Stock Purchase Agreement - Sinclair Broadcast Group Inc. and Superior Communications Group Inc.
STOCK PURCHASE AGREEMENT
by and between
SINCLAIR BROADCAST GROUP, INC,
and
THE STOCKHOLDERS OF
SUPERIOR COMMUNICATIONS GROUP, INC.
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TABLE OF CONTENTS
Page
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SECTION 1 DEFINITIONS.........................................................2
SECTION 2 SALE OF SHARES......................................................2
SECTION 3 PURCHASE PRICE......................................................2
3.1 Payment......................................................2
3.2 Disbursing Agent.............................................3
3.3 Funded Debt..................................................3
SECTION 4 CLOSING.............................................................3
SECTION 5 REPRESENTATIONS AND WARRANTIES OF SELLERS...........................3
5.1 Representations as to Shares, etc............................3
5.2 Organization and Good Standing...............................4
5.3 Capitalization...............................................4
5.4 No Conflicts.................................................4
5.5 Real Property................................................5
5.6 Personal Property............................................5
5.7 Financial Statements.........................................5
5.8 FCC..........................................................5
5.9 Intellectual Property........................................6
5.10 Employee Benefit Plans.......................................6
5.11 Employee Relations...........................................6
5.12 Insurance....................................................7
5.13 Material Contracts...........................................7
5.14 Comipliance with Laws........................................7
5.15 Litigation...................................................7
5.16 No Brokers...................................................7
5.17 Consents.....................................................7
5.18 Environmental................................................8
5.19 Tax Matters..................................................8
SECTION 6 REPRESENTATIONS AND WARRANTIES OF PURCHASER.........................9
6.1 Organization and Good Standing...............................9
6.2 Execution and Effect of Agreement............................9
6.3 No Conflicts.................................................9
6.4 Consents....................................................10
6.5 Availability of Funds.......................................10
6.6 Litigation..................................................10
6.7 No Brokers..................................................10
6.8 FCC.........................................................10
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SECTION 7 ADDITIONAL PROVISIONS REGARDING REPRESENTATIONS AND
WARRANTIES..........................................................11
7.1 Limitation; Survival.......................................11
7.2 Right to Update Schedules..................................11
7.3 Knowledge of Purchaser or Sellers..........................11
7.4 Schedules and Exhibits.....................................11
SECTION 8 TAX MATTERS.......................................................11
8.1 Section 338 Election.......................................11
SECTION 9 ADDITIONAL COVENANTS AND UNDERTAKINGS.............................12
9.1 Further Assurances and Assistance..........................12
9.2 Access to Information......................................12
9.3 Conduct of Business Prior to Closing.......................12
9.4 H-S-R Act..................................................13
9.5 FCC Application............................................13
9.6 Books and Records..........................................14
9.7 Employees and Employee Benefits............................14
9.8 Control of Stations........................................14
SECTION 10 INDEMNIFICATION...................................................15
10.1 Indemnification of Purchaser by Sellers....................15
10.2 Indemnification of Sellers by Purchaser....................15
10.3 Limitations and Other Provisions Regarding
Indemnification Obligations................................15
10.4 Notice of Claim Defense of Action..........................16
SECTION 11 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARTIES TO
CLOSE...............................................................18
11.1 Conditions to the Obligation of Purchaser..................18
11.2 Conditions Precedent to the Obligation of
Sellers....................................................19
SECTION 12 DELIVERIES AT THE CLOSING........................................19
12.1 Deliveries by Sellers......................................19
12.2 Deliveries by Purchaser....................................20
SECTION 13 EXPENSES.........................................................20
SECTION 14 TERMINATION......................................................20
SECTION 15 NOTICES..........................................................21
SECTION 16 SELLERS' AGENTS..................................................22
16.1 Sellers' Agents............................................22
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SECTION 17
MISCELLANEOUS........................................................23
17.1 Headings....................................................23
17.2 Schedules and Exhibits......................................23
17.3 Execution in Counterparts...................................23
17.4 Entire Agreement............................................23
17.5 Governing Law...............................................23
17.6 Modification................................................23
17.7 Successors and Assigns......................................23
17.8 Waiver......................................................23
17.9 Severability................................................24
17.10 Announcements...............................................24
17.11 Specific Performance........................................24
ANNEX 1 DEFINITIONS...........................................................1
ANNEX 2 Number of Shares......................................................7
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of
this 1st day of March, 1996, is entered into by and among Sinclair Broadcast
Group, Inc., a Maryland corporation ("Purchaser"), and PNC Capital Corp, Primus
Capital Fund II Limited Partnership, Albert M. Holtz, Perry A. Sook, Richard J.
Roberts, George F. Boggs, Albert M. Holtz, as Trustee for the Irrevocable Deed
of Trust for Tara Ellen Holtz, dated December 6, 1994, and Albert M. Holtz, as
Trustee for the Irrevocable Deed of Trust for Meghan Ellen Holtz, dated December
6, 1994 (each a "Seller" and collectively, "Sellers").
WITNESSETH:
WHEREAS, Sellers own collectively all of the issued and
outstanding shares of capital stock (the "Stock") of Superior Communications
Group, Inc,, a Delaware corporation (the "Company"); and
WHEREAS, the Company owns all of the capital stock of Superior
Communications of Kentucky, Inc., a Delaware corporation, which owns the assets
(other than the FCC license) of and operates television station WDKY-TV in
Lexington, KY ("WDKY"); and
WHEREAS, the Company also owns all of the capital stock of
Superior Communications of Oklahoma, Inc., an Oklahoma corporation, which owns
the assets (other than the FCC license) of and operates television station
KOCB-TV in Oklahoma City, OK ("KOCB"); and
WHEREAS, Superior OK License Corp. and Superior KY License
Corp., each an indirect subsidiary of the Company, respectively hold the
licenses granted by the Federal Communications Commission (the "FCC") pursuant
to which KOCB and WDKY (each a "Station" and collectively the "Stations") are
permitted to operate (the "FCC Licenses"); and
WHEREAS, Sellers desire to sell to Purchaser, and Purchaser
desires to purchase from Sellers, all of the outstanding shares of Stock;
NOW, THEREFORE, for the purpose of consummating the above
transaction and in consideration of the promises and mutual covenants herein
contained, Sellers and Purchaser hereby agree as follows:
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SECTION 1
DEFINITIONS
As used in this Agreement, capitalized terms shall have the
meanings specified in the text hereof or on Annex 1 hereto (which is
incorporated herein by reference) , which meanings shall be applicable to both
the singular and plural forms of the terms defined.
SECTION 2
SALE OF SHARES
At the Closing, each Seller, severally and not jointly, shall
sell, assign, transfer and deliver to Purchaser, and Purchaser shall purchase
from each Seller, that number and class of shares of Stock as is set forth
opposite the name of each Seller in Annex 2 hereto.
SECTION 3
PURCHASE PRICE
3.1 Payment. In consideration for the sale of the Stock, Purchaser
shall pay to Sellers the aggregate amount of $63,000,000 plus the Cash on Hand
less the principal amount of all Funded Debt (the "Purchase Price") , payable as
follows:
(1) $3,150,000 simultaneously with the execution and delivery
of this Agreement, to be held in escrow by Kirkpatrick & Lockhart LLP
as Escrow Agent pursuant to the Escrow Agreement in the form of Exhibit
A hereto (the "Deposit Escrow Agreement"). At the Closing, Purchaser
and Sellers shall cause such $3,150,000 to be released to the
Disbursing Agent (as hereinafter defined) and shall cause any interest
or other additional amounts in such escrow to be released to Purchaser;
(2) $1,000,000 at the Closing to be held in Escrow (the
"Indemnification Escrow") by PNC Bank National Association as Escrow
Agent pursuant to the Indemnification Escrow Agreement in the form of
Exhibit B hereto (the "Indemnification Escrow Agreement") ; and
(3) The balance of the Purchase Price at the Closing, by wire
transfer of federal or other immediately available funds to the
accounts specified by the Sellers' Agents or, to the extent no such
accounts are specified, to the following bank account of the Disbursing
Agent:
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WIRE TRANSFER INSTRUCTIONS
FOR KIRKPATRICK & LOCKHART LLP ESCROW ACCOUNT
Bank: PNC Bank
Pittsburgh, Pennsylvania
ABA Routing No: 043-000096
Kirkpatrick & Lockhart LLP IOLTA Account No: 105 11592
3.2 Disbursing Agent. The Disbursing Agent shall disburse the
Purchase Price to Sellers in accordance with the Disbursement Agreement.
