Asset Purchase Agreement - WTTE Channel 28 Inc., WTTE Channel 28 Licensee Inc. and Glencairn Ltd.
ASSET PURCHASE AGREEMENT
(LICENSE ASSETS)
BY AND BETWEEN
WTTE, CHANNEL 28, INC.
AND
WTTE, CHANNEL 28 LICENSEE, INC.
(COLLECTIVELY, "SELLER")
AND
GLENCAIRN, LTD.
("BUYER")
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TABLE OF CONTENTS
ARTICLE 1 TRANSFER OF LICENSE ASSETS........................................ 1
1.1. Transfer of License Assets....................................... 1
1.2. Excluded Assets.................................................. 2
1.3. Liabilities...................................................... 3
ARTICLE 2 PURCHASE/CLOSING.................................................. 5
2.1. Purchase Price................................................... 5
2.2. Adjustments...................................................... 5
2.3. The Closing...................................................... 6
2.4. Deliveries at Closing............................................ 6
2.5. Effect of Laws or Proceedings.................................... 8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER.......................... 9
3.1. Organization..................................................... 9
3.2. Authority........................................................ 9
3.3. FCC Licenses..................................................... 9
3.4. Condition of Assets..............................................10
3.5. Title, Etc.......................................................10
3.6. Call Letters, Trademarks, Etc....................................10
3.7. Insurance........................................................10
3.8. Contracts........................................................10
3.9. Employees........................................................11
3.10. Litigation ......................................................11
3.11. Compliance with Laws.............................................11
3.12. No Defaults......................................................11
3.13. Brokers..........................................................12
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER...........................12
4.1. Incorporation....................................................12
4.2. Corporate Action.................................................12
4.3. No Defaults......................................................12
4.4. Brokers..........................................................12
4.5. Qualification as a Broadcast Licensee............................12
4.6. Litigation.......................................................12
ARTICLE 5 COVENANTS OF SELLER PENDING THE CLOSING DATE......................13
5.1. Maintenance of Business..........................................13
5.2. Organization/Goodwill............................................14
5.3. Reports; Access to Facilities, Files, and Records................14
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5.4. Application for Commission Consent...............................14
5.5. Consents.........................................................14
5.6. Notice of Proceedings............................................14
5.7. Confidential Information.........................................15
5.8. Consummation of Agreement........................................15
5.9. Notice of Certain Developments...................................15
5.10. Updated Information..............................................15
ARTICLE 6 COVENANTS OF BUYER PENDING THE CLOSING DATE.......................15
6.1. Application for Commission Consent...............................15
6.2. Confidential Information.........................................16
6.3. Consummation of Agreement........................................16
6.4. Notice of Proceedings............................................16
ARTICLE 7 CONDITIONS TO THE OBLIGATIONS OF SELLER...........................16
7.1. Representations, Warranties, and Covenants.......................16
7.2. Proceedings......................................................17
7.3. Opinion of Counsel...............................................17
7.4. FCC Authorization................................................17
7.5. Other Instruments................................................17
ARTICLE 8 CONDITIONS TO THE OBLIGATIONS OF BUYER............................17
8.1. Representations, Warranties, Covenants...........................18
8.2. Proceedings......................................................18
8.3. Opinion of Counsel...............................................18
8.4. Damage to the Assets.............................................18
8.5. FCC Licenses.....................................................18
8.6. Consents.........................................................19
8.7. Other Instruments................................................19
ARTICLE 9 INDEMNIFICATION...................................................19
9.1. Survival.........................................................19
9.2. Indemnification of Buyer.........................................19
9.3. Indemnification of Seller........................................20
9.4 Limitation of Liability..........................................20
9.5. Bulk Sales Indemnity.............................................20
9.6. Notice of Claims.................................................20
9.7. Defense of Third Party Claims....................................20
ARTICLE 10 POST-CLOSING MATTERS.............................................21
10.1. Employee Matters................................................21
10.2. Call Letters....................................................21
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ARTICLE 11 TERMINATION/MISCELLANEOUS........................................21
11.1. Termination of Agreement........................................21
11.2. Expenses........................................................22
11.3. Assignments.....................................................22
11.4. Further Assurances..............................................23
11.5. Notices.........................................................23
11.6. Captions........................................................24
11.7. Governing Law and Remedies......................................24
11.8. Consent To Jurisdiction, Etc....................................24
11.9. Waiver of Provisions............................................24
11.10. Counterparts....................................................25
11.11. Entire Agreement/Amendments.....................................25
11.12. Access to Books and Records.....................................25
11.13. Public Announcements............................................25
SCHEDULES
1.1(a) FCC Licenses and Renewal Dates
1.1(b) Tangible Personal Property
1.1(c) Contracts
1.1(d) Intellectual Property
1.3 Continuing Liabilities
2.1(b) Allocation of Purchase Price to Assets Acquired
2.4(a)(ii) Form of Local Marketing Agreement
3.8 Material Contracts
3.9 Employees Related to License Assets
3.10 Litigation Related to License Assets
Note: Any Schedules not delivered by Seller at the time of execution
of this Agreement shall be delivered within 15 days of
execution and must be acceptable to Buyer in its reasonable
judgment.
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated as of June 10, 1996, and is by
and between WTTE, CHANNEL 28, INC. a Maryland corporation and WTTE, CHANNEL 28
LICENSEE, INC., a Delaware corporation (collectively, "Seller") and GLENCAIRN,
LTD., a Maryland corporation, or its designee ("Buyer").
RECITALS
WHEREAS, Seller is the licensee of broadcast station WTTE-TV in
Columbus, Ohio (the "Station") pursuant to certain licenses, permits and other
authorizations (the "Licenses") issued by the Federal Communications Commission
(the "FCC Authorization").
WHEREAS, Seller desires to sell, assign, and transfer the Licenses,
including the FCC Authorization, and other Station assets related thereto
(collectively the "License Assets"), and Buyer desires to acquire the License
Assets, on the terms described herein.
NOW, THEREFORE, IN CONSIDERATION OF the foregoing and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
TRANSFER OF LICENSE ASSETS
1.1. Transfer of License Assets. Upon and subject to the terms and
conditions stated in this Agreement, on the Closing Date (as hereinafter
defined) Seller shall convey, transfer, and deliver to Buyer, and Buyer shall
acquire from Seller all of the License Assets of Seller, real and personal,
tangible and intangible, of every kind and description which are owned and used
by Seller in connection with the business and operations of the Station, as a
going concern, free and clear of all liabilities, other than the Assumed
Liabilities (as hereinafter defined), and Liens, other than Permitted
Encumbrances (as hereinafter defined).
The License Assets include the following:
(a) FCC Licenses. All FCC Licenses issued with respect to the
Station, including, without limitation, those shown on Schedule 1.1(a) to this
Agreement, and all applications therefor, together with any renewals,
extensions, or modifications thereof and additions thereto.
(b) Tangible Personal Property. All equipment, vehicles,
furniture, fixtures, transmitting towers, transmitters, office materials and
supplies, spare parts and other tangible
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personal property of every kind and description owned as of the date of this
Agreement by Seller and used in connection with the business and operations of
the Station, including, without limitation, those shown on Schedule 1.1(b) to
this Agreement, and any additions, improvements, replacements, and alterations
thereto made between the date of this Agreement and the Closing Date, but
excluding all such property which is consumed, retired, or disposed of by Seller
in the ordinary course of their business between the date of this Agreement and
the Closing Date or as otherwise permitted by this Agreement.
(c) Contracts. All contracts relating to the License Assets to
which the Seller is a party, including all agreements, equipment and other
leases listed in Schedule 1.1(c) to this Agreement, together with all such
contracts that will have been entered into in the ordinary course of business of
the Station between the date of this Agreement and the Closing Date which are
related to the License Assets and the making of which by Seller is permitted by
this Agreement, to the extent existing as of the Closing Date. As used in this
Agreement, "Contract" means any agreement, lease, arrangement, commitment, or
understanding, written or oral, expressed or implied, to which the Station or
Seller with respect to the License Assets are a party or are bound.
