Exhibit 2.7
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 7th day of August, 1998,
by and between Port Jervis Broadcasting Co., Inc., a New York corporation
("Seller") and Nassau Broadcasting Partners, L.P., a Delaware limited
partnership ("Buyer").
STATEMENT OF FACTS
1. Seller is the licensee and operator of radio stations WTSX-FM
and WDLC-AM licensed to Port Jervis, New York (the "Stations").
2. Buyer and Seller are parties to a Time Brokerage Agreement
dated as of August 1, 1998 ("TBA"), pursuant to which Buyer has provided an
over-the-air program service on the Stations.
3. Buyer has exercised an Option, granted pursuant to an Option
Agreement dated as of August __, 1998, to purchase all of the assets of the
Stations (the "Option Agreement").
4. Subject to the consent of the Federal Communications
Commission ("FCC"), Buyer desires to acquire the Stations, and all of the
assets, leases, contracts, agreements, licenses, and other property used or
useful in the operation of the Stations, with certain exceptions as provided
herein, and Seller desires to transfer such assets to Buyer.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties intending to be legally bound hereby, agree as follows:
1. SALE AND TRANSFER OF ASSETS.
At the Closing, Seller will sell, assign, transfer and deliver to Buyer
the following:
1.1. ASSETS TO BE TRANSFERRED. Subject to the terms and conditions
of this Agreement, on the Closing Date (as defined in Section 10.1), Seller
shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall
purchase and accept, all of the business, rights, properties and assets, real
and personal, tangible and intangible, of every type and description owned by
Seller and used or held for use in connection with the business and operations
of the Stations, together with all rights and privileges associated with such
assets and business of the Stations, except for Excluded Assets (as defined in
Section 1.2) (collectively, the "Assets"). Without limiting the foregoing, the
Assets shall include the following:
1.1(a) LICENSES AND AUTHORIZATIONS. Subject to prior FCC
consent, all of the FCC authorizations issued to Seller with respect to the
Stations and their auxiliaries, including without limitation, all rights in and
to the call letters WTSX-FM and WDLC-AM, to the extent that they can be
conveyed, and all of those FCC authorizations listed and described on SCHEDULE
1.1(a) attached hereto, and all applications therefor, together with any
renewals, extensions or modifications thereof and additions thereto or
applications filed between the date hereof and the Closing Date (collectively,
the "Licenses"). All of Seller's interest in the Licenses will be assigned to
Buyer as hereinafter provided;
1.1(b) TANGIBLE PERSONAL PROPERTY. All equipment, electrical
devices, antennas, cables, vehicles, furniture, fixtures, towers, office
materials and supplies, hardware, tools, spare parts, records, tapes, discs,
carts and other tangible personal property of every kind and description owned
by Seller and used or held for use (including those not in operating condition)
in connection with the business and operations of the Stations on the Closing
Date, including without limitation those listed and described on SCHEDULE 1.1(b)
attached hereto or any replacements thereafter acquired prior to the Closing
Date (except as may be consumed in the ordinary course of business) and
including all rights under manufacturers' and vendors' warranties;
1.1(c) REAL PROPERTY. The real property owned and used in
connection with the operation of Stations, listed on SCHEDULE 1.1(c), including
all structures, buildings, towers, transmitters, antennas and other improvements
thereon (the "Real Property");
1.1(d) LEASED REAL PROPERTY. Any of the leases of real
property with respect to real property leased by Seller and used or held for use
in connection with the business and operations of the Stations on the Closing
Date, described on SCHEDULE 1.1(d) (the "Leased Property");
1.1(e) AGREEMENTS FOR SALE OF TIME; TRADE/BARTER AGREEMENTS.
Those orders and agreements now existing for the sale of advertising time on the
Stations, to the extent of the unexpired portion thereof, for cash as listed and
described in SCHEDULE 1.1(e)-1; those orders, agreements and arrangements for
the exchange of advertising time, to the extent of the unexpired portion thereof
for consideration other than cash ("Trade Out Agreements"), as listed and
described in SCHEDULE 1.1(e)-2; all Cash Agreements and all Trade Out Agreements
entered into in the ordinary course of business between the date hereof and the
Closing Date to the extent of the unexpired portion thereof;
1.1(f) OTHER CONTRACTS. All unexpired contracts, agreements,
equipment leases, arrangements, commitments or understandings, written or oral
("Contracts") described in SCHEDULE 1.1(f) hereto;
1.1(g) INTANGIBLE RIGHTS. Any trademarks, trade names, service
marks, franchises, patents, jingles, slogans, logotypes and other intangible
rights, owned and used or held for use by Seller on the Closing Date in
connection with the business and
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operations of the Stations, including those listed and described on SCHEDULE
1.1(g) hereto to the extent that Seller has the right to use and assign them;
1.1(h) PROGRAMMING AND COPYRIGHTS. All programs and
programming materials and elements, music libraries and software of whatever
form or nature owned by Seller and used or held for use in connection with the
business and operation of the Stations on the Closing Date, whether recorded on
tape or any other media or intended for live performance, and whether completed
or held in production and any related common law and statutory copyrights owned
by Seller and used or held for use in connection with the business and
operations of the Stations, or licensed or sublicensed to Seller in connection
therewith, to the extent that Seller has the right to use and assign them;
1.1(i) FCC RECORDS. All FCC program logs and other records
that relate to the operation of the Stations as are required to be maintained
under the rules and regulations of the FCC, including, but not limited to, an
up-to-date and complete local public file during the 36 months prior to the
Closing Date;
1.1(j) FILES AND RECORDS. All original files and other records
of Seller relating to the business and operations of the Stations owned and in
the possession of Seller, including without limitation all available schematics,
blueprints, engineering data, customer lists, reports, specifications,
projections, statistics, promotional graphics, original art work, mats, plates,
negatives and other advertising, marketing or related materials, and copies of
all other technical and financial information concerning the Stations and the
Assets during the 36 months prior to the Closing Date; and
1.1(k) GOODWILL. All of Seller's goodwill in, and going
concern value of, the Stations.
1.1(l) ACCOUNTS RECEIVABLE. Seller's accounts receivable in
respect to the Stations.
1.2 EXCLUDED ASSETS. There shall be excluded from the Assets, and
retained by Seller, to the extent in existence on the Closing Date the following
assets listed in SCHEDULE 1.2 (collectively, the "Excluded Assets"):
1.2(a) CASH AND INVESTMENTS. All cash on hand or in bank
accounts, and any and all other cash equivalents, including without limitation,
certificates of deposit, commercial paper, treasury bills, asset or money market
accounts and all such similar accounts or investments, or notes or other
entitlements evidencing loans receivable and any securities owned or held by
Seller;
1.2(b) CERTAIN ASSETS. Pension, profit sharing and savings
plan and trusts and any assets thereof;
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1.2(c) CONSIDERATION. The consideration delivered by Buyer to
Seller pursuant to this Agreement;
1.2(d) FILES AND RECORDS. The files and records referred to in
the parenthetical in Section 1.1(j);
1.2(e) INSURANCE POLICIES. All right, title and interest under
all insurance policies or contracts of insurance and all claims or rights to
payment thereunder, including insurance refunds;
1.2(f) CHOSES IN ACTION. Any and all causes of action and
claims of Seller arising out of or relating to transactions prior to the Closing
Date, including, without limitation, claims for tax refunds; and
1.2(g) FM ANTENNA SITE. All of Sellers right title and
interest in and to the FM Site as that term is defined in 1.3 below, except for
the lease set forth in 1.3.
1.3 LEASE OF ANTENNA SITE. The FM antenna site, described in the
attached SCHEDULE 1.3, (the "FM Site") is now owned by Seller. From the Closing
Date, for a period of ten (10) years, Seller shall lease to Buyer the FM Site,
for $1 per month. In the event that Seller constructs a new tower on the FM
Site, the monthly rent shall be increased to $750 per month upon completion of
such tower. Buyer shall have an option to renew the lease of the FM Site for an
additional ten year period.