3.3 Funded Debt. At the Closing, Purchaser shall also cause the
Companies to pay in full all Funded Debt.
SECTION 4
CLOSING
The closing of the transaction contemplated by this Agreement
(the "Closing"), subject to fulfillment or waiver of the conditions set forth in
Section 10 hereof, shall be held at the offices of Kirkpatrick & Lockhart LLP,
1500 Oliver Building, Pittsburgh, PA 15222, at 10:00 A.M. local time (but shall
be deemed to have occurred at the close of business on the immediately preceding
day) , on the later to occur of (a) five Business Days after all applicable
waiting periods under the H-S-R Act shall have expired or terminated or (b) five
Business Days after the Initial Orders (the date of Closing being the "Closing
Date") , unless the parties shall mutually agree upon a different date or
location.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF SELLERS
5.1 Representations as to Shares, etc. Each Seller, severally and not
jointly, hereby represents and warrants to Purchaser that: (i) such Seller is
the record and the beneficial owner of all the shares of the Stock set forth
opposite such Seller's name in Annex 2 hereto, except that the beneficial owners
of those shares of Stock indicated on Annex 2 as being held pursuant to
instruments of trust are as set forth in such instruments of trust; (ii) such
Seller (and the beneficial owner of such stock to the extent that such
beneficial owner is different from such Seller) owns all of the shares of the
Stock set forth opposite such Seller's name in Annex 2 hereto free and clear of
any lien, security interest, pledge or encumbrance other than those set forth on
Schedule 5.1 hereof, all of which will be released at or before the Closing;
(iii) upon transfer of the Stock set forth opposite such Seller's name in Annex
2 hereto to Purchaser at the Closing, Purchaser will have legal and equitable
title to such Stock, free and clear of any lien, security
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interest, pledge or encumbrance, except for any lien, security interest, pledge
or encumbrance created by Purchaser; (iv) such Seller has full power and
authority to enter into this Agreement, and the consummation of the transactions
contemplated hereby has been duly authorized by all necessary action on the part
of such Seller; (v) this Agreement has been duly executed and delivered by such
Seller and constitutes a legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and to the exercise of judicial
discretion in accordance with general principles of equity (whether applied by a
court of law or equity); and (vi) neither the execution and delivery of this
Agreement by such Seller nor the consummation of the transactions contemplated
hereby by such Seller will (a) violate any of the provisions of any governing
documents of such Seller if it is an entity, (b) prevent or materially interfere
with such Seller's ability to perform its obligations hereunder, or (c) conflict
with or result in a breach of, or give rise to a right of termination of, or
accelerate the performance required by the terms of any judgment, court order or
consent decree, or any agreement, indenture, mortgage or instrument to which
such Seller is a party or to which its property is subject, or constitute a
default thereunder, where such conflict, breach, right of termination,
acceleration or default would prevent or materially interfere with such Seller's
ability to perform hereunder.
Sellers, jointly and severally, hereby represent and warrant
to Purchaser:
5.2 Organization and Good Standing. Each of the Companies is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation as listed on Schedule 5.2 hereto, and has
full corporate power and authority to carry on its business as it is now being
conducted. Each of the Companies is qualified as a foreign corporation and is in
good standing under the laws of each jurisdiction in which the conduct of its
business or the ownership of its properties requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect.
5.3 Capitalization. The designations of each class of the capital stock
of each of the Companies and the number of authorized and issued and outstanding
shares thereof is as described on Schedule 5.3. All the shares of the Stock have
been validly issued and are fully paid and nonassessable. Except as described on
Schedule 5.3, (i) no shares of capital stock of the Companies are held in
treasury, (ii) there are no other issued or outstanding equity securities of any
of the Companies and (iii) there are no other issued or outstanding securities
of any of the Companies convertible at any time into equity securities of any of
the Companies. None of the Companies is subject to any commitment or obligation
that would require the issuance or sale of additional shares of capital stock of
any of the Companies at any time under options, subscriptions, warrants, rights
or any other obligations. None of the Companies has any equity interest in any
corporation, partnership, joint venture or other entity, other than another
Company.
5.4 No Conflicts. Except as described on Schedule 5.4, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will
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(a) violate any provision of applicable law, rule and regulation which violation
would prevent materially or materially interfere with Sellers' ability to
perform hereunder or have a Material Adverse Effect, or (b) conflict with or
result in a breach of, or give rise to a right of termination of, or accelerate
the performance required by the terms of any judgment, court order or consent
decree, or any agreement, indenture, mortgage or instrument to which any of the
Companies is a party or to which their property is subject, or constitute a
default thereunder, where such conflict, breach, right of termination,
acceleration or default would prevent or materially interfere with Sellers'
ability to perform hereunder or have a Material Adverse Effect.
5.5 Real Property. All interests of any of the Companies in and to any
Real Property are listed on Schedule 5.5 hereto, and true and complete copies of
all leases related thereto have heretofore been delivered to Purchaser. The
Companies have good and marketable title to each parcel of Real Property listed
on Schedule 5.5 that is identified thereon as being owned by the Companies, free
and clear of all liens, mortgages and encumbrances, subject only to Permitted
Exceptions and the matters shown on Schedule 5.5. To the Companies' Knowledge,
none of the Companies is in material default or has received written notice of
default under any lease of Real Property that has not been cured or withdrawn.
5.6 Personal Property. Except (a) as set forth on Schedule 5.6 hereto,
(b) for taxes not yet due and payable and (c) liens, security interests or
encumbrances that do not materially impair the use thereof, the Companies have
good title to all of their material items of tangible personal property and
assets, free and clear of all liens, security interests and encumbrances. Taken
as a whole, the condition of the tangible personal property of the Companies is
adequate for its present use by the Companies.
5.7 Financial Statements. The Companies have provided or made available
to Purchaser copies of the Financial Statements and the Partnership Financial
Statements. The Financial Statements and the Partnership Financial Statements
have been prepared in accordance with GAAP consistently applied with prior
periods, except as may be noted therein. The Financial Statements and the
Partnership Financial Statements present fairly, in all material respects, the
financial position of the Companies (or the Partnership, as the case may be) as
at and for the periods indicated therein. Except as set forth on Schedule 5.7
hereto, the Business has been conducted in the ordinary course since December
31, 1994, and the Companies have not suffered an adverse change in their
business or financial condition since December 31, 1994, that would have a
Material Adverse Effect. The absolute value of the consolidated pre-tax income
or loss of the Companies for 1995 is less than $4,000,000.
5.8 FCC. The Companies are operated in material compliance with the
terms of the FCC Licenses, the Communications Act of 1934, as amended, and
applicable rules, regulations and policies of the FCC ("FCC Rules and
Regulations") . All FCC Licenses, a true and complete list of which is set forth
on Schedule 5.8 and true and complete copies of each of which have been
delivered to Purchaser, are valid and in full force and effect. Except as set
forth on Schedule 5.8, no application, action or proceeding is pending for the
renewal or modification of any of the FCC Licenses and, to the Companies'
Knowledge, there is not now before the FCC
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any investigation or complaint against any of the Companies or relating to the
Stations, the unfavorable resolution of which would impair the qualifications of
the applicable Companies to hold any material FCC Licenses. Except as set forth
on Schedule 5.8, there is no proceeding pending before the FCC, and there is no
outstanding notice of violation from the FCC, with respect to the Stations.
Except as set forth on Schedule 5.8, no order or notice of violation has been
issued by any governmental entity which permits, revocation, adverse
modification or termination of any FCC License. All documents required by 47
~C.F.R, Section 73.3526 to be kept in the Stations, public inspection files are
in such file, other than documents the absence of which either individually or
in the aggregate would be immaterial to the conduct of the operations of the
Companies as presently conducted, or the Stations or the ability of the
applicable Companies to renew the FCC Licenses, and such file will be maintained
in proper order and complete up to and through the Closing Date, except for any
such immaterial documents.
5.9 Intellectual Property. The Companies have delivered or made
available to Purchaser a complete list of all Intellectual Property on the date
hereof. To the Companies' Knowledge, except as otherwise set forth on Schedule
5.9 hereto, the Companies own such Intellectual Property free and clear of any
royalty, lien, encumbrance or charge. Except as set forth on Schedule 5.9 during
the two year period immediately preceding the date of this Agreement, none of
the Companies has received any written notice or written claim that any such
Intellectual Property is not valid or enforceable, or of any infringement upon
or conflict with any patent, trademark, service mark, copyright or trade name of
any third party by the Companies. Except as set forth on Schedule 5.9, during
the two year period immediately preceding the date of this Agreement, none of
the Companies has given any notice of infringement to any third party with
respect to any of the Intellectual Property.
