Exhibit 10.1

 

 

 

 

 

 

 

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ASSET PURCHASE AGREEMENT

 

 

Dated as of September 14, 2015

 

 

among

 

 

Schurz Communications, Inc.,

Each Subsidiary of Schurz Communications, Inc.

Listed on Annex A hereto,

 

 

and

 

 

Gray Television Group, Inc.

 

 

 

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ARTICLE 1 PURCHASE OF ASSETS      

1

         

 

1.1 

 

Purchase and Sale of Purchased Assets 

 1

 

1.2

 

Excluded Assets 

 3

 

1.3

 

Assumption of Obligations 

 5

 

1.4

 

Purchase Price 

 6

 

1.5

 

Indemnity Escrow 

 6

 

1.6

 

Allocation 

 7

 

1.7

 

Closing 

 7

 

1.8

 

Governmental Consents 

 8

 

1.9

 

Multi-Station Contracts 

 11

 

 

 

 

 

ARTICLE 2 SELLER REPRESENTATIONS AND WARRANTIES 13          

 

2.1 

 

Organization 

 13

 

2.2

 

Authorization 

 13

 

2.3

 

No Conflicts 

 13

 

2.4

 

FCC licenses 

 14

 

2.5

 

Taxes 

 15

 

2.6

 

Tangible Personal Property 

 16

 

2.7

 

Real Property/Leases 

 17

 

2.8

 

Contracts 

 18

 

2.9

 

Environmental

 19

 

2.10

 

Intangible Property 

 20

 

2.11

 

Employees; Labor Matters 

 20

 

2.12

 

Insurance 

 22

 

2.13

 

Compliance with Law; Permits 

 22

 

2.14

 

Litigation; Orders 

 22

 

2.15

 

Financial Statements 

 23

 

2.16

 

Absence of Changes  

 23

 

2.17

 

Purchased Assets; Sufficiency 

 23

 

2.18

 

No Brokers 

 23

 

2.19

 

Transactions with Affiliates 

 23

 

2.20

 

Disclaimer 

 24

 

 

 

 

 

ARTICLE 3 BUYER REPRESENTATIONS AND WARRANTIES 24             3.1   Organization
24   3.2   Authorization 24   3.3   No Conflicts 24

 

3.4

 

Litigation 

 25

 

3.5

 

Qualification 

 25

 

3.6

 

Financing 

 25

 

3.7

 

Solvency 

 25

 

3.8

 

Brokers 

 26

 

3.9

 

Securities Laws 

 26

 

3.10

 

Projections and Other Information 

 26

  

 
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ARTICLE 4 CERTAIN COVENANTS

 27

 

 

 

 

 

 

4.1 

 

Seller's Covenants 

 27

 

4.2 

 

No Solicitation or Negotiation 

 30

 

 

 

 

 

ARTICLE 5 JOINT COVENANTS

 30

 

 

 

 

 

 

5.1 

 

Confidentiality 

 31

 

5.2 

 

Accouncements 

 31

  5.3   Control 31   5.4   Risk of Loss 31   5.5   Consents and Other
Arrangements 32   5.6   Employee Relations 32   5.7   Accounting Services;
Access to and Retention of Records 36   5.8   Further Action 37   5.9   Title
Insurance; Survey 37   5.10   Environmental Assessments; Phase I Investigations
37   5.11   Financing 39   5.12   Audit and SEC Reports 42   5.13   Interim
Reports 43   5.14   Cooperation 43   5.15   Tax Returns and Payments 43   5.16  
Fulfillment of Conditions 43   5.17   Notice; Updated Schedules 44   5.18  
Affiliate Arrangements 45   5.19   Non-Solicitation 45   5.20   Mail and Other
Communications 46           ARTICLE 6 SELLER CLOSING CONDITIONS 46            
6.1   Representations and Covenants 46   6.2   Proceedings 46   6.3   FCC
Authorization 46   6.4   Hart-Scott-Rodino 46   6.5   Deliveries 46          
ARTICLE 7 BUYER CLOSING CONDITIONS 47             7.1   Representations and
Covenants 47   7.2   Proceedings 47   7.3   FCC Authorization 47   7.4  
Hart-Scott-Rodino 47   7.5   Deliveries 47   7.6   Consents 47   7.7   No
Material Adverse Effect 48           ARTICLE 8 CLOSING DELIVERIES 48            
8.1   Seller Documents 48   8.2   Buyer Documents 50

  

 
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ARTICLE 9 SURVIVAL; INDEMNIFICATION 50             9.1   Survival 50   9.2  
Indemnification 51   9.3   Procedures with Respect to Third Party Claims 52  
9.4   No Special Damages; Mitigation 54   9.5   Offset 54   9.6   Treatement of
Indemnity Benefits 54   9.7   Exclusive Remedies 54   9.8   Effect of
Investigation 54           ARTICLE 10 TERMINATION AND REMEDIES 55            
10.1   Termination 55   10.2   Cure Period 55   10.3   Termination and Survival
56   10.4   Specific Performance 57           ARTICLE 11 MISCELLANEOUS 58      
      11.1   Expenses 58   11.2   Further Assurances 58   11.3   Assignment 58  
11.4   Notices 59   11.5   Amendments; Waiver 60   11.6   Entire Agreement 60  
11.7   Severability 60   11.8   Third Party Beneficiaries; No Recourse to
Financing Sources 61   11.9   Governing Law; Consent to Jurisdiction; Waiver of
Jury Trial 61   11.10   Neutral Construction 62   11.11   Cooperation 62   11.12
  Counterparts; Delivery by Facsimile/Email 62   11.13   Interpretation 62  
11.14   Certain Definitions 63   11.15   Bulk Transfer 70   11.16   Non-Recourse
70

 

 
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Annexes   Annex A   Schurz Subsidiaries Party to this Agreement      Exhibits  

Exhibit A-1

TV Stations

Exhibit A-2

Radio Stations

Exhibit A-3

TV and Radio Stations to which a Station Provides Services

Exhibit B

Assignments of FCC Authorizations Assigning FCC Licenses

Exhibit C

Assignments and Assumptions of Contracts Assigning Purchased Contracts

Exhibit D

Assignments and Assumptions of Leases Assigning Real Property Leases

Exhibit E

Intellectual Property Assignments Assigning Intangible Rights

Exhibit F

General Bills of Sale Conveying Purchased Assets

Exhibit G

Affidavits of Non-Foreign Status of Seller

Exhibit H

Indemnity Escrow Agreement

Exhibit I

Material Lease Agreement Terms (WSBT Building)

    Schedules   Schedule 1.1(a)  FCC Licenses Schedule 1.1(b)     Tangible
Personal Property Schedule 1.1(c)(i)  Owned Real Property Schedule 1.1(c)(ii)   
Leased Real Property

Schedule 1.1(d) 

Purchased Contracts Schedule 1.1(e) Intangible Property Schedule 1.2(c) Excluded
Contracts Schedule 1.2(d) Seller Marks Schedule 1.2(p) Certain Excluded Assets
Schedule 1.4(a)   Certain Proration Adjustments Schedule 1.8(a)  FCC Licenses
Schedule 1.8(c)  Primary FCC Licenses Schedule 1.8(g)  Overlap Licenses Schedule
1.8(h) Certain Regulatory Actions Schedule 1.9    Material Multi-Station
Contracts Schedule 1.9(b)   Material Multi-Station Contracts Allocation
Schedule 2.3   Conflicts Schedule 2.4(a)     Knowledge Schedule 2.4(b)   Certain
Notices Schedule 2.4(c)  Certain FCC Changes Schedule 2.5   Taxes Schedule
2.6    Permitted Liens Schedule 2.7(a)   Options to Purchase Real Property
Schedule 2.7(b)   Leased Real Property Schedule2.7(d)   Improvements Schedule
2.9  Environmental Exceptions Schedule 2.10    Intangible Property

  

 
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Schedule 2.11   Employees; Labor Matters Schedule 2.11(c) Benefit Plans Schedule
2.11(d)   Benefit Exceptions Schedule 2.12 Insurance Schedule 2.13  Compliance
with Law; Permits Schedule 2.14   Litigation Schedule 2.15  Financial Statements
Schedule 2.16    Absence of Changes Schedule 2.17   Purchased Assets;
Sufficiency Schedule 2.19    Transactions with Affiliates Schedule 3.5     Buyer
FCC Matters Schedule 4.1    Permitted Activity Schedule 5.5(a)   Required
Consents Schedule 5.18      Continuing Affiliate Relationships Schedule 11.3
Designated Stations

  

 
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ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of September 14,
2015, by and among (i) Schurz Communications, Inc., an Indiana corporation
(“Schurz”), each subsidiary of Schurz listed on Annex A hereto (each such
subsidiary, a “Seller,” and together the “Sellers”) and (ii) Gray Television
Group, Inc., a Delaware corporation (“Buyer”).

 

Recitals

 

A.     Sellers are the owners of the assets used or held for use in the
operation of the television broadcast stations identified on Exhibit A-1 hereto
(each, a “TV Station” and collectively, the “TV Stations”) and used in the
operation of the radio broadcast stations identified on Exhibit A-2 hereto
(each, a “Radio Station” and collectively, the “Radio Stations”, and together
with the TV Stations, the “Stations” and each, a “Station”) and operate such
Stations pursuant to certain authorizations issued by the Federal Communications
Commission (the “FCC”), with the holders of the FCC License for each Station
being listed on Exhibit A-1 or Exhibit A-2, respectively (each, a “FCC Licensee”
and collectively, the “FCC Licensees”).

 

B.     Each Seller is engaged in the business and operation of its Station
(collectively, the “Business” which, for the avoidance of doubt, shall not
include the other businesses or assets of Sellers or Schurz, but shall include
the business and operations specified on Exhibit A-3 to the extent conducted by
any Station).

 

C.     Pursuant to the terms and subject to the conditions set forth in this
Agreement, Sellers desires to sell to Buyer, and Buyer desires to purchase from
Sellers, the Purchased Assets (as defined below).

 

Agreement

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties, intending to be legally bound, hereby agree as
follows:

 

Article 1
PURCHASE OF ASSETS

 

1.1     Purchase and Sale of Purchased Assets. On the terms and subject to the
conditions hereof, at the Closing (as defined below), except as set forth in
Section 1.2 and Section 1.3, each Seller shall sell, assign, transfer, convey
and deliver to Buyer, in each case free and clear of all Liens (as defined
below) other than Permitted Liens (as defined below), and Buyer shall purchase
and acquire from each Seller, all right, title and interest of such Seller in
and to all assets, properties and rights of such Seller, real and personal,
tangible and intangible that are exclusively or primarily used or exclusively or
primarily held for use in the Business (as defined below) (the “Purchased
Assets”), including the following:

 

(a)     all licenses, permits and other authorizations issued by the FCC with
respect to the Stations (the “FCC Licenses”), and all licenses, permits and
authorizations issued by any Governmental Entity (as defined below) other than
the FCC Licenses applicable to the Business, including those described on
Schedule 1.1(a), and including any applications therefor and renewals or
modifications thereof between the date hereof and Closing;

 

 
 

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(b)     all of each Seller’s equipment, transmitters, antennas, cables, towers,
vehicles, furniture, fixtures, servers, traffic systems, graphic systems, audio
boards, switchers, back-up generators, radar systems, microwaves, transponders,
relays, motor vehicles, computers, computer hardware and peripherals, office
equipment, production and news operation equipment, inventory, spare parts and
other tangible personal property of every kind and description that are
exclusively or primarily used or exclusively or primarily held for use in the
Business, in each case, including those listed on Schedule 1.1(b) (as updated by
Final Schedule 1.1(b)), except for any retirements or dispositions thereof made
between the date hereof and Closing in accordance with Section 4.1) (the
“Tangible Personal Property”);

 

(c)     all of the real property interests (i) owned by each Seller (the “Owned
Real Property”), or (ii) leased, subleased, licensed or otherwise occupied by
each Seller (the “Real Property Leases”) (in the case of both (i) and (ii)
above, including any appurtenant easements, building, structures, fixtures and
other Improvements located thereon), that is exclusively or primarily used or
exclusively or primarily held for use in the Business, including the Owned Real
Property and Real Property Leases listed on Schedules 1.1(c)(i) and (ii),
respectively, (collectively, the “Real Property”);

 

(d)     all agreements (whether written or oral) for the sale of advertising
time and all other contracts, agreements, leases and licenses, including any
employment and severance agreements with Station employees (as defined below) or
website development and hosting agreements and agreements for accounts with
Twitter, Facebook or other social media companies (including agreements for
social media identifications, administrator rights, and tags on Facebook and
Twitter accounts), in each case, exclusively or primarily used or exclusively or
primarily held for use in the Business, including the Material Contracts listed
on Schedule 1.1(d) (as updated by Final Schedule 1.1(d)), together with all
contracts, agreements, leases and licenses made between the date hereof and the
Closing in accordance with Section 4.1 (the “Purchased Contracts,” which, for
the avoidance of doubt, include the Real Property Leases and, to the extent
provided under Section 1.9, the Multi-Station Contracts); provided, that, with
respect to employment agreements and severance agreements with Station
employees, Buyer shall only assume such contracts set forth on Schedule 1.1(d)
as in effect on the date hereof or entered into prior to the Closing in
accordance with the terms hereof, including Section 4.1;

 

(e)     all of each Seller’s rights in any Intellectual Property (as defined
below) exclusively or primarily used or exclusively or primarily held for use in
the Business but, for the avoidance of doubt, excluding any Intellectual
Property exclusively or primarily used in connection with any station or
business unit of Schurz or any Affiliate of Schurz that is not a Station or a
part of the Business (the “Other Schurz Business”), in each case together with
all goodwill associated therewith, including all Intellectual Property listed on
Schedule 1.1(e) (the “Intangible Property”). For purposes of this Agreement,
“Intellectual Property” means all call letters, trademarks, trade names, service
marks, designs, patents, inventions, trade secrets, know-how, processes,
methods, techniques, Internet domain names, Websites, web content, social media
account names and content, databases, software or applications (including
user-applications, source code, executable code, systems, tools, data, firmware
and related documentation), copyrights and other works of authorship, programs
and programming material, jingles, slogans, logos, content, all applications,
registrations and renewals relating to any of the foregoing, and any other
intellectual property rights or proprietary rights in or arising from any of the
foregoing, including all licenses, sublicenses and other rights granted and
obtained with respect thereto, and rights thereunder, including rights to
collect royalties, products and proceeds, rights to sue and bring other claims
and seek remedies against past, present and future infringements or
misappropriations thereof or other conflicts therewith, rights to recover
damages or lost profits in connection therewith, and other rights to recover
damages (including attorneys’ fees and expenses) or lost profits in connection
therewith, and otherwise to seek protection or enforcement of interests therein
under the Laws of all jurisdictions;

 

 
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(f)     Each Seller’s rights in and to all the files, documents, records, and
books of account (or copies thereof at each Seller’s sole discretion) to the
extent exclusively or primarily used or exclusively or primarily held for use in
the Business, including the Business’s local and/or FCC online public files,
programming information and studies, signal and program carriage agreements,
engineering files, data, drawings, blueprints, schematics, advertising studies,
marketing and demographic data, sales correspondence, lists of advertisers,
credit and sales reports, and logs, but excluding records to the extent relating
to Excluded Assets (as defined below) or any Other Schurz Business (the
“Purchased Documents”);

 

(g)     Each Seller’s Accounts Receivable (as defined below) and other current
assets not described in Section 1.2(a) below; and

 

(h)     Each applicable Seller’s interest in and to the equity interests of
Alaska Movie House LLC, Goose Bay Joint Venture LLC, Anchorage Broadcast
Television Consortium, Inc., Augusta Tower, LLC, and, if Market Branson, LLC
does not exercise its right of first refusal, Branson Visitors TV, LLC
(collectively, the “Business Joint Venture Interests”).   

 

1.2     Excluded Assets. Notwithstanding anything to the contrary contained
herein, the Purchased Assets shall not include the following assets or any
rights, title and interest of any Seller therein (the “Excluded Assets”):

 

(a)     all cash and cash equivalents of Sellers, including certificates of
deposit, commercial paper, treasury bills, marketable securities, checks
received and not cashed prior to the Closing, bank accounts, money market
accounts, other depository accounts and all such similar accounts or
investments;

 

(b)     all tangible and intangible personal property of Sellers sold,
transferred, retired or otherwise disposed of in compliance with the terms of
this Agreement prior to the Closing;

 

(c)     all Purchased Contracts that are terminated in compliance with the terms
of this Agreement or expire (and are not renewed or extended by the applicable
Seller or Schurz) prior to the Closing and any contracts, agreements, leases and
licenses listed on Schedule  1.2(c) (collectively, the “Excluded Contracts”);

 

 
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(d)     all of Schurz’s and any Seller’s rights, title and interest in and to
(i) any names, trade names or service names of Schurz or any Seller that are not
exclusively or primarily used nor exclusively or primarily held for use in the
Business (including the names “Schurz” and “Schurz Communications”), (ii) the
corporate, limited liability company and trade names listed on Schedule 1.2(d),
(iii) all URLs and internet domain names consisting of or containing any of the
foregoing; and (iv) any variations or derivations of the foregoing that include
the word “Schurz” or any confusingly similar term (collectively, the “Seller
Marks”);

 

(e)     all contracts of insurance (including Schurz’s and any Seller’s
contracts of health and dental insurance), all coverages and proceeds thereunder
and all rights in connection therewith, including rights arising from any
refunds due with respect to insurance premium payments to the extent related to
such insurance policies;

 

(f)     except for Purchased Contracts, all pension or profit sharing plans, any
trusts established to fund benefits under any employee benefit plan and the
assets thereof and, any other benefit or compensation plan, program, contract,
policy, agreement or arrangement and the assets thereof, if any, maintained,
sponsored or contributed to by Schurz or any Seller, or by any ERISA Affiliate,
or with respect to which any of them has any liability or obligation;

 

(g)     any rights under any non-transferable shrink-wrapped or click-wrapped
licenses of computer software and any other non-transferable licenses of
computer software;

 

(h)     except as provided in Section 1.1(g), all rights and claims of any
Seller, whether mature, contingent or otherwise, against third parties with
respect to the Business, to the extent arising during or attributable to any
period prior to the Effective Time (as defined below);

 

(i)     all claims of Schurz and Sellers with respect to any Tax (as defined
below) assets (including refunds and prepayments);

 

(j)     all Intellectual Property other than the Intangible Property, including
all of Schurz’s and each Seller’s rights, title and interest in and to any
Intellectual Property that is not exclusively or primarily used nor exclusively
or primarily held for use in the Business (including any call letters used in
connection with any Other Schurz Business), and all goodwill arising from any of
the foregoing;

 

(k)     (i) Schurz’s and each Seller’s charters or other governance documents,
minute books and all books and records relating to the organization, existence
or ownership of Schurz and each Seller, (ii) all records, documents, plans and
financial records related to the transactions contemplated by this Agreement,
(iii) duplicate copies of all Purchased Documents, (iv) all records relating to
other Excluded Assets, (v) all personnel files, and (vi) all files, documents,
records, Tax Returns (as defined below), books of account and other materials to
the extent not relating exclusively or primarily to the Purchased Assets or the
operation of the Business;

 

(l)     the WSBT Building and all other real and personal, tangible and
intangible assets of Schurz and each Seller and their Affiliates (as defined
below) that are exclusively or primarily used or held exclusively or primarily
for use in the operation of the Other Schurz Business;

 

 
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(m)     all capital stock or other equity securities of Schurz and Sellers, or
of subsidiaries of Schurz and Sellers, or their respective Affiliates, and all
other equity interests in any entity that are owned beneficially or of record by
Schurz, any Seller, or their Affiliates, other than the Business Joint Venture
Interests; provided, however, if Market Branson, LLC exercises its right of
first refusal, Branson Visitors TV, LLC will be an Excluded Asset;

 

(n)     all intercompany debts, obligations and other contracts, leases,
agreements and arrangements among Schurz, Sellers or their Affiliates that are
not Purchased Contracts;

 

(o)     all rights of Schurz and Sellers under this Agreement, including the
right to receive the Purchase Price (as defined below), under any agreement,
certificate, instrument or other document executed and delivered in connection
with this Agreement or the transactions contemplated hereby and under any side
agreement between Schurz or any Seller and Buyer entered into on or after the
date of this Agreement; and

 

(p)     the assets listed on Schedule 1.2(p), if any.

 

1.3     Assumption of Obligations.

 

(a)     On the terms and subject to the conditions hereof, at the Closing, each
Seller shall assign to Buyer, and Buyer shall assume from each Seller (and Buyer
shall thereafter pay, perform, discharge or otherwise satisfy in accordance with
their respective terms) (i) subject to Section 1.9, the Multi-Station Contract
Obligations and all liabilities and obligations of the Business arising out of,
or attributable to, any period of time after the Effective Time, (ii) the
obligations described in Section 5.6, (iii) sales commissions related to the
sale of advertisements broadcast on the Stations in accordance with the sales
commission plans referenced in Schedule 1.1(d) either arising out of or
attributable to any period of time after the Effective Time or constituting an
Assumed Current Liability, (iv) all obligations and liabilities under those
Purchased Contracts that are assumed pursuant to Section 1.1(d) and the FCC
Licenses, in each case, either arising out of or attributable to any period of
time after the Effective Time or constituting an Assumed Current Liability, (v)
any and all Taxes with respect to Purchased Assets arising out of or
attributable to any period of time after the Effective Time, (vi) all other
trade accounts payable of each Seller to third parties in connection with the
Business that constitute Assumed Current Liabilities, (vii) all liabilities and
obligations of each Seller relating to compensation or other arrangements with
respect to any Employees that constitute Assumed Current Liabilities, and (viii)
all other obligations and liabilities arising out of or relating to Buyer’s
ownership and operation of the Business and the Purchased Assets (collectively,
the “Assumed Obligations”). For purposes of this Agreement, “Assumed Current
Liabilities” means only the current liabilities in the “Accounts Payable,”
“Accrued Expenses” and “Unexpired subscriptions and deposits” line items of a
balance sheet for the Stations, in each case as determined on a combined basis
for the Stations as of the Effective Time in accordance with GAAP and consistent
with the historical treatment of such line items the Financial Statements for
each Station and assuming that the Stations were operated in the ordinary course
of business between the date of the latest balance sheet for each respective
Station included in the Financial Statements and the Effective Time; provided,
that for purposes hereof “Group Insurance INBR” shall be excluded from Accrued
Expenses and Assumed Current Expenses. For the avoidance of doubt, except for
severance and other obligations and liabilities assumed by Buyer under Section
1.1(d) and Section 5.6, stay bonuses, severance and termination pay, and other
compensation payable by any Seller in connection with the consummation of the
transactions contemplated by this Agreement will not constitute Assumed Current
Liabilities or Assumed Obligations and shall be paid by each applicable Seller.

 

 
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(b)     Except for the Assumed Obligations, Buyer does not assume, and will not
be deemed by the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby to have assumed, any other liabilities or
obligations of Schurz or any Seller or relating to the Purchased Assets or the
Business, of any kind or nature, whether accrued, absolute, contingent or
otherwise, or whether due or to become due, or otherwise, whether known or
unknown, arising out of events, transactions or facts which shall have occurred,
arisen or existed on or before the Effective Time, which liabilities and
obligations, if ever in existence, shall continue to be liabilities and
obligations of the applicable Seller, including any and all liabilities and
obligations of or on behalf of Seller for Taxes in respect of taxable periods
(or portions thereof) ending on or before the Effective Time and those relating
to the Excluded Assets or for borrowed money, including any liability of
infringement, misappropriation or other conflict with the Intellectual Property
of any third party arising on or before the Effective Time (the “Retained
Obligations”). Each applicable Seller shall perform or otherwise discharge all
Retained Obligations. For purposes of clarity, and not in limitation of the
foregoing, each applicable Seller or Schurz shall be solely responsible for any
forfeitures, fines and other payments (collectively, “Fines”) imposed by the FCC
in connection with such Seller’s Business operations prior to the Closing Date,
whether such Fines are imposed by the FCC in connection with a Renewal
Application (as defined below) or otherwise and regardless of whether such Fines
are imposed before or after the Closing Date.

 

1.4     Purchase Price. In consideration for the sale of the Purchased Assets,
Buyer shall, at the Closing, in addition to assuming the Assumed Obligations,
pay to Schurz the sum of (i) Four Hundred Forty Two Million Five Hundred
Thousand Dollars ($442,500,000) (the “Base Purchase Price”), subject to
adjustment as set forth on Schedule 1.4(a), (ii) minus the amount of the
Employee Credit, and (iii) minus the amount, if any, of any QA Payments actually
received by any Seller (collectively, the “Purchase Price”). The Purchase Price
shall be paid at Closing as follows: (a) Buyer shall deliver, or cause to be
delivered, the Escrow Amount to the Escrow Agent; and (b) the balance of the
Purchase Price shall at Closing be paid by Buyer to Schurz on behalf of Sellers
by wire transfer of immediately available funds in accordance with written
instructions delivered by Schurz to Buyer prior to Closing.

 

1.5     Indemnity Escrow. At the Closing, as provided in Section 1.4, Buyer
shall deliver the Escrow Amount to be retained in escrow with the Wells Fargo,
National Association (the “Escrow Agent”) pursuant to the terms of that certain
escrow agreement in the form of Exhibit H attached hereto (the “Indemnity Escrow
Agreement”). At Closing, Buyer and Schurz shall execute and deliver the
Indemnity Escrow Agreement and use commercially reasonable efforts to cause the
Escrow Agent to execute and deliver the Indemnity Escrow Agreement. The Escrow
Amount plus any interest or earnings thereon (the “Indemnity Escrow”) shall be a
source of funds used to satisfy any amounts owed by any Seller to Buyer or the
Buyer Indemnified Parties pursuant to Section 9.2 in accordance with the terms
of this Agreement and the Indemnity Escrow Agreement. On the date after the
expiration of the Survival Period, the remaining Unclaimed Escrow Amount shall
be released to Schurz. Any amount remaining as Indemnity Escrow shall thereafter
be released in accordance with the Indemnity Escrow Agreement.