2. PURCHASE PRICE AND PAYMENT.
The Buyer shall pay to Seller as consideration for all of the Assets to
be sold and bought hereunder pursuant to Section 1, the amounts described as the
Purchase Price in Section 3.1 of the Option Agreement, less any adjustments
described in Section 3.2, including credit for the Option Payment, as that term
is defined in the Option Agreement.
3. NO ASSUMPTION OF LIABILITIES.
The leases described in Section 1.1(d), the orders and agreements
described in Section 1.1(e), the liabilities incurred by Buyer pursuant to the
TBA which have not been satisfied prior to the Closing Date, and the contracts,
agreements, arrangements, commitments and understandings described in SCHEDULE
1.1(f) are herein referred to as the "Assumed Obligations" and are the only
agreements, contracts, obligations or commitments of Seller, whether known or
unknown, contingent or otherwise that are to be assumed by Buyer as of the
Closing Date. Except for the Assumed Obligations, Seller shall be solely
responsible, and there shall be no assumption of liability by Buyer, for any
agreement, contract, obligation or commitment of Seller, whether known or
unknown, contingent or otherwise, relating to either the Stations or any of the
affairs of Seller including, but not limited to, any agreement, executed or
executory, relating to the exchange of time on the Stations for goods, wares,
services, promotions, merchandising or anything other than cash. With respect to
the Assumed Obligations, it is specifically
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understood that Buyer shall assume only those obligations of Seller thereunder
accruing on or after the Closing Date. Buyer shall not be obligated to perform
any contract, agreement, obligation or commitment of Seller, whether known or
unknown, contingent or otherwise, not specifically assigned to and assumed by
Buyer hereunder.
4. SELLER'S REPRESENTATIONS AND WARRANTIES.
As used in this Section 4, references to Seller's knowledge shall mean
Seller's knowledge after Seller has exercised due diligence in making inquiries
of its personnel. Seller represents and warrants that the following statements
as to Seller and the Assets and the Stations are correct as of the date hereof
and will be correct at the Closing Date:
4.1 LICENSES, AUTHORIZATION AND COMPLIANCE THEREWITH. Seller owns
and/or has all franchises, licenses, permits, consents, approvals or
authorizations of any public or governmental agency materially necessary to the
conduct by Seller of its business as now conducted, including, but not limited
to, the Licenses described in SCHEDULE 1.1(a) hereto, without any material
conflict with the rights of others, all of which are in full force and effect,
except as set forth in SCHEDULE 1.1(a), subject to no lien, charge, encumbrance,
or limitation. Without material exception, to the best of Seller's knowledge,
Seller is in material compliance with all of its material obligations with
respect thereto; and no event has occurred which permits, or after notice or
lapse of time, or both, would permit, the revocation or termination of any of
the foregoing or would materially adversely affect the rights of Seller
thereunder.
Except as may be provided in SCHEDULE 1.1(a), Seller has no knowledge
of any applications or any material complaints or proceedings pending or to the
best of Seller's knowledge threatened as of the date hereof before the FCC
directly relating to the business or operation of the Stations other than
proceedings which generally affect the broadcast industry. Further, on the
Closing Date, except as set forth on Schedule 1.1(a), the Stations will, unless
otherwise provided, be on the air operating at full licensed power (consistent
with the FCC's Rules and Regulations, the Communications Act of 1934, as amended
(the "Act"), and regulations promulgated thereunder) under their present
licenses, not under any Special Temporary Authority, as defined by the FCC. All
FCC requirements for such authority will have been met, and there will be no
material uncorrected FCC violations. If notice of any such violation is received
or if Seller hereinafter becomes aware of any such violation prior to Closing,
Seller, at its own expense, shall eliminate and cause to be removed all such
violations by the date of Closing. All returns, reports and statements required
to be filed with the FCC or other governmental agency relating to the Stations
have been or will be duly and timely filed, and all said reports, returns and
statements are or will be complete and correct as filed. To Seller's best
knowledge, the "Public Inspection File" of the Stations will be complete and in
full compliance with Section 73.3526 of the FCC's Rules and Regulations on the
Closing Date.
4.2 ASSETS.
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4.2(a) RIGHTS, ETC. TO SELL. Seller is the owner of and will
at the Closing Date have good title to the Assets, and will on the Closing Date
have full legal right, power and authority to assign, transfer and sell the
Assets to Buyer, free and clear of all claims, security interests, mortgages,
pledges, liens and other encumbrances of every nature whatsoever, except as set
forth on Schedule 4.2(a). No action is pending or, to the knowledge of Seller,
threatened, which would contest the ownership of, or right to transfer, any of
the Assets. The Assets will not at the Closing Date be subject to any contract,
sale or other agreement, except as disclosed in writing to and expressly assumed
or taken subject to by Buyer hereunder, and the delivery of the Assets to Buyer
pursuant to the provisions of this Agreement will transfer good and valid title
thereto, free and clear of all claims, security interests, mortgages, pledges,
liens and other encumbrances of every nature whatsoever.
4.2(b) CONDITION OF TANGIBLE PERSONAL PROPERTY. The equipment
described in SCHEDULE 1.1(b) hereto comprises all the equipment used or useful
to operate the Stations as they are presently being operated and to the best of
Seller's knowledge said equipment is in material compliance with the FCC's Rules
and Regulations. From the date hereof until Closing, the Stations and equipment
will be operated and maintained in accordance with good engineering practices
and to the best of Seller's knowledge in compliance with all of the FCC's Rules
and Regulations. Except as disclosed in SCHEDULE 1.1(b), there are no material
defects in any of the structures, improvements, electronic equipment or other
tangible personal assets of the Stations, all of which are in operating
condition. All of the Stations' buildings, structures, transmitters, towers,
antennas, guy wires, ground systems, radials and other improvements are on
property that will be included within the boundaries of the Real Property and
the Leased Property.
4.2(c) REAL PROPERTY. With respect to the Real Property:
(i) Seller is not a "foreign person" as that term is
used in the Internal Revenue Code Section 1445 ("IRC ss.1445"), and Seller
agrees to furnish to Buyer, at or prior to Closing, an Affidavit of Non-Foreign
Status or any other documentation required under IRC ss.1445 to evidence that
Seller is not a "foreign person";
(ii) There are no leases, rental agreements or other
agreements relating to the Real Property which are to remain in effect after
Buyer takes title to the Real Property, and Seller will make no agreement
relating to the Real Property with any person other than Buyer;
(iii) Seller has not received any notice with respect
to the Real Property of any threatened rezoning, annexation or modification to
the general plan proceeding which proceeding is still pending.
4.3 CONTRACTS, LEASES, AGREEMENTS, ETC. To the best of Seller's
knowledge, each of the contracts, agreements, easements, licenses and leases
(collectively,
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"Contracts") described in Sections 1.1(d), 1.1(e)-1, 1.1(e)-2 and 1.1(f) hereto
is valid, binding and enforceable in accordance with its terms and Seller is not
in any material respect in default thereunder. Except for Contracts marked with
an asterisk on SCHEDULES 1.1(d), 1.1(e)-1, 1.1(e)-2 and 1.1(f) (the "Contract
Schedules"), no consents are required to assign to Buyer Seller's interest in
any such Contract. Each such Contract may be assumed by Buyer without any
material adverse change, and is now, and on the Closing Date will be, in full
force and effect.
4.4 EMPLOYEES AND AGREEMENTS RELATING TO EMPLOYMENT.
4.4(a) Attached hereto as SCHEDULE 4.4(a) is a listing of: (1)
the names of all persons currently on the payroll of the Stations, together with
the amount paid or payable to each such person for their services; (2) any bonus
or other material compensation arrangements and personnel benefits or policies
in effect, if any, for each employee; and (3) a complete copy of each such plan,
benefit, and policy.
4.4(b) Except as set forth on SCHEDULE 4.4(b), Seller has made
no representation to any of the Stations' employees concerning their employment,
if any, by Buyer after the Closing Date. Any decision by Buyer to employ any of
the employees of the Stations in the operation of the Stations on or after 12:01
a.m. on the Closing Date, other than those set forth on 4.4(b), shall be made in
its sole discretion.