5.10 Employee Benefit Plans. Attached as Schedule 5.10 is a complete
and accurate list, as of the date hereof, of all employee benefit plans, all
employee welfare benefit plans, all employee pension benefit plans, all
multi-employer plans, and all multi-employer welfare arrangements (as defined in
Sections 3(1), (2), (37), and (40), respectively, of ERISA), which are currently
maintained and/or sponsored by the Companies, or to which the Companies
currently contribute, or have an obligation to contribute in the future,
including, without limitation, employment agreements and any other agreements
containing "golden parachute" provisions and deferred compensation agreements
(collectively, the "Plans"), together with a list of employees covered thereby.
Complete and accurate copies of all Plans and any trusts related thereto have
been provided to Purchaser. Schedule 5.10 also contains a list of all of the
plans that have been terminated by any Company within the past three years.
5.11 Employee Relations. Except as set forth on Schedule 5.11 hereto,
the employees of the Companies are not covered by any collective bargaining
agreement. No strike, work stoppage,! slowdown or labor dispute involving any
employees of the Companies has occurred during the past three years or, to
Companies, Knowledge, is threatened. Schedule 5.11 also contains a list of all
employees of any Company and their salary or rate of pay.
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5.12 Insurance. Schedule 5.12 hereto contains a list of all material
insurance policies concerning the Business, other than employee-benefit related
insurance policies. To the Companies' Knowledge, all such policies are in full
force and effect and no notice of cancellation or termination has been received.
5.13 Material Contracts. Schedule 5.13 hereto contains a list of all
the Material Contracts, and true copies of such agreements have been furnished
to Purchaser or have been made available to Purchaser. To the Companies'
Knowledge, there exists no default or event which, with notice or lapse of time,
or both, would constitute a default by any party to any such Material Contract,
except where such default would not have a Material Adverse Effect. Neither
Sellers nor the Companies have received written notice that any party to any
Material Contract intends to cancel or terminate any such agreement or to
exercise or not to exercise any option to renew thereunder.
5.14 Comipliance with Laws. Except as set forth on Schedule 5.14, to
the Companies' Knowledge, each of the Companies is in compliance with all
applicable Federal, state and local laws, rules and regulations, except where
the failure to so comply would not have a Material Adverse Effect.
5.15 Litigation. Except as set forth on Schedule 5.15 hereto, there is
no suit, claim, action, proceeding or arbitration pending or, to the Companies'
Knowledge, threatened against (i) any of the Companies, or (ii) against any of
Sellers which seeks to enjoin or obtain damages in respect of the transactions
contemplated hereby. There is no outstanding citation, order, judgment, writ,
injunction, or decree of any court, government, or governmental or
administrative agency against or affecting the Business or the Companies which
could reasonably be expected to have a Material Adverse Effect, except as
disclosed on Schedule 5.15.
5.16 No Brokers. Neither any Company nor any Seller nor anyone acting
on the behalf thereof has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the sale of the Stock and the transactions contemplated by this Agreement,
other than the Company's engagement of Communications Equity Associates, Inc, as
exclusive agent for the Companies and Sellers, to attempt to arrange the
disposition of the Stock.
5.17 Consents. Except (a) for filings, consents, approvals and
authorizations that the failure to obtain or make would not have a Material
Adverse Effect, (b) as set f orth on Schedule 5.17 hereto, (c) for filings
pursuant to the H-S-R Act, or (d) the applications requesting the approval and
consent of the FCC to the transactions contemplated by this Agreement (the "FCC
Applications"), no filing, consent, approval or authorization of any
governmental authority or of any third party on the part of any Seller or any of
the Companies is required in connection with the execution and delivery of this
Agreement by Sellers or the consummation of any of the transactions contemplated
hereby.
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5.18 Environmental. Except as set forth on Schedule 5.18 hereto:
(a) To the Companies' Knowledge, all of the operations of the Companies
at or from any Real Property comply in all material respects with applicable
Environmental Laws. To the Companies, Knowledge, none of the Companies has
engaged in or permitted any operations or activities upon any of the Real
Property for the purpose of or involving the treatment, storage, use,
generation, release, discharge, emission, or disposal of any Hazardous
Substances at the Real Property, except in substantial compliance with
applicable Environmental Laws.
(b) None of the Real Property is listed or, to the Companies'
Knowledge, proposed for listing on the National Priorities List pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
42 U.S.C. 9601 et seq., or any similar inventory, register or identification of
sites requiring investigation or remediation maintained by any state or other
governmental authority. The Companies have not received any written notice from
any governmental entity or third party of any actual or threatened Environmental
Liabilities with respect to the Real Property or the conduct of the Business.
(c) To the Companies' Knowledge, there are no conditions existing at
the Real Property that require, or which with the giving of notice or the
passage of time or both would likely require remedial or corrective action,
removal or closure pursuant to the Environmental Laws.
(d) To the Companies' Knowledge, the Companies have all the material
permits, authorizations, licenses, consents and approvals necessary for the
current conduct of the Business and for the operations on, in or at the Real
Property which are required under applicable Environmental Laws and are in
substantial compliance with the terms and conditions of all such permits,
authorizations, licenses, consents and approvals.
5.19 Tax Matters. Except as set forth on Schedule 5.19 hereto:
(a) All Returns with respect to any material Tax required to be filed
by, or with respect to, the Companies have been filed when due in timely
fashion. All Taxes shown as payable on such Returns have been paid when due in
timely fashion. Sellers have made available to Purchaser, for the last three
taxable years, copies of all income and franchise Tax Returns filed by, or with
respect to, the Companies. Sellers also have made available to Purchaser the
copies of all examination reports and statements of deficiencies assessed with
respect to the Companies for the last three taxable years.
(b) No Tax Proceeding is currently being conducted with respect to the
Companies and none of the Companies has received notification from any Tax
Authority that it intends to commence a Tax Proceeding with respect to any
Return.
(c) There are no agreements for the extension of the time for
assessment of any Taxes relating to the Companies.
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(d) There are no liens on the assets of the companies for any Tax
currently due and owing.
(e) None of the Sellers is a "foreign person" as that term is defined
in Section 1445 (f) (3) of the Code.
(f) There is not, and will not be as of the Closing, any agreement or
consent made under Section 341(f) of the Code affecting any of the Companies.
(g) None of the Companies has made, nor will become obligated to make,
as a result of any event connected with the transaction contemplated by this
Agreement, any "excess parachute payment" as defined in Section 28OG of the Code
(without regard to subsection (b)(4) thereof).
(h) All taxes of the Companies for the year 1995 either have been paid
or will be paid prior to the Closing.
SECTION 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers that:
6.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Maryland. Purchaser has full corporate power and authority to carry on its
business as it is now being conducted.
6.2 Execution and Effect of Agreement. Purchaser has full corporate
power and authority to enter into this Agreement. The consummation of the
transactions contemplated hereby has been duly authorized by all necessary
corporate action on the part of Purchaser. This Agreement has been duly executed
and delivered by Purchaser and constitutes a legal, valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors generally and to the exercise of
judicial discretion in accordance with general principles of equity (whether
applied by a court of law or equity).
6.3 No Conflicts.
(a) Except as provided in Sections 6.3(b) and 6.4 hereof, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (a) violate any of the provisions of the
charter or by-laws of Purchaser, (b) to Purchaser's Knowledge, violate any
provision of applicable law, rule or regulation which violation would have a
material adverse effect on the business or financial condition of Purchaser or
prevent or materially interfere with Purchaser's ability to perform hereunder or
(c) conflict with or result in
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a breach of, or give rise to a right of termination of, or accelerate the
performance required by the terms of any judgment, court order or consent
decree, or any agreement, indenture, mortgage or instrument to which Purchaser
is a party or to which its property is subject, or constitute a default
thereunder, except where such conflict, breach, right of termination,
acceleration or default would not have a material adverse effect on the business
or financial condition of Purchaser or prevent or materially interfere with
Purchaser's ability to perform hereunder.
(b) Purchaser has filed an application for consent to the assignment of
the FCC licenses associated with WSTR-TV~, Cincinnati, Ohio (the "WSTR
Application"), the Grade B contour of which overlaps the Grade B contour of
WDKY. Purchaser agrees that it will amend the WSTR Application to request a
waiver of the Commission's rules prohibiting the acquisition of television
stations with such overlapping contours and inform the Commission to give
precedence to the application for consent to the transfer of control of the
licensee of WDKY. Purchaser further agrees that it will take any and all actions
that may be reasonably necessary to ensure that the Initial Order will not be
delayed in any manner by any matter relating to the WSTR Application or WSTR-TV.
