Exhibit 1.1
AGREEMENT TO PURCHASE NST VENTURE INTEREST
AND CAPITAL STOCK
by and among
THE STOCKHOLDERS OF HARRISCOPE OF CHICAGO, INC. and
NATIONAL SUBSCRIPTION TELEVISION OF CHICAGO INC.,
as the Sellers
and
TELEMUNDO OF CHICAGO, INC.,
as Buyer
Dated as of November 8, 1995
AGREEMENT TO PURCHASE NST VENTURE INTEREST
AND CAPITAL STOCK
AGREEMENT TO PURCHASE NST VENTURE INTEREST AND CAPITAL STOCK (this
"Agreement") dated as of November 8, 1995, by and among all the
stockholders of Harriscope of Chicago, Inc., an Illinois corporation
("Harriscope"), whose names appear on the signature page of this Agreement
(the "Stockholders"), and NATIONAL SUBSCRIPTION TELEVISION OF CHICAGO INC.,
an Illinois corporation ("NST") (each of the Stockholders and NST may
hereinafter be referred to individually as a "Seller", and collectively as
the "Sellers"; the Stockholder other than NST herein is referred to as the
"▇▇▇▇▇▇ Group"), and TELEMUNDO OF CHICAGO, INC., a Delaware corporation
(the "Buyer").
RECITALS
Harriscope, NST, and ESSANESS THEATRES CORPORATION, a Delaware
corporation ("Essaness"), currently comprise all of the members of the
joint venture (the "Joint Venture") (created under that certain Amended and
Restated Joint Venture Agreement (Video 44), dated May 16, 1980 (the "Joint
Venture Agreement")). The Joint Venture owns, leases or has a right to use
all of the assets, both tangible and intangible, of or used by television
broadcast station WSNS-TV, Channel 44, Chicago, Illinois, together with
certain auxiliary facilities and properties (the "Station"). NST holds a
twenty-four and one-half percent (24.5%) interest (the "NST Venture
Interest") in the profits, losses, assets and capital of the Joint Venture
under the Joint Venture Agreement. The Stockholders own one hundred
percent (100%) of the outstanding capital stock (the "Shares") of
Harriscope, which holds a fifty percent (50%) interest (the "Harriscope
Interest") in the profit, losses, assets and capital of the Joint Venture.
Buyer desires to purchase from the Sellers, and the Sellers desire to sell
to Buyer, the NST Venture Interest and the Shares, all in accordance with
the terms and conditions set forth in this Agreement.
In consideration of the mutual promises set forth in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the parties agree as follows:
1. PURCHASE AND SALE; PURCHASE PRICE; PAYMENT AND CLOSING
1 Purchase and Sale
Subject to the terms and conditions of this Agreement, at the
Closing, Buyer shall purchase:
(a) the NST Venture Interest from NST; and
(b) the Shares from the Stockholders.
2 Purchase Price
(a) The purchase price for the NST Venture Interest shall be Fourteen
Million Seven Hundred Thousand Dollars ($14,700,000.00), subject to
adjustment as set forth herein (the "NST Purchase Price").
(b) The purchase price for the Shares shall be Thirty Million Dollars
($30,000,000.00), divided among the Stockholders as set forth in Schedule
1.2, subject to adjustment as set forth herein (the "Harriscope Purchase
Price").
The NST Purchase Price and the Harriscope Purchase Price shall be
referred to collectively in this Agreement as the "Purchase Price."
(c) The amount of the Purchase Price shall be reduced by seventy four
and one half percent (74.5%) of the unpaid principal and unpaid accrued
interest outstanding, if any, as of the Closing Date (as defined below) on
that certain promissory note dated May 27, 1993 from the Joint Venture as
payor to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as Trustee or payee in the original principal
amount of $10 million (the "▇▇▇▇▇▇ Note"). The Purchase Price shall be
reduced proportionately among NST and the Stockholders as set forth in
Schedule 1.2.
(d) Within one business day of the date of this Agreement, Buyer will
deposit One Million Five Hundred Thousand Dollars ($1,500,000.00) (the
"Deposit") in escrow with The First National Bank of Chicago (such escrow
agent, or any successor person or entity acting as the escrow agent under
this Agreement, the "Escrow Agent") to be held and disbursed pursuant to
the terms of this Agreement and the escrow agreement being executed
contemporaneously with this Agreement (the "Escrow Agreement").
(e) NST and Buyer agree that the NST Purchase Price shall be allocated
among the assets of the Joint Venture as may be reasonably agreed by NST
and Buyer.
3 Payment of Purchase Price and Closing
Buyer shall pay the Purchase Price to the Sellers at the Closing by
wire transfer of immediately available funds pursuant to the Sellers'
written instructions, provided that Buyer shall be required to send only
one wire to NST and only one wire to the ▇▇▇▇▇▇ Group. Buyer may offset
against the Purchase Price due to the Sellers at the Closing by delivery
to the Sellers of the Deposit at the Closing pursuant to the Escrow
Agreement. The closing of the purchase of the NST Venture Interest and the
Shares by Buyer (the "Closing") shall take place at the offices of Akin
Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇, L.L.P., New York, New York (the "Closing
Location") and shall be held within ten (10) business days after all
conditions to the Closing set forth in this Agreement have been satisfied
(the "Closing Date"); provided that, to the extent practicable, it is the
parties' intention to close on the last day of a month.
4 Working Capital Adjustments
In addition to the Purchase Price and in further consideration of
the purchases and sales hereunder, the following payments or adjustments
shall be made:
(a) The Joint Venture and Harriscope shall prepare closing statements as
of the last day of the month immediately preceding the Closing Date,
indicating, among other items, each of their respective current assets and
liabilities (which are or should be reflected on the Joint Venture or
Harriscope's balance sheets in accordance with generally accepted
accounting principles), which statements shall be prepared in accordance
with generally accepted accounting principles consistently applied (the
"Closing Statements"). In making such calculations, neither Harriscope's
interest in the Joint Venture nor any asset or liability of the Joint
Venture shall be included in the current assets or liabilities of
Harriscope. In determining Adjusted Positive Working Capital (as defined
below) and Adjusted Negative Working Capital (as defined below), the
monthly average of the previous four months' cash flow (calculated after
any distributions to any Partners) shall be added to the cash balance in
such calculation (the "Closing Month Adjustment"). The following payments
or adjustments shall be made on the Closing Date:
(i) To the extent that the current assets (excluding account
receivables) plus the Closing Month Adjustment (as contemplated above) are
greater than liabilities (excluding the BMI liability described to Buyer),
(the "Adjusted Positive Working Capital") of the Joint Venture as shown on
its Closing Statement, Buyer shall pay to (A) NST, 24.5% of the Adjusted
Positive Working Capital and (B) the Stockholders (pro rata based upon
their proportionate interests in Harriscope as set forth in Schedule 1.2),
50% of the Adjusted Positive Working Capital; and
(ii) To the extent that current assets (excluding account
receivables) plus the Closing Month Adjustment (as contemplated above) are
less than such liabilities (the "Adjusted Negative Working Capital") of the
Joint Venture as shown on its Closing Statement, 74.5% of the Adjusted
Negative Working Capital shall be deducted from the proceeds payable to the
Sellers from Joint Venture Account Receivables (as defined below) (prior to
remitting any amounts received from Joint Venture Account Receivables to
Sellers) (proportionally based on their ownership of the Joint Venture),
provided, that to the extent the Adjusted Negative Working Capital is
greater than $1 million, 74.5% of such amount above $1 million shall be
deducted from the proceeds payable to the Sellers at the Closing. In
addition, Sellers shall remit to Buyer at the end of the 120 day period
determined in Section 1.4(c), 74.5% of the Adjusted Negative Working
Capital balance for the Joint Venture remaining after giving effect to the
net proceeds received from Joint Venture Account Receivables. Furthermore,
Sellers shall remit to Buyer at the end of the 120 day period determined in
Section 1.4(d) 100% of the Adjusted Negative Working Capital balance for
Harriscope after giving effect to the net proceeds received from Harriscope
Account Receivables and any remaining Harriscope Account Receivables.
In addition to and notwithstanding the above, the parties further
agree to similarly adjust the amount payable by Buyer to Stockholders at
the Closing to reflect the Adjusted Positive Working Capital or the
Adjusted Negative Working Capital of Harriscope based on the above
principles without duplication of any item in such calculation that was
otherwise included in the calculation for the Joint Venture as contemplated
by the preceding paragraphs and with the understanding that the
Stockholders shall receive 100% of the Adjusted Positive Working Capital of
Harriscope.
(b) Within forty-five business days after the Closing Date, Buyer shall
furnish to NST and the ▇▇▇▇▇▇ Group Representative closing statements as of
the Closing Date prepared in the same format as the Closing Statements
("Actual Closing Statements"). Within 45 days after delivery to NST and
the ▇▇▇▇▇▇ Group Representative of the Actual Closing Statements, NST and
the ▇▇▇▇▇▇ Group Representative shall furnish to Buyer a statement showing
any objections they have to the Actual Closing Statements. Any disputes
regarding the Actual Closing Statements or any adjustments in connection
therewith not resolved by the parties within 30 days after the receipt by
Buyer's, NST's and the ▇▇▇▇▇▇ Group Representative's objections shall be
resolved by a "big six" accounting firm mutually acceptable to the parties.
The determination of any accounting firm so selected shall be conclusive
and binding upon the parties. The fees and expenses of such accounting
firm acting under this Agreement shall be shared equally among the Buyer,
NST and the ▇▇▇▇▇▇ Group. Upon the agreement or final determination of any
Adjusted Positive Working Capital or Adjusted Negative Working Capital
different from those determined pursuant to the Actual Closing Statements,
Buyer shall make appropriate payments, or Sellers shall make appropriate
refunds, within five business days after such agreement or final
determination.
(c) From and after the Closing, Buyer shall use its reasonable best
efforts to collect and receive and liquidate into cash all account
receivables of the Joint Venture as of the Closing Date (the "Joint Venture
Account Receivables"), in the ordinary course of the Joint Venture's
business and consistent with past practice. TGI will pay its receivables
due or accrued as of the Closing Date to the Joint Venture promptly when
due, in accordance with past practice. From the amounts actually collected
or received with respect to the Joint Venture Account Receivables, net of
reasonable out-of-pocket collection costs paid to any non-affiliated third
party, Buyer shall remit to (i) NST its proportionate 24.5% share and (ii)
to the Stockholders in proportion to their interest in Harriscope as set
forth in Schedule 1.2, Harriscope's proportionate 50.0% share, of any
future liquidated Joint Venture Account Receivables collected or received
by the Joint Venture or the Buyer, net of reasonable out-of-pocket
collection costs paid to any non-affiliated third party, on a monthly
basis, by the 15th day of the following calendar month. Buyer will
exercise reasonable best efforts and diligence to collect such Joint
Venture Account Receivables, but will not be required to institute
collection or any other court proceedings. NST and the ▇▇▇▇▇▇ Group agree
that during the Collection Period (as defined herein), the Buyer shall be
solely responsible for seeking collection of Joint Venture Account
Receivables, and during the Collection Period, NST and the ▇▇▇▇▇▇ Group
shall not correspond with or seek payment from any such Joint Venture
Account Receivables' debtors. In the event that any of the Joint Venture
Account Receivables have not been collected within 120 days after the
Closing Date (the "Collection Period"), Buyer shall, upon the request of
NST and the ▇▇▇▇▇▇ Group, assign such receivable to the NST and the ▇▇▇▇▇▇
Group or any entity they may designate, who shall remit to Joint Venture
(for the account of Essaness) 25.5% of any net amount collected with
respect to such receivable.
(d) From and after the Closing, Buyer shall use its reasonable best
efforts to collect and receive and liquidate into cash all account
receivables of Harriscope as of the Closing Date (the "Harriscope Account
Receivables"), in the ordinary course of the Harriscope's business and
consistent with past practice. From the amounts actually collected or
received with respect to the Harriscope Account Receivables, net of
reasonable out-of-pocket collection costs paid to any non-affiliated third
party, Buyer shall remit to the Stockholders their respective proportionate
share of any future liquidated Harriscope Account Receivables collected or
received by Buyer, net of reasonable out-of-pocket collection costs paid to
any non-affiliated third party, on a monthly basis, by the 15th day of the
following calendar month. Buyer will exercise reasonable best efforts and
diligence to collect such future liquidated Harriscope Account Receivables,
but will not be required to institute collection or other court
proceedings. The Stockholders agree that during the Collection Period the
Buyer shall be solely responsible for seeking collection of Harriscope
Account Receivables, and during the Collection Period the Stockholders
shall not correspond with or seek payment from any Harriscope Account
Receivables' debtors. Notwithstanding the foregoing, no amount of
Harriscope Account Receivables shall be counted for purposes of this
Section 1.4(d) to the extent already counted as Joint Venture Account
Receivables for purposes of Section 1.4(c). In the event that any of the
Harriscope Account Receivables have not been collected within 120 days
after the Closing Date, Buyer shall, upon the request of the Stockholders,
assign such receivable to the Stockholders or any entity they may
designate.
(e) In determining the gross amount received from an account receivables
debtor with respect to the Joint Venture Account Receivables or the
Harriscope Account Receivables, unless the account debtor disputes an
invoice or invoices in writing, such amount received shall be applied to
all accounts receivables owed by such party such that the oldest receivable
is paid off first.
5 Stockholders' Representative
(a) In order to administer efficiently the waiver of any condition to
the obligations of the ▇▇▇▇▇▇ Group to consummate the transactions
contemplated hereby, the defense and/or settlement of any claims for which
the ▇▇▇▇▇▇ Group may be required to indemnify the Buyer pursuant to the
indemnity provisions of this agreement, any amendment to this Agreement (or
any related agreements) or the execution and delivery of any closing
document, and any other actions required to be taken by the ▇▇▇▇▇▇ Group,
the ▇▇▇▇▇▇ Group hereby designates and appoints ▇▇▇▇ ▇. ▇▇▇▇▇▇, or any
successor or assign, as their representative and attorney-in-fact (in such
capacity, the "▇▇▇▇▇▇ Group Representative").
(b) By its execution of this Agreement, the ▇▇▇▇▇▇ Group agrees that:
(i) the Buyer and NST shall be able to rely conclusively without further
inquiry on the instructions and decisions of the ▇▇▇▇▇▇ Group
Representative acting in such capacity as to the settlement of any claims
for indemnification by the Buyer hereunder and as to any other action taken
by the ▇▇▇▇▇▇ Group Representative hereunder, and no party hereunder shall
have any cause of action against the Buyer or NST for any action taken by
the Buyer in reliance upon the instructions or decisions of the ▇▇▇▇▇▇
Group Representative; and
(ii) all actions, decisions and instructions of the ▇▇▇▇▇▇ Group
Representative shall be conclusive and binding upon all of the ▇▇▇▇▇▇
Group.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Notwithstanding anything else contained in this Section 2 to the
contrary, each of the following representations and warranties:
(i) made as to matters relating solely to NST, either in its capacity as
a Joint Venture partner or a Stockholder, or the NST Venture Interest or
NST's Shares, shall be made by NST to Buyer by NST, for itself only;
(ii) made as to matters relating solely to the Stockholders, or their
respective Shares, shall be made to Buyer by each of NST and the ▇▇▇▇▇▇
Group severally, for itself only and not jointly;
(iii) made as to matters relating solely to Harriscope, shall be made to
Buyer by each of NST and the ▇▇▇▇▇▇ Group severally, for itself only and
not jointly;
(iv) made as to other matters, including as relates to the Joint Venture
(including, but not limited to, the business, operations and financial
condition of the Station), shall be made to Buyer by each of NST and the
▇▇▇▇▇▇ Group severally (except as expressly set forth otherwise, in which
case such representation and warranty shall nonetheless be made severally,
and not jointly, by each party making the same), for itself only and not
jointly; and
(v) made as to matters relating to the ▇▇▇▇▇▇ Group, shall be made to
the Buyer by the ▇▇▇▇▇▇ Group, for itself only.
2 Organization and Authority of the Joint Venture
The Joint Venture (a) was formed under the laws of the State of
Illinois, (b) is conducting business in and is located in the City of
Chicago, State of Illinois, and (c) has the full and unrestricted power and
authority to own, lease and otherwise to use, hold and operate the Assets
(as hereinafter defined), and to carry on its business as now being
conducted. A copy of the Joint Venture Agreement as in effect on the date
hereof, certified by NST and the ▇▇▇▇▇▇ Group Representative, has been
delivered to the Buyer, is complete and correct, and no amendments have
been made thereto or have been authorized since the date thereof. The
Joint Venture does not own any capital stock of or other equity interest in
any corporation, partnership or other entity and is not obligated to make
an investment in or contribution to any such entity. The Joint Venture's
sole business is to own and operate the Station.
3 Organization and Authority of Harriscope
Harriscope is a corporation duly organized, validly existing and in
good standing under the laws of the State of Illinois, and has the full and
unrestricted power and authority to own, lease or otherwise hold its
properties and to carry on its business as now being conducted. Certified
copies of the Articles of Incorporation and Bylaws of Harriscope, each as
amended to date, have been previously delivered to Buyer, are complete and
correct, and no amendments have been made thereto or have been authorized
since the date thereof. Harriscope does not own any capital stock,
partnership interest or other equity or ownership interest in any
corporation, partnership or other entity other than the Harriscope Interest
and is not obligated to make an investment in or contribution to any such
entity. Harriscope's sole business is to own an interest in the Joint
Venture.
4 Authorization of NST and the ▇▇▇▇▇▇ Group
(a) This Agreement and the Escrow Agreement have been, and the other
agreements contemplated by the transactions to be consummated hereby to
which NST is a party, will be at the time of execution by NST, duly
authorized, executed and delivered by NST. Assuming due authorization,
execution and delivery by the other parties hereto and thereto, this
Agreement and all such other agreements and written obligations entered
into and undertaken in connection with the transactions contemplated hereby
to which NST is a party or by which it is bound constitute (or will
constitute at the time of execution) the valid and legally binding
obligations of NST enforceable against it in accordance with their
respective terms, except to the extent limited by applicable bankruptcy,
insolvency, moratorium and other similar laws of general application
relating to or affecting the enforcement of creditors' rights and general
equity principles. The execution, delivery and performance of this
Agreement and the agreements contemplated by the transactions to be
consummated hereby to which NST is a party, and the consummation by NST of
the transactions contemplated hereby and thereby, will not, with or without
the giving of notice or the passage of time or both, (i) violate the
provisions of any law, rule or regulation applicable to NST, Harriscope or
the Joint Venture (assuming compliance with the requirements of the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Communications Act of 1934, as amended (the "FCC Act") and the
Federal Communications Commission (the "FCC")); (ii) violate the provisions
of NST's or Harriscope's Articles of Incorporation or Bylaws; (iii) violate
any judgment, decree, order or award of any court, governmental body or
arbitrator applicable to NST, Harriscope or the Joint Venture; (iv)
conflict with or result in the breach or termination of any term or
provision of, or constitute a default under, or cause any acceleration
under, or cause the creation of any Encumbrance (as defined in Section 2.5)
upon the properties or assets of NST or Harriscope pursuant to, any
contract, indenture, mortgage, deed of trust or other agreement or
instrument to which NST or Harriscope is a party, or by which NST,
Harriscope or NST's properties being transferred to the Buyer hereunder or
Harriscope's properties are or may be bound; or (v) conflict with or result
in the breach or termination of any material term or provision of, or
constitute a default under, or cause any acceleration under, or cause the
creation of any Encumbrance upon the material properties or assets of the
Joint Venture pursuant to, any contract, indenture, mortgage, deed of trust
or other agreement or instrument to which the Joint Venture is a party, or
by which the Joint Venture or the Joint Venture's properties (other than
the Drake Property (as defined)) are or may be bound.
