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EXHIBIT (10)(gg)
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of August 8, 1995, by and
between USA Broadcast Group, L.L.C., a Delaware limited liability company
("Buyer"), and Price Communications Corporation, a New York corporation
("Price), Texoma Broadcasting Corp., a Texas corporation ("Texoma"), Southeast
Texas Broadcasting Corp., a Texas corporation ("Southeast") and Tri-State
Broadcasting Corp., a Delaware corporation ("Tri-State") (Price, Texoma,
Southeast and Tri-State, collectively "Seller").
RECITALS
A. Price is the parent company of Texoma, Southeast and
Tri-State.
B. Texoma is the licensee of and owns and operates Television
Station KFDX-TV, Channel 3, Wichita Falls, Texas ("KFDX-TV" or the "Station")
pursuant to authorizations issued by the Federal Communications Commission.
C. Southeast is the licensee of and owns and operates Television
Station KJAC-TV, Channel 4, Port Xxxxxx, Texas ("KJAC-TV" or the "Station")
pursuant to authorizations issued by the Federal Communications Commission.
D. Tri-State is the licensee of and owns and operates Television
Station KSNF(TV), Channel 16, Joplin, Missouri ("KSNF(TV)" or the "Station")
pursuant to authorizations issued by the Federal Communications Commission
(KFDX-TV, KJAC-TV and KSNF(TV) collectively the "Stations").
E. Seller desires to sell, and Buyer wishes to buy, substantially
all the assets that are used or useful in the business or operations of the
Stations, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the accounts held by Seller as of the
Closing Date for advertising and programming aired on the Stations prior to the
Closing Date and for production and other services provided by Seller prior to
the Closing Date.
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"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are designated to indicate that they will be assumed by Buyer upon its
purchase of the Stations, (ii) Contracts with advertisers for the sale of
advertising time on the Stations for cash at prevailing rates and which may be
canceled by the Stations without penalty on not more than thirty days' notice,
and (iii) any Contracts entered into by Seller between the date of this
Agreement and the Closing Date in accordance with the terms hereof.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Stations, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
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"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data (but excluding any technical
information and data located at Seller's New York corporate headquarters),
machinery and equipment warranties, and other similar intangible property
rights and interests (and any goodwill associated with any of the foregoing)
applied for, issued to, or owned by Seller or under which Seller is licensed or
franchised and which are used or useful in the business and operations of the
Stations, together with any additions thereto between the date of this
Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, including the call letters, the Federal Aviation
Administration, or any other federal, state, or local governmental authorities
to Seller in connection with the conduct of the business or operations of the
Stations, together with any additions thereto between the date of this
Agreement and the Closing Date.
"Permitted Liens" means (i) liens for current taxes not yet due and
payable, (ii) any easement, right-of-way or encumbrance on the real property
included in the Assets that does not materially impair the value or interfere
with the use and enjoyment thereof in the operation of the Stations, and (iii)
any matter disclosed in Schedule 3.5 hereto.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the business or operations of the Stations,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the conduct of the business or operations of the Stations, together
with any additions thereto between the date of this Agreement and the Closing
Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions
set forth in this Agreement, Seller hereby agrees to sell, transfer, and
deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of the
tangible and intangible assets used or useful in connection with the conduct of
the business or operations of the Stations, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding the
assets described in Section 2.2, free and clear of any claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges, or
encumbrances of any nature whatsoever (except for Permitted Liens),
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including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Seller
relating to the Stations that are not specifically included within the
Intangibles, including the goodwill of the Stations.
(f) All of Seller's proprietary information, technical
information and data, maps, computer discs and tapes, plans, diagrams
blueprints, and schematics, including filings with the FCC relating to the
business and operations of the Stations;
(g) All choses in action of Seller relating to the
Stations; and
(h) All books and records relating to the business or
operations of the Stations, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Stations.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all other
cash in any of Seller's bank accounts;
(b) Any notes receivable, insurance policies, bonds,
letters of credit, or other similar items, and any cash surrender value in
regard thereto;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements;
(d) All books and records that Seller is required by law
to retain;
(e) Any interest in and to any refunds of federal, state,
or local franchise, income, or other taxes for periods prior to the Closing
Date; and
(f) All Accounts Receivable of the Stations.
2.3 Purchase Price. The Purchase Price for the Assets shall be
calculated on the basis of the multiple of 9.2 times the combined twelve-month
trailing Cash Flow (as hereinafter
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defined) for all of the Stations, as determined as of the last day of the month
preceding the Closing Date. As used herein, the term "Cash Flow" shall mean
net operating revenues less all operating expenses, including actual cash
payments for programming, but not including depreciation, amortization
(including programming amortization), trade revenues and expenses, income
taxes, interest expenses, environmental remediation expenses, if any, legal and
other transactional costs and management fees, and as that term is used in the
broadcast industry; provided, however, that operating revenues shall not
include the "mutual growth grant" (or equivalent payment) payable to Seller
under the NBC term sheet referenced below. Seller covenants and agrees to pay
in a timely manner all accounts payable, expenses and other obligations which
are due and payable at or prior to Closing and arising out of the operation of
the Stations between the date hereof and Closing, subject to good faith
disputes. The Purchase Price shall be adjusted at closing as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Stations, including business and license
fees, utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Assets under this Agreement), and similar prepaid and deferred
items shall be prorated between Buyer and Seller in accordance with the
principle that Seller shall be responsible for all expenses, costs, and
liabilities allocable to the period prior to the Closing Date, and Buyer shall
be responsible for all expenses, costs, and obligations allocable to the period
on and after the Closing Date. Notwithstanding the preceding sentence, there
shall be no adjustment for, and Seller shall remain solely liable with respect
to, any Contracts not included in the Assumed Contracts.
