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Purchase and Sale Agreement |
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2 0002.txt
PURCHASE AND SALE AGREEMENT
FOR
LEE ENTERPRISES, INCORPORATED,
NEW MEXICO BROADCASTING CO.,
AND
EMMIS COMMUNICATIONS CORPORATION
May 7, 2000
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as
of May 7, 2000 by and among Lee Enterprises, Incorporated, a Delaware
corporation ("Lee"), and New Mexico Broadcasting Co., a New Mexico corporation
("NMBC", and Lee and NMBC sometimes referred to in this Agreement, individually
and collectively, as "Lee-NMBC"), and Emmis Communications Corporation, an
Indiana corporation (the "Purchaser").
WITNESSETH:
WHEREAS, Lee owns and operates television stations WSAZ-TV ("Station WSAZ") in
Charleston-Huntington, West Virginia; KGMB-TV ("Station KGMB") in Honolulu,
Hawaii, and television station satellites KGMD ("Station KGMD") in Hilo, Hawaii,
and KGMV ("Station KGMV") in Wailuku, Hawaii; KGUN-TV ("Station KGUN") in
Tucson, Arizona and KMTV-TV ("Station KMTV") in Omaha, Nebraska.
WHEREAS, Lee owns all of the outstanding capital stock of KOIN-TV, Inc., a
Delaware corporation ("KOIN"), and KOIN owns and operates television station
KOIN-TV and an operating division, MIRA MOBILE TELEVISION (KOIN-TV and MIRA
MOBILE are collectively, "Station KOIN") in Portland, Oregon.
WHEREAS, Lee owns all of the outstanding capital stock of NMBC and NMBC owns and
operates television station KRQE-TV ("Station KRQE") in Albuquerque, New Mexico
and television station satellites KBIM ("Station KBIM") in Roswell, New Mexico,
and KREZ-TV in Durango, Colorado-Farmington, New Mexico ("Station KREZ" and
together with Station WSAZ, Station KGMB, Station KGMD, Station KGMV, Station
KGUN, Station KMTV, Station KRQE and Station KBIM, the "Lee-NMBC Stations," and
individually a "Lee-NMBC Station").
WHEREAS, Lee owns all of the outstanding capital stock of SJL of Kansas Corp., a
Kansas corporation ("SJL-Kansas"), and SJL-Kansas owns and operates television
station KSNW-TV ("Station KSNW") in Wichita, Kansas, and television station
satellites KSNG-TV ("Station KSNG") in Garden City, Kansas, KSNC-TV ("Station
KSNC") in Great Bend, Kansas, and KSNK-TV ("Station KSNK") in Oberlin,
Kansas-McCook, Nebraska; SJL-Kansas owns all of the outstanding shares of
capital stock of Wichita License Subsidiary Corp., a Delaware corporation
("Wichita License Sub"), and all of the outstanding capital stock of Topeka
Television Corporation, a Missouri corporation ("Topeka"); Topeka owns all of
the outstanding shares of capital stock of Topeka License Subsidiary Corp., a
Delaware corporation ("Topeka License Sub" and together with KOIN, SJL-Kansas,
Wichita License Sub and Topeka, the "Acquired Companies," and individually an
"Acquired Company"), and Topeka owns and operates television station KSNT-TV in
Topeka, Kansas ("Station KSNT" and together with Station KOIN, Station KSNW,
Station KSNG, Station KSNC, Station KSNK, the "Acquired Companies' Stations,"
and individually an "Acquired Company Station").
WHEREAS, the Purchaser desires to purchase from Lee-NMBC, and Lee-NMBC desires
to sell to the Purchaser, substantially all of the assets of Lee-NMBC owned,
used or held for use by Lee-NMBC primarily to conduct the operations of the
Lee-NMBC Stations, and in connection therewith, the Purchaser has agreed to
assume certain Liabilities of Lee-NMBC relating to the Lee-NMBC Stations, all
upon the terms and subject to the conditions set forth herein (the "Asset
Purchase").