(b) This Agreement and the Escrow Agreement have been, and the other
agreements contemplated by the transactions to be consummated hereby to
which the ▇▇▇▇▇▇ Group is a party, will be at the time of execution by the
▇▇▇▇▇▇ Group duly authorized, executed and delivered by the ▇▇▇▇▇▇ Group.
Assuming due authorization, execution and delivery by the other parties
hereto and thereto, this Agreement and all such other agreements and
written obligations entered into and undertaken in connection with the
transactions contemplated hereby to which the ▇▇▇▇▇▇ Group are parties or
by which they are bound constitute (or will constitute at the time of
execution) the valid and legally binding obligations of the ▇▇▇▇▇▇ Group
enforceable against them in accordance with their respective terms, except
to the extent limited by applicable bankruptcy, insolvency, moratorium and
other similar laws of general application relating to or affecting the
enforcement of creditors' rights and general equity principles. The
execution, delivery and performance of this Agreement and the agreements
provided for herein to which the ▇▇▇▇▇▇ Group is a party, and the
consummation by the ▇▇▇▇▇▇ Group of the transactions contemplated hereby
and thereby, will not, with or without the giving of notice or the passage
of time or both, (i) violate the provisions of any law, rule or regulation
applicable to the ▇▇▇▇▇▇ Group or Harriscope (assuming compliance with the
requirements of the HSR Act, the FCC Act and the FCC); (ii) violate the
provisions of any trust agreement to which the ▇▇▇▇▇▇ Group is a party or
Harriscope's Articles of Incorporation or Bylaws; (iii) violate any
judgment, decree, order or award of any court, governmental body or
arbitrator applicable to the ▇▇▇▇▇▇ Group, the Joint Venture or Harriscope;
(iv) conflict with or result in the breach or termination of any term or
provision of, or constitute a default under, or cause any acceleration
under, or cause the creation of any Encumbrance upon the properties or
assets of the ▇▇▇▇▇▇ Group or Harriscope pursuant to, any contract,
indenture, mortgage, deed of trust or other agreement or instrument to
which the ▇▇▇▇▇▇ Group or Harriscope are parties or by which the ▇▇▇▇▇▇
Group, or Harriscope or the Shares being transferred by the ▇▇▇▇▇▇ Group,
or Harriscope's properties are or may be bound; or (v) conflict with or
result in the breach or termination of any material term or provision of,
or constitute a default under, or cause any acceleration under, or cause
the creation of any Encumbrance upon the material properties or assets of
the Joint Venture pursuant to, any contract, indenture, mortgage, deed of
trust or other agreement or instrument to which the Joint Venture is a
party, or by which the Joint Venture's properties being transferred to
Buyer hereunder or the Joint Venture's properties (other than the Drake
Property) are or may be bound. The ▇▇▇▇▇▇ Group Representative is the
voting trustee ("Voting Trustee") pursuant to the Voting Trust Agreement
Number Two, dated as of October 31, 1989 as amended by the amendment dated
October 2, 1995 (the "Voting Trust") a complete and correct copy of which
(as in effect on the date hereof) has been delivered to Buyer, and no
amendments have been made thereto or have been authorized since the date
thereof. Any right of the beneficiaries of the Voting Trust (each of which
is specified on Schedule 2.4) to remove any Shares from the Voting Trust
has been waived or has expired.
5 Ownership of Joint Venture and Harriscope
(a) Harriscope is the record and beneficial owner of a fifty percent
(50%) interest in the Joint Venture. NST is the record and beneficial
owner of a twenty-four and one-half percent (24.5%) interest in the Joint
Venture. NST and the ▇▇▇▇▇▇ Group are the record and/or beneficial owners
of one hundred percent (100%) of the outstanding capital stock of
Harriscope in the proportions set forth on Schedule 1.2 (except that the
beneficial owners of the Harriscope Interest are set forth on Schedule
2.4). Except as provided in the Voting Trust, the Joint Venture Agreement,
the Agreement Respecting Purchase and Sale of Interests and Options Related
Thereto, dated May 16, 1980, among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Oak Communications,
Inc., Harriscope, Essaness and Riverdale Drive-In, Inc. and the
Shareholders Agreement dated May 1, 1980 among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the other
shareholders of Harriscope and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as trustee (collectively,
the "Partnership Agreements"), (i) no person or entity has any claim,
option or interest in or with respect to the venture interest owned by
Harriscope, the NST Venture Interest or the Shares, and (ii) no person or
entity has or may have any right or options to become a stockholder of
Harriscope or to obtain or acquire any beneficial or legal interest in the
NST Venture Interest, Harriscope or the Shares, (iii) to the best knowledge
of NST and the ▇▇▇▇▇▇ Group, no person or entity has or may have any right
or options to become a member of the Joint Venture or to obtain or acquire
any beneficial or legal interest in the Joint Venture, and (iv) there are
no agreements or understandings by or among the members of the Joint
Venture or by or among the Stockholders relating to their ownership and
operation of Harriscope or the Joint Venture.
(b) The Shares constitute the only outstanding capital stock of any
class of Harriscope, and 6,506 shares of capital stock are held in its
treasury. All of the Shares have been validly issued, are fully paid and
non-assessable and have not been issued in violation of the preemptive
rights of any person or entity and no personal liability attaches to the
ownership of the Shares. Harriscope has no subsidiaries other than the
Joint Venture.
6 Ownership of the Assets of the Station
The Joint Venture and Harriscope have good and marketable title to
all of the material real, personal and mixed assets, rights, benefits and
privileges, both tangible and intangible wherever located, owned, leased,
used, held for use or otherwise held by the Joint Venture in connection
with its business and the business and operations of the Station
(collectively, the "Business") and owned, leased, used, held for use or
otherwise held by Harriscope in connection with its business (collectively,
the "Assets"), free and clear of any mortgages, pledges, liens, adverse
claims, charges, security interests, conditional sales agreements or other
encumbrances or restrictions of any kind (collectively, "Encumbrances"),
except for (A) encumbrances set forth on Schedule 2.5 and (B) subject only
to (i) liens for taxes, assessments and other government charges not yet
due or being contested in good faith, (ii) carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like liens arising in the
ordinary course of business, (iii) pledges and deposits made in the
ordinary course of business in compliance with workmen's compensation,
unemployment insurance and other social security laws or regulations, (iv)
zoning restrictions, easements, rights of way restrictions on use of real
property and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto, (v)
purchase money security interests arising in the ordinary course, (vi)
deposits to secure the performance of bids, trade contacts, leases,
statutory obligations and other obligations of a like nature incurred in
the ordinary course of business and (vii) encumbrances set forth in any
title policy delivered with respect to any of the Real Properties
("Permitted Liens"). To the knowledge of NST and the ▇▇▇▇▇▇ Group, the
Assets are sufficient to operate the Station as presently being conducted.
7 Ownership of the NST Venture Interest and Shares
(a) NST (i) owns the entire right, title and interest in and to the NST
Venture Interest, (ii) has good and marketable title in and to the NST
Venture Interest, (iii) has the full right, power, capacity and authority
to validly sell, assign, convey and transfer the NST Venture Interest and,
assuming Buyer's payment of the Purchase Price as contemplated hereby, as a
result of such sale and transfer of the NST Venture Interest to Buyer (as
contemplated by this Agreement), Buyer will have good and marketable title
in and to the NST Venture Interest free and clear of all Encumbrances, (iv)
other than the Partnership Agreements and pursuant to the letter of intent
dated September 14, 1995 among Telemundo Group, Inc. ("TGI"), NST and
certain other shareholders of Harriscope (the "LOI"), is not a party to any
agreement, executed or executory, to sell, encumber, hypothecate or
otherwise dispose of the NST Venture Interest, (v) has not sold,
encumbered, hypothecated or otherwise disposed of the NST Venture Interest,
and (vi) owns the NST Venture Interest free and clear of all Encumbrances.
The NST Venture Interest to be sold to the Buyer under this Agreement may
be sold by NST by NST's sole act and deed, and no consent on the part of
any other person is necessary to validate the sale of the NST Venture
Interest to Buyer, or to consummate the transactions contemplated by this
Agreement except for the approval by the Board of Directors of Oak
Industries, Inc. of the Guaranty described in Section 7.6(c) hereof,
Essaness, which has been obtained, and the FCC and the expiration of the
waiting period under the HSR Act contemplated by Section 6.1.
(b) Each Stockholder (i) owns the entire right, title and interest in
and to its respective Shares, (ii) has good and marketable title in and to
its respective Shares, (iii) has the full right, power, capacity and
authority to validly sell, assign, convey and transfer its respective
Shares and assuming Buyer's payment of the Purchase Price as contemplated
hereby, as a result of such sale and transfer of the Shares to Buyer (as
set forth in this Agreement) Buyer will have good and marketable title in
and to the Shares free and clear of all Encumbrances, (iv) except for the
Partnership Agreement and the LOI, is not a party to any agreement,
executed or executory, to sell, encumber, hypothecate or otherwise dispose
of its respective Shares, (v) has not sold, encumbered, hypothecated or
otherwise disposed of its respective Shares, and (vi) owns its respective
Shares free and clear of all Encumbrances. The respective Shares of each
Stockholder to be sold to Buyer under this Agreement may be sold by such
Stockholder by such Stockholder's sole act and deed, and no consent on the
part of any other person is necessary to validate the sale of such Shares
to Buyer, or to consummate the transactions contemplated by this Agreement
except for the approval of Essaness, which has been obtained, and the FCC
and the expiration of the waiting period under the HSR Act contemplated by
Section 6.1.
8 Financial Statements
(a) Attached as Schedule 2.7(a) are the audited balance sheets for the
Joint Venture at December 31, 1993 and 1994 and the related statements of
operations and cash flow and statements of capital accounts (deficiency)
for the years ended December 31, 1993 and 1994 (collectively, the "Joint
Venture Year End Financial Statements"), and an unaudited balance sheet for
the Joint Venture at September 30, 1995 and the related statements of
operations and cash flow and statements of capital accounts (deficiency)
for the period then ended (the "Joint Venture Current Financial
Statements"). All such financial statements have been prepared in
accordance with the books and records of the Joint Venture and with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, subject to an absence of footnotes in the
case of the Joint Venture Current Financial Statements, and present fairly
the financial position and results of operations of the Joint Venture as of
the dates and for the periods indicated; and each and every financial
statement prepared for each month commencing with January 1995, and for
each calendar year commencing with 1995, and until the Closing (to be
delivered to Buyer pursuant to Section 5.4(i)) will be prepared by the
Joint Venture in accordance with its books and records and with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, and as compared with prior periods set forth above, and,
subject to year-end adjustments where applicable and an absence of
footnotes in the case of interim statements, and will be true, correct and
complete in all material respects, and will present fairly the financial
position and results of operations of the Joint Venture as of the dates and
for the periods indicated. The Joint Venture Year End Financial Statements
have been certified by the certified public accountants who examine the
financial statements of the Joint Venture (who are now and will continue
until Closing to be a nationally recognized accounting firm).
(b) Attached as Schedule 2.7(b) are the unaudited balance sheets for
Harriscope at December 31, 1993 and 1994 and the related statements of
income and cash flows and statements of changes in stockholder's equity
(deficit) for the years ended December 31, 1993 and 1994 (collectively, the
"Harriscope Year End Financial Statements"), and an unaudited balance sheet
for Harriscope at June 30, 1995 and the related statements of income and
cash flow and statements of changes in stockholders' equity (deficit) for
the period then ended (the "Harriscope Current Financial Statements"). The
treasurer of Harriscope will certify that all such financial statements
have been prepared in accordance with the books and records of Harriscope
and with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, and present fairly the financial
position and results of operations of Harriscope as of the dates and for
the periods indicated, subject to an absence of footnotes; and each and
every financial statement prepared for each quarter commencing with January
1995, and for each calendar year commencing with 1995, and until the
Closing (to be delivered to Buyer pursuant to Section 5.4(i)) will be
prepared by Harriscope as being in accordance with its books and records
and with generally accepted accounting principles applied on a consistent
basis throughout the periods involved and as compared with prior periods
set forth above, and, subject to year-end adjustments where applicable and
an absence of footnotes, will be true, correct and complete in all material
respects, and will present fairly the financial position and results of
operations of Harriscope as of the dates and for the periods indicated, all
as certified by Harriscope's treasurer. The Joint Venture Year-End
Financial Statements and the Harriscope Year-End Financial Statements are
referred to in this Agreement as the "Year-End Financial Statements"; the
Joint Venture Current Financial Statements and the Harriscope Current
Financial Statements are referred to in this Agreement as the "Current
Financial Statements"; and the Year-End Financial Statements and the
Current Financial Statements are referred to collectively in this Agreement
as the "Financial Statements."
(c) Schedule 2.7(c) sets forth a list of all indebtedness of the Joint
Venture or Harriscope of any kind, including without limitation with
respect to: (i) borrowed money, (ii) obligations evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligations as lessee
under leases which have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, and (iv)
obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iii)
above (collectively, the "Indebtedness").
9 Absence of Undisclosed Liabilities
Except as and to the extent (a) reflected and reserved against in
the Current Financial Statements (or reflected in the notes thereto), (b)
set forth on Schedule 2.8 or (c) incurred in the ordinary course of
business and consistent with past business practices and which are
immaterial in amount, after the date of the Current Financial Statements,
neither the Joint Venture nor Harriscope has entered into or become
obligated under any material contract, agreement or commitment, or incurred
any material obligation or liability, secured or unsecured relating to the
Joint Venture, Harriscope or the Station, and there has not been (i) any
material loss or material injury to the Assets or the Station, (ii) any
material adverse change in the Assets or in the condition (financial or
otherwise) of the Joint Venture, Harriscope or the Station (other than may
be directly attributable to a decline in ratings or revenues due to
programming at the station provided by TGI or competition from Univision
(assuming compliance with the covenant in Section 6.11(b)), or (iii) to the
knowledge of NST and the ▇▇▇▇▇▇ Group, any event, development, act or
omission that is likely to give rise to a material obligation or liability
of the Joint Venture, Harriscope or the Station or a material adverse
change in the Assets or the condition (financial or otherwise) of the Joint
Venture, Harriscope or the Station other than events or developments
affecting the television industry or the Chicago television market
generally or other than maybe directly attributable to a decline in ratings
or revenues due to programming at the Station provided by TGI or
competition from Univision (assuming compliance with the covenant in
Section 6.11(b)).
10 FCC Licenses and Reports
(a) The Joint Venture is the sole owner and holder of all of the
licenses, permits and other authorizations issued by the FCC for the
ownership of the Assets or operation of the Station (the "Licenses"), as
set forth on Schedule 2.9. The Licenses constitute all of the licenses,
permits and other authorizations from the FCC that are necessary or
required for or used in the business and operation of the Station as
presently conducted. The Licenses are valid and in full force and effect,
unimpaired by any condition specific to the Station which could have any
material adverse effect on the operation of the Station. No application,
action or proceeding is pending for the renewal or modification of any of
the Licenses, and, except for actions or proceedings affecting the
broadcasting industry generally, no application, action or proceeding is
pending or to the knowledge of NST and the ▇▇▇▇▇▇ Group, threatened that
may result in the denial of an application for renewal, the revocation,
modification, nonrenewal or suspension of any of the Licenses, the issuance
of a cease-and-desist order, or the imposition of any administrative or
judicial sanction with respect to the Station.
(b) The Joint Venture has the sole right to the use of the call letters
"WSNS-TV" and the sole right to the use of channel 44 in the Chicago
Dominant Market Area (as defined by ▇.▇. ▇▇▇▇▇▇▇ Co.) pursuant to the rules
and regulations of the FCC.
(c) Except for actions or proceedings affecting the broadcasting
industry generally, there is not now pending or outstanding or, to the
knowledge of NST and the ▇▇▇▇▇▇ Group, threatened, any investigation,
proceeding, notice of violation or complaint against the Joint Venture or
Harriscope at the FCC or any other Governmental Authorities. To the
knowledge of NST and the ▇▇▇▇▇▇ Group, there is no person who has
manifested an intention to contest the renewal of the Licenses.
(d) The operation of the Station does not cause or result in exposure of
workers or the general public to levels of radio frequency radiation in
excess of the "Radio Frequency Protection Guides" recommended in "American
National Standard Safety Levels with Respect to Human Exposure to Radio
Frequency Electromagnetic Fields 300 kHz to 100 gHz" (ANSI C95.1-1982),
issued by the American National Standards Institute, and renewal of the
Licenses would not constitute a "major action" within the meaning of
Section 1.1301, et seq., of the FCC's rules. The Station is being operated
in compliance in all material respects with the Licenses and the parameters
set forth therein and consistent with any proofs of performance and there
are no pending or, to the knowledge of NST and the ▇▇▇▇▇▇ Group, threatened
proceedings before the FCC with respect to objectionable interference
relating to the Station within the meaning of the rules or policies of the
FCC.
11 Litigation
Except as set forth on Schedule 2.10, there is no litigation or
proceeding of any kind pending or, to the best knowledge of NST or the
▇▇▇▇▇▇ Group, threatened against the Joint Venture, Harriscope, the
Station, the Assets or any of the Sellers (as relates to the Sellers,
relating to the Shares or NST Venture Interest owned by them, or which
would prevent or delay the transactions contemplated by this Agreement).
None of Harriscope, NST nor the ▇▇▇▇▇▇ Group (with respect to their
ownership of their respective NST Venture Interest or Shares) nor, to the
knowledge of NST or the ▇▇▇▇▇▇ Group, the Joint Venture is in violation of
or in default of any judgment, order, writ, injunction, decree, regulation
or rule of any Governmental Authority, which violation or default would
have a material adverse effect on the business, operations, assets or
financial condition of the Joint Venture or Harriscope (a "Material Adverse
Effect").