(d) Intellectual Property. All trademarks, service marks,
patents, trade names, jingles, slogans, and logotypes owned and used by Seller
in connection with the business and operations of the Station as of the date
hereof, including, without limitation, Seller's rights to use the call letters
"WTTE" and any related names and phrases and those shown on Schedule 1.1(d) to
this Agreement and those acquired between the date hereof and the Closing Date
and all goodwill associated therewith.
(e) License Books and Records. All books and records of the
Seller relating to the employment of any employee of the Seller who becomes an
employee of the Buyer after the Closing and all other books and records of the
Seller relating primarily to one or more of the License Assets, including, but
not limited to, the FCC logs.
1.2. Excluded Assets.
The Excluded Assets shall include all of the asset of the Seller not
specifically included in the License Assets. The Excluded Assets shall include
but not be limited to the following:
(a) Cash. All cash, cash equivalents, and cash items of any
kind whatsoever, certificates of deposit, money market instruments, bank
balances, and rights in and to bank accounts, marketable and other securities of
Seller.
(b) Receivables. All notes and accounts receivable and other
receivables of Seller relating to or arising out of the operation of the Station
prior to Closing.
(c) Personal Property Disposed Of. All tangible personal
property disposed
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of or consumed in the ordinary course of the business of the Station.
(d) Insurance. All contracts of insurance and all insurance
plans and the assets thereof.
(e) Claims. Any and all claims of Seller with respect to
transactions prior to the Closing Date, including, without limitation, claims
for tax refunds and claims of Seller under contracts with respect to events
prior to the Closing Date.
(f) Pension Assets, Etc. Pension, profit sharing, retirement,
bonus, stock purchase, savings plans and trusts, 401(k) plans, health insurance
plans, and the assets thereof, and all other plans, agreements, or
understandings to provide employee benefits of any kind for employees of Seller.
(g) Certain Contracts. Seller's agreements, including all
program contracts not listed on Schedule 1.1(c) hereof (the "Excluded
Contracts") and any contract which is not capable of being transferred or
assigned without the approval or consent of any party thereto or any third party
if such approval or consent has not been obtained, subject, however, to Section
1.3 hereof.
(h) Certain Books and Records. Seller's account books of
original entry with respect to the Station, and all books, records, accounts,
checks, payment records, tax records (including payroll, unemployment, real
estate, and other tax records), and other similar books, records, and
information of Seller relating to Seller's operation of the business of the
Station prior to Closing, excluding those referred to in Section 1.1(e) above,
with the proviso that Buyer shall be allowed to maintain copies of all such
records and/or upon a written request for same shall be allowed further access
to all excluded records at all reasonable times.
1.3. Liabilities. The License Assets shall be sold and conveyed to
Buyer free and clear of all liens, security interests, and encumbrances except
(a) those disclosed on Schedule 1.3 hereto as "continuing," and the leases
listed on Schedule 1.1(c), if any; and (b) the Assumed Liabilities (as
hereinafter defined) and the other obligations and liabilities of Buyer assumed
hereunder (all of the foregoing are sometimes referred to herein collectively as
"Permitted Encumbrances"). Buyer agrees that on the Closing Date, Buyer shall
assume, undertake, and agree to pay, satisfy, perform, and discharge only those
liabilities and obligations of Seller which have not yet accrued, but which
arise on or after the Closing Date under the Contracts assigned pursuant to
Section 1.1(c) and any contracts that are entered into after the date hereof as
permitted by this Agreement and those liabilities and obligations referred to in
Section 10.1 hereof (all of the foregoing are referred to herein collectively as
the "Assumed Liabilities").
Notwithstanding any provision of this Agreement to the contrary, if any
required approval of or consent to the transfer and assignment of any contract
included in the License Assets is not obtained, Buyer shall assume and shall
pay, satisfy, perform, and discharge Seller's liabilities
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and obligations which arise thereunder on and after the Closing Date unless
Buyer's enjoyment of the rights and benefits under any such contract is
expressly terminated by the other party thereto by affirmative action within six
(6) months after the Closing Date because of such failure to obtain approval or
consent and not because of any other default or nonperformance by Buyer. The
liabilities and obligations assumed pursuant to the immediately preceding
sentence shall also constitute "Assumed Liabilities" for purposes of this
Agreement.
Buyer shall not assume or be liable for (a) any liability or obligation
arising out of the License Assets prior to the Closing Date (except for the
Assumed Liabilities and other obligations and liabilities specifically assumed
by Buyer hereunder); (b) any liability or obligation under any contracts not
specifically assumed by Buyer hereunder; (c) any liability or obligation of
Seller for any federal, state, or local income or other taxes; (d) any liability
or obligation to any employee or former employee of Seller or the Station
attributable to any period of time prior to the Closing Date (including
liability for accrued vacation and other benefits adjusted pursuant to Section
2.2 hereof); (e) any liability or obligation of Seller arising out of any
litigation, proceeding, or claim by any person or entity relating to the License
Assets prior to the Closing Date, whether or not such litigation, proceeding, or
claim is pending, threatened, or asserted before, on, or after the Closing Date;
(f) any severance or other liability arising out of the termination of any
employee's employment with Seller; or (g) any duty, obligation, or liability
relating to any pension, 401(k) or other similar plan, agreement, or arrangement
provided by Seller to employees of Seller, and none of such plans shall be
assumed by Buyer.
Notwithstanding any provision of this Agreement to the contrary, to the
extent, if any, Seller makes payment to Buyer as a result of any proration and
adjustment pursuant to Section 2.2 hereof, Buyer assumes and shall be obligated
to pay the special assessments, accrued vacation, and other obligations and
liabilities for which adjustment was made pursuant to Section 2.2.
Seller shall not be liable for: (a) any liability or obligation arising
out of the business or operations of the License Assets on or after the Closing
Date; (b) any Assumed Liabilities or other liabilities and obligations assumed
by the Buyer under this Agreement; (c) any liability or obligation of Buyer for
any federal, state, or local income or other taxes; (d) any liability or
obligation incurred or assumed by Buyer with respect to any License Assets; (e)
any liability or obligation to any employee or former employee of Buyer or the
Station attributable to any period of time on or after the Closing Date or, to
the extent of any proration pursuant to Section 2.2(a) hereof, to any former
employee of Seller attributable to any period of time prior to the Closing Date;
(f) any liability or obligation of Buyer arising out of any litigation,
proceeding, or claim by any person or entity relating to the License Assets on
or after the Closing Date; or (g) any duty, obligation, or liability relating to
any person, 401(k) or other similar plan, agreement, or arrangement provided by
Buyer to employees of Buyer.
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ARTICLE 2
PURCHASE/CLOSING
2.1. Purchase Price.
(a) In consideration of Seller's performance of this Agreement
and the transfer and delivery of the License Assets to Buyer at the Closing,
Buyer will pay to Seller an amount equal to the fair market value of the License
Assets as determined by a recognized appraisal firm regularly performing
appraisals of broadcasting assets and selected by Seller and approved by Buyer,
such approval not to be unreasonably withheld, and set forth in a written report
delivered to Buyer no later than fifteen (15) days prior to the Closing (the
"Purchase Price"), plus or minus the amount of any adjustments made pursuant to
Section 2.2 below, and Buyer will assume the Assumed Liabilities and the other
obligations and liabilities to be assumed by Buyer hereunder. The Purchase Price
shall be paid by Buyer to Seller on the Closing Date by wire transfer of
immediately available funds to such bank accounts as are designated by Seller on
or prior to the Closing Date.
