 15% Gross
Income
TB-58 E/S of US 301, 50'N of US301 2 S 12'x25' Y Pasco 209092 Scotty's $1,272.00 6-23/1998 4 Yr. Lease-
Morningside Dr. Facing Florida BJ370-35 Inc. Rent + 10%
N/S (1720 US 301) BJ371-35 of Gross
Rev.
exceeding
sum of Min.
Mo. Rent
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</TABLE>
Page 5 of 7
<PAGE> 63
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-59 W/S of US 301, .1 of a US301 4 W 12'x25' Y Pasco 208836 Enza $1,200.00 8-4/2014 10 Yrs. w/ 10
M/S of US 98 Facing Stack A&B Florida BJ295-35 Orsi Yr. Renewal
N/S (11131 Hwy. 301) BJ296-35 Option Rent
$1200 or 10% Net
TB-60 W/S of US 301, .3 of a US301 4 W 12'x25' Y Pasco 208837 Enza $1,200.00 6-13/2014 10 Yrs. w/ 10
M/S of US 98 Facing N/S Stack A&B Florida BJ297-35 Orsi Yr. Renewal
(11131 Hwy. 301) BJ298-35 Option Rent
$1200 or 10%
Net
TB-61 S/S of SR 54, 100'E of SR54 4 W 12'x25' Y Pasco 219395 H&S Realty $2,400.00 1-24/2002 7 Yrs.:1@$250;
Allen Rd. Facing E/W Stack A&B Florida BK129-35 Property 2&3@$200; 4/7@
BK130-35 Inc. $250 Inc. to
$250 2-1-98
TB-62 N/S of SR 54, 1 M/W of SR54 4 W 12'x25' Y Pasco 205991 Dave & $1,200.00 8-16/2014 10 Yrs. w/ 10
Seven Springs Blvd. Stack A&B Florida BJ084-35 Darla Yr. Renewal
Just W of Thys Rd., BJ085-35 Schwendeman Option Rent
Facing E/W (6325 SR 54) $1200 Ann. or
15% Net
TB-63 N/S of 2328 SR54 at SR54 4 W 12'x25' Y Pasco 205009 Wendy's Old $1,399.20 8-8/109 5 Yr. Lease @
Raden Dr., .4 of a M/E Stack A&B Florida BJ194-35 Fashion $1399.20 Ann.
of US 41, Facing E/W BJ195-35 Hamburgers or 20% Gross
of NY Inc.
TB-64 N/S of SR 52, .3 of a SR52 2 S 10.6'x36' Y Pasco 240444 One Pasco $1,272.00 13-31/2014 10 Yrs. w/ 10
M/E of I-75 Facing E/W Florida BL310-35 Center % Yr. Renewal
BL311-35 WREC Option
TB-65 S/S of SR 50, .4 of a SR50 2 W 10.6'x36' Y Hernando 9500433 Jack $1,800.00 2-13/2015 10 Yrs. w/ 10
M/W of I-75 Facing E/W Florida BK435-35 Melton Yr. Renewal
(30220 E. Cortez Blvd.) BK436-35 Family, Option
Inc.
TB-66 S/S of SR 50, at SR50 2 S 10.6'x36' Y Hernando 1009119 Gary J. Dame $3,000.00 5-31/2006 10 Yrs.
Junction of CR 570 and Florida BL730-35 Yvonne M.
SR 50, Facing E/W BL731-35 Dame
(15250 Cortez Blvd.)
TB-67 W/S of Dale Mabry, .2 SR597 2 S 10.6'x36' Y Pasco 243787 John M. $2,400.00 4-2/2026 15 Yrs. w/ 15
M/S of US 41 Facing N/S Florida BL744-35 Harris Yr. Renewal
(1635 Dale Mabry) BL745-35 Gretchen W. Option Rent
Harris $2400 Ann or
15% Net
TB-68 W/S OF US Hwy. 19, 3 US19 2 W 10.6'x36' Y Pasco 222958 Leonard $1,282.00 8-12/2015 10 Yrs. w/ 10
M/S of County Line Rd. Florida BK473-35 Whitney Yr. Renewal
Facing N/S (16309 US BK474-35 Option 1st and
Hwy. 19) Last months
paid w/ 1st Mo.
TB-69 E/S of US Hwy. 19, .8 US19 2 S 10.6'x36' Y Pasco 219077 Tri County $1,800.00 8-4/2014 10 Yrs. w/ 10
a M/S of SR 52 (11138 Florida BJ082-35 Development/ Yr. Renewal
US Hwy. 19) Facing N/S BJ083-35 Pasco Option Rent
$1800 Ann or
35% Gross
TB-70 E/S of US Hwy. 19, 1.3 US19 2 S 10.6'x36' Y Pasco 205012 Hao Wah $1,800.00 8-4/2014 10 Yrs. w/ 10
M/S of SR 52 (10704 US Florida BM832-35 Quach Yr. Renewal
Hwy. 19) Facing NS BM833-35 Option
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<PAGE> 64
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-71 W/S of I-75, 1.2 M/S I-75 2 S 10.6'x36' Y Hernando 1004109 Jack Melton $ 2,004.00 6-17/2016 10 Yrs.+10 Yrs:
of SR 50 Facing N/S Florida BK904-35 Family, Inc. 1-5@$167/6-10
(4400 Lockhart Rd.) BK90-35 @$185/11-15@
$200/16-20@ 220
Mo. or 15% Net
TB-72 W/S of I-75, 1.8 M/S I-75 2 S 10.6'x36' Y Hernando 1004108 Jack Melton $ 2,004.00 6-17/2016 10 Yrs.+10 Yrs:
of SR 50 Facing N/S Florida BK908-35 Family, Inc. 1-5@$167/6-10
(4400 Lockhart Rd.) BK909-35 @$185/11-15@
$200/16-20@ 220
Mo. or 15% Net
TB-73 W/S of I-75, 2 M/S I-75 2 S 10.6'x36' Y Hernando 1003669 Jack Melton $ 2,004.00 3-21/2016 10 Yrs.+10 Yrs:
of SR 50 Facing N/S Florida BK910-35 Family, Inc. 1-5@$167/6-10
(4400 Lockhart Rd.) BK911-35 @$185/11-15@
$200/16-20@ 220
Mo. or 15% Net
TB-74 W/S of I-75, 2.3 M/S I-75 2 S 10.6'x36' Y Hernando 1003668 Jack Melton $ 2,004.00 6-12/2016 10 Yrs.+10 Yrs:
of SR 50 Facing N/S Florida BK912-35 Family, Inc. 1-5@$167/6-10
(4400 Lockhart Rd.) BK913-35 @$185/11-15@
$200/16-20@ 220
Mo. or 15% Net
TB-75 W/S of I-75, .7 M/S I-75 2 S 10.6'x36' Y Hernando 1012190 Jack Melton $ 2,004.00 8-26/2016 10 Yrs.+10 Yrs:
of a M/S SR 50 Florida BM349-35 Family, Inc. 1-5@$167/6-10
Facing N/S (5360 BM350-35 @$185/11-15@
Lockhart Rd.) $200/16-20@ 220
Mo. or 15% Net
TB-76 E/S of I-75, 2.3 M/S I-75 2 S 10.6'x36' Y Hernando 1003151 Jack Melton $ 2,004.00 3-21/2016 10 Yrs.+10 Yrs:
of SR 50 Facing N/S Florida BK629-35 Family, Inc. 1-5@$167/6-10
(30107 Power Line Rd.) BK630-35 @$185/11-15@
$200/16-20@ 220
Mo. or 15% Net
TB-77 E/S of I-75, 2.7 M/S I-75 2 S 10.6'x36' Y Hernando 1003670 Jack Melton $ 2,004.00 3-21/2016 10 Yrs.+10 Yrs:
of SR 50 Facing N/S Florida BK902-35 Family, Inc. 1-5@$167/6-10
(30107 Power Line Rd.) BK903-35 @$185/11-15@
$200/16-20@ 220
Mo. or 15% Net
TB-78 S/S of County Line Rd. I-75 2 S 10.6'x36' Y Pasco 250219 Frank Oliver $ 1,200.00 6-31/2026 15 Yrs. w/15
(15718), .5 M/W of Florida Yr. Renewal
Mariner Blvd., Facing Option Rent
E/W (Spring Hill) $1200 Ann or
10% Net
TB-79 W/S of I-75, 2.5 M/S I-75 2 S 10.6'x36' Y Hernando 1017270 Jack Melton $ 2,004.00 Construc- 10 Yrs.+10 Yrs:
of SR 50, Facing N/S Florida BN197-35 Family, Inc. tion 1-5@$167/6-10
(4400 Lockhard Rd.) BN198-35 @$185/11-15@
$200/16-20@ 220
Mo. or 15% Net
TB-80 N/S of E. Hillsborough US92 2 S 10.6'x36' Y Tampa 153658 Elias de la $ 1,500.00 11-01-2016 10 Yrs. w/10
Ave. (4130) .2 M/E of SR580 Florida BM909-35 Torre Renewal
49th St., Facing E/W BM910-35
TB-81 N/S of E. Hillsborough US92 2 S 10.6'x36' Y Tampa 152853 Kirit A. $ 1,800.00 11-01-2016 10 Yrs. w/10
Ave. (1042) .2 M/E of SR580 Florida BM907-35 Patel Renewal
Nebraska, Facing E/W BM908-35
NUMBER FACES OWNED: 4
NUMBER FACES LEASED: 174
09-23-97
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</TABLE>
Page 7 of 7
<PAGE> 65
SCHEDULE 1(S) - LOCATIONS
See Attached.
<PAGE> 66
- --------------------------------------------------------------------------------
TAMPA MARKET
BILLBOARD PROPERTIES/LEASES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-1 S/S Park Blvd. (7290), FL694 2 S 10.5'x36' Y Pinellas Fred Herbst $3,000.00 12-01/ 10 Yrs. w/
.1 of a mile W of Florida N/A 2003 10 Option
Belcher Rd., Facing E/W with notice
T-2 E/S Clearwater-Largo US19A 2 S 10.5'x36' Y Pinellas Luis Botelko $2,400.00 4-27/Yr Year to
Rd. (1699), 1.5 M/N of Florida BL554-35 to Yr Year Lease
W. Bay Dr., Facing N/S BL555-35
T-3 E/S Park St. (5001), CR 1 2 S 10.5'x36' Y Pinellas 226761 Gloria McCausland $2,400.00 6-12- 10 Yrs w/
.5 of a M/N of Tyrone Florida N/A 2007 Automatic
Blvd., Facing N/S 10 Yr.
Renewal
T-4 W/S 66th St. N (11980), FL693 2 S 10.5'x36' Y Pinellas 246112 RCL Enterprises $2,500.00 12-1/ 5 Yrs
1 M/S of Ulmerton Rd., Florida N/A Inc. 1998 option to
Facing N/S renew w/8%
rent
increase
T-5 N/S Walsingham Rd. FL688 2 S 10'x30' Y Largo Larry R. Horden $2,400.00 5-6/ 10 Yrs. w/
(14461), .3 of a M/W of Florida N/A 2008 Automatic
Indian Rocks Rd., 10 Yr.
Facing E/W Renewal
T-6 E/S Clearwater-Largo US19A 2 S 10'x30' Y Largo 0004026 Alvin J. Smith $2,400.00 8-22/ 10 Yrs. w/
Rd. (904), .5 of a M/N Florida N/A 2008 Automatic
of W. Bay Dr., Facing 10 Yr.
N/S Renewal
T-7 S/S E. Bay Dr. (1995), FL686 2 S 10'x30' Y Largo Peter Feth $2,400.00 12-13/ 10 Yrs. w/
.2 of a M/W of Starkey Florida N/A 2008 Automatic
Rd., Facing E/W 10 Yr.
Renewal
T-8 S/S Sunset Point Rd. CR576 2 S 10.5'x36' Y Pinellas John Gianfilippo $3,000.00 10-17/ 10 Yrs. w/
(1947), .2 of a M/W of Florida N/A 2008 Automatic
Hercules Rd., Facing 10 Yr.
E/W Renewal
T-9 E/S Alt. US 19 (1743), SR595 2 S 10.5'x36' Y Pinellas Russ & Brigitte $2,400.00 6-9/ 10 Yrs. w/
.4 of a M/N of Florida BM888-35 Britton 2088 Automatic
Klosterman Rd., Facing BM889-35 10 Yr.
N/S Renewal
T-10 N/S of SR 52 (10601), SR52 2 S 10.5'x36' Y Pasco 228122 U-Haul $2,250.00 7-31/ 20 Yrs.-8-1
.6 of a M/E of Hick Florida BL116-35 Partnership 2006 -86/91@
Rd., Facing E/W BL117-35 $1400; 91/
96@$1680
8-1-96/01@
$2250;01/
06@$2820
T-11 W/S Clearwater/Largo US19A 2 S 10x30' Y Largo Robert J. $2,280.00 4/27/ Ten Yr.