12 Insurance
Schedule 2.11 sets forth a list, true, correct and complete in all
material respects of all insurance policies insuring the Joint Venture,
Harriscope, the Assets or the business of the Station and of all life and
other insurance policies maintained by the Joint Venture, Harriscope or the
Station for any of its employees, specifying the type of coverage, the
amount of coverage, the premium, the insurer and the expiration date of
each such policy (collectively, the "Insurance Policies"). All premiums
due on the Insurance Policies or renewals thereof have been paid, and there
is no material default under any of the Insurance Policies.
13 Regulatory Approvals
All governmental and regulatory consents, approvals, authorizations
and other requirements prescribed by any law, rule or regulation which
must be obtained or satisfied by the Sellers, the Joint Venture or
Harriscope and which are necessary and material for the execution, delivery
and performance by the Sellers of this Agreement and the documents to be
executed and delivered by the Sellers in connection herewith are set forth
on Schedule 2.12.
14 Tangible Personal Property
(a) All of the furniture, fixtures, furnishings, equipment, machinery,
supplies, tools, parts, antenna installations and other tangible personal
property owned, leased, held or used by the Joint Venture or Harriscope
(the "Tangible Personal Property") is in a suitable condition for the
purposes for which it is intended or is being used, and is in sufficient
working order. Schedule 2.13(a) sets forth a true, correct and complete
list of all of the Tangible Personal Property with a book value per item as
of the date of this Agreement of more than $5,000, including a description
and the book value of such Tangible Personal Property. To the knowledge of
NST and the ▇▇▇▇▇▇ Group, the Tangible Personal Property set forth on
Schedule 2.13(a) is sufficient for the conduct of the Joint Venture's and
Harriscope's business and the operation of the Station by the Joint
Venture. The Sellers have made available to Buyer all logs maintained by
the Station. Sellers shall within 30 days of the date of this Agreement
provide a detailed true, correct and complete list of each separate item of
Tangible Personal Property with a book value per item as of the date of
this Agreement of more than $5,000, including a description and the best
reasonable estimate of book value of each such item of Tangible Personal
Property.
(b) Schedule 2.13(b) sets forth a list of each material lease, permit,
right, authorization or other agreement (including capital leases) under
which the Joint Venture, Harriscope or the Station leases or has, or on the
Closing Date will have, rights to use any Tangible Personal Property (the
"Personal Property Leases"). The Joint Venture and Harriscope have
delivered to Buyer true and complete copies of the Personal Property
Leases. There are no amendments or modifications to any of the Personal
Property Leases, except as set forth on Schedule 2.13(b). No event has
occurred under any of the Personal Property Leases that, with the lapse of
time or the giving of notice or both, would constitute a default by
Harriscope or, to the knowledge of NST and the ▇▇▇▇▇▇ Group, the Joint
Venture or any other party thereunder and there are no offsets asserted by
Harriscope or to the knowledge of NST and the ▇▇▇▇▇▇ Group, the Joint
Venture or any other party thereto. Harriscope and, to the knowledge of
NST and the ▇▇▇▇▇▇ Group, the Joint Venture are in compliance in all
material respects with each of the Personal Property Leases, and the
representations and warranties of Harriscope and, to the knowledge of NST
and the ▇▇▇▇▇▇ Group, the Joint Venture with respect to each of the
Personal Property Leases are true and correct in all material respects.
Each of NST and the ▇▇▇▇▇▇ Group is not aware of any circumstance that
would give the other parties to any Personal Property Lease the right to
terminate such lease, and none of NST, the ▇▇▇▇▇▇ Group nor the Joint
Venture have been informed in writing by the lessor under any Personal
Property Lease that it intends to terminate, modify (except pursuant to its
terms) or not renew such lease. No consents are required under the
Personal Property Leases in connection with the consummation of the
transactions contemplated hereunder, and the consummation of the
transactions contemplated by this Agreement will not result in a default
under or give the lessor a right to terminate any Personal Property Lease
or modify in any material respect any Personal Property Lease.
15 Real Properties
(a) Except for the Drake Avenue Property (the "Drake Property") as to
which the parties hereto agree that the Drake Property, including all
assets and liabilities directly related thereto shall not be transferred to
the Buyer or retained by the Joint Venture or Harriscope after Closing,
Schedule 2.14 sets forth (i) a list and legal description of all real
properties or interests in real property owned by the Joint Venture or
Harriscope directly or through an Illinois land trust or used in the
operation of the Station (individually, a "Real Property" and collectively,
the "Real Properties"), and (ii) each material lease, permit, right,
authorization or other agreement (including any easements) under which the
Joint Venture, Harriscope or the Station leases, occupies or has, or on the
Closing Date will have, rights in any real property, including without
limitation any transmitter tower leases (the "Real Property Leases").
Except as set forth on Schedule 2.14, neither the Joint Venture nor
Harriscope owns, leases, uses or holds any real property or any option to
acquire any real property or interest therein. The Joint Venture and
Harriscope have delivered to Buyer true and complete copies of the Real
Property Leases. There are no amendments or modifications to any of the
Real Property Leases, except as set forth on Schedule 2.14. No Assets of
the Joint Venture (other than the physical real property comprising the
Drake Property) are attached to or will be transferred as part of the Drake
Property.
(b) The Joint Venture or Harriscope have good and marketable title to
all of their respective Real Properties and have a valid and subsisting
good and marketable leasehold interest in all the real property which is
the subject of each of their respective Real Property Leases (individually
a "Leased Property" and collectively, the "Leased Properties") free and
clear of all Encumbrances of any nature whatsoever, except for (i)
Encumbrances set forth on Schedule 2.5, (ii) the Permitted Liens and (iii)
as to the Real Property Leases, subject to inchoate landlord's liens and
Encumbrances of record. Each of the Real Property Leases is a legal, valid
and binding agreement of the Joint Venture or Harriscope and is in all
material respects enforceable in accordance with its terms except to the
extent limited by applicable bankruptcy, insolvency, moratorium and other
similar laws of general application relating to or affecting the
enforcement of creditors' rights and general equity principles. Schedule
2.14 to this Agreement contains a list of any policies insuring the Joint
Venture's or Harriscope's title or leasehold interest in their respective
Real Properties or Leased Properties, as applicable, including the amounts
thereof. The Joint Venture or Harriscope has delivered to Buyer true and
complete copies of all currently available title policies insuring the
Joint Venture's or Harriscope's title or leasehold interest in the Real
Properties, and all existing surveys, plans and maps in the Joint Venture's
or Harriscope's possession relating to the Real Properties. Neither the
Joint Venture nor Harriscope has granted to any other person any right to
the use, occupancy or enjoyment of the Real Properties or the Leased
Properties or any part thereof.
(c) No event has occurred under any of the Real Property Leases that,
with the lapse of time or the giving of notice or both, would constitute a
default by the Joint Venture or Harriscope or to the knowledge of NST and
the ▇▇▇▇▇▇ Group any other party thereunder and there are no offsets by the
Joint Venture or Harriscope or any other party thereto. The Joint Venture
and Harriscope are in compliance with each of the Real Property Leases
other than immaterial non-compliance that has no adverse effect of any
nature on the Joint Venture or Harriscope, and the representations and
warranties of the Joint Venture and Harriscope with respect to each of the
Real Property Leases are true and correct in all material respects. Each
of NST, the ▇▇▇▇▇▇ Group and, to the knowledge of NST and the ▇▇▇▇▇▇ Group,
the Joint Venture is not aware of any circumstance that would give the
other parties to any Real Property Lease the right to terminate or modify
such lease, and none of NST, the ▇▇▇▇▇▇ Group nor the Joint Venture has
been informed in writing by the lessor under any Real Property Lease that
it intends to terminate or not renew such lease or modify such lease.
(d) No consents are required under the Real Property Leases in
connection with the consummation of the transactions contemplated
hereunder, and the consummation of the transactions contemplated by this
Agreement will not result in a default under or give the lessor a right to
terminate or modify any Real Property Lease. Neither the Joint Venture nor
Harriscope is obligated to pay any leasing or brokerage commission relating
to any Real Property Lease or any renewal thereof.
(e) To the knowledge of NST and the ▇▇▇▇▇▇ Group, the Real Properties
and all structures and appurtenances thereto owned, leased or used by the
Joint Venture or Harriscope have been owned and operated in all material
respects in compliance with all material applicable laws, ordinances,
regulations, rules, orders, restrictions or other requirements of all
Governmental Authorities (including without limitation building, zoning and
use ordinances and regulations), and no written notice of violation of any
such laws, rules, regulations, orders, restrictions or other requirements
has been received by either NST, the ▇▇▇▇▇▇ Group, the Joint Venture or
Harriscope.
(f) There are no and, except as disclosed to Buyer in writing, on the
Closing Date there will not be (i) actual or pending impositions or
assessments for public or private improvements with respect to any Real
Property or Leased Property for which the Joint Venture or Harriscope would
be liable, or (ii) improvements constructed or planned that would be paid
for by means of public or private assessments upon any Real Property or
Leased Property for which the Joint Venture or Harriscope would be liable.
Neither NST nor the ▇▇▇▇▇▇ Group has received any actual notice and, to the
knowledge of NST and the ▇▇▇▇▇▇ Group, there is no pending, threatened or
contemplated condemnation proceeding affecting any Real Property or Leased
Property or any part thereof or of any sale or any disposition of any Real
Property or any Leased Property or any portion thereof in lieu of
condemnation.
(g) On the Closing Date, no material assets used or useful in the
business and operations of the Station by the Joint Venture or Harriscope
will be located on any real property not included in the Real Properties or
leased by the Joint Venture or Harriscope under the Real Property Leases.
There is no real property other than as set forth on Schedule 2.14 which is
necessary for the conduct of the Joint Venture's or Harriscope's business
or the operation of the Station by the Joint Venture or Harriscope.
(h) All buildings and improvements owned by the Joint Venture or
Harriscope included within the Real Property and any premises leased by the
Joint Venture or Harriscope pursuant to a Real Property Lease have been
maintained in a suitable condition and in sufficient working order, for the
purposes for which it is intended or being used. All water, gas,
electrical, utility, telecommunication, sanitary and storm sewage lines and
systems and other similar systems located on the Real Properties or
servicing the premises leased pursuant to the Real Property Leases have
been operating and have been sufficient to enable the Real Properties and
Leased Properties to be used and operated in the manner currently being
used and operated by the Joint Venture or Harriscope .
(i) Neither the Joint Venture nor Harriscope is a "foreign person" or a
"foreign corporation" as such terms are defined in Section 1445 of the
Internal Revenue Code of 1986, as amended.
16 Tax Matters
(a) The Joint Venture and Harriscope have filed in a timely manner
(taking into account all extension of due dates) all tax returns, reports
and forms required to be filed, including, without limitation, income tax
returns, withholding tax returns, declarations, of estimated tax and tax
reports required to be filed with respect to each of the Joint Venture or
Harriscope or any of their income, properties or operations, and have paid
in full (except for those Taxes (as defined below) being contested in good
faith and set forth on Schedule 2.15(a)) any taxes, charges, fees, levies,
penalties, interest or other assessments, including without limitation,
income, sales and use, excise, withholding, employment related taxes,
property, sales and franchise taxes, estimated taxes, penalties, interest,
assessments and deficiencies imposed by any Governmental Authority
("Taxes") that have become due and payable for, or with respect to, the NST
Venture Interest, the Shares, the Joint Venture or Harriscope or their
respective operations as of the date hereof. All information provided in
such returns, declarations and reports is true, correct and complete. The
Joint Venture and Harriscope have withheld all amounts required by law from
their respective employees for all periods in full and complete compliance
with the tax, social security and unemployment withholding provisions of
applicable federal and state law. No Taxes are payable with respect to the
Joint Venture or Harriscope or their respective operations for the periods
covered by such returns and forms except as shown on such returns and
forms, and any such Taxes shown as due and payable on such returns and
forms have been paid. Neither the Joint Venture nor Harriscope is a party
to any pending action or proceeding, and, to the knowledge of each Seller,
there is no action or proceeding threatened by any Governmental Authority
against the Joint Venture or Harriscope for audit, assessment or collection
of Taxes, and to the best knowledge of the Sellers there is no basis for
any such action or proceeding. For purposes of this Agreement,
"Governmental Authority" shall mean any agency, board, bureau, court,
commission, department, subdivision, district, instrumentality or
administration of the United States government, any state government or any
local or other governmental body in a state, territory or possession of the
United States or the District of Columbia, or any foreign government or
instrumentality.
(b) Each Seller has filed all tax returns (taking into account any
applicable extensions) and forms required to be filed and has paid in full
any Taxes which have become due and payable for, or with respect to,
Harriscope, the NST Venture Interest or the Shares. No Taxes are payable
with respect to such Seller or its operations for the periods covered by
such returns and forms except as shown on such returns and forms, and any
such Taxes shown as due and payable on such returns and forms have been
paid. Each Seller is not a party to any pending action or proceeding and
to such Seller's knowledge, there is no action or proceeding threatened by
any Governmental Authority against Harriscope for audit, assessment or
collection of Taxes and to the best knowledge of Sellers there is no basis
for any such action or proceedings.
(c) Adequate provisions in accordance with generally accepted accounting
principles in the United States appropriately and consistently applied to
each of the Joint Venture and Harriscope have been made in the financial
statements of the Joint Venture and Harriscope, respectively, for the
payment of all Taxes for which each of the Joint Venture and Harriscope may
be liable for the periods covered thereby that were not yet due and payable
as of the date thereof, regardless of whether the liability for such Taxes
is disputed.
(d) No consent has been filed relating to Harriscope pursuant to Section
341(f) of the Internal Revenue Code of 1986, as amended (the "Code").
(e) No Tax is required to be withheld pursuant to Section 1445 of the
Code as a result of the transfers contemplated by this Agreement.
(f) The Sellers have made available to Buyer complete and accurate
copies of the income and franchise tax returns (including federal income
tax returns and reports), and any amendments thereto, filed by or on behalf
of Harriscope or the Joint Venture for the taxable years ending December
31, 1992, 1993, and 1994.
(g) There is no claim or assessment pending or, to the knowledge of
Sellers, Harriscope or the Joint Venture threatened against any of the
Sellers, Harriscope or the Joint Venture for any alleged deficiency in
Taxes attributable to the Joint Venture or Harriscope, and neither the
Sellers, Harriscope, or the Joint Venture knows of any audit or
investigation with respect to any liability of the Sellers (and any of
their affiliates), Harriscope or the Joint Venture. There are no
agreements in effect to extend the period of limitations for the assessment
or collection of any Taxes for which Harriscope or the Joint Venture (or
any members of the Joint Venture) may be liable.
(h) Other than as described in Schedule 2.15(h), Harriscope has not
taken any positions, with respect to the treatment of any items, that lack
"substantial authority" (pursuant to Code Section 6662(d)(2)(B)) such that
there could be a "substantial understatement" of income tax (pursuant to
Code Section 6662(d)(1)) for any taxable year of Harriscope.
(i) At no time during its existence has Harriscope been a member of an
affiliated group of corporations as defined in Code Section 1504.
17 Books and Records
The books and records of Harriscope and, to the knowledge of the
Sellers, the Joint Venture, are complete and correct in all material
respects and accurately reflect all material transactions of the Joint
Venture and Harriscope during the periods covered by such books and
records. The minute books of Harriscope as previously made available to
Buyer contain records accurate in all material respects of all meetings and
actions by consent and reflect the corporate action taken by the
stockholders and Board of Directors of Harriscope in such meeting or by
such consents accurately in all material respects. All material
applications, returns, reports and statements required to have been filed
by Harriscope and, to the knowledge of the Sellers, the Joint Venture and
the Station with any Governmental Authority have been filed and are true,
correct and complete in all material respects. Neither NST nor the ▇▇▇▇▇▇
Group has received written notice from the FCC of any failure to make any
applicable filings or comply with any material compliance matters, nor has
NST or the ▇▇▇▇▇▇ Group received any written complaint or notice that the
public file of the Station is incomplete in any respect.
18 Contracts and Commitments
(a) Schedule 2.17 contains a true, complete and correct list and
description of all written, and, to the knowledge of NST and the ▇▇▇▇▇▇
Group, oral, contracts, agreements, understandings, obligations and
commitments of the Joint Venture or Harriscope of any kind or nature
(including all Program Contracts), other than (i) miscellaneous service or
other contracts or commitments which do not require payments of more than
$10,000 each or $100,000 in the aggregate, (ii) contracts for sale of
advertising for cash payments and (iii) unfulfilled trade-out agreements,
or similar contracts, commitments or understandings to provide broadcast
time (collectively, "Trade Agreements") of less than $5,000 each or $25,000
in the aggregate.
(b) (i) Each of the agreements set forth on Schedule 2.17 hereto (a
"Specified Contract") is a valid and binding agreement of the Joint Venture
or Harriscope, as the case may be, enforceable against the Joint Venture or
Harriscope in accordance with its terms except to the extent limited by
applicable bankruptcy, insolvency, moratorium and other similar laws of
general application relating to or affecting the enforcement of creditors'
rights and general equity principles.
(i) Harriscope and, to the knowledge of the Sellers, the Joint Venture
have fulfilled all material obligations required pursuant to the Specified
Contracts to have been performed by the Joint Venture or Harriscope on
their part prior to the date hereof (other than payments of accounts
payable after the due date thereof in accordance with past practices of the
Joint Venture or Harriscope); and
(ii) Harriscope and, to the knowledge of the Sellers, the Joint Venture
are not in material breach of or in default under any material Specified
Contract, and no occurrence, event or development has occurred which with
the passage of time or giving of notice or both would constitute such a
default by the Joint Venture or Harriscope, result in a loss of material
rights or result in the creation of any Encumbrance thereunder or pursuant
thereto.
(c) Except as set forth on Schedule 2.17, the continuation, validity and
effectiveness of each Specified Contract will not be affected by the
transactions contemplated herein.
(d) True, correct and complete copies of all written Specified Contracts
have been delivered or made available by the Sellers to Buyer.
(e) Except as set forth on Schedule 2.17, the Joint Venture and
Harriscope are in compliance in all material respects with all of their
respective obligations with respect to the payment of licensing fees for
all video and audio programming broadcast by the Station, including having
made reserves which are reasonably believed to be adequate to cover any and
all payments which may be due for past periods with respect to such rights,
including but not limited to payments to ASCAP and BMI.
(f) Each film or program license or contract under which the Joint
Venture or Harriscope is authorized to broadcast film product or programs
on the Station, including, without limitation, all cash and non-cash
(barter) program contracts are set forth on Schedule 2.17, other than
contracts requiring payments by the Joint Venture less than $10,000 each or
$100,000 in the aggregate (collectively, the "Program Contracts").