WHEREAS, the Purchaser desires to purchase from Lee, and Lee desires to sell to
the Purchaser, all of the issued and outstanding capital stock of the Acquired
Companies, all upon the terms and are subject to the conditions set forth herein
(the "Stock Purchase").
WHEREAS, Lee-NMBC and Lee, on behalf of each Acquired Company, and the Purchaser
desire to make certain representations, warranties, covenants and agreements in
connection with the Asset Purchase and Stock Purchase, all as more fully set
forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises, the mutual covenants,
promises and agreements hereinafter set forth, the mutual benefits to be gained
by the performance of such covenants, promises and agreements, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and accepted, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Certain Definitions. For all purposes of and under this Agreement, the
following terms shall have the respective meanings set forth below:
(a) "Action" means any claim, demand, action, suit or proceeding,
arbitral action, governmental inquiry or criminal prosecution.
(b) "Affiliate" means any "affiliate" as defined in Rule 144(a)(1)
promulgated under the Securities Act.
(c) "Business Day" means any weekday (Monday through Friday) on which
commercial banks in Chicago, Illinois are open for business.
(d) "Code" means the Internal Revenue Code of 1986, as amended, any
successor statute thereto, and the rules and regulations promulgated thereunder.
(e) "Communications Act" means the Communications Act of 1934, as
amended, any successor statute thereto, and the rules, regulations and written
policies of the FCC promulgated thereunder.
(f) "Confidentiality Agreement" means the letter agreement between Lee
and the Purchaser, dated as of March 6, 2000.
(g) "Contract" means any contract, agreement, indenture, note, bond,
instrument, lease, conditional sales contract, mortgage, license, franchise
agreement, concession agreement, insurance policy, security interest, guaranty,
binding commitment or other agreement or arrangement, whether written or oral.
(h) "Encumbrance" means any security interest, pledge, mortgage, lien,
charge, adverse claim of ownership or use, restriction on transfer (such as a
right of first refusal or other similar right), defect of title, or other
encumbrance of any kind or character.
(i) "Environmental Law" means any Law pertaining to land use, air, soil,
surface water, groundwater (including the protection, cleanup, removal,
remediation or damage thereof), public or employee health or safety or any other
environmental matter, including the following laws as in effect on the Closing
Date: (i) Clean Air Act (42 U.S.C.ss.7401, et seq.); (ii) Clean Water Act (33
U.S.C.ss.1251, et seq.); (iii) Resource Conservation and Recovery Act (42
U.S.C.ss.6901, et seq.); (iv) Comprehensive Environmental Resource Compensation
and Liability Act (42 U.S.C.ss.9601, et seq.); (v) Safe Drinking Water Act (42
U.S.C.ss.300f, et seq.); (vi) Toxic Substances Control Act (15 U.S.C.ss.2601, et
seq.); (vii) Rivers and Harbors Act (33 U.S.C.ss.401, et seq.); (viii)
Endangered Species Act (16 U.S.C.ss.1531, et seq.); (ix) Occupational Safety and
Health Act (29 U.S.C.ss.651, et seq.); and (x) any other Laws relating to
Hazardous Materials or Hazardous Materials Activities.
(j) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
(l) "FCC" means the United States Federal Communications Commission, and
any successor agency thereto.
(m) "FCC Licenses" means all licenses, authorizations, permits and other
authorizations issued by the FCC for the operation of the Lee-NMBC Stations and
the Acquired Companies' Stations, as the case may be, all of which are set forth
in Schedule 4.8(b) hereto.
(n) "FCC Transfer Application" means the written application to be filed
with the FCC requiring its written consent to the assignment or the transfer of
control of each of the FCC Licenses to Purchaser or any of its Subsidiaries, as
the case may be, or each of their permitted assignees or designees.
(o) "Final Determination" means the final resolution of liability for
any Tax for a Taxable Period, including any related interest or penalties, that
is final and nonappealable, including by reason of the expiration of the
applicable statute of limitations.
(p) "Final Order" means an order or action by the FCC, that by reason of
expiration of time or exhaustion of remedies, is no longer subject to
administrative or judicial reconsideration, or review or rehearing.