Rd. (101), .1 of a Florida N/A McDermott 2004 Lease
M/N of W. Bay Dr.,
Facing N/S
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</TABLE>
Page 1 of 7
<PAGE> 67
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-12 S/S W. Bay D. (2261), FL686 2 S 10'X30' Y Largo 5151 Ernest & Thirza $1,800.00 6-17 5 Yrs w/5Yr
1 M/W of Clearwater- Single Pinellas N/A Mortham . 2004 Auto Renewal
Largo Rd., Facing E/W
T-13 N/S SR 54, .1 of a M/W FL54 2 S 10.5'5 Y Pasco 120758 Todd Woods $2,500.00 12-1/ 10 Yrs w/5Yr
of Collier Parkway, x 36' Florida BK983-35 Enterprises 2006 Auto Renewal
Facing E/W BK984-35
T-14 N/S SR 54, .3 of a M/W FL54 2 S 10.5' Y Pasco 120758 Todd Woods $2,500.00 12-1/ 10 Yrs w/5Yr
of Collier Parkway, x36' Florida B1835-35 Enterprises 2006 Auto Renewal
Facing E/W B1836-35
T-15 E/S Land 'O' Lakes US41 2 S 14'x48 Y Pasco 228914 J.E. Harvey $2,025.90 1-5/ 5 Yrs w/two
Blvd. (5400), 3 M/N of Flordia BG460-35 Emma Lou Harvey 2005 5 Yr. Renewal
SR 54, Facing N/S BG461-35 with written
request-3%
Ann. Increase
T-16 E/S Land '0' Lakes US41 2 S 10.5'x36' Y Pasco 260999 Phillip White $2,086.70 3-2/ 5 Yrs w/two
Blvd. (2914), US 41, Florida BN841-55 2005 5 Yr. Renewals
.5 M/N of SR 54, BN842-55 with written
Facing N/S request-3%
Ann. Increase
T-17 E/S Land 'O' Lakes US41 2 S 10.5'x36' Y Pasco 228915 Norman Conaty $1,800.00 5-15/ Two 5 Yr.
Blvd. (5710), 3.3 M/N Florida BC097-35 2005 Options to
of SR 54, Facing N/S BCO98-35 renew with 5%
rent increase
T-18 E/S Cortez Blvd. FL577 2 S 10.5'x36' y Hernando 8704360 Vance $1,273.08 12-1/ Auto renewal
(18845), .4 of a M/S of Florida BM809-35 Revennaugh 2007 Yr. to Yr.
SR 50, Facing N/S BM810-35 with 3% Inc.
every other
year.
T-19 E/S US Hwy. 19, 10.2 US19 2 S 10.5'x36' Y Hernando Joseph $1,200.00 15 Yrs. w/a 10
M/N of SR 50 at Kelso Florida AR840-35 D'Ettore 6-30-03 Option to
Rd., Facing N/S AR841-35 renew Same
Terms to 2013
T-20 E/S US Hwy. 19 S. US19 2 S 14'x48' Y Pinellas 2557 Butler Carpet $5,500.00 7-10/ $5500 or 16%
(10815), .6 of a M/S Florida AY601-35 Co. 1099 net revenue
of 110th Ave., Facing AY602-35
N/S
T-21 S/S E. Bay Dr. (2805), FL686 2 S 10'x30' Y Largo 7794 Ralph Braun, $3,000.0 12-31/ Ten Yrs: Yrs.
.3 of a M/E of Starkey Florida N/A Braun Corp. 2003 1-5 @$3000
Rd., Facing E/W Ann. & Yrs.
6-10 @ $3600
Ann.
T-22 N/S E. Bay Dr. (5200), FL686 2 S 10'x30' Y Largo 6691 Am South $3,600.00 2-14/ 5 Yr. Option
.2 of a M/W of US Hwy. Pinellas N/A Bank 2000 to Renew
19, Facing E/W
T-23 N/S E. Bay Dr. (1198), FL686 2 S 10'x30' Y Largo 8449 Valerie L. $4,800.00 11-1/ 10 Yrs. w/10
W of Highland Ave. Florida N/A Ayers 1999 Yr. Option to
Facing N/S renew to 2009
w/ conditions
T-24 E/S of US Hwy 19 S. US19 2 S 14'x48' Y Pinellas 6171 James T. $7,200.00 12-31 10 Yr. Lease
(10925), at 110th Ave. Florida AY984-35 Paul 1999
Facing N/S AY985-35
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</TABLE>
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<PAGE> 68
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-25 W/S 34th St. (4550), US19 2 S 14'x46' Y Pinellas 7641 Mark A. $4,500.00 9-14/ 10 Yr. Lease.
.6 of a M/N of 38th Florida AZ166-35 LaPrade 2002.
Ave. N., Facing N/S AZ167-35
T-26 W/S of 34th St. N. US19 2 S 14'x48' Y Pinellas Doug $5,903,57 12-1/ 10 Yr. Lease w/
(6190), US Hwy. 19, at Florida B1363-35 Lowery & 1098 3% Ann.
62nd Ave., Facing N/S B1364-35 Ben Sudduth Increases
beginning at
$4800 or 15%
gross
T-27 W/S Madison Ave. FL54 2 S 10.5'x36' Y Pasco Armstrong $2,737.32 8-1/ 8 Yr. Lease
(4051), 300'N of SR 54 Florida BQ153-35 Plaza for 1997 no option for
Facing N/S BQ154-35 Thomas renewal
Daniel
T-28 E/S US Hwy. 19 N. US19 2 S 10'x20' Y Pasco Invesco $1,500.00 7-30/ 10 Yrs w/10 Yr.
(7404), .1 of a M/S of Florida New Port renewal option
Port Richey Bridge, Richey @ same rent of
Facing N/S Corp. of $1500 or 15%
Gr. Income
T-29 S/S of SR 54 (5226), FL54 2 S 14'x48' Y Pasco Dominick $3,646.52 8-31/ 20 Yr. Lease
.6 of a M/E of US Hwy. Florida B1573-35 Macaluso 2008 with Year to
19, Facing E/W B1574-35 Year Renewal
Rent ($3000)
w/5% ann.
increase
T-30 W/S of Land '0' Lakes US41 2 S 10.5'x36' Y Pasco 217551 Ridge $2,000.00 8-20/2006 20 Yr. Lease w/
Blvd. (6105), 3.7 M/N Florida BD726-35 Manor Yr. to Yr.
of SR 54, Facing N/S BD727-35 Properties Renewal
T-31 E/S US Hwy. 19 (16642), US19 2 S 14'x14' Y Pasco Peter $2,000.00 6-2/2007 10 Yrs. w/10 Yr.
5.4 M/N of SR 52 Florida B1365-35 Wong & renewal option @
Facing N/S B1366-35 Gim Mar $2000 Ann. or 15
Gross Income
T-32 S/S Cortez Blvd. FL50 2 S 10.5'x36' Y Hernando Thomas $1,311.27 10-31/ 20 Yr. Lease w/
(15430), 6.3 M/E of Florida AU153-35 H. White Yr. to Yr.
US Hwy. 19, Facing E/W AU154-35 Renewal at $1200
w/3% Inc. every
2nd Year
T-33 N/S Cortez Blvd. FL50 2 S 10.5'36' Y Hernando John Ames $1,445.14 12-31/ 20 Yr. Lease w/
(28363), 1.8 M/W of Florida BD438-35 2007 Yr. to Yr.
I-75 Facing E/W BD439-35 Renewal at $1200
w/ 3% Inc. every
2nd year.
T-34 E/S S. Missouri Ave. US19A 2 S 14'x48' Y Pinellas Robert $1,605.00 10-31/ Ten Yrs from
(1535), .2 of a M/N of Flordia BL541-35 Keller 2003 11-1 93: 1-5 @
Belleair Rd., Facing BL542-35 1605; Yrs. 6-10
N/S @$2675 Ann.
T-35 E/S S. Missouri Ave. US19A 2 S 14'x48' Y Pinellas Ronald E. $2,000 11-28/ Ten Yrs. w/Ten
(1477), .4 of a M/N of Florida BL43-35 Smith 2006 Yr. renewal
Belleair Rd., Facing BL44-35 option
N/S
T-36 W/S Clearwater-Largo US19A 2 S 12'x25' Y Largo Lee & $1,500 1-30/ Ten Yrs. w/Ten
Rd. (1509), 1 M/N of Florida N/A Karen 2007 renewal option
Belleair Rd., Facing Johnson from 1-30-87
N/S then Yr. to Yr.
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</TABLE>
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<PAGE> 69
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-35 E/S S. Missouri Ave. US19A 2 S 14'x48' Y Pinellas Ronald E. $2,000.00 11-28/ Ten Yrs. w/Ten
(1477), .4 of a M/N of Florida BL543-35 Smith 2006 Yr. renewal
Belleair Rd., Facing N/S BL544-35 option
T-36 W/S Clearwater-Largo Rd. US19A 2 S 12'x25' Y Largo Lee & $1,500.00 1-30/ Ten yrs. w/ Ten
(1509). 1 M/N of Florida N/A Karen 2004 Yr. renewal
Belleair Rd., Facing N/S Johnson option from
1-30-87 then Yr.
to Yr.
T-37 N/S Walsingham Rd. FL688 2 S 10'x30' Y Largo Joyce $1,500.00 5-24/ Ten Yrs. w/Ten
(14385), .3 of a M/W of Pinellas Westphal 2004 Yr. renewal
Indian Rocks Rd., option then Yr.
Facing E/W to Yr.
T-38 S/S E. Bay Dr. (5105), US19A 4 S 12'x25' Y Largo N/A Lee & $1,500.00 1-30/ Ten yrs. with
.3 of a M/W of US Hwy. TRI B Florida Karen 2004 Ten Yr. renewal
19, Facing E/W Johnson from 1-30-87
then Yr. to Yr.
T-39 N/S W. Bay Dr. (1400), FL688 2 S 10'x30' Y Largo Ronald R. $1,605.00 5-12/ 10 yrs. with
.5 of a M/W of Florida and Joan 2007 Renewal Option
Clearwater-Lago Rd., A. Daniels then Yr. to Yr.
Facing E/W
T-40 E/S Gall Blvd. (7010), US301 2 S 10.5'x36' Y Pasco 229939 William $3,180.00 MTM Month to Month
3 M/N of SR 54 (Gulf Florida B1369-35 F. Nye Lease
Station), Facing N/S B1370-35 ABMM Inc.
T-41 N/S of SR 52, 2.9 M/E FL42 2 S 14'x48' Y Pasco 209642 Permanent $ -0- N/A
of US Hwy. 19 Facing Florida B1361-35 Easement
E/W B1362-35
T-42 S/S of Walsingham Rd. FL688 2 2 S 10'x30' Y Largo 9063 Antoni $3,600.00 4-7- Ten Yrs. w/Ten
(14530), .3 of a M/W Pinellas N/A Wincent 2009 Yr. Renewal
of Indian Rocks Rd., Niewiarowski Option
Facing E/W
T-43 S/S of Walsingham Rd. FL688 2 S 10'x30' Y Largo 9062 Antoni $3,600.00 4-7- Ten Yrs. w/Ten
(14590), .3 of a M/W Florida N/A Wincent 2009 Yr. Renewal
of Indian Rocks Rd., Niewiarowski Option
Facing E/W
T-44 W/S 4th St. N. (5590), FL687 2 S 10'x30' Y St. 11219050 Cassie $2,400.00 10-12/ Ten Yrs. w/
.2 of a M/N of 54th Petersburg Featherstone 2009 Ten Yr. Renewal
Ave., Facing N/S Florida Option
T-45 E/S of 66th St. N. SR693 2 S 10'6'x36' Y St. 13594 Warren $3,210.00 5-31/ Ten Yrs. w/
(4801), N of 48th Ave. Petersburg BA448-35 Mack & Sally 1999 Beginning 6-1-92
N. Facing N/S Florida BA449-35 Mack Weiner 1-2@ $2400;
3-5 @ 3,000,
6-8 @3600
T-46 E/S of US Hwy. 19 N. US19 2 S 10'6'x36' Y Pasco 098273 Rent-A- $3,600.00 12/31- 9 Yrs -7 Yrs
(4218), .3 of a M/N Florida B1367-35 Space 2002 @$300 Mo. &
of SR 54, Facing N/S B1368-35 Corp. 2 Yrs. @ $400
Mo.