19 Permits
The Joint Venture and Harriscope each have all requisite licenses,
permits, certificates and other authorizations, including any applicable
environmental, health and safety permits, from Governmental Authorities
necessary and material to conduct their respective businesses and to own
and operate the Assets and in the case of the Joint Venture, the Station
(collectively, the "Permits"). Schedule 2.18 sets forth a list, true,
correct and complete in all material respects, of all such Permits, copies
of which have previously been delivered or made available by the Sellers to
the Buyer. Each of the Joint Venture and Harriscope has operated and
continues to operate the Station in accordance with, and is presently in
compliance in all material respects with, applicable statutes and
regulations of the United States of America, the State of Illinois and each
municipality and authority having jurisdiction over the Station.
20 Employee Relations, ERISA and Employees
(a) To the knowledge of NST and the Joint Venture, each of the Joint
Venture and Harriscope is in compliance in all material respects with all
laws, rules, regulations, and interpretations of any Governmental Authority
respecting employment and employment practices (including anti-
discrimination laws, rules and regulations), terms and conditions of
employment, and wages and hours, and there are no arrears in the payment of
wages, unemployment compensation, worker's compensation or social security
taxes or underfunding of workers' compensation insurance premiums. Neither
NST nor the ▇▇▇▇▇▇ Group has received notice of any non-compliance (which
remains uncured) by the Joint Venture of any material law, rule, regulation
or interpretation of any Governmental Authority respecting employment and
employment practices (including anti-discrimination laws, rules and
regulations), terms and conditions of employment and wages and hours. To
the knowledge of NST and the ▇▇▇▇▇▇ Group, there are no arrears in the
payment of wages, unemployment compensation, worker's compensation or
social security taxes or underfunding of workers' compensation insurance
premiums with respect to the Joint Venture.
(b) Schedule 2.19 sets forth a list of all pension, retirement, profit-
sharing, deferred compensation, and group insurance benefit plans that are
employee pension benefit or employee welfare benefit plans as defined in
Sections 3(1) and 3(2) of the Employee Retirement Income Security Act of
1974 as amended ("ERISA") of which the Joint Venture or Harriscope is plan
sponsor or administrator (collectively, the "Benefit Plans"). To the
knowledge of Sellers, all of the Benefit Plans are in material compliance
with all applicable law.
(c) None of the Benefit Plans is subject to Title IV of ERISA.
Harriscope has no, and, to the knowledge of NST and the ▇▇▇▇▇▇ Group, the
Joint Venture has no, liability arising under Title IV of ERISA.
(d) Except as disclosed in Schedule 2.19(d), with respect to each
Benefit Plan, (i) there is no material accrued liability for any Benefit
Plan that is not reflected in the Financial Statements; (ii) each plan
intended to qualify under Section 401(a) of the Code (A) has been
determined by the Internal Revenue Service to so qualify and (B) with
respect to all periods for which a favorable determination does not yet
exist, has been timely and properly submitted to the Internal Revenue
Service for a determination of its qualified status retroactive to all
periods of its existence for which another favorable determination letter
is not in effect as to the entire plan; (iii) to the best knowledge of NST
and the ▇▇▇▇▇▇ Group, no act or omission of the Joint Venture or Harriscope
has occurred which could cause the loss of such qualification for any time
period, and, to the knowledge of Sellers, no Benefit Plan has been operated
in a manner that may be reasonably likely to cause it to be disqualified in
operation under the Code or ERISA; and (iv) the Joint Venture, Harriscope
and any plan administrator designated by the Joint Venture or Harriscope
has complied in all material respects with all applicable reporting and
disclosure requirements under Title I of ERISA.
(e) Except as set forth on Schedule 2.19, no collective bargaining
agreement or other contract, agreement or understanding of any kind,
written or oral, with any trade or labor union, employees' association or
similar organization is in effect or due to take effect with respect to any
employee of the Joint Venture or Harriscope.
(f) Except as set forth on Schedule 2.19, (i) there are no strikes, work
stoppages, lockouts, slow downs, labor disputes, grievance proceedings or
other controversies pending or to the knowledge of any Seller threatened in
writing between the Joint Venture or Harriscope and any employees, trade or
labor union, employees' association or similar organization. Neither
Harriscope nor, to the knowledge of NST and the ▇▇▇▇▇▇ Group, the Joint
Venture has committed or engaged in any unfair labor practices in
connection with the operation of the business of the Joint Venture or
Harriscope and, to the knowledge of NST and the ▇▇▇▇▇▇ Group, there is no
pending or threatened charge or complaint against the Joint Venture by or
with the National Labor Relations Board or any comparable state agency.
(g) Schedule 2.19 sets forth a list of all employees of the Joint
Venture and Harriscope and certain related information. Any contracts and
agreements for employment, whether oral or written, with the Joint Venture
or Harriscope are listed in Schedule 2.19. The transactions contemplated
by this Agreement will not result in or give rise to any severance payment,
"golden parachute" payment, or other compensation under any contracts,
agreements, plans, policies or other arrangements.
21 Environmental Matters
(a) To the knowledge of each Seller, there are no pending or threatened
actions, suits, claims, legal proceedings or any other administrative
proceedings based on the Environmental Laws or the use, storage or
discharge of Hazardous Materials relating to the Real Properties or the
Leased Properties (collectively, the "Properties") or any part thereof, or
otherwise arising from the Joint Venture's or Harriscope's activities at
the Properties involving Hazardous Materials.
(b) To the knowledge of each Seller, there are no known conditions,
procedures or any other facts or circumstances which may be reasonably
likely to give rise to claims, expenses, losses, liabilities, or
governmental action against the Joint Venture or Harriscope in connection
with any Hazardous Materials present at or disposed of from the Properties,
including without limitation the following conditions arising out of,
resulting from, or attributable to, the Assets, business, or operations of
the Joint Venture or Harriscope at the Properties: (i) the presence of any
Hazardous Materials on the Properties or the release or threatened release
of any Hazardous Materials into the environment from the Properties; (ii)
the off-site disposal of Hazardous Materials originating on or from the
Properties or the business or operations of the Joint Venture or
Harriscope; (iii) the release or threatened release of any Hazardous
Materials into any storm drain, sewer, septic system or publicly owned
treatment works; (iv) any noncompliance with any material requirements of
any Governmental Authority governing occupational safety and health, or
presence or release in the air and water supply systems of the Properties
of any substances that pose a hazard to human health or an impediment to
working conditions; or (v) any facility operations, procedures or designs,
which do not materially conform to the material statutory or regulatory
requirements of any Environmental Laws.
(c) Neither friable asbestos-containing materials nor, to the knowledge
of each Seller, polychlorinated biphenyls, are present on or in the
Properties in violation of any Environmental Laws. To the knowledge of NST
and the ▇▇▇▇▇▇ Group, any such materials that have been removed have been
so removed in full compliance with all applicable laws, rules and
regulations regarding the removal of such substances.
(d) To the knowledge of NST and the ▇▇▇▇▇▇ Group, the Properties contain
no underground storage tanks, or underground piping associated with tanks,
used currently or in the past for the storage or transmission of Hazardous
Materials, provided that the properties may contain two underground storage
tanks which will not violate Environmental Laws or require remediation.
(e) For purposes of this section, "Hazardous Materials" means any
wastes, substances, or materials, whether solids, liquids or gases, that
are deemed hazardous, toxic, pollutants, or contaminants, including but not
limited to substances defined as "hazardous wastes," "hazardous
substances," "toxic substances," "radioactive materials," or other similar
designations in, or otherwise subject to regulation under, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), as amended by the Superfund Amendments and Reauthorization
Act of 1986 ("▇▇▇▇"), 42 U.S.C. Sec. 9601 et seq.; the Toxic Substance
Control Act ("TSCA"), 15 U.S.C. Sec. 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Sec. 1802 et seq.; the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. Sec. 6901 et seq.; the Clean Water Act
("CWA"), 33 U.S.C. Sec. 1251 et seq.; the Safe Drinking Water Act, 42
U.S.C. Sec. 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. Sec. 7401 et
seq.; or other applicable laws of any Governmental Authority, including any
rules, regulations, orders, or ordinances adopted, or other criteria and
guidelines promulgated pursuant to the preceding laws or other similar
laws, regulations, rules, orders, or ordinances now or hereafter in effect
relating to the protection of human health and the environment
(collectively "Environmental Laws"). "Hazardous Materials" includes but is
not limited to polychlorinated biphenyls (PCBs) and asbestos.
22 Absence of Certain Changes or Events
As of the date of this Agreement, except as set forth on Schedule
2.21 and except for the transactions contemplated by this Agreement, since
the date of the Current Financial Statements, neither the Joint Venture nor
Harriscope has entered into any transaction which is not in the usual and
ordinary course of business and consistent with past practices, and,
without limiting the generality of the foregoing, neither the Joint Venture
nor Harriscope has other than in the usual and ordinary course of business:
(a) except for scheduled payments under the ▇▇▇▇▇▇ Note, repaid or
incurred any intercompany borrowings or advances from any affiliate of the
Joint Venture or Harriscope;
(b) subjected the NST Venture Interest or the Shares to any Encumbrance;
(c) subjected any of the Assets to any Encumbrances except for Permitted
Liens;
(d) sold, assigned or transferred any of its material Assets;
(e) made any material amendment to or termination of or waived any
material rights under any Real Property Lease, Personal Property Lease or
Specified Contract or done any act or omitted to do any act which may be
reasonably likely to cause a material breach or default of any Real
Property Lease, Personal Property Lease or Specified Contract (other than
late payments in accordance with past practice);
(f) suffered any losses or incurred any liabilities or obligations or
suffered any Claim, in excess of $250,000 in the aggregate for insured
matters and $25,000 in the aggregate for uninsured matters;
(g) made any changes in compensation payable by the Joint Venture or
Harriscope to its officers, directors or employees;
(h) declared, set aside or paid any dividend or distribution in respect
of, or purchased, redeemed or otherwise acquired any of its capital stock
of Harriscope or NST Venture Interest, but only to the extent that such
dividend, distribution, purchase, redemption or acquisition is not to be
paid prior to the Closing.
(i) changed or agreed to change any accounting principle, practice or
method.
23 Trade Names and Other Intangible Property
(a) Schedule 2.22 sets forth a true, correct and complete list and,
where appropriate, a description of, all material intangible property
rights, including but not limited to the Joint Venture's rights to the call
letters for the Station, United States and foreign, patents, patent
applications, trade names, trademarks, trademark registrations,
applications for trademark registrations, service marks, service ▇▇▇▇
applications or registrations, copyright applications or registrations,
owned, licensed or used by the Joint Venture, Harriscope or the Station and
all licenses and other agreements to which the Joint Venture or Harriscope
is a party (as licensor or licensee) or by which the Joint Venture or
Harriscope is bound relating to any of the foregoing kinds of property or
rights (collectively, the "Intangible Property"). True, correct and
complete copies of all material applications, registrations, licenses and
other agreements and instruments relating to the Intangible Property have
been previously delivered or made available by the Joint Venture and
Harriscope to Buyer. (b) Except (i) as otherwise disclosed in Schedule
2.22, and (ii) as to programming licensed to the Joint Venture or
Harriscope from third parties, the Joint Venture or Harriscope is the sole
and exclusive owner of all material Intangible Property owned by it. The
Intangible Property owned, licensed or used by the Joint Venture or
Harriscope is sufficient to conduct the Station's business as presently
conducted. Neither the Joint Venture nor Harriscope has received written
notice of, or has knowledge of, a claim against the Joint Venture or the
Station that any of their operations, activities, products or publications
infringes on any patent, trademark, trade name, copyright or other
intangible property right of a third party, or that the Joint Venture is
illegally or otherwise using the trade secrets, formulae or any intangible
property rights of others. Neither the Joint Venture nor Harriscope has
material disputes with or claims against any third party for infringement
by such third party of any trade name or the Intangible Property of the
Joint Venture or Harriscope. The Joint Venture and Harriscope have taken
all steps reasonably necessary to protect their respective right, title and
interest in and to the Intangible Property.
24 No Shared Assets or Operations
Except as set forth on Schedule 2.23, neither the Sellers, the
Joint Venture nor Harriscope share, exchange or mutually use any assets or
personnel (or any costs or expenses associated therewith) used in
connection with the business and operations of the Station with any Seller
or any entity controlling, controlled by or under common control with any
Seller. Except (a) as set forth on Schedule 2.23, (b) management fees paid
to Harriscope, (c) payments under the ▇▇▇▇▇▇ Note, and (d) distributions of
cash to be made to NST, Harriscope or the Stockholders, as the case may be,
prior to the Closing Date, neither the Joint Venture nor Harriscope has any
contractual relationships with, or is required to make any payments to, any
Seller or any entity controlling, controlled by or under common control
with any Seller.
25 Disclosure
No representation or warranty by any Seller in this Agreement or
any ancillary agreement, certificate, exhibit or schedule to be delivered
pursuant to the provisions of this Agreement contains or shall contain any
untrue statement of a material fact by such Seller or omits or shall omit
to state any material fact necessary to make the statements contained
herein or therein by such Seller not misleading.
3. REPRESENTATIONS OF BUYER
Buyer represents and warrants to the Sellers as follows:
1 Organization and Authority of Buyer
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the full and
unrestricted power and authority to own its properties and to carry on its
business as now being conducted. Buyer has full power to execute and
deliver this Agreement and the agreements contemplated by this Agreement
and to consummate the transactions contemplated hereby. Copies of the
Certificate of Incorporation and Bylaws of Buyer, each as amended to date
and certified by the Secretary of Buyer will be delivered to Sellers within
10 days of the date of this Agreement.
2 Authorization
This Agreement has been, and the other agreements contemplated by
the transaction to be consummated hereby to which Buyer is a party, will be
at or prior to the Closing, duly authorized, executed and delivered by
Buyer. Assuming due authorization, execution and delivery by the other
parties hereto and thereto, this Agreement and all such other agreements
and written obligations entered into and undertaken in connection with the
transactions contemplated hereby will when executed, constitute the valid
and legally binding obligations of Buyer, enforceable against it in
accordance with their respective terms except to the extent limited by
applicable bankruptcy, insolvency, moratorium and other similar laws of
general application relating to or affecting the enforcement of creditors'
rights and general equity principles. Except as set forth on Schedule 3.2,
the execution, delivery and performance of this Agreement and the other
agreements contemplated by this Agreement to which the Buyer is a party,
and the consummation by Buyer of the transactions contemplated hereby and
thereby, will not, with or without the giving of notice or the passage of
time or both, (a) violate the provisions of any law, rule or regulation
applicable to Buyer; (b) violate the provisions of Buyer's Certificate of
Incorporation or Bylaws; (c) violate any judgment, decree, order or award
of any court, governmental body or arbitrator applicable to Buyer; or (d)
conflict with or result in the breach or termination of any term or
provision of, or constitute a default under, or cause any acceleration
under, or cause the creation of any lien, charge or encumbrance upon the
properties or assets of Buyer pursuant to, any contract, indenture,
mortgage, deed of trust or other agreement or instrument to which it is a
party or by which Buyer or its properties is or may be bound.
3 Litigation
As of the date of this Agreement, there is no litigation,
proceeding or investigation pending or, to the best knowledge of Buyer,
threatened, against Buyer or any of its respective assets or properties
which questions the validity of any action taken or to be taken pursuant to
or in connection with this Agreement or might otherwise affect the ability
of Buyer to perform the various terms and conditions of this Agreement or
of any agreements contemplated herein or to consummate the transactions
contemplated hereby.
4 Compliance with Laws; Regulatory Approvals
Buyer is not in violation of any provision of any law, judgment,
award, rule, regulation, order, decree, writ or injunction of any
Governmental Authority having jurisdiction over Buyer, which violation
would materially and adversely affect the ability of Buyer to carry out its
obligations hereunder. Except for all consents, approvals and
authorizations of the FCC which are necessary for the transfer by the
Sellers of the NST Venture Interest and the Shares to Buyer and the
expiration of the waiting period under the HSR Act contemplated by Section
6.1, all other governmental and regulatory consents, approvals,
authorization and other requirements prescribed by any law, rule or
regulation which must be obtained or satisfied by Buyer and which are
necessary and material for the execution, delivery and performance by Buyer
of this Agreement have been obtained.
5 FCC Approvals
To the best of Buyer's knowledge, (i) it and TGI is legally and
financially qualified to be the transferee of the FCC License, and (ii) it
or TGI has not engaged in any proceeding before the FCC which would prevent
or delay the transfer of the FCC licenses as contemplated hereunder, nor is
it aware of any claim which would result in such proceeding. The Buyer
reasonably believes it is in a position to obtain all FCC consents and FCC
approvals necessary to consummate the purchase of the Shares and the NST
Interest.
6 Investment Representation
Buyer is acquiring the Shares from the Stockholders and the NST
Venture Interest from NST for its own account for investment and not with a
view to, or for sale in connection with, any distribution thereof in
violation of applicable federal or state securities laws.
7 Information Representation
Neither Essaness nor ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ has told Buyer in writing or
orally that any of the Sellers' representations and warranties contained
herein are incorrect. Except for information previously disclosed to
Sellers or their attorneys, Buyer has no actual knowledge that any of the
representations or warranties made by Sellers herein are incorrect in any
material respect as of the date such representation or warranty was made.
It is agreed among the parties that for purposes of this representation,
and without otherwise limiting the breadth or scope of the second sentence
hereof, Buyer shall be deemed to have disclosed all (i) information
contained in written due diligence materials obtained by Buyer, its
attorneys or its representatives which have been or will be, prior to
Closing, delivered to Sellers or their attorneys and (ii) written and oral
information relating to certain tax and environmental matters which have
been, or may prior to Closing be, discussed between or among the Sellers or
their attorneys or representatives. It is explicitly agreed among the
parties that the burden of establishing that this representation is not
true (including each element thereof, including that Buyer had such actual
knowledge referred to above and that information relating thereto had not
been disclosed to Sellers) shall be that of the Sellers. The parties
acknowledge that Buyer has, as contemplated by the second sentence hereof,
disclosed information relating to Tax matters and environmental matters;
and, in clarification of the parties rights and obligations hereunder, the
parties agree that Sellers may not claim a breach of this representation by
Buyer relating to Tax matters or environmental matters.
4. CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
1 Confidentiality
The Sellers have furnished and will continue to furnish to Buyer
and its officers, directors, employees, agents or representatives,
including, without limitation, its attorneys, accountants and potential
financing sources for the transactions herein contemplated (the
"Representatives") certain non-public, confidential or proprietary
information in connection with the transactions contemplated by this
Agreement. Buyer agrees to maintain the confidentiality of such
information (subject to any disclosures required by applicable law), to use
such information solely in connection with the consummation of the
transactions contemplated hereby, and to transmit such information only to
those Representatives of Buyer on a "need to know" basis and who owe to
Buyer a duty of confidentiality with respect to such information.