(q) "Funded Debt" means all indebtedness for borrowed money, all
obligations under leases which in accordance with GAAP constitute capital
leases, all notes payable and drafts accepted representing extensions of credit
and any guarantee obligation with respect to any of the foregoing, as applied to
the Lee-NMBC Stations or any Acquired Company.
(r) "GAAP" means generally accepted accounting principles in the United
States on the date of this Agreement.
(s) "Governmental Authority" means any government, any governmental
entity, department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial body, in each case whether federal, state, county,
provincial, local or foreign.
(t) "Governmental Order" means any statute, rule, regulation, order,
judgment, injunction, decree, stipulation or determination issued, promulgated
or entered by or with any Governmental Authority of competent jurisdiction.
(u) "Hazardous Material" means any material or substance that is
prohibited or regulated by any Environmental Law or that has been designated by
any Governmental Authority to be radioactive, toxic, hazardous or otherwise a
danger to health, reproduction or the environment, including asbestos,
petroleum, radon gas and radioactive matter.
(v) "Hazardous Materials Activity" means the handling, transportation,
transfer, recycling, storage, use, treatment, manufacture, investigation,
removal, remediation, release, exposure of others to, sale or other distribution
of any Hazardous Material or any product containing a Hazardous Material.
(w) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
(x) "Income Tax" means any federal, state, county, provincial, local or
foreign income, franchise, business profits or other similar Tax, any estimated
Tax related thereto, any interest and penalties (civil or criminal) thereon or
additions thereto.
(y) "Intellectual Property" means any (i) United States and foreign
patents, patent applications, patent disclosures and improvements thereto, (ii)
United States, state or foreign trademarks, service marks, trade dress, logos,
trade names and corporate names, the goodwill associated therewith, and the
registrations and applications for registration thereof, (iii) United States and
foreign copyrights, and the registrations and applications for registration
thereof, and (iv) websites and domain names.
(z) "IRS" means the United States Internal Revenue Service, and any
successor agency thereto.
(aa) "Knowledge of" "known to" and phrases of similar import mean the
actual knowledge of each executive officer of Lee-NMBC and each Acquired Company
or Purchaser, as the case may be, together with each General Manager and Chief
Engineer of the Lee-NMBC Stations and Acquired Companies' Stations, without
obligation of inquiry.
(bb) "Law" means any federal, state, county, provincial, local or
foreign statute, law, ordinance, regulation, rule, code or rule of common law.
(cc) "Lee Documents" means, collectively, the (i) the Grant Deeds, (ii)
the Bill of Sale, (iii) the Assignment and Assumption, (iv) the Assignment of
Proprietary Rights, (v) the Stock Certificates, and (vi) any other document
executed and delivered at the Closing under or in connection with this Agreement
by or on behalf of Lee-NMBC or any of the Acquired Companies.
(dd) "Liability" means any direct or indirect debt, obligation or
liability of any kind or nature, whether accrued or fixed, absolute or
contingent, determined or determinable, matured or unmatured, and whether due or
to become due, asserted or unasserted, or known or unknown, and regardless of
whether required by GAAP to be reflected in a balance sheet or disclosed in the
related notes.
(ee) "License" means any franchise, approval, permit, order,
authorization, consent, license, registration or filing, certificate, variance
and any other similar right obtained from or filed with any Governmental
Authority.
(ff) "Lien" means any adverse claim, restriction on voting or transfer
or pledge, lien, charge, Encumbrance or security interest of any kind.
(gg) "Loss or Losses" means any claims, demands, Liabilities, losses,
damages, deficiencies, assessments, judgments, remediations and costs or
expenses (including reasonable attorneys', consultants' and experts' fees and
expenses but excluding punitive damages for breach of this Agreement or any Lee
Document).
(hh) "Material Adverse Effect" means any change or effect that is
materially adverse to the assets, properties, operations, business, financial
condition or results of operations of the Lee-NMBC Stations and the Acquired
Companies' Stations, taken as a whole, except for any such change or effect
resulting directly or indirectly from (i) the transactions contemplated by this
Agreement, (ii) the announcement or other disclosure of the transactions
contemplated by this Agreement, (iii) regulatory changes, (iv) changes in
conditions generally applicable to the television broadcasting industry, or in
general economic conditions in the geographic regions in which such stations are
operated; or (v) circumstances that are not likely to recur and have been
substantially restored or will be substantially restored in the near future.