T-47 S/S of SR 580 (2321), SR580 2 S 14'X48' Y Pinellas T8641 Sevald & $5,500.00 9-30/ to 2001; $5500;
.3 of a M/W of US Hwy. Florida BA948-35 Barbara 2006 to 2006; $6000
19, Facing E/W BA949-35 60 Day Notice of
Renewal Yr. 2001
T-48 W/S of US Hwy. 19 N. US19 2 S 12'x42' Y Pinellas Permanent N/A N/A
(39310), .4 of a M/N Florida AM944-10 Easement
of Klosterman Rd., AM945-10 Bradley
Facing N/S Plaza Assoc.
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</TABLE>
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<PAGE> 70
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-49 W/S of 66th St. at FL693 2 W 10'x28' Y Pinnellas 245029 Dorothy R. $1,605.00 4-14/2008 10 Yrs. w/10 Yr.
Bryan Dairy Rd. Florida BM896-35 Mills Renewal Option
Facing N/S BM897-35 Trustee
T-50 S/S Bay Pines Blvd. FL688 2 W 10'X36' Y Pinnellas 20266 Anthony $3,852.00 Yr. to Yr.
(8330), .3 of a M/W of Florida BL552-35 Barbato
Park St., Facing E/W BL553-35
T-51 E/S US Hwy. 19 S. US19 4 W 10'x28' Y Clearwater 72225 Jacinto $5,018.65 9-22/ 10 Yrs. w/10 Yr.
(12737), .5 of M/S of Stack Florida AX816-35 Rodriques 2008 Renewal Option
Ulmerton Rd. @ 126th A&B AX817-35 Yrs. 1-10@$5%
Ave. N., Facing N/S Ann. Increase
T-52 W/S Seminole Blvd. FL595 2 W 10'x40' Y Seminole 22619 Lazzara Oil $2,568.00 3-14/ 3 Yrs. w/3 Yrs.
(10998), at 110th Ave. Pinellas BL539-35 Michael A. 2001 Renewal Option
N., Facing N/S BL540-35 Lazzara Beginning 3-14-95
T-53 W/S of 49th St. N. CR611 2 W 10'x28' Y Clearwater 254050 Marshall $2,675.00 2-1-1999 3 Yrs.-1@$2675;
(12650), .4 of a M/S of Pinellas Harris 3@$2,949.19
Ulmerton Rd., Facing 1 Plastic N
N/S
T-54 W/S of 66th St. N. FL693 2 S 14'x48' Y Pinellas The Chris- $2,400.00 1-1/2016 10 Yrs. w/10 Yr.
(14444), .6 of a M/N of Florida BNA839-55 tian Renewal Option
Ulmerton Rd., Facing BNA840-55 Network
N/S
T-55 S/S of SR 52 (18950), FL52 2 S 10.5'x36' Y Pasco 238242 Anne T. $1,800.00 10-31 10 Yrs. w/10 Yr.
.1 of a M/E of US 41 Florida BG758-35 Calhoun 2015 Renewal Option
Facing E/W BG759-35 10 Yrs @$150 Mo.;
10 Yrs. @$200 Mo.
T-56 W/S of US 41 (50th US41 2 S 10.5'x36' Y Tampa 146682 Outdoor $1,597.50 Yr. to Yr. to Yr. Lease
St.), .5 of a M/N of Hills- BL734-35 Systems Yr. 4-1/ @$1500 + 6.5% tax
Crosstown Expressway, borough BL734-35 Adv. 3-31 or 25% of Gross
Facing N/S whichever is
greater.
TB-57 W/S of US 301, 2 M/N US301 2 S 12'x215' Y Pasco 224145 Store-Ete $1,200.00 6-30/ 5 Yrs. w/5 Yr.
of SR 52 Facing N/S Stack Florida BK522-35 Storage Renewal Option
(16031 US 301) A&B BK523-35 Rent $1200 Ann.
or 15% Gross
Income
TB-58 E/S of US 301, 50'N US301 2 S 12'x25' Y Pasco 209092 Scotty's $1,272.00 6-23/ 4 Yr. Lease-
of Morningside Dr. Facing Florida BJ370-55 Inc. 1998 Rent + 10% of
N/S (1720 US 301) BJ371-35 Gross Rev.
exceeding sum of
Min. Mo. Rent
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</TABLE>
page 5 of 7
<PAGE> 71
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C><C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-59 W/S of US 301, .1 of a US301 4 W 12'x25' Y Pasco 208836 Enza Orsi $1,200.00 8-4/2014 10 Yrs. w/10 Yr.
M/S of US 98 Facing Stack Florida BJ295-35 Renewal Option
N/S (11131 Hwy. 301) A&B BJ296-35 Rent $1200 or
10% Net
TB-60 W/S of US 301, .3 of a US301 4 W 12'x25' Y Pasco 208837 Enza Orsi $1,200.00 6-13/2014 10 Yrs. w/10 Yr.
M/S of US 98 Facing N/S Stack Florida BJ297-35 Renewal Option
(11131 Hwy. 301) A&B BJ298-35 Rent $1200 or
10% Net
TB-61 S/S of SR 54, 100'E of SR54 4 W 12'x25' Y Pasco 219395 H&S Realty $2,400.00 1-24/2002 7 Yrs;1@250;2&3
Allen Rd. Facing E/W Stack Florida BK129-35 Property Inc. @200;4/7@$250
A&B BK130-35 Inc. to $250
2-1-98
TB-62 N/S of SR 54, 1 M/W of SR54 4 W 12'x25' Y Pasco 205991 Dave & Data $1,200.00 8-16/2014 10 Yrs. w/10 Yr.
Seven Springs Blvd. Stack Florida BJ084-35 Schwendeman Renewal Option
(just W of Thys Rd.) A&B BJ085-35 Rent $1200
Facing E/W Ann. or 15% Net
TB-63 N/S of SR 54, .4 of a SR54 4 W 12'x25' Y Pasco 205009 Wendy's Old $1,399.20 8-8/109 5 Yr. Lease @
M/E of US 41 at Raden Stack Florida BJ194-35 Fashion $1399.20 Ann. or
Rd., Facing E/W A&B BJ195-35 Hamburger of 20% Gross
NY Inc.
TB-64 N/S of SR 52, .3 of a SR52 2 S 10.6'x36' Y Pasco 240444 One Pasco Ctr. $1,272.00 13-31/2014 10 Yrs w/10 Yr.
M/E of I-75 Facing E/W Florida BL310-35 % WREC Renewal Option
BL311-35
TB-65 S/S of SR 50, .4 of a SR50 2 W 10.6'x36' Y Hernando 95000433 Jack Melton $1,800.00 2-13/2015 10 Yrs.w/10 Yr.
M/W of I-75 Facing E/W Florida BK435-35 Family Inc. Renewal Option
(30220 E. Cortez Blvd.) BK436-36
TB-66 S/S of SR 50, at SR50 2 S 10.6'x36' Y Pasco 1009119 Gary J. Dame $3,000.00 5-31/2006 10 Yrs.
Junction of CR 570 and Florida BL730-35 Yvonne M.
SR 50, Facing E/W BL731-35 Dame
(15250 Cortez Blvd.)
TB-67 W/S of Dale Mabry, .2 SR597 2 S 10.6'x36' Y Pasco 243787 John M. Harris $2,400.00 4-2/2026 15 Yrs. w/15
M/S of US 41 Facing N/S Florida BL744-35 Gretchen W. Renewal Option
(1635 Dale Mabry) Bl745-35 Harris Rent $2400
Ann or 15% Net
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</TABLE>
Page 6 of 7
<PAGE> 72
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C><C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-68 W/S of US Hwy. 19, US19 2 W 10.6'x36' Y Pasco 222958 Leonard $1,282.00 8-12/2015 10 Yrs. w/10 Yr.
3 M/S of County Line Florida BK473-35 Whitney Renewal Option
Rd. Facing N/S (16309 BK474-35 1st and Last months
US Hwy. 19) paid w/1st Mo.
TB-69 E/S of US Hwy. 19, .8 US19 2 S 10.6'x36' Y Pasco 219077 Tri County $1,800.00 8-04/2014 10 Yrs. w/10 Yr.
of a M/S of SR 52 Florida BJ082-35 Development/ Renewal Option
(11138 US Hwy. 19) BJ083-35 Pasco Rent $1800 Ann or
Facing N/S 35% Gross
TB-70 E/S of US Hwy 19, 1.3 US19 2 S 10.6'x36' Y Pasco 205012 Hao Wah Quach $1,800.00 8-04/2014 10 Yrs. w/10 Yr.
M/S of SR 52 (10704 Florida BM832-35 Renewal Option
US Hwy. 19) Facing N/S BM833-35
TB-71 W/S of I-75, 1.2 M/S 1-75 2 S 10.6'x36' Y Hernando 1004109 Jack Melton $2,004.00 6-17/2014 10 Yrs. + 10 Yrs:
of SR 50 Facing N/S Florida BK904-35 Family, Inc. 1-5@$167/6-10@
(4400 Lockhart Rd.) BK90-35 $185/11-15@ $200/
16-20@$220 Mo.
or 15% Net
TB-72 W/S of I-75, 1.8 M/S 1-75 2 S 10.6'x36' Y Hernando 1004108 Jack Melton $2,004.00 6-17/2016 10 Yrs. + 10 Yrs:
of SR 50 Facing N/S Florida BK908-35 Family, Inc. 1-5@$167/6-10@
(4400 Lockhart Rd.) BK909-35 $185/11-15@ $200/
16-20@$220 Mo.
or 15% Net
TB-73 W/S of I-75, 2 M/S 1-75 2 S 10.6'x36' Y Hernando 1003669 Jack Melton $2,004.00 3-21/2016 10 Yrs. + 10 Yrs:
of SR 50 Facing N/S Florida BK910-35 Family, Inc. 1-5@$167/6-10@
(4400 Lockhart Rd.) BK911-35 $185/11-15@ $200/
16-20@$220 Mo.
or 15% Net
TB-74 W/S of I-75, 2.3 M/S 1-75 2 S 10.6'x36' Y Hernando 1003668 Jack Melton $2,004.00 6-12/2016 10 Yrs. + 10 Yrs:
of SR 50 Facing N/S Florida BK912-35 Family, Inc. 1-5@$167/6-10@
(4400 Lockhart Rd.) BK913-35 $185/11-15@ $200/
16-20@$220 Mo.
or 15% Net
TB-75 W/S of I-75, .7 of a 1-75 2 S 10.6'x36' Y Hernando 1012190 Jack Melton $2,004.00 8-26/2016 10 Yrs. + 10 Yrs:
M/S of SR 50 Facing N/S Florida BM349-35 Family, Inc. 1-5@$167/6-10@
(5360 Lockhart Rd.) BM350-35 $185/11-15@ $200/
16-20@$220 Mo.
or 15% Net
TB-76 E/S of I-75, 2.3 M/S 1-75 2 S 10.6'x36' Y Hernando 1003151 Jack Melton $2,004.00 3-21/2016 10 Yrs. + 10 Yrs:
of SR 50 Facing N/S Florida BK629-35 Family, Inc. 1-5@$167/6-10@
(30107 Power Line Rd.) BK630-35 $185/11-15@ $200/
16-20@$220 Mo.
or 15% Net
TB-77 E/S of I-75, 2.7 M/S 1-75 2 S 10.6'x36' Y Hernando 1003670 Jack Melton $2,004.00 6-31/2016 10 Yrs. + 10 Yrs:
of SR 50 Facing N/S Florida BK902-35 Family, Inc. 1-5@$167/6-10@
(30107 Power Line Rd.) BK903-35 $185/11-15@ $200/
16-20@$220 Mo.
or 15% Net
TB-78 S/S of County Line 1-75 2 S 10.6'x36' Y Pasco 250219 Frank Oliver $1,200.00 6-31/2026 15 Yrs. w/15 Yr.
Rd., .5 M/W of Mariner Florida Renewal Option
Blvd., Facing E/W Rent $1200 Ann or
(Spring Hill) 10% Net
TB-79 W/S of I-75, 2.5 M/S of 1-75 2 S 10.6'x36' Y Hernando 1017270 Jack Melton $2,004.00 Constr- 10 Yrs. + 10 Yrs:
SR 50, Facing N/S Florida BN197-35 Family, uction 1-5@$167/6-10@
(4400 Lockhart Rd.) BN198-35 Inc. $185/11-15@ $200/
16-20@$220 Mo.
or 15% Net
T-80 N/S of E. Hillsborough US92 2 S 10.6'x36' Y Tampa 15365 Elias de la $1,500.00 11-01-2016 10 Yrs. w/10
Ave. (4130), .2 M/E of SR580 Florida BM909-35 Torre Renewal
49th St., Facing E/W BM910-35
T-81 N/S of E. Hillsborough US92 2 S 10.6'x36' Y Tampa 152853 Kirit A. $1,800.00 11-01-2016 10 Yrs. w/10
Ave. (1042), .2 M/E of SR580 Florida BM907-35 Patel Renewal
Nebraska, Facing E/W BM908-35
NUMBER FACES OWNED: 4
NUMBER FACES LEASED: 174 09-23-97
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</TABLE>
Page 7 of 7
<PAGE> 73
SCHEDULE 1(Y) - OTHER ASSETS
(a) All billings and accounts receivable of the Seller relating to or
arising from any outdoor advertising (relating to the Locations)
provided or made available for any period(s) after September 30,
1997.
