EX-10.4



 






Exhibit 10.4




AMENDED AND RENEWED OPTION AGREEMENT




          THIS AMENDED AND RENEWED OPTION AGREEMENT is entered into as of the 29th day of
August, 2000, by and between The Hearst Corporation (“Hearst”), a Delaware corporation, and
Hearst-Argyle Television, Inc. (the “Company”), a Delaware corporation.




          WHEREAS, Hearst and the Company (formerly known as Argyle Television, Inc.) entered into an
Option Agreement dated as of August 29, 1997 (the “1997 Option Agreement”), pursuant to which
Hearst granted the Company certain options and other rights with respect to the Option Stations and
WPBF-TV (as such terms are defined below); and




          WHEREAS, Hearst and the Company mutually desire to amend and renew the 1997 Option Agreement
as set forth hereinafter;




          NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree to amend and renew the 1997 Option Agreement as follows:




          1. Hearst, or a subsidiary, is the licensee of Television Stations WMOR-TV, Lakeland, Florida
(“WMOR-TV”) and WPBF-TV, Tequesta, Florida (“WPBF-TV”) and Hearst brokers time and provides
programming and other services to Television Station KCWE-TV, Kansas City, Missouri (“KCWE-TV”)
pursuant to a Program Service and Time Brokerage Agreement more particularly described hereinafter.
WMOR-TV and KCWE-TV are sometimes collectively referred to herein as the “Option Stations”.
During the period commencing September 1, 2000 and terminating August 31, 2003 (the “Option
Period”), the Company shall have the following options, exercisable upon written notice to Hearst:




               (a) The option to purchase WMOR-TV. The form of the transaction shall be either the purchase
of those assets (including the applicable Federal Communications Commission (“FCC”) licenses) then
used solely by WMOR-TV to conduct its operations and business or the purchase of the capital stock
of WMOR-TV, Inc., as determined by Hearst. The purchase price shall be the Fair Market Value (as
defined below) of such assets or capital stock, as the case may be, as of the option exercise date.



               (b) With respect to KCWE-TV, (i) if Hearst has not exercised its option to purchase KCWE-TV,
the option to have Hearst assign to the Company the Option Agreement dated December 7, 1995 (the
“1995 Option Agreement”) by and between Hearst and CamEl, L.L.C. and David E. and Sonia G. Salzman,
and subject to applicable contractual consents, if any, the Programming Services and Time Brokerage
Agreement dated August 24, 1995 between Hearst and T.V. 32, Inc. (the “TBA”), and (ii) if Hearst
has exercised its option to purchase KCWE-TV, the option to purchase those assets (including the
applicable FCC licenses) then used solely to conduct the operations and business of KCWE-TV. The
purchase price shall be the Fair Market Value (as defined below) of either the 1995 Option
Agreement and the TBA in the case of (i) above, or the assets of KCWE-TV in the case of (ii) above,
as of the option exercise date, provided that, in no event shall the purchase price be less than
the aggregate amount of the Accumulated Costs, as such term is defined in the 1995 Option
Agreement, plus interest thereon at the annual average rate of prime as declared from time to time
by Chase Bank (or its successor) plus one percent (1%) compounded semi-annually.



If the Company exercises an option, Hearst and the Company agree they shall each use their
respective commercially reasonable efforts to cause the closing of the sale to the Company pursuant
to this Section 1 to occur as soon as practicable after the Company has delivered a notice to
Hearst of the Company’s intent to exercise its option and all other necessary and reasonable
requirements for the sale are met, including but not limited to obtaining all necessary
governmental and third-party approvals required for the consummation of such transaction. The
closing of such sale to the Company shall take place at the offices of Hearst specified in Section
5(b) below, or such other place as the parties may agree upon. At such closing, (i) Hearst shall,
or it shall cause the applicable seller to, deliver to the Company either the stock




 









 








certificates, in the case of a sale of stock, or all necessary conveyancing documents, in the case
of a sale of assets, and such other conveyancing instruments and other documents as shall be
reasonably requested by the Company and (ii) the Company shall deliver to Hearst or the applicable
seller, as the case may be, the purchase price for the stock or assets to be sold by either wire
transfer of immediately available funds to a bank account designated to such party, or, at Hearst’s
election, stock of the Company (with the number of shares to be determined by market value at the
time of closing).




          2. As used in this Agreement the term “Fair Market Value” shall mean the cash price that a
willing buyer would pay a willing seller, both in reasonable possession of the relevant facts with
neither acting under compulsion to buy or sell or under time constraints, in an arm’s-length
transaction in an asset sale (or a stock sale, as the case may be with respect to WMOR-TV) for the
going concern of the applicable station, which for these purposes should be deemed to be as it
would exist if operated by the buyer in a like manner as then being operated by Hearst (and, in the
case of KCWE-TV, without the existence of the TBA). Any determination of Fair Market Value
hereunder shall be agreed to by the parties, provided that if any party so elects, such
determination shall be conclusively established by independent appraisal in the manner contemplated
below by giving the other party written notice of appraisal.