4.4(c) No labor union is currently certified, or otherwise
recognized, as the collective bargaining representative for any of the Stations'
employees. Seller has no actual knowledge of any labor strike, or other employee
or labor controversy or dispute pending which would affect the operation of the
Stations.
4.4(d) Seller is not, and on the Closing Date will not be,
except as disclosed on SCHEDULE 4.4(d), a party to (a) any labor contract, (b)
any vacation pay, severance pay or other benefit arrangement (including ERISA or
similar plans) with its employees, or (c) any employment contract or agreement
which is not terminable upon termination notice of thirty (30) days.
4.5 LITIGATION. There are no actions, judgments, suits,
proceedings, investigations or inquiries pending or, to the knowledge of Seller,
threatened against or affecting Seller or questioning the validity of any action
taken or to be taken in connection with the implementation of the provisions of
this Agreement, at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board, agency, court or
instrumentality, domestic or foreign. Seller does not know or have reasonable
grounds to know of any factors or circumstances which might be the basis of any
action, suit or proceeding; and, to the best of Seller's knowledge, except as
disclosed in SCHEDULE 4.5, Seller has complied with all applicable statutes and
regulations of all governmental authorities and agencies having jurisdiction
over Seller.
4.6 COMPLIANCE WITH LAW.
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4.6(a) GENERALLY. Seller has complied and is in compliance in
all material respects with all laws, rules, regulations, and orders of any
governmental entity applicable to Seller and the Assets, including, without
limitation, the Act and rules and regulations thereunder ("Applicable Laws").
Seller has not been charged with and is not under investigation for any
violation of Applicable Laws, nor, to the knowledge of Seller, is there any
basis for any such charge or investigation.
4.6(b) REAL ESTATE MATTERS. All of the Real Property and all
structures, transmitters, towers, equipment and improvements located thereon
conform in all material respects with all applicable laws and regulations,
including, without limitation, environmental, building and zoning laws and
regulations, and no notice or actual knowledge of any violation of zoning,
building or other laws, statutes and ordinances and regulations relating to such
real property has been received or is known and there is no proposed, pending or
threatened condemnation proceeding or similar action affecting any such Real
Property.
4.6(c) HAZARDOUS MATERIALS. Except as set forth on Schedule
4.6(c), to the best of Seller's knowledge, no hazardous or toxic materials (as
hereinafter defined) exist in any structure located on, or exist on or under the
surface of the Real Property. For purposes of this Agreement, "hazardous or
toxic material" shall mean waste, substances, materials, smoke, gas, pollutants,
contaminants, asbestos or asbestos related products, PCB's, petroleum, crude oil
(or any fraction or distillate thereof) or particulate matter designated as
hazardous, toxic or dangerous, or requiring special handling, treatment or
storage whether or not designated hazardous, toxic or dangerous under any
environmental laws. For purposes of this Agreement, "environmental law" shall be
interpreted to mean the Comprehensive Environmental Response Compensation and
Liability Act, any successor to such law, and/or any other applicable federal,
state, or local environmental, health or safety law, rule or regulation
concerning the treating, producing, handling, storing, releasing, spilling,
leaking, pumping, pouring, emitting, or dumping of any waste, substance,
materials, smoke, gas or particulate matter or imposing liability or standards
in connection therewith.
4.7 EXISTENCE AND POWERS; NO CONFLICT. Seller is a corporation
duly formed, validly existing and in good standing under the laws of the State
of New York and has the power and authority to own or lease its properties and
to carry on business as now being conducted, and has all requisite power and
authority to enter into, deliver and perform this Agreement. The execution,
delivery, and performance of this Agreement by Seller have been duly and validly
authorized and no other action is required. Neither the execution and delivery
of this Agreement by Seller, nor the compliance by Seller with the respective
terms thereof: (i) will, to the best of Seller's knowledge, breach any
Applicable Laws; (ii) will conflict with or result in a breach of or constitute
a default (or an event which, with notice or lapse of time, or both, would
become a default) under any of the terms, conditions or provisions of any
judgment, order, arbitration, injunction, decree or ruling of any court or
governmental authority to which Seller or any of the Assets is subject or of
Seller's Certificate of Incorporation, by-laws or any agreement, commitment,
arrangement, lease, insurance policy, or other instrument to which Seller is a
party or by
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which it is bound; (iii) will result in the creation of any lien, equitable
lien, tax lien, mortgage, charge, security interest or other encumbrance upon
any of the Assets; (iv) will give to any other person any interests or rights,
including rights of termination or cancellation, in or with respect to any of
the priorities, assets, agreements, contracts or business of Seller; (v) will
result in the loss or adverse modifications of the Licenses or any other
license, franchise, permit or other governmental authorization granted to or
held by Seller; or (vi) require the consent of any person except as disclosed in
this Agreement.
4.8 OPERATION OF STATIONS.
4.8(a) The Stations have been, and shall continue to be,
operated (1) in material compliance with their Licenses and Applicable Laws, and
(2) in a manner which will not expose human beings to any level of non-ionizing
radiation higher than the levels recommended for human exposure in "Safety
Levels With Respect to Human Exposure to Radio Frequency Electromagnetic Fields,
3 kHz to 300 GHz" (ANSI/IEEE C95.1-1992), adopted by the IEEE and by the
American National Standards Institute, November 1992.
4.8(b) Seller shall give prompt written notice to Buyer if (i)
the transmission of the regular broadcast programming of either of the Stations
in the normal and usual manner is interrupted or discontinued other than as a
result of weekly routine maintenance or public utility company activity; or (ii)
either of the Stations is operated at less than ninety (90%) of its licensed
operating power, in either event for a period in excess of (A) twenty-four (24)
consecutive hours or (B) an aggregate of seventy-two (72) hours in any thirty
(30) day period; or (iii) if either of the Stations operate at reduced power for
ten (10) days, thereby requiring written notification to the FCC pursuant to
Section 73.1560(d) of the FCC Rules; or (iv) the programming format of either of
the Stations is materially changed.
4.9 INSURANCE. The insurance policies owned by Seller or of which
Seller is a named beneficiary, set forth on SCHEDULE 4.9 attached hereto, are
now and on the Closing Date will be fully in effect in accordance with their
terms, with no default in the payment of premiums on any such policy and no
ground for cancellation or avoidance of any thereof or for reduction of the
coverage provided hereby.
4.10 ABSENCE OF INSOLVENCY. No insolvency proceedings of any
character, including, without limitation, bankruptcy, receivership,
reorganization, composition or arrangement with creditors, voluntary or
involuntary, affecting the Seller or any of its respective assets or properties,
are pending or, to the knowledge of Seller, threatened, and Seller has made no
assignment for the benefit or creditors, nor taken any action with a view to, or
which would constitute the basis for, the institution of any such insolvency
proceedings.
4.11 INTANGIBLES. Seller owns and has the exclusive right to use
all the patents, copyrights, service or trademarks and trade names, call
letters, logos, slogans and other intangible property or rights ("Intangibles")
presently used in conjunction with the operation of the Stations, together with
any goodwill associated therewith. To the best of
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Seller's knowledge, the Intangibles are subject to no pending or threatened
challenge and none of the Intangibles is being infringed by the activities or
operations of any third person and none is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting the use thereof.
4.12 FINANCIAL STATEMENTS. Seller has heretofore furnished
Purchaser with copies of the financial information of Seller as set forth on the
attached SCHEDULE 4.12 (the "Financial Statements"). Except as noted therein or
on SCHEDULE 4.12, the Financial Statements are complete and correct in all
material respects, were prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods indicated and
present fairly the results of operating cash flows for said periods.
4.13 TAXES. As of the Closing Date, Seller shall have timely and
duly filed with the appropriate governmental agencies all tax returns,
declarations of estimated tax, and tax reports required to be filed by it, and
all taxes and other assessments which Seller is required to pay, withhold or
collect have been timely and duly paid, withheld and collected. There are no
present disputes as to taxes of any nature payable by Seller with respect to the
Stations, and it has not filed an IRS Form 872 ("Consent Fixing Period of
Limitations Upon Assessment of Income Tax") or otherwise agreed to extend the
time for assessment of any taxes against it for any year. Any additional taxes,
interest, penalties, assessments and deficiencies that shall become due and
payable with respect to any tax return or tax obligation of Seller shall be the
sole responsibility of Seller.