(ii) "Permitted Encumbrances" means (i) Encumbrances for inchoate
mechanics' and materialmen's liens for construction in progress and workmen's,
repairmen's, warehousemen's and carriers' liens arising in the ordinary course
of business securing amounts not in default; (ii) Encumbrances for Taxes and
other Liabilities not yet due and payable, and for Taxes and other Liabilities
being contested in good faith, (iii) Encumbrances securing liabilities shown on
the Financial Statements, (iv) Encumbrances and imperfections of title
(including but not limited to those contained in a standard pre-printed ALTA
exception) the existence of which do not, and would not reasonably be expected
as of the date hereof to, materially detract from the value of, interfere with,
or otherwise affect the use and enjoyment of the property subject thereto or
affected thereby, consistent with past practice, and (v) solely with respect to
Owned Real Property, provided that the following are not violated by existing
improvements in any material respect and do not prohibit or materially restrict
the continued use and operation of such Owned Real Property for the same uses
and operations as currently conducted, or grant any third party any option or
right to acquire or lease a material portion thereof, (A) easements, rights of
way and other similar restrictions which would be shown by a current title
report, (B) conditions that may be shown by a current survey, title report or
visual site inspection, and (C) zoning, building and other similar restrictions
imposed by applicable Law.
(jj) "Person" means any individual, general or limited partnership,
firm, corporation, limited liability company, association, trust, unincorporated
organization or other entity.
(kk) "Proprietary Rights" means (i) Intellectual Property, (ii) trade
secrets and confidential business information (including ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), knowhow, research and development information, software,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information), (iii) other proprietary rights, (iv) copies and tangible
embodiments thereof (in whatever form or medium), and (v) licenses granting any
rights with respect to any of the foregoing.
(ll) "Securities Act" means the Securities Act of 1933, as amended, any
successor statute thereto, and the rules and regulations promulgated thereunder.
(mm) "Subsidiary" means, unless otherwise indicated with respect to a
Person, any other Person in which such Person has a direct or indirect equity
interest or other ownership interest in excess of fifty percent (50%).
(nn) "Tax" means any federal, state, county, provincial, local or
foreign income, gross receipts, sales, use, ad valorem, employment, severance,
transfer, gains, profits, excise, franchise, property, capital stock, premium,
minimum and alternative minimum or other taxes, fees, levies, duties,
assessments or charges of any kind or nature whatsoever imposed by any
Governmental Authority (whether payable directly or by withholding), together
with any interest, penalties (civil or criminal), additions to, or additional
amounts imposed by, any Governmental Authority with respect thereto, and any
expenses incurred in connection with the determination, settlement or litigation
of any Liability therefor.
(oo) "Tax Benefit" means, with respect to any Taxable Period, the amount
of the actual reduction in an indemnified party's liability for Taxes payable
for the Taxable Period as a result of the payment or accrual of any Loss
indemnifiable under this Agreement. The amount, if any, of a Tax Benefit with
respect to a Taxable Period arising from the payment or accrual of any Loss
indemnifiable under this Agreement shall be determined after first reducing
Taxes for the Taxable Period by taking into account all other applicable credits
and items of loss, deduction and similar items.
(pp) "Tax Cost" means, with respect to any Taxable Period, the amount of
the actual increase in an indemnified party's liability for Taxes payable for
the Taxable Period (including as a result of any decrease in a Tax refund or
credit) as a result of the accrual or receipt of payment for any Loss for which
the indemnified party is entitled to indemnification under this Agreement.
(qq) "Tax Return" means a report, return or other information required
to be supplied to a Governmental Authority with respect to any Tax.
(rr) "Taxable Period" means any taxable year or any other period that is
treated as a taxable year with respect to which any Tax may be imposed under any
applicable statute, rule or regulation.