(b) Manner of Determining Adjustments. The Purchase
Price, taking into account the adjustments and prorations pursuant to Section
2.3(a), will be determined finally in accordance with the following procedures:
(1) Seller shall prepare and deliver to Buyer not
later than five days before the Closing Date a preliminary settlement statement
which shall set forth Seller's good faith estimate of the Purchase Price and
any adjustments to the Purchase Price under Section 2.3(a). The preliminary
settlement statement (A) shall contain all information reasonably necessary to
determine the adjustments to the Purchase Price under Section 2.3(a), to the
extent such adjustments can be determined or estimated as of the date of the
preliminary settlement statement, and such other information as may be
reasonably requested by Buyer, and (B) shall be certified by Seller to be true
and complete as of the date thereof.
(2) No later than 90 days after the Closing Date,
Buyer will deliver to Seller a statement setting forth Buyer's determination of
the Purchase Price and the calculation thereof pursuant to Section 2.3(a). If
Seller disputes the amount of the Purchase Price determined by Buyer, it shall
deliver to Buyer within 30 days after its receipt of Buyer's
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statement a statement setting forth its determination of the amount of the
Purchase Price. If Seller notifies Buyer of its acceptance of Buyer's
statement, or if Seller fails to deliver its statement within the 30-day period
specified in the preceding sentence, Buyer's determination of the Purchase
Price shall be conclusive and binding on the parties as of the last day of the
30-day period.
(3) Buyer and Seller shall use good faith efforts
to resolve any dispute involving the determination of the Purchase Price and
any adjustments thereto. If the parties are unable to resolve the dispute
within 15 days following the delivery of Seller's statement or Buyer's
statement, as the case may be, Buyer and Seller shall jointly designate an
independent certified public accountant, who shall be knowledgeable and
experienced in the operation of television broadcasting stations, to resolve
the dispute. The accountant's resolution of the dispute shall be final and
binding on the parties, and a judgment may be entered thereon in any court of
competent jurisdiction. Any fees of this accountant shall be split equally
between the parties.
2.4 Payment of Purchase Price. The Purchase Price shall be paid by
Buyer to Seller as follows:
(a) Payment of Estimated Purchase Price. At the Closing,
Buyer shall pay or cause to be paid to or for the account of Seller the
Purchase Price as adjusted by the estimated adjustments set forth in Seller's
preliminary settlement statement (the "Estimated Purchase Price") by federal
wire transfer of same-day funds pursuant to wire instructions which shall be
delivered by Seller to Buyer at least two business days prior to the Closing
Date.
(b) Payments to Reflect Adjustments.
(1) If the Purchase Price as finally determined pursuant
to Section 2.3(b) exceeds the Estimated Purchase Price, Buyer shall pay to
Seller, in immediately available funds within five days after the date on which
the Purchase Price is determined pursuant to Section 2.3(b), the difference
between the Purchase Price and the Estimated Purchase Price.
(2) If the Purchase Price as finally determined pursuant
to Section 2.3(b) is less than the Estimated Purchase Price, Seller shall pay
to Buyer, in immediately available funds within five days after the date on
which the Purchase Price is determined pursuant to Section 2.3(b), the
difference between the Purchase Price and the Estimated Purchase Price.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Stations on or after the Closing Date, together with any other
obligation of Seller which has been prorated in favor of Buyer under Section
2.3(a) above. Buyer shall not assume any other obligations or liabilities of
Seller, including (i) any obligations or liabilities under any
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Contract not included in the Assumed Contracts, (ii) any obligations or
liabilities under the Assumed Contracts relating to the period prior to the
Closing Date, (iii) any Claims or pending litigation or proceedings relating to
the operation of the Stations prior to the Closing, (iv) any obligations or
liabilities of Seller under any employee pension, retirement, health and
welfare or other benefit plans or collective bargaining agreements, (v) any
obligation to any employee of the Stations for severance benefits, vacation
time, or sick leave accrued prior to the Closing Date (except to the extent
such items are prorated in Buyer's favor at Closing, and except to extent
provided for in an employment contract assumed by Buyer at Closing), or (vi)
any obligations or liabilities caused by, arising out of, or resulting from any
negligent action or omission of Seller or other intentional breach or wilful
misconduct of Seller prior to the Closing, and all such obligations and
liabilities shall remain and be the obligations and liabilities solely of
Seller. Except in connection with Buyer's agreement to assume certain
employment contracts at Closing, Buyer shall be under no obligation to hire the
Stations' employees.
2.6 Escrow Deposit. The parties acknowledge and agree that Buyer
has deposited One Hundred Fifty Thousand Dollars ($150,000) (the "Escrow
Deposit") with Seller on the date hereof. Unless Buyer cancels this Agreement
in accordance with Section 9.2(g) hereof, within fourteen (14) days after the
date hereof (or such later date if Buyer's cancellation right is extended
under Section 9.2(g) (such date hereinafter being referred to as the "Escrow
Date")), Buyer agrees to place an additional Three Hundred and Fifty Thousand
Dollars ($350,000) in escrow to be held by Fleet National Bank (the "Escrow
Agent") and disbursed pursuant to Section 9.3 hereof and in accordance with
the terms of the Escrow Agreement which is attached hereto as Exhibit A. Upon
Buyer's deposit of the additional $350,000 into escrow, Seller agrees to
deposit into escrow with the Escrow Agent the $150,000 deposit previously
delivered by Buyer, at which time the aggregate sum of $500,000 shall be deemed
the Escrow Deposit hereunder to be applied toward the Purchase Price at Closing
or held and disbursed in accordance with Section 9.3 and the Escrow Agreement.