6.4 Consents. Except (i) as set forth on Schedule 6.4 hereto, (ii) for
filings pursuant to the H-S-R Act, or (iii) the FCC Applications, no filing,
consent, approval or authorization of any governmental authority or of any third
party on the part of Purchaser is required in connection with the execution and
delivery of this Agreement by Purchaser or the consummation of any of the
transactions contemplated hereby.
6.5 Availability of Funds. Purchaser has available and will have
available on the Closing Date sufficient funds to enable it to consummate the
transactions contemplated by this Agreement, including the payment of the
Purchase Price. At Sellers' request, Purchaser shall provide Sellers with
evidence reasonably satisfactory to Sellers of the availability of such funds.
6.6 Litigation. There is no suit, claim, action, proceeding or
arbitration pending or, to Purchaser's Knowledge, threatened against Purchaser
which seeks to enjoin or obtain damages in respect of the transactions
contemplated hereby.
6.7 No Brokers. Except for Alex Brown & Sons, Inc., neither Purchaser
nor anyone acting on its behalf has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the purchase of the Stock and the transactions contemplated by this
Agreement.
6.8 FCC. Except for the ministerial confirmation by the FCC that the 12
station national ownership limit in its existing regulations has been eliminated
by the enactment of the Communications Act of 1996, Purchaser is qualified to
acquire control of the FCC Licenses as contemplated by this Agreement under the
Communications Act of 1934 and the FCC Rules and Regulations, without any
requirement to obtain any waiver thereof. Except as described in Section 6.3(b)
, there is no state of affairs relating directly or indirectly to Buyer or its
plans for
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the Companies or the Stations that could reasonably be expected to result in a
refusal by the FCC to approve the transactions contemplated hereby or to delay
such approval.
SECTION 7
ADDITIONAL PROVISIONS REGARDING
REPRESENTATIONS AND WARRANTIES
7.1 Limitation; Survival. Except as specifically set forth herein or in
any Schedule, Exhibit or other document delivered pursuant hereto, neither party
has made any representation or warranty with respect to the transactions to be
consummated hereunder. Except as set forth in the last sentence of this Section
7.1, the representations and warranties herein and the obligations of the
parties shall survive the Closing for a period of one year. Sellers'
representations and warranties in Section 5.18 (environmental matters) hereof
shall survive the Closing for a period of two years and Sellers' representation
and warranties set forth in Section 5.19 (tax matters) shall survive until the
applicable statute of limitations for the imposition of that Tax has run,
provided, however, that any claims that have been made before such date shall
survive until the final resolution thereof.
7.2 Right to Update Schedules. Sellers shall have the right, without
being deemed to be in breach of its representations and warranties set forth in
this Agreement, to supplement or amend the Schedules to this Agreement with
respect to any matter arising after the date hereof or, as to any representation
and warranty that is limited to Companies' Knowledge, discovered by Sellers
between the date hereof and the Closing Date.
7.3 Knowledge of Purchaser or Sellers. If any party hereto (a "Knowing
Party") has knowledge upon its execution and delivery of this Agreement or at
Closing that any other party hereto (an "Other Party") is or will be in breach
of any representation or warranty made or to be made in this Agreement by such
other Party, then such Knowing Party shall not have any right or remedy
(including indemnification pursuant to Section 10 below) with respect to such
breach, and the Other Party will not be deemed to be in breach of such
representation or warranty.
7.4 Schedules and Exhibits. Disclosure of any fact or item in any
Schedule or Exhibit hereto shall be deemed to have been disclosed in all other
Schedules or Exhibits requiring such disclosure and for purposes of all other
representations and warranties made herein.
SECTION 8
TAX MATTERS
8.1 Section 338 Election. Notwithstanding anything set forth this
Agreement to the contrary, Purchaser shall be responsible for and shall pay all
Tax Liabilities resulting from an actual or deemed election made under Section
338 of the Code (or any comparable provision
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under foreign, state or local law) with respect to any of the Companies in
connection with the purchase of stock on the Closing Date.
SECTION 9
ADDITIONAL COVENANTS AND UNDERTAKINGS
9.1 Further Assurances and Assistance. Purchaser and Sellers agree that
each will execute and deliver to the other any and all documents, in addition to
those expressly provided for herein, that may be necessary or appropriate to
implement the provisions of this Agreement, whether before, at or after the
Closing. The parties agree to cooperate with each other to any extent reasonably
required in order to accomplish fully the transactions herein contemplated.
9.2 Access to Information. Sellers, from and after the date of this
Agreement and until the Closing Date, shall give Purchaser and Purchaser's
employees and counsel full and complete access upon reasonable notice during
normal business hours, to all officers, employees, offices, properties,
agreements, records and affairs of the Companies or otherwise relating to the
Business, will provide Purchaser with all regularly prepared financial
statements of the Companies, and will provide copies of such information
concerning the Companies and the Business as Purchaser may reasonably request;
provided, however, that the foregoing shall not permit Purchaser or any agent
thereof to (i) disrupt the Business or (ii) contact any employee of any Company
without providing reasonable prior notice to Sellers and allowing a
representative of Sellers to be present. In addition, while Purchaser may
perform a Phase I study, Purchaser shall not perform intrusive testing on any
Real Property without Sellers' consent, which will not be unreasonably withheld.
9.3 Conduct of Business Prior to Closing. Except as contemplated by
this Agreement, from and after the date hereof Sellers shall use their
reasonable best efforts (without requiring Sellers or the Companies to incur
material costs or expenses outside the ordinary course of the Business) to
conduct such Business in the ordinary course. Except as contemplated by this
Agreement or as consented to by Purchaser (which consent shall not unreasonably
be withheld), from and after the date hereof Sellers shall act, and shall cause
the Companies to act, as follows:
(a) The Companies will not adopt any material change in any method of
accounting or accounting practice, except as contemplated or required by GAAP;
(b) None of the Companies will amend its charter or by-laws;
(c) Except (i) for the disposition of obsolete equipment in the
ordinary course of business, or (ii) as set forth on Schedule 9.3 hereto, none
of the Companies will sell, mortgage, pledge or otherwise dispose of any
material assets or properties owned or used in the operation of the Business;
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(d) None of the Companies will merge or consolidate with, or agree to
merge or consolidate with, or purchase or agree to purchase all or substantially
all of the assets of, or otherwise acquire, any other business entity;
(e) None of the Companies will authorize for issuance, issue or sell
any additional shares of its capital stock or any securities or obligations
convertible into shares of its capital stock or issue or grant any option,
warrant or other right to purchase any shares of its capital stock;
(f) None of the Companies will incur, or agree to incur, any debt f or
borrowed money other than draws under the Companies, existing revolving credit
agreement; and
(g) None of the Companies will change its historic practices concerning
the payment of accounts payable.
9.4 H-S-R Act. Each of Purchaser and Sellers shall, within ten Business
Days following the date hereof, file duly completed and executed Pre-Merger
Notification and Report Forms as required under the H-S-R Act and shall
otherwise use their respective best efforts (without requiring either Purchaser
or Sellers to incur material costs or expenses) to comply promptly with any
requests made by the Federal Trade Commission or the Department of Justice
pursuant to the H-S-R Act or the regulations promulgated thereunder. All filing
fees and other similar payments in connection with the H-S-R Act shall be split
equally by Purchaser and the Company.
9.5 FCC Application.
(a) Each of Purchaser and Sellers shall, within five Business Days
following the date hereof, file with the FCC the FCC Applications; provided that
the parties shall cooperate with each other in the preparation of the FCC
Applications and shall in good faith and with due diligence take all reasonable
steps necessary to expedite the processing of the FCC Applications and to secure
such consents or approvals as expeditiously as practicable. If the Closing shall
not have occurred for any reason within the initial effective periods of the
granting of FCC approval of any of the FCC Applications, and no party shall have
terminated this Agreement under Section 14, the parties shall jointly request
and use their respective best efforts to obtain one or more extensions of the
effective periods of such grants. No party shall knowingly take, or fail to
take, any action the intent or reasonably anticipated consequence of which would
be to cause the FCC not to grant approval of the FCC Applications.