1.2 Certain Additional Definitions. For all purposes of and under this
Agreement, the following terms shall have the respective meanings ascribed
thereto in the respective sections of this Agreement set forth opposite each
such term below:
Term Section
--------------------------------------------------------------------------------
Acquired Companies Recitals
Acquired Companies' Closing Liabilities 2.7(b)(i)
Acquired Companies' Common Stock 2.6
Acquired Companies' Stations Recitals
Acquired Company Recitals
Acquired Company Station Recitals
Agreement Preamble
Asset Purchase Recitals
Asset Purchase Cash Payment 2.3(a)
Asset Purchase Notice of Disagreement 2.3(b)(v)
Asset Purchase Price 2.3(a)
Assignment and Assumption 3.2(a)(iii)
Assignment of Proprietary Rights 3.2(a)(iv)
Assumed Liabilities of the Lee-NMBC Stations 2.2(b)
Benefit Plan(s) 4.10(a)
Bill of Sale 3.2(a)(ii)
Cash Payment 2.9
Claimant 8.3(a)
Closing 3.1
Closing Date 3.1
Closing Adjusted Net Worth of the Acquired
Companies 2.7(b)(ii)
COBRA 4.10(a)
Contract of the Lee-NMBC Stations 2.1(b)(ii)
Contracts of the Lee-NMBC Stations 2.1(b)(ii)
CST 3.1
Employee 4.9
Employees 4.9
Excluded Assets of the Lee-NMBC Stations 2.1(c)
Excluded Liabilities of the Lee-NMBC Stations 2.2(c)
Financial Statements 4.12
Grant Deeds 3.2(a)(i)
Indemnitor 8.3(a)
Independent Accountant 2.3(b)(v)
Insurance Policies 4.17(a)
Interest Rate 2.3(b)(iv)
KOIN Recitals
KOIN Common Stock 4.3(a)
Leased Assets 4.5(a)
Leased Real Property 4.5(a)
Lee Preamble & 9.1(a)
Lee-NMBC Preamble
Lee-NMBC Hawaii Stations 6.4(c)
Lee-NMBC Station Recitals
Lee-NMBC Stations Recitals
License of the Lee-NMBC Stations 2.1(b)(iii)
Licenses of the Lee-NMBC Stations 2.1(b)(iii)
Material Contract 4.7(a)
Material Contracts 4.7(a)
Material License 4.8(a)
Material Licenses 4.8(a)
NMBC Preamble
Owned Real Property 4.5(a)
Preliminary Statement of Closing Adjusted
Net Worth of the Acquired 2.7(c)(i)
Preliminary Statement of Working Capital of
the Lee-NMBC Stations 2.3(b)(ii)
Purchased Assets of the Lee-NMBC Stations 2.1(b)
Purchaser Preamble
Purchaser's Hawaii Stations 6.4(c)
Purchaser's Plans 6.9(a)
Schedules 6.11
Short Term Agreement 4.7(a)
SJL-Kansas Recitals
SJL-Kansas Common Stock 4.3(b)
Spin-Off Applications 6.4(c)
Term Section
--------------------------------------------------------------------------------
Statement of Closing Adjusted Net Worth of the
Acquired Companies 2.7(c)(ii)
Statement of Working Capital of the Lee-NMBC
Stations 2.3(b)(iii)
Station KBIM 2.3(b)
Station KGMB Recitals
Station KGUN Recitals
Station KMTV Recitals
Station KOIN Recitals
Station KREZ Recitals
Station KRQE Recitals
Station KSNC Recitals
Station KSNG Recitals
Station KSNK Recitals
Station KSNT Recitals
Station KSNW Recitals
Station WSAZ Recitals
Stock Certificates 3.2(a)(vii)
Stock Purchase Recitals
Stock Purchase Cash Payment 2.7(a)
Stock Purchase Notice of Disagreemen 2.7(c)(iv)
Stock Purchase Price 2.7(a)
Termination Date 9.1(b)
Topeka Recitals
Topeka License Sub Recitals
Transferred Employees 6.9(a)
Transferred Non-Union Employees 6.9(a)
Transferred Union Employees 6.9(a)
Violation 8.5(e)
Wichita License Sub Recitals
Working Capital of the Lee-NMBC Stations 2.3(b)(i)
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale of Purchased Assets of the Lee-NMBC Stations.