If Buyer cancels this Agreement pursuant to Section 9.2(g) hereof,
Seller shall be entitled to retain the $150,000 deposit for its own account.
The parties acknowledge that Seller has not yet provided Disclosure Schedules
and certain deliveries of documents as required hereunder.
2.7 Collection of Accounts Receivable.
(a) At the Closing, Seller shall designate Buyer as its
agent solely for purposes of collecting the Accounts Receivable existing on the
Closing Date and provide Buyer with an accurate and up to date list of the
Accounts Receivable. Buyer shall make reasonable efforts to collect the
Accounts Receivable during the "Collection Period," which shall be the period
beginning on the Closing Date and ending on the last day of the fourth calendar
month following the Closing Date. All amounts received from accounts with
respect to which Buyer continues to sell advertising time on the Stations, or
otherwise maintains a business relationship, on and after the Closing Date
shall be applied first to the payment in full of any outstanding Account
Receivable balance for such account. Buyer shall not be obligated to use any
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extraordinary efforts to collect any of the Accounts Receivable or to refer any
of the Accounts Receivable to a collection agency or to an attorney for
collection. Buyer shall incur no liability to Seller for any uncollected
Accounts Receivable. During the Collection Period, neither Seller nor its
agents shall make any direct solicitation of any of the Accounts Receivable for
collection purposes. Following the expiration of the Collection Period, Seller
may pursue collections of all Accounts Receivable.
(b) On or before the fifth day following the end of each
calendar month in the Collection Period, Buyer shall furnish Seller with a list
of, and pay over to Seller without set-off or deduction, the amounts collected
during such calendar month with respect to the Accounts Receivable, less any
amounts for commissions due (which Buyer will then pay) and any amounts finally
determined to be payable to Buyer pursuant to Section 2.4(b)(2).
(c) Following the expiration of the Collection Period,
Buyer shall have no further obligations under this Section 2.7, except that
Buyer shall immediately pay over to Seller any amounts subsequently paid to it
with respect to any Accounts Receivable.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization. Standing. and Authority. Each of the Sellers is
a corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction in which it is organized. Tri-State is duly qualified
to conduct business as foreign corporation in the State of Missouri. Seller
has all requisite power and authority (i) to own, lease, and use the Assets as
now owned, leased. and used, (ii) to conduct the business and operations of the
Stations as now conducted, and (iii) to execute and deliver this Agreement and
the documents contemplated hereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by Seller
hereunder and thereunder. Seller is not a participant in any joint venture or
partnership with any other person or entity with respect to any part of the
business or operations of the Stations or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by Seller have been (or will prior to Closing
be) duly authorized by all necessary actions on the part of Seller and its
shareholders. This Agreement has been duly executed and delivered by Seller and
constitutes the legal, valid, and binding obligation of Seller, enforceable
against Seller in accordance within its terms except as the enforceability of
this Agreement may be affected by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally, and by judicial discretion in the
enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3 and satisfaction of the requirements of the HSR
Act, if applicable, the execution, delivery, and performance by Seller of this
Agreement and the documents contemplated hereby
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(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with any
provision of the Articles of Incorporation or Bylaws of Seller; (iii) will not
conflict with, result in a breach of, or constitute a default under, any law,
judgment, order, ordinance, injunction, decree, rule, regulation, or ruling of
any court or governmental instrumentality; (iv) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any material agreement, instrument, license, or
permit to which Seller is a party or by which Seller may be bound; and (v) will
not create any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued pursuant to Final Orders, and
Seller is the authorized legal holder thereof. The Licenses comprise all of the
material licenses, permits, and other authorizations required from any
governmental or regulatory authority for the lawful conduct of the business and
operations of the Stations in the manner and to the full extent they are now
conducted, and none of the Licenses is subject to any restriction or condition
that would materially limit the full operation of the Stations as now operated.
The Licenses are in full force and effect, and the conduct of the business and
operations of the Stations is in accordance therewith in all material respects.
Seller has no reason to believe that any of the Licenses would not be renewed
for a full term with no materially adverse conditions by the FCC or other
granting authority in the ordinary course. Schedule 3.7 includes a true and
complete list of all agreements with operators of cable television systems
pursuant to which Seller has granted to such operators the right to retransmit
the Stations' signals (the "Retransmission Agreements"). Except with respect
to the cable television systems that are parties to the Retransmission
Agreements, on or before June 17, 1993, Seller made a valid election of must
carry with respect to each cable system located within each Station's Area of
Dominant Influence (as defined in Section 76.55(e)(1) of the Commission's
rules). Except as set forth on Schedule 3.4, no cable system has advised
Seller of any signal quality deficiency or copyright indemnity or other
prerequisite to cable carriage of any Station's signal, and no cable system has
declined or threatened to decline such carriage or failed to respond to a
request for carriage or sought any form of relief from carriage from the FCC.