 

 
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1.6     Allocation. All amounts constituting consideration within the meaning of
and for the purposes of Section 1060 of the Internal Revenue Code of 1986, as
amended (the “Code”) and the Treasury Regulations thereunder shall be allocated
among the Purchased Assets and any other rights acquired by Buyer hereunder, as
applicable, in the manner required by Section 1060 of the Code. Within ninety
(90) days after the Closing Date, Buyer shall prepare an allocation of the
Purchase Price and any Assumed Obligations for financial and Tax reporting
purposes in accordance with the requirements of Section 1060 of the Code and the
Treasury Regulations thereunder (and any similar provision of state, local, or
non-U.S. law as appropriate). Buyer and Schurz shall in good faith use their
respective commercially reasonable efforts to agree within one hundred fifty
(150) days after the Closing Date on such allocations for Tax reporting purposes
based upon a reasonable determination of the respective fair market values of
the Purchased Assets in accordance with the requirements of the Code and the
applicable Treasury regulations promulgated thereunder. To the extent Buyer and
Schurz so agree, then they shall complete and timely file any necessary Tax
forms, and their respective income Tax Returns, in accordance with such
allocation. If Buyer and Schurz are unable to agree on such allocation within
such one hundred fifty (150) day period, then Buyer and Schurz shall have no
further obligations pursuant to this Section 1.6, and each of Buyer and Schurz
shall make its own determination of such allocation for financial and tax
reporting purposes.

 

1.7     Closing.

 

(a)     Subject to any prior termination of this Agreement pursuant to
Section 10.1, the consummation of the sale and purchase of the Purchased Assets
pursuant to this Agreement and the assumption of the Assumed Obligations (the
“Closing”) shall take place at the offices of Cooley LLP, 1299 Pennsylvania
Avenue, NW Suite 700, Washington, D.C. 20004 on the fifth (5th) Business Day
after the latest of (i) the date upon which the FCC Consent (as defined below)
shall have been granted and shall be in full force and effect and, solely if any
petitions to deny or other informal objections have been filed by any person
with respect to the FCC Applications, shall have become a Final Order (as
defined below), and (ii) the date the HSR Clearance (as defined below) occurs,
subject to the satisfaction or waiver of the conditions to Closing set forth
herein, or on such other date or at such other location as is mutually agreeable
to Buyer and Schurz; provided, however, that, in the event of any petitions to
deny or other informal objections have been filed by any person with respect to
the FCC Applications, Buyer in its sole discretion and upon at least ten (10)
days prior written notice to Schurz may waive the requirement that the FCC
Consent become a Final Order, in which event, the date described in clause (i)
above will be the date upon which public notice of the grant of the FCC Consent
is made by the FCC; provided, further, that if the Marketing Period has not
ended on the last date the Closing shall be required to occur pursuant to the
foregoing, the Closing shall not occur until the earlier to occur of (1) a date
during the Marketing Period specified by the Buyer on no fewer than three (3)
Business Days prior notice to Schurz and (2) the third (3rd) Business Day
immediately following the final day of the Marketing Period (subject in each
case to the satisfaction or waiver of all of the conditions set forth in Article
6 and Article 7 (other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or waiver of such
conditions at the Closing) as of the date determined pursuant to this proviso).
For purposes of this Agreement, “Final Order” means an action by the FCC (x)
that has not been vacated, reversed, stayed, enjoined, set aside, annulled or
suspended; (y) with respect to which no request for stay, motion or petition for
rehearing, reconsideration or review, or application or request for review or
notice of appeal or sua sponte review by the FCC is pending; and (z) as to which
the time for filing any such request, motion, petition, application, appeal or
notice, and for the entry of orders staying, reconsidering or reviewing on the
FCC’s own motion has expired.

 

 
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(b)     The date on which the Closing occurs is referred to herein as the
“Closing Date” and, in respect of each Station, 12:01 a.m., local time, for such
Station on the Closing Date is referred to herein as the “Effective Time”;
provided, however, that with respect to those certain Purchased Contracts
relating to advertising time on the Stations, the Effective Time shall be deemed
to be 5:00 a.m., local time, on the Closing Date.

 

1.8     Governmental Consents.

 

(a)     Within ten (10) Business Days after the date of this Agreement, Buyer
and each applicable Seller shall file applications with the FCC (collectively,
the “FCC Application”) requesting FCC consent to the assignment of the FCC
Licenses to Buyer. FCC consent to the FCC Application with respect to those FCC
Licenses set forth on Schedule 1.8(a), including (1) FCC consent to the
continuing satellite waivers or main studio waivers for KBSD-DT, KBSL-DT,
KBSH-DT, KHSD-TV, KDUH-TV and KSGW-TV or a determination that no such waivers
are required, (2) FCC consent to the waiver of the FCC’s local television
ownership rule, 47 C.F.R. § 73.3555(b), and any other FCC rule, policy, or
guideline to permit the assignment to Buyer of the FCC Licenses and the joint
sales agreements currently in place in Wichita, Kansas and Springfield, Missouri
following the Closing until at least December 31, 2016, (3) FCC consent to the
waiver of the FCC’s local television ownership rule, 47 C.F.R. § 73.3555(b), and
any other FCC rule, policy, or guideline to permit the assignment to Buyer of
the FCC Licenses in the Augusta, Georgia market, and (4) FCC consent to the
waiver of the FCC’s local television ownership rule, 47 C.F.R. § 73.3555(b) to
permit the assignment to Buyer of the license for KSCW-DT, Wichita, Kansas, in
each case of (1), (2), (3) and (4), without any material adverse conditions
other than those of general applicability is referred to herein as the “FCC
Consent.” Buyer and each applicable Seller shall diligently prosecute the FCC
Application and otherwise use their commercially reasonable efforts to obtain
the FCC Consent as soon as possible; provided, however, except as provided in
the following sentence, neither Buyer, Schurz, nor shall any Seller be required
to pay consideration to any third party to obtain FCC Consent.

 

(b)     Buyer shall pay one-half (1/2) and Schurz shall pay one-half (1/2) of
the FCC filing fees relating to the transactions contemplated hereby,
irrespective of whether the transactions contemplated by this Agreement are
consummated. Buyer and each applicable Seller each shall oppose any petitions to
deny or other objections filed with respect to the FCC Application to the extent
such petition or objection relates to such party or Person. Neither Buyer nor
any Seller shall take any intentional action that would, or intentionally fail
to take such action the failure of which to take would, reasonably be expected
to have the effect of materially delaying the receipt of the FCC Consent. If the
Closing shall not have occurred for any reason within the original effective
period of the FCC Consent, and neither party shall have terminated this
Agreement under Section 10.1, Buyer and each applicable Seller shall jointly
request one or more extensions of the effective period of the FCC Consent;
provided, however, that no such extension of the FCC Consent shall limit the
right of either party to exercise such party’s rights under Section 10.1.

 

 
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(c)     The “Primary FCC Licenses” shall mean those FCC Licenses set forth in
Schedule 1.8(c). The Primary FCC Licenses of the Stations expire on the dates
set forth in Schedule 1.1(c). If, at any point prior to Closing, an application
for the renewal of any Primary FCC License (a “Renewal Application”) is either
pending or must be filed pursuant to the Communications Laws, the applicable
Seller shall timely execute, file and prosecute with the FCC such Renewal
Application in accordance with Section 4.1(b) hereof. If the FCC Application is
granted by the FCC subject to a renewal condition, then, notwithstanding any
limitation in this Section 1.8, the applicable Seller’s satisfaction of such
renewal condition shall be deemed a precondition to obtaining the FCC Consent
and Governmental Consent. For each Renewal Application that is pending on the
date hereof or that must be filed during the pendency of the FCC Application,
Buyer agrees to request that the FCC apply its policy permitting the transfer of
control of Primary FCC Licenses in transactions involving multiple stations to
proceed, notwithstanding the pendency of one or more Renewal Applications (the
“FCC Renewal Policy”). Buyer shall make such representations and agree to such
undertakings as are required to be made in order to invoke the FCC Renewal
Policy, including undertakings to assume, as between the parties and the FCC,
the position of the applicant before the FCC with respect to any pending Renewal
Application and to assume the corresponding regulatory risks relating to any
such Renewal Application; provided, however, that nothing set forth in this
Section 1.8(c) shall be deemed to amend or modify the provisions of Section 1.3
relating to the Retained Obligations and, notwithstanding anything to the
contrary contained in this Agreement, and subject to and in accordance with the
provisions of Article 9 hereof, the applicable Seller shall indemnify Buyer for
any forfeiture or other penalty that Buyer may incur due to an FCC determination
as to such Seller’s operation of that Station. In addition, should it be
necessary to avoid disruption or delay in the processing of the FCC Application
despite the forgoing, the applicable Seller shall, to the extent reasonably
necessary to expedite grant by the FCC of that Renewal Application and thereby
to facilitate grant of the FCC Application, promptly enter into a tolling,
assignment and assumption or similar agreement (a “Tolling Agreement”) with the
FCC to facilitate grant of any Renewal Application, to extend the statute of
limitations for the FCC to determine or impose a forfeiture penalty against that
Station in connection with (i) any pending complaints that the Station aired
programming that contained obscene, indecent or profane material or (ii) any
other enforcement matters against the Station with respect to which the FCC may
permit such Seller to enter into a tolling assignment and assumption or similar
agreement, and such Seller shall comply with such Tolling Agreement(s). To the
extent that it may be required by the FCC, Buyer agrees to become a party to and
execute such a Tolling Agreement subject to the condition that, notwithstanding
anything to the contrary contained in this Agreement, Schurz shall indemnify
Buyer for any forfeiture or other penalty that Buyer may incur due to an FCC
determination as to the applicable Seller’s operation of that Station. Buyer and
Schurz shall consult in good faith with each other prior to any Seller entering
into any such Tolling Agreement under this Section 1.8(c); provided, however,
that Buyer shall not be required to enter into any Tolling Agreement or agree to
fund any Tolling Agreement escrow.

 

(d)     Within ten (10) Business Days after the date of this Agreement, Buyer
and Schurz shall make any required filings with the Federal Trade Commission
(the “FTC”) and the United States Department of Justice (the “DOJ”) pursuant to
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”), with respect to the transactions contemplated hereby (including a request
for early termination of the waiting period thereunder), and Buyer and Schurz
shall thereafter promptly use commercially reasonable efforts to respond to all
requests received from such agencies for additional information or
documentation. Expiration or termination of any applicable waiting period under
the HSR Act is referred to herein as the “HSR Clearance.” Buyer shall pay
one-half (1/2) and Seller shall pay one-half (1/2) of the HSR filing fees
relating to the transactions contemplated hereby, irrespective of whether the
transactions contemplated by this Agreement are consummated.

 

 
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(e)     Notwithstanding anything in this Agreement to the contrary, and in
addition to the other covenants set forth in this Agreement, Buyer agrees to use
commercially reasonable efforts to obtain all consents under any antitrust or
competition Legal Requirement, rule or regulation (including the HSR Act) or
Communications Act of 1934, as amended, and the rules, regulations and written
policies of the FCC promulgated pursuant thereto (the “Communications Laws”)
that may be required by the FCC, the FTC, the DOJ, any state Attorney General or
any other U.S. federal, state or local Governmental Entity, or any applicable
non-U.S. antitrust or competition Governmental Entity, in each case having
competent jurisdiction, so as to enable the parties to close the transactions
contemplated by this Agreement as promptly as practicable.

 

(f)     In connection with their obligations pursuant to this Section 1.8 with
respect to pursuing the FCC Consent and the HSR Clearance, Buyer and Schurz
shall, subject to applicable Legal Requirements and confidentiality obligations
(i) keep each other informed in all material respects and on a reasonably timely
basis of any material communication received by such party from, or given by
such party to, any governmental agency and of any material communication
received or given in connection with any Action by a private party, in each case
with respect to this Agreement, the Stations, the Business or the transactions
contemplated hereby, (ii) notify each other of all documents filed with or
received from any governmental agency with respect to this Agreement, the
Stations, the Business or the transactions contemplated hereby, (iii) furnish
each other with such information and assistance as the other may reasonably
request in connection with their preparation of any governmental filing
hereunder and (iv) cooperate in all reasonable respects with each other in
connection with any filing or submission with a governmental agency in
connection with the transactions contemplated by this Agreement and in
connection with any investigation or other inquiry by or before any governmental
agency relating to this Agreement, the Stations, the Business or the
transactions contemplated hereby, including any Action initiated by a private
party. The FCC Consent and HSR Clearance are referred to herein collectively as
the “Governmental Consents”. Subject to applicable laws relating to the exchange
of information and any existing confidentiality obligations, each of Buyer and
Schurz shall have the right to review in advance, and to the extent practicable
each will consult with the other on all information relating to the other party
or parties, as the case may be, and their respective Affiliates, that both
appears in any filing made with, or written materials submitted to, any third
party and/or any governmental agency and relates to the parties’ obtaining the
Governmental Consents with respect to this Agreement, the Stations, the Business
or the transactions contemplated hereby.

 

 
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(g)     In addition to, and not in limitation of, any other provision of this
Agreement, if at any time following the execution of this Agreement, Buyer is
not qualified under applicable Law to acquire attributable interests in any FCC
Licenses included in the Purchased Assets associated with the TV Stations listed
on Schedule 1.8(g) (such FCC Licenses, the “Overlap Licenses”), then Buyer shall
elect one or more of the following with respect to the Overlap Licenses: (i) use
commercially reasonable efforts to (A) promptly enter into a purchase agreement
(or other similar agreement) no later than the forty-fifth (45th) Business Day
following execution of this Agreement with one or more third parties that is or
are so qualified to acquire such Overlap Licenses and such other Purchased
Assets as Buyer elects to include in such transaction and (B) cause such third
party or parties to purchase such Overlap Licenses concurrently with the
Closing; and/or (ii) use commercially reasonable efforts to (A) promptly enter
into a purchase agreement (or other similar agreement) no later than the
forty-fifth (45th) Business Day following execution of this Agreement with one
or more third parties to acquire such assets currently owned by Buyer such that
Buyer would become qualified under applicable Legal Requirement to acquire
attributable interests in any Overlap Licenses in such market and (B) cause such
third party or parties to purchase such divested assets concurrently with the
Closing. Notwithstanding anything to the contrary contained herein, no
assignment contemplated by this Section 1.8 shall relieve Buyer of its
obligation to consummate the transaction contemplated by this Agreement or to
pay the entire Purchase Price at the Closing. With respect to the Overlap
Licenses, Buyer shall use commercially reasonable efforts to take all actions
required, and comply with all conditions imposed on it, in order to obtain the
FCC Consent and HSR Clearance with respect to the Overlap Licenses, including,
but not limited to, any requirement that Buyer utilize an FCC divestiture trust
in connection with the consummation of the Transactions at the Closing to the
extent related to such Overlap Stations. Buyer shall be responsible for the
payment of all Taxes and other costs and expenses, including filing fees,
incurred in connection with or as a result of the asset purchase agreement and
any divesture trust or other similar structure or transaction.

 

(h)     Buyer and Schurz will reasonably cooperate with and assist each other in
connection with the foregoing, will comply with their obligations set forth on
Schedule 1.8(h), and will use commercially reasonable efforts to undertake their
obligations under this Section 1.88 in a manner that shall not materially delay
or otherwise impair the receipt of the applicable FCC Consent, HSR Clearance or
the consummation of the transactions hereunder.

 

1.9     Multi-Station Contracts. For purposes of this Agreement, “Multi-Station
Contract” means any contract, agreement or lease used in the Business that one
or more Other Schurz Business is party to, or has rights or obligations with
respect to, and “Material Multi-Station Contract” means any Multi-Station
Contract for which (a) the obligations under such contract, agreement or lease
require payment by a Seller in excess of One Hundred Thousand Dollars ($100,000)
annually, or (b) the rights under such contract, agreement or lease entitle a
Seller to receive in excess of One Hundred Thousand Dollars ($100,000) annually.
Schedule 1.9 includes a list, as of the date hereof, of the Material
Multi-Station Contracts. The rights and obligations under each Multi-Station
Contract that is assigned to and assumed by Buyer (and included in the Purchased
Assets and Assumed Obligations, as the case may be) shall include only those
rights and obligations under such Multi-Station Contract to the extent that they
are applicable to the Stations. The rights of each Other Schurz Business with
respect to such Multi-Station Contract and the obligations of each Other Schurz
Business to such Multi-Station Contract shall not be assigned to and assumed by
Buyer (and shall be Excluded Assets and Retained Obligations, as the case may
be). Subject to the provisions of this Section 1.9, the Purchased Assets shall
include those rights to the extent relating to the Business which are
attributable to the period from and after the Effective Time under a
Multi-Station Contract, subject to the terms and conditions of such
Multi-Station Contract (such rights, the “Multi-Station Contract Rights”), and
the Assumed Obligations shall include both those obligations assumed under
Section 1.3(a)(vi) and those obligations to the extent relating to the Business
which are attributable to the period from and after the Effective Time under a
Multi-Station Contract, subject to the terms and conditions of each such
Multi-Station Contract (such obligations, the “Multi-Station Contract
Obligations”). All rights and obligations which arise under a Multi-Station
Contract other than the Multi-Station Contract Rights and the Multi-Station
Contract Obligations shall in all cases be included in the Excluded Assets and
the Retained Obligations, as applicable. For purposes of determining the scope
of the Multi-Station Contract Rights and the Multi-Station Contract Obligations,
the rights and obligations under each Multi-Station Contract shall be equitably
allocated among (1) the Stations, on the one hand, and (2) the Other Schurz
Business, on the other hand, in accordance with the following equitable
allocation principles:

 

 
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(a)     any allocation set forth in the Multi-Station Contract shall control;

 

(b)     except as set forth on Schedule 1.9(b), if there is no allocation in the
Multi-Station Contract as described in clause (a) hereof, then any reasonable
allocation previously made by Schurz or its Affiliates (as applicable) in the
ordinary course of business or consistent with Schurz’s or its Affiliates’ (as
applicable) historical expense allocation of such Multi-Station Contract shall
control;

 

(c)     if there is no reasonable allocation as described in clause (b) hereof,
then the quantifiable proportionate benefit to be received by Schurz and Buyer
after the Effective Time (to be determined by mutual good faith agreement of
Schurz and Buyer) shall control; and

 

(d)     if not quantifiable as described in clause (c) hereof, then reasonable
accommodation (to be determined by mutual good faith agreement of Schurz and
Buyer) shall control.

 

Subject to any applicable third-party consents, authorizations, approvals,
waivers or notices, such allocation shall be effectuated, at the election of
Schurz, by termination of the Multi-Station Contract in its entirety and the
execution of new contracts on substantially the same terms and conditions as the
terminated Multi-Station Contract or by an assignment to and assumption by Buyer
of the Multi-Station Contract Rights and the Multi-Station Contract Obligations
under such Multi-Station Contract. The parties shall use commercially reasonable
efforts to obtain any such new contracts or assignments to, and assumptions by,
Buyer in accordance with this Section 1.91.9 and Section 5.5. Schurz shall keep
Buyer reasonably informed and shall consult with Buyer in good faith in making
any determinations described in this paragraph.

 

 
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Article 2
SELLER REPRESENTATIONS AND WARRANTIES

 

Except as set forth in the Disclosure Schedules, Schurz and Sellers, jointly and
severally, hereby make the following representations and warranties to Buyer:

 

2.1     Organization. Schurz and each Seller are duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, with full power and authority to own, operate and lease its
properties and assets and to carry on its business as now conducted, and each is
qualified to do business in each jurisdiction in which the ownership of the
Purchased Assets or the operation of the Business as currently conducted makes
such licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing would not have a material adverse impact
on the operation of any Station. Schurz and each Seller have the requisite power
and authority to execute, deliver and perform this Agreement and all of the
other agreements and instruments to be made by Schurz or such Seller pursuant
hereto (collectively the “Seller Ancillary Agreements”) and to consummate the
transactions contemplated hereby and thereby.

 

2.2     Authorization. Except as set forth on Schedule 2.3, the execution,
delivery and performance of this Agreement and the Seller Ancillary Agreements
and the consummation of the transactions contemplated hereby and thereby by
Schurz and each Seller have been duly authorized and approved by all necessary
action of Schurz and each Seller and do not require any further authorization or
consent of Schurz or any Seller or its directors, managers, officers,
stockholders or members. This Agreement is, and each Seller Ancillary Agreement
when executed and delivered by Schurz and/or any applicable Seller and the other
parties thereto will be, a legal, valid and binding agreement of Schurz and/or
such Seller, enforceable in accordance with its terms, except in each case as
such enforceability may be limited by bankruptcy, moratorium, insolvency,
reorganization or other similar laws affecting or limiting the enforcement of
creditors’ rights generally and except as such enforceability is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

2.3     No Conflicts. Except (a) as set forth on Schedule 2.3, (b) for the
Governmental Consents and consents to assign the Material Contracts (as
indicated on Schedule 1.1(d)), (c) where the violation, breach, conflict,
default, acceleration or failure to give notice would not have a material
adverse impact on the operation of any Station, or (d) for such consents,
approvals, filings or notices which, in the aggregate, would not have a material
adverse impact on the operation of any Station, the execution, delivery and
performance by Schurz and each Seller of this Agreement and the Seller Ancillary
Agreements and the consummation by Schurz and Sellers of any of the transactions
contemplated hereby or thereby does not and will not, in any material respect,
conflict with, violate, result in a breach of the terms and conditions of, or,
with or without notice or the passage of time, result in any breach, event of
default or the creation of any Lien under, any Material Contract, any
organizational documents of Schurz or Sellers, or any law, judgment, order, or
decree to which Schurz or any Seller is subject or to which any of its material
assets are bound, or require the consent or approval of, or a filing by Schurz
or any Seller with, any governmental or regulatory authority or any other
Person.

 

 
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2.4     FCC Licenses.

 

(a)     Schedule 1.1(a) sets forth all of the FCC Licenses (and the expiration
dates thereof), which constitute all of the licenses, permits, authorizations
and registrations of the FCC required for the lawful operation of the Business
and the ownership of Purchased Assets or otherwise material to the present
operation of the Business and the ownership of Purchased Assets, all required
FCC antenna structure registrations that are associated with towers owned by any
Seller, and any pending applications for renewal or modification of the FCC
Licenses. Except as set forth on Schedule 1.1(a): (i) the FCC Licensees are
holders of the FCC Licenses described on Schedule 1.1(a), (ii) the FCC Licenses
are in full force and effect in accordance with their terms and have not been
revoked, suspended, canceled, rescinded or terminated and have not expired,
(iii) there is not pending, or, to Seller’s Knowledge (as defined below),
threatened, any action by or before the FCC to revoke, suspend, cancel, rescind
or materially adversely modify any of the FCC Licenses (other than proceedings
to amend FCC rules of general applicability), (iv) there is not issued or
outstanding, by or before the FCC, any order to show cause, notice of violation,
notice of apparent liability, or order of forfeiture against the Business or any
Seller with respect to the Business that could result in any such action, (v) to
Seller’s Knowledge, the FCC Licenses have been issued for the full terms
customarily issued by the FCC for each class of Station, and (vi) the FCC
Licenses are not subject to any condition except for those conditions appearing
on the face of the FCC Licenses and conditions generally applicable to each
class of Station. Except as set forth on Schedule 2.4(a), to Seller’s Knowledge,
the Stations and the Business are operating in compliance in all material
respects with the terms of the FCC Licenses and the Communications Laws. To
Seller’s Knowledge, except as set forth on Schedule 2.4(a) and after appropriate
inquiry to the FCC regarding any pending indecency matters or other enforcement
issues, there are no facts or circumstances relating to any Seller that would
reasonably be expected to (a) result in the FCC’s refusal to grant the FCC
Consent or any Renewal Application or otherwise disqualify any Seller, (b)
materially delay obtaining the grant of the FCC Consent or any Renewal
Application, (c) cause the FCC to impose a material condition or conditions on
its granting the FCC Consent or any Renewal Application or (d) result in any
challenge to the FCC Application or any Renewal Application. “Knowledge” with
respect to Schurz or any Seller shall mean the actual knowledge of (y) the
general manager and chief engineer (or person holding a similar position, but
not including any contract employee or consultant) of the applicable Station,
and (z) the individuals set forth on Schedule 2.4(a).

 

(b)     Schedule 1.1(d) contains, as of the date hereof, (i) a list of all
retransmission consent agreements with multi-channel video programming
distributors, including cable systems, telephone companies, and DBS systems
(together, “MVPDs”) with respect to each TV Station, and (ii) a list of the
MVPDs with more than 10,000 subscribers that, to Seller’s Knowledge, carry any
TV Station outside such TV Station’s Nielsen Designated Market Area (“DMA”).
Except as set forth on Schedule 2.4(b), Seller has entered into retransmission
consent agreements with respect to each MVPD with more than 10,000 subscribers
in any of the TV Stations’ DMAs. Since January 1, 2015 and until the date
hereof, except as set forth on Schedule 2.4(b), (x) no headend with more than
10,000 subscribers covered by an MVPD in any of the TV Stations’ DMAs has
provided written notice to Seller of any material signal quality issue or has
failed to respond to a request for carriage or, to Seller’s Knowledge, sought
any form of relief from carriage of a TV Station from the FCC and (y) no Seller
has received any written notice from any MVPD with more than 10,000 subscribers
in any of the TV Station’s DMAs of such MVPD’s intention to delete a TV Station
from carriage or to change a TV Station’s channel position.