(b) Sellers shall publish the notices required by the FCC Rules and
Regulations relative to the filing of the FCC Applications. Copies of all
applications, documents and papers filed after the date hereof and prior to the
Closing, or filed after the Closing with respect to the transactions under this
Agreement, by Purchaser or Sellers with the FCC shall be mailed to the other
simultaneously with the filing of the same with the FCC. Each party shall bear
its own costs and expenses (including the fees and disbursements of its counsel)
in connection with the
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preparation of the portion of the application to be prepared by it and in
connection with the processing of that application. All filing and grant fees,
if any, paid to the FCC, shall be borne 50% by Purchaser and 50% by the Company.
None of the information contained in any filing made by Purchaser or Sellers
with the FCC with respect to the transactions contemplated by this Agreement
shall contain any untrue statement of a material fact.
9.6 Books and Records. Following the Closing, Purchaser shall permit
each Seller (a) to have reasonable access to the books and records of Purchaser
and those retained or maintained by the Companies relating to the operation of
the Business prior to the Closing or after the Closing to the extent related to
transactions or events occurring prior to the Closing, and (b) to have
reasonable access to employees of the Companies and Purchaser to obtain
information relating to such matters. Purchaser shall maintain such books and
records for a period of seven years following the Closing.
9.7 Employees and Employee Benefits.
(a) Purchaser acknowledges that the Companies are party to the
employment contracts identified on Schedule 9.7 hereto, which shall continue for
the benefit of the Companies following the Closing.
(b) Purchaser acknowledges that the employment contracts listed on
Schedule 9.7 contain severance obligations that will be the obligation of
Purchaser following the Closing. With regard to the employment contract with
Albert M. Holtz, Purchaser acknowledges that Mr, Holtz will be resigning from
Superior as of the Closing Date and that, under Section 13(b) of his employment
agreement, he is entitled to receive his base salary of $150,000 and current
benefits for one year. On the Closing Date, the Company will pay $150,000 less
applicable withholding to Mr. Holtz and will agree to maintain, at Superior's
expense, Mr, Holtz's existing healthcare and disability insurance for one year.
At or before the Closing, Superior will, if requested by Mr. Holtz, transfer to
Mr, Holtz, at no cost, any life insurance policy maintained by Superior on Mr.
Holtz's life, Perry A. Sook has a similar contract with Superior. In the event
that he decides to terminate the contract as a result of the change of control
of Superior, he will be entitled to be treated in the same manner as Mr. Holtz
under this section. Any payment by Superior under this section will not reduce
Cash on Hand.
(c) The Sellers may direct the Companies to pay bonuses to various
employees in connection with the transfer of the Stations, Any such amounts (and
related payroll taxes) shall reduce Cash on Hand, To the extent such amounts
cause Cash on Hand to become negative, they will reduce the Purchase Price.
9.8 Control of Stations. From the date hereof until the Closing Date,
subject to the express provisions of this Agreement, Purchaser shall not
directly or indirectly control, supervise or direct the operation of the
Stations.
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SECTION 10
INDEMNIFICATION
10.1 Indemnification of Purchaser by Sellers. (a) Subject to Section
10.3 hereof, each Seller, for itself or himself, as the case may be, and not
jointly, shall indemnify and hold Purchaser harmless from and against any and
all Loss, however incurred, which arises out of or results from any breach by
such Seller of any representation or warranty of such Seller as to itself or
himself, in Section 5.1 of this Agreement.
(b) Subject to Section 10.3 hereof, Sellers shall jointly and severally
indemnify and hold Purchaser harmless from and against any and all Loss,
howsoever incurred, which arises out of or results from:
(i) any breach by Sellers of any representation or warranty of
Sellers set forth in Section 5 of this Agreement other than any representation
or warranty of any Seller set forth in Section 5.1 of this Agreement; or
(ii) the material failure by Sellers to perform any covenant
of Sellers contained herein.
10.2 Indemnification of Sellers by Purchaser. Subject to Section 10.3
hereof, Purchaser shall indemnify and hold Sellers harmless from and against any
and all Loss, howsoever incurred, which arises out of or results from:
(a) any breach by Purchaser of any representation or warranty of
Purchaser set forth in Section 6 of this Agreement;
(b) the material failure by Purchaser t~o perform any covenant of
Purchaser contained herein;
(c) the assertion of any claim by any third party against Sellers or
any Affiliate thereof (other than the Companies) relating to any aspect of the
Business, including, without limitation, any past, present or future liabilities
or obligations of the Companies, whether actual or contingent other than any
claim constituting a breach of representation or warranty by Sellers in this
Agreement,
10.3 Limitations and Other Provisions Regarding Indemnification
Obligations.
(a) Notwithstanding the provisions of Section 10.1 hereof , Purchaser
shall not be entitled to receive indemnification payments with respect to any
Loss under Section 10.1 hereof except if and to the. extent that (i) the
aggregate amount of Losses incurred by Purchaser and its Affiliates to which it
or they would otherwise be entitled to indemnification under Section 10.1
hereof, exceeds $ 200,000, (ii) with respect to Tax Liabilities only, such Tax
Liability exceeds the Tax Reserve and (iii) with respect to Losses after the
first Loss for which Purchaser claims indemnification, such Loss exceeds
$50,000.
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(b) No party otherwise required to indemnify any other party with
respect to any Tax Liability shall have any obligation to indemnify such other
party until there has been a Final Determination with respect to any such Taxes,
at which time indemnification shall be promptly made.
(c) In case any event shall occur which would otherwise entitle
Purchaser to assert a claim for indemnification hereunder, no Loss shall be
deemed to have been sustained by Purchaser to the extent of (i) any tax savings
realized or realizable by Purchaser or its Affiliates with respect thereto, or
(ii) the failure by Purchaser to mitigate such Loss as provided in Section
10.3(f) hereof, or (iii) any proceeds received or otherwise recoverable by
Purchaser from any third party, including but not limited to any insurance
carrier.
(d) In addition to the other limitations set forth in this Section 10:
(i) Each Seller's liability for its indemnification
obligations in Section 10.1 (a) hereof shall not exceed its Pro Rata Share of
the aggregate payments required to be made by Sellers thereunder (each Seller's
Pro Rata Share being the percentage of the proceeds received by all Sellers
under this Agreement which is received by such Seller under this Agreement) ;
and
(ii) Sellers, liability for their indemnification obligations
in Section 10.1(b) hereof shall not exceed the amount of the indemnification
Escrow, and Purchaser's right to indemnification shall be limited to the monies
contained in the Indemnification Escrow.
(e) No claim for indemnification for a Loss shall be made after
expiration of the applicable period set forth in Section 7.1 hereof.
(f) Purchaser shall take or cause to be taken all such steps and
actions as are necessary or as Sellers may reasonably require in order to
mitigate any Loss otherwise indemnifiable under this Agreement. Nothing in this
Agreement shall, or shall be deemed to, relieve Purchaser of any common law or
other duty to mitigate any Loss incurred by it. In no event shall Sellers be
liable to Purchaser for any indirect, special, incidental or consequential loss
or damages.
(g) Indemnification pursuant to this Section 10 shall be the sole and
exclusive remedy of each party hereto with respect to any Loss as to which the
provisions of Sections 10.1 or 10.2 hereof, as the case may be, are applicable,
notwithstanding that indemnification may not be available.
(h) Any payments made by either party hereto pursuant to this Section
10 shall be treated as an adjustment to the Purchase Price.
10.4 Notice of Claim Defense of Action.
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(a) An indemnif ied party shall promptly give the indemnifying part
(ies) notice of any matter which an indemnified party has determined has given
or could give rise to a right of indemnification under this Agreement, stating
the nature and, if known, the amount of the Loss, and method of computation
thereof, all with reasonable particularity and containing a reference to the
provisions of this Agreement in respect of which such right to indemnification
is claimed or arises; provided that the failure of any party to give notice
promptly as required in this Section 10.4 shall not relieve any indemnifying
party of its indemnification obligations except to the extent that such failure
materially prejudices the rights of such indemnifying party. The indemnif ied
party shall give continuing notice promptly thereafter of all developments
coming to the indemnified party's attention materially affecting any matter
relating to any indemnification claims.
(b) The obligations and liabilities of an indemnifying party under this
Section 10 with respect to Losses arising from claims of any third party that
are subject to the indemnification provided for in this Section 10, shall be
governed by and contingent upon the following additional terms and conditions:
(i) With respect to third party claims, promptly after receipt
by an indemnified party of notice of the commencement of any action or the
presentation or other assertion of any claim which could result in any
indemnification claim pursuant to Section 10.1 or 10.2 hereof, such indemnified
party shall give prompt notice thereof to the indemnifying part(ies) and the
indemnifying part (ies) shall be entitled to participate therein or, to the
extent that it shall wish, assume the defense thereof with its own counsel.