          3. The exercise of the Company’s options hereunder shall be by action of the Company’s
directors elected by the holders of the Company’s Series A Common Stock. Additionally, the Company
may withdraw the exercise of such option within twenty (20) days following the receipt of an
appraisal, as described hereinafter. The appraiser shall be independent and selected by mutual
agreement of the Company and Hearst. If the Company and Hearst cannot within ten (10) days agree
as to the selection of the appraiser, then each of them shall select an appraiser and the two
appraisers shall select a third appraiser within an additional ten (10) days. The appraisal shall
take into account both the structure of the proposed transaction and the tax basis of the property
(assets or stock) to be acquired by the Company. If three appraisers are used, the appraised value
shall be the average of the three appraisals. If the option is exercised and not withdrawn, the
fees for the appraisal shall be paid as follows: (i) if a single appraiser is used, equally by the
Company and Hearst; and (ii) if three appraisers are used, each party pays the fees of its
appraiser and the Company and Hearst shall pay the fees of the third appraiser equally. If the
option is exercised and withdrawn, then the Company shall pay the fees of all appraisers and all
options and rights of first refusal with respect to such station shall terminate.




          4. Notwithstanding any provision of this Agreement to the contrary, Hearst shall have the
right to sell, assign or otherwise transfer any or all of the Option Stations (or their assets or
stock) or WPBF-TV to a wholly-owned subsidiary of Hearst or to a third party unrelated to Hearst
prior to the commencement of or during the Option Period, subject in the case of a sale, assignment
or transfer to a third party unrelated to Hearst to a right of first refusal to the Company as
follows:





          If Hearst receives a bona fide written offer (the “Bona Fide Offer”)
submitted by a third person to acquire the assets or stock of any of the Option
Stations or WPBF-TV, Hearst will first offer to sell same to the Company at such
price and on such terms and conditions as are contained or included in the written
offer so submitted by such third person. The Company, by action of its
independent directors, will have thirty (30) days from the date of its receipt of
the aforesaid offer from Hearst (which offer must be accompanied by a copy of the
written offer from the third person) to commit to purchase such stock or assets,
at the same price and on the same terms and conditions. Should the Company fail
to commit to purchase under this section within the aforesaid thirty (30) day
period, Hearst may sell the applicable Option Station or WPBF-TV to the offering
third person in accordance with the third person’s written offer. Should the
Company fail to commit to so purchase the Option Station, then its right of first
refusal hereunder with respect hereto shall terminate and, in the case of either
of the Option Stations, the Company’s option with respect thereto pursuant to
Section 1 shall also terminate. In the event that the Company exercises its right
of first refusal, then the purchase price, and all other terms and conditions for
the purchase by the Company shall be the same as those set forth in the Bona Fide
Offer, except that, if any portion of the proposed purchase price in the Bona Fide
Offer includes non-cash consideration, then the Company shall pay cash



 









 






consideration equal to the fair market value of such non-cash consideration, as
determined in accordance with the appraisal procedures as defined in Section 3
above.



          5, Notices. All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally or by facsimile
transmission or mailed (first class postage prepaid) to the parties at the following addresses or
facsimile numbers:




	 	 	 	 	 	 	 	 	 
	 

	 	(a)
	 	If to Hearst:
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	The Hearst Corporation	 	 
	 	 	 	 	959 Eighth Avenue	 	 
	 	 	 	 	New York, New York 10019	 	 
	 	 	 	 	Attn.: Victor F. Ganzi	 	 
	

	 	 	 	Telephone:
	 	(212) 649-2103	 	 
	

	 	 	 	Fax:
	 	(212) 246-3630	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	(b)	 	If to the Company:	 	 
	 
	 	 	 	 	Hearst-Argyle Television, Inc.	 	 
	 	 	 	 	888 Seventh Avenue	 	 
	 	 	 	 	New York, New York 10106	 	 
	 	 	 	 	Attn: David J. Barrett	 	 
	

	 	 	 	Telephone:
	 	(212) 887-6811	 	 
	

	 	 	 	Fax:
	 	(212) 887-6835	 	 






Any party from time to time may change its address, facsimile number or other information for the
purpose of notices to the Company party by giving notice specifying such change to the other
parties hereto.




          6. Assignment. Neither party shall assign or otherwise transfer this Agreement or any
of their respective rights and obligations to any other party without the prior written consent of
the other party hereto, and any assignment or transfer in violation of the foregoing shall be null
and void ab initio, provided however, that the parties acknowledge that this Agreement
shall be binding upon and inure to the benefit of the Company.




          7. Entire Agreement; Amendments. This Agreement contains the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof, supersedes and
replaces all prior agreements and understandings (oral or written), and cannot be modified or
amended except by an instrument in writing signed by all parties hereto or their respective
successors or assigns.




          8. Governing Law. This Agreement shall bind the parties and their successors and
assigns, and shall be governed by and construed in accordance with the laws of the State of New
York applicable to agreements wholly entered into and performed therein, without giving effect to
provisions regarding conflicts of laws.




          9. Counterparts. This Agreement may be executed in separate counterparts, each of
which so executed and delivered shall constitute an original, but all such counterparts shall
together constitute one and the same instrument.





 









 








          IN WITNESS WHEREOF, each party has caused this Agreement to be duly executed as of the date first written above.



	 	 	 	 	 
	 	THE HEARST CORPORATION 

 	 
	 	By:  	/s/ Ronald J. Doerfler
 	 
	 	 	     Name:  	Ronald J. Doerfler          	 
	 	 	     Title:  	Senior Vice President and

Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	HEARST-ARGYLE TELEVISION, INC. 

 	 
	 	By:  	/s/  Harry T. Hawks
 	 
	 	 	     Name:  	Harry T. Hawks 	 
	 	 	     Title:  	Executive Vice President and

Chief Financial Officer