 

 
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(c)     To Seller’s Knowledge, no Radio Station receives material interference
from another radio broadcast station or causes material interference to another
radio broadcast station, except to the extent permitted by the Communications
Laws or the terms of a Radio Station’s FCC License. Except as set forth on
Schedule 2.4(c), each applicable Seller has completed or caused to be completed
the construction of all facilities or changes contemplated by any of the FCC
Licenses or construction Permits issued to modify the FCC Licenses with respect
to the Radio Stations.

 

2.5     Taxes.(a)     Schurz and each Seller have, in respect of the Business,
timely filed all material Tax Returns which are required to have been filed
(taking into account any permitted extension of time within which to file) under
applicable law, and all such Tax Returns are complete, true and correct in all
material respects. Except as set forth on Schedule 2.5 and for Taxes contested
in good faith by appropriate proceedings, Schurz and each Seller have fully and
timely paid all Taxes due and payable as shown on any Tax Return. As used
herein, “Taxes” shall mean any and all federal, state, local, county,
provincial, national, foreign and other taxes, assessments, fees, levies,
duties, tariffs, imposts, and other similar charges (together with any and all
interest, penalties and additions to tax) imposed by any governmental or taxing
authority including, without limitation, taxes or other charges on or with
respect to income, gross receipts, minimum, franchises, windfall or other
profits, gross receipts, property, environmental, custom duties, sales, use,
capital stock, payroll, employment, social security, workers’ compensation,
unemployment compensation, disability or net worth taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, conveyance, value
added, or gains taxes, license, registration and documentation fees and similar
charges, and “Tax Returns” shall mean any returns, reports, claims for refund,
declarations of estimated Taxes and information statements, including any
schedule or attachment thereto or any amendment thereof, with respect to Taxes
required to be filed with any governmental or taxing authority, domestic or
foreign, including consolidated, combined and unitary tax returns.

 

(b)     With respect to the Business:

 

(i)     Neither Schurz nor any Seller has received any notice from any taxing
authority in connection with any Seller’s liability with respect to Taxes, and
no Seller has waived any statute of limitations in respect of Taxes or agreed to
any extension of time to assess a Tax.

 

(ii)     There are no Liens, except Permitted Liens, on any of the assets of any
Seller with respect to Taxes nor, to Seller’s Knowledge, is any taxing authority
in the process of imposing any lien for Taxes on any such assets.

 

(iii)     To Seller’s Knowledge, each Seller has withheld and paid all Taxes
required to have been withheld and paid in connection with any amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or other
third party, and all Forms W-2 and 1099 required with respect thereto have been
properly completed and timely filed.

 

 
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(c)     There is no dispute or claim concerning any Tax liability of any Seller
claimed or raised by any authority in writing.

 

(d)     No Seller has waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency
other than as the result of extending the due date of a Tax Return for Schurz or
any Seller.

 

2.6     Tangible Personal Property.

 

(a)     Schedule 1.1(b) contains a list of all Tangible Personal Property with
an original acquisition cost in excess of One Hundred Thousand Dollars
($100,000) that is included in the Purchased Assets with respect to each
Station. Except as set forth on Schedule 2.6, each Seller does, and immediately
prior to the Closing such Seller will, have good and valid title to its portion
of the Tangible Personal Property free and clear of liens, claims and
encumbrances (“Liens”), other than Permitted Liens. As used herein, “Permitted
Liens” means, collectively, (i) statutory liens for taxes, assessments and
governmental charges not yet due and payable or that are being contested in good
faith by appropriate proceedings and, if required under GAAP, for which
appropriate reserves have been created; (ii) easements, rights of way, zoning
ordinances and other similar encumbrances affecting Real Property which are not
violated in any material respect by the current operation of the Business;
(iii) any right reserved to any governmental authority to regulate the affected
property that is stated in any permits or recorded documents; (iv) in the case
of any leased Purchased Asset, (A) the rights of any lessor under the applicable
Purchased Contract or any Lien granted by any lessor or any Lien that the
applicable Purchased Contract is subject to, (B) any statutory Lien for amounts
that are not yet due and payable or that are being contested in good faith by
appropriate proceedings and, if required under GAAP, for which appropriate
reserves have been created, and (C) the rights of the grantor of any easement or
any Lien granted by such grantor on such easement property; (v) statutory Liens
of landlords and Liens of carriers, warehousemen, mechanics, material men and
other Liens imposed by law arising or incurred in the ordinary course of
business for amounts that are not yet due and payable and, if required under
GAAP, for which appropriate reserves have been created or that are being
contested in good faith by appropriate proceedings and that are not resulting
from any breach, violation or default by any Seller of any Purchased Contract or
applicable law; (vi) Liens created by or through Buyer or any of its Affiliates;
(vii) any Liens or other facts, rights or interests that would be set forth in a
title policy or an accurate and complete land survey relating to any Seller’s
interests in any Real Property, or any defects, easements, rights-of-way,
restrictions and other similar Liens of record set forth in any state, local or
municipal recording or like office, which do not materially interfere with the
present use of any Real Property, any Station or other Purchased Asset or with
the operation of the Business; (viii) Liens that will be released prior to or as
of the Closing Date, including, without limitation, all mortgages and security
interests securing indebtedness of any Seller; (ix) non-exclusive licenses of
Intellectual Property granted in the ordinary course of business; and (x) Liens
designated as Permitted Liens on Schedule 2.6, if any.

 

(b)     Except as set forth on Schedule 1.1(b), each item of Tangible Personal
Property with an original acquisition cost in excess of One Hundred Thousand
Dollars ($100,000) is in adequate operating condition, ordinary wear and tear
excepted.

 

 
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2.7     Real Property/Leases.

 

(a)     Schedule 1.1(c)(i) lists the address of all Owned Real Property. Each
Seller has, and immediately prior to or as of the Closing will have, good and
marketable fee simple title to its portion of the Owned Real Property free and
clear of Liens, other than Assumed Obligations and Permitted Liens. Except as
disclosed on Schedule 2.7(a), neither any Seller nor any of its Affiliates is
obligated under, nor is a party to, any option, right of first refusal or other
contractual right to purchase, acquire, sell, assign or dispose of any of the
Owned Real Property or any portion thereof or interest therein. Except as
disclosed on Schedule 2.7(a), no Seller has leased or otherwise granted to any
Person the right to use or occupy any of the Owned Real Property or any portion
of the income or profits from the sale, operation or development thereof.

 

(b)     No Seller, nor to such Seller’s Knowledge any other party to any Real
Property Lease, has violated any provision of, or committed or failed to perform
any act which, with notice, lapse of time or both, would constitute a material
default under the provisions of any of the Real Property Leases. Schedule 2.7(b)
includes a list of all Real Property Leases, the location of the underlying
Leased Real Property and the parties to the Real Property Leases. Except as set
forth on Schedule 2.7(b), to Seller’s Knowledge, each Seller has, and at Closing
will have a good and valid leasehold interest in the real property subject to
the Real Property Leases (the “Leased Real Property”). Except as set forth on
Schedule 2.7(b), no Seller has subleased, licensed or otherwise granted any
Person the right to use or occupy any Leased Real Property. Except for Permitted
Liens, no Seller has collaterally assigned or granted any other security
interest in any Real Property Lease. Except as adequately reserved for, there
are no outstanding obligations regarding material construction or other material
work or installations to be performed by or on behalf of Seller at any Leased
Real Property. To Seller’s Knowledge, the Owned Real Property includes, and the
Real Property Leases provide, sufficient access (including but not limited to
access for ingress, egress, and the ability to perform of routine maintenance)
to each Station’s facilities, including, but not limited to, broadcast towers.
There are no material oral agreements regarding the use or occupancy of the
Owned Real Property or the Leased Real Property.

 

(c)     There is not pending nor, to Seller’s Knowledge, threatened any (i)
zoning application or proceeding; (ii) condemnation, eminent domain or taking
proceeding; or (iii) other action relating to any Owned Real Property or portion
thereof or interest therein or, any Leased Real Property. Within the past two
(2) years, no Seller has received written (or, to Seller’s Knowledge, other)
notice of default or violations in connection with any material permits required
for the occupancy and operation of the Real Property.

 

(d)     Except as set forth in Schedule 2.7(d), to Seller’s Knowledge, the
Improvements are in adequate condition and repair, and adequate to operate such
facilities as currently used. To Seller’s Knowledge, there are no (i) structural
defects, or defects in the mechanical or building systems, in the Improvements
or (ii) other facts or conditions affecting any of the towers, antennae,
Improvements or Real Property, which would, individually or in the aggregate,
interfere in any material respect with the use or occupancy of the towers,
antennae, Improvements or Real Property or any portion thereof in the operation
of the Business. For the purposes hereof, “Improvements” shall mean all
buildings, structures, improvements, fixtures, furniture, building systems and
equipment, and all components thereof located on any Owned Real Property, and
all buildings, structures, improvements, fixtures, furniture, building systems
and equipment, and all components thereof located on any real property leased,
subleased or licensed under any Real Property Lease and which are owned by
Seller, regardless of whether title to such buildings, structures, improvements
or fixtures are subject to reversion to the landlord or other third party upon
the expiration or termination of such Real Property Lease.

 

 
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2.8     Contracts.

 

(a)     Schedule 1.1(d) sets forth a true and complete list of the following
Purchased Contracts (collectively, the “Material Contracts”):

 

(i)     any contract under which the aggregate payments or receipts for the past
twelve (12) months exceeded, or for the following twelve (12) months is expected
to exceed, One Hundred Thousand Dollars ($100,000);

 

(ii)     any network affiliation agreement;

 

(iii)     any retransmission consent agreement with any MVPD with more than
10,000 subscribers in any of the Station’s markets;

 

(iv)     any contract that relates to an ownership interest in any corporation,
partnership, joint venture or other business enterprise or other entity,
excluding wholly-owned subsidiaries of any Seller;

 

(v)     any Real Property Lease;

 

(vi)     any contract involving the purchase or sale of Real Property that has
not closed as of the date hereof;

 

(vii)     any contract involving construction, architecture, engineering or
other agreements relating to uncompleted construction projects, in each case
that involve payments in excess of One Hundred Thousand Dollars ($100,000);

 

(viii)     any contract involving compensation to any Station employee, or
independent contractor or consultant engaged to perform services to the Business
in excess of One Hundred Thousand Dollars ($100,000) per year (provided,
however, that for purposes of this Section 2.8(a)(viii), the term Material
Contract shall not include at-will contracts or any other contracts involving
compensation to any Station Employee or independent contractor or consultant, in
each case that can be terminated upon thirty (30) days’ notice, without penalty
or additional payment), other than Seller’s standard severance policy; and

 

(ix)     any contract with any labor union, collective bargaining group, works
council or association representing any employee of the Sellers.

 

Prior to Closing, Schurz and Sellers will have made available to Buyer true and
complete copies of the Material Contracts (including all amendments and
supplements thereto) required to be listed on Schedule 1.1(d) (or Final Schedule
1.1(d)); provided, that with respect to any oral contract, Seller has provided a
summary of the material terms.

 

 
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(b)     Each of the Material Contracts is in full force and effect and is
binding and enforceable upon the applicable Seller and, to such Seller’s
Knowledge, the other parties thereto (subject to bankruptcy, insolvency,
reorganization or other similar laws relating to or affecting the enforcement of
creditors’ rights generally and except as such enforceability is subject to
general principles of equity (regardless of whether such enforceability is
considered a proceeding in equity or at law)). Each Seller has performed its
obligations under each of the Material Contracts applicable to such Seller in
all material respects and are not in material default thereunder, and to
Seller’s Knowledge, no other party to any of the Material Contracts is in
default thereunder in any material respect.

 

(c)     Unless listed on Schedule 1.1(c)(ii) or Schedule 1.1(d) (as further
described in Schedule 2.3), each Seller’s rights, title and interest in and to
each of the Material Contracts (or the Multi-Station Contract Rights, as the
case may be) applicable to such Seller are fully assignable to Buyer without the
consent, approval or waiver of any other Person and the assignment of such
Material Contracts will give no party thereto the right to terminate such
Material Contract.

 

2.9     Environmental. Except as set forth on Schedule 2.9, and except as would
not reasonably be expected to result in any Seller or the Real Property
incurring material liability under any applicable Environmental Law (as defined
below), (a) each Seller is and has been in compliance in all material respects
during the last five (5) years from the date hereof with all Environmental Laws
applicable to the Business, the Purchased Assets, and the Real Property, which
compliance includes obtaining, maintaining and complying in all material
respects with all permits, licenses or other authorizations required by
Environmental Law for the operation of the Business or use of the Real Property,
(b) no claims are pending or, to Seller’s Knowledge, threatened against any
Seller, the Business, the Purchased Assets or the Real Property alleging a
violation of, or liability under, Environmental Laws, (c) to Seller’s Knowledge,
there are no conditions resulting from the operations of the Business or
existing at or resulting from the Purchased Assets or any Real Property that
would reasonably be expected to result in the owner or operator of the Business
or the Real Property incurring material liability under Environmental Laws, (d)
to Seller’s Knowledge, there has been no release by any Seller of Hazardous
Materials on, at, or under any Real Property, (e) there is no pending or, to
Seller’s Knowledge, threatened Action by any Person arising from or related to
electromagnetic spectrum pollution or emissions generated by or originating from
the Stations or otherwise related to the operation of the Business by Sellers,
(f) to Seller’s Knowledge, the operations of the Business do not materially
exceed the permissible levels of exposure to RF radiation specified in the
Communications Laws or under Environmental Laws, (g) during the last five (5)
years from the date hereof, no Seller has received any written request for
information, notice of violation or other communication from any Governmental
Entity or third party alleging a violation of or liability under any
Environmental Law, and (h) each Seller has made available, or will make
available prior to Closing, to Buyer copies of all material non-privileged
environmental assessments, audits, investigations or other similar environmental
reports relating to the Business, the Purchased Assets or the Real Property that
are in the possession of such Seller and that have been obtained in the last
five (5) years. For purposes of this Agreement, the following terms have the
following meanings: (i) “Environmental Law” shall mean any and all federal,
state or local laws (including common law), statutes, rules, regulations, codes,
policies, ordinances, orders, injunctions and directives, in effect on or prior
to the Closing Date: (a) related to releases or threatened releases of, or
exposure to, any Hazardous Materials; (b) governing the use, treatment, storage,
disposal, transport or handling of Hazardous Materials; or (c) related to
pollution or the protection of the Environment or human or worker health and
safety (with respect to management of or exposure to hazardous substances). Such
Environmental Laws include, without limitation, the following federal laws: the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation, and Liability Act, the Emergency Planning & Community
Right-to-Know Act, the Clean Air Act, the Clean Water Act, the Safe Drinking
Water Act, the Occupational Health and Safety Act, as it relates to management
of or exposure to hazardous substances, and the Toxic Substances Control Act.;
(ii) “Hazardous Materials” shall mean (A) all chemicals, materials, substances
or wastes classified, characterized or regulated as “hazardous,” “toxic,”
“pollutant” or “contaminant,” or words of similar meaning, defined, listed,
classified, regulated or prohibited under any Environmental Law, (B) all
petrochemical or petroleum products or oil, and (C) any other chemical,
material, substance, emission or media exposure to which may be harmful to human
health or is prohibited, limited or regulated by any Environmental Law; and
(iii) “Environment” shall mean surface waters, ground waters, surface water
sediment, soil, subsurface strata, buildings, indoor air, ambient air and other
environmental medium.

 

 
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2.10     Intangible Property. Schedule 2.10 contains a description of all
material Intangible Property. Except as set forth on Schedule 2.10, (a) to
Seller’s Knowledge, each Seller’s use of the Intangible Property does not
infringe upon any third party’s Intellectual Property in any material respect,
(b) to Seller’s Knowledge, none of the Intangible Property is being infringed or
misappropriated by any third party, (c) no Intangible Property is the subject of
any pending or, to Seller’s Knowledge, threatened Action claiming infringement
of any third party’s Intellectual Property and (d) in the past three (3) years,
no Seller has received any written claim asserting that its use of any
Intangible Property is unauthorized or violates or infringes upon the
Intellectual Property of any third party or challenging the ownership, use,
validity or enforceability of any Intangible Property which claim has not been
settled or resolved prior to Closing. To Seller’s Knowledge, the Sellers are the
owners of or have the valid right to use the Intangible Property free and clear
of Liens, other than Permitted Liens, in the applicable jurisdictions in which
such Intangible Property is currently being used. Subject to obtaining any
required consents set forth on Schedule 2.3, and except for the Seller Marks,
from and after Closing, all material Intangible Property shall be owned or
available for use by Buyer on terms and conditions that are substantially
similar to the terms and conditions under which each Seller owned or used such
Intellectual Property immediately prior to the Closing.

 

2.11     Employees; Labor Matters.

 

(a)     Except as set forth on Schedule 2.11, since January 1, 2010 to Seller’s
Knowledge, each Seller has complied in all material respects with all labor and
employment laws, rules and regulations applicable to the Business, including
those which relate to wages, hours, benefits, terms and conditions of
employment, discrimination in employment, collective bargaining, equal
employment opportunity, harassment, immigration, disability, workers’
compensation, unemployment compensation, the payment of social security and
similar taxes, the classification of employees, plant closing and layoff of
employees, and occupational health and safety.  Except as set forth on
Schedule 2.11, there is, and since January 1, 2015 there has been, no unfair
labor practice charge, employment discrimination charge, or other complaint
against or affecting any Seller in respect of the Business pending or, to
Seller’s Knowledge, threatened before the National Labor Relations Board, the
Equal Employment Opportunity Commission, or any comparable governmental body
including any state labor relations board or equal opportunity agency or any
court or tribunal, nor has any written complaint pertaining to any such charge
or complaint or potential charge or complaint been filed against any Seller, and
there is, and for the past three (3) years has been, no strike, picketing, labor
dispute, request for representation, slowdown or work stoppage pending or, to
Seller’s Knowledge, threatened in respect of the Business.

 

 
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(b)     Seller is not party to or subject to any collective bargaining, union or
similar agreement with respect to the Station employees (as defined below), and,
to Seller’s Knowledge, no union or other labor organization represents or claims
to represent or is attempting (or within the past three (3) years has attempted)
to organize such Station employees. To Seller’s Knowledge, there are, and for
the past three (3) years have been, no ongoing or threatened union
decertification activities relating to Station employees.

 

(c)     Schedule 2.11(c) sets forth a complete and correct list of each deferred
compensation, incentive compensation, stock purchase, stock option, retention,
severance or termination pay, hospitalization or other medical, life, or other
insurance, supplemental unemployment benefits, profit-sharing, 401(k), pension
or retirement plan, program or agreement, and each other material employee
benefit plan, program, agreement, arrangement, contract or policy, that
currently is sponsored, maintained, or contributed to or required to be
contributed to by a Seller or by any trade or business, whether or not
incorporated (an “ERISA Affiliate”), that together with such Seller would be
deemed a “single employer” within the meaning of Section 414 of the Code or
Section 4001(b)(1) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), for the benefit of any Employee (collectively with the
employment agreements or severance agreements referenced in Section 1.1(d), the
“Benefit Plans”). Schedule 2.11(c) identifies each of the Benefit Plans that is
an “employee welfare benefit plan” or “employee pension benefit plan” as such
terms are defined in Sections 3(1) and 3(2) of ERISA. None of the Station
employees participate, or have participated within the past five years, in a
multiemployer pension plan (within the meaning of Section 4001(a)(3) of ERISA)
that is covered by Title IV of ERISA, nor has such Seller been required to or
contributed to such a plan for any Employee within the past five years. To
Seller’s Knowledge, each of the Benefit Plans has been and is operated and
administered in accordance with its terms in all material respects and in
material compliance with applicable requirements of the Code, ERISA, and other
applicable Legal Requirements. Each Benefit Plan that is intended to be
qualified under Section 401(a) of the Code has received a currently applicable
favorable determination letter from the Internal Revenue Service and, to
Seller’s Knowledge, nothing has occurred that would reasonably be expected to
adversely affect the qualification of such Benefit Plan. With respect to each
Benefit Plan to which a Seller is obligated to contribute, all contributions for
all periods ending prior to or on the Closing Date shall have been made or will
be made by such Seller, or its Affiliates.

 

 
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(d)     Except as disclosed on Schedule 2.11(d), neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (alone or in combination with any other event) (i) result in any
payment becoming due (for severance, termination pay or otherwise) to any
Employee or satisfy any prerequisite to any payment or benefit to any Employee,
(ii) increase any benefits or give rise to any liability under any Benefit Plan,
(iii) result in the acceleration of the time of payment, vesting or funding of
any such benefits under any Benefit Plan, or increase the amount of compensation
or benefits due to any Employee or their beneficiaries.

 

2.12     Insurance. Each Seller maintains insurance policies or other
arrangements with respect to the Business and the Purchased Assets consistent
with its practices for other stations, and will maintain such policies or
arrangements until the Effective Time. Schedule 2.12 includes a true and
complete list of all insurance policies maintained by or on behalf of Sellers.
Schurz has made, or will make prior to Closing, available to Buyer true and
complete copies of all such insurance policies, together with copies of all
policy endorsements. There is no material claim pending under any of such
insurance policies relating to any Seller or the Business.

 

2.13     Compliance with Law; Permits. Subject to Section 2.4 and Schedule
2.4(a) with respect to the FCC Licenses, and except as set forth on Schedule
2.13, each Seller has complied in all material respects with all laws,
ordinances, codes, rules and regulations, and all decrees, judgments and orders
of any Governmental Entity which are applicable to the Business or any Seller in
respect of its Business, including, without limitation, the requirements of the
FCC and the Federal Aviation Administration with respect to the Stations’
antennas, and, to Seller’s Knowledge, such Seller has not been charged and is
not under investigation with respect to any material violation of any the
foregoing. Schedule 2.13 sets forth a true and complete list of all material
Permits. Except as set forth on Schedule 2.13, (x) each Seller holds all
material licenses, franchises, permits, certificates, approvals and
authorizations, including all required FCC Antenna Structure Registrations, from
Governmental Entities necessary for the ownership and operation of its portion
of the Business (collectively, “Permits”), (y) to Seller’s Knowledge, all such
Permits are valid and in full force and effect and (z) each Seller is in
compliance in all material respects with the terms of all Permits and, there is
no Action pending or, to Seller’s Knowledge, threatened regarding the
suspension, revocation, or cancellation of any Permits.

 

2.14     Litigation; Orders. Except as set forth on Schedule 2.14, there is no
legal or administrative claim, suit, action, complaint, charge, grievance,
arbitration, audit, investigation, inquiry or other proceeding (each, an
“Action”) pending or, to Seller’s Knowledge, threatened against any Seller
(i) that would have a Material Adverse Effect on the Business or (ii) which
would reasonably be expected to affect such Seller’s ability to perform its
obligations under this Agreement or any Seller Ancillary Agreement or otherwise
impede, prevent or materially delay the consummation of the transactions
contemplated by this Agreement or any Seller Ancillary Agreement. Except as set
forth on Schedule 2.14, there is no material decree, judgment or order of any
Governmental Entity (i) to which any Seller is subject or (ii) by which any
material asset or property owned or used by any Seller in the operation of its
portion of the Business is subject, except, in each case, those affecting the
television broadcast industry or radio broadcast industry generally. To Seller’s
Knowledge, no director, officer or employee of any Seller is subject to any
decree, judgment or orders of any Governmental Entity that prohibits such Person
from engaging in or continuing any material service provided to such Seller’s
portion of the Business.

 

 
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2.15     Financial Statements. Schurz has made available to Buyer prior to the
date of this Agreement copies of the following unaudited financial statements of
Sellers on a combined and combining basis (such financial statements,
collectively, the “Financial Statements”): (a) an unaudited balance sheet as of
the fiscal year ended December 31, 2014, (b) an unaudited statement of
operations for the fiscal year ended December 31, 2014, and (c) an unaudited
balance sheet as of June 30, 2015 and the related unaudited statement of
operations for the six (6) months month period then ended. The Financial
Statements have been derived from the books and records of Sellers relating to
the Business and fairly present, in all material respects, the financial
position and results of operations, on a per market basis with respect to the
applicable Station, of the Business as of the dates thereof and for the periods
indicated therein in conformity with GAAP and reflect all material costs and
expenses of conducting the Business of each Station, including reasonable
allocations for all costs and expenses of services performed for Seller by its
Affiliates . Except as set forth on Schedule 2.15, Sellers have no liabilities
or obligations with respect to the Business that would be required to be
disclosed on a balance sheet or in footnotes thereto, in each case prepared in
accordance with GAAP, except (i) liabilities which are adequately reflected or
reserved against in the balance sheets as of June 30, 2015 included in the
Financial Statements and (ii) current liabilities incurred in the ordinary
course of business since June 30, 2015.

 

2.16     Absence of Changes. Except as set forth on Schedule 2.16, since
December 31, 2014, there has not occurred a Material Adverse Effect, and the
Business has been operated in all material respects in the ordinary course of
business consistent with past practice.

 

2.17     Purchased Assets; Sufficiency. Except as set forth on Schedule 2.17,
Sellers have good and valid title to, or a valid leasehold interest in, the
Purchased Assets free and clear of all Liens (other than Permitted Liens). The
Purchased Assets include all assets that are owned, leased or licensed by any
Seller and exclusively or primarily used or exclusively or primarily held for
use in the Business, except for the Excluded Assets. Except as set forth on
Schedule 2.17, the Purchased Assets constitute all the material assets and
properties (including Material Contracts and FCC Licenses), whether tangible or
intangible, whether personal, real or mixed, wherever located, that are used in
the Business and are sufficient to conduct the Business in the manner in which
it is conducted on the date hereof and as of the Closing Date.