(b) Buyer and Seller agree to allocate the Purchase Price
among the License Assets as designated on Schedule 2.1(b) and, Buyer and Seller
agree to file returns and reports (including income tax returns) on the basis of
such allocations.
2.2. Adjustments.
(a) Use of the License Assets and any income, expenses, and
liabilities attributable thereto through 11:59 p.m. on the day preceding the
Closing Date (the "Adjustment Date") shall be for the account of Seller and,
thereafter, for the account of Buyer, and shall be prorated accordingly. Items
including, but not limited to, power and utilities charges, ad valorem property
taxes upon the basis of the most recent assessment available, commissions,
wages, payroll taxes, and accrued vacation pay of employees of Seller who enter
the employment of Buyer (all such vacation pay accrued prior to the Closing Date
to be the responsibility of Seller), rents, and similar prepaid or deferred
items which are directly related to the License Assets, shall be prorated
between Seller and Buyer; the proration to be made as of the Adjustment Date.
There shall be prorations and/or adjustments with respect to any sick leave and
personal days accrued on or prior to the Closing Date by any employees of Seller
whose employment is directly related to the License Assets, and Seller shall
assume and be responsible for all liabilities in respect thereof. All special
assessments and similar charges or liens imposed against the License Assets in
respect of any period of time through the Adjustment Date, whether payable in
installments or otherwise, shall be the responsibility of Seller, and amounts
payable with respect to such special assessments, charges, or liens imposed
against the License Assets in respect of any period of time after the Adjustment
Date, shall be the responsibility of Buyer and shall be adjusted as required
hereunder.
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(b) On the Closing Date, to the extent practicable, the
adjustments provided in Section 2.2(a) shall be made on the basis of the then
most recently available financial statements and other information of the
Station (the "Preliminary Adjustments"). Within forty-five (45) days after the
Closing Date, the Buyer shall prepare a closing balance sheet (the "Closing
Balance Sheet") as of the close of business on the Adjustment Date and submit it
to Seller for review. Within seventy-five (75) days after the Closing Date,
final adjustments pursuant to Section 2.2 shall be determined, and any required
refund or payment shall be made on the basis of the Closing Balance Sheet. If
any dispute arises over the amount to be refunded or paid, such refund or
payment shall nonetheless be made to the extent such amount is not in dispute.
If any such dispute cannot be resolved by the parties or their
respective independent public accountants within one hundred eighty (180) days
after the Closing Date, the dispute shall be referred to a mutually satisfactory
independent public accounting firm of national stature which has not been
employed by any party hereto for the two (2) years preceding the date of such
referral; such referral to be selected by Seller's and Buyer's respective
independent public accountants. The determination of such firm shall be
conclusive and binding on each party. One half of the fees of such firm shall be
paid by Seller, and one half shall be paid by Buyer.
2.3. The Closing. The closing of the transactions provided for in this
Agreement (the "Closing") shall be held in the offices of Buyer's legal counsel,
or at such other place that the Buyer may direct, at 10:00 a.m. on a date (which
shall be the first day of a calendar month) (the "Closing Date") as shall be
mutually agreed upon by the parties which is not later than thirty (30) days
after the FCC approvals and consents to the transactions contemplated hereby
shall have become a "Final Grant," but in no event later than December 31, 1998.
The term "Final Grant" is defined in Section 8.5 hereof.
Buyer agrees to use its best efforts to close the transactions as soon
as practicable after the FCC consents and approvals to the transactions
contemplated hereby have become a "Final Grant". However, the Seller agrees that
the Buyer shall have the option, but not the obligation, to waive the necessity
of a "Final Grant" by the FCC and elect to close upon an "Initial Grant" (as
that term is defined in Section 7.4 hereof).
2.4. Deliveries at Closing. All actions at the Closing shall be deemed
to occur simultaneously, and no document or payment shall be deemed to be
delivered or made until all documents and payments are delivered or made to the
reasonable satisfaction of Buyer, Seller, and their respective counsel.
(a) Deliveries by Seller. At the Closing, Seller shall deliver
to Buyer such instruments of conveyance and other customary documentation as
shall in form and substance be reasonably satisfactory to Buyer and its counsel,
including, without limitation, the following:
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(i) one or more bills of sale conveying the personal
property included in the License Assets;
(ii) a local marketing agreement executed by Seller
substantially in the form attached hereto as Schedule 2.4(a)(ii);
(iii) one or more assignments conveying the FCC Licenses
and all leases, contracts, and other intangible assets included in the License
Assets;
(iv) any releases of liens that are necessary in order to
transfer the License Assets as contemplated by Section 1.3;
(v) certificates of Seller as required by Section 8.1(c)
hereof;
(vi) a certified copy of the resolutions or proceedings
of Seller authorizing the transactions contemplated by this Agreement;
(vii) certificates as to the existence and good standing
of each corporation comprising the Seller issued by the Maryland State
Department of Assessments and Taxation and Secretary of State of Delaware dated
shortly before the Closing Date;
(viii) a receipt for the Purchase Price;
(ix) the opinions of counsel required by Section 8.3
hereof;
(x) all consents received by Seller through the Closing
Date to the assignment to or assumption by Buyer of licenses, contracts, and
leases included in the License Assets; and
(xi) such other documents as Buyer shall reasonably
request.
(b) Deliveries by Buyer. At the Closing, Buyer shall deliver
to Seller the Purchase Price and such instruments of assumption and other
customary documentation as shall in form and substance be reasonably
satisfactory to Seller and its counsel, including, without limitation, the
following:
(i) the Purchase Price which shall be delivered in the
manner set forth in Section 2.1 hereof;
(ii) a local marketing agreement executed by Buyer
substantially in the form attached hereto as Schedule 2.4(a)(ii);
(iii) an assumption of liabilities pursuant to which
Buyer will assume the
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Assumed Liabilities;
(iv) a certificate of Buyer as required by Section 7.1(c)
hereof;
(v) a certified copy of the resolutions or proceedings of
Buyer authorizing the transactions contemplated by this Agreement;
(vi) a certificate as to the existence and good standing
of Buyer issued by the Maryland State Department of Assessments and Taxation
shortly before the Closing Date;
(vii) the opinion of counsel required by Section 7.3
hereof; and
(viii) such other documents as Seller shall reasonably
request.
2.5. Effect of Laws or Proceedings. The parties hereto acknowledge and
agree that, notwithstanding anything in this Agreement or any other documents
related hereto to the contrary (including, without limitation, any
representations or warranties made by Seller, covenants of the Seller made
herein, any condition precedent to the obligations of Buyer set forth in this
Agreement, or any provisions relating to indemnification to be made by Seller
hereunder), matters relating to, in connection with or resulting or arising
from: (a) the effect, for purposes of any laws, statutes, ordinances, rules,
regulations, orders or other actions, whenever promulgated or enacted, including
any communications or communications-related laws, statutes, ordinances, rules,
regulations, orders or other actions, whenever promulgated or enacted, and any
licenses, permits or authorizations issued by any governmental authority
(including, without limitation, the FCC) (collectively, "Laws") or any contract
or agreement to be conveyed to or assumed, directly or indirectly, by Buyer
pursuant hereto(collectively, "Conveyed Contracts"), of (1) the transfer of the
License Assets to Buyer and the retention by Seller of the Excluded Assets or
(2) the consummation of the other transactions contemplated hereby; (b) any
conflict with, violation of, termination of or breach or default under any Laws
or Conveyed Contracts as a result of the consummation of any of the transactions
contemplated hereby; or (c) any claims, actions, suits or other proceedings of
any nature whatsoever ("Proceedings"), by any person or entity (including,
without limitation, any governmental entity) by or before any court,
administrative agency or otherwise, alleging a conflict, violation of, breach or
default under, termination of, or other inconsistency with Laws or Conveyed
Contracts as a result of the consummation of any of the transactions
contemplated hereby shall not:
(i) cause or constitute, directly or indirectly, a breach by Seller of
any of its representations, warranties, covenants or agreements set forth in
this Agreement or any other document related hereto (and such representations,
warranties, covenants and agreements shall hereby be deemed to be modified
appropriately to reflect and permit the impact and existence of such Laws,
Conveyed Contracts and Proceedings and to permit any action by Seller to comply
with or attempt in good faith to comply with such Laws, Conveyed Contracts and
Proceedings);
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(ii) otherwise cause or constitute, directly or indirectly, a default
or breach by Seller under this Agreement or any other documents related hereto;
(iii) result in the failure of any condition precedent to the
obligations of Buyer under this Agreement or any other document related hereto
to be satisfied;
(iv) otherwise excuse Buyer's performance of its obligations under this
Agreement or any other document related hereto; or
(v) give rise to any claim for indemnification or other compensation by
Buyer or any adjustment of the Purchase Price.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Each Seller represents and warrants to Buyer as follows:
3.1. Organization. Each corporation comprising the Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the state of its incorporation. Each Seller has the corporate power and
authority to carry on the business of the Station now being conducted by it, to
own and operate the License Assets owned and operated by it, and to enter into
and consummate the transactions contemplated by this Agreement.
