Exhibit 2.5
FIRST AMENDMENT TO
PURCHASE AND SALE AGREEMENT
FIRST AMENDMENT, dated as of July 20, 1998, among Granite Broadcasting
Corporation (the "Buyer"), Pacific FM Incorporated, ("Pacific"), and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (collectively, "Stockholders"), to the Purchase
and Sale Agreement, dated as of October 3, 1997, among Buyer, Pacific and
Stockholders (the "Agreement").
The parties hereto agree that the Agreement is hereby amended as follows:
1. Section 1.1 of the Agreement is hereby amended as follows:
(a) The definition of "Accrued Pacific Taxes" is hereby amended and
restated in its entirety as follows:
"Accrued Pacific Taxes" means all Taxes of Pacific and its Subsidiaries
accruing during any tax period ending on or prior to the Closing Date,
including but not limited to Taxes attributable to: (i) the direct or
indirect transfer and assignment of the Excluded Pacific Assets from
Pacific and its Subsidiaries to Stockholder Co. and the assumption by
Stockholder Co. of the Excluded Pacific Liabilities; and (ii) the
distribution of the stock of Next Century Aviation, Inc., a California
company, from Pacific to the Stockholders or Stockholder Co.
(b) The definition of "Stockholder Co." is hereby amended and
restated in its entirety as follows:
"Stockholder Co." means Next Century Enterprises, a California company
wholly-owned by Stockholders, that shall be assigned all the Excluded
Pacific Assets and assume all of the Excluded Pacific Liabilities (other
than those released by Next Century Aviation) prior to the Closing.
(c) The following new definitions are hereby added to Section 1.1 of
the Agreement:
(i) "Closing Escrow Agreement" means the Escrow Agreement, dated as
of the date hereof, among Buyer, Pacific, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
individually and as Agent, and the Escrow Agent.
(ii) "Escrow Agent" means Citibank, N.A.
(iii) "Finova Loans" means the loans made by Finova Capital
Corporation pursuant to the Amended and Restated Loan Agreement, dated
as of August 17, 1995, among Pacific, Finova Capital Corporation
("Finova") (formally known as Greyhound Financial Corporation) in its
individual capacity and as agent for all Lenders, as amended as of
September 29, 1995 and as further amended on October 17, 1996, the
aggregate principal amount thereof plus accrued interest thereon is
$5,450,588.89 as of the date hereof.
(iv) "Finova Payment Obligation" means Pacific's interest and
principal obligations under the Finova Loans.
(v) "Past Due Programmer Contracts" means those programming
contracts listed on Schedule 1-G hereto.
(vi) "Past Due Programming Payment Obligations" means Pacific cash
payment obligations under the Past Due Programming Contracts, evidenced
by the Note listed on Schedule 1-G not to exceed the amounts listed
adjacent to the Note on Schedule 1-G.
(vii) "Sony Contract" means the Purchase Money Security Agreement,
dated March 21, 1994, by and between Sony Electronics, Inc. and Pacific
FM Incorporated (d/b/a KOFY-TV) and the Purchase Money Security
Agreement, dated May 8, 1995, by and between Sony Electronics, Inc. and
Pacific FM Incorporated (d/b/a/ KOFY-TV).
(viii) "401(k) Plan" has the meaning set forth in Section 10.3.2
hereof.
2. Section 2.2.1 of the Agreement is hereby amended and restated in its
entirety as follows:
"2.2.1 Purchase Price. The Purchase Price for the shares of Pacific's
Common Stock to be sold and transferred pursuant to this Agreement shall be
$73,312,500, less (i) $5,540,588.89, the amount of Finova Payment
Obligation, and less (ii) $698,973.00, the amount of the Past Due Program
Obligations, subject to adjustment pursuant to Sections 2.2.2 and 2.2.3
below. At the Closing, Buyer will pay: (a) to Agent, the Purchase Price, as
adjusted pursuant to Sections 2.2.2 and 2.2.3 below, less the amount of the
Deposit and $1,000,000; and (b) to the Escrow Agent $1,000,000 to be held
in escrow by the Escrow Agent pursuant to the Closing Escrow Agreement."
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3. Section 2.2.4 (a) of the Agreement is hereby amended and restated in its
entirety as follows:
(a) "Payment of Estimated Purchase Price at Closing." The Purchase
Price, adjusted by the estimated Closing adjustments pursuant to Section
2.2.3(b), is referred to as the "Estimated Purchase Price." The Estimated
Purchase Price shall be paid as follows: (a) to Agent and Agent's designees
(as designated in Agent's written instruction to Buyer prior to Closing),
at Closing, by wire transfer, in immediately available funds, the Estimated
Purchase Price less the amount of the Deposit and $1,000,000; and (b) to
the Escrow Agent $1,000,000 to be held by the Escrow Agent pursuant to the
terms and conditions of the Closing Escrow Agreement.