(ii) If the indemnifying part(ies) elects to assume the
defense of any such action or claim, the indemnifying part (ies) shall not be
liable to the indemnified party for any fees of other counsel or any other
expenses, in each case incurred by such indemnified party in connection with the
defense thereof, unless representation of both parties by the same counsel would
be prohibited under the applicable Code of Professional Responsibility.
(iii) The indemnifying part(ies) shall be authorized, without
consent of the indemnified party being required, to settle or compromise any
such action or claim, provided that such settlement or compromise includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim.
(iv) Whether or not an indemnifying part(ies) elects to assume
the defense of any action or claim, the indemnifying part(ies) shall not be
liable for any compromise or settlement of any such action or claim effected
without its consent, such consent not to be unreasonably withheld.
(v) The parties agree to cooperate to the fullest extent
possible in connection with any claim for which indemnification is or may be
sought under this Agreement, including, without limitation, making available all
witnesses, pertinent records, materials and information
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in its possession or under its control relating thereto as is reasonably
requested by the other party.
SECTION 11
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARTIES TO CLOSE
11.1 Conditions to the Obligation of Purchaser. The obligation of
Purchaser to consummate the Closing is subject to the fulfillment or waiver, on
or prior to the Closing Date, of each of the following conditions precedent:
(a) Sellers shall have complied in all material respects with their
agreements and covenants contained herein to be performed at or prior to the
Closing, and the representations and warranties of Sellers contained herein
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though made on and as of the Closing Date, except that
representations and warranties that were made as of a specified date shall
continue on the Closing Date to have been true as of the specified date, and
Purchaser shall have received a certificate of one of Sellers' Agents, dated as
of the Closing Date and signed by Sellers Agent, certifying as to the
fulfillment of the condition set forth in this Section 11.1(a) (Sellers' Bring-
Down Certificate").
(b) No statute, rule or regulation, or order of any court or
administrative agency shall be in effect which restrains or prohibits Purchaser
from consummating the transactions contemplated hereby.
(c) All applicable waiting periods under the H-S-R Act shall have
expired or been terminated.
(d) All consents identified on Schedule 5.17, if any, shall have been
received.
(e) The Initial Orders approving the applications for transfer of
control of the Companies holding the FCC Licenses shall have been obtained. All
the material conditions contained in the Initial Orders required to be satisfied
on or prior to the Closing Date shall have been duly satisfied and performed.
Notwithstanding the foregoing, if the consent of the FCC is conditional or
qualified in any manner (other than one relating to WSTR-TV) that has a Material
Adverse Effect on Purchaser, Purchaser may, nevertheless, in its sole
discretion, require the consummation of the transactions contemplated by this
Agreement, but shall not be required to do so. No reporting conditions,
admonitions or forfeitures shall be deemed to have such a Material Adverse
Effect.
(f) Sellers shall have delivered to Purchaser at the Closing each
document required by Section 12.1 hereof.
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(g) The Company shall have delivered to Purchaser a written statement
from Heller Financial, Inc., as to the amount of Funded Debt held by it on the
Closing Date.
11.2 Conditions Precedent to the Obligation of Sellers. The obligation
of Sellers to consummate the Closing is subject to the fulfillment or waiver, on
or prior to the Closing Date, of each of the following conditions precedent:
(a) Purchaser shall have complied in all material respects with its
agreements and covenants contained herein to be performed at or prior to the
Closing, and the representations and warranties of Purchaser contained herein
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though made on and as of the Closing Date, except that
representations and warranties that were made as of a specified date shall
continue on the Closing Date to have been true as of the specified date, and
Seller shall have received a certificate of Purchaser, dated as of the Closing
Date and signed by an officer of Purchaser, certifying as to the fulfillment of
the condition set forth in this Section 11.2(a) ("Purchaser's Bring-Down
Certificate") .
(b) No statute, rule, or regulation or order of any court or
administrative agency shall be in effect which restrains or prohibits Sellers
from consummating the transactions contemplated hereby.
(c) All applicable waiting periods under the H-S-R Act shall have
expired or been terminated.
(d) The issuance by the FCC of Initial Orders approving the
applications for transfer of control of the material FCC Licenses contemplated
by this Agreement shall have occurred. There shall have been duly satisfied and
performed on or prior to the Closing Date all the material conditions contained
in the Initial orders required to be so satisfied;
(e) Purchaser shall have delivered to Sellers at the Closing the
Purchase Price and each document required by Section 12.2 hereof.
SECTION 12
DELIVERIES AT THE CLOSING
12.1 Deliveries by Sellers. At the Closing, Sellers will deliver or
cause to be delivered at the Closing to Purchaser:
(a) Sellers' Bring-Down Certificate;
(b) a legal opinion of Kirkpatrick & Lockhart LLP, counsel to Sellers,
substantially in the form attached as Exhibit C hereto;
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(c) stock certificates evidencing the Stock, together with stock
powers, dated as of the Closing Date and executed by the respective Sellers,
transferring the Stock to Purchaser; and
(d) the original corporate minute books, stock registry and seal of
each of the Companies (to the extent available).
12.2 Deliveries by Purchaser. Purchaser will deliver or cause to be
delivered at the Closing to Sellers, the Disbursing Agent or the Indemnification
Escrow Agent, as the case may be:
(a) Purchaser's Bring-Down Certificate;
(b) a legal opinion of Thomas & Libowitz, P,A., counsel to Purchaser,
substantially in the form attached as Exhibit D hereto; and
(c) the Purchase Price as required pursuant to Section 3.1 hereof.
SECTION 13
EXPENSES
Except as provided in Sections 9.4 and 9.5, each party will pay its own
fees, expenses, and disbursements and those of its counsel in connection with
the subject matter of this Agreement (including the negotiations with respect
hereto and the preparation of any document(s) and all other costs and expenses
incurred by it in the performance and compliance with all conditions and
obligations to be performed by it pursuant to this Agreement or as contemplated
hereby.
SECTION 14
TERMINATION
(a) Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to Closing:
(i) by mutual written consent of Purchaser and Sellers; or (ii) by any party to
this Agreement, upon written notice to the other parties, at any time after 240
days following the date hereof, except that the right to terminate this
Agreement pursuant to this Section 14 shall not be available to (A) Sellers, if
the failure to consummate the Closing on or before such date was caused by or
resulted from Sellers' failure to fulfill any of their obligations under this
Agreement or (B) Purchaser, if the failure to consummate the Closing on or
before such date was caused by or resulted from Purchaser's failure to fulfill
any of its obligations under this Agreement. Upon such termination, all further
obligations of the parties hereto shall become null and void and no party shall
have any liability to any other party, unless the basis for such termination was
the failure by such party to fulfill its covenants and agreements set forth
herein. Notwithstanding anything to the contrary herein, the
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provisions of the Confidentiality Letter dated as of October 27, 1995 between
Purchaser's representative and the Company (the "Confidentiality Agreement"),
shall remain in effect either until the Closing, if it occurs, or for the stated
term thereof, if there is no Closing.
(b) Liquidated Damages, Notwithstanding anything to the
contrary contained in this Agreement, if Purchaser shall default in its
obligations to consummate this Agreement, then Sellers shall receive upon
demand, as liquidated damages for and in full settlement of all claims against
Purchaser in connection with this Agreement, the amount deposited by Purchaser
with the Escrow Agent, the nature of this transaction being such as will not
permit any exact determination of the damage that may be suffered by Sellers
under such circumstances.
SECTION 15
NOTICES
All notices, requests, consents, payments, demands, and other
communications required or contemplated under this Agreement shall be in writing
and (a) personally delivered or sent via telecopy (receipt confirmed). or (b)
sent by Federal Express or other reputable overnight delivery service (for next
Business Day delivery), shipping prepaid, as follows:
If to Purchaser to:
Mr. David Smith
Chief Executive Officer
Sinclair Broadcast Group, Inc,
2000 West 41st Street
Baltimore, MD 21211-1420
Fax: 410-467-5043
With a copy to:
Steven A, Thomas, Esq.
Thomas & Libowitz, P.A.
Suite 1100
100 Light Street
Baltimore, MD 21202-1053
Fax: 410-752-2046
If to Sellers to:
Albert M. Holtz
Chairman
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Superior Communications Group, Inc.
Manor Oak II
Suite 658
Pittsburgh, PA 15220
with a copy to:
John C. Rodney, Esquire
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, PA 15222
or to such other Persons or addresses as any Person may request by notice given
as aforesaid, Notices shall be deemed given and received at the time of personal
delivery or completed telecopying, or, if sent by Federal Express or such other
overnight delivery service one Business Day after such sending.