2 Public Announcements
No party hereto shall make any announcement regarding the
Transactions contemplated by this Agreement to the public prior to the
Closing Date without the mutual consent of all of the parties hereto;
provided that Oak Industries Inc. ("Oak") or TGI may make such disclosure
as may be required or advisable under applicable law, and provided further
that in the event that either Oak or TGI has determined that such
disclosure is required or advisable, such party shall, to the extent
reasonably practicable, provide the other parties hereto (or their
representative, as the case may be) with prior notice of such disclosure
and an opportunity to review the contents thereof.
5. COVENANTS OF THE SELLERS
Each Seller severally covenants and agrees that from and after the
date of this Agreement through the Closing Date as relates to it, it will
comply, and as relates to the Joint Venture or Harriscope, it will cause
the Joint Venture or Harriscope, as the case may be, to comply, with the
following provisions.
It is expressly understood by the parties hereto that Essaness is
not selling its interest in the Joint Venture to Buyer and is not a party
to this Agreement. Accordingly, Buyer understands and agrees that (i) to
the extent any information or other disclosure shall be required to be made
specifically as to Essaness either directly or indirectly pursuant to any
term or provision herein, to the extent such information or disclosure is
not known by Seller, such Seller shall have no obligation or liability if
such information or disclosure is not given, and (ii) to the extent that
any covenant herein shall require the consent of Essaness, to the extent
that such Seller uses reasonable best efforts to seek such consent of
Essaness, no such Seller hereunder has or shall have any obligation or
liability with respect to the failure to comply with such covenant (other
than liability, if any, for Taxes for which indemnification is contemplated
by Section 9.1), although Buyer's rights to terminate this Agreement if
such failures shall cause a condition to Buyer's obligation to close to not
be satisfied shall remain unaffected.
1 Absence of Material Changes
Except as permitted by the prior written consent of Buyer, Sellers
shall cause each of the Joint Venture and Harriscope to not violate the
following provisions applicable to them. Notwithstanding the previous
sentence, no Seller shall have any liability (other than liability, if any,
for Taxes for which indemnification is contemplated by Section 9.1) to
Buyer (though Buyer's rights to terminate this Agreement if such failures
cause a condition to Buyer's obligation to close to not be satisfied shall
remain unaffected) if such violation occurs as a result of the action or
inaction of Essaness and such Seller does not approve the occurrence of any
of the following and uses its reasonable best efforts to prevent the
occurrence of any of the following:
(a) (i) purchase or redeem any of its NST Venture Interest or capital
stock, (ii) convey, pledge or otherwise encumber or transfer any NST
Venture Interest or capital stock, or (iii) issue or authorize any
additional interests in the Joint Venture or capital stock in Harriscope;
(b) merge or consolidate with or into any partnership, corporation or
other entity;
(c) dissolve, liquidate or wind up the affairs of the Joint Venture or
Harriscope or enter into any agreement relating thereto;
(d) make, accrue or become liable for any bonus, profit sharing or
incentive payment, except for accruals and payments under existing plans or
agreements, if any, or increase the rate of compensation payable or to
become payable by it to any of its officers, directors or employees other
than in the usual and ordinary course of business other than the payment of
one-time cash bonuses to employees payable and paid immediately prior to
the Closing, which amounts shall be treated as a liability for purposes of
Section 1.4;
(e) make any election or give any consent under the Code or the Tax
statutes of any state or other jurisdiction or make any termination,
revocation or cancellation of any such election or any consent or
compromise or settle any claim for past or present Tax due, in each case to
the extent such action would adversely affect the tax treatment of Buyer or
the transactions contemplated hereby;
(f) fail to operate its business and maintain its books, accounts and
records in the customary manner and in the ordinary course of business
consistent with past practices;
(g) cancel, renew, extend, materially amend, waive or otherwise change
in any material respect any Specified Contract, Personal Property Lease or
Real Property Lease or any provision thereof or enter into any new
Specified Contract, Personal Property Lease or Real Property Lease or take
or authorize any act or omission constituting a material breach or default
under any Specified Contract, Personal Property Lease or Real Property
Lease;
(h) other than the transfer of the Drake Property contemplated herein,
sell, assign, lease or otherwise transfer or dispose of any of the Assets,
or acquire any amount of material assets, or enter into any material
agreements relating thereto, except in the ordinary course of business
consistent with past practices;
(i) enter into Trade Agreements, except those which are (i) in the
ordinary course of business and consistent with the Station's past business
practices, (ii) recorded in the Financial Statements in accordance with
generally accepted accounting principles consistently applied, and (iii)
under which the Station's obligations under any such Trade Agreement shall
be fulfilled in reasonable relation to the amount and timing of
consideration therefor received by the Station;
(j) enter into any broadcast time sales agreement, contract, commitment
or understanding, except those which are in the ordinary course of business
and consistent with the Station's past business practices;
(k) create or permit to be incurred any Encumbrance on any of the Assets
other than Permitted Liens;
(l) incur any indebtedness of any kind in excess of the amount of
Indebtedness as of the date hereof other than in the usual and ordinary
course of business;
(m) engage in any transaction with any affiliate other than on terms no
less favorable than would be obtained in an arms-length transaction or
other than expressly disclosed pursuant to the terms of this Agreement;
(n) change or modify any of the Joint Venture's or Harriscope's
accounting principles or practices or any method of applying such
principles or practices (other than modifying the depreciation lives in a
manner than remains consistent with GAAP);
(o) amend or modify the Joint Venture Agreement or the Articles of
Incorporation or Bylaws of Harriscope;
(p) incur any material obligation, liability, or commitment secured or
unsecured (whether accrued, absolute, contingent, unasserted or otherwise),
with respect to the Station, the Joint Venture or Harriscope, except those
which are in the usual and ordinary course of business and consistent with
past practices or are immaterial in amount;
(q) make any (i) non-cash distributions on its NST Venture Interest or
capital stock or (ii) make any cash distributions on its NST Venture
Interest or capital stock that is not paid prior to the Closing or (iii)
make any cash distributions on or after the first day of the calendar month
immediately prior to the month in which the Closing occurs that would cause
the cash balance of the Joint Venture on the Closing Statement to go below
the Closing Month Adjustment except that such distributions otherwise
restricted under (iii) above may be made to the extent that the Sellers
recontribute to the Joint Venture 74.5% of the amount that would cause such
cash balance to again equal the Closing Month Adjustment;
(r) reclassify or recapitalize its capital structure;
(s) except for repayments of the ▇▇▇▇▇▇ Note, repay or incur any
intercompany borrowings or advances from any affiliate of the Joint Venture
or Harriscope;
(t) subject the NST Venture Interest or the Shares to any Encumbrance;
(u) suffer any loss or incur any liabilities or obligations or suffer
any Claim, in excess of $500,000 in the aggregate for Insured matters and
$250,000 in the aggregate for uninsured matters; or
(v) commit or agree to do any of the foregoing in the future.
2 Taxes
(a) Pre-Closing Tax Liabilities. On or prior to the Closing Date, the
Joint Venture, Harriscope and each Seller will, on a timely basis (taking
into account any applicable extensions), file or cause to be filed all tax
returns for and pay in full in a timely manner any and all Taxes which
shall become due or payable on account of the operation of the business of
the Joint Venture and Harriscope, the ownership of the Assets or the
ownership of the NST Venture Interest or Shares to the Closing Date.
(b) Post-Closing Tax Liabilities in Respect of Pre-Closing Periods. The
Stockholders shall prepare a calculation of any Taxes of Harriscope that
have accrued but not been paid prior to the Closing Date, for all taxable
periods that end, with respect to Harriscope, on or before the Closing Date
(including any short period ending on the Closing Date) and shall duly
prepare in a manner reasonably acceptable to Buyer any Tax returns or other
Tax filings relating to such taxable periods and shall deliver any such
return or filing to Buyer at a reasonable amount of time prior to the due
date for such return or filing (taking into account any applicable
extensions) or the due date for the payment of any Tax shown on such return
or filing. The Sellers, Buyer and Harriscope shall cooperate fully, as and
to the extent reasonably requested by the other parties, in connection with
the preparation and filing of such tax returns to Buyer. All Taxes shown
and not paid on the calculation shall be included as a liability of
Harriscope for purposes of Section 1.4. The Stockholders and NST shall
prepare a calculation of any Taxes of the Joint Venture that have accrued
but not been paid prior to the Closing Date, for all taxable periods that
end, with respect to the Joint Venture, on or before the Closing Date
(including any short period ending on the Closing Date) and shall duly
prepare in a manner reasonably acceptable to Buyer any Tax returns or other
Tax filings relating to such taxable periods and shall deliver any such
return or filing to Buyer at a reasonable amount of time prior to the due
date for such return or filing (taking into account any applicable
extensions) or the due date for the payment of any Tax shown on such return
or filing. The Sellers, Buyer and Harriscope shall cooperate fully, as and
to the extent reasonably requested by the other parties, in connection with
the preparation and filing of such tax returns. All Taxes shown and not
paid on the calculation shall be included as a liability of the Joint
Venture for purposes of Section 1.4. Sellers shall promptly indemnify
Buyer pursuant to Section 9.1 to the extent the amount shown on the
calculation is less than the amount of Tax ultimately determined to be due
in respect of the periods covered by the calculation.
(c) Tax Liabilities in Respect of Periods that Straddle the Closing
Date. For any tax periods beginning before the Closing Date and ending
after the Closing Date, Buyer shall prepare or cause to be prepared all tax
returns or filings for the Joint Venture or Harriscope that are filed after
the Closing Date. The Sellers, Buyer and Harriscope shall cooperate and
consult fully in good faith, as and to the extent reasonably requested by
the other parties, in connection with the preparation and filing of tax
returns pursuant to this section. However, all decisions concerning the
preparation or filing of any returns, and the payment of any tax, on behalf
of Harriscope or the Joint Venture, in respect of periods beginning before
the Closing Date and ending after the Closing Date shall be in the
reasonable discretion of Buyer (subject to applicable law and the
obligation to cooperate and consult in good faith with Sellers).
Buyer and Sellers agree for all tax reporting and other purposes
that profit and loss of the Joint Venture for any taxable period that
includes the Closing Date shall be allocated among the partners of the
Joint Venture as if the Closing Date were the last day of the such taxable
period. Accordingly, income and loss of the Joint Venture (calculated in
accordance with applicable tax rules and regulations) for periods up to and
including the Closing Date shall be allocated among the persons who were
partners of the Joint Venture up to the Closing Date, and income and loss
of the Joint Venture for periods after the Closing Date shall be allocated
among the partners of the Joint Venture as of and following the Closing
Date. For purposes of determining Sellers' indemnity obligations under
Section 9.1, income Taxes imposed on Harriscope in respect of any period
within which the Closing Date occurs shall be allocated to the portion of
such period ending on the Closing Date by treating the Closing Date as if
it were the last day of a taxable period.
3 Compliance with Laws, Specified Contracts and Leases
The Joint Venture, Harriscope and each Seller will comply in all
material respects with all material laws, rules and regulations which are
applicable to them and the Joint Venture, Harriscope, and each Seller will
comply in all material respects with all material laws, rules and
regulations applicable to their ownership of the Assets or the NST Venture
Interest or the Shares, as the case may be, or to the conduct of their
business, and will perform and comply in all material respects with all
Specified Contracts, Personal Property Leases and Real Property Leases.
All such applications, reports, returns and statements contemplated by
Section 2.16 shall continue to be filed on a current basis until the
Closing Date, and will be true, correct, and complete in all material
respects.
4 Affirmative Covenants
(a) The Joint Venture and Harriscope shall carry on their respective
businesses and the business of the Station substantially in the same manner
as heretofore conducted;
(b) The Tangible Personal Property shall be maintained in a suitable
condition and in sufficient working order for the purposes for which they
are used and currently intended to be used, consistent with past practices;
(c) The Joint Venture and Harriscope shall take such action as
reasonably necessary to contest any challenge to any Permit or License and
any efforts at the FCC which would adversely affect the broadcast license
of the Station (it being agreed that actions relating directly to the
consummation of the transactions contemplated by this Agreement are not
intended to be covered by this subsection, but rather are covered by
Section 6.1 hereof);
(d) The Joint Venture and Harriscope shall maintain in full force and
effect existing insurance coverage on the Assets;
(e) The Station shall be operated in conformity with the Permits and the
Licenses, with the Communications Act of 1934, as amended, with the rules
and regulations of the FCC and with those rules and regulations of any
other Governmental Authority with jurisdiction over the Joint Venture,
Harriscope or the Station. The Permits and Licenses for the Station shall
at all times remain in full force and effect, and the Joint Venture and
Harriscope shall take all actions necessary to maintain them as such;
(f) The Joint Venture shall remove, or pay the cost of the cost of
removing, the cause of any violation, breach or default of the Permits or
Licenses, the Communications Act of 1934, as amended, and the rules and
regulations of the FCC and of any other Governmental Authority which occurs
prior to the Closing Date, including the payment of any fines that may be
asserted for any such violation (other than those being contested
diligently and in good faith; provided that the Sellers shall be obligated
to remove or pay only 74.5% of the cost of removing such violation, breach
or default upon a final determination of liability post-Closing);
(g) The Joint Venture and Harriscope shall not change the call letters
or channel position of the Station or change the channel position of the
Station on any cable system;
(h) The Joint Venture and Harriscope shall not accelerate, discount,
sell or assign any accounts receivable or substantially alter its policies
regarding the cash or credit sales of advertising time except in accordance
with the Station's previous policies and practices;
(i) The Sellers shall cause the Joint Venture and Harriscope to furnish
to Buyer as soon as available, and in any event within 40 days following
the end of each month commencing with September, 1995, unaudited balance
sheets of the Joint Venture and Harriscope as of such month (in the case of
the Joint Venture) or quarter (in the case of Harriscope) together with the
related statements of income or operations, cash flows and changes in
capital accounts or stockholders' equity, for the month (in the case of the
Joint Venture) or quarter (in the case of Harriscope) and the fiscal year
to date then ended, which financial statements will be prepared from the
books and records of the Joint Venture and Harriscope in accordance with
past practices, generally accepted accounting principles consistently
applied;
(j) The Joint Venture and Harriscope shall promptly provide or make
available to Buyer copies of all correspondence, applications, returns,
reports and statements filed with the FCC or placed in the Station's public
file in connection with the operation of the Station;
(k) The Joint Venture and Harriscope shall, consistent with the needs of
the Station, maintain in all material respects film usage schedules and
amortization schedules consistent with past practice, and shall pay all
obligations and liabilities that are due and payable under the Specified
Contracts, the Personal Property Leases and the Real Property Leases in a
timely manner. If reasonably requested by Buyer, the Sellers shall provide
evidence reasonably satisfactory to Buyer of the payment of such
obligations and liabilities;
(l) Except for the members of the management board of the Joint Venture,
no Seller nor Harriscope shall require or cause the full-time employees of
the Joint Venture or Harriscope to perform duties that are not directly
related to the business and operations of the Station;
(m) Each Seller shall preserve its existence and shall take all
corporate or joint venture action required under the laws of any state
having jurisdiction over the Joint Venture or Harriscope to effectuate the
transactions contemplated by this Agreement;
(n) Except for maintenance, acts of "force majeure" and past practice in
compliance with applicable law, the Joint Venture shall continuously
operate the Station at not less than 80% of its authorized power. To the
extent that any of the Sellers becomes aware of such event, such Seller
shall promptly notify Buyer in writing if the Station broadcasts at less
than its authorized power for more than thirty (30) consecutive minutes;
and
(o) Sellers shall use their reasonable best efforts to cause the Joint
Venture and Harriscope to have its financial statements for the year ending
December 31, 1995 prepared on or before February 15, 1996 (which
statements, in the case of the Joint Venture, shall be audited).
5 Labor Matters
Sellers will advise Buyer of the status of collective bargaining
negotiations relating to the employees of the Joint Venture and, at Buyer's
request, use reasonable best efforts (including obtaining any required
consent of any union) to permit Buyer or its representatives to observe all
bargaining sessions. The Joint Venture may agree to the terms and
conditions of any collective bargaining agreement relating to the employees
of the Joint Venture and may enter into any collective bargaining agreement
relating to the employees of the Joint Venture (and it is agreed, may be
required to do so under applicable law), and it is agreed that if the Joint
Venture agrees to any such terms and conditions of any collective
bargaining agreement or enters into such collective bargaining agreement
without Buyer's written consent, it shall be deemed a breach of this
sentence of this covenant, giving rise to all rights and remedies of Buyer
applicable to a breach of a covenant made under Section 5 of this
Agreement.
Notwithstanding the provisions of this Section 5, no Seller shall
have any liability (other than liability, if any, for Taxes for which
indemnification is contemplated by Section 9.1) to Buyer (though Buyer's
rights to terminate this Agreement if such failures cause a condition to
Buyer's obligation to close to not be satisfied shall remain unaffected) if
such violation occurs as a result of the action or inaction of Essaness and
such Seller does not approve the occurrence of any of the preceding and
uses its reasonable best efforts to prevent the occurrence of any action or
inaction that would cause a breach of such provision.
6. FURTHER COVENANTS AND AGREEMENTS
Each Seller severally covenants and agrees that from and after the
date of this Agreement through the Closing Date as relates to it, it will
comply, and as relates to the Joint Venture or Harriscope, it will cause
the Joint Venture or Harriscope, as the case may be, to comply, with the
following provisions.
1 Application for FCC Consent; HSR Act Notification
(a) As promptly as practicable and no later than ten (10) business days
following execution of this Agreement, the Sellers and Buyer shall file an
application with the FCC requesting the FCC's consent to the transfer of
the NST Venture Interest and the Shares to Buyer (the "FCC Application").
The parties will use their reasonable best efforts to prosecute the FCC
Application diligently and expeditiously to a favorable conclusion
(provided that the parties shall not be obligated to participate in any
evidentiary hearing at the FCC or to make any payments to the FCC in
connection with this transaction other than filing fees). The Sellers and
Buyer mutually agree to provide (and each Seller agrees to cause Harriscope
and the Joint Venture to provide) whatever additional information the FCC
may request in processing the FCC Application, and to furnish such
information within the time established by the FCC in its request and any
reasonable and necessary extension thereof, and otherwise to cooperate in
the filing and processing of the FCC Application.