3.2. Authority. All corporate actions and proceedings necessary to be
taken by or on the part of Seller in connection with the execution and delivery
of this Agreement and the consummation of transactions contemplated hereby and
necessary to make the same effective have been duly and validly taken. This
Agreement has been duly and validly authorized, executed, and delivered by each
Seller and constitutes its valid and binding agreement, enforceable in
accordance with and subject to its terms, except as limited by laws affecting
the enforcement of creditors' rights or contractual obligations generally.
3.3. FCC Licenses. WTTE, Channel 28 Licensee, Inc. is the holder of the
FCC Licenses listed in Schedule 1.1(a) to this Agreement. Such FCC Licenses
constitute all of the licenses and authorizations required under the
Communications Act of 1934, as amended (the "Communications Act"), or the
current rules, regulations, and policies of the FCC for and/or used in the
operation of the Station as now operated by Seller. The FCC Licenses are validly
issued and in full force and effect and will not be subject to or scheduled for
renewal until at least October 1, 1997. Except as set forth in Schedule 3.3,
there is not pending, or to the knowledge of Seller, threatened any action by or
before the FCC to revoke, cancel, rescind, modify, or refuse to renew in the
ordinary course any of the FCC Licenses, and there is not now pending, or to the
actual knowledge of Seller, threatened, issued, or outstanding by or before
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the FCC, any investigation, order to show cause, notice of violation, notice of
apparent liability, or notice of forfeiture or complaint against Seller with
respect to the Station. The Station is operating in compliance, in all material
respects, with the FCC Licenses, the Communications Act, and the current rules
and regulations of the FCC. The renewal dates for all FCC Licenses are disclosed
on Schedule 1.1(a) to this Agreement.
3.4. Condition of Assets. The material tangible assets included in the
License Assets are being maintained in accordance with general industry
practices in good operating condition and repair, wear and tear in ordinary
usage excepted.
3.5. Title, Etc. Seller has good and marketable title to the tangible
assets and personal property included in the License Assets, and all such assets
and personal property will on the Closing Date be free and clear of all security
interests, mortgages, pledges, liens, encumbrances, or charges of any nature
whatsoever except for Permitted Encumbrances.
3.6. Call Letters, Trademarks, Etc. Seller possesses adequate rights,
licenses, or other authority to use all call letters, trademarks, and trade
names necessary to conduct the business of the Station as presently conducted or
presently proposed to be conducted by Seller. Seller has not received any notice
with respect to any alleged infringement or unlawful or improper use of any
copyright, trademark, trade name, or other intangible property right owned or
alleged to be owned by others and used in connection with the Station. Seller
represents and warrants that all trademarks listed on Schedule 1.1(d) hereto are
duly registered and validly issued to Seller.
3.7. Insurance. The License Assets are, as of the date of this
Agreement, adequately insured by Seller against loss or damage by fire and other
hazards and risks of the character usually insured against by persons operating
similar properties and businesses under policies issued by insurers of
recognized responsibility.
3.8. Contracts. Schedules 1.1(c) and 3.8 to this Agreement contain a
complete list of the following, as to which the Station or Seller with respect
to the Station is a party, as of the date of this Agreement:
(a) employment contracts;
(b) licenses or agreements under which Seller is authorized to
broadcast on the Station filed or taped programming supplied by others;
(c) leases of personal property which have a term, including
renewal options exercisable by any other party thereto, ending more than one
year after the date of this Agreement and/or which involve annual payments of
more than $10,000.00;
(d) contracts not made in the ordinary and usual course of
business; and
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(e) any other contracts which are material to the use of the
License Assets.
3.9. Employees. Schedules 3.9 lists all employees of the Seller whose
employment is directly related to the License Assets, as of the date of this
Agreement, and their respective salaries and dates of hire and includes
information on the benefits provided to employees (including, without
limitation, pension, retirement, hospitalization, life, accident or medical
insurance, vacation, and other employee benefit plans, agreements, arrangements,
or understandings). Except as described on Schedule 3.9, Seller has no written
or oral contracts of employment with any employee. Seller is not a party to or
subject to any collective bargaining agreements with respect to the Station, nor
does Seller have any other contracts with any labor union or other labor
organization with respect to the Station. Seller is not a party to any pending
or, to its actual knowledge (after inquiry of the Station's management),
threatened labor dispute affecting the Station.
3.10. Litigation. Except as set forth on Schedule 3.10 hereto, (i)
Seller, with respect to the License Assets, has not been operating under or
subject to or in default with respect to any order, writ, injunction, or decree
of any court or federal, state, municipal, or other governmental department,
commission, board, agency, or instrumentality which has had or could reasonably
be expected to have a material adverse effect on the use of the License Assets;
(ii) there is no litigation pending by or against, or to Seller's actual
knowledge (after inquiry of the Station's management) threatened against, Seller
related to or affecting any of the License Assets which materially interferes or
could reasonably be expected to materially interfere with Seller's ability to
transfer the License Assets to Buyer. There are no attachments, executions, or
assignments for the benefit of creditors or voluntary or involuntary proceedings
in the bankruptcy pending against or contemplated by Seller, and no such actions
have been threatened against Seller. There is no litigation or proceeding
pending or, to the best of Seller's knowledge, threatened against or affecting
Seller that would affect Seller's ability to carry out the transactions
contemplated by this Agreement.
3.11. Compliance with Laws. Seller, with respect to the License Assets,
is to its knowledge in compliance in all material respects with all applicable
laws, regulations, and orders, and the present uses by Seller of the License
Assets do not, to Seller's actual knowledge (after inquiry of the Station's
management), violate any such laws, regulations, or orders in any material
respect.
3.12. No Defaults. On the Closing Date, neither the execution and
delivery by Seller of this Agreement, nor the consummation by Seller of the
transactions contemplated hereby would constitute or, with the giving of notice
or the passage of time or both, would constitute a violation of or would
conflict with or result in any breach of or any default under, any of the terms,
conditions, or provisions of any law or regulation to which Seller is subject,
or of Seller's Charter or By-Laws, or of any material contract, agreement, or
instrument to which Seller is a party or by which Seller is bound, except to the
extent any necessary consents to assignment of the program contracts and
consents to assignment of the leases and other contracts included
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in the License Assets are required and have not been obtained.
3.13. Brokers. There is no broker or finder or other person who would
have any valid claim against any of the parties to this Agreement for a
commission or brokerage in connection with this Agreement or the transactions
contemplated hereby as a result of any agreement or understanding of or action
taken by Seller.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1. Incorporation. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland, and has
the corporate power and authority to enter into and consummate the transactions
contemplated by this Agreement.