(b) All of the books, records and documents of the Seller described in
Section 7(a)(xiv) of the Asset Purchase Agreement.
(c) Any non-competition, non-solicitation, non-interference, non-
disclosure or similar agreements, covenants and restrictions running
in favor of the Seller from any third party(ies) to the extent the
same pertain to the Locations.
<PAGE> 74
SCHEDULE 1(AA) - PERMITS
See Attached.
<PAGE> 75
- --------------------------------------------------------------------------------
TAMPA MARKET
BILLBOARD PROPERTIES/LEASES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-1 S/S Park Blvd. (7290), FL694 2 S 10.5'x36' Y Pinellas Fred $3,000.00 12-01/2003 10 Yrs. w/10
.1 of a mile W of Florida N/A Herbst Option with
Belcher Rd., Facing E/W notice
T-2 E/S Clearwater-Largo US19A 2 S 10.5'x36' Y Pinellas Luis $2,400.00 4-27/Yr Year to Year
Rd. (1699), 1.5 M/N of Florida BL554-35 Botelko to Yr Lease
W. Bay Dr., Facing N/S BL555-35
T-3 E/S Park St. (5001), CR 1 2 S 10.5'x36' Y Pinellas 226761 Gloria $2,400.00 6-12-2007 10 Yrs w/Auto-
.5 of a M/N of Tyrone Florida N/A McCausland matic 10 Yr.
Blvd., Facing N/S Renewal
T-4 W/S 66th St. N (11980), FL693 2 S 10.5'x36' Y Pinellas 246112 RCL $2,500.00 12-1/1998 5 Yrs option to
1 M/S of Ulmerton Rd., Florida N/A Enterprises renew w/8% rent
Facing N/S Inc. increase
T-5 N/S Walsingham Rd. FL688 2 S 10'x30' Y Largo Larry R. $2,400.00 5-6/2008 10 Yrs. w/Auto-
(14461), .3 of a M/W of Florida N/A Horden matic 10 Yr.
Indian Rocks Rd., Renewal
Facing E/W
T-6 E/S Clearwater-Largo US19A 2 S 10'x30' Y Largo 0004026 Alvin J. $2,400.00 8-22/2008 10 Yrs. w/Auto-
Rd. (904), .5 of a M/N Florida N/A Smith matic 10 Yr.
of W. Bay Dr., Facing Renewal
N/S
T-7 S/S E. Bay Dr. (1995), FL686 2 S 10'x30' Y Largo Peter $2,400.00 12-13/2008 10 Yrs. w/Auto-
.2 of a M/W of Starkey Florida N/A Feth matic 10 Yr.
Rd., Facing E/W Renewal
T-8 S/S Sunset Point Rd. CR576 2 S 10.5'x36' Y Pinellas John $3,000.00 10-17/2008 10 Yrs. w/Auto-
(1947), .2 of a M/W of Florida N/A Gianfilippo matic 10 Yr.
Hercules Rd., Facing Renewal
E/W
T-9 E/S Alt. US 19 (1743), SR595 2 S 10.5'x36' Y Pinellas Russ & $2,400.00 6-9/2088 10 Yrs. w/Auto-
.4 of a M/N of Florida BM888-35 Brigitte matic 10 Yr.
Klosterman Rd., Facing BM889-35 Britton Renewal
N/S
T-10 N/S of SR 52 (10601), SR52 2 S 10.5'x36' Y Pasco 228122 U-Haul $2,250.00 7-31/2006 20 Yrs.-
.6 of a M/E of Hick Florida BL116-35 Partnership 8-1-86/91@$1400;
Rd., Facing E/W BL117-35 91/96@$1680;
8-1-96/01@2250;
01/06@$2820
T-11 W/S Clearwater/Largo US19A 2 S 10'x30' Y Largo Robert J. $2,800.00 4-27/2004 Ten Yr. Lease
Rd. (101), .1 of a M/N Florida N/A McDermott
of W. Bay Dr., Facing
N/S
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</TABLE>
Page 1 of 7
<PAGE> 76
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-12 S/S W. Bay D. (2261), FL686 1 S 10'x30' Y Largo 5151 Ernest & $1,800.00 6-17/2004 5 Yrs w/5 Yr
1 M/W of Clearwater- Single Pinellas N/A Thirza Auto. Renewal
Largo Rd., Facing E/W B Mortham
T-13 N/S SR 54, .1 of a M/W FL54 2 S 10.5'x36' Y Pasco 120758 Todd Woods $2,500.00 12-1/2006 10 Yrs w/5 Yr
of Collier Parkway, Florida BK983-35 Enterprises Auto Renewal
Facing E/W BK984-35
T-14 N/S SR 54, .3 of a M/W FL54 2 S 10.5'x36' Y Pasco 120758 Todd Woods $2,500.00 12-1/2006 10 Yrs. w/5 Yr
of Collier Parkway, Florida BI835-35 Enterprises Auto Renewal
Facing E/W BI836-35
T-15 E/S Land 'O' Lakes US41 2 S 14'x48' Y Pasco 228914 J. E. $2,025.90 1-5/2005 5 Yrs w/two
Blvd. (5400), 3 M/N of Florida BG460-35 Harvey & 5 Yr. Renewals
SR 54, Facing N/S BG461-35 Emma Lou with written
Harvey request - 3%
Ann. Increases
T-16 E/S Land '0' Lakes US41 2 S 10.5'x36' Y Pasco 260999 Phillip $2,086.70 3-2-2005 5 Yrs w/two 5
Blvd. (2914), US 41, Florida BN841-55 White Yr. Renewals
.5 M/N of SR 54, BN842-55 with written
Facing N/S request - 3%
Ann. Increases
T-17 E/S Land 'O' Lakes US41 2 S 10.5'x36' Y Pasco 228915 Norman $1,800.00 5-15/2005 Two 5 Yr.
Blvd. (5710), 3.3 M/N Florida BC097-35 Conaty options to
of SR 54, Facing N/S BC098-35 renew with 5%
rent increases
T-18 E/S Cortez Blvd. FL577 2 S 10.5'x36' Y Hernando 8704360 Vance $1,273.08 12-1/2007 Auto Renewal
(18845), .4 of a M/S of Florida BM809-35 Revennaugh Yr. to Yr. w/3%
SR 50, Facing N/S BM810-35 Inc. every
other year
T-19 E/S US Hwy. 19, 10.2 US19 2 S 10.5'x36' Y Hernando Joseph $1,200.00 6-30-03 15 Yrs. w/ a 10
M/N of SR 50 at Kelso Florida AR840-35 D'Ettore Yr. Option to
Rd., Facing N/S AR841-35 renew Same
Terms to 2013
T-20 E/S US Hwy. 19 S. US19 2 S 14'x48' Y Pinellas 2557 Butler $5,500.00 7-10/1099 $5500 or 16%
(10815), .6 of a M/S Florida AY601-35 Carpet net revenue
of 110th Ave., Facing AY602-35 Co.
N/S
T-21 S/S E. Bay Dr. (2805), FL686 2 S 10'x30' Y Largo 7794 Ralph Braun $3,000.00 12-31/2003 Ten Yrs: Yrs
.3 of a M/E of Starkey Florida N/A Braun Corporation 1-5@$3000 Ann.
Rd., Facing E/W & Yrs. 6-10
@$3600 Ann.
T-22 N/S E. Bay Dr. (5200), FL686 2 S 10'x30' Y Largo 6691 Am South $3,600.00 2-14/2000 5 Yr. Option
.2 of a M/W of US Hwy. Pinellas N/A Bank to Renew
19, Facing E/W
T-23 N/S E. Bay Dr. (1198), FL686 2 S 10'x30' Y Largo 8449 Valerie L. $4,800.00 11-1/1999 10 Yrs. w/10
W of Highland Ave. Florida N/A Ayers Yr. Option to
Facing N/S renew to 2009
with conditions
T-24 E/S of US Hwy 19 S. US19 2 S 14'x48' Y Pinellas 6171 James T. $7,200.00 12-31-1999 10 Yr. Lease
(10925), at 110th Ave. Florida AY984-35 Paul
Facing N/S AY985-35
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</TABLE>
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<PAGE> 77
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-25 W/S 34th St. (4550), US19 2 S 14'x48' Y Pinellas 7641 Mark A. $4,500.00 9-14/2002 10 Yr. Lease
.6 of a M/N of 38th Florida AZ166-35 LaPrade
Ave. N., Facing N/S AZ167-35
T-26 W/S of 34th St. N. US19 2 S 14'x48' Y Pinellas BI363-35 Doug $5,903.57 12-1/1098 10 Yr. Lease w/
(6190), US Hwy. 19, at Florida BI364-35 Lowery & 3% Ann.
62nd Ave., Facing N/S Ben Sudduth Increases
beginning at
$4800 or 15%
gross
T-27 W/S Madison Ave. FL54 2 S 10.5'x36' Y Pasco BQ153-55 Armstrong $2,737.32 8-1/1997 8 Yr. Lease -
(4051), 300'N of SR 54 Florida BQ154-55 Plaza for no option for
Facing N/S Thomas Renewal
Daniel
T-28 E/S US Hwy. 19 N. US19 2 S 10'x20' Y Pasco BI517-35 Invesco New $1,500.00 7-30/2007 10 Yrs. w/10
(7404), .1 of a M/S of Florida BI518-35 Port Richey Yr. renewal
Port Richey Bridge, Corp. option @ same
Facing N/S rent of $1500
or 15% Gr.
Income
T-29 S/S of SR 54 (5226), FL54 2 S 14'x48' Y Pasco BI573-35 Dominick $3,646.52 8-31/2008 20 Yr. Lease w/
.6 of a M/E of US Hwy. Florida BI574-35 Macaluso Yr. to Yr.
19, Facing E/W Renewal Rent
$3000 w/5% ann.
increase
T-30 W/S of Land '0' Lakes US41 2 S 10.5'x36' Y Pasco 217551 Ridge Manor $2,000.00 8-20/2006 20 Yr. Lease w/
Blvd. (6105), 3.7 M/N Florida BD726-35 Properties Yr. to Yr.
of SR 54, Facing N/S BD727-35 Renewal
T-31 E/S US Hwy. 19 (16642), US19 2 S 14'x48' Y Pasco BI365-35 Peter Wong $2,000.00 6-2/2007 10 Yrs. w/10
5.4 M/N of SR 52 Florida BI366-35 & Gim Mar Yr. renewal
Facing N/S option @ $2000
Ann. or 15%
Gross Income
T-32 S/S Cortez Blvd. FL50 2 S 10.5'x36' Y Hernando AU153-35 Thomas H. $1,311.27 10-31/2007 20 Yr. Lease w/
(15430), 6.3 M/E of Florida AU154-35 White Yr. to Yr.
US Hwy. 19, Facing E/W Renewal at $1200
w/3% Inc. every
2nd Year
T-33 N/S Cortez Blvd. FL50 2 S 10.5'x36' Y Hernando BD438-35 John Ames $1,445.14 12-31/2007 20 Yr. Lease w/
(28363), 1.8 M/W of Florida BD439-35 Yr. to Yr.
I-75 Facing E/W Renewal at $1200
w/3% Inc. every
2nd Year
T-34 E/S S. Missouri Ave. US19A 2 S 14'x48' Y Pinellas BL541-35 Robert $1,605.00 10-31/2003 Ten Yrs. from
(1535), .2 of a M/N of Florida BL542-35 Keller 11-1-93; 1-5@
Belleair Rd., Facing $1605; Yrs.
N/S 6-10@$2675 Ann.
T-35 E/S S. Missouri Ave. US19A 2 S 14'x48' Y Pinellas BL543-35 Ronald E. $2,000.00 11-28/2006 Ten Yrs. w/ Ten
(1477), .4 of a M/N of Florida BL544-35 Smith Yr. renewal
Belleair Rd., Facing option
N/S
T-36 W/S Clearwater-Largo US19A 2 S 12'x25' Y Largo N/A Lee & Karen $1,500.00 1-30/2007 Ten Yrs. w/ Ten
Rd. (1509), 1 M/N of Florida Johnson Yr. renewal
Belleair Rd., Facing option from
N/S 1-30-87 then
Yr. to Yr.