 

2.18     No Brokers. Except for services of RBC Capital Markets, LLC to Schurz,
for which the applicable fee shall be paid by Schurz, no broker, investment
banker, financial advisor or other third party has been employed or retained by
Schurz or any Seller in connection with the transactions contemplated by this
Agreement or is or may be entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission, or the reimbursement of expenses,
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Schurz or any Seller.

 

2.19     Transactions with Affiliates. Except as set forth on Schedule 2.19,
there are no arrangements between any Seller, on the one hand, and any of its
Affiliates, on the other hand, relating to the Business (other than the
Multi-Station Contracts and the services provided by Schurz or any other
Excluded Assets). Upon Closing, no Seller will have any interest in any asset
used in the Business (other than the Excluded Assets and the Multi-Station
Contracts).

 

 
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2.20     Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 2 OR ANY
SCHEDULE, CERTIFICATE OR OTHER DOCUMENT DELIVERED BY SCHURZ OR ANY SELLER
PURSUANT TO THIS AGREEMENT, INCLUDING THE OTHER TRANSACTION DOCUMENTS, NEITHER
SCHURZ NOR ANY SELLER MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND,
NATURE OR DESCRIPTION, EXPRESS OR IMPLIED, INCLUDING, ANY WARRANTY OF TITLE,
MERCHANTABILITY OR FITNESS OF ANY PURCHASED ASSET FOR A PARTICULAR PURPOSE or
with respect to any projections or future FINANCIAL OR OPERATIONAL performance
of the PURCHASED ASSETS, THE Stations, THE BUSINESS or ANY Seller. THE
REPRESENTATIONS AND WARRANTIES OF SCHURZ AND THE SELLERS SET FORTH IN THIS
ARTICLE 2 ARE THE ONLY REPRESENTATIONS AND WARRANTIES OF SCHURZ AND THE SELLERS
TO BUYER WITH RESPECT TO THE PURCHASED ASSETS, THE Stations, THE BUSINESS, THE
SUBJECT MATTER OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Article 3
BUYER REPRESENTATIONS AND WARRANTIES

 

Except as set forth in the Disclosure Schedules, Buyer hereby makes the
following representations and warranties to Schurz and Sellers:

 

3.1     Organization. Buyer is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. Buyer has the
requisite power and authority to execute, deliver and perform this Agreement and
all of the other agreements and instruments to be executed and delivered by
Buyer pursuant hereto (collectively, the “Buyer Ancillary Agreements”) and to
consummate the transactions contemplated hereby.

 

3.2     Authorization. The execution, delivery and performance of this Agreement
and the Buyer Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby by Buyer have been duly authorized and approved
by all necessary action of Buyer and its directors, officers and stockholders
and do not require any further authorization or consent of Buyer or its
directors, officers or stockholders. This Agreement is, and each Buyer Ancillary
Agreement when executed and delivered by Buyer and the other parties thereto
will be, a legal, valid and binding agreement of Buyer enforceable in accordance
with its terms, except in each case as such enforceability may be limited by
bankruptcy, moratorium, insolvency, reorganization or other similar laws
affecting or limiting the enforcement of creditors’ rights generally and except
as such enforceability is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

3.3     No Conflicts. Except for the Governmental Consents, the execution,
delivery and performance by Buyer of this Agreement and the Buyer Ancillary
Agreements and the consummation by Buyer of any of the transactions contemplated
hereby or thereby does not and will not conflict with, violate, result in a
breach of the terms and conditions of, or, with or without notice or the passage
of time, result in any breach, event of default or the creation of any lien
under, any lease, contract or agreement to which Buyer is a party or to which
its assets are subject, any organizational documents of Buyer, or any law,
judgment, order or decree to which Buyer is subject, or require the consent or
approval of, or a filing by Buyer with, any governmental or regulatory authority
or any third party (other than required filings with the FCC and SEC).

 

 
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3.4     Litigation. There is no Action pending or, to Buyer’s Knowledge,
threatened against Buyer which would reasonably be expected to affect Buyer’s
ability to perform its obligations under this Agreement or otherwise impede,
prevent or materially delay the consummation of the transactions contemplated by
this Agreement. “Knowledge” with respect to Buyer shall mean the actual
knowledge of Kevin Latek and Jim Ryan of Buyer.

 

3.5     Qualification. Except as set forth on Schedule 3.5, Buyer is legally,
financially and otherwise qualified to be the licensee of, acquire, own and
operate the Stations under the Communications Laws. Buyer is in compliance with
Section 310(b) of the Communications Laws and the FCC’s rules governing alien
ownership. Except as set forth on Schedule 3.5, there are no facts or
circumstances that would, under the Communications Laws and the existing
procedures of the FCC, disqualify Buyer as an assignee of the FCC Licenses or as
the owner and operator of the Stations. No waiver of or exemption from any
provision of the Communications Laws and policies of the FCC is necessary for
the FCC Consent to be obtained. To Buyer’s Knowledge, except as set forth on
Schedule 3.5, there are no facts or circumstances relating to Buyer that might
reasonably be expected to (a) result in the FCC’s refusal to grant the FCC
Consent or otherwise disqualify Buyer, (b) materially delay obtaining the FCC
Consent or (c) cause the FCC to impose a material condition or conditions on its
granting of the FCC Consent.

 

3.6     Financing. Buyer acknowledges and agrees that the obligation of Buyer to
consummate the transactions contemplated by this Agreement is not conditioned
upon Buyer’s ability to finance or pay the Purchase Price and that, if all of
the conditions set forth in Article 7 are satisfied (other than those conditions
that by their nature would be satisfied at the Closing) and this Agreement has
not been previously terminated, any failure of Buyer to consummate the
transactions contemplated by this Agreement at the Closing as a result of the
failure to pay the Purchase Price shall constitute a material breach by Buyer of
this Agreement giving rise to Schurz’s right to terminate this Agreement under
Section 10.1(c) hereof. Buyer has funds on hand sufficient to enable Buyer to
pay the Business Disruption Termination Fee, if so required.

 

3.7     Solvency. Assuming (a) the satisfaction of the conditions in Article 7
hereof, and (b) the accuracy in all material respects of the representations and
warranties of Schurz and Sellers set forth in Article 2 hereof, then immediately
after giving effect to the transactions contemplated by this Agreement,
including any financing, any other repayment or refinancing of debt contemplated
in this Agreement, payment of all amounts required to be paid in connection with
the consummation of the transactions contemplated hereby, and payment of all
related fees and expenses, Buyer shall be Solvent (as defined below). For
purposes of this Agreement: (i) “Solvent”, when used with respect to Buyer,
means that, as of any date of determination, (A) the Present Fair Salable Value
(as defined below) of its assets will, as of such date, exceed all of its
liabilities, contingent or otherwise, as of such date, (B) Buyer will not have,
as of such date, an unreasonably small amount of capital for the business in
which it is engaged or will be engaged and (C) Buyer will be able to pay its
debts as they become absolute and mature, in the ordinary course of business,
taking into account the timing of and amounts of cash to be received by it and
the timing of and amounts of cash to be payable on or in respect of its
indebtedness, in each case after giving effect to the transactions contemplated
by this Agreement, and the term “Solvency” shall have a correlative meaning;
(ii) ”debt” means liability on a “claim”; (iii) ”claim” for purposes of this
Section 3.7 means (A) any right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured or (B) the right to an
equitable remedy for a breach in performance if such breach gives rise to a
right to payment, whether or not such equitable remedy is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured; and (iv) ”Present Fair
Salable Value” means the amount that may be realized if the aggregate assets of
Buyer (including goodwill) are sold as an entirety with reasonable promptness in
an arm’s-length transaction under present conditions for the sale of comparable
business enterprises.

 

 
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3.8     Brokers. Except for services of Wells Fargo Securities to Buyer, for
which the applicable fee shall be paid by Buyer, no broker, investment banker,
financial advisor or other third party has been employed or retained by Buyer or
any of its Affiliates in connection with the transactions contemplated by this
Agreement or is or may be entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission, or the reimbursement of expenses,
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Buyer or any of its Affiliates.

 

3.9     Securities Laws. Buyer is an “accredited investor” within the meaning of
regulation D of the Securities Act, with such knowledge and experience in
financial and business matters as are necessary in order to evaluate the merits
and risks in an investment in the Business Joint Venture Interests. The Business
Joint Venture Interests to be acquired by Buyer pursuant to this Agreement shall
be acquired for Buyer’s own account and not with a view to, or intention of,
distribution thereof in violation of the Securities Act or any applicable state
securities laws. Buyer is able to bear the economic risk of its investment in
the Business Joint Venture Interests for an indefinite period of time and
acknowledges that the Business Joint Venture Interests have not been registered
under the Securities Act and, therefore, cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.

 

3.10     Projections and Other Information. Buyer acknowledges that, with
respect to any estimates, projections, forecasts, business plans, budget
information and similar documentation or information relating to the Sellers,
the Stations, the Business and the transactions contemplated hereby that Buyer
has received from Schurz, any Seller or any of their respective Affiliates or
advisors and that is not expressly set forth in this Agreement, (a) Buyer is not
relying on such documentation in making its determination with respect to
signing this Agreement or completing the transactions contemplated hereby,
(b) there are uncertainties inherent in attempting to make such estimates,
projections, forecasts, plans and budgets, and Buyer is familiar with such
uncertainties, (c) Buyer is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all estimates, projections,
forecasts, plans and budgets so furnished to it, and (d) Buyer does not have,
and will not assert, any claim against Schurz, the Sellers, their respective
Affiliates or any of its or any of their respective directors, officers,
members, managers, employees, Affiliates or representatives, or hold Schurz, the
Sellers or any such Persons liable, with respect thereto. None of Schurz, the
Sellers, any of their respective Affiliates nor any other Person will have or be
subject to any liability to Buyer or any other Person resulting from the
distribution to Buyer or its representatives or Buyer’s use of, any such
information, including any confidential memoranda distributed on behalf of
Schurz or the Sellers relating to the Purchased Assets or other publications or
data room information provided to Buyer or its representatives.

 

 
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Article 4
CERTAIN COVENANTS

 

4.1     Seller’s Covenants. Between the date hereof and Closing, except as
permitted by this Agreement or as specifically permitted in Schedule 4.1 or any
schedule to any subsection of Section 4.1 or required by applicable law or the
regulations or requirements of any regulatory organization applicable to Schurz
or Sellers, unless Buyer otherwise consents in writing (which request for
consent shall, notwithstanding the provisions of Section 11.4, be directed to
and promptly considered in accordance with the terms and conditions of this
Section 4.1 by the Buyer Principal Liaisons (as defined below)) and may be
delivered by email and which consent shall not be unreasonably withheld,
conditioned or delayed), Sellers shall:

 

(a)     operate the Business in the ordinary course and conduct the Business in
all material respects in accordance with the Communications Laws and with all
other applicable Legal Requirements, including using commercially reasonable
efforts to preserve and maintain the Business’ goodwill, business, customer and
employee relationships, licenses and franchises;

 

(b)     (i) except as may be required by FCC orders in proceedings generally
applicable to the television industry, not materially modify any of the FCC
Licenses (or any practices, policies or procedures of any Seller relating to
regulatory compliance) and shall maintain all of the FCC Licenses in full force
and effect or (ii) not change any Station’s call letters;

 

(c)     other than in the ordinary course of business or for the purpose of
disposing of obsolete or worthless assets, not (i) sell, lease, license or
dispose of or agree to sell, lease, license or dispose of any of the Purchased
Assets (other than the Real Property, which is subject to Section 4.1(d) below)
unless replaced with similar items of substantially equal or greater value and
utility, (ii) create, assume or permit to exist any Liens upon the Purchased
Assets, except for Permitted Liens or (iii) dissolve, liquidate, merge or
consolidate with any other entity;

 

(d)     (i) maintain the Net Working Capital in the ordinary course of business
consistent with past practice (which will include, among other things,
fluctuations in Net Working Capital resulting from the inherent seasonality in
the Business); (ii) maintain and replace the Tangible Personal Property and
maintain the Real Property, in each case, in the ordinary course of business,
(iii) not grant any material easements or licenses with respect to the Real
Property, (iv) not dispose, sell, transfer, acquire, lease, or exchange any
material Real Property (other than income leases entered into in the ordinary
course of business); (v) not amend, modify or terminate any material Real
Property Lease or other agreements relating to material Leased Real Property; or
(vi) not fail to exercise any rights of renewal of a material Real Property
Lease that by its terms would otherwise expire;

 

 
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(e)     maintain in all material respects in full force and effect policies of
insurance of the same type, character and coverage as the policies set forth in
Schedule 2.12;

 

(f)     not enter into any interference acceptance agreement with another FCC
licensee that would reasonably be expected to result in electrical interference
to a Station in excess of the applicable interference level permitted under the
Communications Laws;

 

(g)     (i) upon reasonable advance written notice to Schurz, give Buyer and its
representatives reasonable access at reasonable, mutually agreed-upon times
during normal business hours to the Purchased Assets and the books and records
and personnel of the Business, and furnish Buyer with information relating to
the Purchased Assets or the Business that Buyer may reasonably request,
provided, that such access rights shall not be exercised in a manner that
unreasonably interferes with the operation of the Business, and (ii) otherwise
provide such reasonable assistance and cooperation as may be requested of Schurz
by Buyer from time to time prior to the Closing Date to reasonably facilitate
the transition of the Business, including facilities, operations and applicable
Business data, to Buyer upon and effective as of the Effective Time; provided,
further, all requests by Buyer for access pursuant to this Section 4.1(g) shall
be submitted or directed exclusively to Marcia K. Burdick or such other
individuals as Schurz may designate in writing from time to time.
Notwithstanding anything to the contrary in this Agreement, Schurz and Sellers
shall not be required to disclose any information to Buyer if such disclosure
would, in Schurz’s sole discretion: (x) jeopardize any attorney-client or other
privilege; or (y) contravene any applicable law, fiduciary duty or binding
agreement entered into prior to the date of this Agreement that will not be
assumed by Gray; and further, notwithstanding anything to the contrary in this
Agreement, Schurz and Sellers shall not be required to disclose any information
to Buyer if such disclosure would, in Schurz’s reasonable discretion cause
significant competitive harm to any Seller or the Business in any market where
any Seller competes with Buyer or any of its Affiliates if the transactions
contemplated by this Agreement are not consummated, provided such information is
limited to strategic plans, local news market research, local news consultant
reports or plans, and similar information determined by Schurz in its reasonable
discretion to potentially cause significant competitive harm and provided,
however, that, Schurz shall be required to disclose such information, and
provide access, to any Qualified Assignee;

 

(h)     except for performance and stay bonuses and other compensation payable
solely by Schurz or Sellers in connection with the consummation of the
transactions contemplated by this Agreement or as required by Legal Requirement,
not enter into or amend (i) any employment agreement with (A) an Employee
providing for annual compensation in excess of One Hundred Thousand Dollars
($100,000) or (B) any other Employee other than in the ordinary course of
business, (ii) any severance agreement or (iii) any labor or union agreement or
plan, in each case that will be binding upon Buyer or the Business after
Closing;

 

(i)     notify Buyer of the hiring of, terminating the employment of, or
transferring of the employment of any Station general manager or any other
Employee with annual aggregate non-equity compensation, including target
bonuses, in excess of One Hundred Thousand Dollars ($100,000), excluding any
terminations for “cause” as reasonably determined by Schurz or any Seller;

 

 
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(j)     not (i) increase the compensation (including base salary and bonus or
incentive compensation or hourly wage) or benefits payable to any Employee
(except for (A) performance and stay bonuses and other compensation payable
solely by Schurz or any Seller in connection with the consummation of the
transactions contemplated by this Agreement or (B) increases to employee
compensation (including base salary and bonus or incentive compensation or
hourly wage) made in the ordinary course of business consistent with past
practice), or (ii) modify any severance policy applicable to any Employee that
would result in any increase in the amount of severance payable to any such
employee (or would expand or change the circumstances in which such severance is
payable);

 

(k)     take commercially reasonable steps to maintain the TV Stations’ MVPD
carriage existing as of the date of this Agreement;

 

(l)     not change any accounting practices, period, policies, procedures or
methods relating to the Business (except for any change required under GAAP or
applicable law or other ministerial changes to policies or procedures);

 

(m)     except for contracts permitted pursuant to Section 4.1(h) hereof, or
agreements and contracts which will be terminable by Buyer, without penalty,
upon notice of sixty (60) days or less, not (i) enter into any agreement or
contract (x) for the use of any digital subchannel of any TV Station or (y) that
would have been a Material Contract were Seller a party or subject thereto on
the date of this Agreement, (ii) amend in any material respect or renew any
Material Contract unless such amendment or renewal (A) is effected in the
ordinary course of business, (B) does not increase the amount of payments to be
made by any Seller during any twelve (12) month period by One Hundred Thousand
Dollars ($100,000) or more and (C) is not to a retransmission consent agreement
covering more than 50,000 subscribers or (iii) terminate or waive any material
right under any Material Contract other than in the ordinary course of business
(excluding the expiration of any Purchased Contract in accordance with its
terms) (it being understood that if any such entry into, or amendment or
termination of any such agreement or contract is permitted pursuant to this
Section 4.1(m) as a result of the references to acts taken in the ordinary
course of business, but such action would otherwise be prohibited by any other
provision of this Section 4.1, then this Section 4.1(m) shall not be interpreted
to permit such action without the prior written consent of Buyer as contemplated
hereby);

 

(n)     not communicate to any Employee any information regarding the
prospective terms and conditions of his or her employment with Buyer which is
not expressly stated in this Agreement;

 

(o)     not take any action, or omit to take any action, or enter into any
agreement or contract which would, or would reasonably be expected to, prevent
or materially interfere with the successful prosecution of the FCC Application
or any Renewal Application or the consummation of the transactions contemplated
by this Agreement, or which is or would be inconsistent with any FCC Application
or Renewal Application or the consummation of the transactions contemplated by
this Agreement;

 

(p)     except for Douglas Road Radio, Inc., Branson Visitor TV, LLC or as
otherwise contemplated by this Agreement, not make any other acquisition
(including by merger, consolidation or acquisition of stock) of the capital
stock or a material portion of the assets of any third party, excluding such
acquisitions the capital stock or assets of which shall not constitute Purchased
Assets or relate to the Business;

 

 
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(q)     take commercially reasonable steps to maintain its qualifications to
hold the FCC Licenses with respect to each Station and not take any action that
will impair such FCC Licenses or such qualifications, or cause the grant of FCC
Consent to be delayed;

 

(r)     promote the Stations and the programming of the Stations (both on-air
and using third party media) in the ordinary course of business, taking into
account inventory availability;

 

(s)     not voluntarily recognize (except as have been recognized as of the date
hereof), or collectively bargain without the participation by and approval of
Buyer with, any labor unions as the collective bargaining representative of any
Employee;

 

(t)     pay accounts payable and collect accounts receivable of the Business in
the ordinary course of business;

 

(u)     not change any accounting practices, period, policies, procedures or
methods relating to the Business (except for any change required under GAAP or
applicable law or other ministerial changes to policies or procedures); and

 

(v)     not agree, commit or resolve to take any actions inconsistent with the
foregoing.

 

4.2     No Solicitation or Negotiation. Except for any divestitures or releases
of Overlap Licenses and related Purchased Assets as contemplated pursuant to
Section 1.8 or Section 11.3, Schurz and Sellers agree that between the date of
this Agreement and the earlier of the Closing and the termination of this
Agreement, for so long as Buyer is not in material breach of this Agreement,
Schurz and Sellers shall not directly or indirectly, (i) solicit, initiate,
encourage or accept any other proposals or offers from any Person (A) relating
to any acquisition or purchase of all or any material portion of the Business or
Sellers or (B) to enter into any merger, consolidation, business combination,
recapitalization, reorganization or other extraordinary business transaction
involving or otherwise relating to the Business or Sellers or (ii) participate
in any material discussions, conversations, negotiations and other
communications regarding, or furnish to any other Person any information with
respect to, or otherwise cooperate in any way with, assist or participate in, or
facilitate or encourage any effort or attempt by any other Person to seek to do
any of the foregoing. Schurz and Sellers shall immediately cease and cause to be
terminated all existing discussions, conversations, negotiations and other
communications with any Persons conducted heretofore with respect to any of the
foregoing. For the avoidance of doubt, nothing herein shall in any way limit
Seller’s actions with respect to the Other Schurz Business.

 

Article 5
JOINT COVENANTS

 

Schurz, Sellers and Buyer hereby covenant and agree as follows:

 

 
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5.1     Confidentiality.

 

(a)     Schurz and Buyer (or an Affiliate of Buyer) are parties to a
nondisclosure agreement (the “NDA”) with respect to Sellers and the Stations. To
the extent not already a direct party thereto, Buyer hereby assumes the NDA and
agrees to be bound by the provisions thereof applicable to its Affiliate which
is a party thereto and such NDA shall remain in effect in accordance with its
terms. Buyer acknowledges and agrees that the NDA remains in full force and
effect and, in addition, covenants and agrees to keep confidential, in
accordance with the provisions of the NDA, information provided to Buyer
pursuant to this Agreement. If this Agreement is, for any reason, terminated
prior to the Closing, the NDA and the provisions of this Section 5.1(a) shall
nonetheless continue in full force and effect. Notwithstanding anything to the
contrary contained in the NDA, Buyer’s obligations under the NDA with respect to
Purchased Assets and the Business shall terminate upon the Closing.

 

(b)     From and after the Closing for a period of two (2) years, Schurz and
Sellers shall: (i) treat and hold as confidential (and not disclose or provide
access to any Person to) all Confidential Information (as defined in the NDA),
(ii) in the event that Schurz or any Seller or any of its representatives
becomes legally compelled to disclose any such information, provide Buyer with
prompt written notice of such requirement so that Buyer may seek a protective
order or other remedy or waive compliance with this Section 5.1(b), (iii) in the
event that such protective order or other remedy is not obtained, or Buyer
waives compliance with this Section 5.1(b), furnish only that portion of such
confidential information which, on the advice of counsel, is legally required to
be provided and, at Buyer’s expense, exercise commercially reasonable efforts to
obtain assurances that confidential treatment will be accorded such information;
provided, however, that this sentence shall not apply to any information that,
at the time of disclosure, is available publicly and was not disclosed in breach
of this Agreement by Schurz or Sellers and shall not in any way limit Schurz or
any Seller’s ability to use any such information in connection with any dispute
between Buyer and Schurz or Sellers.

 

5.2     Announcements. Prior to the Closing, no party shall, without the prior
written consent of the other, issue any press release or make any other public
announcement concerning the transactions contemplated by this Agreement, except
to the extent that such party is so obligated by law or any rule or regulation
of any securities exchange upon which the securities of such party are listed or
traded, in which case such party shall give advance notice to the other, and
except that the parties shall cooperate to make a mutually agreeable
announcement.

 

5.3     Control. Notwithstanding any other provision set forth in this
Agreement, Buyer shall not, directly or indirectly, control, supervise or direct
the business or operations of the Business prior to Closing. Consistent with the
Communications Laws, control, supervision and direction of the operation of the
Business prior to Closing shall remain the responsibility of the respective FCC
Licensees as the holders of the FCC Licenses.

 

5.4     Risk of Loss.

 

(a)     Sellers shall bear the risk of any loss of or damage to any of the
Purchased Assets at all times from the date hereof until the Effective Time.

 

 
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(b)     In furtherance thereof, if after the date hereof and prior to the
Effective Time any material Purchased Asset is lost, damaged or destroyed or
otherwise not in the condition described in Section 2.6 or Section 2.7, as
applicable, then (i) the applicable Seller shall promptly notify Buyer of such
loss, damage or destruction of such material Purchased Asset, which notice shall
specify in reasonable detail the nature of such loss, damage or destruction, the
cause thereof (if known or reasonably ascertainable) and the insurance coverage,
if any, available with respect to such lost, damaged or destroyed material
Purchased Asset, and (ii) such Seller shall repair or replace such material
Purchased Asset, including by submitting one or more claims under any applicable
insurance policy maintained by such Seller with respect to such lost, damaged or
destroyed material Purchased Asset.

 

5.5     Consents and Other Arrangements.

 

(a)     The parties shall, and Schurz shall cause each Seller to, use
commercially reasonable efforts to obtain (i) any third party consents necessary
for the assignment of any Purchased Contract to Buyer (which shall not require
any payment to any such third party), and (ii) estoppel certificates reasonably
acceptable to Buyer from lessors under any Real Property Leases, but no such
third party consents or estoppel certificates are conditions to Closing except
for those with respect to the Material Contracts identified on Schedule 5.5(a)
(the “Required Consents”).

 

(b)     To the extent that any Purchased Contract may not be assigned without
the consent of any third party, and such consent is not obtained prior to
Closing, this Agreement and any assignment executed pursuant to this Agreement
shall not constitute an assignment of such Purchased Contract; provided,
however, with respect to each such Purchased Contract, the applicable Seller and
Buyer shall cooperate to the extent feasible in effecting a lawful and
commercially reasonable arrangement under which Buyer shall receive the benefits
under the Purchased Contract from and after Closing, and to the extent of the
benefits received, Buyer shall pay and perform the applicable Seller’s
obligations arising under the Purchased Contract from and after Closing in
accordance with its terms and indemnify and hold harmless each Seller and its
Affiliates for any costs, expenses or liabilities (including reasonable legal
fees and expenses) incurred by them in connection with the enforcement of such
Purchased Contract as it relates to any period after the Effective Time, and
Buyer and Sellers shall continue to use reasonable efforts for a reasonable
period of time after Closing (not to exceed six (6) months) to obtain consents
to assign such Purchased Contracts.