4.14. ABSENCE OF CERTAIN CHANGES. Since July 1, 1998, there has not
been (i) any material adverse change in the property of Seller or any material
labor dispute, grievance or organizational effort affecting the Assets, taken as
a whole; (ii) any physical damage, destruction or loss (not covered by
insurance) materially and adversely affecting the Assets or business of Seller,
taken as a whole; (iii) any sale, assignment, lease or other transfer or
disposition of any of the assets or properties of Seller, except in the ordinary
course of business and with adequate replacement property being acquired as
necessary; or (iv) any waiver of any right resulting in a materially adverse
affect on the Assets.
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5. BUYER'S REPRESENTATIONS AND WARRANTIES.
As used in this Section 5, references to Buyer's knowledge shall mean
Buyer's knowledge after the Buyer has exercised due diligence in making
inquiries of its personnel. Buyer represents and warrants that the following
statements as to Buyer are correct as of the date hereof and will be correct at
the Closing Date:
5.1 FCC QUALIFICATIONS. Buyer is qualified under the Act, and the
rules, regulations and policies promulgated thereunder to obtain FCC approval of
the Application, as that term is defined in Section 8 of this Agreement and
serve as the licensee of the Stations. Buyer has no knowledge of any material
reason, fact, allegation or claim not stated herein which may impair Buyer's
qualifications and knows of no reason why the FCC would not approve said
Application. Between the date hereof and the Closing, Buyer will take no action
knowingly that would substantially delay FCC approval or make it not qualified.
5.2 EXISTENCE AND POWERS; NO CONFLICT. Buyer is a limited
partnership duly formed, validly existing and in good standing under the laws of
the State of Delaware and has the power and authority to own or lease its
properties and to carry on business as now being conducted, and has all
requisite power and authority to enter into, deliver and perform this Agreement.
The execution, delivery, and performance of this Agreement by Buyer have been
duly and validly authorized by Buyer's general partner, and no other action is
required. Neither execution and delivery of this Agreement by Buyer, nor the
compliance by Buyer with the respective terms hereof: (i) will, to Buyer's best
knowledge, breach any Applicable Laws; (ii) will conflict with or result in a
breach of or constitute a default (or an event which, with notice or lapse of
time, or both, would become a default), under any of the terms, conditions or
provisions of, any judgment order arbitration injunction, decree or ruling of
any court or governmental authority to which buyer is subject, or any of Buyer's
partnership agreement, or any contract, commitment, arrangement, or agreement to
which Buyer is party or by which it may be bound; or (iii) require the consent
of any person except as disclosed in this Agreement.
5.3 DISCLOSURE. No covenant, representation or warranty made by
Buyer in this Agreement and no statement made in any certificate or document
furnished or to be furnished by Buyer in connection with the transactions
contemplated by this Agreement contains or will contain any untrue statement of
a material fact or omits or will omit to state any material fact necessary to
make such representation, warranty or statement not misleading to Seller.
5.4 NO LITIGATION. There is no litigation, judgment or decree
outstanding or other judicial or administrative proceeding pending or, to the
best of Buyer's knowledge, threatened which might adversely affect Buyer's
power, authority or ability to enter into this Agreement and to carry out the
transactions contemplated herein. Buyer does not know or have reasonable grounds
to know of any factors or circumstances which might be the basis for such
litigation, proceeding or investigation.
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6. AGREEMENT NOT TO COMPETE.
6.1 AGREEMENT NOT TO COMPETE. On or before the Closing Date,
Seller and Xxxxxx X. Xxxx shall execute individually an Agreement Not To Compete
in the form annexed hereto as EXHIBIT D pursuant to which they shall agree not
to participate in the ownership, management, operational control of and not be
connected with or have any interest in, any radio station licensed to any
community within the counties of Sussex in the State of New Jersey, Orange in
the State of New York and Pike in the Commonwealth of Pennsylvania for a period
of three (3) years immediately following the Closing.
The parties hereto agree that the duration and area of the Agreement
Not To Compete are reasonable. In the event that any Court determines that the
duration or area, or both of them are unreasonable, and the Agreement Not To
Compete is to that extent unenforceable, the parties hereto agree that the
Agreement Not To Compete shall remain in full force and effect for the greatest
period of time and in the greatest area that would render it enforceable. Seller
agrees that damages are an inadequate remedy for any breach of this covenant and
that Buyer shall, whether or not it is pursuing any potential remedies at law,
be entitled to equitable relief, in the form of temporary, preliminary and
permanent injunctions, without bond or security, without any actual or
threatened breach of this Agreement Not To Compete.
By executing this Agreement in the space provided below, Seller and
Xxxxxx X. Xxxx each agree to execute such Agreement Not To Compete and deliver
such Agreement Not To Compete to Buyer at Closing.
Port Jervis Broadcasting Co., Inc.
By:
------------------------------- ---------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx
7. CONDUCT PRIOR TO CLOSING.
7.1 ACCESS AND INFORMATION. Seller shall give Buyer and its
representatives reasonable access throughout the period prior to Closing to the
operations, properties, books, contracts, agreements, leases, commitments and
records of the Stations at reasonable times, provided that the normal operations
of Seller's business shall not be disrupted.
7.2 CONDUCT OF STATION BUSINESS. Between the date hereof and
Closing:
7.2(a) Seller shall produce the consent of any third parties
necessary for the assignment to Buyer of any contract, lease or agreement marked
with an asterisk and listed on the CONTRACT SCHEDULES;
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7.2(b) Seller shall (i) conduct the business of the Stations
in a prudent and responsible manner in good faith and operate and maintain the
Stations and the Assets in accordance with good engineering and Seller's past
practices and in compliance with the terms of the Licenses and Applicable Laws;
and (ii) keep all of the Assets to be transferred hereunder in substantially the
same operating condition and repair as of the date hereof, reasonable wear and
tear excepted;
7.2(c) Except as set forth in SCHEDULE 7.2(c), Seller shall
not (i) hire additional personnel or unreasonably increase the compensation or
bonuses payable or to become payable to any of the Stations' employees; (ii)
enter into an agreement to sell, assign, lease, exchange or otherwise transfer
or dispose of any of the Assets; (iii) enter into any new contract or
renegotiate, modify, amend, renew, or terminate any existing contract, except
that Seller may, in the ordinary and usual course of business, enter into: (1)
agreements for the sale of time on the Stations for such rates and on such terms
as are consistent with Seller's normal and usual practices; (2) any contract(s)
terminable on thirty (30) days notice or less without premium or penalty; and
(3) any contract(s) consented to by Buyer in writing; (iv) change the Stations'
call letters, or change the Stations' facilities, or apply for any construction
permit(s) with the FCC, without Buyer's consent, which will not be unreasonably
withheld or delayed, or make any material adverse changes in the Stations'
leasehold improvements and other improvements and fixtures; or (v) except as
required by law or any governmental agency, disclose any information relating to
the Stations to any third party, other than to Seller's authorized employees,
agents and professional advisors in the ordinary course of business and other
than to Buyer and Buyer's authorized representatives as provided for herein;
7.2(d) Seller shall maintain in full force and effect the
insurance described in SCHEDULE 4.9; and
7.2(e) Seller shall give Buyer notice of any unusual operating
problems or developments affecting Seller between the date hereof and the
Closing Date, including, but not limited to, any problem or development which
would materially adversely affect the Assets, and keep Buyer fully apprised of
all matters having material financial impact on Seller.