(b) As promptly as practicable and no later than fifteen (15) days
following execution of this Agreement, the Sellers and Buyer shall file all
required notifications and documentation (other than information required
pursuant to any "second request", which will be filed promptly if required)
required by the HSR Act (the "HSR Notifications"). The parties will use
their respective reasonable best efforts to prosecute the HSR Notifications
diligently and expeditiously to a favorable conclusion. The Sellers and
Buyer mutually agree to provide (and each Seller agrees to cause Harriscope
and the Joint Venture to provide) timely whatever additional information
the appropriate regulatory authorities may request in processing the HSR
Notifications, and otherwise to cooperate in the filing and processing of
the HSR Notifications.
2 Inspection of the Station; Engineering Inspection
Upon reasonable advance notice, Buyer and Buyer's representatives
may make, during normal business hours, such investigation of the Joint
Venture's and Harriscope's properties, books, records, contracts,
commitments, facilities, premises and Assets, including the Station, as
they deem necessary or advisable to familiarize themselves with such
matters. All requests made by Buyer's representatives in connection with
any such investigation shall be made to a single representative designated
by the Sellers. Buyer's representatives shall have reasonable access
during normal business hours to the properties, documents, books,
contracts, commitments, facilities, premises and records of the Sellers in
the Sellers' possession and the Sellers shall cause the employees of the
Station to furnish Buyer or its representatives with such available
information with respect to such matters as Buyer shall from time to time
reasonably request and otherwise to cooperate with Buyer in the conduct of
any investigations that Buyer wishes to conduct. Prior to the Closing,
Buyer and Buyer's consulting engineers and other representatives of Buyer
may, at Buyer's expense, conduct engineering and other tests and
inspections of the Station and the Assets.
3 Environmental Investigation
Upon reasonable advance notice, Buyer and Buyer's representatives
may enter, inspect and investigate the Properties, such inspection to be
completed prior to Closing. In order to complete such investigation, Buyer
or its representative shall have the right but not the obligation: (a) to
conduct tests (including a "Phase I" and/or "Phase II" environmental study)
of the structures, soil, surface or subsurface waters, and air quality at,
in, on, beneath or about the Properties, in a manner consistent with good
engineering practice; (b) to inspect all records, reports, permits,
applications, monitoring results, studies, correspondence, data and any
other information or documents relevant to Hazardous Materials or other
environmental conditions; and (c) to inspect all buildings and Tangible
Personal Property at the Properties for friable asbestos-containing
materials or other Hazardous Materials. The Sellers agree to permit Buyer
reasonable access to all portions of the Properties, during regular
business hours; provided, however, that any inspection pursuant to this
provision shall be commenced by Buyer within thirty (30) days of the
execution of this Agreement, and provided further that within fifteen (15)
days after the receipt by Buyer of any third-party report relating to such
investigation, Buyer shall inform Sellers of any issues it believes are
relevant to the provisions of this Agreement. Buyer shall have the right
to terminate its obligations under this Agreement without penalty upon
written notice to Sellers in the event that Buyer's environmental
investigation discloses any violation of or any remedial work required by
any applicable laws to the Joint Venture or Harriscope which would cost in
excess of $250,000 in the aggregate to cure and remediate; provided,
however, that the Sellers shall have the right either to take or cause to
be taken remedial action as is necessary to eliminate such violation(s) and
complete such remedial work so as to eliminate any liability which could
arise therefrom, and, in the event of such curative and remediative action,
Buyer shall not be entitled to terminate this Agreement pursuant to this
sentence. Buyer agrees to keep and hold confidential any and all reports,
summaries, studies or results that are the product of its pre-Closing
investigations of the Properties, to provide copies of such reports to
Sellers within five business days of receipt of any request therefrom, and
not to disclose such reports without the written consent of the Sellers or
unless required to do so by applicable law or in connection with any legal
action. Buyer agrees to notify Sellers prior to initiating a Phase II
environmental study. In addition, Buyer shall obtain insurance of at least
$1 million as relates to the conduct of the Phase I and/or Phase II
environmental study prior to conducting any such study, naming as
additional insureds such entities as Sellers shall reasonably request and
providing Sellers with a copy of the certificate of insurance relating
thereto.
4 Restrictions on Transfer of NST Venture Interest and Shares
(a) From the date of this Agreement until the Closing, no Seller shall
directly or indirectly, voluntarily or involuntarily, by operation of law
or otherwise, (i) assign, sell, mortgage, pledge, hypothecate or otherwise
dispose of or encumber, or permit or suffer to exist any Encumbrance on,
all or any portion of its respective NST Venture Interest or Shares or the
Assets (other than Permitted Liens on the Assets) or such Seller's direct
or indirect, legal or beneficial interest in the Joint Venture or
Harriscope or such Seller's rights and obligations under either the Joint
Venture Agreement or this Agreement or change such Seller's ownership
percentage in the Joint Venture or the Shares or (ii) admit new or
additional members or stockholders to the Joint Venture or Harriscope or
(iii) transfer any rights or obligations hereunder without the prior
written consent of Buyer, which may be withheld in Buyer's sole and
absolute discretion or (iv) enter or continue negotiations or enter into
any contract, agreement or understanding of any kind with respect to the
matters described in (i), (ii) and (iii).
5 Control of the Station
Prior to Closing, Buyer shall not, directly or indirectly, control,
supervise or direct the operations of the Station; such operation,
including complete control and supervision of all of the Station's
programs, employees, and policies, shall be the sole responsibility of the
Joint Venture. The provision of services by TGI to the Joint Venture as
contemplated by the Network Affiliation and Representation Agreement
between the Joint Venture and Telemundo Group, Inc. shall not be construed
as constituting such control or supervision. On and after the Closing, the
Sellers shall not, directly or indirectly, control, supervise or direct the
operation of the Station.
6 Consent to Transaction
Each Seller waives any rights such Seller may have under the Joint
Venture Agreement, the Shareholders Agreement pertaining to Harriscope
dated May 1, 1980 (the "Shareholders Agreement"), or otherwise to object
to or otherwise restrict the transfer of the NST Venture Interest or the
Shares contemplated by this Agreement or to purchase the NST Venture
Interest or the Shares as contemplated by this Agreement and consents to
the transactions contemplated herein.
7 Notices
The Sellers shall promptly notify Buyer in writing of, and furnish
to Buyer any information that the Buyer may reasonably request with respect
to, the occurrence of any event or the existence of any state of facts that
would result in the Sellers' representations and warranties not being true
in any material respect as of the Closing Date or which as of the Closing
Date would substantially impair the Sellers' ability to perform their
obligations under this Agreement. No notification pursuant to this Section
shall in any manner constitute a waiver by Buyer of any of the conditions
precedent to the Closing hereunder.
8 Supplement to Disclosures
Sellers shall update the schedules to this Agreement from time to
time prior to Closing to reflect matters or circumstances that, if known or
existing at the time the Agreement was executed, would have been included
on such schedules. Notwithstanding the preceding sentence, for purposes of
determining the parties rights and obligations under this Agreement, the
schedules delivered by the Sellers shall be deemed to include only that
information contained therein on the date of this Agreement.
9 Representations, Etc.
Disclosure of any matter set forth in any one schedule (or in this
Agreement) shall, if reasonably described, be deemed to be set forth on any
other schedule for which such matter is applicable.
10 Drake Property
Prior to the Closing, Sellers shall have caused the Joint Venture
to have sold, transferred or distributed to its partners the Drake Avenue
Property (as previously described to Buyer), including all liabilities
related thereto (and shall be done in a manner that will not create any Tax
liability to the Joint Venture or Harriscope, other than liabilities which
are fully indemnified under the terms of this Agreement).
11 Other Covenants
(a) Sellers shall cause the ▇▇▇▇▇▇ Note to be repaid in full and the
security interest relating thereto to be released prior to Closing.
(b) The Joint Venture shall maintain substantially the same type of, and
substantially the same expenditures on, advertising, community affairs and
promotion as it has supplied for comparable previous periods.
(c) Sellers shall be responsible for satisfying (on or after Closing)
the BMI liability described to Buyer which is in existence on the Closing
Date.
(d) On or prior to Closing, Sellers will provide the tax basis for
U.S. federal income tax purposes in each of the material Assets of the
Joint Venture as set forth in the Joint Venture's books and records as of
the Closing Date, and will provide a statement as to the tax basis for U.S.
federal income tax purposes of Harriscope as of the Closing Date in the
Harriscope Interest.
7. CONDITIONS TO OBLIGATIONS OF BUYER PRIOR TO THE CLOSING
The obligations of Buyer under this Agreement to consummate the
Closing are subject to the fulfillment, on or before the Closing Date, of
the following conditions precedent, each of which may be waived in writing
in the sole discretion of Buyer.
1 Continued Truth of Representations and Warranties of the Sellers;
Compliance with Covenants and Obligations
The representations and warranties of the Sellers shall be true on
and as of the Closing Date in all material respects as though such
representations and warranties were made on and as of such date, except for
any changes consented to in writing by the Buyer or except for
representations and warranties which refer to a specified date (which shall
be true in all material respects on such specified date). The Sellers
shall have performed and complied in all material respects with all terms,
conditions, covenants, obligations, agreements and restrictions required by
this Agreement to be performed or complied with by each Seller, prior to or
at the Closing Date.
2 Corporate and Other Proceedings
All corporate and other similar proceedings required to be taken on
the part of each Seller and Harriscope to authorize or carry out this
Agreement shall have been taken.
3 Governmental Approvals
(a) An FCC Order approving the transfer of the NST Venture Interest and
the Shares to Buyer shall have become a Final Order. For purposes of this
Section 7.3, (a) an "FCC Order" means an order of the FCC, or of the Mass
Media Bureau acting under delegated authority, approving the transfer of
the NST Venture Interest and the Shares to Buyer in accordance with this
Agreement, as proposed in the FCC Application filed pursuant to Section 6.1
of this Agreement, without conditions (other than existing License
conditions as of the date hereof) that (i) are materially adverse to Buyer
(or TGI) or (ii) in any way materially diminish the Buyer's operating
rights with respect to the Station, except any such condition expressly
accepted by Buyer in writing, and (b) a "Final Order" means an FCC Order
that is no longer subject to judicial, administrative or any other review;
provided that, at Buyer's sole option and subject to paragraph (b), upon at
least ten (10) business days' notice to the Sellers, the Closing may take
place after December 31, 1995 following the issuance of an FCC Order
approving the transfer of the NST Venture Interest and the Shares to Buyer
but before a Final Order.
(b) In the event that the Closing occurs prior to a Final Order as
contemplated by the proviso set forth above, the Buyer acknowledges that it
is assuming the risk of Closing prior to the FCC Order becoming a Final
Order and agrees to indemnify the Sellers for all reasonable costs and
expenses incurred by Sellers in connection with such early Closing after
issuance of the FCC Order including but not limited to those costs and
expenses arising from Sellers appearing before, or making filings with, the
FCC with respect to the FCC Order; provided, that this provision shall not
apply to the extent any challenge to the FCC Order relates to a fact which
would have constituted a misrepresentation or breach of Sellers'
representations and warranties or obligations under this Agreement.
(c) All other consents, approvals and authorizations of any other
Governmental Authorities which are necessary for the transfer by the
Sellers of the NST Venture Interest and the Shares shall have been obtained
and shall no longer be subject to judicial, administrative or other review.
The waiting period (and any extensions thereof) as prescribed by the
regulations promulgated under the HSR Act shall have expired or shall have
been terminated.
4 Adverse Proceedings
No preliminary or permanent injunction or temporary restraining
order of any federal or state court, and no order or any governmental
authority, which prevents or prohibits the consummation of the transactions
contemplated by this Agreement, shall be issued and remain in effect.
5 Opinion of Counsel
Buyer shall have received an opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇, Ltd.,
counsel to the Sellers, and other attorneys acceptable to Buyer, dated as
of the Closing Date, in form and substance as shall be reasonably
satisfactory to Buyer's counsel.
6 Closing Deliveries
Buyer shall have received at or prior to the Closing each of the
following documents:
(a) an assignment of the NST Venture Interest, executed by NST, in form
and substance satisfactory to Buyer and its counsel, and certificates
representing all of the Shares, in the name of Buyer or its designee;
(b) a guaranty, executed by a person or entity reasonably acceptable to
Buyer (the "▇▇▇▇▇▇ Group Guarantor"), and in form and substance reasonably
acceptable to Buyer, dated as of the Closing Date pursuant to which the
▇▇▇▇▇▇ Group Guarantor guarantees the prompt and complete payment and
performance of the obligations of the ▇▇▇▇▇▇ Group under Section 9.1 of
this Agreement; it being agreed that the guaranty will be primary (but
total liability cannot exceed the limits contemplated by Section 9) and
will have a term of six years (subject to extension in the event a Claim or
threatened Claim is pending at the end of the six year period which is not
resolved prior to the end of such six year period), and will provide that
the ▇▇▇▇▇▇ Group Guarantor will maintain a minimum net worth during the
period of the guaranty of $20 million.
(c) a guaranty, executed by Oak Industries, Inc. ("Oak"), a publicly
traded corporation and the ultimate corporate parent of NST (the "Oak
Guarantor"), and in form and substance reasonably acceptable to Buyer,
dated as of the Closing Date, pursuant to which the Oak Guarantor
guarantees the prompt and complete payment and performance of the
obligations of NST under Section 9.1 of this Agreement it being agreed
that, the guaranty will be primary (but total liability cannot exceed the
limits contemplated by Section 9) and will have a term of six years
(subject to extension in the event a Claim or threatened Claim is pending
at the end of the six year period which is not resolved prior to the end of
such six year period).
(d) a certificate executed by each Seller evidencing satisfaction by
each Seller of the conditions specified in this Section 7;
(e) a certificate of the Secretary of State of the state of
incorporation or formation of each Seller that is a corporation (each, a
"Corporate Seller"), and Harriscope as to the legal existence and good
standing of each Corporate Seller, and Harriscope, as of a date no more
than five business days prior to the Closing;
(f) certificates of the Secretary of each Corporate Seller attesting to
the incumbency of each Corporate Seller's officers, and the authenticity of
the resolutions authorizing the transactions contemplated by this
Agreement;
(g) existing title insurance commitments and currently available surveys
with respect to the Real Properties;
(h) the minute books of Harriscope not previously delivered to Buyer
under this Agreement;
(i) "FIRPTA" certificates executed by each of the Sellers in a form
reasonably acceptable to Buyer. If such certificates are not delivered to
Buyer by a Seller, Buyer shall be entitled to withhold 10% of the portion
of the Purchase Price payable to such Seller;
(j) Resignations of all officers and directors of the Joint Venture and
Harriscope who are representatives of the ▇▇▇▇▇▇ Group or NST, as Buyer may
request.
(k) Certification by an officer of the Joint Venture or the Sellers that
the ▇▇▇▇▇▇ Note has been repaid in full and the security interest relating
thereto has been released.
(l) Such other documents, instruments or certificates as the Buyer's
counsel may reasonably request to fulfill the terms and conditions of this
Agreement.
7 Absence of Material Change
There shall have been no material adverse changes since the date of
the Current Financial Statements in the business, operations, condition
(financial or otherwise), properties, assets or liabilities of either the
Joint Venture, Harriscope or of the Station (other than those affecting the
television broadcast industry or the Chicago television market generally or
as may be directly attributable to programming provided by TGI or
competition from Univision (assuming compliance with the covenant in
Section 6.11(b))), except changes contemplated by this Agreement.
8 Consents of Lenders, Lessors and Other Third Parties
Sellers shall have received all requisite consents and approvals of
all lenders, lessors and other third parties whose consent or approval is
required in order for Sellers to consummate the transactions contemplated
by this Agreement.
8. CONDITIONS TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers under this Agreement to consummate the
Closing hereunder are subject to the fulfillment, on or before the Closing
Date, of the following conditions precedent, each of which may be waived in
writing in the sole discretion of the Sellers.
1 Continued Truth of Representations and Warranties of Buyer
The representations and warranties of Buyer in this Agreement shall
be true on and as of the Closing Date in all material respects as though
such representations and warranties were made on and as of such date,
except for any changes consented to in writing by the Sellers or except for
representations or warranties which refer to a specified date (which shall
be true in all material respects on such specified date). Buyer shall have
performed and complied in all material respects with all terms, conditions,
obligations, agreements and restrictions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
2 Corporate Proceedings
All corporate proceedings required to be taken on the part of Buyer
to authorize or carry out this Agreement shall have been taken.
3 Governmental Approvals
Subject to Buyer's right under Section 7.3 to proceed to a Closing
upon the issuance of an FCC Order, all consents, approvals and
authorizations of the FCC and other Governmental Authorities, if any, that
are necessary for the consummation by Buyer of the transactions
contemplated by this Agreement shall have been obtained. The waiting
period (and any extensions thereof) as prescribed by the regulations,
promulgated under the HSR Act shall have expired or shall have been
terminated.
4 Adverse Proceedings
No preliminary or permanent injunction or temporary restraining
order of any federal or state court, and no order or any governmental
authority, which prevents or prohibits the consummation of the transactions
contemplated by this Agreement, shall be issued and remain in effect.
5 Opinion of Counsel
The Sellers shall have received an opinion of Akin Gump ▇▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇, LLP, counsel to Buyer and other attorneys acceptable to
Sellers, dated as of the Closing Date, in form and substance as shall be
reasonably satisfactory to Sellers' counsel.
6 Closing Deliveries
The Sellers shall have received at or prior to Closing each of the
following:
(a) the Purchase Price, subject to Buyer's right to offset the amount
thereof by delivery of the Deposit on the Closing Date to the Sellers
pursuant to the Escrow Agreement;
(b) a guaranty, executed by TGI, and in form and substance reasonably
acceptable to Seller, dated as of the Closing Date, pursuant to which TGI
guarantees the prompt and complete payment and performance of the
obligations of Buyer under Section 9.3 of this Agreement, it being agreed
by the parties that the guaranty will be primary (but total liability
cannot exceed the limits contemplated by Section 9) and will have a term of
six years (subject to extension in the event a Claim or threatened Claim is
pending at the end of the six year period which is not resolved prior to
the end of such six year period);
(c) a certificate of the President and Chief Financial Officer of Buyer
evidencing satisfaction of the conditions specified in this Section 8;
(d) a certificate of the Secretary of State of the State of Delaware as
to legal existence and good standing of Buyer as of a date not more than
five business days prior to the Closing;
(e) a certificate of the Secretary of Buyer attesting to the incumbency
of Buyer's officers, the authenticity of the resolutions authorizing the
transactions contemplated by this Agreement, and the authenticity and
continuing validity of the charter documents delivered pursuant to Section
3.1; and
(f) such other documents, instruments or certificates as the Sellers'
counsel may reasonably request to fulfill the terms and conditions of the
Agreement.