With respect to KJAC-TV, the parties acknowledge that the Station's
1993 application for renewal of licenses ("Renewal Application") is pending
before the FCC. Seller represents that neither a petition to deny nor a
competing application has been filed against the Renewal Application and the
deadline for filing either a petition to deny or competing application against
the Renewal Application was July 1, 1993. Seller further represents that the
only reason the KJAC-TV renewal has not been granted is the fact that the FCC
has not resolved an indecency complaint against the Station involving an
episode of The Xxxx Xxxxxxx Show. Seller covenants to use its best efforts to
obtain an expeditious grant of the Renewal Application without any conditions
materially adverse to Buyer's ownership or operations of KJAC-TV. Seller shall
hold Buyer harmless and indemnify Buyer in connection with the complaint and
the FCC's disposition of the renewal application. With respect to KSNF-TV, the
parties further
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acknowledge that there is pending against the Station a complaint alleging EEO
violation(s). Seller covenants to use its best efforts to have the matter
resolved expeditiously without any conditions materially adverse to Buyer's
ownership or operations of the Station. Seller shall hold Buyer harmless and
indemnify Buyer in connection with that EEO complaint and the FCC's disposition
of it.
3.5 Title to and Condition of Real Property. Schedule 3.5 contains
a complete and accurate description of all the Real Property and Seller's
interests therein (including the street address and legal description of owned
Real Property). The Real Property listed on Schedule 3.5 comprises all real
property interests necessary to conduct the business and operations of the
Stations as now conducted. Seller has good and insurable fee simple title, to
all fee estates (including the improvements thereon) included in the Real
Property, free and clear of all liens, mortgages, pledges, covenants,
easements, restrictions, encroachments, leases, charges, and other claims and
encumbrances of any nature whatsoever, and without reservation or exclusion of
any mineral, timber, or other rights or interests, except for liens for real
estate taxes not yet due and payable and liens disclosed on Schedule 3.5 and
Permitted Liens. All towers, guy anchors, and buildings and other improvements
included in the Assets are located entirely on the Real Property listed in
Schedule 3.5 or, in the case of guy wires or anchors, Seller otherwise has
legal and valid rights for the placement thereof on adjoining properties.
Seller has delivered to Buyer true and complete copies of all deeds pertaining
to the Real Property. Except as set forth on Schedule 3.5, all Real Property
(including the improvements thereon) (i) is in good condition and repair
consistent with its present use, (ii) is available for immediate use in the
conduct of the business and operations of the Stations, and (iii) complies in
all material respects with all applicable building or zoning codes and the
regulations of any governmental authority having jurisdiction. Seller has full
legal and practical access to the Real Property.
3.6 Title to and Condition of Tangible Personal Property. Schedule
3.6 lists all material items of Tangible Personal Property. The Tangible
Personal Property listed on Schedule 3.6 comprises all material items of
tangible personal property necessary to conduct the business and operations of
the Stations as now conducted. Except as described in Schedule 3.6, Seller owns
and has good title to each item of Tangible Personal Property, and none of the
Tangible Personal Property owned by Seller is subject to any security interest,
mortgage, pledge, conditional sales agreement, or other lien or encumbrance,
except for liens for current taxes not yet due and payable. Each item of
Tangible Personal Property is available for immediate use in the business and
operations of the Stations. Except as set forth on Schedule 3.6, all items of
transmitting and studio equipment included in the Tangible Personal Property
(i) have been maintained in a manner consistent with generally accepted
standards of good engineering practice, and (ii) will permit the Stations and
any of its auxiliary broadcast stations to operate in all material respects in
accordance with the terms of the FCC Licenses and the rules and regulations of
the FCC, and in all material respects with all other applicable federal, state,
and local statutes, ordinances, rules, and regulations.
3.7 Contracts. Schedule 3.7 is a true and complete (i) list of all
material Contracts, except contracts with advertisers for the sale of
advertising time on the Stations for cash at prevailing rates and which have
not been prepaid and which may be canceled by the Stations
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without penalty on not more than thirty days' notice, and (ii) summary of
Seller's rights and obligations as of the date hereof under trade and barter
agreements relating to the Stations. Seller has delivered to Buyer true and
complete copies of all written Contracts which are required to listed on
Schedule 3.7, and true and complete memoranda of all oral Contracts (including
any amendments and other modifications to such Contracts). Other than the
Contracts listed on Schedule 3.7 and those that are not required to be listed
thereon, Seller requires no material contract, lease, or other agreement to
enable it to carry on its business as now conducted. Except as set forth on
Schedule 3.7, all of the Assumed Contracts are in full force and effect, and
are valid, binding, and enforceable in accordance with their terms. To
Seller's knowledge, there is not under any Assumed Contract any material
default by any party thereto. Seller has full legal power and authority to
assign its rights under the Assumed Contracts to Buyer in accordance with this
Agreement, and such assignment will not affect the validity, enforceability, or
continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1, the other Consents described in Schedule 3.3 and satisfaction of the
requirements under the HSR Act, if applicable, no material consent, approval,
permit, or authorization of, or declaration to or filing with any governmental
or regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby, (ii) to permit Seller
to assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct
the business and operations of the Stations in essentially the same manner as
such business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are, to
Seller's knowledge, valid and in good standing and uncontested. Seller has
delivered to Buyer copies of all documents in its possession establishing or
evidencing all Intangibles. To Seller's knowledge, Seller is not infringing
upon or otherwise acting adversely to any trademarks, trade names, service
marks, service names, copyrights, patents, patent applications, know-how,
methods, or processes owned by any other person or persons, and there is no
claim or action pending, or to the knowledge of Seller threatened, with respect
thereto. The Intangibles listed on Schedule 3.9 comprise all intangible
property interests necessary to conduct the business and operations of the
Stations as now conducted.