7.3 BUYER'S INSPECTIONS AND APPROVALS.
7.3(a) ENGINEERING INSPECTION. It is agreed that within ten
(10) days prior to the Closing Date, Buyer's engineer may inspect the Assets to
insure that its equipment complies with all warranties and conditions set forth
herein. Seller agrees to extend full cooperation to said engineer, including
such access to the equipment and to logs pertaining thereto at such time or
times as said engineer shall reasonably request. Buyer shall furnish Seller with
a copy of the report of any inspection prior to the Closing Date. If Buyer's
engineer reports that the equipment fails to materially comply with said
warranties, Buyer may either:
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(1) Elect to consummate the purchase of the Assets in
which case Seller shall bear the cost of equipment
repair in an amount not to exceed $50,000, and such
amount shall be deducted from the Purchase Price; or
(2) Elect to consummate the purchase of the Assets
exclusive of the equipment which fails to materially
comply with warranties, in which case the Purchase
Price shall be reduced by the fair market value of such
equipment.
7.3(b) INSPECTION OF REAL ESTATE. Seller agrees to convey and
Buyer agrees to accept such title to the Real Property as the title company
shall be willing to insure on its standard form and at standard rates, such
title to be subject to: (i) all standard exclusions and printed exceptions in
the standard form of owner's policy of title insurance; (ii) encroachments and
all other matters that would be disclosed by a current and accurate survey of
the Real Property; (iii) liens for taxes and assessments not yet due and
payable; (iv) easements for public utilities affecting the Real Property; (v)
all easements, covenants, restrictions and rights-of-way affecting the Real
Property; (vi) the exceptions listed on SCHEDULE 7.3; and (vii) both (a) any
applicable zoning ordinances, other land use laws and regulations; and (b) those
matters, if any, which are waived by Buyer pursuant to this Section (the
foregoing title matters are hereinafter referred to as "Permitted Title
Exceptions"). Within thirty (30) days of the execution of this Agreement, Buyer
shall order, at Buyer's sole cost and expense, a title commitment from a title
insurance company authorized to do business in the State of New York (the
"Commitment"). If the Commitment reveals a defect in title which is not one of
the Permitted Title Exceptions, Buyer may either waive such defect or give
prompt (within ten (10) days of receipt of such commitment or endorsement, time
being of the essence) written notice to Seller of such defect in title whereupon
Seller may, at its option, attempt to cure such defect prior to the Closing or
decline to cure such defect. Nothing contained herein shall be deemed or
construed to require Seller to incur any costs and expenses, or to bring any
action or proceeding, to remove any defect in title. Notwithstanding the
foregoing, Seller shall have the right, at its sole option, to extend the
Closing Date by not more than sixty (60) days to attempt to cure any defect in
title objected to by Buyer in accordance with this Section 7. Seller shall give
Buyer no less than five (5) business days' notice of a new Closing Date.
7.3(c) ENVIRONMENTAL AUDIT. Buyer shall promptly, at its
expense, arrange for such environmental investigations and audits (the "Audit")
of the Real Property as it deems appropriate including, without limitation: (i)
conditions with respect to or contamination or pollution of surface or
groundwaters, soil and air, (ii) the disposal, presence, release or threat of
release of hazardous or toxic material thereon, and (iii) compliance with
environmental laws or other Applicable Laws. Buyer shall furnish Seller with a
copy of the report of the Audit within five (5) business days after Buyer's
receipt thereof. If the Audit discloses a condition which materially contradicts
the representations in Section 5.6(c), Buyer may either:
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(i) Elect to consummate the purchase of the Assets in
which case Seller shall bear the cost of remediating such condition in an amount
not to exceed $100,000, and such amount shall be deducted from the Purchase
Price; or
(ii) Elect to consummate the purchase of the Assets
exclusive of the portion of the Real Property on which the condition exists (and
exclusive of the lease in the event such Real Property is leased by Seller), in
which case the Purchase Price shall be reduced by the fair market value of such
Real Property without reference to such condition.
7.4 RISK OF LOSS. The risk of any loss, damage or destruction to
any of the Assets from fire or other casualty or cause shall be borne by the
Seller at all times prior to 12:01 a.m. on the Closing Date. Upon the occurrence
of any loss or damage to any material portion of the Assets as a result of fire,
casualty or other cause prior to Closing, Seller shall notify Buyer of same in
writing immediately, stating with particularity the extent of such loss or
damage incurred, the cause thereof if known, and the extent to which
restoration, replacement and repair of the Assets lost or destroyed will be
reimbursed under any insurance policy with respect thereto. Subject to the
provisions hereof, Buyer shall have the option (but not the obligation), in the
event the loss or damage exceeds One Hundred Thousand Dollars ($100,000.00) and
the property cannot be substantially repaired or restored within thirty (30)
days, exercisable within ten (10) days after receipt of such notice from Seller
to: (i) postpone the Closing until such time as the property has been completely
repaired, replaced or restored, unless the same cannot be reasonably effected
within two (2) months of notification; (ii) elect to consummate the Closing and
accept the property in its "then" condition, in which event Seller shall at the
Closing assign all rights under any insurance claim covering the loss and pay
over any proceeds under any such insurance policy theretofore received by Seller
with respect thereto; or (iii) rescind this Agreement at no cost or expense to
Buyer and declare the Agreement of no further binding force and effect, if such
repairs, replacements or restorations are not completed within ninety (90) days
after the date specified herein as the Closing Date, provided that such repairs,
replacements or restorations are necessary to the normal operation of the
Stations. In the event Buyer elects to postpone the Closing Date as provided in
clause (i) of this Subsection, the parties hereto will cooperate to extend the
time during which this Agreement must be closed as specified in the consent of
the FCC referred to herein.
7.5 CONFIDENTIALITY. Between the date of this Agreement and the
Closing Date, Buyer will maintain strict confidentiality with respect to all
documents and information furnished by or on behalf of Seller (except for
documents of information required to be disclosed by law), and, if this
Agreement is terminated, Buyer shall return to Seller all such documents and
information. Notwithstanding the foregoing, Buyer may make disclosure that may
be required: (i) by its lenders; (ii) in the preparation of federal, state and
local tax returns; (iii) pursuant to any federal or state securities laws; or
(iv) as may be necessary to advise any of Buyer's investors or advisors;
provided, that, in such case, Buyer shall advise the investors of the
confidentiality of the information.
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7.6 PROHIBITED ACTION. Between the date of this Agreement and the
Closing Date, neither Buyer nor Seller will commit any act or omission that
would: (i) disqualify them as parties to an assignment of the Licenses or, as to
Buyer, as owner or operator of the Stations and the Assets; (ii) jeopardize the
validity of the Licenses or (iii) interfere with the existing relationships
between the Stations and their advertisers, suppliers and others.
8. APPLICATION FOR FCC APPROVAL.
8.1 FILING AND PROSECUTION OF APPLICATION. As promptly as
practicable after the execution of this Agreement, and in no event later than
ten (10) business days thereafter, Buyer and Seller shall join in an application
to the FCC requesting the FCC's written consent to the assignment of the
Licenses of the Stations to Buyer and to the consummation of the transactions
contemplated by this Agreement (the "Application"). Both parties shall promptly
respond to any requests for the submission of additional information and shall
vigorously oppose any protests, petition to deny, petition for reconsideration
or appeal of the FCC's consent and approval that may be filed. Buyer and Seller
shall proceed with due diligence and promptly take all steps necessary to the
expeditious prosecution of such application to a favorable conclusion, using
their best efforts throughout.
8.2 EXPENSES. Each party shall bear its own expenses in connection
with the preparation of the applicable sections of the Application and in
connection with the prosecution of such application. Seller and Buyer will
divide and pay equally the filing and grant fees, if any, charged by the FCC.
8.3 DESIGNATION FOR HEARING. If, for any reason, the Application
is designated for hearing by the FCC or if the parties are notified by the FCC
in writing of its intention to designate the Application for hearing, either
party, if not then in default, shall have the right by written notice within
fifteen (15) days of such designation for hearing, to terminate this Agreement.
8.4 CONTROL OF STATIONS. This Agreement shall not be consummated
until the FCC has given its written consent to the assignment of the Licenses of
the Stations.
8.5 BEST EFFORTS. Each party hereto agrees to use its best efforts
in the performance and fulfillment of all terms and conditions of this
transaction applicable to such party and in filing an application for the FCC's
consent, and agrees to execute such other and further documents as may be
reasonably required to carry out the intent of this Agreement.