 

5.6     Employee Relations.

 

(a)     Buyer shall offer employment in accordance with the provisions of this
Section 5.6 to all Employees effective as of the Closing Date (provided such
Employee is employed as of such date) on substantially the same terms as in
effect for each such Employee immediately prior to Closing. Such offers of
employment pursuant to the preceding sentence to the Employees who are not on
short-term or long-term disability shall be made not later than ten (10)
calendar days prior to the Closing Date and must remain outstanding for at least
five (5) business days but in no event later than the Closing Date.
Notwithstanding the foregoing, the offers of employment to any Employee who is
covered by a written employment agreement shall be made in accordance with the
terms and conditions set forth in the applicable employment agreement. Buyer’s
offer of employment to each Employee on short-term or long-term disability who
is not actively employed as of the Closing Date shall be made promptly when such
Employee is eligible to return to active service at any time within the
six-month period following the Closing Date, or if longer, during the period
Employee has a right to re-employment under applicable law. Employees whose
employment with each applicable Seller terminates and who accept or are treated
by Buyer as accepting such offers of employment by and actually commence
employment with Buyer (or its Affiliates) in accordance with this Section 5.6
are referred to collectively herein as the “Transferred Employees.” Unless
otherwise provided under the terms of a written employment contract, each
Transferred Employee shall be employed by Buyer on an at will basis and nothing
shall prohibit Buyer from terminating the employment of any such Transferred
Employees at any time after the Closing Date or changing any of the terms and
conditions of employment related to such Transferred Employees at any time,
except for such changes that are inconsistent with Buyer’s obligations as set
forth in this Section 5.6. Notwithstanding the foregoing, any Transferred
Employee terminated by Buyer shall be eligible for severance in accordance with
the terms of Buyer’s existing severance plans, policies or practices. Service
with the applicable Seller shall be deemed service with Buyer for purposes of
determining the amount of any such severance.

 

 
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(b)     In the case of each Transferred Employee under a written employment
contract, Buyer shall assume each Seller’s obligations under such employment
contract as of the applicable effective date of their employment with Buyer
arising out of or attributable to any period of time after the Effective Date or
constituting an Assumed Current Liability. For the avoidance of doubt, without
limiting the foregoing, Buyer shall not assume any written employment agreement,
nor owe any obligation to, any Employee who is not a Transferred Employee.

 

(c)     If any Employee to whom Buyer has offered employment in accordance with
this Section 5.6 does not consent to employment with Buyer or for any other
reason (other than rescission of such offer by Buyer) does not commence
employment with Buyer and severance benefits are owed to such employee as a
result, such severance benefits shall be paid by the applicable Seller. Nothing
in this Agreement shall preclude Schurz from offering or paying performance and
stay bonuses and other compensation payable solely by Schurz or Sellers in
connection with the consummation of the transactions contemplated by this
Agreement.

 

(d)     Except with respect to Buyer’s 401(k) plan, Buyer shall permit
Transferred Employees (and their spouses and dependents) to participate in its
“employee welfare benefit plans” (including without limitation health insurance
plans) in which similarly situated employees of Buyer are generally eligible to
participate, with coverage effective immediately on the applicable effective
date of their employment with Buyer (and without exclusion from coverage on
account of any pre-existing condition except to the extent such persons were
subject to such pre-existing condition limitations under Seller’s group health
plan); provided, that, for the avoidance of doubt, there shall be no
participation of any Transferred Employee in Buyer’s pension plan.  Transferred
Employees’ service with any Seller (and any predecessors of any Seller to the
extent credited with service by such Seller) will be deemed as service with
Buyer for purposes of eligibility, waiting periods, vesting periods (but not
benefit accrual) based on length of service for purposes of all of Buyer’s
employee benefit plans, including Buyer’s 401(k) plan, and calculation of
vacation and severance benefits, if applicable.  Buyer agrees to give credit
under its group health plan to the Transferred Employees who do not elect COBRA
under the Schurz or applicable Seller’s group health plan for the deductible and
coinsurance amounts incurred by the Transferred Employees during the calendar
year under the Schurz or applicable Seller’s group health plan subject to
receipt by Buyer of reasonable documentation with respect to such amounts. To
the extent reasonably administratively feasible and subject to applicable law,
Buyer also agrees to cover under its health flexible spending account program
those Transferred Employees who have elected to participate in the health
flexible spending account under the cafeteria plan maintained by Schurz or any
applicable Seller, and who do not elect COBRA coverage under the Schurz or
applicable Seller’s health flexible spending account, with the same level of
coverage provided under the Schurz or applicable Seller’s health flexible
spending account and to treat such Transferred Employees as if their
participation had been continuous from the beginning of Schurz or applicable
Seller’s plan year.  Notwithstanding anything to the contrary contained herein,
in the event that the Closing Date occurs prior to December 31, 2015, (i) Buyer
may elect, and Schurz and each Seller shall use commercially reasonable efforts
to assist Buyer’s efforts, to continue in place one or more of Seller’s
“employee welfare benefit plans” (including without limitation health insurance
plans) until December 31, 2015 at no financial cost to Schurz or any Seller
(such costs to be promptly reimbursed by Buyer) with respect to the period after
the Closing, and (ii) Buyer’s obligations with respect to participation in its
plans under this Section 5.6(d) shall commence January 1, 2016.

 

 
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(e)     In the event Schurz’s 401(k) plan incurs a partial plan termination due
to the transactions contemplated by this Agreement or if otherwise required by
such plan, effective as of the applicable effective date of their employment
with Buyer or the payroll period ending immediately thereafter, Schurz or each
Seller shall have contributed to Schurz’s 401(k) plan all matching or other
employer contributions, if any, with respect to the Transferred Employees’
employment service rendered prior to the applicable effective date of their
employment with Buyer (irrespective of any end-of-year service requirements
otherwise applicable to such contributions) and cause the matching and other
employer contribution amounts of all Transferred Employees under the Schurz
401(k) Plan to become fully vested as of such date. Following the Closing Date,
Schurz or each applicable Seller shall take all actions necessary or appropriate
to ensure that under the terms of the Seller 401(k) plan, each Transferred
Employee with an account balance is eligible to receive a distribution as a
result of their separation from employment with the applicable Seller as of the
applicable effective date of their employment with Buyer. From and after the
applicable effective date of their employment with Buyer, Buyer shall permit
each Transferred Employee who participates in Seller’s 401(k) plan to elect to
make direct rollovers of their account balances (including any outstanding loan
balances; provided such Transferred Employee elects to make a direct rollover of
their entire vested account balance) into Buyer’s 401(k) plan as of the
applicable effective date of their employment with Buyer (or as soon as
practicable thereafter when Buyer’s 401(k) plan is capable of accepting such
rollovers), subject to compliance with applicable law and subject to the
reasonable requirements of Buyer’s 401(k) plan. Transferred Employees shall be
eligible to otherwise participate in Buyer’s 401(k) plan as of the first date of
the first full month after Closing, and the Closing Date shall be deemed the
Transferred Employees hire date for the determination of any benefit or
eligibility under Buyer’s 401(k) plan.

 

 
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(f)     Buyer shall provide to each Transferred Employee credit for any unused
paid time off (or sick and vacation) (calculated as of the Closing Date) that
was accrued in calendar year 2015 in an amount equal to the lesser of (i) the
amount calculated pursuant to the applicable Seller’s policies as in effect on
the date of this Agreement excluding any hours credited and not earned by such
date, and (ii) 75% of Buyer’s PTO Cap (as defined below) (giving the Transferred
Employees credit for service with the applicable Seller to the same extent such
service was credited to such Transferred Employee by such Seller for similar
purposes). For purposes hereof, “Buyer’s PTO Cap” means (a) for any Transferred
Employee with less than 8 years of service with any applicable Seller, 120
hours, (b) for any Transferred Employee with between 8 years and 15 years of
service with any applicable Seller, 160 hours and (c) for any Transferred
Employee with more than 15 years of service with any applicable Seller, 200
hours. The total amount of the credits given by Buyer will reduce the Purchase
Price dollar-for-dollar (such credit amounts, the “Employee Credit”). If the
amount calculated pursuant to clause (i) above is greater than the amount
calculated pursuant to clause (ii) above with respect to any Transferred
Employee and if such difference is required to be paid, each applicable Seller
shall be solely responsible as a Retained Obligation for the amount of such
difference with respect to the Transferred Employees, and Buyer shall not be
responsible for any portion of such liability. If the applicable laws of any
State mandate, in the circumstances of the transactions contemplated by this
Agreement, that any Transferred Employee be paid cash in lieu of a credit in
respect of any unused vacation leave, or mandate that any Transferred Employee
be given a choice of cash payment in lieu of a credit in respect of any unused
vacation leave, each applicable Seller shall make a cash payment to any such
Transferred Employee who is so entitled to receive (or elects to receive) a cash
payment in accordance with applicable law.

 

(g)     All workers’ compensation obligations relating to, arising out of or
resulting from any claim by any Employee that results from an injury that
occurred prior to the applicable effective date of their employment with Buyer
shall be retained by each applicable Seller. All workers’ compensation
obligations relating to, arising out of or resulting from any claim by a
Transferred Employee that results from an injury that occurs after the
applicable effective date of their employment with Buyer shall be the exclusive
responsibility of the Buyer. Each Seller further agrees that (i) any Employee,
including any Transferred Employee, who has received an offer of employment from
Buyer but has not yet commenced employment with Buyer and who as of the
applicable effective date of their employment with Buyer is receiving or is
entitled to receive short-term or long-term disability benefits under Schurz’s
short-term or long-term disability benefit plans shall receive or continue to be
paid such benefits after the applicable effective date of their employment with
Buyer in accordance with the terms of the disability plans of Schurz and (ii)
Buyer shall have no obligation to provide any disability or other benefits or
compensation to any such Person unless and until they become a Transferred
Employee.

 

(h)     Each applicable Seller shall retain responsibility and liability for
offering and providing “continuation coverage” to the “qualified beneficiaries”
receiving continuation coverage under Schurz’s group health plan as of the day
prior to Closing as well as to any “qualified beneficiary” for which the
consummation of the transaction constitutes a “qualifying event.”  The terms
“continuation coverage”, “qualified beneficiary” and “qualifying event” shall
each have the meaning set forth in Section 4980B of the Internal Revenue Code
and Section 601 et. seq. of ERISA.

 

 
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(i)     The parties expressly acknowledge and agree that nothing contained in
this Section 5.6 or any other provision of this Agreement, shall (i) be
construed to establish, amend, or modify any benefit or compensation plan,
program, agreement, contract, policy or arrangement of Schurz, any Seller or
Buyer, (ii) limit the ability of Buyer or any of its Affiliates to amend, modify
or terminate any benefit or compensation plan, program, agreement, contract,
policy or arrangement at any time assumed, established, sponsored or maintained
by any of them, (iii) create any third-party beneficiary rights or obligations
in any Person (including any Employee, or Transferred Employee) other than the
parties to this Agreement or create a contract between Buyer, Schurz, any
Seller, or any of their respective Affiliates on the one hand and any employee
of any Seller on the other hand, and no employee of any Seller or Schurz may
rely on this Agreement as the basis for any breach of contract claim against
Buyer or such Seller or Schurz, (iv) be deemed or construed to require Buyer or
any of its Affiliates to continue to employ any particular employee of such
Seller for any period after the Closing, or (v) be deemed or construed to limit
Buyer’s or any of its Affiliates’ right to terminate the employment of any
Transferred Employee during any period on or after the applicable effective date
of their employment with Buyer or confer on any Person any right to employment
or continued employment or to a particular term or condition of employment with
Buyer or any of its Affiliates.

 

5.7     Accounting Services; Access to and Retention of Records.

 

(a)     During the first sixty (60) days after the Closing, Buyer shall provide
to Schurz and Sellers, at no additional cost, the reasonable services of the
Business’s business offices, together with reasonable access to related systems
and records, for the purposes of closing the books of the Business for the
period prior to the Closing, all substantially in accordance with the reasonable
procedures and practices applied by Buyer’s business offices, as amended from
time to time.

 

(b)     For a period of five (5) years from and after the Closing Date, Buyer
shall preserve, in accordance with Buyer’s normal document retention procedures
and practices, all books and records transferred by Schurz and Sellers to Buyer
pursuant to this Agreement and shall provide Schurz and Sellers a reasonable
opportunity to access and obtain copies, at Schurz’s expense, of any such books
and records. In addition to the foregoing, from and after the Closing, Buyer
shall afford to Schurz and Sellers, and its counsel, accountants, and other
authorized agents and representatives, at Schurz’s expense, during normal
business hours, reasonable access to the Station employees, books, records and
other data relating to the Purchased Assets, or the Assumed Obligations in its
possession with respect to the periods prior to the Closing, and the right to
make copies and extracts therefrom, to the extent that such access may be
reasonably required by Schurz or any Seller (i) to facilitate the investigation,
litigation and final disposition of any claims which may have been or may be
made against Schurz or any Seller, (ii) for the preparation of Tax Returns and
audits and (iii) for any other reasonable and proper business purpose, provided
in each case that such access does not unreasonably disrupt the business and
operations of the Business or of Buyer.

 

(c)     Within 30 Business Days of the date hereof, Schurz will provide Buyer a
list of all Tax Returns currently being filed with respect to each Seller,
indicating if those Tax Returns have been audited, and indicating any Tax
Returns that currently are the subject of audit.

 

 
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(d)     In the event that Buyer determines prior to Closing that it shall need
transition services for a period after Closing not to exceed ninety (90) days
for any corporate services currently provided by Schurz to any Station or
Seller, then Buyer and Schurz shall enter into a transition services agreement
at Closing, which shall provide that Schurz shall continue to provide such
services to the Station after Closing in a manner consistent with its current
provision of such services for a period not to exceed ninety (90) days after
Closing and Gray shall reimburse Schurz for the cost of such services as
currently reflected on each Station’s income statement.

 

5.8     Further Action. In furtherance (and not in limitation) of the provisions
set forth in this Agreement, at all times prior to the Closing, Buyer and Schurz
and Sellers shall use their respective commercially reasonable efforts to take
or cause to be taken all action necessary or desirable in order to consummate
the transactions contemplated by this Agreement as promptly as is practicable.

 

5.9     Title Insurance; Survey. Buyer may obtain, at its sole option and
expense, and Sellers shall grant Buyer commercially reasonable access to obtain
(a) commitments for owner’s and lender’s title insurance policies on the Owned
Real Property and commitments for lessee’s and lender’s title insurance policies
for all Leased Real Property (collectively the “Title Commitments”), and (b) an
ALTA survey on each parcel of Real Property (the “Surveys”); provided, however,
that Sellers shall provide Buyer with any existing Title Commitments and Surveys
in their possession and that have been obtained in the last five (5) years. The
Title Commitments will evidence a commitment to issue an ALTA title insurance
policy insuring marketable fee simple (or leasehold, if applicable) title to
each parcel of the Real Property contemplated above for such amount as Buyer
reasonably directs and will contain no material exceptions except for Assumed
Liabilities or Permitted Liens. Schurz and each Seller shall reasonably
cooperate with Buyer in obtaining such Title Commitments and Surveys (including
by providing customary representations and affidavits to Buyer’s title company
to the extent consistent with Schurz’s and the Sellers’ obligations hereunder);
provided that neither Schurz nor any Seller willl be required to incur any cost,
expense or other liability in connection therewith inconsistent with such
Seller’s obligations hereunder. If the Title Commitments or Surveys reveal any
Lien on the title, other than Assumed Liabilities or Permitted Liens, Buyer may
notify Seller in writing of such objectionable matter as soon as Buyer
determines that such matter is not an Assumed Liability or Permitted Lien or
otherwise a customary title exception, and Schurz and each Seller shall to use
commercially reasonable efforts to remove such objectionable matter as required
pursuant to the terms of this Agreement. At or prior to Closing, Schurz and each
Seller shall be obligated to remedy any title defect that is of a monetary
nature and that is not an Assumed Liability or a Permitted Lien.

 

5.10     Environmental Assessments; Phase I Investigations.

 

(a)     Within sixty (60) days from the date of this Agreement, Buyer shall have
the right, at its sole cost and expense, to engage an environmental consulting
firm to conduct a Phase I Environmental Site Assessment and Compliance Review,
as such terms are commonly understood (“Phase I Environmental Site Assessment”)
provided such environmental assessment, investigation or review shall be
conducted only (i) during regular business hours, (ii) with no less than two (2)
business days prior written notice to Schurz, (iii) in a manner which will not
unduly interfere with the operation of the Business or the use of access to or
egress from the Real Property; and (iv) with respect to Leased Real Property, if
the landlord of such Leased Real Property consents to such assessment after the
applicable Seller requests permission. Any damage to the Real Property caused by
Buyer and its consultants in conducting any such environmental assessment,
investigation or review shall be repaired by Buyer at its sole cost and expense.

 

 
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(b)     If the Phase I Environmental Assessment discloses the presence or likely
presence of Hazardous Materials, Buyer, at its sole cost and expense may within
sixty (60) days obtain a Phase II Environmental Assessment (“Phase II
Environmental Assessment”) for each such parcel of Real Property owned or leased
by the applicable Seller with any potential liability with respect to the
Environment provided such Phase II Environmental Assessment shall be conducted
only (i) during regular business hours, (ii) with no less than two (2) business
days prior written notice to Schurz, (iii) in a manner which will not unduly
interfere with the operation of the Business or the use of access to or egress
from the Real Property; and (iv) with respect to Leased Real Property, if the
landlord of such Leased Real Property consents to such assessment after the
applicable Seller requests permission. Any damage to the Real Property caused by
Buyer and its consultants in conducting any Phase II Environmental Assessment
shall be repaired by Buyer at its sole cost and expense. Prior to conducting any
Phase II Environmental Assessment, Buyer shall obtain written approval for the
scope of work from Schurz, which approval may be withheld or conditioned in
Schurz’s sole discretion. The Phase I Environmental Assessment and Phase II
Environmental Assessment are hereinafter referred to as the “Assessments.”

 

(c)     Buyer shall pay all the costs and expenses of any Assessments regardless
of whether this Agreement is terminated or closed. Schurz and Buyer agree that
the results of the Assessments carried out pursuant to this Section 5.10 shall
not be disclosed to any third party, unless such disclosure is required by law
in Schurz’s sole discretion; provided, however, that each party may disclose
such information to such party’s officers, directors, employees, lenders,
advisors, attorneys, Financing Sources and accountants who need to know such
information in connection with the consummation of the transactions contemplated
by this Agreement and who are informed by such party of the confidential nature
of such information.

 

(d)     If any Assessments reveal the presence of Hazardous Materials the
remediation of which is required under any applicable Environmental Laws or if
any Assessments reveal the likely presence of Hazardous Materials that would
require remediation, then Schurz and each Seller agrees, at their cost, to
perform such environmental remediation or provide Buyer with a purchase price
reduction for the estimated cost of such environmental remediation, as
reasonably determined by the environmental consulting firm which performed the
applicable Assessment; provided, however, that if such remediation is estimated
to cost in excess of Three Million Dollars ($3,000,000.00), Schurz, at its
option, may (i) terminate this Agreement by written notice to Buyer without
further liability, or (ii) proceed to close the transaction with Schurz assuming
the responsibility for the environmental remediation only to the extent
necessary to come in compliance with applicable Environmental Laws or providing
Buyer with a purchase price reduction for the estimated cost of such
remediation; provided, further that, if such remediation is estimated to cost in
excess of Seven Million Dollars ($7,000,000.00), either Schurz or Buyer, at its
option, may (x) terminate this Agreement by written notice to the other party
without further liability, or (y) if neither Schurz nor Buyer terminates this
Agreement, proceed to close the transaction with Schurz assuming the
responsibility for the environmental remediation only to the extent necessary to
come in compliance with applicable Environmental Laws or providing Buyer with a
purchase price reduction for the estimated cost of such remediation. If the
Closing is not consummated hereunder, neither party shall have any obligation to
remediate any potential liability with respect to the results of such
Assessments. Any damage to the Real Property caused by Buyer and its consultants
in conducting any Assessment shall be repaired by Buyer at its sole cost and
expense. Any such environmental remediation required of either party under this
Section 5.10(d) shall entail the most cost-effective method necessary to obtain
the risk-based standards specified by applicable Environmental Laws given the
commercial use of the applicable Real Property and taking into account any
engineering or institutional controls feasible at such Real Property. In the
event that Schurz elects to withhold consent for any Phase II Environmental
Assessment, Buyer, at its option, may (1) terminate this Agreement by written
notice to the other party without further liability or (2) proceed to close the
transaction with Schurz indemnifying Buyer any actual Liability directly related
to facts that would have been discovered in such Phase II Environmental
Assessment.

 

 
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5.11     Financing.

 

(a)     Subject to the terms and conditions of this Agreement, Buyer shall use,
and shall cause its Affiliates to use, their reasonable best efforts to take or
cause to be taken (taking into account the anticipated timing of the Marketing
Period) all actions and to do, or cause to be done, all things necessary, proper
or advisable to arrange and obtain, if necessary, any Financing. For purposes of
this Agreement, references to “Financing” shall include any financing
contemplated or completed by Buyer in connection with this Agreement, including
any financing commenced prior to the date of this Agreement and “Financing
Sources” means the actual lenders and arrangers, if any, under any Financing.
Upon the request of Schurz, Buyer shall provide Schurz with updates on the
status of its efforts to obtain any Financing (or any alternative financing).

 

(b)     Prior to the Closing, Schurz and each Seller shall use its reasonable
best efforts to cause its directors, officers, employees, accountants, counsel,
investment bankers and consultants (collectively, “Representatives”) to provide
to Buyer all timely cooperation reasonably requested by Buyer in causing the
conditions and covenants related to any Financing to be satisfied and such
cooperation as is otherwise reasonably requested by Buyer in connection with
obtaining any Financing in accordance with its terms, including cooperation that
consists of:

 

(i)     (A) furnishing Buyer and any Financing Sources as promptly as reasonably
practicable with the Financial Statements, (B) furnishing Buyer and any
Financing Sources prior to the Closing Date the audited combined balance sheet
and combined statements of operations, stockholders equity and cash flows as of
and for the fiscal year ended December 31, 2013 and December 31, 2014, of the
Business (the “Audited Financials”), (C) for each fiscal quarter (other than any
fiscal year end) ending after the date hereof and prior to the Closing Date and
for the comparable quarter of the prior fiscal year, within twenty-five (25)
days after the applicable quarter, unaudited combined balance sheet and combined
statements of operations, stockholders equity and cash flows, each as of the end
of such fiscal quarter and the related unaudited combined statements of income
of the Business, (D) for each fiscal year end ending after the date hereof and
prior to the Closing Date and for the comparable quarter of the prior fiscal
year, within forty-five (45) calendar days after the applicable year end,
audited combined balance sheet of the Schurz and the Sellers for the Stations,
as of the end of such fiscal year and the related audited combined statements of
income, stockholders’ equity and cash flows and any additional audited financial
statements related to the Business or any Station as required by any Legal
Requirement to which Buyer is subject, in each case of (B) – (D) prepared in
accordance with GAAP subject, in the case of interim financial statements, to
year-end audit adjustments and the absence of footnotes, and using the same
accounting principles, policies, methods, practices, procedures,
classifications, categories, estimates, judgments and assumptions as were used
in preparing the Financial Statements, (E) furnishing Buyer and any Financing
Sources with such projected financial statements of the Schurz and the Sellers
and the Stations reasonably requested by Buyer prior to the commencement of the
Marketing Period in connection with any Financing, and (F) assisting Buyer in
the preparation by Buyer of customary rating agency presentations, lender
presentations, customary bank offering memoranda, syndication memoranda, private
offering memoranda, registration statement, prospectus and other marketing
materials or memoranda, including pro forma financial statements, in each case,
in connection with any Financing (the “Offering Materials”) (the information
required to be delivered pursuant to the foregoing clauses (A) and (B) of this
Section 5.11(b)(i) and Section 5.11(b)(iii) below, together with any
replacements or restatements thereof, and supplements thereto, if any such
information would otherwise be unusable under customary practices for such
purposes, the “Required Information”);

 

 
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(ii)     participating in a reasonable number of meetings (including customary
one-on-one meetings with the parties acting as lead arrangers or agents for, and
prospective lenders and purchasers of, any Financing and senior management and
Representatives, with appropriate seniority and expertise, of Schurz),
presentations, road shows, due diligence sessions, drafting sessions and
sessions with rating agencies in connection with any Financing;

 

(iii)     executing and delivering authorization letters (including
representations with respect to material non-public information) to any
Financing Sources authorizing the distribution of information to prospective
lenders or investors, subject to reasonable confidentiality;

 

(iv)     facilitating the execution and delivery on the Closing Date of
representation letter to auditors and other certificates or documents and
back-up therefor and for legal opinions as may be reasonably requested by Buyer
or any Financing Sources or their respective counsel (including consents of
accountants for use of their reports in any materials relating to any Financing)
and otherwise reasonably facilitating the pledging of collateral;

 

(v)     obtaining customary payoff letters, Lien terminations and instruments of
discharge to be delivered at Closing to allow for the transfer of the Purchased
Assets to Buyer free and clear of all Liens, other than Permitted Liens and
Assumed Liabilities;

 

 
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(vi)     furnishing Buyer and any Financing Sources as promptly as practicable
within the periods specified in Section 5.11(b)(i) above, with information
regarding Schurz, each Seller, the Stations, the Purchased Assets and the
Business, including unaudited (and, in the case of year-end, audited) historical
financial statements (including as of and for the twelve-month period ending on
the last day of the most recently completed sixteen-fiscal quarter period ended
at least sixty (60) days before the Closing Date, in each case prepared in
accordance with GAAP subject, in the case of any interim statements, to year-end
audit adjustments and the absence of footnotes, financial data, audit reports
and business and other historical financial information, or that would otherwise
be necessary to receive from the independent accountants that audited the
Financial Statements (and any other accountant to the extent financial
statements audited or reviewed by such accountants are or would be included in
such offering memorandum) customary “comfort” (including “negative assurance”
comfort), together with drafts of customary comfort letters that such
independent accountants are prepared to deliver (and causing such independent
accountants to deliver) upon “pricing” of any bonds being issued in lieu of any
portion of any Financing, with respect to the financial information to be
included in such Offering Materials, and (B) assisting Buyer in the preparation
of customary road show presentations or memoranda;

 

(vii)     otherwise cooperating with the marketing efforts of Buyer and its
Financing Sources for any of any Financing as necessary or reasonably requested
by Buyer or its Financing Sources; and

 

(viii)     provided that (x) nothing in this Section 5.11(b) shall require such
cooperation to the extent it would require Seller to waive or amend any terms of
this Agreement or agree to pay any fees or reimburse any expenses prior to the
Closing for which it has not received prior reimbursement by or on behalf of
Buyer (except to the extent Buyer has provided the indemnities set forth in
Section 5.11(c)), (y) nothing herein shall require such cooperation from Schurz
or any Seller to the extent it would unreasonably interfere with the ongoing
operations of Schurz, any Seller or the Business, and (z) none of Schurz, any
Seller, nor any of their applicable Representatives, shall have any liability or
obligation under any certificate, agreement, arrangement, document or instrument
relating to any Financing.