4.2. Corporate Action. All corporate actions and proceedings necessary
to be taken by or on the part of Buyer in connection with the execution and
delivery of this Agreement and the consummation of transactions contemplated
hereby and necessary to make the same effective have been duly and validly
taken. This Agreement has been duly and validly authorized, executed, and
delivered by Buyer, and constitutes its valid and binding agreement, enforceable
in accordance with and subject to its term, except as limited by laws affecting
the enforcement of creditors' rights or contractual obligations generally.
4.3. No Defaults. On the Closing Date, neither the execution and
delivery by Buyer of this Agreement, nor the consummation by Buyer of the
transactions contemplated hereby, will constitute or, with the giving of notice
or the passage of time or both, would constitute a violation of or would
conflict with or result in any breach of or default under any of the terms,
conditions, or provisions of any judgment, law, or regulation, or Buyer's
Charter or By-Laws, or any contract, agreement, or instrument to which Buyer is
a party or by which it is bound.
4.4. Brokers. There is no broker or finder or other person who would
have any valid claim against any of the parties to this Agreement for a
commission or brokerage in connection with this Agreement or for the
transactions contemplated hereby as a result of any agreement or understanding
of or action taken by Buyer.
4.5. Qualification as a Broadcast Licensee. Buyer knows of no fact that
would under existing law and the existing rules, regulations, policies, and
practices of the FCC, disqualify Buyer as an assignee of the FCC Licenses or as
owner and operator of the License Assets.
4.6. Litigation. There is no litigation, proceeding, or investigation
of any nature pending or, to the best of Buyer's knowledge, threatened against
or affecting it that would affect Buyer's ability fully to carry out the
transactions contemplated by this Agreement. There are no attachments,
executions, or assignments for the benefit of creditors or voluntary or
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involuntary proceedings in bankruptcy pending against or contemplated by Buyer,
and no such actions have been threatened against Buyer.
ARTICLE 5
COVENANTS OF SELLER PENDING THE CLOSING DATE
Seller covenants and agrees that from the date hereof to and including
the Closing Date:
5.1. Maintenance of Business. Seller shall, with respect to the License
Assets, continue to carry on its business and operations and keep its books of
account, records, and files in the ordinary and usual course of business. Seller
shall continue to operate the Station in all material respects in accordance
with the terms of the FCC Licenses and in compliance in all material respects
with all applicable laws and FCC rules and regulations. Seller will promptly
execute any necessary applications for renewal of the FCC Licenses.
Seller will maintain in full force and effect through the Closing Date
adequate property damage, liability, and other insurance with respect to the
License Assets.
Nothing contained in this Agreement shall give Buyer any right to
control the programming, operations, or any other matter relating to the Station
prior to the Closing Date, and Seller shall have complete control of the
programming, operations, and all other matters relating to the Station up to the
Closing Date.
Prior to the Closing Date, except as otherwise permitted by the last
paragraph of this Section 5.1, Seller will not without the prior written consent
of Buyer (to the extent the following restrictions are permitted by the FCC and
all applicable law):
(a) sell, lease, transfer, or agree to sell, lease, or
transfer any License Assets which are material to the operation of the Station,
considered as a whole or which have individually or in the aggregate a value in
excess of $25,000.00 without replacement thereof with a substantially equivalent
asset of substantially equivalent kind, condition, and value; or
(b) enter into any contract of employment or collective
bargaining agreement which will be binding on Buyer, permit any increases in the
compensation of any of the Station's employees whose employment is related to
the License Assets, except to the extent consistent with past practices.
Notwithstanding anything to this Agreement to the contrary, Seller
shall be entitled to renew or extend the term of any contract listed on Schedule
1.1(c) which, by its terms, expires or will expire prior to December 31, 1996
and, in connection therewith, agree to increase the amounts payable thereunder
during any such renewal term in accordance with the Station's usual practices.
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5.2. Organization/Goodwill. Seller shall use best efforts to preserve
the business organization of the Station and preserve the goodwill of the
Station's suppliers, customers, and others having business relations with it.
5.3. Reports; Access to Facilities, Files, and Records. At the request
of Buyer, Seller shall from time to time give or cause to be given to the
officers, employees, accountants, counsel, and representatives of Buyer (i)
access, upon reasonable prior notice, during normal business hours to all
facilities, property, accounts, books, deeds, title papers, insurance policies,
licenses, agreements, contracts, commitments, records, equipment, machinery,
fixtures, furniture, vehicles, accounts payable and receivable, and inventories
related to the Station, and (ii) all such other information concerning the
affairs of the Station as Buyer may reasonably request provided that the
foregoing does not materially disrupt or interfere with the business and
operations of the Station.
5.4. Application for Commission Consent. As promptly as practicable
after the date of this Agreement and in no event later than fifteen (15) days
after the date hereof, Seller will complete Seller's portion of applications to
the FCC requesting its written consent to the assignment of the FCC Licenses for
the Station (and any extension or renewals thereof) to Buyer, and upon receipt
of Buyer's applications pursuant to Section 6.1 hereof, will promptly file such
applications with the FCC jointly with Buyer. Seller will diligently take or
cooperate in the taking of all steps that are necessary, proper, or desirable to
expedite the preparation of such applications and its prosecution to a Final
Grant. Seller will promptly provide Buyer with a copy of any pleading, order, or
other document served on it relating to such applications.
5.5. Consents. Seller will use best efforts to obtain or cause to be
obtained prior to the Closing Date consents to the assignment to or assumption
by Buyer of all material Licenses or Contracts included in the License Assets
that require the consent of any third party by reason of the transactions
provided for in this Agreement. If any material necessary consent or approval is
not obtained prior to the Closing Date, then Seller will cooperate with Buyer in
any reasonable arrangement deemed necessary or desirable by Buyer to provide to
Buyer, after the Closing Date, the benefits under such Contracts, including
enforcement for the benefit of Buyer of any and all rights of Seller against
third parties.
5.6. Notice of Proceedings. Seller will promptly notify Buyer in
writing upon becoming aware of any order or decree or any complaint praying for
an order or decree restraining or enjoining the consummation of this Agreement
or the transactions contemplated hereunder, or upon receiving any notice from
any governmental department, court, agency, or commission of its intention to
institute an investigation into or institute a suit or proceeding to restrain or
enjoin the consummation of this Agreement or such transactions, or to nullify or
render ineffective this Agreement or such transactions if consumed.
5.7. Confidential Information. If for any reason the transactions
contemplated in this Agreement are not consummated, Seller shall not use or
disclose to third parties (except as may
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be required by law) any confidential information received from Buyer or its
agents in the course of investigating, negotiating, and completing the
transactions contemplated by this Agreement. Nothing shall be deemed to be
confidential information that (a) is known to Seller at the time of its
disclosure to it; (b) becomes publicly known or available other than through
disclosure by Seller; (c) is rightfully received by Seller from a third party;
or (d) is independently developed by Seller.
5.8. Consummation of Agreement. Subject to the provisions of Section
11.1 of this Agreement, Seller shall use its best efforts to fulfill and perform
all conditions and obligations on its part to be fulfilled and performed under
this Agreement and to cause the transactions contemplated by this Agreement to
be fully carried out.
5.9. Notice of Certain Developments. Seller shall give prompt written
notice to Buyer (a) if the License Assets have suffered damage on account of
fire, explosion, or other cause of any nature which is sufficient to prevent
operation of Station for more than four (4) days, and (b) if the regular
broadcast transmission of Station in the normal and usual manner in which it
heretofore has been operating is interrupted for a period of four (4) days or
more.
5.10. Updated Information. Seller agrees to provide to Buyer on or
shortly prior to the Closing Date a list of any additional leases or contracts
which would have been required to be listed on Schedule 1.1(c) hereto pursuant
to Article 3 hereof if such leases or contracts existed on the date of this
Agreement.