9. INDEMNIFICATION
1 Indemnification by the Sellers
(a) From and after the Closing, each of NST and the ▇▇▇▇▇▇ Group,
severally, and not jointly, shall indemnify and hold Buyer and Harriscope
harmless from and against any and all Claims (as defined below) arising out
of or accruing from (i) any misrepresentation or breach of the
representations or warranties made by NST or the ▇▇▇▇▇▇ Group relating
solely to NST, Harriscope, the Stockholders, the Shares or the NST Venture
Interest (the "Seller Matters") set forth in this Agreement or in any
certificate delivered by NST or the ▇▇▇▇▇▇ Group or in any schedule or
exhibit furnished to Buyer pursuant to this Agreement at or before the
Closing and relating to the Seller Matters, and (ii) any non-compliance by
NST or the ▇▇▇▇▇▇ Group of any covenants, agreements or undertakings made
by such party contained in or made pursuant to this Agreement relating to
the Seller Matters.
(b) From and after the Closing, each of NST and the ▇▇▇▇▇▇ Group, shall
indemnify and hold Buyer and Harriscope harmless from and against any and
all liabilities, damages, losses, costs and expenses, including reasonable
attorney's fees (collectively, "Claims"), arising out of or accruing from
(i) any misrepresentation or breach of the representations and warranties
of NST or the ▇▇▇▇▇▇ Group set forth in this Agreement relating other than
to Seller Matters or in any certificate delivered by NST or the ▇▇▇▇▇▇
Group or in any schedule or exhibit furnished to Buyer pursuant to this
Agreement at or before the Closing relating other than to Seller Matters;
(ii) except as explicitly provided in Section 5, any non-compliance by NST
or the ▇▇▇▇▇▇ Group with any covenants, agreements or undertakings of the
Sellers, the Joint Venture or Harriscope contained in or made pursuant to
this Agreement relating other than to Seller Matters; (iii) any and all
Taxes (including any Taxes imposed on Harriscope, the Joint Venture,
Buyer, or any affiliated group of which Buyer is or will be a member)
relating to the income, business, property or operations of the Joint
Venture or Harriscope or the Assets or any other Taxes (including any Taxes
arising as a result of the several tax liability of members of an
affiliated group under U.S. Treasury Regulations Section 1.1502-6) for
which the Joint Venture or Harriscope may be liable (A) in respect of any
taxable period ending on or prior to the Closing Date, or, in the case of
any taxable period that includes, but does not end on the Closing Date, the
portion of such period ending on the Closing Date (a "Pre-Closing Period")
or (B) in respect of any period (or portion thereof) beginning on or after
the Closing Date to the extent such Taxes are attributable to events,
occurrences, transactions, sales, services or rentals occurring or
performed on or prior to the Closing Date and (iv) any and all Taxes
relating to NST's ownership of its NST Venture Interest or Harriscope's
ownership of its interest in the Joint Venture, including Harriscope's and
NST's proportionate share of any and all Taxes (including any real property
taxes, personal property taxes or similar ad valorem obligations) levied or
imposed upon, or in connection with, the Assets of the Joint Venture or
Harriscope or the conduct or operation of the business of the Joint Venture
on or before the Closing Date and (v) (A) the BMI liability described to
Buyer in existence on the Closing Date (and any breach of the covenant set
forth in Section 6.11(c), (B) the Drake Property or any breach of the
representation set forth in Section 2.14 relating to the Drake Property or
a breach of the covenant in Section 6.10), (C) matters relating to the
general manager of the Joint Venture (including as relates to his
employment or any statements, promises or agreements entered into, if any)
prior to Closing or (D) the ▇▇▇▇ ▇▇▇▇▇▇▇, WGBO and Chicago Communications
Service as WSNS TV, Channel 44 claims referred to in Schedule 2.10 as
relates to action or inaction occurring prior to Closing ((A), (B), (C) and
(D) collectively, the "Subsection V Matters"). The obligation of Sellers
to indemnify Buyer pursuant to clauses (iii) and (iv) in the preceding
sentence shall exist regardless of whether the liability for any Taxes
described in such clauses is reflected in the Current Financial Statements
or has been disclosed to Buyer in any manner. The parties hereto agree
that all real property taxes, use taxes, personal property taxes and
similar ad valorem obligations that are levied on Harriscope or the Joint
Venture or with respect to the Assets or the Business, or with respect to
the assets or business of Harriscope, for assessment periods within which
the Closing Date occurs shall be apportioned between pre- and post-closing
periods based on the number of days in any such period falling on or before
the Closing Date, on the one hand, and after the Closing Date, on the other
hand. The parties hereto also agree that income or similar taxes levied
for an assessment period within which the Closing Date occurs should be
allocated between pre- and post-closing periods by treating the Closing
Date as if it were the last day of a short taxable period. The parties
hereto agree that nothing contained in this Section 9.2 shall be
interpreted as providing Buyer or Harriscope with the right to receive an
indemnity payment for Taxes on any gain recognized by Harriscope arising
solely as a consequence of (i) any sale or disposition after the Closing by
Harriscope of all or a portion of the Harriscope Interest (including any
sale or disposition of the Harriscope Interest resulting from the
termination of the Joint Venture pursuant to Section 708 of the Internal
Revenue Code of 1986, as amended (the "Code")) or (ii) any sale or
disposition by Harriscope on or after the Closing resulting from Buyer
causing Harriscope to make an election under Section 338 of the Code.
(c) All amounts paid pursuant to Section 9 of this Agreement by one
party to another party (other than interest payments) shall be treated by
such parties as an adjustment to either the NST Purchase Price or the
Harriscope Purchase Price, as applicable. If contrary to the intent of the
parties any payment made pursuant to Section 9 of this Agreement is treated
as taxable income of the recipient, then the payor shall indemnify and hold
harmless the recipient from any actual net liability for Taxes attributable
to the receipt of such payment.
2 Limitations on Indemnification by the Sellers
Buyer's right to indemnification pursuant to Section 9.1 is subject
to the following specific limitations:
(a) Buyer shall not be entitled to assert any right of indemnification
hereunder for any Claims pursuant to Section 9.1 after eighteen (18) months
from the Closing Date, except that with respect to Claims arising out of a
breach of any representations or warranties set forth in (i) Sections
2.15(a), (b) and (e), 5.2 and 9.1(b)(iii) and (iv), Buyer's right to
indemnification shall expire after the expiration of the applicable tax
statute of limitations, (ii) Section 2.20, Buyer's right to indemnification
shall expire after 3 years from the Closing Date and (iii) Sections 2.4,
2.6 and 2.9(a), (b) and (c), Buyer's right to indemnification shall expire
after 5 years from the Closing Date, and (iv) Subsection V Matters, Buyer's
right to indemnification shall expire after 6 years from the Closing Date,
and except that if there shall be pending any Claim or threatened Claim
under this Agreement for which Sellers have been given notice on or before
the end of the applicable expiration period hereunder at the time Buyer's
right to indemnification would otherwise expire, Buyer shall continue to
have the right to be indemnified with respect to such Claim or threatened
Claim.
(b) Buyer shall not be entitled to indemnification for any Claims
(except for such breaches as may have been effected willfully and
knowingly) until the aggregate Claims suffered by Buyer exceeds $250,000,
whereupon Buyer shall be entitled to indemnification for all Claims
suffered by Buyer (including the first $250,000 in Claims). In no event
shall (i) NST be liable for indemnification Claims in excess of (A)
$29,562,000 for Claims against it arising under Sections 2.4, 2.6, 2.9(a),
(b) and (c), 2.15(a), (b) and (e), 5.2, Subsection V Matters, or
9.1(b)(iii) and (iv) and (B) $3,000,000 for all other indemnification
Claims and (ii) the ▇▇▇▇▇▇ Group be liable for indemnification Claims in
excess of (A) $15,138,000 for Claims arising under Section 2.4, 2.6(b),
2.9(a), (b) and (c), 2.15(a), (b) and (e), 5.2, Subsection V Matters, or
9.1(b)(iii) and (iv) and (B) $1,500,000 for all other indemnification
Claims.
In the event that Buyer seeks indemnification pursuant to the
provisions of this Agreement for more than one Claim, the aggregate
liability of NST hereunder for all Claims shall not exceed $29,562,000 and
the aggregate liability of the ▇▇▇▇▇▇ Group hereunder shall not exceed
$15,138,000.
The liability of the ▇▇▇▇▇▇ Group pursuant to Section 9.1(b) for
any individual Claim by Buyer in connection with any matter relating solely
to the Joint Venture (including, but not limited to, the business,
operations and financial condition of the Station), shall be limited to
25.23% of the aggregate amount of such Claim. The liability of NST
pursuant to Section 9.1(b) for any individual Claim by Buyer in connection
with any matter relating solely to the Joint Venture (including, but not
limited to the business, operations and financial condition of the Station)
shall be limited to 49.27% of the aggregate amount of such Claim.
Notwithstanding the above, Buyer shall be indemnified for the
following Claims even if aggregate Claims suffered by Buyer have not
exceeded $250,000 (and such Claims shall not be treated as Claims counting
toward satisfying such $250,000 "basket"): any Subsection V Matters and
Claims for which indemnification is sought pursuant to Section 9.1(b)(iii)
and (iv) which relate to any taxable periods beginning after December 31,
1994.
(c) Buyer shall be prohibited from bringing any Claim against (i) NST
relating to the ▇▇▇▇▇▇ Group's ownership of its Shares being sold hereunder
or any breach by the ▇▇▇▇▇▇ Group of any representation or covenant
relating to the Seller Matters, and (ii) the ▇▇▇▇▇▇ Group relating to NST's
ownership of the NST Venture Interest or NST's ownership of its Shares
being sold hereunder or any breach by NST of any representation or covenant
relating to the Seller Matters.
(d) Following the Closing, the indemnification afforded by this Section
9 shall be the sole and exclusive remedy against Sellers for any losses of
the Buyer in respect of the matters covered by such indemnification
provision.
3 Indemnification by Buyer
(a) From and after the Closing, Buyer shall indemnify and hold the
Sellers harmless from and against any and all Claims arising out of or
accruing from (i) any misrepresentation or breach of the representations
and warranties of Buyer set forth in this Agreement or in any certificate
delivered by Sellers or in any schedule or exhibit furnished to the Sellers
pursuant to this Agreement at or before the Closing; (ii) any non-
compliance by Buyer with any covenants, agreements or undertakings of Buyer
contained in or made pursuant to this Agreement; (iii) any physical damage
to the tangible property of the Joint Venture arising directly out of
Buyer's investigations pursuant to Section 6.3 hereof (provided that such
indemnification shall be available from the execution of this Agreement),
(iv) any and all Taxes relating to income accruing on and after the Closing
Date other than any Taxes attributable to events, occurrences,
transactions, sales, services or rentals occurring or performed on or prior
to the Closing Date, (v) any and all non-compliance on or after the Closing
Date, by the Joint Venture with any contracts, leases, liabilities or other
obligations of the Joint Venture (except to the extent such non-compliance
relates to or results in whole or part from any action or inaction or
misrepresentation of Sellers, Harriscope or the Joint Venture on or prior
to Closing) and (vi) indemnification contemplated by Section 7.3(b)
(provided that such indemnification shall be available from the execution
of this Agreement). Sellers' right to indemnification hereunder with
respect to (i) and (ii) above shall expire, and Sellers shall not be
entitled to assert any right of indemnification hereunder for claims after
eighteen (18) months from the Closing Date and Sellers right to
indemnification hereunder with respect to (iv) above shall expire after the
expiration of the applicable tax statute of limitations and except that if
there shall be pending any Claim or threatened Claim under this Agreement
for which Buyer has been given notice on or before the end of the
applicable expiration period hereunder at the time Sellers' right to
indemnification would otherwise expire, Sellers shall continue to have the
right to be indemnified with respect to such Claim or threatened Claim.
(b) The aggregate liability of Buyer for indemnification of Claims
(including pursuant to Section 7.3) shall not exceed $4,500,000.
(c) Following the Closing, the indemnification afforded by this Section
9 shall be the sole and exclusive remedy against Buyer for any losses of
the Sellers in respect of the matters covered by such indemnification
provision.
4 Claims for Indemnification
Subject to the provisions of Section 9.7 hereof, whenever any Claim
shall arise for indemnification hereunder, the party seeking
indemnification (the "Indemnified Party"), shall promptly notify the party
from whom indemnification is sought (the "Indemnifying Party") in writing
of the Claim and, when known, a summary of the facts constituting the basis
for such Claim. If any such Claim for indemnification hereunder results
from or is in connection with any Claim or legal proceedings by a third
party, the notice to the Indemnifying Party shall specify, if known, the
amount or an estimate of the amount of the liability arising therefrom.
The Indemnified Party shall not settle or compromise for the payment of
money any Claim by a third party for which it is entitled to
indemnification hereunder without the prior written consent of the
Indemnifying Party, which shall not be unreasonably withheld, unless suit
shall have been instituted against it and the Indemnifying Party shall not
have taken control of such suit after notification thereof as provided in
Section 9.5 of this Agreement.
5 Defense by Indemnifying Party
Subject to the provisions of Section 9.7 hereof, in connection with
any Claim giving rise to indemnity hereunder resulting from or arising out
of any Claim or legal proceeding by a person who is not a party to this
Agreement, the Indemnifying Party at its sole cost and expense shall, upon
written notice from the Indemnified Party, assume the defense of any such
Claim or legal proceeding. The Indemnified Party shall be entitled to
participate in (but not control) the defense of any such action, with its
counsel and at its own expense. If the Indemnifying Party does not assume
the defense of any such Claim or litigation resulting therefrom within 30
days after the date such Claim is made and notice is received requesting
indemnification, (a) the Indemnified Party may defend against such Claim or
proceeding, in such manner as it may deem appropriate, including, but not
limited to, settling such Claim or proceeding, after giving notice of the
same to the Indemnifying Party, on such terms as the Indemnified Party may
deem appropriate, for the account and at the risk of the Indemnifying
Party, and (b) the Indemnifying Party shall be entitled to participate in
(but not control) the defense of such action, with its counsel and at its
own expense. If the Indemnifying Party thereafter seeks to question the
manner in which the Indemnified Party defended such third party Claim or
the amount or nature of any such settlement, the Indemnifying Party shall
have the burden to prove by a preponderance of the evidence that the
Indemnified Party did not defend or settle such third party Claim in a
reasonably prudent manner.
6 Survival of Representations
Subject to Section 9.2, all representations and warranties made by
the parties herein or in any schedule, certificate or exhibit furnished in
connection herewith shall survive the Closing, and shall also survive and
shall be unaffected by (and shall not be deemed waived by) any
investigation, audit, appraisal, or inspection at any time made by or on
behalf of any party hereto.
7 Tax Claims
(a) Claims Against Seller -- Notice and Consent. Notwithstanding
anything to the contrary in Section 9.4 hereof, if any claim for Tax
relating in any way to Harriscope or the Joint Venture in respect of any
Pre-Closing Periods is asserted by any taxing authority against any Seller,
such Seller shall promptly notify Buyer in writing of such fact. Buyer or
its duly appointed representative shall be allowed to attend all meetings
between Seller and the taxing authority in question and shall be provided
with copies of all correspondence and documents relating to such claim.
Seller and its duly appointed representatives shall have the sole right to
negotiate, resolve, settle or contest any such claim for Tax; provided,
however, that Seller shall not settle, compromise or abandon without
Buyer's prior written consent any claim for Tax which would adversely
affect the tax liability of Harriscope, the Joint Venture, or Buyer in any
Post-Closing Period to any extent (including, but not limited to, the
imposition of income tax deficiencies, the reduction of asset basis or cost
adjustments, the lengthening of any amortization or depreciation periods,
the denial of amortization or depreciation deductions, or the reduction of
loss or credit carryforwards). Such consent shall not be unreasonably
withheld, and shall not be necessary to the extent Seller has fully
indemnified Harriscope, the Joint Venture, or Buyer against the effects of
any such settlement.
(b) Claims Against Buyer, Harriscope or the Joint Venture.
Notwithstanding anything to the contrary in Sections 9.4 and 9.5 hereof, if
any Claim for Tax is asserted by any taxing authority against Buyer, the
Joint Venture, or Harriscope (whether in its own capacity or as successor
in interest to a predecessor corporation) that, if successful, would result
in the indemnification of Buyer or Harriscope, the parties hereto agree to
abide by the following procedures in handling any such Claim:
(i) Notice of Claim. Buyer or Harriscope shall promptly notify the
relevant Sellers in writing of such assertion of a Claim for Taxes. In the
event that such notice of any Claim is not given to such Sellers within a
sufficient period of time or in reasonable detail to apprise Sellers of the
nature of the Claim (in each instance taking into account the facts and
circumstances with respect to such Claim), Sellers shall not be liable to
Buyer or Harriscope under this Agreement for such
Claim to the extent, if any, that the rights of Sellers with respect to
such Claim are actually prejudiced.
(ii) Contests. Subject to the provisions of the proceeding paragraph,
Buyer, Harriscope, or the Joint Venture shall take such action in
connection with contesting such Claim as the relevant Sellers shall
reasonably request in writing from time to time; provided that (i) within
30 days (or such earlier date that any payment of Taxes is due by Buyer,
Harriscope, or the Joint Venture) after the notice described in subsection
9.7(b)(i) has been delivered to Sellers, Sellers request that such Claim be
contested; (ii) prior to taking such action, Sellers have furnished to
Buyer or Harriscope, as the case may be, an opinion of Sellers' independent
tax counsel, which counsel shall be reasonably acceptable to Buyer, to the
effect that a reasonable basis exists for such contest (or appeal, in the
case of an appeal prosecuted pursuant to the proceeding paragraph); (iii)
Sellers shall have agreed to pay to Buyer or Harriscope on demand all costs
and expenses which Buyer or Harriscope may incur in connection with
contesting such Claim (or appeal), including, without limitation,
reasonable attorneys' and accountants' fees and disbursements; and (iv) if
Buyer or Harriscope is requested or shall determine to pay the Tax claimed
and ▇▇▇ for a refund, Sellers shall have advanced to Buyer or Harriscope,
on an interest-free basis, the amount of such Claim. In the case of any
such Claim referred to above, Buyer or Harriscope, as the case may be,
shall not make payment of such Claim for at least 30 days (or such shorter
period as may be required by applicable law) after the giving of such
notice, shall give to Sellers any information reasonably requested by
Sellers relating to such Claim and otherwise shall cooperate with Sellers
in good faith in order to contest effectively any such Claim, and to the
extent not inconsistent with Buyer's or Harriscope's control over any
proceedings (as described below) insofar as they relate to issues other
than those subject to this indemnity, shall permit Sellers to participate
in such proceedings relating to such claim (or appeal).