3.10 Financial Statements. Seller has furnished Buyer with true
and complete copies of balance sheets and a profit and loss statements for the
periods ended December 31, 1993 and 1994, and unaudited balance sheet and
profit and loss statement for the six months ended June 30, 1995 (collectively,
the "Financial Statements). The Financial Statements have been prepared from
the books and records of Seller, have been prepared in accordance with
generally accepted accounting principles consistently applied and maintained
throughout the periods indicated, accurately reflect the books, records, and
accounts of the Stations (which books, records, and accounts are complete and
correct), are complete and correct in all material respects, and present fairly
the financial condition of the Stations as at their respective dates and the
results of operations for the periods then ended. None of the Financial
Statements materially understates the true direct (excluding indirect overhead
and headquarters expense) costs and expenses of
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conducting the business or operations of the Stations or inflates the revenues
of the Stations.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Stations. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate
in amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Stations against all customary and foreseeable risks. During the past three
years, no insurance policy of Seller on the Assets or the Stations has been
canceled by the insurer and no application of Seller for insurance has been
rejected by any insurer.
3.12 Reports. All material returns, reports, and statements which
the Stations are currently required to file with the FCC or with any other
governmental agency have been filed, and all reporting requirements of the FCC
and other governmental authorities having jurisdiction over Seller and the
Stations have been complied with in all material respects. All of such returns,
reports, and statements are substantially complete and correct as filed. Seller
has timely paid to the FCC all annual regulatory fees payable with respect to
the FCC Licenses.
3.13 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and Seller has paid or caused to be
paid all taxes shown on those returns or on any tax assessment received by
Seller to the extent that such taxes have become due, or has set aside on its
books adequate reserves (segregated to the extent required by generally
accepted accounting principles) with respect thereto. There are no governmental
investigations or other legal, administrative, or tax proceedings pursuant to
which Seller is or could be made liable for any taxes, penalties, interest, or
other charges, the liability for which could extend to Buyer as transferee of
the business of the Stations, and no event has occurred that could impose on
Buyer any material transferee liability for any taxes, penalties, or interest
due or to become due from Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings affecting the television broadcasting industry generally or except
as set forth in Schedule 3.14, there is no claim, legal action, counterclaim,
suit, arbitration, governmental investigation or other legal, administrative,
or tax proceeding, nor any order, decree or judgment, in progress or pending,
or to the knowledge of Seller threatened, against Seller with respect to its
ownership or operations of the Stations or otherwise relating to the Assets or
the business or operations of the Stations. In particular, but without
limiting the generality of the foregoing, except as set forth in Schedule 3.14,
there are no applications, complaints or proceedings pending or, to the best of
its knowledge, threatened (i) before the FCC relating to the business or
operations of the Stations other than rule making proceedings which affect the
television industry generally, (ii) before any federal or state agency relating
to the business or operations of the Stations involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Stations involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.15 Environmental Matters.
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(a) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge Seller has complied in all material respects with all laws,
rules, and regulations of all federal, state, and local governments (and all
agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Stations
alleging any failure to comply with any such law, rule, or regulation. For
purposes of this Section 3.15, Buyer acknowledges that Seller purchased the
stock of Texoma and Southeast and that the term "Seller" as used herein does
not include Texoma and Southeast prior to such stock purchase.
(b) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge, Seller has no liability relating to its ownership and
operations of the Stations (and there is no reasonable basis related to the
past or present operations, properties, or facilities of Seller for the
creation of any such material future liability) under the Comprehensive
Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act, the Federal Water Pollution Control Act, the
Clean Air Act, the Safe Drinking Water Act, the Toxic Substances Control Act,
the Refuse Act, or the Emergency Planning and Community Right-to-Know Act (each
as amended) or any other law, rule, or regulation of any federal, state, or
local government (or agency thereof) concerning release or threatened release
of hazardous substances, public health and safety, or pollution or protection
of the environment.
(c) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge, Seller has no material liability relating to its ownership
and operation of the Stations (and there is no reasonable basis for the
creation of any such material future liability) under the Occupational Safety
and Health Act, as amended, or under any other law, rule, or regulation of any
federal, state, or local government (or agency thereof) concerning employee
health and safety.
(d) Except as set forth on Schedule 3.15, in connection
with its ownership and operation of the Stations, Seller has obtained and been
in material compliance with the terms and conditions of all material permits,
licenses, and other authorizations which are required under, and has complied
in all material respects with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and timetables
which are contained in, all federal, state, and local laws, rules, and
regulations (including all codes, plans, judgments, orders, decrees,
stipulations, injunctions, and charges thereunder) relating to public health
and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
(e) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge, all properties and equipment used in the business and
operations of the Stations are and have been free of friable asbestos and
asbestos- related products, PCB's, methylerle chloride, trichloroethylene, 1,
2-transdichloroethylene, dioxins, dibenzofurans, and Extremely Hazardous
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Substances (as defined in Section 302 of the Emergency Planning and Community
Right-to-Know Act), where the existence thereof would be a material violation
of applicable environmental laws.
(f) Except as set forth on Schedule 3.15, to the best of
Seller's knowledge, no pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Stations where the existence
thereof would be a material violation of applicable environmental laws. Seller
did not discover the existence of any of the foregoing when it acquired the
Real Property.