ARTICLE 6
COVENANTS OF BUYER PENDING THE CLOSING DATE
Buyer covenants and agrees that from the date hereof to and including
the Closing Date:
6.1. Application for Commission Consent. As promptly as practicable
after the date of this Agreement, and in no event later than fifteen (15) days
from the date hereof, Buyer will complete and give to Seller a fully executed
copy of Buyer's portion of applications to the FCC requesting its written
consent to the assignment of the FCC requesting its written consent to the
assignment of the FCC Licenses (and any extension or renewals thereof) to Buyer.
Buyer will diligently take or cooperate in the taking of all steps that are
necessary, proper, or desirable to expedite the preparation of such application
and its prosecution to a Final Grant. Buyer will promptly provide Seller with a
copy of any pleading, order, or other document served on it relating to such
application.
6.2. Confidential Information. If for any reason the transactions
contemplated in this Agreement are not consummated, Buyer shall not use for its
or any third party's benefit and shall not disclose to third parties (except as
may be required by law) any confidential information (including, without
limitation, financial information) received from Seller or its agents in the
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course of investigating, negotiating, and performing the transactions
contemplated by this Agreement. Nothing shall be deemed to be confidential
information that (a) is known to Buyer at the time of its disclosure to it; (b)
becomes publicly known or available other than through disclosure by Buyer; (c)
is rightfully received by Buyer from a third party; or (d) is independently
developed by Buyer.
6.3. Consummation of Agreement. Subject to the provisions of Section
11.1 of this Agreement, Buyer shall use its best efforts to fulfill and perform
all conditions and obligations on its part to be fulfilled and performed under
this Agreement and to cause the transactions contemplated by this Agreement to
be fully carried out. Buyer agrees to cooperate with Seller in connection with
obtaining consents to the assignment to or assumption by Buyer of any Licenses
or Contracts included in the License Assets, and to execute such assumption
instruments as may be required in connection with obtaining such consents.
6.4. Notice of Proceedings. Buyer will promptly notify Seller in
writing upon becoming aware of any order or decree or any complaint praying for
an order or decree restraining or enjoining the consummation of this Agreement
or the transactions contemplated hereunder, or upon receiving any notice from
any governmental department, court, agency, or commission of its intention to
institute an investigation into or institute a suit or proceeding to restrain or
enjoin the consummation of this Agreement or such transactions, or to nullify or
render ineffective this Agreement or such transactions if consummated.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to or at the
Closing Date:
7.1. Representations, Warranties, and Covenants.
(a) Each of the representations and warranties of Buyer
contained in this Agreement shall have been true and accurate in all material
respects as of the date when made and shall be deemed to be made again on and as
of the Closing Date and shall then be true and accurate except to the extent
changes are permitted or contemplated pursuant to this Agreement.
(b) Buyer shall have performed and complied with each and
every covenant and agreement required by this Agreement to be performed or
complied with by it prior to or at the Closing Date.
(c) Buyer shall have delivered to Seller a certificate of an
officer of Buyer dated the Closing Date certifying to the fulfillment of the
conditions set forth in Sections 7.1(a) and 7.1(b).
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7.2. Proceedings. As of the Closing Date, (a) no action or proceeding
shall have been instituted before any court or governmental body to restrain or
prohibit, or to obtain substantial damages in respect of, the consummation of
this Agreement that, in the reasonable opinion of Seller, may reasonably be
expected to result in a preliminary or permanent injunction against such
consummation or, if the transactions contemplated hereby were consummated, an
order to nullify or render ineffective this Agreement or such transactions or
the recovery against Seller of substantial damages; and (b) none of the parties
to this Agreement shall have received written notice from any governmental body
of (i) its intention to institute any action or proceeding to restrain or enjoin
or nullify this Agreement or the transactions contemplated hereby, or to
commence any investigation (other than a routine letter of inquiry) into the
consummation of this Agreement, or (ii) the actual commencement of such an
investigation.
7.3. Opinion of Counsel. Seller shall have received opinions of Buyer's
counsel and Buyer's special FCC counsel, each dated the Closing Date, in forms
reasonably satisfactory to counsel to Seller.
7.4. FCC Authorization. All FCC approvals and consents to the
transactions contemplated by this Agreement shall have been granted by an
Initial Grant. "Initial Grant" shall be defined for the purposes of this
Agreement as the publication of the FCC "Public Notice" announcing the grant of
the "Assignment Application(s)" for the FCC License(s) to be transferred
hereunder, there being no necessity for a Final Grant (as that term is defined
in Section 8.5 hereof). The terms "Public Notice" and "Assignment
Application(s)" shall have the same meaning herein as in existing FCC rules,
regulations and procedures.
7.5. Other Instruments. Buyer shall have delivered to Seller such
instruments, documents, and certificates as are contemplated by Section 2.4
hereof.
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to or at the
Closing Date.
8.1. Representations, Warranties, Covenants.
(a) Each of the representations and warranties of Seller
contained in this Agreement shall have been true and accurate in all material
respects as of the date when made and shall be deemed to be made again on and as
of the Closing Date and shall then be true and accurate except to the extent
changes are permitted or contemplated pursuant to this Agreement.
(b) Seller shall have performed and complied with each and
every covenant and agreement required by this Agreement to be performed or
complied with by it prior to or
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at the Closing Date.
(c) Seller shall have delivered to Buyer a certificate of an
officer of Seller dated the Closing Date certifying to the fulfillment of the
conditions set forth in Sections 8.1(a) and 8.1(b).
8.2. Proceedings. As of the Closing Date, (a) no action or proceeding
shall have been instituted before any court or governmental body to restrain, or
prohibit or to obtain substantial damages in respect of, the consummation of
this Agreement that, in the reasonable opinion of Buyer, may reasonably be
expected to result in a preliminary or permanent injunction against such
consummation or, if the transactions contemplated hereby were consummated, an
order to nullify or render ineffective this Agreement or such transactions or
the recovery against Seller of substantial damages; and (b) none of the parties
to this Agreement shall have received written notice from any governmental body
of (i) its intention to institute any action or proceeding to restrain or enjoin
or nullify this Agreement or the transactions contemplated hereby, or to
commence any investigation (other than a routine letter of inquiry) into the
consummation of this Agreement, or (ii) the actual commencement of such an
investigation.
8.3. Opinion of Counsel. Buyer shall have received opinions of Seller's
counsel and Seller's special FCC counsel, each dated the Closing Date, in forms
reasonably satisfactory to counsel to Buyer.
8.4. Damage to the Assets. The License Assets shall not have suffered
damage on account of fire, explosion, or other similar cause of any nature that
is sufficient to prevent operation of the Station or the transmission of its
normal and usual signal for a period of at least ten (10) consecutive days;
provided that on or prior to five (5) business days after Seller shall have
notified Buyer of such damage or event, Buyer shall have notified Seller that
Buyer is terminating this Agreement on account of such damage or event pursuant
to Section 11.1(b)(iii) hereof.
8.5. FCC Licenses. All FCC consents and approvals to the transactions
contemplated by this Agreement shall have become a Final Grant without any
condition or qualification materially adverse to Buyer or the operation of the
Station. For the purposes of this Agreement, "Final Grant" shall mean action by
the FCC as to which no further steps (including those of appeal or certiorari)
can be taken in any action or proceeding to review, modify, or set the
determination aside, whether under Section 402 of 405 of the Communications Act,
or otherwise. Buyer shall have the right to waive the foregoing condition and
proceed to Closing when all such FCC consents and approvals shall have been
granted by an Initial Grant.
8.6. Consents. Seller shall have obtained, prior to the Closing Date,
any necessary consents from third parties with respect to the Contracts included
in the License Assets which are listed as "material" on Schedule 3.8 hereto.
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8.7. Other Instruments. Seller shall have delivered to Buyer such
instruments, documents, and certificates as are contemplated by Section 2.4
hereof.