9. BULK SALES LAW.
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Buyer hereby waives compliance by seller with the provisions of all
Bulk Sales Laws, or other similar provisions, provided, however that Seller
agrees to indemnify and hold Buyer harmless for any claims arising thereunder.
10. CLOSING.
Subject to the terms and conditions herein stated, the parties agree as
follows:
10.1 CLOSING DATE. The Closing of the transactions contemplated
herein shall be held on a date in time, as specified by Buyer in writing to
Seller that is no less than five (5) and no more than ten calendar (10) days
after the date upon which the approval of the FCC required for the consummation
of the transactions contemplated herein shall become a "Final Order"; provided,
however, "Final Order" means the date on which the consent of the FCC is no
longer subject to administrative or judicial reconsideration, review, appeal or
stay. The parties hereby agree and stipulate that, absent the pendency of any
petition, application or motion seeking reconsideration, review, appeal or stay
of the Consent, and absent any FCC action reconsidering, reviewing, staying or
modifying the Consent, such Consent shall be treated as final as of 12:01 A.M.
on the forty-first day after the date of public notice issued by the FCC
approving the assignment of the Licenses to Buyer. The Closing shall take place
at the offices of Xxxxxx & Xxxxxxxx, A Professional Corporation, at 9:00 A.M.
local time, or such other time or place as mutually agreed.
10.2 SELLER'S OBLIGATIONS AT CLOSING. At the Closing, Seller shall
execute and deliver or cause to be delivered to Buyer the following, in a form
and substance reasonably approved by counsel for Buyer:
10.2(a) A Xxxx of Sale for all tangible personal property to
be transferred hereunder, pursuant to Section 1.1(b), containing a warranty of
title and covenant against all liens, encumbrances and restrictions of any kind
whatsoever, in substantially the form attached hereto as EXHIBIT B;
10.2(b) One or more assignments assigning to Buyer the
Licenses and intangible property to be acquired by Buyer hereunder, in
substantially the form attached hereto as EXHIBIT C;
10.2(c) One or more assignments assigning to Buyer the
Contracts to be assigned to Buyer hereunder, in substantially the form attached
hereto as EXHIBIT D, together with all necessary consents thereto and the
original copies of said Contracts;
10.2(d) A certificate from Seller stating that: (i) all
representations and warranties of Seller as set forth in this Agreement or in
any statement, certificate, schedule, exhibit or other document delivered
pursuant to this Agreement by Seller are true and correct in all material
respects, as of the Closing Date; and (ii) Seller has, in all material respects,
performed and complied with all covenants, agreements and
17
conditions required by this Agreement to be performed or complied with by Seller
at or prior to the Closing Date;
10.2(e) A deed transferring title to the Real Property to
Buyer;
10.2(f) A lease for the FM Site in substantially the form
attached hereto as EXHIBIT E;
10.2(g) An opinion of counsel for Seller in the form attached
hereto as EXHIBIT F;
10.2(h) An opinion of Seller's FCC Counsel in the form
attached hereto as EXHIBIT G;
10.2(i) Copies of the files, records and logs referred to in
Sections 1.1(i) and 1.1(j) hereof and copies of all of the Licenses; and
10.2(j) Such other documents or instruments as counsel for
Buyer may reasonably request and in a form reasonably acceptable to Buyer's
counsel, which documents are necessary to carry into effect the provisions of
this Agreement.
10.3 BUYER'S OBLIGATIONS AT CLOSING. At the Closing, Buyer shall
execute and deliver or cause to be delivered to Seller the following in a form
and substance reasonably acceptable to Seller's counsel:
10.3(a) The Purchase Price as set forth in Section 2;
10.3(b) One or more assumptions assuming the Contracts being
assigned by Seller;
10.3(c) A certificate from Buyer stating that: (i) all
representations and warranties of Buyer as set forth in this Agreement or any
statement, certificate, or other document delivered pursuant to this Agreement
by Seller are true and correct in all material respects as of the Closing Date;
and (ii) Seller has, in all material respects, performed and complied with all
covenants, agreements, and conditions required by this Agreement to be performed
or complied with by Seller at or prior to the Closing Date; and
10.3(d) Such other documents or instruments as counsel for
Seller may reasonably request and in a form acceptable to Seller's counsel,
which documents are necessary to carry into effect the provisions of this
Agreement.
10.4 CONDITION TO OBLIGATIONS OF BUYER. The obligation of Buyer to
consummate the purchase of the Assets at the Closing shall be subject to the
performance, in all material respects, on or prior to the Closing Date, of all
of the covenants and agreements as set forth elsewhere in this Agreement to be
performed by Seller, and upon the following additional conditions:
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10.4(a) The representations and warranties of Seller shall be
true in all material respects as of the Closing Date;
10.4(b) There shall not have occurred any material adverse
change in the condition of the Assets;
10.4(c) The consents required from all governmental agencies
(including, without limitation, the Final Order of the FCC) to Buyer's
acquisition of the Assets shall have been granted, without any condition
materially adverse to Buyer, and such consents shall be valid and outstanding on
the Closing Date;
10.4(d) No action or proceeding shall be pending or
threatened, challenging the validity of this Agreement or seeking to delay the
consummation of any of the transactions for which this Agreement provides, which
in the reasonable opinion of Buyer is material to the transactions contemplated
by this Agreement;
10.4(e) Seller shall have obtained and delivered to Buyer the
written consents of all requisite parties to assign and transfer to Buyer those
Contracts material to the operation of the Stations without conditions
materially adverse to Buyer;
10.4(f) Seller shall have in all material respects performed
and complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to and on the Closing
Date;
10.4(g) All of the requirements of Section 10.2 shall have
been met; and
10.4(h) Seller shall deliver, in form and substance
satisfactory to Buyer, an acknowledgment that Seller has retained no right or
reversion of the Licenses, has no right to the reassignment of the Licenses in
the future and has not reserved the right to use the facilities of the Stations
in the future for any reason whatsoever.
10.4(i) Seller shall agree to the allocation of the Purchase
Price among the Assets pursuant to Section 12 of this Agreement, which agreement
Seller shall not unreasonably withhold.
Buyer shall have the right to waive any or all of the foregoing
conditions of Closing at its sole option and risk.
10.5 CONDITION TO OBLIGATIONS OF SELLER. The obligation of Seller
to consummate the purchase of the Assets at the Closing shall be subject to the
performance, in all material respects, on or prior to the Closing Date, of all
of the covenants and agreements as set forth elsewhere in this Agreement to be
performed by Seller, and upon the following additional conditions:
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10.5(a) The representations and warranties of Buyer shall be
true in all material respects as of the Closing Date;
10.5(b) The consents required from all governmental agencies
(including, without limitation, the Final Order of the FCC) to Buyer's
acquisition of the Assets shall have been granted, without any condition
materially adverse to Seller, and such consents shall be valid and outstanding
on the Closing Date;
10.5(c) Buyer shall have in all material respects performed
and complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to and on the Closing
Date; and
10.5(d) All of the requirements of Section 10.3 shall have
been met.
10.5(e) Buyer shall agree to the allocation of the Purchase
Price among the Assets pursuant to Section 12 of this Agreement, which agreement
Buyer shall not unreasonably withhold.
Seller shall have the right to waive any or all of the foregoing
conditions of Closing at its sole option and risk.
10.6 FURTHER ASSURANCE. From time to time, upon request and without
further consideration on or after the Closing Date, Seller and Buyer will
execute and deliver such other instruments of conveyance and transfer and take
such other action as may be reasonably required more effectively to convey,
transfer to and vest in the Buyer, and to put the Buyer in possession and
operating control of, any part of the Assets, and, in the case of contracts and
rights, if any, which cannot be transferred effectively without the consent of
third parties which is unobtainable, to use good faith efforts to secure to the
Buyer the benefits thereof.