(a) Purchase and Sale of Purchased Assets of Lee-NMBC Stations. Upon the
terms and subject to the conditions set forth herein, at the Closing, the
Purchaser shall purchase from Lee-NMBC, and Lee-NMBC shall irrevocably sell,
convey, transfer, assign and deliver to the Purchaser, free and clear of all
Liens other than Permitted Encumbrances, all right, title and interest in and to
the Purchased Assets of the Lee-NMBC Stations (as defined below).
(b) Definition of Purchased Assets of the Lee-NMBC Stations. For all
purposes of and under this Agreement, the term "Purchased Assets of the Lee-NMBC
Stations" shall mean, refer to and include all of Lee's and NMBC's right, title
and interest in and to all tangible and intangible assets, properties and rights
which are owned, used or held for use by Lee-NMBC primarily to conduct the
operations of the Lee-NMBC Stations, including, except for the Excluded Assets
of the Lee-NMBC Stations, all right, title and interest of Lee and NMBC in and
to all real property (including the Owned Real Property of the Lee-NMBC Stations
set forth in Schedule 4.5(a) hereto), and any leaseholds and sub-leaseholds
therein (including leases for the Leased Real Property of the Lee-NMBC Stations
set forth in Schedule 4.5(a) hereto), buildings, structures, improvements,
fixtures, furnishings and other fittings thereon, and easements, rights-of-way,
and other appurtenances thereto, all tangible personal property (whether or not
located on any of the premises of the Lee-NMBC Stations and including the
tangible personal property set forth in Schedule 4.5(a) hereto) including all
machinery, equipment and tools, furniture and furnishings, computers and
computer supplies, office materials and supplies, automobiles, trucks and other
vehicles, inventories of any kind or nature, materials and supplies, purchased
goods, all accounts, notes and other receivables, all prepaid assets and
expenses, and all books, records (other than records relating to Income Taxes),
ledgers, files, documents, correspondence, customer, supplier, advertiser, and
other lists, invoices and sales data, creative, advertising and other
promotional materials, studies, reports, and other printed or written materials
or data, and specifically including the following:
(i) Proprietary Rights (including the Intellectual Property of
the Lee-NMBC Stations set forth in Schedule 4.6(a) hereto), goodwill associated
therewith, licenses and sublicenses granted and obtained with respect thereto,
rights thereunder, remedies against infringements thereof, and rights to
protection of interests therein under the applicable Laws of all jurisdictions;
(ii) Contracts to which Lee-NMBC is a party or by which its
assets or properties are bound which primarily relate to the operations of the
Lee-NMBC Stations (each, a "Contract of the Lee-NMBC Stations" and,
collectively, "Contracts of the Lee-NMBC Stations") (including the Material
Contracts of the Lee-NMBC Stations set forth in Schedule 4.7(a) hereto), and all
rights thereunder;
(iii) Licenses owned or possessed by Lee-NMBC (each, a "License
of the Lee-NMBC Stations" and, collectively, "Licenses of the Lee-NMBC
Stations") (including the FCC Licenses of the Lee-NMBC Stations and the Material
Licenses of the Lee-NMBC Stations), and all rights thereunder;
(iv) rights in or to all Assumed Plans of the Lee-NMBC Stations,
and any and all assets associated with or allocated to the Employees of the
Lee-NMBC Stations thereunder;
(v) any and all refunds of Taxes relating primarily to the
Lee-NMBC Stations other than refunds of Income Taxes;
(vi) Actions, deposits, prepayments, refunds, causes of action,
chooses in action, rights of recovery, rights of set off, and rights of
recoupment of any kind or nature (including any such item relating to Taxes
other than Income Taxes) relating to the Purchased Assets of the Lee-NMBC
Stations or the Assumed Liabilities; and .