ARTICLE 9
INDEMNIFICATION
9.1. Survival. All statements of any party contained in this Agreement
(including the Schedules hereto) or in any certificate delivered by it pursuant
to this Agreement shall be deemed to be representations and warranties made
pursuant to this Agreement. The representations, warranties, covenants, and
agreements of Seller and Buyer contained in or made pursuant to this Agreement
shall be deemed to have been made on the Closing Date, shall survive the Closing
Date for a period of two (2) years after the Closing Date, and shall remain
operative and in full force and effect after the Closing Date for a period of
two (2) years after the Closing Date regardless of any investigation or
statement as to the results thereof made by or on behalf of any party provided,
however, that (i) Buyer's obligation to pay, perform, and discharge the Assumed
Liabilities shall survive until such Assumed Liabilities have been paid,
performed, or discharged in full; and (ii) Seller's obligations with respect to
all obligations and liabilities not assumed by Buyer pursuant to this Agreement
shall survive until such obligations and liabilities have been paid, performed,
or discharged in full.
9.2. Indemnification of Buyer. Seller agrees that, after the Closing,
it shall indemnify and hold Buyer harmless from and against any and all damages,
claims, losses, expenses, costs, obligations, and liabilities, including,
without limiting the generality of the foregoing, liabilities for reasonable
attorneys' fees and expenses ("Loss and Expense") suffered directly or
indirectly by Buyer by reason of or arising out of (i) any material breach of
representation or warranty made by Seller pursuant to this Agreement; (ii) any
material failure by Seller to perform or fulfill any of their covenants or
agreements set forth in this Agreement; (iii) any failure by Seller to pay,
perform, or discharge any liabilities or obligations not specifically assumed by
Buyer pursuant to this Agreement; or (iv) any litigation, proceeding, or claim
by any third party arising from the use of the License Assets by Seller prior to
the Closing Date, except to the extent arising from obligations or liabilities
of or assumed by Buyer pursuant to this Agreement.
9.3. Indemnification of Seller. Buyer agrees that, after the Closing,
it shall indemnify and hold Seller harmless from and against any and all Loss
and Expense suffered directly or indirectly by Seller by reason of or arising
out of (i) any material breach of representation or warranty made by Buyer
pursuant to this Agreement; (ii) any material failure by Buyer to perform or
fulfill any of its covenants or agreements set forth in this Agreement; (iii)
any failure by Buyer to pay, perform, or discharge any Assumed Liabilities or
any other obligations or liabilities of or assumed by Buyer under this Agreement
(including, without limitation, those set forth in Section 10.2 hereof); or (iv)
any litigation, proceeding, or claim by any third party arising from the use of
the License Assets on or after the Closing Date.
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9.4 Limitation of Liability. Notwithstanding Sections 9.1, 9.2 and 9.3
hereof, after the Closing, Seller shall not indemnify or otherwise be liable to
Buyer, and Buyer shall not indemnify or otherwise be liable to Seller unless the
aggregate amount of Buyer's or Seller's, as applicable, Loss and Expense exceeds
$25,000, in which event the indemnified party shall be entitled to recover its
aggregate Loss and Expense inclusive of such $25,000 threshold; provided,
however, that the foregoing limitation shall not be applicable to the
obligations of either party under Section 2.2 or to the obligation of Buyer to
pay and discharge any Assumed Liabilities or any other obligations or
liabilities of Buyer under this Agreement or the obligation of Seller to pay and
discharge liabilities to third parties not assumed by Buyer hereunder.
9.5. Bulk Sales Indemnity. Buyer hereby waives compliance with the
provisions of any applicable bulk transfer laws, and Seller covenants to pay and
discharge when due all debts, obligations, and liabilities incurred prior to the
Closing Date relating to the License Assets, except the Assumed Liabilities and
other obligations or liabilities to be paid or discharged by Buyer as provided
in this Agreement. Seller further agrees to indemnify and hold Buyer harmless
from and indemnify Buyer against any and all Loss and Expense, including,
without limitation, any claims made by creditors, with respect to non-compliance
with any bulk transfer law, except to the extent that such claims result from
the Assumed Liabilities and other obligations or liabilities to be paid or
discharged by Buyer as provided in this Agreement and/or Buyer's failure to pay
the same when due.
9.6. Notice of Claims. If Buyer or Seller believes that it has suffered
or incurred any Loss and Expense, such party shall notify the other promptly in
writing describing such Loss and Expense, the amount thereof, if known, and the
method of computation of such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred. If any action at law
or suit in equity is instituted by a third party with respect to which any of
the parties intends to claim any liability or expense as Loss and Expense under
this Article 9, such party shall promptly notify the indemnifying party of such
action or suit.
9.7. Defense of Third Party Claims. The indemnifying party under this
Article 9 shall have the right to conduct and control through counsel of its own
choosing any third party claim, action, or suit, but the indemnified party may,
at its election, participate in the defense of any such claim, action, or suit
at its sole cost and expense provided that, if the indemnifying party shall fail
to defend any such claim, action, or suit, then the indemnified party may defend
through counsel of its own choosing such claim, action, or suit, and (so long as
it gives the indemnifying party at least fifteen (15) days' notice of the terms
of the proposed settlement thereof and permits the indemnifying party to then
undertake the defense thereof) settle such claim, action, or suit, and to
recover from the indemnifying party the amount of such settlement or of any
judgment and the costs and expenses of such defense. The indemnifying party
shall not compromise or settle any third party claim, action, or suit without
the prior written consent
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of the indemnified party, which consent will not be unreasonably withheld or
delayed.
ARTICLE 10
POST-CLOSING MATTERS
10.1. Employee Matters. Buyer is not obligated by this Agreement to
offer employment to any of the employees of Seller whether or not such employee
is employed in connection with the License Assets. At its election, after the
Closing, the Buyer may solicit for employment by Buyer any individual who is an
employee of the Seller who is employed in connection with the License Assets.
Buyer shall not assume and shall not be responsible for any liabilities with
respect to sick leave and personal days accrued by any employees of Seller who
enter the employment of Buyer or for any accrued vacation of any such employees
unless specifically provided for in the adjustment made pursuant to Section 2.2.
Buyer agrees that Seller may inform its employees that Buyer may agree to offer
employment, as provided in this Section 10.1. Buyer does not agree to pay and/or
reimburse Seller for and to indemnify Seller from and against any and all
severance or other liabilities arising out of Seller's termination of the
employment of any of its employees in connection with the sale of the License
Assets to Buyer (including, without limitation, any liabilities under the
so-called "WARN Act" or any applicable state laws regarding termination of
employees). This Section 10.1 shall operate exclusively for the benefit of the
parties to this Agreement and not for the benefit of any other person or entity.
10.2. Call Letters. After the Closing Date, Seller shall take such
action as may be reasonably requested by Buyer to evidence this assignment to
Buyer of the right to the use of the name and call letters "WTTE."
ARTICLE 11
TERMINATION/MISCELLANEOUS
11.1. Termination of Agreement. This Agreement may be terminated at any
time on or prior to the Closing Date as follows:
(a) By Seller:
(i) if Buyer fails to comply with Sections 6.1 hereof
within ten (10) days after Seller notifies Buyer that Buyer has not complied
with such section, provided that Seller shall have used its best efforts to
cooperate in the preparation of its portion of the application for FCC consents
as provided in Section 5.4; or
(ii) if any of the conditions provided in Article 7
hereof have not been met
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by the time required and have not been waived, provided that the failure to meet
such conditions is not due to Seller's breach of the Agreement; or
(b) By Buyer:
(i) if Seller fails to comply with Sections 5.4
hereof within ten (10) days after Buyer notifies Seller that Seller has not
complied with any such section, provided that Buyer shall have used its best
efforts to cooperate in the preparation of its portion of the application for
FCC consents as provided in Section 6.1; or
(ii) if any of the conditions provided in Article 8
hereof have not been met by the time required and have not been waived, provided
that the failure to meet such conditions is not due to Buyer's breach of the
Agreement; or
(iii) no later than fifteen (15) business days after
Seller has notified Buyer pursuant to Section 8.4 of the occurrence of any
damage or event as described in Section 8.4.