11. OTHER CLOSING OBLIGATIONS.
11.1 PRORATIONS. Except for the income and obligations which are
the subject of the TBA, Seller shall be entitled to all income earned or accrued
and shall be responsible for all liabilities and obligations incurred or payable
in connection with the operation of the Stations through the close of business
on the day preceding the Closing Date. Buyer shall be entitled to all income
earned or accrued and shall be responsible for all liabilities and obligations
incurred or payable in connection with the operation of the Stations after the
close of business on the day preceding the Closing Date. All overlapping items
of income or expense for which Buyer is not entitled to receive or responsible
to pay under the TBA shall be apportioned between Seller and Buyer as of the
close of business on the day preceding the Closing Date, in accordance with
generally accepted accounting principles with the understanding that Buyer shall
only have responsibility for the Assumed Obligations. Items to be apportioned
include, but are not limited to, the following:
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11.1(a) Prepaid expenses arising from payments made for goods
or services prior to the Closing Date if all or part of the goods or services
have not been received or used prior to the Closing Date (for example, rents
paid in advance for a rental period extending beyond the Closing Date);
11.1(b) Liabilities, customarily accrued, arising from
expenses incurred but unpaid as of the close of business on the day preceding
the Closing Date (for example, frequency discounts; rent; and sales
commissions); and
11.1(c) Personal property taxes and utility charges relating
to the Stations.
Within thirty (30) days after the Closing, Buyer shall deliver to
Seller a statement setting forth in reasonable detail the basis for prorations
pursuant to this Section, and Buyer shall pay to Seller, or Seller shall pay to
Buyer, as the case may be, any net amount due as the result of the proration
statement (or, if there is a dispute, the undisputed amount thereof). If Seller
disputes Buyer's determinations, or, if at any time after delivery of Buyer's
statement of determinations any party determines that any item included in the
proration is inaccurate or that an additional item should be included in the
prorations, the parties shall confer with regard to the matter and an
appropriate adjustment and payment shall be made as agreed upon by them or, if
they are unable to resolve the matter, by a firm of independent certified public
accountants mutually agreeable to the parties, whose decision on the matter
shall be binding and whose fees and expenses shall be borne equally by them.
11.2 FEES; SALES AND TRANSFER TAXES. All filing and recording fees
in connection with any instrument of conveyance or transfer delivered pursuant
to this Agreement shall be paid by Buyer. All sales and other transfer taxes, if
any, in respect of the Assets sold and transferred hereunder shall be paid by
Seller.
11.3 OTHER TAXES. Any and all sales taxes, unemployment insurance
and social security taxes, and all other taxes due any state, federal or local
government by Seller on or before the Closing Date shall be paid by Seller on,
or prior to, such time.
11.4 EMPLOYEES. On the Closing Date, Seller shall notify all
persons employed by Seller in connection with the business of the change of the
ownership of the business and shall pay all wages and bonuses owing to such
employees (and all vacation, severance pay and fringe benefits to which such
employees are entitled) such that any employee of Seller whom Buyer may elect to
retain in Buyer's employ shall have no claim against Buyer by reason of any
prior employment in Seller's business during Seller's ownership thereof.
12. ALLOCATION OF PURCHASE PRICE.
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The Purchase Price shall be allocated among the Assets pursuant to the
mutual agreement of the Buyer and Seller prior to the Closing Date. Each of the
parties hereto agrees to prepare and file its tax returns reflecting the
allocations in a manner consistent with this Agreement.
13. INDEMNIFICATION.
13.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All covenants and
agreements pertaining to matters to be performed after Closing and all
representations and warranties contained in this Agreement shall survive for a
period not to exceed two (2) years after the Closing Date ("Survival Period"),
except that the representations and warranties which the party making the same
knew or would have, through the exercise of reasonable diligence, known to be
false shall continue indefinitely. No claim which is the subject of the Survival
Period may be brought under this Agreement or with respect to the transactions
described herein unless written notice describing in reasonable detail the
nature and basis of such claim is given on or prior to the last day of the
Survival Period. In the event such notice is so given, the right to
indemnification with respect thereto under this Section 13 shall survive the
Survival Period until such claim is finally resolved and any obligations with
respect thereto are fully satisfied.
13.2 INDEMNITY BY SELLER. Seller agrees to pay and discharge and to
save and protect Buyer and its officers, directors, shareholders and affiliates
free and harmless from all obligations, claims and demands (including reasonable
attorneys' fees incurred by Buyer with respect thereto) (collectively "Seller's
Obligations") against, arising out of or in connection with (a) any lease,
contract or other agreement of Seller not assumed by Buyer pursuant to this
Agreement; (b) the ownership of the Stations or the Assets that shall arise or
accrue prior to the Closing which was not incurred by Buyer under the TBA; and
(c) any material breach or violation by Seller of any covenant, agreement or
warranty herein contained, or the inaccuracy of any representation of Seller
made in this Agreement.
13.3 INDEMNITY BY BUYER. Buyer agrees to pay and discharge and to
save and protect Seller and its officers, directors, shareholders and affiliates
free and harmless from all obligations, claims, and demands (including but not
limited to attorney fees incurred by Seller with respect thereto) against,
arising out of or in connection with (a) any lease, contract, or other agreement
of Seller to be assumed by Buyer pursuant to this Agreement; (b) that shall
arise or accrue against or in connection with the ownership or operation of the
Stations and the Assets from and after the Closing; and (c) any material breach
or violation by Buyer of any covenant, agreement or warranty herein contained or
the inaccuracy of any representation of Buyer made in this Agreement.
13.4 INDEMNIFICATION PROCEDURE; RIGHT OF OFFSET. In the event that
any party hereto asserts a claim for indemnification hereunder, such party
seeking indemnification shall give written notice to the indemnifying party
specifying the nature and the amount, if known, of the claim asserted. The
indemnifying party shall then have the right, using counsel reasonably
satisfactory to the party seeking indemnification, to investigate,
22
secure, contest or settle the claim alleged by such third party (hereinafter
called a "contest"), provided that the party seeking indemnification may
participate voluntarily, at its own expense, in any such contest through
representatives and counsel of its own choice, and, provided further, that any
such action by the indemnifying party relating to the contest shall be without
prejudice to the party seeking indemnification.
Except as provided otherwise in Section 13.4, the indemnifying party
shall bear all costs of such contests and shall indemnify and hold the party
seeking indemnification harmless against and from all costs, fees, and expenses
of such contest. Unless and until the indemnifying party elects to prosecute the
contest, the party seeking indemnification shall have the full right, at its
option, to do so and to look to the indemnifying party under the provisions of
this Agreement for the amount of the costs, if any, of prosecuting the contest.
The failure of the indemnifying party to respond in writing to the aforesaid
notice of the party seeking indemnification with respect to such contest within
twenty (20) days after the receipt thereof shall be deemed an election not to
prosecute the same. If the indemnifying party fails to prosecute the contest and
the party seeking indemnification does not prosecute the contest or does so and
the decision is rendered against it, the amount paid by the party seeking
indemnification to the third party in settlement or satisfaction of the contest
shall be deemed a valid claim hereunder. In the event that the contest involves
any Seller's obligations, Buyer shall have the right to offset the amount of the
costs, if any, incurred by Buyer in prosecuting the contest together with any
sums owed in connection with the resolution or settlement thereof against
amounts which may be owed by Buyer to Seller.
The parties hereto shall make mutually available to each other all
relevant information in their possession relating to any such contest and shall
cooperate in the defense thereof.
14. TERMINATION BEFORE CLOSING; DEFAULT AND REMEDIES.
14.1 TERMINATION BEFORE CLOSING. If Closing shall not have
previously occurred, this Agreement may be terminated:
14.1(a) Pursuant to Section 7.3 hereof;
14.1(b) By Buyer, upon the occurrence of a Seller's Event of
Default (as defined in Section 14.2) or upon failure of a condition precedent to
Buyer's obligation to close set forth in Section 10.4;
14.1(d) By Seller, upon the occurrence of a Buyer's Event of
Default (as defined in Section 14.2) or upon failure of a condition precedent to
Seller's obligation to close set forth in Section 10.5;
14.1(e) By Seller upon the failure of any of the conditions
set forth in Section 10.5(b) hereof; or
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14.2 DEFAULT AND REMEDIES.