3.16 Compliance with Laws. Seller has complied in all material
respects with (i) the Licenses, and (ii) all federal, state, and local laws,
rules, regulations, and ordinances applicable or relating to the ownership and
operation of the Stations. To the best of Seller's knowledge, neither the
ownership or use of the properties of the Stations nor the conduct of the
business or operations of the Stations conflicts in any material respect with
the rights of any other person or entity. Buyer acknowledges that Seller's
representations and warranties regarding compliance with environmental laws are
governed by Section 3.15.
3.17 Conduct of Business in Ordinary Course. Since June 30, 1995,
Seller has conducted the business and operations of the Stations only in the
ordinary course and has not:
(a) Suffered any significant material adverse change in
the business, assets, or properties of the Stations, including any damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Stations which would have a material adverse effect on the
operations of the Stations;
(b) Made any material sale, assignment, lease, or other
transfer of any Station's properties other than in the normal and usual course
of business where no longer needed in the operation of the business of the
Stations or with suitable replacements being obtained therefor (for purposes of
this subparagraph (b), the term "material" shall mean in excess of $10,000 per
Station);
(c) Canceled any material debts owed to or claims held by
Seller with respect to any Station, except in the normal and usual course of
business;
(d) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
any Station; or
(e) Transferred or granted any right under, or entered
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to any Station.
3.18 Transactions with Affiliates. Other than Price Communications
and its subsidiaries, Seller has not been involved in any business arrangement
or relationship relating to
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the Stations with any affiliate of Seller, and no affiliate of Seller owns any
property or right, tangible or intangible, which is used in the business of the
Stations. As used in this paragraph, "affiliate'' has the meaning set forth in
Rule 12b-2 promulgated under the Securities and Exchange Act of 1934.
3.19 Broker. Neither Seller nor any person or entity acting on
Seller's behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.20 Personnel.
(a) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.20, and complete and accurate copies of
any such written Employee Plans and Compensation Arrangements (or related
insurance policies) have been furnished to Buyer, along with copies of any
employee handbooks or similar documents describing such Employee Plans and
Compensation Arrangements. Schedule 3.20 also includes a description of any
unwritten Employee Plans or Compensation Arrangements. Schedule 3.20 also
contains a true and complete list of all employees of the Stations, their job
descriptions, dates of hire and amounts and dates of last salary increase.
(b) Each Employee Plan and Compensation Arrangement has
been administered in material compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, the Age Discrimination in
Employment Act and any other applicable Federal or state laws. Seller is not
aware of any pending governmental audit or examination of any Employee Plan or
Compensation Arrangement or of any facts which would lead it to believe that
any such audit or examination is threatened. There exists no action, suit or
claim (other than routine claims for benefits) with respect to any Employee
Plan or Compensation Arrangement pending or, to the best knowledge of Seller,
threatened against any of such plans or arrangements, and Seller possesses no
knowledge of any facts which could give rise to any such action, suit or claim.
(c) Seller does not contribute to and is not required to
contribute to any Multi-employer Plan with respect to the employees of the
Stations, and neither Seller nor any other trade or business under common
control with Seller (within the meaning of Sections 414(b), (c), (m) or (o) of
the Code) has incurred or reasonably expects to incur any "withdrawal
liability," as defined under Section 4201 et seq. of ERISA.
(d) Except as described in Schedule 3.20, neither Seller
nor any other trade or business under common control with Seller (within the
meaning of Sections 414(b), (c), (m) or (o) of the Code) sponsors, maintains or
contributes to any Employee Plan or Compensation Arrangement that provides
retiree medical or retiree life insurance coverage to employees of Seller at
the Stations upon their retirement.
(e) Except as described in Schedule 3.20, with respect to
each Employee Plan and, to the extent applicable, each Compensation
Arrangement: (i) each Employee Plan that is
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intended to be tax-qualified, and each amendment thereto, is the subject of a
favorable determination letter, and no plan amendment that is not the subject
of a favorable determination letter would affect the validity of an Employee
Plan's letter; (ii) no prohibited transaction, within the definition of section
4975 of the Code or Title 1, Part 4 of ERISA, has occurred which would subject
Seller to any liability that could become a liability of Buyer; and (iii) all
contributions, premiums or payments accrued, in whole or in part, under each
Employee Plan or Compensation Arrangement or with respect thereto as of the
Closing will be paid by the Seller prior to the Closing.
(f) For purposes of this Agreement, the following terms
shall have the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan
as defined in Section 3(3) of ERISA to which Seller or any entity related to
Seller (under the terms of Section 414(b), (c), (m) or (o) of the Code)
contributes or to which Seller or any entity related to Seller (under the terms
of Section 414(b), (c), (m) or (o) of the Code) sponsors, maintains or
otherwise is bound which provides benefits to persons employed or previously
employed at the Stations; (ii) "Code" shall mean the Internal Revenue Code of
1986, as amended, any successor thereto and any regulations promulgated
thereunder; (iii) "Compensation Arrangement" shall mean any plan or
compensation arrangement other than an Employee Plan, whether written or
unwritten, which provides to persons employed or previously employed at the
Stations any compensation or other benefits, whether deferred or not, in excess
of base salary or wages, including, but not limited to, any bonus or incentive
plan, stock rights plan, deferred compensation arrangement, life insurance,
stock purchase plan, severance pay plan and any other employee fringe benefit
plan; (iv) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, any successor thereto and any regulations promulgated
thereunder; and (v) "Multi-employer Plan" means a plan, as defined in ERISA
Section 3(37), to which Seller or any entity related to Seller (under the terms
of Section 414(b) or (c) of the Code) contributes or is required to contribute.