SECTION 16
SELLERS' AGENTS
16.1 Sellers' Agents. Each of the Sellers hereby irrevocably appoints
Albert M. Holtz, PNC Capital Corp and Primus Capital Fund II Limited Partnership
(herein called the "Sellers' Agents") as his or its agent and attorney-in-fact
to take any action required or permitted to be taken by such Seller under the
terms of this Agreement, including without limiting the generality of the
foregoing, the payment of expenses relating to the transactions contemplated by
the Agreement, and the right to waive modify or amend any of the terms of this
Agreement in any respect, whether or not material, and agrees to be bound by any
and all actions taken by the Sellers' Agents on his or its behalf. Any action to
be taken by the Sellers, Agents shall be unanimous. In the event of the death,
incapacity or liquidation of any of Sellers' Agents, such person or entity shall
not be replaced and the remaining Sellers' Agents shall continue in that
capacity. The Sellers agree jointly and severally to indemnify the Sellers'
Agents from and against and in respect of any and all liabilities, damages,
claims, costs, and expenses, including but not limited to attorneys' fees,
arising out of or due to any action by them as the Sellers, Agents and any and
all actions, proceedings, demands, assessments, or judgments, costs, and
expenses incidental thereto, except to the extent that the same result from bad
faith or gross negligence on the part of the Sellers' Agents, Purchaser shall be
entitled to rely exclusively upon any communications given by the Sellers'
Agents on behalf of any Seller, and shall not be liable for any action taken or
not taken in reliance upon the Sellers, Agents, Purchaser shall be entitled to
disregard any notices or communications given or made, by Sellers unless given
or made through the Sellers' Agents.
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SECTION 17
MISCELLANEOUS
17.1 Headings. The headings contained in this Agreement (including but
not limited to the titles of the Schedules and Exhibits hereto) have been
inserted for the convenience of reference only, and neither such headings nor
the placement of any term hereof under any particular heading shall in any way
restrict or modify any of the terms or provisions hereof. Terms used in the
singular shall be read in the plural, and vice versa, and terms used in the
masculine gender shall be read in the feminine or neuter gender when the context
so requires.
17.2 Schedules and Exhibits. All Schedules and Exhibits attached to
this Agreement constitute an integral part of this Agreement as if fully
rewritten herein.
17.3 Execution in Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
17.4 Entire Agreement. This Agreement, the Related Agreements and the
documents to be delivered hereunder and thereunder constitute the entire
understanding and agreement between the parties hereto concerning the subject
matter hereof. All negotiations and writings between the parties hereto are
merged into this Agreement, and there are no representations, warranties,
covenants, understandings, or agreements, oral or otherwise, in relation thereto
between the parties other than those incorporated herein or to be delivered
hereunder.
17.5 Governing Law. This Agreement is to be delivered in and should be
construed in accordance with and governed by the laws of the Commonwealth of
Pennsylvania without giving effect to conflict of laws principles.
17.6 Modification. This Agreement cannot be modified or amended except
in writing signed by each of the parties hereto.
17.7 Successors and Assigns. Neither this Agreement nor any of the
rights and obligations hereunder shall be assigned, delegated, sold,
transferred, sublicensed, or otherwise disposed of by operation of law or
otherwise, without the prior written consent of each of the other parties
hereto, provided, however, that Purchaser may assign its rights and obligations
hereunder to one or more subsidiaries so long as Purchaser is not relieved of
its obligations hereunder. In the event of such permitted assignment or other
transfer, all of the rights, obligations, liabilities, and other terms and
provisions of this Agreement shall be binding upon, inure to the benefit of, and
be enforceable by and against, the respective successors and assigns of the
parties hereto, whether so expressed or not.
17.8 Waiver. Any waiver of any provision hereof (or in any related
document or instrument) shall not be ef f ective unless made expressly and in a
writing executed in the name of the party sought to be charged. The failure of
any party to insist, in any one or more instances, on performance of any of the
terms or conditions of this Agreement shall not be
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construed as a waiver or relinquishment of any rights granted hereunder or of
the future performance of any such term, covenant, or condition, but the
obligations of the parties with respect hereto shall continue in full force and
effect.
17.9 Severability. The provisions.of this Agreement shall be deemed
severable, and if any part of any provision is held to be illegal, void,
voidable, invalid, nonbinding or unenforceable in its entirety or partially or
as to any party, for any reason, such provision may be changed, consistent with
the intent of the parties hereto, to the extent reasonably necessary to make the
provision, as so changed, legal, valid, binding, and enforceable. If any
provision of this Agreement is held to be illegal, void, voidable, invalid,
nonbinding or unenforceable in its entirety or partially or as to any party, for
any reason, and if such provision cannot be changed consistent with the intent
of the parties hereto to make it fully legal, valid, binding and enforceable,
then such provisions shall be stricken from this Agreement, and the remaining
provisions of this Agreement shall not in any way be affected or impaired, but
shall remain in full force and effect.
17.10 Announcements. From the date of this Agreement, all further
public announcements relating to this Agreement or the transactions contemplated
hereby will be made only as agreed upon jointly by the parties hereto, except
that nothing herein shall prevent any Seller or any Affiliate thereof or
Purchaser from making any disclosure in connection with the transactions
contemplated by this Agreement if required by applicable law or otherwise as a
result of its, or its Affiliate's, being a public company, provided that prior
notice of such disclosure is given to the other party hereto.
17.11 Specific Performance. Sellers acknowledge that Purchaser will
have no adequate remedy at law if Sellers fail to perform their obligation to
consummate the sale of Stock contemplated under this Agreement. In such event,
Purchaser shall have the right, in addition to any other rights it may have, to
specific performance of this Agreement.
IN WITNESS WHEREFORE, the parties hereto have caused this Agreement to
be duly executed as of the date and year first written above.
PURCHASER: SELLERS:
SINCLAIR BROADCAST GROUP, INC. PNC CAPITAL CORP.
By:/s/ David Smith By:/s/ Gary J. Zentner
David Smith Gary J. Zentner
Title: Chief Executive Off icer Title: Presdient
PRIMUS CAPITAL FUND II
LIMITED PARTNERSHIP
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<PAGE>
By: Primus Management II,
General Partner
By: Primus Venture Partners,
General Partner
Title:/s/ Kevin J. McGinty
Kevin J. McGinty
General Partner
/s/ Albert M. Holtz
ALBERT M. HOLTZ
/s/ Perry A. Sook
PERRY A. SOOK
/s/ Richard J. Roberts
RICHARD J. ROBERTS
/s/ George F. Boggs
GEORGE F. BOGGS
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<PAGE>
ANNEX 1
DEFINITIONS
As used in the attached Stock Purchase Agreement, the
following terms shall have the corresponding meaning set forth below:
a. "Affiliate" of, or a Person "Affiliated" with, a
specified Person, means a Person who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Person specified.
b. "Agreement" has the meaning set forth in the preamble
to the attached Stock Purchase Agreement.
c. "Business" means the business of owning and operating
the Stations.
d. "Business Day" means any day on which banks in New
York City are open for business.
e. "Cash on Hand" means the amount of cash held on the
Closing Date by the Companies in bank accounts, money market funds and other
locations, provided, however, that Cash on Hand shall be reduced by any amounts
previously due as of the Closing Date under any programming contracts and not
yet paid.
f. "CERCLA" has the meaning set forth in Section 5.18 of
the Agreement.
g. "Closing" has the meaning set forth in Section 4 of
the Agreement.
h. "Closing Date" has the meaning set forth in Section 4
of the Agreement.
i. "Code" means the Internal Revenue Code of 1986, as
the same may be amended from time to time.
j. "Stock" has the meaning set forth in the recitals to
the Agreement.
k. "Company" has the meaning set forth in the recitals
to the Agreement.
l. "Companies" means the company and each of its
Subsidiaries.
m. "Companies" Knowledge" mean the actual knowledge,
after due inquiry, of Albert M. Holtz, Richard J. Roberts, Perry A.Sook or
George F. Boggs or any other individuals responsible for the day-to-day
operations of the Stations.