 

(c)     Buyer shall indemnify and hold harmless Schurz, each Seller, their
Affiliates and their respective Representatives from and against any and all
losses suffered or incurred by them in connection with the arrangement of any
Financing (including any action taken in accordance with this Section 5.11) and
any information utilized in connection therewith, other than to the extent any
of the foregoing arises from the willful misconduct or gross negligence by any
of Schurz, each Seller, their Affiliates and their respective Representatives.
Buyer shall promptly, upon request of Schurz, reimburse Schurz and each Seller
for all third party costs and expenses paid by Schurz or Sellers in connection
with the Audited Financials; provided, that Schurz or Sellers shall provide
Buyer notice prior to incurring any such cost or expense.

 

(d)     Schurz hereby consents to the use of its and its Affiliates’ logos in
connection with any Financing; provided that such logos are used solely in a
manner that is not intended to or reasonably likely to harm or disparage Seller
or any of the Purchased Assets or the reputation or goodwill of Schurz or any of
the Purchased Assets.

 

 
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(e)     Within five (5) Business Days after execution of this Agreement, Schurz
shall use deliver to Buyer monthly trial balances and unaudited monthly combined
balance sheets and statements of operations for the Business for each calendar
month in the period from January 1, 2012 through the date hereof, in each case
prepared in accordance with GAAP subject to year-end audit adjustments and the
absence of footnotes. Schurz shall promptly deliver to Buyer within twenty-five
(25) calendar days of the end of each month from the date hereof until the
Closing, monthly trial balances and unaudited monthly combined balance sheets
and statements of operations for the Business. The respective statements of
operations shall present the monthly and year-to-date periods.

 

(f)     Schurz shall provide the Required Information (as well as any additional
information, statements, reports and materials required by this Section 5.11,
Section 5.12 and Section 5.13) in electronic file formats as reasonably
requested by Buyer.

 

5.12     Audit and SEC Reports. Schurz shall cooperate with Buyer with respect
to any reasonable request in connection with the obligations of Buyer to prepare
and file with the SEC the financial information required to be included by Buyer
in its current and periodic reports filed under the Securities Exchange Act of
1934, as amended, and in registration statements, prospectuses and prospectus
supplements filed under the Securities Act of 1933, as amended, by:

 

(a)     providing to Buyer the relevant financial statements (including the
Audited Financials) and records, documents and information as is available to
Schurz and its Affiliates and making available the employees of Schurz, each
Seller, the Stations and the Purchased Assets who have knowledge thereof, in
each case as may reasonably be requested by Buyer;

 

(b)     retaining Deloitte LLP to audit the relevant financial statements of the
Business and using commercially reasonable efforts to cause Deloitte LLP to
provide, in connection with such audits, its unqualified opinion (and any
consents related thereto that may be reasonably required by Buyer) on such
Audited Financials;

 

(c)     requesting, in conjunction with Buyer, Deloitte LLP to provide such
customary consents, comfort letters and documents that may be reasonably
required or reasonably necessary; and

 

(d)     providing to Buyer’s employees and independent accountants such access,
information and records as they may reasonably request for purposes of the
foregoing; provided that all such cooperation shall be provided by reasonable
access to the personnel of the Stations and the Purchased Assets, and Schurz,
each Seller and the documents, information and books and records of Schurz, each
Seller, the Purchased Assets and their respective Affiliates. The auditors and
accountants of Schurz (including Deloitte LLP), or any of its Affiliates shall
not be obliged to make any work papers (to the extent extant) available to any
Person unless and until such Person has signed a customary agreement relating to
such access to work papers in form and substance reasonably acceptable to Schurz
and such auditors or accountants.

 

 
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(e)     Buyer shall pay all of the costs and expenses incurred to third parties
with respect to the audit and other requirements under this Section 5.12;
provided, that Schurz or Sellers shall provide Buyer notice prior to incuring
any such cost or expense.

 

5.13     Interim Reports. Within twenty-five (25) calendar days after the end of
each calendar month during the period from the date hereof through the Closing,
Schurz shall provide to Buyer, with respect to the Business, the unaudited
combined balance sheet as of the end of such month and the related combined
unaudited statement of operations for such month ended of the Business. Within
twenty-five (25) calendar days after the end of each quarter during the period
from the date hereof through the Closing, Schurz shall provide to Buyer the
unaudited combined balance sheet as of the end of such quarter and the related
combined unaudited statement of operations for such quarter ended of the
Business. The monthly and quarterly reports delivered pursuant to this Section
5.13 shall contain reasonably sufficient detail as historically has been
available on a per-Seller and/or per-Station basis.

 

5.14     Cooperation. Buyer shall exercise commercially reasonable efforts to
cooperate with Schurz and each Seller to release any Liens on the Purchased
Assets (which efforts shall not require any payment by Buyer), other than
Permitted Liens and Assumed Liabilities, if any. At or prior to Closing, Schurz
and each Seller will be responsible for the repayment of indebtedness for money
borrowed from any third-party, Schurz, Seller or any affiliate thereof, if any,
associated with any Liens on the Purchased Assets.

 

5.15     Tax Returns and Payments.

 

(a)     All material Tax Returns, estimates, and reports with respect to the
Purchased Assets or operation of the Business that are required to be filed by
Schurz or any Seller prior to the Closing Date or relating to periods prior to
the Closing Date will be timely filed when due with the appropriate taxing
authorities or extension requests will have been timely filed and granted. All
material Taxes pertaining to each Seller’s ownership of the Purchased Assets or
such Seller’s operation of the Business prior to the Closing Date will be paid
by such Seller when due and payable unless protested in good faith.

 

(b)     All transfer, documentary, sales, use, stamp, registration and other
Taxes and all fees and charges (including any penalties and interest) incurred
in connection with the transactions consummated pursuant to this Agreement,
including with respect to the Purchased Assets conveyed by Seller (collectively,
the “Transfer Taxes”) will be paid one-half (1/2) by Sellers and one-half (1/2)
by Buyer when due; provided, however, that Seller shall be solely responsible
for any and all income taxes incurred due to the consummation of the
transactions contemplated in this Agreement. Any Tax Returns that are required
to be filed in connection with Transfer Taxes will be prepared by Buyer, at its
own expense (except where Seller is legally required to file any such Tax
Return, in which case Seller will prepare and file such Tax Return at its own
expense). Without limiting the foregoing, Buyer and Seller will cooperate in all
reasonable respects in the preparation and filing of all Tax Returns regarding
Transfer Taxes and in seeking or perfecting any available exemption from
Transfer Taxes.

 

5.16     Fulfillment of Conditions. Schurz and Sellers will use commercially
reasonable efforts to satisfy each of the conditions for Closing of Buyer set
forth in Article 7, and Buyer will use its commercially reasonable efforts to
satisfy each of the conditions for Closing of Schurz and Sellers set forth in
Article 6.

 

 
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5.17     Notice; Updated Schedules.

 

(a)     From the date hereof until the Closing, each party will give prompt
written notice (and in any event prior to the Closing) to the other party of any
action, suit, proceeding or investigation that is instituted or threatened in
writing against such notifying party to restrain, prohibit or otherwise
challenge the legality or propriety of any transaction contemplated by this
Agreement. Pending the Closing, Schurz shall give Buyer prompt written notice of
the occurrence of any of the following:

 

(i)     the commencement of any proceeding before the FCC or any other
Governmental Entity involving any of the FCC Licenses or which would reasonably
be expected to have a Material Adverse Effect, other than proceedings or
litigation of general applicability to the television broadcasting industry or
radio broadcasting industry that do not have a disproportionate impact on the
Business or the Stations as compared with other broadcast television stations or
broadcast radio stations generally;

 

(ii)     any material written labor grievance, material controversy, strike or
material dispute affecting the Business or the Stations and the scheduling of
any bargaining discussions with the certified bargaining unit;

 

(iii)     any written notice received by Schurz or the applicable Seller of any
material breach, material default, claimed material breach or material default
or termination of any contract that, if it were in effect on the Closing Date,
would be a Material Contract;

 

(iv)     any material written correspondence received by any Seller from, or
sent by any Seller or to, any MVPD concerning must carry status, retransmission
consent and other matters arising under the Communications Laws, including any
material correspondence related to the status of negotiations with any MVPD; and

 

(v)     the loss of carriage or change in channel position of any TV Station on
any MVPD or the cessation of broadcasting or failure of a Station to broadcast
at least 80% of its authorized power for more than forty-eight (48) consecutive
hours.

 

(b)     Without limitation of, and in compliance with, Section 4.1, Schurz
shall, on or prior to the Closing Date, deliver to Buyer (i) Schedule 1.1(b)
updated as of the Closing Date reflecting changes permitted by or approved in
accordance with Section 4.1 (“Final Schedule 1.1(b)”) and (ii) Schedule 1.1(d)
updated as of the Closing Date reflecting changes permitted by or approved in
accordance with Section 4.1 (“Final Schedule 1.1(d)”). Schurz or Sellers may (x)
at any time before the filing deadline under Section 1.8(a), add any contract,
agreement or lease entered into by a Seller in the ordinary course of business
before the date of this Agreement that was unintentionally omitted from the
original Schedule 1.1(d) and reflected in the applicable Station’s or Stations’
statement of operations and provide any necessary updates to Schedules 1.1(a),
1.8(a), 1.8(c) and 2.4(a), 2.4(b) and 2.4(c), (y) remove any Purchased Contract
that is described in Section 1.1(d) that after the date of this Agreement and
before the Closing has expired or been terminated in compliance with the terms
of this Agreement, including Section 4.1, or (z) update any of the following
Schedules for any event or activity occurring after the date of this Agreement
that is permitted by or approved in accordance with Section 4.1: Schedules 2.3
(but only to reflect consents required under Purchased Contracts added to
Schedule 1.1(d) as provided in this section), 2.7(a), 2.7(b), 2.7(d) (but only
to reflect changes resulting from causes outside the control of Schurz and
without limiting Section 5.4), 2.10, 2.11, 2.11(c), 2.11(d) (but subject to
Section 5.6), 2.12, 2.14 and 2.16. All such contracts, agreements and leases
that are so added to Schedule 1.1(d) in accordance with this paragraph shall,
for all purposes of this Agreement, be deemed to be Purchased Contracts and
included in the Purchased Assets. All Purchased Contracts that are so removed
from Schedule 1.1(d) in accordance with the terms and conditions of this
Agreement, including Section 4.1, shall, for all purposes of this Agreement,
thereafter be deemed to be Excluded Assets and shall cease to be Purchased
Contracts and shall no longer be included in the Purchased Assets.    

 

 
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(c)     Except for updates provided under and permitted by Section 5.17(b) (as
and to the extent provided in this Section 5.17(c)), the delivery of any notice
or updated Schedules pursuant to this Section 5.17 shall not cure any breach of
any representation or warranty requiring disclosure of such matter or any breach
of any covenant or agreement contained in this Agreement or any Ancillary Seller
Agreement or Ancillary Buyer Agreement or otherwise limit or affect the rights
of, or the remedies available to, the parties under this Agreement. For the
avoidance of doubt, (i) the closing conditions set forth in Article 6 and
Article 7 shall be read without giving effect to any written notices or updated
Schedules delivered pursuant to this Section 5.17, and (ii) the delivery of any
notice or updated Schedules pursuant to and in accordance with Section 5.17(b)
shall not limit or affect the rights or obligations of, or the remedies
available to, the parties under this Agreement other than being taken into
account for purposes of the indemnification obligations of Schurz pursuant to
Section 9.2(a)(i).

 

5.18     Affiliate Arrangements. Except as set forth on Schedule 5.18, Schurz
and Sellers shall take, or cause to be taken, such action as may be necessary so
that, as of the Closing, none of the Purchased Assets or Assumed Obligations
shall consist of agreements, obligations or arrangements with Schurz, or any its
Affiliates, on the one hand, and Buyer, on the other hand, and all such
agreements, obligations and arrangements shall be deemed to be, and shall be,
terminated in all respects (notwithstanding anything therein relating to the
survival of any provisions thereof) without any further action by the parties,
excluding in each case the Multi-Station Contracts and any other agreements,
obligations and arrangements between Seller and Buyer expressly set forth or
contemplated herein.

 

5.19     Non-Solicitation. For a period of two (2) years from the Closing Date,
none of Schurz and Sellers, nor any of their officers, directors or employees
shall, directly or indirectly, solicit for employment or hire (whether as an
employee, consultant or otherwise) any Transferred Employee; provided that
Schurz and Sellers and their officers, directors and employees shall not be
precluded from soliciting or hiring, or taking any other action with respect to
any such person who responds to general or public solicitation not targeted at
employees of Buyer or any of its Affiliates (including by a bona fide search
firm), any such person who first initiates contact or any Transferred Employee
who has terminated employment with Buyer or its Affiliates.

 

 
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5.20     Mail and Other Communications. After the Closing, each party shall use
commercially reasonable efforts to promptly remit to the other any checks, cash,
payments, mail or other communications directed to such other party; provided,
that Buyer shall have no obligation to remit any checks, cash, payments, mail or
other communications related to the Purchased Assets or Assumed Obligations, and
Schurz and Sellers shall have no obligation to remit any checks, cash, payments,
mail or other communications related to the Excluded Assets or Retained
Obligations.

 

Article 6
SELLER CLOSING CONDITIONS

 

The obligation of Schurz and Sellers to consummate the Closing hereunder is
subject to satisfaction, at or prior to Closing, of each of the following
conditions (unless waived in writing by Schurz and Sellers):

 

6.1     Representations and Covenants.

 

(a)     All representations and warranties of Buyer contained in this Agreement
shall be true and correct as of the date of this Agreement and at and as of the
Closing ((i) other than any representation or warranty that is expressly made as
of a specified date, which need be true and correct as of such specified date
only, and (ii) except for changes expressly required by this Agreement), except
to the extent that the failure of the representations and warranties of Buyer
contained in this Agreement to be so true and correct at and as of the Closing
(or in respect of any representation or warranty that is expressly made as of a
specified date, as of such date only) has not had and would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect
(as defined below) on the ability of Buyer to perform its obligations under the
Agreement; provided, that for purposes of this Section, all materiality or
similar qualifiers within such representations and warranties shall be
disregarded.

 

(b)     The covenants and agreements in this Agreement that by their terms are
to be complied with and performed by Buyer at or prior to Closing shall have
been complied with or performed by Buyer in all material respects.

 

(c)     Schurz and Sellers shall have received a certificate dated as of the
Closing Date from Buyer executed by an authorized officer of Buyer to the effect
that the conditions set forth in Sections 6.1(a) and 6.1(b) have been satisfied.

 

6.2     Proceedings. Neither Schurz, Sellers nor Buyer shall be subject to any
court or governmental order or injunction, which remains in effect, prohibiting
or making illegal the consummation of the transactions contemplated hereby.

 

6.3     FCC Authorization. The FCC Consent shall have been granted and shall be
in full force and effect.

 

6.4     Hart-Scott-Rodino. The HSR Clearance shall have been obtained.

 

6.5     Deliveries. Buyer shall have complied with each of its obligations set
forth in Section 8.2.

 

 
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Article 7
BUYER CLOSING CONDITIONS

 

The obligation of Buyer to consummate the Closing hereunder is subject to
satisfaction, at or prior to Closing, of each of the following conditions
(unless waived in writing by Buyer):

 

7.1     Representations and Covenants.

 

(a)     All representations and warranties of Schurz and Sellers contained in
this Agreement shall be true and correct as of the date of this Agreement and at
and as of the Closing (other than any representation or warranty that is
expressly made as of a specified date, which need be true and correct as of such
specified date only), except to the extent that the failure of the
representations and warranties of Schurz and Sellers contained in this Agreement
to be so true and correct at and as of the Closing (or in respect of any
representation or warranty that is expressly made as of a specified date, as of
such date only) has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; provided, that for
purposes of this Section, all materiality or similar qualifiers within such
representations and warranties shall be disregarded.

 

(b)     The covenants and agreements in this Agreement that by their terms are
to be complied with and performed by Schurz and Sellers at or prior to Closing
shall have been complied with or performed by Schurz and Seller in all material
respects.

 

(c)     Buyer shall have received a certificate dated as of the Closing Date
from Schurz and Sellers executed by an authorized officer or member of Schurz or
the applicable Seller to the effect that (i) the conditions set forth in
Sections 7.1(a) and 7.1(b) have been satisfied, and (ii) to the Knowledge of the
applicable Seller and Schurz, the conditions set forth in Section 7.7 have been
satisfied.

 

7.2     Proceedings. None of Schurz, Sellers nor Buyer shall be subject to any
court or governmental order or injunction, which remains in effect, prohibiting
or making illegal the consummation of the transactions contemplated hereby.

 

7.3     FCC Authorization. The FCC Consent shall have been granted and shall be
in full force and effect and shall have become a Final Order, except as set
forth in Section 1.8 hereof.

 

7.4     Hart-Scott-Rodino. The HSR Clearance shall have been obtained.

 

7.5     Deliveries. Schurz and Sellers shall have complied with each of the
obligations set forth in Section 8.1.

 

7.6     Consents. The Required Consents (in form and substance reasonably
acceptable to Buyer) shall have been obtained.

 

 
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7.7     No Material Adverse Effect. Since the date of this Agreement, there
shall not have occurred a Material Adverse Effect. For purposes of this
Agreement, “Material Adverse Effect” means any event, state of facts,
circumstance, development, change, effect or occurrence (an “Effect”) that,
individually or in the aggregate with any other Effect, has had or would
reasonably be expected to have a materially adverse effect on the business,
properties, assets, financial condition or results of operations of the
Stations, Purchased Assets or the Business, taken as a whole, or on the ability
of Schurz and Sellers to perform in all material respects its obligations under
the Agreement, other than any Effect arising out of or resulting from (a) any
Effect affecting the economy of the United States generally, including changes
in the United States or foreign credit, debt, capital or financial markets
(including changes in interest or exchange rates) or the economy of any town,
city, region or country in which the Stations conduct business, only to the
extent that the Effect thereof are not disproportionately adverse to or on the
Stations, Purchased Assets, or the Business, (b) general changes or developments
in the broadcast television industry or broadcast radio industry to the extent
that the Effect thereof are not disproportionately adverse to or on the
Stations, Purchased Assets, or the Business, (c) the execution and delivery of
this Agreement, the announcement of this Agreement and the transactions
contemplated hereby or the consummation of the transactions contemplated hereby,
(d) earthquakes, hurricanes, tornadoes, natural disasters or global, national or
regional political conditions, including hostilities, military actions,
political instability, acts of terrorism or war or any escalation or material
worsening of any such hostilities, military actions, political instability, acts
of terrorism or war existing or underway as of the date hereof (other than any
of the foregoing that causes any material damage or destruction to or renders
unusable any material Purchased Assets), only to the extent that the Effect
thereof is not disproportionately adverse to or on the Stations, Purchased
Assets, or the Business, (e) any failure, in and of itself, by Sellers or any
Station to meet any internal or published projections, forecasts or revenue or
earnings predictions for any period ending on or after the date of this
Agreement (it being understood that the underlying facts or occurrences giving
rise to such failure may be deemed to constitute, or be taken into account in
determining whether there has been or will be a Material Adverse Effect), (f)
any Effect that results from any action taken at the express prior written
request of Buyer, with Buyer’s written prior consent or required to be taken
under this Agreement, (g) changes in law, regulations or GAAP or any
interpretation thereof (including proposed legislation or regulatory changes)
only to the extent that the Effect thereof is not disproportionally adverse to
or on the Stations, Purchased Assets, or the Business, or (h) any breach by
Buyer of its obligations under this Agreement.

 

Article 8
CLOSING DELIVERIES

 

8.1     Seller Documents. At Closing, Schurz and/or the applicable Sellers shall
deliver or cause to be delivered to Buyer:

 

(a)     good standing certificates or certificates of existence issued by the
Secretary of State of the applicable Seller’s jurisdiction of formation and each
of the jurisdictions in which such Seller is qualified;

 

(b)     certified copies of all corporate, limited liability company or other
resolutions of Schurz and Sellers necessary to authorize the execution, delivery
and performance of this Agreement, including the consummation of the
transactions contemplated hereby;

 

(c)     the certificate described in Section 7.1(c);

 

 
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(d)     assignments of FCC authorizations assigning the FCC Licenses from the
applicable Seller to Buyer in substantially the forms attached hereto as
Exhibit B, duly executed by such Seller;

 

(e)     assignments and assumptions of contracts assigning the Purchased
Contracts from the applicable Sellers to Buyer in substantially the forms
attached hereto as Exhibit C, duly executed by each applicable Seller;

 

(f)     assignments and assumptions of leases assigning the Real Property Leases
from the applicable Sellers to Buyer in substantially the forms attached hereto
as Exhibit D, duly executed by each applicable Seller;

 

(g)     limited or special (but not general) warranty deeds (as customary in the
applicable jurisdiction and subject to Permitted Liens) conveying the Owned Real
Property from each applicable Seller, to Buyer in forms reasonably acceptable to
such Seller and Buyer, duly executed by such Seller;

 

(h)     intellectual property assignments duly executed by each applicable
Seller assigning the Intangible Property listed on Schedule 1.1(e) to Buyer, in
substantially the forms attached hereto as Exhibit E, duly executed by such
Seller;

 

(i)     domain name transfers duly executed by each applicable Seller assigning
the Business’ domain names included in the Intangible Property, including the
domain names listed on Schedule 1.1(e) (if any), to Buyer;

 

(j)     a general bill of sale conveying the other Purchased Assets from each
applicable Seller to Buyer in substantially the forms attached hereto as
Exhibit F, duly executed by such Seller;

 

(k)     an affidavit of non-foreign status of each applicable Seller that
complies with Section 1445 of the Code in substantially the form attached hereto
as Exhibit G, duly executed by such Seller;

 

(l)     lease agreements, duly executed by the applicable Seller and reflecting
the terms set forth on Exhibit I and otherwise including commercially reasonable
terms mutually acceptable to Seller and Buyer;

 

(m)     the Indemnity Escrow Agreement, duly executed by Seller

 

(n)     (i) with respect to the Liens securing Sellers’ secured credit
facilities, if any, (x) a letter from the appropriate agent thereunder
acknowledging that, upon receipt of the amount required to be prepaid as a
result of the transactions contemplated by this Agreement, the Liens securing
the Purchased Assets will be released; and (y) a form of UCC-3 financing
statement to be filed in each applicable Seller’s jurisdiction of organization
following receipt by such agent of such amount; and (ii) forms of documentation
reasonably acceptable to both parties effectuating the release of all other
Liens (other than Permitted Liens) on the Purchased Assets, if any; and

 

 
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(o)     documents reasonably required by Buyer’s title company or the relevant
County to record the deeds for the Owned Real Property or that such parties may
reasonably request in furtherance of the transactions contemplated hereby,
including any documents reasonably necessary to vest, evidence or confirm title
of the Purchased Assets in Buyer in accordance with the terms of this Agreement.

 

8.2     Buyer Documents. At Closing, Buyer shall deliver or cause to be
delivered to Schurz and Sellers:

 

(a)     the Purchase Price in accordance with Section 1.4 hereof;

 

(b)     a good standing certificate issued by the Secretary of State of Buyer’s
jurisdiction of formation;

 

(c)     certified copies of all corporate or other resolutions of Buyer
necessary to authorize the execution, delivery and performance of this
Agreement, including the consummation of the transactions contemplated hereby;

 

(d)     the certificate described in Section 6.1(c) and a certificate as to the
incumbency and signatures of the officers of Buyer executing this Agreement or
any other agreement contemplated by this Agreement;

 

(e)     assignments of FCC authorizations assigning the FCC Licenses from the
applicable Seller to Buyer in substantially the forms attached hereto as
Exhibit B, duly executed by Buyer;

 

(f)     assignments and assumptions of contracts assuming the Purchased
Contracts in substantially the form attached hereto as Exhibit C, duly executed
by Buyer;

 

(g)     assignments and assumptions of leases assuming the Real Property Leases
in substantially the form attached hereto as Exhibit D, duly executed by Buyer;

 

(h)     lease agreements, duly executed by Buyer and reflecting the terms set
forth on Exhibit I and otherwise including commercially reasonable terms
mutually acceptable to Seller and Buyer;

 

(i)     the Indemnity Escrow Agreement, duly executed by Buyer; and

 

(j)     assignments and assumptions assuming any other Assumed Obligations in a
form reasonably acceptable to Schurz and the Sellers.