4. Section 2.4.2 of the Agreement is hereby amended and restated in its
entirety to read as follows:
"2.4.2 Retained Obligations Relating to KOFY." Subject to the provisions
of Sections 2.4.3 below, the following obligations shall be the only
obligations or other Liabilities of Pacific and/or its Affiliates not
assumed by Stockholder Co. (or retained by Next Century Aviation, Inc.,
which shall be spun off to the Stockholders in accordance with Section
7.1.23 hereof) immediately prior to Closing (collectively, the "Included
Pacific Obligations"): (a) the obligations of Pacific arising subsequent
to, and relating solely to, the operations of KOFY after the Effective
Time, under (i) all Contracts, commitments and leases of Pacific included
in the Broadcasting Assets, and set forth on Schedules 1-A, 1-B and 1-C, in
effect as of October 3, 1997, (ii) the Sony Contract (up to an amount not
to exceed $250,000) and the 401(k) Plan and (iii) all Contracts,
commitments, leases and amendments, renewals and other modifications
thereof that are entered into by Pacific in connection with KOFY between
October 3, 1997 and the Closing Date as expressly permitted by and subject
to the terms of this Agreement; (b) any other Prorated Obligations which
accrued prior to the Effective Time to the extent that the Purchase Price
has been reduced therefor in accordance with Section 2.2 hereof; (c) any
other Prorated Obligations which accrue after the Effective Time; (d)
Finova Payment Obligations up to an amount not to exceed $5,540,588.89 and
(e) Past Due Programming Payment Obligations up to an amount not to exceed
$698,973.00. It is understood and agreed that Included Pacific Obligations
shall not included trade or other accounts payable, accrued payroll,
employee sales commissions, payroll taxes, or unemployment taxes, that are
not Prorated Obligations,
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any obligations relating to any funded or other indebtedness (other then
Finova Payment Obligations up to an amount not to exceed $5,540,588.89 and
Past Due Programming Payment Obligations not to exceed $698,973.00) or
under any Employee Benefit Plans, collective bargaining agreements, Accrued
Pacific Taxes or any other Excluded Pacific Liabilities.
5. Section 4.4.3 of the Agreement is hereby amended and restated in its
entirety as follows:
"4.4.3 No Commitments. There are no outstanding contractual obligations
of Pacific or any Affiliate of Pacific to repurchase, redeem, otherwise
acquire, or otherwise make any payment with respect to any shares of
Pacific Common Stock or any beneficial or other ownership interest of any
Subsidiary of Pacific or to provide funds to, or make any investment (in
the form of a loan, capital contribution or otherwise) in, any Subsidiary
of Pacific or any other Person."
6. Section 7.1.23 of the Agreement is hereby amended and restated in its
entirety to read as follows:
(a) 7.1.23 Excluded Pacific Assets and Excluded Pacific Liabilities.
Immediately prior to the Closing, Pacific shall assign all of the Excluded
Pacific Assets (other than the 401(k) Plan), including all capital stock of
Next Century Aviation, Inc., to Stockholder Co. (the Securities of which at
all times since its incorporation have been, and will continue through the
Closing to be, wholly-owned by Stockholders), and shall have no Liability,
responsibility or obligation, whether direct or indirect, absolute,
accrued, contingent or otherwise, or due or to become due, asserted or
unasserted, matured or unmatured, for any of the Excluded Pacific
Liabilities (which shall be assumed by Stockholder Co. or, in the case of
Liabilities of Next Century Aviation, retained in Next Century Aviation).
7. Section 9.2.2 of the Agreement is hereby amended and restated in its
entirety as follows:
"9.2.2 Pacific's Subsidiaries and Shareholder Co.'s Articles of
Incorporation. A copy of each of Pacific's Subsidiaries' articles of
incorporation certified by the Secretary of State of California and any
other formation documents together with a certificate from the Secretary or
any Assistant Secretary of each of Pacific's Subsidiaries and Stockholder
Co. certifying such Subsidiary's and Stockholder Co.'s bylaws,
respectively."
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8. Section 9.2.3 of the Agreement is hereby amended and restated in its
entirety as follows:
"9.2.3 Good Standing Certificates. Certificates of good standing or
subsistence, dated no earlier than seven days prior to the Closing and tax
certificates dated as of the closest practicable date prior to the Closing
Date as to Pacific, each of its Subsidiaries and Stockholder Co. from the
Secretary of State of its state of incorporation and each other
jurisdiction where such entity owns any material assets."
9. Section 10.3.2 of the Agreement is hereby amended and restated as
follows:
"10.3.2 Assumption of Plan Liability by Stockholder Co. Effective as of
the Closing Date, Stockholder Co. shall assume the Pacific Benefit Plans
(other than the Pacific FM, Inc. Retirement Plan (the "401(k) Plan") and
honor or cause its insurance carriers to honor, in accordance with the
terms of such plans, all claims for benefits incurred by any employees (or
their dependents or beneficiaries) under such plans."
10. The Agreement is hereby amended to add the following Sections 21.22 and
21.23:
"21.22 Release.
21.22.1 Satisfaction of Commitments. Stockholders represent, warrant and
covenant that: (a) the contract set forth on Schedule 21.22(a) hereto (the
"Release") remains in full force and effect, enforceable against the
parties thereto and no party thereto has breached the Release in any
respect; (b) Pacific has satisfied all of its payment obligations under the
Release in full on or prior to the time periods such payments were
required, including the payment (i) of $200,000 made on September 17, 1997,
and (ii) of $1,842,213.70, made on January 2, 1998, evidenced by the
receipt, attached hereto as Schedule 22.22(b).
21.22.2 Assumption of Liabilities. Notwithstanding anything to the
contrary contained herein, Stockholders, jointly and severally, hereby
assume all Liabilities and other obligations of Pacific, Stockholders and
any of their Affiliates under the Release and each document referenced
therein, or contemplated thereby.
21.23 Pre-Closing Taxes.
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21.23.1 Pacific represents, warrants and covenants that:
(a) Attached hereto as Schedule 21.23.1 are true, correct and complete
copies of the calculations of Pacific's Tax Liabilities for all periods
beginning on or after July 1, 1997 and ending on or prior to the Closing;
(b) After payment of the taxes listed on Schedule 21.22.3, Pacific
shall have no further Tax Liabilities for the periods included on Schedule
21.23.1."
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IN WITNESS WHEREOF, each party has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the date and
year first above written.
GRANITE BROADCASTING CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President--Finance and Controller
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PACIFIC FM INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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