(c) By Either Buyer or Seller as follows:
(i) by mutual consent of all parties; or
(ii) if the Closing shall not have been completed by
the date set forth in Section 2.3 hereof.
No party hereto shall have any liability to any other for costs,
expenses, damages, loss of anticipated profits, or otherwise as a result of a
termination pursuant to this Section 11.1.
11.2. Expenses. Each party hereto shall bear all of its expenses
incurred in connection with the transactions contemplated by this Agreement,
including, without limitation, accounting, and legal fees incurred in connection
herewith, provided that Seller shall pay the FCC filing fees, and any sales, use
or transfer taxes arising from transfer of the License Assets.
11.3. Assignments. This Agreement shall not be assigned by any party
hereto without the prior written consent of the other party, except that Buyer
may assign its rights and interests to: (i) a wholly-owned subsidiary; or (ii) a
wholly-owned subsidiary of a subsidiary; provided that Buyer gives Seller
written notice thereof and that such assignment will not delay receipt of the
FCC consents or the finality thereof and provided further that any such
assignment shall not relieve Buyer of any of its obligations or liabilities
hereunder. Any attempt to assign this Agreement without any required consent
shall be void. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
11.4. Further Assurances. From time to time prior to, at, and after the
Closing Date,
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each party hereto will execute all such instruments and take all such actions as
another party being advised by counsel shall reasonably request in connection
with carrying out and effectuating the intent and purpose hereof, and all
transactions and things contemplated by this Agreement, including, without
limitation, the execution and delivery of any and all confirmatory and other
instruments, in addition to those to be delivered on the Closing Date, and any
and all actions which may reasonably be necessary to complete the transactions
contemplated hereby.
11.5. Notices. All notices, demands, and other communications which may
or are required to be given hereunder or with respect hereto shall be in
writing, shall be delivered personally or sent by nationally recognized
overnight delivery service, charges prepared, or by registered or certified
mail, return-receipt requested, or facsimile transmission and shall be deemed to
have been given or made when personally delivered or received, the next business
day after delivery to such overnight delivery service, five (5) days after
deposited in the mail, first class postage prepaid, addressed as follows:
(a) If to Seller: WTTE, Channel 28, Inc.
WTTE, Channel 28 Licensee, Inc.
c/o Sinclair Broadcast Group, Inc.
2000 W. 41st Street
Baltimore, Maryland 21211
Attn: David B. Amy
Fax: (410) 467-5043
with a copy to: Thomas & Libowitz, P.A.
100 Light Street, Suite 1100
Baltimore, Maryland 21202-1053
Attn: Steven A. Thomas and
Clinton R. Black
Fax: (410) 752-2046
or to such other address as Seller may from time to time designate.
(b) If to Buyer: Glencairn, Ltd.
500 Seco Road
Pittsburgh, Pennsylvania 15146
Attn: Mr. Edwin L. Edwards, Sr.
Fax: (412) 856-0633
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with a copy to: Wilmer, Cutler & Pickering
100 Light Street
Baltimore, Maryland 21202
Attn: John B. Watkins
Fax: (410) 986-2828
or to such other address as Buyer may from time to time designate.
11.6. Captions. The captions of Articles and Sections of this Agreement
are for convenience only, and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
11.7. Governing Law and Remedies. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of Maryland without
reference to its principles of conflict of laws, except to the extent that the
federal law of the United States governs the transactions contemplated hereby.
Buyer and Seller will have and retain all rights and remedies existing in its
favor at law or equity. Without limiting the foregoing, if Seller refuses or
fails to perform any of its covenants or other obligations under this Agreement,
then Buyer will have the right to specific performance of such covenant or
obligation under this Agreement, subject to applicable FCC rules, regulations
and policies. In the event of any action to enforce this Agreement specifically,
Seller hereby waives the defense that Buyer has an adequate remedy at law.
11.8. Consent To Jurisdiction, Etc. In the event of any action or
proceeding with respect to any matter pertaining to this Agreement, the parties
hereto hereby waive the right to a trial by jury. The parties hereto hereby
irrevocably consent to the nonexclusive jurisdiction and venue of the state
courts of Maryland and of any federal court located in the State of Maryland in
connection with any action or proceeding arising out of or relating to this
Agreement. The parties hereby waive personal service of any process in
connection with any such action or proceeding and agree that the service thereof
may be made by certified or registered mail addressed to or by personal delivery
to the other party at such other party's address set forth pursuant to paragraph
11.5 hereof. In the alternative, in its discretion, any of the parties hereto
may effect service upon any other party in any other form or manner permitted by
law.
11.9. Waiver of Provisions. The terms, covenants, representations,
warranties, and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision of this Agreement
shall in no manner affect the right at a later date to enforce the same. No
waiver by any party of any condition or the breach of any provision, term,
covenant, representation, or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or of the
breach of any other provision, term, covenant, representation,
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or warranty of this Agreement.
11.10. Counterparts. This Agreement may be executed in two (2) or more
counterparts, and all counterparts so executed shall constitute one (1)
agreement binding on all of the parties hereto, notwithstanding that all the
parties are not signatory to the same counterpart.
11.11. Entire Agreement/Amendments. This Agreement (including the
Schedules hereto), constitutes the entire Agreement among the parties pertaining
to the subject matter hereof and supersedes any and all prior and
contemporaneous agreements, understandings, negotiations, and discussions,
whether oral or written, between them relating to the subject matter hereof. No
amendment or waiver of any provision of this Agreement shall be binding unless
executed in writing by the party to be bound thereby.
11.12. Access to Books and Records. Buyer shall preserve for at least
three (3) years after the Closing Date all books and records included in the
License Assets. At the request of Seller, Buyer agrees from time to time to give
to the officers, employees, accountants, and counsel of Seller access, upon
reasonable prior notice during normal business hours, to the property, accounts,
books, contracts, records, accounts payable and receivable, records of employees
of Seller, and other information concerning the License Assets and to the
employees of Buyer as Seller may reasonably request in connection with an audit
by Seller of the Station as of the Closing Date and Seller's preparation of tax
returns and reports. At the request of Buyer, Seller agrees from time to time to
give the officers, employees, accountants, and counsel of Buyer access, upon
reasonable prior notice during normal business hours, to the books, records, and
files retained by Seller with respect to the License Assets as Buyer may
reasonably request in connection with its preparation of tax returns and
reports. Each of Buyer and Seller shall be permitted, at their expense, to make
extracts from or copies of the foregoing books, records, and files of the other
party.
11.13. Public Announcements. Prior to the Closing Date, neither Seller
nor Buyer shall, except by mutual agreement, make any press release or other
public announcement concerning the transactions contemplated by this Agreement,
except as may be required by any law, rule, or regulation (including, without
limitation, filings, and reports required to be made with or pursuant to the
rules of the Securities and Exchange Commission) or by any existing contract,
license, or agreement to which it is a party.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by the hands and seals of their duly authorized officers, all as of the
day and year first above written.
WITNESS/ATTEST: WTTE, CHANNEL 28, INC.
_________________________ By: /s/ David B. Amy (SEAL)
Name: Name: David B. Amy
Title: Title: Secretary/Treasurer
WTTE, CHANNEL 28 LICENSEE, INC.
_________________________ By: /s/ David B. Amy (SEAL)
Name: Name: David B. Amy
Title: Title: Secretary/Treasurer
GLENCAIRN, LTD.
_________________________ By: /s/ Edwin L. Edwards (SEAL)
Name: Name: Edwin L. Edwards, Sr.
Title: Title: President
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