With respect to contests against Buyer, the Joint Venture or
Harriscope, Buyer or Harriscope shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego
any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such Claim and may, at its sole
option, either pay the Tax claimed and ▇▇▇ for a refund where applicable
law permits such refund suits or contest the Claim in any permissible
manner; provided, however, that Buyer or Harriscope, as the case may be,
shall (subject to the provisions of the preceding paragraph) consider in
good faith (A) any request Sellers may make concerning the most appropriate
manner in which to proceed, and (B) the manner in which it would proceed if
it were not indemnified hereunder.
8 Tax Benefit Provision
In the event that any Sellers shall have made sufficient payments to
Buyer or Harriscope so as to indemnify Buyer or Harriscope in full for the
amount of any Claim pursuant to Section 9.1(b)(iii) and (iv) hereof, Buyer
or Harriscope shall pay to such Sellers the amount of any Tax Benefits (as
defined below) actually received or realized by Buyer or Harriscope that
have arisen solely as a result of a timing adjustment (including without
limitation any changes to the basis of an asset, changes in connection with
the capitalization or deduction of expenses, changes in the amortization or
depreciation of assets, or changes in the timing of the inclusion of any
item of income, deduction or loss) that gave rise to such Claim. Payments
of a Tax Benefit by Harriscope or Buyer to a Seller shall be made at a
reasonable period of time following the later of (i) the filing of the
applicable Tax return that evidences such Tax Benefit, or (ii) the payment
of the tax due, if any, in respect of such Tax return referred to in clause
(i). The existence and amount of any Tax Benefit payable by Harriscope or
Buyer to a Seller shall be determined by Harriscope or Buyer (as
applicable) in its reasonable discretion. Tax Benefits shall mean the
decrease, if any, in the Tax liability of, or refunds of Taxes paid by,
Buyer or Harriscope (or affiliates filing a consolidated or combined Tax
return) with respect to any Tax period ending prior to December 31, 2001 as
the result of a timing adjustment giving rise to a Claim. The amount of
any such Tax Benefits actually received or realized with respect to any Tax
period shall be the difference between the total amount of actual Tax
liability (or refund claim) for the period taking such adjustment into
account, and the total amount of Tax liability (or refund claim) if such
adjustments were not taken into account; under both calculations,
Harriscope and Buyer shall be entitled to take into account any and all
past, existing, and future Tax attributes (including without limitation net
operating loss carryforwards) available to Harriscope or Buyer (or any
affiliates filing a consolidated or combined Tax Return with Buyer and/or
Harriscope) as Harriscope or Buyer deems appropriate in its reasonable
discretion.
10. TERMINATION AND REMEDIES
1 Termination by Agreement of the Parties
This Agreement may be terminated by the mutual written agreement of
the parties hereto. In the event of such termination by agreement, Buyer
shall have no further obligation or liability to the Sellers under this
Agreement, and the Sellers shall have no further obligation or liability to
Buyer under this Agreement.
2 Termination by Reason of Failure to Obtain Final Order
If (a) an FCC Order has not become a Final Order or the Closing has
not occurred on or before the date which is six (6) months after the FCC
Application has been filed with the FCC, (b) the FCC designates the FCC
Application for an evidentiary hearing, or (c) the FCC denies transfer of
the NST Venture Interest and the Shares contemplated by the FCC Application
or issues a Final Order in connection with such FCC Application with
conditions (other than existing License conditions as of the date hereof)
that (i) are materially adverse to Buyer (or TGI) or (ii) in any way
materially diminish the Buyer's operating rights with respect to the
Station (except any such condition expressly accepted by Buyer in writing),
then in any such event Buyer or, in the event of (a) or (b) above, any of
Buyer, NST or the ▇▇▇▇▇▇ Group may, upon written notice to the other
parties hereto, terminate this Agreement, provided, that such notice of
termination is given prior to the date on which such FCC Order shall have
become a Final Order; and provided, further, that the party seeking to
terminate this Agreement under this Section shall not be in material breach
under this Agreement. Upon termination of this Agreement in accordance
with this Section 10.2, this Agreement shall be deemed null, void, and of
no further force and effect (except for Sections 4.1 and 12, which shall
survive such termination).
3 Remedies Upon Default by Buyer
(a) If Buyer shall default in the performance of its obligations under
this Agreement in any material respect, or if, as a result of such default,
the conditions precedent to the Buyer's or Sellers' obligation to close
specified in Sections 7 and 8 respectively, are not satisfied, or if, as a
result of any action or inaction of Buyer not otherwise permitted by this
Agreement, the conditions set forth in such Sections shall not be satisfied
or the Buyer shall be unable to secure adequate financing to consummate the
purchase of Shares and the NST Venture Interest, and, as a result, the
transactions contemplated by this Agreement are not consummated, and
provided that the Sellers shall not then be in default in any material
respect in the performance of the Sellers' obligations hereunder, the
Sellers shall be entitled, by written notice to Buyer, to terminate this
Agreement and the Sellers shall be entitled to the Deposit in accordance
with the Escrow Agreement. Sellers right to acquire the Deposit shall
require, in addition to complying with the provisions specified in the
Escrow Agreement, that ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, if either
one is no longer living, or, with respect to ▇▇▇▇ ▇▇▇▇▇ only, if he is no
longer associated with Oak, another person from such individual's
organization with familiarity with the subject matter hereof) certify,
after consulting with Buyer regarding the issue, that they each in good
faith believes that Sellers are entitled to the Deposit in accordance with
the provisions hereof and in the Escrow Agreement. The right of Sellers to
acquire the Deposit as contemplated by and under the circumstances set
forth in this Section shall be the sole remedy available to Sellers if the
transactions contemplated by this Agreement shall fail to close (other than
a claim for indemnification under Section 9.3(iii)). If after acquiring
the Deposit it is determined that Sellers were not entitled to the Deposit,
Sellers shall return the Deposit to Buyer and pay all reasonable legal fees
incurred by Buyer with respect to the return of the Deposit and interest
from the date Sellers acquired the Deposit at the prime rate specified by
Citibank N.A., on such date plus 200 basis points, until the Deposit is
delivered to Buyer and Buyer shall retain all rights provided under this
Agreement. Notwithstanding and not limiting the foregoing, Sellers shall
not be entitled to the Deposit if the Agreement is terminated solely
pursuant to Section 10.2 above, entirely for reasons not attributable or
related, directly or indirectly, to Buyer being in default in the
performance of its obligations under this Agreement in any respect or
Buyer's failure to secure adequate financing to consummate the purchase of
Shares and the NST Venture Interest.
4 Remedies Upon Default by the Sellers
If Sellers shall default in the performance of any of their
respective obligations under this Agreement in any material respect, as a
result of such default, the conditions precedent to Buyer's or Sellers'
obligation to close specified in Sections 7 and 8 respectively, are not
satisfied, or if, as a result of the action or inaction of Sellers not
otherwise permitted by this Agreement the conditions set forth in such
Sections shall not be satisfied and, as a result, the transactions
contemplated by this Agreement are not consummated, and provided that Buyer
shall not then be in default in any material respect in the performance of
Buyer's obligations hereunder (such circumstances, the "Default
Circumstances"), Buyer shall be entitled, at Buyer's sole option: (i) to
require the Sellers to consummate and specifically perform the sale of the
NST Venture Interest and the Shares in accordance with the terms of this
Agreement (including the curing of any defaults), if necessary through
injunction or other court order or process; and/or (ii) by written notice
to the Sellers, to terminate this Agreement. In the event of occurrence of
the Default Circumstances, as set forth above, Buyer shall have all rights
and remedies available at law or in equity in respect thereof (including
the right to seek specific performance as contemplated by (i) above);
provided, that the maximum amount recoverable from Sellers in respect of
damages sustained as a result of the occurrence of such Default
Circumstances ("Damages") shall be $1.5 million (which Damages shall
include all reasonable expenses, reasonable legal and other fees and out of
pocket costs associated with this Agreement, an action under this Section
and the transactions contemplated hereby); provided, that in the event of
such Default Circumstances, if prior to the date that is the earlier of (A)
six (6) months from the date of the commencement of any legal action in
connection with (i) above, (B) six (6) months from the date of written
notice by any party of termination of this Agreement as permitted under
this Agreement, and (C) ten (10) months from the date the FCC Application
is filed, any Sellers or Harriscope or any beneficial owner thereof shall
enter into any agreement with any person or entity with respect to the sale
or transfer of any part or all of the NST Venture Interests, the Harriscope
Interests or the Shares or any interests therein, Seller shall remit to
Buyer an amount equal to the greater of (x) Damages determined as in a
legal action as contemplated above (which shall not exceed $1.5 million)
and (y) the difference between the amount to be paid for such interests or
shares and $44.7 million (based upon the sale of a 74.5% interest in the
Joint Venture).
5 Specific Performance
The Sellers acknowledge that the NST Venture Interest
and the Shares to be sold and delivered to Buyer pursuant to this
Agreement are unique, that Buyer will suffer irreparable injury for which
the Buyer has no adequate remedy at law if the Sellers fail to perform any
of their obligations under this Agreement, and that Buyer's right to
specific performance is essential to protect the rights and interests of
Buyer. Accordingly, the Sellers hereby agree that Buyer shall have the
right to have all obligations, undertakings, agreements and other
provisions of this Agreement specifically performed by the Sellers, and
that Buyer shall have the right to obtain an order or decree of such
specific performance in any of the courts of the United States or of any
state or other political subdivision thereof (in which case this Agreement
shall not be terminated and the amounts payable under Sections 10.3 and/or
10.4 shall not be paid).
11. TRANSFER AND SALES TAX
Notwithstanding any provisions of law imposing the burden of such
taxes on the Sellers or Buyer, as the case may be, the Sellers shall be
responsible for and shall pay (a) all sales, use and transfer taxes, and
(b) all governmental charges, if any, upon the sale or transfer of any of
the NST Venture Interest or the Shares; provided that Buyer shall be
responsible for and shall pay (i) any real estate transfer taxes (the "City
Transfer Tax") imposed, if any, by the City of Chicago under the City Real
Estate Transfer Tax law due to the purchase of the NST Venture Interests or
the Shares or (ii) any sales, use or transfer Tax arising as consequence of
any termination of the Joint Venture upon or after the Closing pursuant to
Section 708 of the Code. If the Sellers shall fail to pay such amounts
(other than the City Transfer Tax or any sale, use or transfer tax arising
as a consequence of any termination of the Joint Venture after the Closing
pursuant to Section 708 of the Code) on a timely basis, Buyer may pay such
amounts to the appropriate Governmental Authority and the Sellers shall
promptly reimburse Buyer for any amounts so paid by Buyer upon presentation
of satisfactory evidence of such payment to the Sellers.
12. NO BROKERS
The Sellers represent to Buyer that the Sellers have not engaged, or
incurred any unpaid liability for any brokerage fees, finders' fees,
commissions or otherwise to, any broker, finder or agent in connection with
the transactions contemplated by this Agreement. Buyer represents to the
Sellers that Buyer has not engaged, or incurred any unpaid liability for
any brokerage fees, finders' fees, commissions or otherwise to, any broker,
finder or agent in connection with the transactions contemplated by this
Agreement. The Sellers agree to indemnify Buyer, and Buyer agrees to
indemnify the Sellers, against any claims asserted against the other
parties for any such fees or commissions by any person purporting to act or
to have acted for or on behalf of the indemnifying party (and this
indemnification provision shall not be subject to the time or monetary
limitations set forth in Section 9). Notwithstanding any other provision
of this Agreement, this representation and warranty shall survive the
Closing without limitation.
13. NOTICES
Any notices, demands, consents, agreements, requests or other
communications which may be or are required to be given, served or sent by
any party to any other party or obtained from any party pursuant to this
Agreement must be in writing and must be (i) mailed by first-class United
States mail, registered or certified, return receipt requested, postage
prepaid, (ii) hand delivered personally by independent courier, or (iii)
transmitted by telecopier addressed as follows:
To the Buyer: Telemundo of Chicago, Inc.
c/o Telemundo Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇, LLP
(which shall not ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
constitute notice) ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
To NST or the Harriscope of Chicago, Inc.
Stockholders: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
(as the ▇▇▇▇▇▇ Group Representative)
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
NST
c/o Oak Industries Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Oak Industries, Inc.
(which shall not ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇) ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ and ▇▇▇▇, Ltd.
Quaker Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Unless otherwise specified herein, such notices or other communications
shall be deemed received (a) on the date delivered, if delivered personally
or by telecopier (with receipt confirmed); or (b) three (3) business days
after being sent, if sent by registered or certified mail.
14. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The rights and
obligations of the parties under this Agreement may not be assigned or
delegated without the prior written consent of the other parties. Any
assignment or delegation in contravention of this Agreement shall be void.
Notwithstanding the foregoing, Buyer may assign all or any portion of its
rights and interests herein to one or more entities controlling, controlled
by, or under common control with TGI, unless such assignment would
materially delay the processing of the FCC Application or HSR Notification.
15. NO THIRD PARTY BENEFICIARIES
This Agreement and the obligations of the parties hereunder shall
operate exclusively for the benefit of the parties to this Agreement (and
their permitted assigns) and not for the benefit of any other person or
entity, including, without limitation, Essaness or any creditor, employee
or former employee of any party hereto.
16. ENTIRE AGREEMENT; AMENDMENTS; ATTACHMENTS
(a) This Agreement, all schedules and exhibits hereto, and all
agreements, certificates and instruments to be delivered by the parties
pursuant hereto represent the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof and supersede
all prior oral and written, and all contemporaneous oral, negotiations,
commitments and understandings between such parties. Buyer and the Sellers
may amend or modify this Agreement, in such manner as may be agreed upon,
only by a written instrument executed by Buyer, NST and the ▇▇▇▇▇▇ Group
Representative.
(b) If the provisions of any schedule or exhibit to this Agreement are
inconsistent with the provisions of this Agreement, the provisions of the
Agreement shall prevail. The exhibits and schedules attached hereto or to
be attached hereafter are hereby incorporated as integral parts of this
Agreement.
17. EXPENSES
Except as otherwise expressly provided herein, each of Buyer and the
Sellers shall pay their own expenses in connection with this Agreement and
the consummation of the transactions contemplated hereby; provided,
however, that the Sellers and Buyer shall share equally the cost of any FCC
filing fees, but each party shall bear its own legal fees and expenses in
connection therewith.
18. FURTHER ASSURANCES
At any time and from time to time after the Closing, without further
consideration, Harriscope, the Sellers and Buyer promptly shall execute and
deliver such instruments of purchase, sale, transfer, conveyance,
assignment and confirmation, and take such other action, as reasonably
necessary to effectively transfer, convey and assign to the Buyer, and to
confirm the Buyer's interest in, the NST Venture Interest and the Shares,
and to carry out the purpose and intent of this Agreement. After the
Closing, Buyer shall cooperate and provide the Sellers or their
representatives with access, at reasonable business times and under
reasonable circumstances, to the records and other materials of the Joint
Venture and Harriscope for the period prior to Closing necessary for the
Sellers to comply with their tax, financial or other legal obligations
(including access to such books and records that relate to any Joint
Venture Account Receivables or Harriscope Account Receivables which remain
uncollected after the Collection Period); provided that Sellers shall pay
any out-of-pocket expenses incurred by Buyer with respect to such access.
19. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to its conflict of laws
principles.
20. SECTION HEADINGS
The section headings are for the convenience of the parties and in no
way alter, modify, amend, limit, or restrict the contractual obligations of
the parties.
21. SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of
this Agreement.
22. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which shall be one and
the same document.
23. NAME CHANGE
The Buyer as stockholders shall cause Harriscope to change its name
no later than 30 days after the Closing Date. Each of the Buyer and
Harriscope agrees that after the Closing Date it shall not (except for the
delay in the name change permitted by the preceding sentence) use or employ
in any manner directly or indirectly the name "Harriscope" or any variation
thereof.
24. ALTERNATE CLOSING ARRANGEMENTS
(a) If the condition set forth in Section 7.6(b) shall not be satisfied
as of the time set for Closing, Buyer may elect to close and if the Closing
shall occur, may in lieu of delivering the Harriscope Purchase Price
deliverable to the ▇▇▇▇▇▇ Group to the ▇▇▇▇▇▇ Group, instead deliver such
portion of the Purchase Price to the Escrow Agent (or another escrow agent
reasonably suggested by Buyer), who shall hold it (and make it available to
satisfy indemnification claims pursuant to Section 9.1) until the earlier
of the date the ▇▇▇▇▇▇ Group Guaranty would have terminated as contemplated
by Section 7.6(b) and the date the ▇▇▇▇▇▇ Group Guaranty is executed.
(b) If the condition set forth in Section 7.6(c) shall not be satisfied
as of the time set for Closing, Buyer may elect to close and if the Closing
shall occur, may in lieu of delivering the NST Purchase Price and
Harriscope Purchase Price deliverable to or for the account of NST to NST,
instead deliver such portion of the Purchase Price to the Escrow Agent (or
another escrow agent reasonably suggested by Buyer), who shall hold it (and
make it available to satisfy indemnification claims pursuant to Section
9.1) until the earlier of the date the Oak Guaranty would have terminated
as contemplated by Section 7.6(c) and the date the Oak Guaranty is
executed.
25. INTERPRETATION REGARDING RIGHTS AND OBLIGATIONS
(a) Notwithstanding anything to the contrary contained in this
Agreement, for purposes of determining the rights and obligations of the
parties hereunder (including for purposes of determining if the closing
condition set forth in Section 7.1 is satisfied and for purposes of
determining whether a representation or warranty is true for purposes of
Section 9.1), the references "to the knowledge of" any or all of the
Sellers, NST, the ▇▇▇▇▇▇ Group or the ▇▇▇▇▇▇ Group Representative, or words
of similar import, contained in Article 2 of this Agreement, shall be given
effect except for the qualifiers contained in the provisions specified
below (in which case such qualifier shall not be given effect; i.e. the
representation shall be deemed to be made without the "to the knowledge of"
(or words of similar import) qualifier): the last sentence of 2.10, the
third sentence of 2.16, 2.17(b)(iii), the second sentence of 2.20(c), and
2.20(d).
(b) The parties hereto agree that except for Sellers' indemnification
obligations pursuant to Section 9.1(b)(v)(C), any dispute relating to
amounts owed as employment compensation to the current general manager
shall not affect the other obligations of the parties hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
Purchase NST Venture Interest and Capital Stock to be duly executed as of
the date first written above.
NST:
NATIONAL SUBSCRIPTION TELEVISION OF
CHICAGO, INC.
By:
Name:
Title:
THE STOCKHOLDERS:
NATIONAL SUBSCRIPTION TELEVISION OF
CHICAGO, INC.
By:
Name:
Title:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Voting Trustee of Harriscope of Chicago, Inc.,
Voting Trust Agreement Number Two
BUYER:
TELEMUNDO OF CHICAGO, INC.
By:
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
Title: Chief Financial Officer