 

Article 9
SURVIVAL; INDEMNIFICATION

 

9.1     Survival. The representations, warranties and covenants in this
Agreement and any agreements required to be performed prior to the Closing,
including the Seller Ancillary Agreements and the Buyer Ancillary Agreements, or
in the certificate delivered pursuant to Section 8.1(c), shall survive the
Closing and will remain in full force and effect until the later of (a) the date
that is twelve (12) months after the Closing Date, and (b) March 19, 2017 (the
“Survival Period”), at which time they will terminate (and no claims with
respect to such representations, warranties and covenants (or in such
certificates, to the extent they relate to such representations, warranties and
covenants) shall be made by any Person for indemnification thereafter);
provided, that claims for fraud shall not be subject to such limitations;
provided, further, such covenants and agreements of the parties hereto shall
survive until they are fully performed or, if earlier, until the expiration
thereof set forth in the terms of such covenant and agreement (except that no
claims with respect to such covenants and agreements shall be made by any Person
after the expiration of the Survival Period). Notwithstanding the foregoing, any
claim made by the party seeking to be indemnified within the time periods set
forth in this Section 9.1 shall survive until such claim is finally resolved.

 

 
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9.2     Indemnification.

 

(a)     From and after Closing, Schurz and Sellers, jointly and severally, shall
defend, indemnify and hold harmless Buyer, its Affiliates, and their respective
employees, officers, directors, representatives and agents and all of their
successors and assigns (the “Buyer Indemnified Parties”) from and against any
and all losses, costs, damages, taxes, liabilities, penalties, judgments,
awards, and expenses, including reasonable attorneys’ fees and expenses
(collectively, “Damages”) incurred by any of the Buyer Indemnified Parties,
whether or not resulting from third party claims, to the extent arising out of
or resulting from:

 

(i)     any breach or inaccuracy of any representations or warranties made by
Schurz or Sellers under this Agreement or in the certificate delivered pursuant
to Section 8.1(c) (in each case, without giving effect to any materiality or
Material Adverse Effect qualifiers, except in the case of the representations
and warranties set forth in the first sentence of Section 2.16);

 

(ii)     any default or breach by Schurz or Sellers of any covenant or agreement
made in this Agreement;

 

(iii)     the Excluded Assets and the Retained Obligations; and/or

 

(iv)     the ownership, business or operation of the Business before the
Effective Time (other than in respect of the Assumed Obligations).

 

(b)     Notwithstanding the foregoing or anything else herein to the contrary,
after Closing, (i) Schurz and Sellers shall have no liability to any Buyer
Indemnified Parties under Section 9.2(a)(i) unless the aggregate amount of the
Damages exceed Two Million Two Hundred Thousand Dollars ($2,200,000) (the
“Threshold”), after which Schurz and Sellers will be liable for all Damages
under Section 9.2(a)(i) without giving effect to the Threshold, (ii) the maximum
aggregate liability of Schurz and Sellers (x) under Section 9.2(i) shall be an
amount equal to Twenty-Two Million Dollars ($22,000,000) and (y) under Sections
9.2(a)(ii), (a)(iii) and (a)(iv) and collectively for all Damages under Section
9.2(a) shall be an amount equal to the Purchase Price, it being understood that,
subject to the proviso contained in this Section 9.2(b), the Buyer Indemnified
Parties shall not be entitled to collect any Damages under Section 9.2(a) from
Schurz or Sellers or their Affiliates in excess of the applicable Cap and none
of Schurz, Sellers or its Affiliates shall have any liability for any Damages
under Section 9.2(a) in excess of the applicable Cap, and (iii) Schurz and
Sellers shall have no liability to Buyer under Section 9.2(a)(i) for any claims
arising out of or relating to any circumstances occurring after the expiration
of the applicable Survival Period; provided, however, that (x) claims for fraud
shall not be subject to the Threshold or the Cap, and (y) claims for any Damages
incurred by the Buyer Indemnified Parties arising out of or resulting from the
breach or inaccuracy of any of the representations and warranties made by Seller
in Section 2.1 (Organization), Section 2.2 (Authority), Section 2.4 (FCC
Licenses), Section 2.5 (Taxes), the second sentence of Section 2.6(a) (Tangible
Personal Property), the second sentence of Section 2.7(a) (Real Property), the
first sentence of Section 2.17 (Purchased Assets) and Section 2.18 (No Brokers)
shall not be subject to the Threshold.

 

 
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(c)     Upon the expiration of the Survival Period, the Cap shall be reduced to
the amount of any claims by the Buyer Indemnified Parties for indemnification
under this Agreement outstanding and unpaid as of such date, if any, pursuant to
the terms and subject to the conditions set forth in this Agreement.

 

(d)     From and after Closing, Buyer shall defend, indemnify and hold harmless
Schurz, Sellers, their Affiliates, and their respective employees, officers,
directors, representatives and agents and all of their successors and assigns
(the “Seller Indemnified Parties”) from and against any and all Damages incurred
by any of the Seller Indemnified Parties, whether or not resulting from third
party claims, arising out of or resulting from:

 

(i)     any breach or inaccuracy of any representations and warranties made by
Buyer under this Agreement or in the certificate delivered pursuant to Section
8.2(d) (in each case, without giving effect to any materiality or Material
Adverse Effect qualifiers);

 

(ii)     any default or breach by Buyer of any covenant or agreement made in
this Agreement;

 

(iii)     the Assumed Obligations; and

 

(iv)     the ownership, business or operation of the Business after the
Effective Time (other than in respect of the Retained Obligations).

 

9.3     Procedures with Respect to Third Party Claims.

 

(a)     The indemnified party shall give prompt written notice to the
indemnifying party of any demand, suit, claim or assertion of liability by third
parties that is subject to indemnification hereunder (a “Claim”), but a failure
to give such notice or delaying such notice shall not affect the indemnified
party’s rights or the indemnifying party’s obligations except to the extent the
indemnifying party’s ability to remedy, contest, defend or settle with respect
to such Claim is thereby materially prejudiced and provided that, where
applicable, such notice is given within the time period described in
Section 9.1.

 

 
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(b)     The indemnifying party shall have the right to undertake the defense or
opposition to such Claim (at the indemnifying party’s expense) with counsel
selected by it so long as (i) the indemnifying party gives written notice to the
indemnified party within thirty (30) days after it has been notified of the
Claim that it will defend the indemnified party against such Claim and the
indemnifying party acknowledges its obligation to indemnify the indemnified
party for Damages related to such Claim (subject to the Threshold and Cap, to
the extent applicable), (ii) the Claim involves only money damages and does not
seek an injunction or other equitable relief against the indemnified party that
would reasonably be expected to materially restrict or materially and adversely
affect the future activity or conduct of the Business by Buyer, (iii) the
indemnified party has not been advised in writing by outside counsel that a
material legal conflict exists between the indemnified party and the
indemnifying party in connection with conducting the defense of the Claim, (iv)
the Claim does not relate to or otherwise arise in connection with any criminal
or regulatory enforcement action that would reasonably be expected to materially
restrict or materially and adversely affect the future activity or conduct of
the Business by Buyer, and (v) the indemnifying party conducts the defense of
the Claim in good faith. In the event that the indemnifying party does not,
within thirty (30) days of its receipt of notice of a Claim pursuant to clause
(i) above of this Section 9.3(b), elect to undertake such defense or opposition,
the indemnified party may undertake the defense, opposition, compromise or
settlement of such Claim with counsel selected by it at the indemnifying party’s
cost; provided, that the indemnifying party shall not be required to pay for
more than one such counsel for all indemnitees in connection with such Claim. If
the indemnified party defends any Claim pursuant to the preceding sentence or
pursuant to clauses (ii) – (v) above of this Section 9.3(b), then the
indemnifying party shall promptly reimburse the applicable indemnified party for
the reasonable costs and expenses of defending such Claim upon submission of
periodic bills.

 

(c)     Anything herein to the contrary notwithstanding:

 

(i)     the indemnified party shall have the right, at its own cost and expense,
to participate in the defense, opposition, compromise or settlement of the
Claim;

 

(ii)     the indemnifying party shall not, without the indemnified party’s
written consent (which consent shall not be unreasonably withheld, conditioned
or delayed), settle or compromise any Claim or consent to entry of any judgment
which settlement, compromise or judgment (x) by its terms does not obligate the
indemnifying party (or its Affiliates) to pay the full amount of any Damages in
connection with such Claim, (y) requires any payment or other action by, or
limitation on, any indemnified party or (z) does not include the giving by the
claimant to the indemnified party of a full release from all liability in
respect of such Claim;

 

(iii)     if the indemnified party defends any Claim pursuant to Section 9.3(b),
the indemnified party shall not, without the indemnifying party’s written
consent (which consent shall not be unreasonably withheld, conditioned or
delayed), settle or compromise any Claim or consent to entry of any judgment
with respect to such Claim; and

 

(iv)     the indemnified party and the indemnifying party shall cooperate in the
conduct of the defense of any Claim, including by providing reasonable access to
each other’s relevant business records and other documents and employees, and
shall use commercially reasonable efforts to avoid production of confidential
information (consistent with applicable Legal Requirement), and to cause all
communications among employees, counsel and others representing any party to a
Claim to be made so as to preserve any applicable attorney-client or
work-product privileges, if practicable.

 

 
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9.4     No Special Damages; Mitigation. No indemnifying party shall be liable to
any indemnified party for special, indirect, consequential, punitive or
exemplary damages of any kind, in each case unless and to the extent such
damages are actually paid to a third party (who is not an Affiliate of the
indemnified party). Each party agrees to exercise its commercially reasonable
efforts to mitigate any Damages in respect of any pending or threatened Claim.

 

9.5     Offset. The amount of any Damages indemnifiable by any indemnifying
party to any indemnified party pursuant to this Article 9 will be reduced to
reflect any amount actually recovered or recoverable by the indemnified party
under the indemnified party’s insurance policies or otherwise with respect to
such Damages (less any increase in premiums related thereto).

 

9.6     Treatment of Indemnity Benefits. All payments made by Schurz or Sellers
or Buyer, as the case may be, to or for the benefit of the other pursuant to any
indemnification obligations under this Agreement shall be treated, unless
otherwise required by law, as adjustments to the Purchase Price for Tax purposes
and such agreed treatment shall govern for purposes of this Agreement.

 

9.7     Exclusive Remedies. Buyer, Schurz and Sellers acknowledge and agree
that, if the Closing occurs, the indemnification provisions of this Article 9
shall be the sole and exclusive remedies of Buyer, Schurz and Sellers for any
breach of the representations or warranties or nonperformance of or default
under any covenants or agreements of Buyer, Schurz or Sellers contained in this
Agreement or any Buyer Ancillary Agreements or Seller Ancillary Agreements, and
neither party shall have any liability to the other party under any
circumstances for special, indirect, consequential, punitive or exemplary
damages, or lost profits, or any damage calculated on the basis of a multiple of
earnings, profits or similar measure, unless and to the extent such damages are
actually paid to a third party (who is not an Affiliate of the third party);
provided, however, that nothing contained in this Agreement shall relieve or
limit the liability of any party from any liability or Damages arising out of or
resulting from such party’s fraud in connection with the transactions
contemplated in this Agreement, the Seller Ancillary Agreements or the Buyer
Ancillary Agreements. In furtherance of the foregoing, each of Buyer, Schurz and
each Seller hereby waive, to the fullest extent permitted under applicable law,
except in the case of fraud, any and all rights, claims and causes of action it
may have against the others arising under or based upon any federal, state or
local law, rule or regulation (including any such rights, claims or causes of
action arising under or based upon common law, tort or otherwise and relating to
this Agreement, any Seller Ancillary Document or any Buyer Ancillary Document
(including any certificate delivered pursuant to Section 6.1(c) or Section
7.1(c)) or the transactions contemplated hereby) other than any rights, claims
or actions arising under this Article 9.

 

9.8     Effect of Investigation. The right to indemnification or any other
remedy based on representations, warranties, covenants and agreements in this
Agreement, any Seller Ancillary Agreement or Buyer Ancillary Agreement shall not
be affected by any investigation conducted at any time, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing, with respect to the
accuracy or inaccuracy of or compliance with, any such representation, warranty,
covenant or agreement.

 

 
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Article 10
TERMINATION AND REMEDIES

 

10.1     Termination. This Agreement may be terminated prior to Closing as
follows:

 

(a)     by mutual written agreement of Buyer and Schurz;

 

(b)     by written notice of Buyer to Schurz and Sellers if (i) Buyer is not in
material breach of its representations, warranties or covenants under this
Agreement, (ii) Schurz or Sellers breach their representations or warranties, or
defaults in the performance of their covenants, contained in this Agreement and
(iii) all such breaches and defaults by Schurz or Sellers that are not cured
within the Cure Period (as defined in Section 10.2) would prevent any of the
conditions to the obligations of Buyer set forth in Article 7 from being
satisfied;

 

(c)     by written notice of Schurz to Buyer if (i) Schurz and Sellers are not
in material breach of their representations, warranties or covenants under this
Agreement, (ii) Buyer breaches its representations or warranties, or defaults in
the performance of its covenants, contained in this Agreement and (iii) all such
Buyer breaches and defaults that are not cured within the Cure Period would
prevent the conditions to the obligations of Schurz and Sellers set forth in
Article 6 from being satisfied; provided, however, that no Cure Period shall
apply to Buyer’s obligations to pay the Purchase Price at Closing;

 

(d)     by written notice of Buyer to Schurz, or by Schurz to Buyer, if the
Closing does not occur by the date that is twelve (12) months after the date of
this Agreement (such date, the “Outside Date”), unless the Closing has not
occurred by such date as a result of a material breach of this Agreement by the
party providing such notice of termination; and provided that if, as of the
Outside Date, the parties are required to consummate the Closing pursuant to
Section 1.7(a) but for the operation of the second proviso in Section 1.7(a)
(i.e., the Marketing Period has not ended), the Outside Date shall automatically
be extended to one day after the new date on which the parties are required to
consummate the Closing pursuant to such proviso;

 

(e)     pursuant to Section 5.10(d); or

 

(f)     by Buyer or Schurz in the event that (i) there shall be any law that
makes consummation of the transactions contemplated by this Agreement illegal or
(ii) any Governmental Entity shall have issued an order restraining or enjoining
the transactions contemplated by this Agreement, and such order shall have
become final and non-appealable.

 

10.2     Cure Period. Prior to the Closing, each party shall give the other
party prompt written notice upon learning of any breach or default by the other
party under this Agreement, and such notice shall specify the breach. The term
“Cure Period” as used herein means a period commencing on the date Buyer or
Schurz receives from the other written notice of breach or default hereunder and
continuing until the earlier of (i) thirty (30) calendar days thereafter or
(ii) five (5) Business Days after the day otherwise scheduled for Closing;
provided, however, that, in the case of clause (i) above, if the breach or
default is non-monetary and cannot reasonably be cured within such period but
can be cured before the date that is five (5) Business Days after the scheduled
Closing Date, and if diligent efforts to cure promptly commence, then the Cure
Period shall continue as long as such diligent efforts to cure continue, but not
beyond the date that is five (5) Business Days after the scheduled Closing Date.

 

 
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10.3     Termination and Survival.

 

(a)     Subject to the other provisions of this Section 10.3, in the event of a
termination of this Agreement by either Schurz or Buyer as provided in Section
10.1, this Agreement shall forthwith become null and void, and there shall be no
liability or obligation on the part of Schurz, Sellers, Buyer or their
respective directors, officers, employees, incorporators, members, partners,
equity holders, Affiliates, agents, attorneys or representatives; provided that
the provisions of this Section 10.3 and Section 5.1(a) (Confidentiality),
Section 11.1 (Expenses), Section 11.6 (Entire Agreement), Section 11.9
(Governing Law; Consent to Jurisdiction; Waiver of Jury Trial), Section 11.10
(Neutral Construction), Section 11.12 (Counterparts; Delivery by
Facsimile/Email), Section 11.13 (Interpretation) and Section 11.16
(Non-Recourse) shall remain in full force and effect and survive any termination
of this Agreement; and provided, however, that, if a termination shall have
resulted from a breach or fraud of a party (including Buyer’s failure to
consummate the Closing when required), the termination of this Agreement shall
not relieve such breaching party of any liability for such breach or fraud under
this Agreement that occurred prior to the date of termination.

 

(b)     If Buyer or Schurz terminates this Agreement pursuant to Sections
10.1(d) or 10.1(f) and, at the time of such termination (i) any of the
conditions set forth in Section 6.3, Section 6.4, Section 7.3 and Section 7.4
shall not have been satisfied and (ii) all other material conditions to the
Closing set forth in Article 6 and Article 7 shall have been or are reasonably
expected to be satisfied (other than (x) any of the conditions set forth in
Section 6.3, Section 6.4, Section 7.3 and Section 7.4, and (y) conditions that
by their nature are to be satisfied at the Closing but which conditions would in
the case of this clause (y) be satisfied or reasonably expected to be satisfied
if the Closing occurred on the date of termination), then Buyer shall within
three (3) Business Days following the delivery of the termination notice from
Schurz (or, in the case of a Buyer termination, within three (3) Business Days
following the delivery of the notice from Schurz invoking this Section 10.3(b),
which notice shall also certify that all material conditions set forth in
Article 6 and Article 7 have been satisfied or are reasonably expected to be
satisfied (other than (x) any of the conditions set forth in Section 6.3,
Section 6.4, Section 7.3 and Section 7.4, and (y) conditions that by their
nature are to be satisfied or reasonably expected to be satisfied at the Closing
but which conditions would in the case of this clause (y) be satisfied if the
Closing occurred on the date of termination)), pay or cause to be paid to Schurz
the sum of Ten Million Dollars ($10,000,000) by wire transfer of immediately
available funds (the “Business Disruption Termination Fee”).

 

(c)     Each of the parties acknowledges that the agreements contained in this
Section 10.3 are an integral part of the transactions contemplated by this
Agreement and that the Business Disruption Termination Fee is not a penalty, but
rather is a reasonable amount that will compensate Schurz and Sellers in the
circumstances in which the Business Disruption Termination Fee is payable for
the efforts and resources expended and opportunities foregone while negotiating
this Agreement and in reliance on this Agreement and on the expectation of the
consummation of the Closing, which amount would otherwise be impossible to
calculate with precision.

 

 
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(d)     Notwithstanding anything to the contrary in this Agreement, if this
Agreement is terminated in accordance with its terms and such termination gives
rise to the obligation of Buyer to pay the Business Disruption Termination Fee
and Buyer shall have paid the Business Disruption Termination Fee pursuant to
this Section 10.3, the sole and exclusive remedy of the Schurz, Sellers and
their respective officers, directors and Affiliates (collectively, the “Seller
Related Parties”) against Buyer and its Subsidiaries and their respective
officers, directors and Affiliates and any Financing Source, together with each
Financing Source's Affiliates, and their respective officers, directors,
employees, equity holders, partners, controlling parties, advisors, agents and
representatives, and their respective successors and assigns (collectively, the
“Financing Related Parties”) for any business disruption, demands, claims,
actions or causes of action, assessments, losses, damages, liabilities,
diminution in value, costs and expenses, including interest, penalties and
reasonable attorneys' fees and expenses, shall be the Business Disruption
Termination Fee, and following such payment no Person shall have any rights or
claims against Schurz, Sellers, Buyer and its Subsidiaries and their respective
officers, directors and Affiliates and any Financing Related Party under this
Agreement, whether at law or equity, in contract, in tort or otherwise, and none
of Schurz, Sellers, Buyer and its Subsidiaries and their respective officers,
directors and Affiliates and any Financing Related Party shall have any further
liability or obligation resulting from, arising out of, or incurred in
connection with, this Agreement, except as otherwise provided in Section
10.3(a). For purposes of clarity, the parties acknowledge and agree that this
Section 10.3(d) shall not prohibit Schurz or Sellers from seeking any other
remedy available under this Agreement, at law, or in equity in the event of the
termination of this Agreement under Section 10.1(c).

 

10.4     Specific Performance. Subject to Section 1.8, the parties hereto
acknowledge and agree that the parties hereto would be irreparably damaged if
any of the provisions of this Agreement are not performed in accordance with
their specific terms or are otherwise breached and that any non-performance or
breach of this Agreement by any party hereto could not be adequately compensated
by monetary damages alone and that the parties hereto would not have any
adequate remedy at law. Accordingly, in addition to any other right or remedy to
which any party hereto may be entitled, at law or in equity (including monetary
damages), subject to Section 1.8, prior to termination of this Agreement, such
party shall be entitled to enforce any provision of this Agreement by a decree
of specific performance and to temporary, preliminary and permanent injunctive
relief, subject to obtaining any required Governmental Consents, to prevent
breaches or threatened breaches of any of the provisions of this Agreement
without posting any bond or other undertaking. Without limiting the generality
of the foregoing, prior to any termination of this Agreement pursuant to Section
10.1, the parties hereto agree that, the party seeking specific performance
shall be entitled to enforce specifically (a) a party’s obligations under
Section 1.8; and (b) a party’s obligation to consummate the transactions
contemplated by this Agreement (including the obligation to consummate the
Closing and to pay the Purchase Price, if applicable), if the conditions set
forth in Article 6 or Article 7, as applicable, have been satisfied (other than
those conditions that by their nature are to be satisfied at the Closing) or
waived.

 

 
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Article 11
MISCELLANEOUS

 

11.1     Expenses. Except as may be otherwise specified herein, each party shall
be solely responsible for all costs and expenses incurred by it in connection
with the negotiation, preparation and performance of and compliance with the
terms of this Agreement, the Seller Ancillary Agreements and the Buyer Ancillary
Agreements. If more than one HSR Act filing is necessary because a party has
more than one ultimate Buyer entity, then such party shall pay the HSR Act
filing fees for any additional filings. Buyer shall pay one-half (1/2) and
Schurz shall pay one-half (1/2) of all governmental Taxes, fees and charges
applicable to the transfer of the Purchased Assets under this Agreement
(including sales, use and real property transfer taxes and the costs of
recording or filing all applicable conveyance instruments) (collectively,
“Transfer Taxes”); provided, however, that Schurz and Sellers shall be solely
responsible for any and all income taxes incurred by them due to the
consummation of the transactions contemplated in this Agreement. The parties
will cooperate in the preparation, execution and filing of all Tax Returns
regarding Transfer Taxes and in seeking or perfecting any available exemption
from Transfer Taxes. Each party is responsible for any commission, brokerage
fee, advisory fee or other similar payment that arises as a result of any
agreement or action of it or any Person acting on its behalf in connection with
this Agreement or the transactions contemplated hereby. In the event of any
litigation regarding or arising from this Agreement prior to the Closing, the
prevailing party as determined by a court of competent jurisdiction in a final
non-appealable judgment shall be entitled to recover its reasonable costs and
expenses (including attorneys’ fees and expenses) incurred therein or in the
enforcement or collection of any judgment or award rendered therein.

 

11.2     Further Assurances. After Closing, each party shall from time to time,
at the request of and without further cost or expense to the other, execute and
deliver such other instruments of conveyance and assumption and take such other
actions as may reasonably be requested in order to more effectively consummate
the transactions contemplated hereby.

 

11.3     Assignment. Neither party may assign this Agreement without the prior
written consent of the other party hereto, provided, however, that (a) Buyer may
by written notice to, but without consent of, Schurz and Sellers, assign its
rights and obligations hereunder to an Affiliate of Buyer, provided that any
such assignment does not materially delay the processing of the FCC Application,
the grant of the FCC Consent, the HSR Clearance or the Closing; provided,
further that Buyer shall remain liable for all of its obligations hereunder
(including those assigned to such assignee); (b) Buyer may collaterally assign
any or all of its rights and obligations hereunder to any provider of debt
financing to it to the extent permitted by the Communications Laws; and (c)
Buyer may assign its right to purchase the Designated Station Assets with
respect to the Stations set forth on Schedule 11.3 (and delegate its duty to
assume the Assumed Obligations corresponding thereto) to a third party that is
eligible pursuant to the Communications Laws to be the assignee of the
Designated Station Assets and the licensee of the FCC Licenses included in the
Designated Station Assets (a “Qualified Assignee”) by written notice to Schurz
and the applicable Seller. With respect to any assignment permitted under
subsections (a) or (c) of this Section 11.3, (i) any such Qualified Assignee
shall deliver to Schurz and the applicable Seller a written instrument of
assumption with respect to this Agreement or the Designated Station Assets, as
applicable, in which such assignee (A) shall make to Schurz and the applicable
Seller the representations and warranties contained in Article 3 of this
Agreement with respect to such assignee and (B) shall covenant to Schurz and the
applicable Seller to observe, satisfy, discharge and perform the covenants of
Buyer set forth in this Agreement except to the extent that any such covenant
relates solely to Station Assets other than Designated Stations Assets and the
corresponding Assumed Obligations, (ii) Buyer shall remain liable for all of its
obligations hereunder (including those assigned to such assignee) and (iii) the
consummation of the purchase of such Designated Stations Assets shall occur
simultaneously herewith, with Schurz or the applicable Seller accepting payment
of the purchase price for the Designated Station Assets directly from the
Qualified Assignee (the “QA Payment”), and the Purchase Price hereunder shall be
reduced by the amount of such QA Payment, if any. “Designated Station Assets”
means such Purchased Assets with respect to such Station as Buyer and the
Qualified Assignee may mutually agree. The terms of this Agreement shall bind
and inure to the benefit of the parties’ respective successors and any permitted
assigns, and no assignment shall relieve any party of any obligation or
liability under this Agreement.