3.21 Labor Relations. Seller is not a party to or subject to any
collective bargaining agreements with respect to any Station. Seller has no
written or oral contracts of employment with any employee of any Station, other
than those listed in Schedule 3.7. Seller has complied in all material respects
with all laws, rules, and regulations relating to the employment of labor,
including those related to wages, hours, collective bargaining, occupational
safety, discrimination, and the payment of social security and other payroll
related taxes, and it has not received any written notice alleging that it has
failed to comply in any material respect with any such laws, rules, or
regulations. No material controversies, disputes, or proceedings are pending
or, to the best of Seller's knowledge, threatened, between it and any employee
(singly or collectively) of any Station. No labor union or other collective
bargaining unit represents or claims to represent any of the employees of any
Station. There is no union campaign being conducted to represent employees of
any the Station or to solicit cards from employees to authorize a union to
request a National Labor Relations Board certification election with respect to
any employees at any Station.
3.22 Full Disclosure. No representation or warranty made by Seller
in this Agreement
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or in any schedule hereto or any certificate furnished or to be furnished by
Seller pursuant hereto contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact and required to
make any statement made herein or therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization. Standing. and Authority. Buyer is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Delaware and on or before the Closing Date will be
duly qualified to conduct business as a foreign corporation in the States of
Texas and Missouri. Buyer has all requisite power and authority to execute and
deliver this Agreement and the documents contemplated hereby, and to perform
and comply with all of the terms, covenants, and conditions to be performed and
complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by Buyer have been duly authorized by all
necessary actions on the part of Buyer. This Agreement has been duly executed
and delivered by Buyer and constitutes the legal, valid, and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by judicial discretion
in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents and satisfaction of the requirements of the HSR Act, if applicable,
the execution, delivery, and performance by Buyer of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (i) do not require the consent of any third party; (ii) will
not conflict with the Certificate of Incorporation or Bylaws of Buyer; (iii)
will not conflict with, result in a breach of, or constitute a default under,
any law, judgment, order, injunction, decree, rule, regulation, or ruling of
any court or governmental instrumentality; or (iv) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Buyer is a party or by which Buyer may be bound, such that Buyer could
not acquire or operate the Assets.
4.4 Broker. Neither Buyer nor any person or entity acting on
Buyer's behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
4.5 FCC Qualifications. To the best of Buyer's knowledge, (i)
Buyer is qualified under the rules and regulations of the FCC to enter into
this Agreement and consummate the transactions contemplated herein and (ii)
Buyer requires no waivers of such rules or regulations in order for the FCC to
grant the FCC Consent.
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4.6 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document or other instrument furnished
or to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
and required to make any statement made herein or therein not misleading.
SECTION 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Stations only in
accordance with the covenants in this Section 5.
5.2 Contracts. Seller will not enter into any contract or
commitment relating to the Stations or the Assets or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that, in the case of any of the foregoing, will be binding on
Buyer after Closing and will require the payment of consideration of more than
$500 without Buyer's prior written consent. Prior to the Closing Date, Seller
shall deliver to Buyer a list of all Contracts entered into between the date of
this Agreement and the Closing Date, together with copies of such Contracts.
Notwithstanding the foregoing, Seller will not enter into any programming
agreement which will be binding on Buyer after the Closing without Buyer's
prior written consent.
5.3 Disposition of Assets. Seller shall not sell, assign, lease, or
otherwise transfer or dispose of any of the material Assets without Buyer's
prior written consent, except where no longer used or useful in the business or
operations of the Stations or in connection with the acquisition of replacement
property of equivalent kind and value.
5.4 Encumbrances. Seller shall not create, assume or permit to exist
any claim, liability, mortgage, lien, pledge, condition, charge, or encumbrance
of any nature whatsoever upon the Assets, except for (i) liens and encumbrances
disclosed on Schedule 3.5 and Schedule 3.6, and (ii) liens for current taxes
not yet due and payable, (iii) mechanics' liens and other similar liens, and
(iv) Permitted Liens, all of which liens and encumbrances in clauses (i) and
(iii) shall be removed prior to the Closing Date, unless in the case of the
liens and encumbrances specified in clause (i) either: (A) the existence of
such liens and encumbrances does not materially impair the value or interfere
with the use and enjoyment of the Stations; or (B) such liens and encumbrances
are reasonably and adequately described (with respect to possible material
impairment of or interference with value or use as aforesaid) in the Disclosure
Schedules or other written material received by Buyer on or before August 22,
1995; provided, however, that Buyer shall, within thirty (30) days after the
date hereof, inform Sellers in writing of those liens and encumbrances
specified in clause (i) above which it believes Sellers are required to remove
as aforesaid.
5.5 Licenses. Seller shall not cause or permit, by any act or failure
to act, any of the Licenses to expire or to be revoked, suspended, or modified,
or take any action that could cause the FCC or any other governmental authority
to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Seller shall not fail to prosecute with
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due diligence any applications to any governmental authority in connection with
the operation of the Stations.
5.6 Rights. Seller shall not waive any right relating to the Stations
or any of the Assets. Seller shall not cause or permit, by any act or failure
to act, any cable system located within any Station's Area of Dominant
Influence to refuse to carry such Station's signal.
5.7 No Inconsistent Action. Seller shall not take any action that is
inconsistent with its obligations under this Agreement or that could hinder or
delay the consummation of the transactions contemplated by this Agreement.