(vii) Upon reimbursement at the closing for all amounts paid by
or due from iBlast, Inc. to Lee, either as a capital contribution or loan or
other form of indebtedness (such reimbursement not to exceed, however, $750,000
in the aggregate), all capital stock of or other equity interests in iBlast,
Inc.
(c) Definition of Excluded Assets of the Lee-NMBC Stations.
Notwithstanding anything to the contrary set forth in this Section 2.1 or
elsewhere in this Agreement, the term "Purchased Assets of the Lee-NMBC
Stations" shall not mean, refer to or include the following (collectively, the
"Excluded Assets of the Lee-NMBC Stations"):
(i) the corporate charter and bylaws, qualifications to transact
business as a foreign corporation, arrangements with registered agents relating
to foreign qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of Lee and
NMBC as a corporation;
(ii) all assets, whether real or personal, tangible or
intangible, which are owned, used or held for use by Lee-NMBC which do not
primarily relate to the Lee-NMBC Stations, including such assets set forth in
Schedule 2.1(c) hereto;
(iii) Contracts of the Lee-NMBC Stations described in Section
2.5 that, in accordance with Section 2.5, are not assigned to the Purchaser;
(iv) Nontransferable Licenses, other than FCC Licenses, of the
Lee-NMBC Stations described in Section 2.5 that, in accordance with Section 2.5,
are not assigned to the Purchaser;
(v) rights in or to all Benefit Plans (other than Assumed Plans
of the Lee-NMBC Stations and employment agreements included in the Contracts of
the Lee-NMBC Stations), and all assets associated with or allocated to the
Employees of the Lee-NMBC Stations thereunder;
(vi) cash and cash equivalents;
(vii) any and all refunds of Income Taxes;
(viii) Actions, deposits, prepayments, refunds, causes of
action, chooses in action, rights of recovery, rights of set off, and rights of
recoupment of any kind or nature (including any such item relating to Income
Taxes) relating to the Excluded Assets of the Lee-NMBC Stations or the Excluded
Liabilities of the Lee-NMBC Stations;
(ix) refunds paid or payable in connection with the cancellation
or discontinuance of any insurance policies applicable to the Lee-NMBC Stations
(including the Insurance Policies of the Lee-NMBC Stations set forth in Schedule
4.17 hereto) following the Closing;
(x) all rights of Lee-NMBC under this Agreement, any agreement,
certificate, instrument or other document executed and delivered by Lee-NMBC in
connection with the transactions contemplated hereby, or any side agreement
between Lee-NMBC and the Purchaser entered into on or after the date of this
Agreement related primarily to the Lee-NMBC Stations; and
2.2 Assumption of Liabilities.
(a) Assumption. Upon the terms and subject to the conditions set forth
herein, at the Closing the Purchaser shall assume from Lee-NMBC (and therefore
pay, perform and discharge), and Lee-NMBC shall irrevocably convey, transfer and
assign to the Purchaser, all of the Assumed Liabilities of the Lee-NMBC Stations
(as defined below).
(b) Definition of Assumed Liabilities of the Lee-NMBC Stations. For all
purposes of and under this Agreement, the term "Assumed Liabilities of the
Lee-NMBC Stations" shall mean (i) the liabilities of the Lee-NMBC Stations
included in the determination of the Working Capital of the Lee-NMBC Stations
pursuant to Section 2.3(b), (ii) the obligations of Lee-NMBC arising during and
attributable to any period after the Closing under the Contracts, Licenses and
Assumed Plans of the Lee-NMBC Stations that are assigned to Purchaser at Closing
in accordance with this Agreement (excluding (A) any obligations or liabilities
of Lee-NMBC under any such Contract, License or Assumed Plan resulting from the
failure to obtain any consent required in connection with the transactions
contemplated by this Agreement, (B) any default under any such Contract, License
or Assumed Plan prior to or as a result of the Closing, and (C) any bonus or
other payment or benefit conditioned upon or payable in connection with or as a
result of the Closing under any employment agreement, or calculated with
reference to the financial terms, of the transactions contemplated by this
Agreement), and (iii) the obligations of Lee-NMBC arising during and
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