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</TABLE>
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<PAGE> 78
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-37 N/S Walsingham Rd. FL688 2 S 10'x30' Y Largo N/A Joyce $1,500.00 5-24/2004 Ten Yrs. w/Ten
(14385), .3 of a M/W of Pinellas Westphal Yr. renewal
Indian Rocks Rd., option then
Facing E/W Yr. to Yr.
T-38 S/S E. Bay Dr. (5105), FL686 4 S 10'x30' Y Largo N/A Lonnie Orns $2,000.00 1-4/2004 Ten Yrs. w/10
.3 of a M/W of US Hwy. TRI Pinellas Automotive Yr. renewal
19, Facing E/W B Realty option then
Assoc. Yr. to Yr.
T-39 N/S W. Bay Dr. (1400), FL686 2 S 10'x30' Y Largo Ronald R. $1,605.00 5-12/2007 Ten Yrs. w/10
.5 of a M/W of Pinellas and Joan A. Yr. renewal
Clearwater-Lago Rd., Daniels option then
Facing E/W Yr. to Yr.
T-40 E/S Gall Blvd. (7010), US301 2 S 10.5'x36' Y Pasco 229939 William F. $3,180.00 MTM Month to Month
3 M/N of SR 54 (Gulf Florida BI369-35 Nye Lease
Station), Facing N/S BI370-35 ABMM Inc.
T-41 N/S of SR 52, 2.9 M/E FL52 2 S 14'x48' Y Pasco 209642 Permanent $ -0- N/A
of US Hwy. 19 Facing Florida BI361-35 Easement
E/W BI362-35
T-42 S/S of Walsingham Rd. FL688 2 S 10'x30' Y Largo 9063 Antoni & $3,600.00 4-7-2009 Ten Yrs. w/Ten
(14530), .3 of a M/W Pinellas N/A Wincent Yr. renewal
of Indian Rocks Rd., Niewiarowski option
Facing E/W
T-43 S/S of Walsingham Rd. FL688 2 S 10'x30' Y Largo 9062 Antoni & $3,600.00 4-7-2009 Ten Yrs. w/Ten
(14590), .3 of a M/W Florida N/A Wincent Yr. renewal
of Indian Rocks Rd., Niewiarowski option
Facing E/W
T-44 W/S 4th St. N. (5590), FL687 2 S 10'x30' Y St. 11219050 Cassie $2,400.00 10-12/2009 Ten Yrs. w/Ten
.2 of a M/N of 54th Petersburg N/A Featherstone Yr. renewal
Ave., Facing N/S Florida option
T-45 E/S of 66th St. N. SR693 2 S 10.6'x6' Y Pinellas 13594 Warren Mack $3,210.00 5-31/1999 Ten Yrs.-
(4801), N of 48th Ave. Florida BA448-35 & Sally Beginning
N. Facing N/S BA449-35 Mack Weiner 6-1-92 Yrs.
1-2@$2400;
3-5@$3000;
6-8@$3600
T-46 E/S of US Hwy. 19 N. US19 2 S 10.6'x6' Y Pasco 098273 Rent-A- $3,600.00 12-31-2002 9 Yrs. - 7 Yrs.
(4218), .3 of a M/N Florida BI367-35 Space Corp. @$300 Mo. & 2
of SR 54, Facing N/S BI368-35 Yrs.@$400 Mo.
T-47 S/S of SR 580 (2321), SR580 2 S 14'x48' Y Pinellas T8641 Sevald & $5,500.00 9-30/2006 to 2001: $5500;
.3 of a M/W of US Hwy. Florida BA948-35 Barbara to 2006: $6000
19, Facing E/W BA949-35 Nielsen 60 Day Notice
of Renewal Yr.
2001
T-48 W/S of US Hwy. 19 N. US19 2 S 12'x42' Y Pinellas AM944-10 Permanent N/A N/A
(39310), .4 of a M/N Florida AM945-10 Easement
of Klosterman Rd., Bradley
Facing N/S Plaza Assoc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4 of 7
<PAGE> 79
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-49 W/S of 66th St. at FL693 2 W 10'x28' Y Pinellas 245029 Dorothy $1,605.00 4-14/2008 10 Yrs. w/10
Bryan Dairy Rd. Florida BM896-35 R. Mills, Yr. Renewal
Facing N/S BM897-35 Trustee Option
T-50 S/S Bay Pines Blvd. FL688 2 W 10'x36' Y Pinellas 20266 Anthony $3,852.00 Yr. to Yr.
(8330), .3 of a M/W of Florida BL552-35 Barbato
Park St., Facing E/W BL553-35
T-51 E/S US Hwy. 19 S. US19 4 W 10'x28' Y Clearwater 72225 Jacinto $5,018.65 9-22/2008 10 Yrs. w/10
(12737), .5 of M/S of Stack Pinellas AX816-35 Rodriques Yr. Renewal
Ulmerton Rd. @ 126th A&B AX817-35 Option Yrs.
Ave. N., Facing N/S 1-10@$5% ann.
increase
T-52 W/S Seminole Blvd. FL595 2 W 10'x40' Y Seminole 22619 Lazzara $2,568.00 3-14-2001 3 Yrs. w/3 Yrs.
(10998), at 110th Ave. Pinellas BL539-35 Oil Co. Renewal Option
N., Facing N/S BL540-35 Michael A. Beginning
Lazzara 3-14-95
T-53 W/S of 49th St. N. CR611 2 W 10'x28' Y Clearwater 254050 Marshall $2,675.00 2-1-1999 3 Yrs. -
(12650), .4 of a M/S of Pinellas Harris 1@$2675;
Ulmerton Rd., Facing 2@$2808.75;
N/S 3@$2,949.19
1 Plastic 5'x15' N
T-54 W/S of 66th St. N. FL693 2 S 14'x48' Y Pinellas The $2,400.00 1-1/2016 10 Yrs w/10
(14444), .6 of a M/N of Florida BN839-55 Christian Yr. Renewal
Ulmerton Rd., Facing BN840-55 Network Option
N/S
T-55 S/S of SR 52 (18950), FL52 2 S 10.5'x36' Y Pasco 238242 Ann T. $1,800.00 10-31-2015 10 Yrs w/10
.1 of a M/E of US 41 Florida BG758-35 Calhoun Yr. Renewal
Facing E/W (Dade City) BG759-35 Option 10 Yrs
@$150 Mo.;
10 Yrs.@$200
Mo.
T-56 W/S of US 41 (50th US41 2 S 10.5'x36' Y Tampa 1466282 Outdoor $1,597.50 Yr. to Yr. Yr. to Yr.
St.), .5 of a M/N of Hills- BL734-35 Systems 4-1/3-31 Lease@$1500+
Crosstown Expressway, borough BL735-35 Adv. 6.5% Tax or 25%
Facing N/S of Gross
whichever is
greater
TB-57 W/S of US 301, 2 M/N of US301 4 S 12'x25' Y Pasco 224145 Store-Ete $1,200.00 6-30/2005 5 Yrs. w/5 Yr.
SR 52 Facing N/S Stack Florida BK522-25 Storage Renewal Option
(16031 US 301) A&B BK523-35 Rent $1200 Ann
or 15% Gross
Income
TB-58 E/S of US 301, 50'N of US301 2 S 12'x25' Y Pasco 209092 Scotty's $1,272.00 6-23/1998 4 Yr. Lease-
Morningside Dr. Facing Florida BJ370-35 Inc. Rent + 10% of
N/S (1720 US 301) BJ371-35 Gross Rev.
exceeding sum
of Min. Mo.
Rent
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 5 of 7
<PAGE> 80
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-59 W/S of US 301, .1 of a US301 4 W 12'x25' Y Pasco 208836 Enza $1,200.00 8-4/2014 10 Yrs. w/ 10
M/S of US 98 Facing Stack A&B Florida BJ295-35 Orsi Yr. Renewal
N/S (11131 Hwy. 301) BJ296-35 Option Rent
$1200 or 10% Net
TB-60 W/S of US 301, .3 of a US301 4 W 12'x25' Y Pasco 208837 Enza $1,200.00 6-13/2014 10 Yrs. w/ 10
M/S of US 98 Facing N/S Stack A&B Florida BJ297-35 Orsi Yr. Renewal
(11131 Hwy. 301) BJ298-35 Option Rent
$1200 or 10%
Net
TB-61 S/S of SR 54, 100'E of SR54 4 W 12'x25' Y Pasco 219395 H&S Realty $2,400.00 1-24/2002 7 Yrs.:1@$250;
Allen Rd. Facing E/W Stack A&B Florida BK129-35 Property 4/7@$250 Inc.
BK130-35 Inc. to $250 2-1-98
TB-62 N/S of SR 54, 1 M/W of SR54 4 W 12'x25' Y Pasco 205991 Dave & $1,200.00 8-16/2014 10 Yrs. w/ 10
Seven Springs Blvd. Stack A&B Florida BJ084-35 Darla Yr. Renewal
(just W of Thys Rd.) BJ085-35 Schwendeman Option Rent
Facing E/W $1200 Ann. or
15% Net
TB-63 N/S of SR 54, .4 of a SR54 4 W 10.6'x36' Y Pasco 205009 Wendy's Old $1,399.20 8-8/109 5 Yr. Lease @
M/E of US 41 at Raden Stack A&B Florida BJ194-35 Fashion $1399.20 Ann.
Rd., Facing E/W BJ195-35 Hamburgers or 20% Gross
of NY Inc.
TB-64 N/S of SR 52, .3 of a SR52 2 S 10.6'x36' Y Pasco 240444 One Pasco $1,272.00 13-31/2014 10 Yrs. w/ 10
M/E of I-75 Facing E/W Florida BL310-35 Center % Yr. Renewal
BL311-35 WREC Option
TB-65 S/S of SR 50, .4 of a SR50 2 W 10.6'x36' N Hernando 9500433 Jack $1,800.00 2-13/2015 10 Yrs. w/ 10
M/W of I-75 Facing E/W Florida BK435-35 Melton Yr. Renewal
(30220 E. Cortez Blvd.) BK436-35 Family, Option
Inc.
TB-66 S/S of SR 50, at SR50 2 S 10.6'x36' Y Hernando 1009119 Gary J. Dame $3,000.00 5-31/2006 10 Yrs.
Junction of CR 570 and Florida BL730-35 Yvonne M.
SR 50, Facing E/W BL731-35 Dame
(15250 Cortez Blvd.)
TB-67 W/S of Dale Mabry, .2 SR597 2 S 10.6'x36' Y Pasco 243787 John M. $2,400.00 4-2/2026 15 Yrs. w/ 15
M/S of US 41 Facing N/S Florida BL744-35 Harris Yr. Renewal
(1635 Dale Mabry) BL745-35 Gretchen W. Option Rent
Harris $2400 Ann or
15% Net
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 6 of 7
<PAGE> 81
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-68 W/S OF US Hwy. 19, 3 US19 2 W 10.6'x36' Y Pasco 222958 Leonard $1,282.00 8-12/2015 10 Yrs. w/ 10
M/S of County Line Rd. Florida BK473-35 Whitney Yr. Renewal
Facing N/S (16309 US BK474-35 Option 1st and
Hwy. 19) Last months
paid w/ 1st Mo.