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n. "Confidentiality Agreement" has the meaning set forth
in Section 14 of the Agreement.
o. "Deposit Escrow Agreement" has the meaning set forth
in Section 3.1 of the Agreement.
p. "Disbursing Agent" means Kirkpatrick & Lockhart LLP.
q. "Disbursement Agreement" means that certain
Disbursement Agreement dated as of March 1, 1996, among the Disbursing Agent and
the Sellers.
r. "Environment" means any surface or subsurface
physical medium or natural resource, including, air, land, soil (surface or
subsurface), surface waters, ground waters, wetlands, stream and river
sediments, rock and biota.
s. "Environmental Laws" means any federal, state, or
local law, legislation, rule, regulation, ordinance or code of the United States
or any subdivision thereof relating to the injury to, or the pollution or
protection of, human health and safety or the Environment.
t. "Environmental Liability" means any loss, liability,
damage, cost or expense arising under any Environmental Law.
u. "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
v. "FCC" has the meaning set forth in the recitals to
the Agreement.
w. "FCC Applications" has the meaning set forth in
Section 5.17 of the Agreement.
x. "FCC Licenses" has the meaning set forth in Section
5.8 of the Agreement.
y. "FCC Rules and Regulations" has the meaning set forth
in Section 5.8 of the Agreement.
z. "Final Determination" means, with respect to any
United States federal Tax liability (1) a final, unappealable decision by a
court of competent jurisdiction; (ii) the expiration of the statute of
limitations for claiming a refund or, if a refund claim has been timely filed,
the expiration of the time for instituting suit in respect of such refund claim;
(iii) the execution by or on behalf of the taxpayer and the Internal Revenue
Service of a closing agreement under Section 7121 of the Code; or (iv) any other
final and irrevocable determination of such Tax liability, including, without
limitation, execution of Form 870-AD (or its successor). In the
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context of foreign, state or local Taxes, "Final Determination" shall mean any
event with similar final effect; provided, however, that if the meaning of this
term shall be unclear under foreign, state or local law, it shall mean any
final, unappealable and irrevocable determination of such Tax liability.
aa. "Financial Statements" means the consolidated balance
sheet of the Company as of December 31, 1994 and the consolidated income
statement and statement of changes in financial condition for the calendar year
1994.
ab "Funded Debt" means the principal amount of all
indebtedness of any Company for borrowed money or the deferred purchase price of
any property plus the amount required to be recorded as a liability on the
financial statements of any Company in accordance with GAAP with respect to any
capital lease.
ac. "GAAP" means generally accepted accounting
principles.
ad. "Hazardous Substances" means petroleum, petroleum
products, petroleum-derived substances, radioactive materials, hazardous wastes,
polychlorinated biphenyls , lead based paint, urea formaldehyde, asbestos or any
materials containing asbestos, and any materials or substances regulated or
defined as or included in the definition of "hazardous substances," "hazardous
materials," "hazardous constituents," "toxic substances," "pollutants,
"pollutants," "contaminants" or any similar denomination intended to classify
substances by reason of toxicity, carcinogenicity, ignitability, corrosivity or
reactivity under any Environmental Laws.
ae. "H-S-R Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
af. "Initial Order" means an action by the FCC granting
its consent to the transfer of control of the Companies holding the FCC Licenses
without regard to any period during which an appeal may be filed or any similar
action taken that might result in a reversal of the action. In the case of
WNTZ-600, and any other FCC auxiliary authorizations which cannot be transferred
on FCC form 315, "Initial order" shall include a Special Temporary
Authorization, or other comparable instrument, which permits the Purchaser to
operate the underlying facility pending receipt of FCC consent to its transfer.
ag. "Intellectual Property" means the patents, patent
applications, trademark registrations and applications therefor, service mark
registrations and applications therefor, copyright registrations and
applications therefor and trade names that are (i) owned by any of the Companies
and (ii) material to the continued operation of the Business.
ah. "IRS" means the Internal Revenue Service.
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<PAGE>
ai. "Indemnification Escrow Agreement" has the meaning
set forth in Section 3.1 of the Agreement.
aj. "Indemnification Escrow" has the meaning set forth in
Section 3.1 of the Agreement.
ak. "Knowing Party" has the meaning set forth in Section
7.3 of the Agreement.
al. "Loss" means any loss, liability, damage, cost or
expense (including, without limitation, reasonable attorneys' fees and
expenses).
am. "Material Adverse Effect" shall mean a material
adverse effect on the business or financial condition of the Companies taken as
a whole.
an. "Material Contract" means all agreements to which any
of the Companies is a party or by or to which it or its assets or properties are
bound, except: (i) agreements for the cash sale of advertising time with a term
of less than six months, (ii) agreements cancelable on no more than 90 days'
notice without material penalty, or (iii) agreements which are otherwise
immaterial to the Business and the Stations.
ao. "Other Party" has the meaning set forth in Section
7.3 of the Agreement.
ap. "Partnership" means Superior Communications of
Kentucky, L.P., the predecessor of Superior Communications of Kentucky, Inc,
aq. "Partnership Financial Statements" means the balance
sheet of the Partnership as of December 31, 1993 and the consolidated income
statement and statement of changes in financial condition of the Partnership for
the calendar year 1993.
ar. "Permitted Exceptions" means matters that (i) do not
render title to the Real Property unmarketable or (ii) do not prohibit or
materially adversely affect the continued existence and/or continued use (as
presently used) or maintenance of the material buildings, structures or
improvements presently located on the Real Property. Notwithstanding the
foregoing, any matter shown on Schedule 5.5 shall be considered a Permitted
Exception.
as. "Person" means a natural person, a governmental
entity, agency or representative (at any level of government), a corporation,
partnership, joint venture or other entity or association, as the context
requires.
at. "Plan" has the meaning set forth in Section 5.10 of
the Agreement.
au. "Purchase Price" has the meaning set forth in Section
3.1 of the Agreement.
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<PAGE>
av. "Purchaser" has the meaning set forth in the preamble
to the Agreement.
aw. "Purchaser's Bring-Down Certificate" has the meaning
set forth in Section 11.2 (a) of the Agreement.
ax. "Purchaser's Knowledge" means the actual knowledge,
af ter due inquiry, of the officers of Purchaser.
ay. "Real Property" means any real property owned or
leased by any of the Companies.
az. "Related Agreement" means any document delivered at
the Closing and any contract which is to be entered into at the Closing or
otherwise pursuant to this Agreement, including, without limitation the
Confidentiality Agreement and the Escrow Agreement.
aaa. "Returns" means all returns, reports, estimates,
information returns and statements (including any related or supporting
information) filed or to be filed with any Tax Authority in connection with the
determination, assessment, collection or administration of any Taxes.
aab. "Sellers" has the meaning set forth in the preamble
to the Agreement.
aac. "Sellers' Bring-Down Certificate" has the meaning set
forth in Section 10.1(a) of this Agreement.
aad. "Stations" has the meaning set forth in the recitals
to the Agreement.
aae. "Subsidiary", as it relates to any Person, means a
corporation of which such person or entity owns, directly or indirectly, more
than 50% of the common stock.
aaf. "Tax" or "Taxes" means all taxes, including, but not
limited to, income (whether net or gross) , excise, property sales, transfer,
gains, gross receipts, occupation, privilege, payroll, wage, unemployment,
workers' compensation, social security, occupation, use, value added, franchise,
license, severance, stamp, premium, windfall profits, environmental (including
taxes under Code Sec. 59A), capital stock, withholding, disability,
registration, alternative or add-on minimum, estimated or other tax of any kind
whatsoever (whether disputed or not) imposed by any Tax Authority, including any
related charges, fees, interest, penalties, additions to tax or other
assessments.
aag. "Tax Authority" means any federal, national foreign,
state, municipal or other local government, any subdivision, agency, commission
or authority thereof, or any quasi-governmental body or other authority
exercising any taxing or tax regulatory authority.
aah. "Tax Liability" means any liability for a Tax.
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<PAGE>
aai. "Tax Proceeding" means any audit, other
administrative proceeding or judicial proceeding involving Taxes.
aaj. "Tax Reserve" means the amount of deferred taxes
reflected as a liability on the Companies' December 31, 1995 balance sheet,.
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<PAGE>
ANNEX 2
Number of Shares
Stockholder Class A Class B
Common Common Preferred
PNC Capital Corp. -- 4,857.76 4,326.04
Primus Capital Fund
II Limited -- 3,791.23 3,356.87
Partnership
Albert M. Holtz 874 318.915 385.06
Perry A. Sook 362 28.5 --
Richard J. Roberts 120.7 28.5 --
George F. Boggs -- 28.5 --
Albert M. Holtz, 257 58 40
Trustee for the
Irrevocable Deed of
Trust for Tara
Ellen Holtz
Albert M. Holtz,
Trustee for the
Irrevocable Deed of
Trust for Meghan
Ellen Holtz 257 58 40
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