14.2(a) The occurrence of any one or more of the following
events shall constitute a material default of this Agreement by Buyer ("Buyer's
Event of Default"):
(i) The material breach of any representation or
warranty by Buyer hereunder unless such breach is cured prior to the Closing
Date;
(ii) The failure by Buyer to consummate the
transactions contemplated by this Agreement in violation of the provisions of
this Agreement;
(iii) The failure by Buyer to perform any other of its
obligations under this Agreement, where such failure shall continue for a period
of ten (10) days after delivery of written notice of demand therefor from Seller
to Buyer; provided, however, that if more than ten (10) days are reasonably
required to cure such failure, then Buyer shall not be deemed to be in default
thereof if Buyer, in good faith, has commenced such cure within said ten (10)
day period and thereafter diligently prosecutes such cure to completion and
completes such cure prior to Closing.
14.2(b) The occurrence of any one or more of the following
events shall constitute a material default of this Agreement by Seller
("Seller's Event of Default"):
(i) The material breach of any representation or
warranty by Seller hereunder unless such breach is cured prior to the Closing
Date;
(ii) The failure by Seller to consummate the
transactions contemplated by this Agreement in violation of the terms of this
Agreement;
(iii) The failure by Seller to perform any other of its
obligations under this Agreement, where such failure shall continue for a period
of ten (10) days after delivery of written notice of demand therefor from Buyer
to Seller; provided, however, that if more than ten (10) days are reasonably
required to cure such failure, then Seller shall not be deemed to be in default
thereof if Seller, in good faith, has commenced such cure within said ten (10)
day period and thereafter diligently prosecutes such cure to completion and
completes such cure prior to Closing.
14.2(c) Seller acknowledges that the Station is of a special,
unique, and extraordinary character, and that any breach of this Agreement by
Seller could not be compensated for by damages. Accordingly, upon the occurrence
of a Seller's Event of Default, Buyer shall be entitled, in addition to any
other remedies that it may have, to enforcement of this Agreement (subject to
obtaining any required approval of the FCC) by a decree of specific performance
or injunctive relief requiring Seller to fulfill its obligations under this
Agreement. In any action to specifically enforce Seller's obligation to close
the transaction contemplated by this Agreement, Seller shall waive the defense
that there is an adequate remedy at law or in equity and agrees that Buyer shall
be entitled to obtain specific performance of Seller's obligation to close
hereunder without being required to
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prove actual damages. As a condition to seeking specific performance, Buyer
shall not be required to tender the Purchase Price but shall be required to
demonstrate that Buyer is ready, willing and able to tender the Purchase Price
and consummate the purchase of the Station as contemplated hereunder.
14.2(d) Upon the occurrence of a Buyer's Event of Default,
Seller shall have only the rights set forth in Section 14.1.
15. ACCESS TO BOOKS AND RECORDS.
After the Closing Date, Buyer and Seller shall each allow the other
reasonable access during normal business hours upon reasonable prior notice to
their respective books and records pertaining to the operation of the Stations
prior to the Closing Date and shall retain such records for a period of not less
than three (3) years after the Closing Date.
16. NOTICES.
All notices and other communications hereunder shall be in writing and
be deemed to have been duly given if delivered personally or by overnight
courier or sent by telecopy or mailed by registered mail, postage prepaid,
addressed as follows:
(a) If to Seller, to:
WTSX, Inc.
X.X. Xxx 000
Xxxx Xxxxxx, XX 00000
ATTENTION: Xxxxxx X. Xxxx
25
with a copy to:
Xxxxxxxxx & Onofry
00 Xxxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxx Xxxxxx, XX 00000
ATTENTION: Xxxxxx X. Xxxxxx, Esq.
(b) If to Buyer, to:
Xxxxx X. Xxxxxxxxxx, Xx.
Nassau Broadcasting Partners, L.P.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
with a copy to:
Xxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxxx. P.C.
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
P.O. Box 1298
Trenton, NJ 08607-1298
or such other address with respect to any party hereto as such party may from
time to time notify (as provided above) to the other party hereto. Any such
notice, demand or communication shall be deemed to have been given (i) if so
mailed, as of the close of the third business day following the date so mailed,
and (ii) if personally delivered or otherwise sent as provided above, on the
date delivered or sent if sent by telecopy and on the next business day after
the date sent in all other cases.
17. CONTROL OF STATION.
Between the date hereof and the Closing Date, Seller shall manage and
control the operation of the Station subject only to the terms and conditions of
the TBA.
18. EXPENSES.
Unless otherwise agreed to in writing by the parties hereto, each party
shall pay its own costs and expenses, including any and all legal and accounting
fees, of its performance and compliance with all conditions and agreements
contained herein on its or their part to be performed or complied with.
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19. DISCLOSURE OF EXHIBITS AND SCHEDULES.
Notwithstanding anything to the contrary contained in this Agreement or
in any of the Exhibits and Schedules, any information disclosed in one Exhibit
or Schedule, as the case may be, shall be deemed to be disclosed in all Exhibits
and Schedules. Certain information set forth in the Exhibits and Schedules, as
the case may be, is included solely for informational purposes and may not be
required to be disclosed pursuant to this Agreement. The disclosure of any
information shall not be deemed to constitute an acknowledgment that such
information is required to be disclosed in connection with the representations
and warranties made by Seller in this Agreement or is material, nor shall such
information be deemed to establish a standard of materiality. Except as
expressly set forth in this Agreement, there are no representations or
warranties, express or implied, being made by Seller.
20. SECTION HEADINGS.
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
21. ENTIRE AGREEMENT; FILINGS.
This Agreement and all Schedules and Exhibits attached hereto
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede all prior understandings and agreements among the
parties, whether oral or written, contain the entire understanding of the
parties and shall not be changed, modified, amended, extended, terminated,
waived or discharged except by subsequent instrument in writing signed by the
parties hereto. To the extent permitted by the FCC, the Schedules shall not be
filed with the FCC or otherwise disclosed or made public.
22. COUNTERPARTS.
This Agreement may be signed upon any number of counterparts with the
same effect as if the signature to each counterpart were on the same instrument.
23. SURVIVAL.
The provisions hereof, which by their terms are to be performed or
observed after the Closing Date, shall survive the Closing hereunder in
accordance with the terms of this Agreement and shall be binding upon and inure
to the benefit of all of the parties hereto, their heirs, legal representatives,
successors and assigns.
24. CONFIDENTIALITY.
Neither party shall make any announcement or disclose to the press or
others without Seller's consent (which shall not be unreasonable withheld or
delayed) as to the purchase/sale of the Stations prior to the filing of
applications with the FCC and its first
27
public announcement of the assignment application. It is understood that the
foregoing non-disclosure requirement is not intended to preclude Buyer from
having discussions with financial entities, consultants, attorneys and
prospective management level employees outside the Stations, who will also be
advised of the need and agreement for deferred disclosure.
25. ASSIGNABILITY.
Neither the Agreement nor any rights or obligations hereunder may be
assigned by Buyer or Seller without the express prior written consent of the
other party. Except as provided otherwise herein, this Agreement shall inure to
the benefit of and be binding upon the successors and assigns of the parties.
26. GOVERNING LAW.
This Agreement shall be governed by, construed (both as to validity and
performance) and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed wholly within such
jurisdiction.
27. SEVERABILITY.
Any provision of this Agreement which is unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such unenforceability without invalidating the remaining provisions hereof, and
any such unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto hereby waive any provision of law now or
hereafter in effect which renders any provision hereof unenforceable in any
respect.
38. FURTHER ACTIONS.
From time to time before, at and after the Closing, each party, at its
expense and without further consideration, will execute and deliver such
documents to the other party
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as the other party may reasonably request in order more effectively to
consummate the transactions contemplated hereby.
IN WITNESS WHEREOF, this Asset Purchase Agreement has been duly
executed by the parties hereto as of the date first above written.
PORT JERVIS BROADCASTING CO., INC.
By:
------------------------------------
Xxxxxx X. Xxxx, President
NASSAU BROADCASTING PARTNERS, L.P.
BY: NASSAU BROADCASTING PARTNERS, INC., ITS
GENERAL PARTNER
By:
-----------------------------------
Xxxxx X. Xxxxxxxxxx, Xx., President
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