TB-69 E/S of US Hwy. 19, .8 US19 2 S 10.6'x36' Y Pasco 219077 Tri County $1,800.00 8-4/2104 10 Yrs. w/ 10
a M/S of SR 52 (11138 Florida BJ082-35 Development/ Yr. Renewal
US Hwy. 19) Facing N/S BJ083-35 Pasco Option Rent
$1800 Ann or
35% Gross
TB-70 E/S of US Hwy. 19, 1.3 US19 2 S 10.6'x36' Y Pasco 20512 Hao Wah $1,800.00 8-4/2014 10 Yrs. w/ 10
M/S of SR 52 (10704 US Florida BM832-35 Quach Yr. Renewal
Hwy. 19) Facing NS BM833-35 Option
TB-71 W/S of I-75, 1.2 M/S I-75 2 S 10.6'x36' Y Hernando 1004109 Jack Melton $2,004.00 6-17/2016 10 Yrs. + 10
of SR 50 Facing N/S Florida BK904-35 Family, Inc. Yrs: 1-5@$167/
(4400 Lockhart Rd.) BK90-35 6-10@$185/
11-15@$200/
16-20@$220 Mo.
or 15% Net
TB-72 W/S of I-75, 1.8 M/S I-75 2 S 10.6'x36' Y Hernando 1004108 Jack Melton $2,004.00 6-17/2016 10 Yrs. + 10
of SR 50 Facing N/S Florida BK908-35 Family, Inc. Yrs: 1-5@$167/
(4400 Lockhart Rd.) BK909-35 6-10@$185/
11-15@$200/
16-20@$220 Mo.
or 15% Net
TB-73 W/S of I-75, 2 M/S I-75 2 S 10.6'x36' Y Hernando 1003669 Jack Melton $2,004.00 3-21/2016 10 Yrs. + 10
of SR 50 Facing N/S Florida BK910-35 Family, Inc. Yrs: 1-5@$167/
(4400 Lockhart Rd.) BK911-35 6-10@$185/
11-15@$200/
16-20@$220 Mo.
or 15% Net
TB-74 W/S of I-75, 2.3 M/S I-75 2 S 10.6'x36' Y Hernando 1003668 Jack Melton $2,004.00 6-12/2016 10 Yrs. + 10
of SR 50 Facing N/S Florida BK912-35 Family, Inc. Yrs: 1-5@$167/
(4400 Lockhart Rd.) BK913-35 6-10@$185/
11-15@$200/
16-20@$220 Mo.
or 15% Net
TB-75 W/S of I-75, .7 of a I-75 2 S 10.6'x36' Y Hernando 1012190 Jack Melton $2,004.00 8-26/2016 10 Yrs. + 10
M/S of SR 50 Facing N/S Florida BM349-35 Family, Inc. Yrs: 1-5@$167/
(5360 Lockhart Rd.) BM350-35 6-10@$185/
11-15@$200/
16-20@$220 Mo.
or 15% Net
TB-76 E/S of I-75, 2.3 M/S I-75 2 S 10.6'x36' Y Hernando 1003151 Jack Melton $2,004.00 3-21/2016 10 Yrs. + 10
of SR 50 Facing N/S Florida BK629-35 Family, Inc. Yrs: 1-5@$167/
(30107 Power Line Rd.) BK630-35 6-10@$185/
11-15@$200/
16-20@$220 Mo.
or 15% Net
TB-77 E/S of I-75, 2.7 M/S I-75 2 S 10.6'x36' Y Hernando 1003670 Jack Melton $2,004.00 3-21/2016 10 Yrs. + 10
of SR 50 Facing N/S Florida BK902-35 Family, Inc. Yrs: 1-5@$167/
(30107 Power Line Rd.) BK903-35 6-10@$185/
11-15@$200/
16-20@$220 Mo.
or 15% Net
TB-78 S/S of County Line 2 S 10.6'x36' Y Pasco 250219 Frank $1,200.00 6-31/2026 15 Yrs. w/15
Rd., .5 M/W of Mariner Florida Oliver Yr. Renewal
Blvd., Facing E/W Option Rent
(15718 County Line Rd.) $1200 Ann or
10% Net
TB-79 W/S of I-75, 2.5 M/S of I-75 2 S 10.6'x36' Y Hernando 1017270 Jack Melton $2,004.00 Con- 10 Yrs. + 10
SR 50, Facing N/S Florida BN197-35 Family, Inc. struction Yrs: 1-5@$167/
(4400 Lockhart Rd.) BN198-35 6-10@$185/
11-15@$200/
16-20@$220 Mo.
or 15% Net
T-80 N/S of E. Hillsborough US92 2 S 10.6'x36' Y Tampa 153658 Elias de la $1,500.00 11-01-2016 10 Yrs. w/10
Ave. (4130), .2 M/E of SR580 Florida BM909-35 Torre Renewal
40th St., Facing E/W BM910-35
T-81 N/S of E. Hillsborough US92 2 S 10.6'x36' Y Tampa 152853 Kirit A. $1,800.00 11-01-2016 10 Yrs. w/10
Ave. (1042), .2 M/E of SR580 Florida BM907-35 Patel Renewal
Nebraska, Facing E/W BM908-35
NUMBER FACES OWNED: 4
NUMBER FACES LEASED: 174
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</TABLE>
Page 7 of 7
<PAGE> 82
SCHEDULE 1(AI) - UNBUILT LOCATIONS
None.
<PAGE> 83
SCHEDULE 2(C) - SELLER'S WIRE TRANSFER INSTRUCTIONS
See attached.
<PAGE> 84
WIRE TRANSFER INSTRUCTIONS
ACCOUNT NAME PAXSON COMMUNICATIONS CORPORATION
BANK NAME FIRST UNION NATIONAL BANK
ABA#: 063000021
ACCOUNT NUMBER 2090002226777
<PAGE> 85
SCHEDULE 2(D)(II) - PERCENTAGE LEASES
See attached.
<PAGE> 86
TAMPA MARKET
BILLBOARD PROPERTIES ANNUAL LEASED VS % NET REVENUE
<TABLE>
<CAPTION>
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BB# LOCATION HWY. DISPLAY ST/CO/CTY PROPERTY GROUND LEASE CONDITIONS/COMMENTS
SIZE OWNER RENT EXP
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T-20 E/S US Hwy. 19 S (10815), US19 14'x48' Pinellas Butler Carpet Co. $ 5,500.00 7-10/1099 5500 of 16% net revenue
.6 of a M/S of 110th Ave., Florida
Facing N/S
T-26 W/S of 34 St. N. (6190), US19 14'x48' Pinellas Doug Lowery & $ 5,903.57 12-1/1098 10 Yr. Lease w/3% Ann.
US Hwy. 19 at 62nd Ave., Florida Ben Sudduth Increases beginning at
Facing N/S $4800 or 15% gross
T-28 E/S US Hwy. 19 N (7404), US19 10'x20' Pasco Invesco New Port $ 1,500.00 7-30/2007 10 Yrs w/10 Yr. renewal
.1 of a M/S of Port Florida Richey Corp. option @ same rent of
Richey Bridge, Facing $1500 or 15% Gr. Income
N/S
T-31 E/S US Hwy. 19 (16642), US19 14'x48' Pasco Peter Wong & $ 2,000.00 6-2/2007 10 Yrs w/10 Yr. renewal
5.5 M/N of SR 52 Florida Gim Mar option @ $2000 Ann. or
Facing N/S 15% Gross Income
T-56 W/S of US 41 (50th St.), US41 10.5'x36' Tampa Outdoor Systems Adv. $ 1,597.50 Yr. to Yr. Yr. to Yr. Lease @1500 +
.5 of a M/N of Crosstown Hillsborough 4-1/3-31 6.5% Tax or 25% of Gross
Expressway, Facing N/S whichever is greater
TB-57 W/S of US 301, 2 M/N of US301 12'x25' Pasco Stor-Ete Storage $ 1,200.00 6-30/2005 5 Yrs. w/5 Yr. Renewal
SR 52 Facing N/S (16031 Florida Option Rent $1200 Ann or
US 301) 15% Gross Income
TB-58 E/S of US 301, 50' N of US301 12'x25' Pasco Scotty's Inc. $ 1,272.00 6-23/1998 4 Yr. Lease-Rent + 10%
Morningside Dr. Facing Florida of Gross Rev. exceeding
N/S (1720 US 301) sum of Min. Mo. Rent
TB-59 W/S of US 301, .1 of a US301 12'x25' Pasco Enza Orsi $ 1,200.00 8-4/2014 10 Yrs. w/10 Yr. Renewal
M/S of US 98 Facing Florida Option Rent $1200 or
N/S (11131 Hwy. 301) 10% Net
TB-60 W/S of US 301, .3 of a US301 12'x25' Pasco Enza Orsi $ 1,200.00 6-13/2014 10 Yrs. w/10 Yr. Renewal
M/S of US 98 Facing Florida Option Rent $1200 Ann.
N/S (11131 Hwy. 301) or 10% Net
TB-62 N/S of SR 54, 1 M/W of SR54 12'x25' Pasco Dave & Darla $ 1,200.00 8-16/2014 10 Yrs. w/10 Yr. Renewal
Seven Springs Blvd. Florida Schwendeman Option Rent $1200 Ann.
Facing E/W (6325 SR 54) or 15% Net
</TABLE>
Page 1
<PAGE> 87
<TABLE>
<CAPTION>
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BB# LOCATION HWY. DISPLAY ST/CO/CTY PROPERTY GROUND LEASE CONDITIONS/COMMENTS
SIZE OWNER RENT EXP
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TB-63 N/S of 2328 SR 54 at Raden SR54 12'x25' Pasco Wendy's Old Fashion $ 1,399.20 8-8/109 5 Yr. Lease @$1399.20
Dr., .4 of a M/E of US 41, Florida Hamburgers of NY Inc. Ann. or 20% Gross
Facing E/W
TB-67 W/S of Dale Mabry, .2 M/S SR597 10.6'x36' Pasco John M. Harris $ 2,400.00 4-2/2026 15 Yrs. w/15 Yr. Renewal
of US 41 Facing N/S (1635 Florida Gretchen W. Harris Option Rent $2400 Ann or
Dale Mabry) 15% Net
TB-69 E/S of US Hwy. 19, .8 of US19 10.6'x36' Pasco Tri County $ 1,800.00 8-4/2014 10 Yrs. w/10 Yr. Renewal
a M/S of SR 52 (11138 US Florida Development/Pasco Option Rent $1800 Ann. or
Hwy. 19) Facing N/S 35% Gross
TB-71 W/S of I-75, 1.2 M/S of I-75 10.6'x36' Hernando Jack Melton $ 2,004.00 6-17/2016 10 Yrs. +10 Yrs:1-5 @
SR 50 Facing N/S (4400 Florida Family, Inc. $167/6-10@$185/11-15@
Lockhart Rd.) $200/16-20@$220 Mo. or
15% Net
TB-72 W/S of I-75, 1.8 M/S of I-75 10.6'x36' Hernando Jack Melton $ 2,004.00 6-17/2016 10 Yrs. +10 Yrs:1-5 @
SR 50 Facing N/S (4400) Florida Family, Inc. $167/6-10@$185/11-15@
Lockhart Rd.) $200/16-20@$220 Mo. or
15% Net
TB-73 W/S of I-75, 1.3 M/S of I-75 10.6'x36' Hernando Jack Melton $ 2,004.00 3-21/2016 10 Yrs. +10 Yrs:1-5 @
SR 50 Facing N/S (4400) Florida Family, Inc. $167/6-10@$185/11-15@
Lockhart Rd.) $200/16-20@$220 Mo. or
15% Net
TB-74 W/S of I-75, 2.3 M/S of I-75 10.6'x36' Hernando Jack Melton $ 2,004.00 6-12/2016 10 Yrs. +10 Yrs:1-5 @
SR50 Facing N/S (4400 Florida Family, Inc. $167/6-10@$185/11-15@
Lockhart Rd.) $200/16-20@$220 Mo. or
15% Net
TB-75 W/S of I-75, 7 of a M/S I-75 10.6'x36' Hernando Jack Melton $ 2,004.00 8-26/2016 10 Yrs. +10 Yrs:1-5 @
of SR 50 Facing N/S Florida Family, Inc. $167/6-10@$185/11-15@
(5360 Lockhart Rd.) $200/16-20@$220 Mo. or
15% Net
TB-76 E/S of I-75, 2.3 M/S of I-75 10.6'x36' Hernando Jack Melton $ 2,004.00 3-21/2016 10 Yrs. +10 Yrs:1-5 @
SR 50 Facing N/S (30107 Florida Family, Inc. $167/6-10@$185/11-15@
Power Line Rd.) $200/16-20@$220 Mo. or
15% Net
TB-77 E/S of I-75, 2.7 M/S of I-75 10.6'x36' Hernando Jack Melton $ 2,004.00 3-21/2016 10 Yrs. +10 Yrs:1-5 @
SR 50 Facing N/S (30107 Florida Family, Inc $167/6-10@$185/11-15@
Power Line Rd.) $200/16-20@$220 Mo. or
15% Net
TB-78 S/S of County Line Rd. 10.6'x36' Pasco Frank Oliver $ 1,200.00 6-31/2026 15 Yrs. w/15 Yr. Renewal
(15718), .5 M/W of Florida Option Rent $1200 Ann or
Mariner Blvd., Facing 10% Net
E/W (Spring Hill)
</TABLE>
Page 2
<PAGE> 88
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
BB# LOCATION HWY. DISPLAY ST/CO/CTY PROPERTY GROUND LEASE CONDITIONS/COMMENTS
SIZE OWNER RENT EXP
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TB-79 W/S of I-75, 2.5 M/S of I-75 10.6'x36' Hernando Jack Melton $ 2,004.00 5-31/2017 10 Yrs + 10Yrs: 1-5
SR 50, Facing N/S (4400 Florida Family, Inc. @ $167/6-10@$185/
Lockhard Rd.) 11-15@ $200/16-20@
$220 Mo. or 15% Net
</TABLE>
Page 3
<PAGE> 89
<TABLE>
<CAPTION>
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BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
T-49 W/S of 66th St. at
Bryan Dairy Rd.