 

 
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11.4     Notices. Any notice pursuant to this Agreement shall be in writing and
shall be deemed delivered on the date of personal delivery or confirmed
facsimile transmission or confirmed delivery by a nationally recognized
overnight courier service, and shall be addressed as follows (or to such other
address as any party may request by written notice):

 

if to Schurz or Sellers:

Schurz Communications, Inc.

1301 E. Douglas Rd.

Mishawaka, IN 46545

Attention: Todd F. Schurz, CEO

(574) 247-7237

Facsimile No.: (574) 247-7238

with a copy (which shall not constitute notice) to:

 

Barnes & Thornburg LLP

600 1st Source Bank Center

100 North Michigan

South Bend, IN 46601

Attention: John C. Smarrella

(574) 233-1171

Facsimile No.: (574) 237-1125

 

Jack N. Goodman

Law Offices of Jack N Goodman

1200 New Hampshire Avenue, NW, Suite 600

Washington, DC 20036

(202) 776-2045

Facsimile No.: (844) 331-4644

 

 

if to Buyer:

Gray Television Group, Inc.

4370 Peachtree Road, NE

Atlanta, GA 30319-3023

Attn: General Counsel

Facsimile No.: (404) 261-9607

  

 
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with a copy (which shall not constitute notice) to:

Cooley LLP

1299 Pennsylvania Avenue, NW Suite 700

Washington, DC 20004

Attn: John R. Feore

Telephone: (202) 776-2045

Fax: (202) 842-7899

 

11.5     Amendments; Waiver. No amendment or waiver of compliance with any
provision hereof or consent pursuant to this Agreement shall be effective unless
evidenced by an instrument in writing signed, in the case of an amendment, by
Buyer, Schurz and Sellers, or in the case of a waiver or consent, by the party
against whom the waiver or consent is to be effective. No waiver by any party of
any breach or violation of, default under or inaccuracy in any representation,
warranty or covenant hereunder, whether intentional or not, will be deemed to
extend to any prior or subsequent breach or violation of, default under, or
inaccuracy in, any such representation, warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent such
occurrence. No delay or omission on the part of any party in exercising any
right, power or remedy under this Agreement will operate as a waiver thereof.
Notwithstanding anything to the contrary in the foregoing, no FS Provision may
be amended or waived without the consent of the Financing Sources.

 

11.6     Entire Agreement. The Schedules and Exhibits hereto are hereby
incorporated into this Agreement. This Agreement, together with any other
agreement executed on the date hereof in connection herewith, constitutes the
entire agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings
with respect to the subject matter hereof, except the NDA, which shall remain in
full force and effect, in accordance with its terms, subject to Section 5.1. No
party makes any representation or warranty with respect to the transactions
contemplated by this Agreement except as expressly set forth in this Agreement,
any certificate delivered pursuant hereto or any of the Buyer Ancillary
Agreements or Seller Ancillary Agreements.

 

11.7     Severability. If any Governmental Entity holds any provision in this
Agreement invalid, illegal or unenforceable as applied to any party or to any
circumstance under any applicable law, then, so long as no party is deprived of
the benefits of this Agreement in any material respect, (a) such provision, as
applied to such party or such circumstance, is hereby deemed modified to give
effect to the original written intent of the parties to the greatest extent
consistent with being valid and enforceable under applicable law, (b) the
application of such provision to any other party or to any other circumstance
will not be affected or impaired thereby and (c) the validity, legality and
enforceability of the remaining provisions of this Agreement will remain in full
force and effect.

 

 
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11.8     Third Party Beneficiaries; No Recourse to Financing Sources.

 

(a)     Except for the Buyer Indemnified Parties and the Seller Indemnified
Parties, nothing in this Agreement expressed or implied is intended or shall be
construed to give any rights to any Person other than the parties hereto and
their successors and permitted assigns. Notwithstanding the foregoing, the
Financing Sources shall be an express third-party beneficiary with respect to
Section 11.8 and Section 11.9 and any limitations on Buyer’s liabilities
pursuant to Article 9 (the “FS Provisions”).

 

(b)     Subject to the rights of Buyer and/or its Affiliates under the terms of
any agreement with any Financing Source relating to the Financing, none of the
parties hereto, nor any of their respective Affiliates, solely in their
respective capacities as parties to this Agreement, shall have any rights or
claims (whether at law or equity, in contract, in tort or otherwise) against any
Financing Source or any Affiliate thereof, solely in their respective capacities
as lenders or arrangers in connection with the Financing, and the Financing
Sources, solely in their respective capacities as lenders or arrangers, shall
not have any rights or claims against any party hereto or any related Person
thereof, in connection with this Agreement or the Financing, whether at law or
equity, in contract, in tort or otherwise, except for any rights or claims of
the Financing Sources with respect to the Buyer pursuant to the terms of the
Financing.

 

11.9     Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.

 

(a)     This Agreement and the negotiation, execution, performance or
nonperformance, interpretation, termination, construction and all matters based
upon, arising out of or related to this Agreement, whether arising in law or in
equity (collectively, the “Covered Matters”), and all claims or causes of action
(whether in contract or tort) that may be based upon, arise out of or relate to
the Covered Matters, except for documents, agreements and instruments that
specify otherwise, shall be governed by the laws of the State of Delaware
without giving effect to the choice of law provisions thereof. All recording
matters relating to the conveyance of each parcel of Owned Real Property will be
conducted in conformity with the applicable requirements of local law governing
the location of such parcel.

 

(b)     All Actions arising out of or relating to this Agreement shall be heard
and determined exclusively in the Chancery Court of the State of Delaware, or of
the United States of America for the State of Delaware, and the parties hereto
hereby irrevocably submit to the exclusive jurisdiction of such courts (and, in
the case of appeals, appropriate appellate courts therefrom) in any such Action
and irrevocably waive the defense of an inconvenient forum to the maintenance of
any such action or proceeding. The consents to jurisdiction set forth in this
Section 11.9 shall not constitute general consents to service of process in the
State of Delaware and shall have no effect for any purpose except as provided in
this Section 11.9 and shall not be deemed to confer rights on any third party.
The parties hereto agree that a final judgment in any such Action shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by applicable law.

 

(c)     BUYER, SCHURZ AND SELLERS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF
BUYER, SCHURZ OR SELLERS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.

 

 
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11.10     Neutral Construction. Buyer, Schurz and Sellers agree that this
Agreement was negotiated at arms-length and that the final terms hereof are the
product of the parties’ negotiations. This Agreement shall be deemed to have
been jointly and equally drafted by Buyer, Schurz and Sellers, and the
provisions hereof should not be construed against a party on the grounds that
the party drafted or was more responsible for drafting the provision.

 

11.11     Cooperation. After Closing, each party shall cooperate with the other
if reasonably necessary in the investigation, defense or prosecution of any
third party Action which is pending or threatened against either party or its
Affiliates with respect to the Business or the Purchased Assets, whether or not
any party has notified the other of a claim for indemnity with respect to such
matter.

 

11.12     Counterparts; Delivery by Facsimile/Email. This Agreement may be
executed in separate counterparts, each of which will be deemed an original and
all of which together will constitute one and the same agreement. This
Agreement, the agreements referred to herein, and each other agreement or
instrument entered into in connection herewith or therewith or contemplated
hereby or thereby, and any amendments hereto or thereto, to the extent signed
and delivered by facsimile transmission or electronic mail in pdf form, shall be
treated in all manner and respects as an original agreement or instrument and
shall be considered to have the same binding legal effect as if it were the
original signed version thereof delivered in person. At the request of any party
hereto or to any such agreement or instrument, each other party hereto or
thereto shall re-execute original forms thereof and deliver them to all other
parties. No party hereto or to any such agreement or instrument shall raise the
use of a facsimile machine or email to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine or email as a defense to the formation or
enforceability of a contract and each such party forever waives any such
defense.

 

11.13     Interpretation. Article titles and section headings herein are for
convenience of reference only and are not intended to affect the meaning or
interpretation of this Agreement. The Schedules hereto shall be construed with
and as an integral part of this Agreement to the same extent as if set forth
verbatim herein. Where the context so requires or permits, the use of the
singular form includes the plural, and the use of the plural form includes the
singular. Without limiting the generality of the foregoing, it is hereby
acknowledged and agreed that: (a) the term “Station” or “Stations” shall include
and mean, as applicable, any and each applicable Station or Stations
individually, interchangeably and collectively, not just the Stations
collectively or as a group, (b) with respect to any and all covenants and
agreements of a Seller in this Agreement, any such covenant or agreement shall
be deemed to include such Seller’s obligation to cause its subsidiaries to
perform such covenants and agreements, as applicable, and (c) with respect to
any and all covenants and agreements of Schurz in this Agreement, any such
covenant or agreement shall be deemed to include such Schurz’s obligation to
cause each Seller and any of its subsidiaries to perform such covenants and
agreements, as applicable. When used in this Agreement, unless the context
clearly requires otherwise, (i) words such as “herein,” “hereof,” “hereto,”
“hereunder,” and “hereafter” shall refer to this Agreement as a whole, (ii) the
term “including” shall not be limiting, (iii) the word “or” shall not be
exclusive, (iv) the term “ordinary course” or “ordinary course of business”
shall refer to the ordinary manner in which a Seller operates its portion of the
Business consistent with reasonable past practices, (v) the terms “Dollars”,
“dollars” and “$” each mean lawful money of the United States of America,
(vi) the term “Buyer Principal Liaisons” shall mean Kevin Latek and Jim Ryan or
any of their respective successors, (vii) the phrase “Business, taken as a
whole” shall be deemed to refer to, collectively, all Stations (including the
Business of each such Station), (viii) the term “Person” shall mean any natural
person or any corporation, limited liability company, partnership, joint
venture, trust or other legal entity or Governmental Entity, and (ix) the term
“Affiliate” shall mean, with respect to a specified Person, any Person or member
of a group of Persons acting together that, directly or indirectly, through one
or more intermediaries, controls, or is controlled by or is under common control
with, the specified Person. As used in this definition, the term “control”
(including the terms “controlling,” “controlled by” and “under common control
with”) means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

 

 
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11.14     Certain Definitions. As used in this Agreement, the following terms
have the respective meanings set forth below.

 

“Accounts Receivable” means outstanding accounts receivable of the Business as
of the Effective Time.

 

“Action” has the meaning set forth in Section 2.14.

 

“Affiliate” has the meaning set forth in Section 11.13.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Assessments” has the meaning set forth in Section 5.10(b).

 

“Assumed Current Liabilities” has the meaning set forth in Section 1.3(a).

 

“Assumed Obligations” has the meaning set forth in Section 1.3(a).

 

“Audited Financials” has the meaning set forth in Section 5.11(b)(i).

 

“Base Purchase Price” has the meaning set forth in Section 1.4.

 

“Benefit Plans” has the meaning set forth in Section 2.11(c).

 

“Business” has the meaning set forth in the Recitals.

 

“Business Day” shall mean any day that is not a Saturday, Sunday or other day on
which banks are required or authorized by law to be closed (or are actually
closed) in the City of New York.

 

“Business Disruption Termination Fee” has the meaning set forth in Section
10.3(b).

 

 
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“Business Joint Venture Interests” has the meaning set forth in Section 1.1(h).

 

“Buyer” has the meaning set forth in the Preamble.

 

“Buyer Ancillary Agreements” has the meaning set forth in Section 3.1.

 

“Buyer Indemnified Parties” has the meaning set forth in Section 9.2(a).

 

“Buyer’s PTO Cap” has the meaning set forth in Section 5.6(f).

 

“Cap” has the meaning set forth in Section 9.2(b).

 

“claim” for purposes of Section 3.7 only, has the meaning set forth in Section
3.7.

 

“Claim” has the meaning set forth in Section 9.3(a).

 

“Closing” has the meaning set forth in Section 1.7.

 

“Closing Date” has the meaning set forth in Section 1.7(b).

 

“Code” has the meaning set forth in Section 1.6.

 

“Communications Laws” has the meaning set forth in Section 1.8(e).

 

“Covered Matters” has the meaning set forth in Section 11.9(a).

 

“Cure Period” has the meaning set forth in Section 10.2.

 

“Damages” has the meaning set forth in Section 9.2(a).

 

“Designated Station Assets” has the meaning set forth in Section 11.3.

 

“Disclosure Schedules” means the Disclosure Schedules delivered by Schurz and
Sellers and by Buyer concurrently with the execution and delivery of this
Agreement.

 

“DMA” has the meaning set forth in Section 2.4(b).

 

“DOJ” has the meaning set forth in Section 1.8(d).

 

“Effect” has the meaning set forth in Section 7.7.

 

“Effective Time” has the meaning set forth in Section 1.7(b).

 

“Employee Credit” has the meaning set forth in Section 5.6(f).

 

“Employees” means those persons employed by any Seller who worked primarily for
the Business immediately prior to the Closing.

 

“Environment” has the meaning set forth in Section 2.9.

 

 
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“Environmental Law” has the meaning set forth in Section 2.9.

 

“ERISA” has the meaning set forth in Section 2.11(c).

 

“ERISA Affiliate” has the meaning set forth in Section 2.11(c).

 

“Escrow Agent” has the meaning set forth in Section 1.5.

 

“Escrow Amount” means $22,000,000.00.

 

“Excluded Assets” has the meaning set forth in Section 1.2.

 

“FCC” has the meaning set forth in the Recitals.

 

“FCC Application” has the meaning set forth in Section 1.8(a).

 

“FCC Consent” has the meaning set forth in Section 1.8(a).

 

“FCC Licensees” has the meaning set forth in the Recitals.

 

“FCC Licenses” has the meaning set forth in Section 1.1(a).

 

“Final Order” has the meaning set forth in Section 1.7(a).

 

“Final Schedule 1.1(b)” has the meaning set forth in Section 5.17(b).

 

“Final Schedule 1.1(d)” has the meaning set forth in Section 5.17(b).

 

“Financial Statements” has the meaning set forth in Section 2.15.

 

“Financing” has the meaning set forth in Section 5.11(a).

 

“Financing Related Parties” has the meaning set forth in Section 10.3(d).

 

“Financing Sources” has the meaning set forth in Section 5.11(a).

 

“Fines” has the meaning set forth in Section 1.3(a)

 

“Excluded Contracts” has the meaning set forth in Section 1.21.2(c).

 

“FS Provisions” has the meaning set forth in Section 11.8(a).

 

“FTC” has the meaning set forth in Section 1.8(d).

 

“GAAP” means, with respect to any date of determination, United States generally
accepted accounting principles as in effect on the date of this Agreement,
consistently applied.

 

“Governmental Consents” has the meaning set forth in Section 1.8(f).

 

 
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“Governmental Entity” means any (i) federal, state, municipal or other
government, (ii) governmental or quasi-governmental entity of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal) or (iii) body exercising or entitled to exercise
any administrative, executive, judicial, legislative, police, regulatory, or
taxing authority or power of any nature, including any arbitral tribunal.

 

“Hazardous Material” has the meaning set forth in Section 2.9.

 

“HSR Act” has the meaning set forth in Section 1.8(d).

 

“HSR Clearance” has the meaning set forth in Section 1.8(d).

 

“Indemnity Escrow” has the meaning set forth in Section 1.5.

 

“Indemnity Escrow Agreement” has the meaning set forth in Section 1.5.

 

“Improvements” has the meaning set forth in Section2.7(d).

 

“Intangible Property” has the meaning set forth in Section 1.1(e).

 

“Intellectual Property” has the meaning set forth in Section 1.1(e).

 

“Knowledge” (1) with respect to Schurz and Sellers, has the meaning set forth in
Section 2.4(a), and (2) with respect to Buyer, has the meaning set forth in
Section 3.4.

 

“Leased Real Property” has the meaning set forth in Section 2.7(b).

 

“Legal Requirement” means, as in effect on any date of this Agreement,
applicable common law or any applicable statute, permit, ordinance, code or
other law, rule, regulation or order enacted, adopted, promulgated or applied by
any Governmental Entity.

 

“Liens” has the meaning set forth in Section 2.6(a).

 

“Marketing Period” shall mean the first period of twenty (20) consecutive
Business Days after the date of this Agreement throughout and at the end of
which (a) Buyer shall have received the Required Information, and the Required
Information shall be complete in all material respects and (b) FCC Consent shall
have been granted and shall be in full force and effect, and, unless waived by
Buyer in writing, shall have become a Final Order, and HSR Clearance shall have
been obtained; provided that if Schurz or Sellers in good faith reasonably
believes they have delivered such Required Information and that the Marketing
Period has begun, it may deliver to Buyer a written notice to that effect
(stating when it or they believe such delivery has been completed), in which
case the Marketing Period will be deemed to have begun on the date of such
notice unless Buyer in good faith reasonably believes the Marketing Period has
not begun and, within three (3) Business Days after the delivery of such notice
by Schurz or Sellers, delivers a written notice to Schurz and Sellers to that
effect, stating with specificity why it believes the Marketing Period has not
begun; provided further, that (i) (A) the period from (and including) November
24, 2015 to (and including) December 1, 2015 shall be disregarded for purposes
of calculating the consecutive calendar day period required above, (B) if such
period shall not have ended on or prior to December 20, 2015, such period shall
not commence before January 6, 2016, (C) the period from (and including) May 28,
2016 to (and including) May 31, 2016 shall be disregarded for purposes of
calculating the consecutive calendar day period required above, and (D) the
period from (and including) July 3, 2016 to (and including) July 6, 2016 shall
be disregarded for purposes of calculating the consecutive calendar day period
required above, and (ii) the Marketing Period shall not be deemed to have
commenced if, after the date of this Agreement and prior to the completion of
the Marketing Period, (A) Deloitte, LLP shall have withdrawn its audit opinion
with respect to any of the audited year-end financial statements in the Required
Information, in which case the Marketing Period shall not be deemed to commence
unless and until, at the earliest, a new unqualified audit opinion is issued
with respect to such year-end financial statements by Deloitte, LLP or another
independent accounting firm reasonably acceptable to Buyer, or (B) Sellers shall
have restated, or Sellers shall have determined to restate any historical
financial statements included in the Required Information, in which case the
Marketing Period shall not be deemed to commence unless and until such
restatement has been completed and the applicable Required Information has been
amended or Sellers conclude that no such restatement shall be required in
accordance with GAAP.

 

 
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“Material Adverse Effect” has the meaning set forth in Section 7.7.

 

“Material Contracts” has the meaning set forth in Section 2.82.8(a).

 

“Material Multi-Station Contract” has the meaning set forth in Section 1.9.

 

“Multi-Station Contract” has the meaning set forth in Section 1.9.

 

“Multi-Station Contract Obligations” has the meaning set forth in Section 1.9.

 

“Multi-Station Contract Rights” has the meaning set forth in Section 1.9.

 

“MVPDs” has the meaning set forth in Section 2.4(b).

 

“NDA” has the meaning set forth in Section 5.1.

 

“Net Working Capital” means, as of any date of determination, the current assets
of the Sellers on a consolidated basis, excluding cash and cash equivalents,
less the current liabilities of the Sellers on a consolidated basis, in each
case, calculated in accordance with GAAP and, to the extent consistent with
GAAP, using the same accounting principles, practices, procedures, policies and
methods used and applied by Sellers in the preparation of their Financial
Statements.

 

“Offering Materials” has the meaning set forth in Section 5.11(b).

 

“Other Schurz Business” has the meaning set forth in Section 1.1(e).

 

 
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“Outside Date” has the meaning set forth in Section 10.1(d).

 

“Overlap Licenses” has the meaning set forth in Section 1.8(g).

 

“Owned Real Property” has the meaning set forth in Section 1.1(c).

 

“Permits” has the meaning set forth in Section 2.13.

 

“Permitted Liens” has the meaning set forth in Section 2.6(a).

 

“Phase I Environmental Site Assessment” has the meaning set forth in Section
5.10(a).

 

“Phase II Environmental Assessment” has the meaning set forth in Section
5.10(b).

 

“Primary FCC Licenses” has the meaning set forth in Section 1.8(c).

 

“Provided Information” has the meaning set forth in Section 3.8.

 

“Purchase Price” has the meaning set forth in Section 1.4.

 

“Purchased Assets” has the meaning set forth in Section 1.1.

 

“Purchased Contracts” has the meaning set forth in Section 1.1(d).

 

“Purchased Documents” has the meaning set forth in Section 1.1(f).

 

“QA Payment” has the meaning set forth in Section 11.3.

 

“Qualified Assignee” has the meaning set forth in Section 11.3.

 

“Real Property” has the meaning set forth in Section 1.1(c).

 

“Real Property Leases” has the meaning set forth in Section 1.1(c).

 

“Renewal Application” has the meaning set forth in Section 1.8(c).

 

“Representatives” has the meaning set forth in Section 5.11(b).

 

“Required Consents” has the meaning set forth in Section 5.5(a).

 

“Required Information” has the meaning set forth in Section 5.11(b)(i).

 

“Retained Obligations” has the meaning set forth in Section 1.3(a).

 

“Rushmore Acquisition Cost” means the amount paid by Rushmore Media Company,
Inc. for the South Dakota Development Site and site acquisition costs necessary
between the date hereof and the Closing Date; provided, that such amount shall
not exceed $1,000,000.

 

 
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“Schurz” has the meaning set forth in the Preamble.

 

“Seller(s)” has the meaning set forth in the Preamble.

 

“Seller Ancillary Agreements” has the meaning set forth in Section 2.1.

 

“Seller Indemnified Parties” has the meaning set forth in Section 9.2(d).

 

“Seller Marks” has the meaning set forth in Section 1.2(d).

 

“Seller Related Parties” has the meaning set forth in Section 10.3(d).

 

“South Dakota Development Site” means that certain parcel of real estate
commonly known as the Ranch Amusement Park property located at 6303 S. Highway
16, Rapid City, South Dakota.

 

“Station(s)” has the meaning set forth in the Recitals.

 

“Station employee” means each employee of any Seller involved in the operation
of the Stations.

 

“Surveys” has the meaning set forth in Section 5.9.

 

“Survival Period” has the meaning set forth in Section 9.1.

 

“Tangible Personal Property” has the meaning set forth in Section 1.1(b).

 

“Tax Returns” has the meaning set forth in Section 2.5(a).

 

“Taxes” has the meaning set forth in Section 2.5(a).

 

“Threshold” has the meaning set forth in Section 9.2(b).

 

“Title Commitments” has the meaning set forth in Section 5.9.

 

“Tolling Agreement” has the meaning set forth in Section 1.8(c).

 

“Transfer Taxes” has the meaning set forth in Section 5.15(b).

 

“Unclaimed Escrow Amount” means, as of any date of determination, an amount
equal to the amount then remaining in the Indemnity Escrow, minus the good faith
estimate of any outstanding and unpaid indemnification claim made pursuant to
Section 9.2(a) (whether disputed or undisputed).

 

“Websites” means any and all Internet websites owned, operated or licensed by or
for the benefit of Sellers in connection with the Business, including any
content contained thereon or related thereto (but excluding any content that is
not produced by or on behalf of Schurz or a Seller).

 

 
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“WSBT Building” means that certain building and related property and
Improvements located at 1301 E. Douglas Road, Mishawaka, IN 46545, which
currently houses Schurz’s corporate office, WSBT-TV and WSBT Radio Group.

 

11.15     Bulk Transfer. Buyer, Schurz and Sellers hereby waive compliance with
the bulk transfer provisions of the Uniform Commercial Code and all similar
laws.

 

11.16     Non-Recourse. No past, present or future director, officer, employee,
incorporator, member, partner, equity holder, Affiliate, agent, attorney or
representative of Schurz, Sellers or any of their Affiliates (other than each
Seller) shall have any liability for any obligations or liabilities of such
Seller under this Agreement or for any claim (whether in contract or tort, in
law or in equity, or based upon any theory that seeks to “pierce the corporate
veil” or impose liability of an entity against its owners or Affiliates or
otherwise), liability or any other obligation arising under, based on, in
respect of, in connection with, or by reason of, this Agreement or the
transactions contemplated hereby, including its negotiation and/or execution.

 

 

[SIGNATURE PAGE FOLLOWS]

 

 
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement as
of the date set forth above.

 

 

 

SCHURZ COMMUNICATIONS, INC.

 

       

 

 

 

 

 

 

/s/ Todd F. Schurz

 

 

 

Name:     Todd F. Schurz

 

 

 

Title:      President and CEO

 

                            NORTHERN LIGHTS MEDIA, INC.                      
/s/Andy MacLeod        Name:     Andy MacLeod       Title:      President & GM  
                            WAGT TELEVISION, INC.                      
/s/Michael Bell Dethlefsen       Name:     Michael Bell Dethlefsen       Title:
     General Manager                               WSBT, INC.                  
    /s/Sally J. Brown       Name:     Sally J. Brown       Title:
     President/General Manager                               SUNFLOWER
BROADCASTING, INC.                       /s/Joan M. Barrett       Name:     Joan
M. Barrett       Title:      President  

  

[Signature Page to Schurz Asset Purchase Agreement]

 

 
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    KY3, INC.                       /s/Angela Moyle       Name:     Angela Moyle
      Title: Vice President                               RUSHMORE MEDIA
COMPANY, INC.                       /s/Cecelia M. Green        
Name:     Cecelia M. Green       Title:      President                          
    WDBJ TELEVISION, Inc.                       /s/Jeffrey Marks       
Name:     Jeffrey Marks       Title:      President                            
  Douglas Road Radio, Inc.                       /s/James Kehoe      
Name:     James Kehoe       Title:      President                              
WASK, INC.                       /s/Brian Green        Name:     Brian Green    
  Title: President & General Manager                               GRAY
TELEVISION GROUP, INC.                       /s/Hilton H. Howell, Jr.      
Name:     Hilton H. Howell, Jr.       Title:      President  

 

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