Facing N/S
T-50 S/S Bay Pines Blvd.
(8330), .3 of a M/W of
Park St., Facing E/W
T-51 E/S US Hwy. 19 S.
(12737), .5 of M/S of
Ulmerton Rd. @ 126th
Ave. N., Facing N/S
T-52 W/S Seminole Blvd.
(10998), at 110th Ave.
N., Facing N/S
T-53 W/S of 49th St. N.
(12650), .4 of a M/S of
Ulmerton Rd., Facing
N/S
T-54 W/S of 66th St. N.
(14444), .6 of a M/N of
Ulmerton Rd., Facing
N/S
T-55 S/S of SR 52 (18950),
.1 of a M/E of US 41
Facing E/W
T-56 W/S of US 41 (50th
St.), .5 of a M/N of
Crosstown Expressway,
Facing N/S
TB-57 W/S of US 301, 2 M/N of
SR 52 Facing N/S
(16031 US 301)
TB-58 E/S of US 301, 50'N of
Morningside Dr. Facing
N/S (1720 US 301)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 90
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-59 W/S of US 301, .1 of a
M/S of US 98 Facing
N/S (11131 Hwy. 301)
TB-60 W/S of US 301, .3 of a
M/S of US 98 Facing N/S
(11131 Hwy. 301)
TB-61 S/S of SR 54, 100'E of
Allen Rd. Facing E/W
TB-62 N/S of SR 54, 1 M/W of
Seven Springs Blvd.
(just W of Thys Rd.)
Facing E/W
TB-63 N/S of SR 54, .4 of a
M/E of US 41 at Raden
Rd., Facing E/W
TB-64 N/S of SR 52, .3 of a
M/E of I-75 Facing E/W
TB-65 S/S of SR 50, .4 of a
M/W of I-75 Facing E/W
(30220 E. Cortez Blvd.)
TB-66 S/S of SR 50, at
Junction of CR 570 and
SR 50, Facing E/W
(15250 Cortez Blvd.)
TB-67 W/S of Dale Mabry, .2
M/S of US 41 Facing N/S
(1635 Dale Mabry)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 91
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
BB# LOCATION HWY. FACES W/S/ DISPLAY LIT ST/CO/CTY PERMITS PROPERTY GROUND LEASE CONDITIONS/
O L TRI SIZE OWNER RENT EXP COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TB-68 W/S of US Hwy. 19,
3 M/S of County Line
Rd. Facing N/S (16309
US Hwy. 19)
TB-69 E/S of US Hwy. 19, .8
of a M/S of SR 52
(11138 US Hwy. 19)
Facing N/S
TB-70 E/S of US Hwy 19, 1.3
M/S of SR 52 (10704
US Hwy. 19) Facing N/S
TB-71 W/S of I-75, 1.2 M/S
of SR 50 Facing N/S
(4400 Lockhart Rd.)
TB-72 W/S of I-75, 1.8 M/S
of SR 50 Facing N/S
(4400 Lockhart Rd.)
TB-73 W/S of I-75, 2 M/S
of SR 50 Facing N/S
(4400 Lockhart Rd.)
TB-74 W/S of I-75, 2.3 M/S
of SR 50 Facing N/S
(4400 Lockhart Rd.)
TB-75 W/S of I-75, .7 of a
M/S of SR 50 Facing N/S
(5360 Lockhart Rd.)
TB-76 E/S of I-75, 2.3 M/S
of SR 50 Facing N/S
(30107 Power Line Rd.)
TB-77 E/S of I-75, 2.7 M/S
of SR 50 Facing N/S
(30107 Power Line Rd.)
TB-78 S/S of County Line
Rd., .5 M/W of Mariner
Blvd., Facing E/W
(15718 County Line Rd.)
TB-79 W/S of I-75, 2.5 M/S of
SR 50, Facing N/S
(4400 Lockhart Rd.)
T-80 N/S of E. Hillsborough
Ave. (4130), .2 M/E of
40th St., Facing E/W
T-81 N/S of E. Hillsborough
Ave. (1042), .2 M/E of
Nebraska, Facing E/W
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 92
SCHEDULE 3(F) - FINANCIAL INFORMATION
See Attached.
<PAGE> 93
PAXSON OUTDOOR, INC.
PROFIT AND LOSS SUMMARY
BY LOCATION
TAMPA
==========================
<TABLE>
<CAPTION>
JAN FEB MAR APR MAY JUN JUL AUG SEP
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME
Billboard Rentals 50,276 56,160 56,795 56,263 62,003 63,553 64,485 69,858 68,736
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL 50,276 56,160 56,795 56,263 62,003 63,553 64,485 69,858 68,736
DIRECT EXPENSES
Agency Commissions 511 511 511 511 511 511 511 511 511
Local Commissions -- 770 498 758 1,215 762 1,032 1,097 5,537
Ground Rent 16,462 16,462 16,462 16,462 16,462 16,462 16,462 16,462 18,872
Billboard Painting 2,564 2,414 2,783 3,938 1,860 3,495 2,842 6,569 12,655
Bad Debt 503 842 852 900 620 636 645 698 687
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL 20,040 20,999 21,106 22,569 20,668 21,866 21,492 25,337 38,262
SALES DEPARTMENT
Salaries 4,687 6,333 6,333 6,333 4,667 6,000 6,500 6,500 6,500
Outside Services -- 618 284 -- -- -- -- -- --
Repairs & Maintenance 151 -- -- 113 124 -- -- -- --
Travel Expense 151 168 227 281 372 381 -- -- --
Travel Exp-Meal -- 112 -- 56 -- -- -- -- --
Entertainment Exp. -- 112 114 56 62 127 -- -- --
Vehicle Fuel Exp. 191 432 603 422 433 490 267 424 267
Supplies 151 56 114 56 62 64 -- -- 54
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL 5,310 7,831 7,675 7,317 5,720 7,062 6,767 6,924 6,821
ENGINEERING
Billboard - Electric 886 592 2,159 1,274 984 1,155 2,894 2,704 1,940
Billboard - R & M 3,419 168 1,533 1,182 1,302 2,097 967 1,048 2,524
R & M 1,056 281 227 169 186 191 -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL 5,361 1,041 3,919 2,625 2,472 3,442 3,861 3,752 4,464
</TABLE>
Page 1
<PAGE> 94
SCHEDULE 3(Y) - EASEMENTS
1. Easement dated June 2, 1995 by and between Bradley Plaza Associates,
One, a Florida general partnership, as Grantor, and Paxson Outdoor,
Inc., a Florida corporation, as Grantee, as recorded in Official
Records Book 9026, Page 1137, of the public records of Pinellas County,
Florida.
2. Easement dated November 24, 1987, by and between Kenneth J. and Janet
Modzelewski, as Grantors, and D&M Outdoor, Partnership, No. I, as
Grantee, as recorded in Official Records Book 1678, Page 1427, of the
public records of Pinellas County, Florida.
<PAGE> 95
DISCLOSURE SCHEDULE
(d) Seller is solely responsible for the payment of any fees or
brokerage commission due CEA and will hold Buyer harmless
from any such obligation.
(e)&(n) Location T-19's landlord is unknown and attempts to locate the
underlying fee owner have been unsuccessful. To the extent Buyer
is required to or reasonably decides to pay any back rent for
periods prior to the Effective Date to the owner/lessor of this
Location in order to retain the Location, the Seller shall
promptly reimburse Buyer for such back rent upon demand by Buyer.
(g)&(n) Courtesy Leasing, Inc. still has UCC-1 financing statements on file
against Paxson Outdoor, Inc. even though their security interest no
longer exists. These UCC-1 Financing Statements will be terminated
of record at or before the Closing.
(j) Buyer has filed suit against Seller [Universal Outdoor, Inc. v.
Paxson Communications Corporation, Case No. CI 96-8914] and
this lawsuit will be settled and dismissed upon the Closing.
<PAGE> 96
EXHIBIT 10.187
October 28, 1997
EYEMARK ENTERTAINMENT, a business unit of CBS Inc. ("EYEMARK,") 10877 Wilshire
Boulevard, 9th Floor, Los Angeles, California 90024 and PAXSON COMMUNICATIONS
CORPORATION, 601 Clearwater Park Road, West Palm Beach, Florida 33406
("Licensee") agree as follows respecting a license of exhibition rights in the
television series entitled "PROMISED LAND" (the "Series").
1. LICENSED RIGHTS. Subject to Licensee's fulfillment of all of its
obligations hereunder (including without limitations its payment obligations
under paragraph 6 below), EYEMARK hereby grants to Licensee the right to make up
to ten (10) PAX NET Telecasts (as hereinafter defined) of each program of the
Series Library (as hereinafter defined) during the License Term (as hereinafter
defined) in the Telecast Territory (as hereinafter defined) in accordance with
the terms and conditions of this agreement.
2 PAXNET TELECAST. NET "PACX Telecast" means a simultaneous telecast,
transmission and/or exhibition by the television network now known as the PAX
NET network (i e., the network owned and/or controlled by Licensee) distributed
by any or all of the following methods or outlets to homes: over-the-air free
broadcast television stations, multichannel, multipoint distribution systems
("MMDS"), local/regional cable channels (and no national channel), encrypted
direct-to home satellite, Password Protected "Web-TV," and Password Protected
Internet Television, as defined hereinbelow. EYEMARK agrees that, in lieu of
distribution on the Internet by means of Password Protected Internet Television,
Licensee may submit to EYEMARK an alternative proposal for an effective
mechanism to preclude Internet users outside the Telecast Territory from
accessing the telecast or exhibition, which proposal shall be subject to
EYEMARK's prior written approval, not to be unreasonably withheld. The
television devices, methods and improvements referred to herein include so
called "booster" or "translator" stations and relay systems, as well as
satellite or antenna systems which receive or retransmit or redistribute
television signals by wire or cable correction or home satellite devices to
television receiving sets. The term "Internet" means a global network of
interconnected computer networks, each using the Transmission Control
Protocol/Internet Protocol and/or such other standard network interconnection
protocols as may be adopted from time to time, which is used to transmit content
that is directly or indirectly delivered to a computer or other digital
electronic device for display to an end-user, whether such content is delivered
through on-line browsers, off-line browsers, or through "push" technology,
electronic mail, broadband distribution, satellite, wireless or otherwise. The
term "Password Protected" means access which is limited to users that lawfully
obtain and input a sensitive password which can neither be obtained nor used
outside of the Telecast Territory.
3. LICENSE TERM. The "License Term" shall be for an initial four (4)
year period commencing August 28, 2000 and continuing through and including
August 27, 2004. If CBS
-1-
<PAGE> 97
(or any successor network licensee of new Series episodes) elects to order
additional original new episodes of the Series for any broadcast season(s)
subsequent to the 1997/1998 broadcast season, then provided that the network
broadcast of new Series episodes is in prime time the License Term shall
automatically be extended by eight (8) months for each such broadcast season(s)
for which new episodes are produced; provided, however, that with respect to
extension of the Series Term for original new Series episodes produced for the
2002/2003 broadcast season only, the Series Term shall be further extended by an
additional one (l) year period (i.e., a total extension of twenty (20) months).
If CBS does not elect to order production of new Series episodes (and provided
there is no successor network licensee of new Series episodes) for the 1998/1999
and/or the 1999/2000 broadcast seasons, then the four (4) year License Term may
instead commence, at Licensee's option, August 28 of the broadcast season
immediately subsequent to the last network broadcast season of the Series (e.g.,
September 1, 1998, if the Series is not picked up for the 1998/1999 broadcast
season).
4. SERIES LIBRARY. At the commencement of the License Term, the "Series
Library" shall include all Series episodes produced for initial broadcast over
the CBS Television Network ("CBS Broadcast") in the 1996/1997, 1997/1998
broadcast seasons, respectively, and the 1998/1999 and 1999/2000 broadcast
seasons if the Series is ordered for network broadcast by CBS (or any successor
network licensee) for such applicable broadcast season. EYEMARK represents and
warrants that (subject to the occurrence of any Force Majeure Event, as defined
the Terms and Conditions attached hereto) upon commencement of the License Term,
the Series Library shall include no fewer than forty-four (44), one-hour Series
episodes. In addition, the Series Library shall include all episodes produced
for initial CBS Broadcast (or for initial broadcast by any successor network
licensee) in any subsequent broadcast seasons, effective upon their respective
"Date of Availability". For each such subsequent broadcast season of new Series
episodes, if any, the Date of Availability shall be the last Monday in the month
of August following such applicable broadcast season. Nothing contained herein
shall obligate CBS to produce any additional new Series episodes, or to
broadcast or license the broadcast of the Series over the CBS (or any other)
Television Network.
5. TELECAST TERRITORY. The "Telecast Territory" shall include the
United States, its territories and possessions and Puerto Rico (English language
only)
6 PAYMENT. For each episode of the Series Library, Licensee agrees to
pay EYEMARK the following license fees:
(a) For each Series Library episode produced for initial network
broadcast for each of the 1996/1997 through and including the 1999/2000
broadcast seasons, Licensee agrees to pay EYEMARK the per episode sum of Four
Hundred Thousand Dollars ($400,000) per one-hour of programming (i.g. the
licensee fee for a two-hour episode shall be $800,000);
(b) For each Series Library episode produced for initial network
broadcast in
-2-
<PAGE> 98
any season subsequent to the 1999/2000 broadcast (i.e., commencing with the
2000/2001 broadcast season), the license fee shall be increased by five percent
(5%) on annual cumulative basis.
Each episodic fee shall constitute payment in full for up to ten (10)
PAX NET Telecasts of each such Series Library episode. Twenty percent (20%) of
the aggregate episodic license fees for all available Series Library episodes
shall be paid on or before December 31, 1997, with the balance of such fees to
be payable in forty-eight (48) equal consecutive monthly installments thereafter
commencing September 1, 2000 (provided that if the License Term commences
earlier, the payments shall commence September 1 of such applicable year). For
each additional broadcast season to become available as part of the Series
Library. Licensee shall pay the aggregate fees for such additional episodes in
forty-eight (48) equal monthly payments payable over forty-eight (48)
consecutive months commencing September 1 of the broadcast season of the Date of
Availability of such episodes; provided, however, that if the remaining period
of the License Term is less than forty-eight (48) consecutive months from the
applicable Date of Availability, the outstanding balance shall immediately
become payable in equal consecutive monthly installments over the balance of the
License Term.
7. SCHEDULING OF TELECAST: Licensee shall have the right to schedule
its PAX NET Telecasts during primetime or non-primetime viewing hours or any
combination hereof, at its election; provided, however, that no such telecast
shall occur during the regularly scheduled time period of any CBS Broadcast (or
broadcast by any successor network licensee of new Series episodes, if
applicable) of the Series, as it may change from time to time. In connection
therewith, EYEMARK acknowledges and agrees that such CBS Broadcast protection
shall only extend to prohibit Licensee from exhibition of the Series Library in
up to two (2) different time periods in two (2) time zones. (For example, if the
CBS Broadcast occurs at 8:00 PM Pacific and East Standard Time and 7:00 PM
Central Time, then each such time period will be protected in the relevant time
zone. However, if the CBS Broadcast occurs in more than two (2) time periods in
different time zones (e.g. 6:00 PM Pacific, 7:00 PM Central and 8:00 PM Eastern)
then CBS (or any successor network Licensee) shall only have the right to
protect against concurrent broadcast in two (2) of such three (3) times zones
(as selected by CBS)). Licensee shall have the right to take a double run of an
episode (i.e. to treat two (2) PAX NET Telecasts of a Series Library Episode
during any twenty-four (24) hour period as one (1) PAX NET Telecast); provided,
however, that in the event any such double run triggers the payment of
additional residuals (i,e. each of the runs of the double runs requires payment
of residuals), Licensee agrees to pay such additional residuals.
8. TELECAST EXCLUSIVITY. During the License Term, the Series Library
shall be exclusive to Licensee in the Telecast Territory in television
(including free pay, subscription or other form(s) of television exploitation),
subject to CBS's right to continue to produce and broadcast the Series or to
license the broadcast of new Series episodes (along with repeats) to any other
television network, should CBS elect not to broadcast the Series in subsequent
seasons. It
-3-
<PAGE> 99
is expressly understood and agreed that between EYEMARK and Licensee, EYEMARK
retains all other rights with respect to the Series and the Series Library,
including, without limitation, all copyright (including all rights to receive
cable and satellite copyright royalties) and all rights of exploitation outside
the Telecast Territory and, within the Telecast Territory, in-flight, home
video, theatrical and non theatrical rights, all foreign language versions and
dubbing rights, and all ancillary and subsidiary rights in the Series and Series
Library, including, without limitation, music, phonographic recording rights,
publishing and merchandising rights (subject to the grant of rights in Paragraph
11 herein-below). With respect to such reserved rights, EYEMARK retains the
right freely to exploit such rights during the License Term. Licensee
acknowledges and agrees that any spillover within the Telecast Territory from
telecasts originating outside the Telecast Territory shall not be deemed to be a
breach of this agreement by EYEMARK.
9. PUBLICITY AND ADVERTISING. Licensee shall have the right to
publicize and advertise all authorized exploitation hereunder of the episodes
throughout the Telecast Territory during the License Term. In connection
therewith, Licensee shall have the right to: (I) publish and to license and
authorize others to publish synopses and summaries of and excerpts (not to
exceed one hundred (100) words in length) from the episodes in newspapers,
magazines, trade periodicals and in all other media of advertising and
publicity; (ii) broadcast by radio and television and to license and authorize
others to so broadcast, prior to telecast of a Series episode, clips from that
episode (not to exceed two (2) minutes in length); and (iii) in connection with
such clips, to use the name, likeness and voice of any actor rendering services
in connection with all episodes (i.e. series regulars); provided however that
all of the foregoing contained in Paragraph 9 shall be subject to any
limitations furnished by EYEMARK (including contractual restrictions) and
provided further that any such use shall not constitute an express or implied
endorsement of any product or service. In any print advertisement Licensee shall
include the logo and trademark/tradename for EYEMARK and/or CBS Productions, as
designated by EYEMARK.
10. PROMOTIONAL MATERIAL EYEMARK agrees to provide to Licensee, for use
only during the License Term in The Telecast Territory and only in connection
with promotion of a PAX NET Telecast of the Series, all promotional material
made available to EYEMARK by the CBS Television Network, including, without
limitation, all on-air promotional spots and all original artwork and/or
graphics used in connection with the preparation of any print media or on-air
campaigns or promotions for the Series. EYEMARK acknowledges and agrees that
Licensee shall have the right to edit, reformat, and/or use all or any portion
of any such furnished materials. Notwithstanding the foregoing, Licensee
acknowledges and agrees that it will not be furnished with any promotional
materials in which the CBS Television Network does not have sufficient rights or
clearances for Licensee's use. Licensee further acknowledges that it will not be
furnished with any Series promotional material which is part of any CBS
institutional advertising promotion or campaign (e.g., any "Welcome Home"
spots), and that it will not be furnished with any such materials that currently
are in use in
-4-
<PAGE> 100
connection with promotion of broadcast of the Series. In addition, Licensee
agrees to finish any credits required under any applicable guild agreements and
further agrees that it will abide by any contractual obligations of CBS in
connection with the furnishing of any such credits; provided, that EYEMARK has
timely advised Licensee of any such contractual restrictions and/or requirements
in writing.
11. SERIES LICENSED MERCHANDISE. EYEMARK agrees prospectively (i.e.,
with respect to all future agreements) to cause its Series merchandise licensees
and/or merchandising agents to make available to Licensee any Series merchandise
at wholesale pricing with quantity discounts based on bulk purchases. With
respect to any Series licensing and/or agency agreements entered into prior to
the date of this agreement, EYEMARK shall be obligated to use best efforts to
secure for Licensee such merchandise at quantity discounts. EYEMARK further
agrees that Licensee may resell such Series merchandise, subject to written
approval in each instance by EYEMARK (to be exercised in its sole discretion)
with respect to each and all of the following: (a) the method and manner of
resale distribution (including approval of all distribution methods and
outlets), (b) the pricing; (c) all advertising, marketing and publicity in
connection with such resale and (d) the use of any of the trademarks and logos
in connection with the Series. EYEMARK will consider in good faith all proposals
by Licensee for additional license agreements to be entered into between EYEMARK
and manufacturers of Series merchandise; provided that, as between EYEMARK and
Licensee, EYEMARK shall have the sole right of control and approval, to be
exercised in EYEMARK'S sole discretion, over all such agreements and all the
terms and conditions thereof. In connection with the grant of rights hereunder,
Licensee acknowledges that EYEMARK is subject to a pre-existing exclusive agency
representation agreement in connection with licensing of Series merchandise and
that all rights granted hereunder shall be subject to any limitations imposed
thereunder.
12. RESIDUALS. EYEMARK shall have responsibility for payment of
residuals in connection with Licensee's authorized PAX NET Telecasts hereunder.
In connection therewith, the parties acknowledge and agree that the license fees
payable under paragraph 6 above are predicated on payment by EYEMARK of
residuals at the domestic syndication rerun rate under all applicable guild
agreements. In the event that any PAX NET Telecasts trigger payment of residuals
at a higher rate (e.g., a "network" rerun rate), the parties agree that the
license fees shall be increased by the amount of any excess residuals (i.e., by
the amount of the difference between the applicable domestic syndication rate
and the actual rate charged for the run, times the number of telecasts for which
such rate is charged). In the event that Licensee negotiates for and causes a
reduction in the residual rate to be charged for the PAX NET Telecasts hereunder
below the then-current domestic syndication rate, CBS agrees to reduce the
license fees by the amount of any such savings. Upon request by EYEMARK,
Licensee agrees to execute a standard guild Assumption Agreement for payment of
any "excess residuals" in the event any guild makes a determination that any
rate higher than the domestic syndication rerun rate will apply to any PAX NET
Telecast under this Agreement.
-5-
<PAGE> 101
13. ADDITIONAL PROVISIONS. This agreement includes additional terms
and conditions attached hereto as "Terms and Conditions" and incorporated
herein by this reference
14. NOTICES. Notices must be in writing, certified mail, telegraphed,
hand-delivered, or sent by facsimile to the party concerned, effective on the
date so sent, at the address specified in the opening paragraph of this
agreement, or at such other addresses as may be subsequently designated in
writing by such party. When sent by certified mail, notice must also be
accompanied by send a facsimile copy thereof. When sent to EYEMARK, notices
shall be to the attention of the Senior Vice President, Business Affairs, with a
courtesy copy to the attention of the CBS Law Department at 7800 Beverly
Boulevard, Los Angeles, California 90036. When sent to Licensee, notices shall
be to the attention of President, Paxson Television Network, with a courtesy
copy to the attention of the General Counsel, Paxson Television Network
15. CONFIDENTIALITY. Neither party shall at any time in any manner
or form publicize or advertise the existence of, or the financial terms of, this
agreement, except as mutually agreed by the parties or otherwise required under
law. The parties shall mutually approve the content and timing of press releases
relating to this agreement; provided, however, that the parties agree that a
mutually approved press statement will be released not later than November 18,
1997 (provided this agreement has been fully executed by such date).
IN WITNESS WHEREOF the parties have executed this agreement as of the
date first written above.
EYEMARK ENTERTAINMENT
A Business Unit of CBS Inc.
By /s/
-----------------------------
Its President
-----------------------------
ACCEPTED AND AGREED:
PAXSON COMMUNICATIONS CORPORATION
By /s/
------------------------------
Its Chairman
------------------------------
DB
-6-
<PAGE> 102
SCHEDULE IV
TO BORROWER'S SECURITY AGREEMENT
VEHICLES
Not Applicable.
<PAGE> 103
SCHEDULE V
TO BORROWER'S SECURITY AGREEMENT
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
a. File in the following:
Georgia - Secretary of State and DeKalb County
b. Precautionary Statement - Should file in the following:
Virginia - Secretary of State and City of Norfolk
Florida - Secretary of State
Patent and Trademark Filings
See Attached.
Other Actions
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 23,716,665
<SECURITIES> 0
<RECEIVABLES> 24,612,873
<ALLOWANCES> 1,654,697
<INVENTORY> 0
<CURRENT-ASSETS> 50,313,191
<PP&E> 192,388,643
<DEPRECIATION> 41,543,283
<TOTAL-ASSETS> 783,237,089
<CURRENT-LIABILITIES> 26,272,658
<BONDS> 227,877,914
204,083,982
0
<COMMON> 58,950
<OTHER-SE> 190,120,919
<TOTAL-LIABILITY-AND-EQUITY> 783,237,089
<SALES> 61,253,183
<TOTAL-REVENUES> 61,253,183
<CGS> 0
<TOTAL-COSTS> 66,070,188
<OTHER-EXPENSES> 188,874
<LOSS-PROVISION> 1,272,526
<INTEREST-EXPENSE> 27,695,908
<INCOME-PRETAX> (32,324,039)
<INCOME-TAX> 0
<INCOME-CONTINUING> (32,324,039)
<DISCONTINUED> 66,127,067
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,379,373
<EPS-PRIMARY> 0.25
<EPS-DILUTED> 0.25
</TABLE>