5.8 Access to Information. Seller shall give Buyer and its counsel,
accountants, engineers, advisors and other authorized representatives
reasonable access to the Assets, including each of the Station's studios and
tower site locations and to all other properties, equipment, books, records,
Contracts, and documents relating to the Stations for the purpose of audit and
inspection, including inspections incident to the environmental survey
described in Section 6.5 and the engineering report described in Section 6.6,
and will furnish or cause to be furnished to Buyer or its authorized
representatives all information with respect to the affairs and business of the
Stations that Buyer may reasonably request (including any financial reports and
operations reports produced with respect to the affairs and business of the
Stations). Without limiting the generality of the foregoing, Seller shall give
Buyer and its counsel, accountants and other authorized representatives
reasonable access to Seller's financial records and Seller's employees,
counsel, accountants and other representatives for the purpose of preparing and
auditing such financial statements as Buyer determines, in its judgment, are
required or advisable to comply with federal or state securities laws and the
rules and regulations of securities markets as a result of the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
5.9 Maintenance of Assets. Seller shall maintain all of the Assets
in good condition (ordinary wear and tear excepted), and use, operate, and
maintain all of the Assets in a reasonable manner. Seller shall maintain
inventories of spare parts and expendable supplies at levels consistent with
past practices. If any loss, damage, impairment, confiscation, or condemnation
of or to any of the Assets occurs, Seller shall repair, replace, or restore the
Assets to their prior condition as represented in this Agreement as soon
thereafter as possible, and Seller shall use the proceeds of any claim under
any insurance policy solely to repair, replace, or restore any of the Assets
that are lost, damaged, impaired, or destroyed.
5.10 Insurance. Seller shall maintain the existing insurance
policies on the Stations and the Assets.
5.11 Consents. Seller shall use reasonable efforts to obtain the
Consents and the estoppel certificates described in Section 8.2(b), without any
change in the terms or conditions of any Contract or License that could be less
advantageous to the Stations than those pertaining under the Contract or
License as in effect on the date of this Agreement. Seller shall promptly
advise Buyer of any difficulties experienced in obtaining any of the Consents
and of any conditions
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proposed, considered, or requested for any of the Consents.
5.12 Books and Records. Seller shall maintain its books and records
relating to the Stations in accordance with past practices.
5.13 Notification. Seller shall promptly notify Buyer in writing of
any unusual or material developments with respect to the business or operations
of the Stations, and of any material change in any of the information contained
in Seller's representations and warranties contained in Section 3 of this
Agreement.
5.14 Financial Information. Seller shall furnish to Buyer within
twenty days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense of the
Stations for the month just ended and such other financial information
(including information on payables and receivables) relating to the Stations as
Buyer may reasonably request. All financial information delivered by Seller to
Buyer pursuant to this Section shall be prepared from the books and records of
Seller in accordance with generally accepted accounting principles consistently
applied, shall accurately reflect the books, records, and accounts of the
Stations shall be complete and correct in all material respects, and shall
present fairly the financial condition of the Stations as at their respective
dates and the results of operations for the periods then ended. Seller shall
also furnish to Buyer weekly pacing reports for the Stations.
5.15 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Stations.
5.16 Preservation of Business. Seller shall use its reasonable
efforts to (i) preserve the business and organization of the Stations and keep
available to the Stations its present employees (subject to Seller's right to
control normal personnel decisions), (ii) maintain its level of promotional
efforts in accordance with past practice and current budgets, (iii) preserve
the Station's present relationships with material suppliers, advertisers, and
others having business relations with it.
5.17 Collection of Accounts Receivable. Prior to the Closing, Seller
shall collect the Accounts Receivable only in the ordinary course consistent
with its past practices.
5.18 Personnel Recommendations. Seller shall promptly notify Buyer as
personnel vacancies occur at the Stations and consider for employment all
personnel recommended by Buyer for such vacant positions.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the
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FCC.
(b) Seller and Buyer shall promptly prepare (an) appropriate
application(s) for the FCC Consent and shall jointly file the application(s)
with the FCC within five business days of the Escrow Date. The parties shall
prosecute the application(s) with all reasonable diligence and otherwise use
their best efforts to obtain a grant of the application(s) as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by
the FCC Consent, except that no party shall be required to comply with a
condition if (1) the condition was imposed on it as the result of a
circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it Buyer and Seller shall oppose any petitions and objections filed in
opposition to the application(s) and any requests for reconsideration or
judicial review 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 9, the parties shall
jointly request an extension of the effective period of the FCC Consent. No
extension of the FCC Consent shall limit the exercise by either party of its
rights under Section 9.
6.2 Control of the Stations. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Stations, and all such operations,
including complete control and supervision of all of each Station's programs,
employees, and policies, shall be the sole responsibility of Seller until the
Closing.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement and except as and to the extent
required by law, including disclosure requirements of federal and state
securities laws and rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party upon request
all information obtained by the such party from the other party in connection
with the transactions contemplated by this Agreement.
6.5 Environmental Assessment. Buyer shall have the option, at its
sole expense and cost, to undertake an Environmental Assessment of the real
properties of the Stations in accordance with the terms and conditions set
forth herein. Said Environmental Assessment shall be performed by Dames and
Xxxxx or such other environmental consulting firm acceptable to Seller (the
"Approved Consultant"). The Environmental Assessment shall consist of a Phase
I environmental assessment and Phase I report (the "Phase I") and, only if and
to the extent expressly recommended by the Approved Consultant in its Phase I,
a Phase II environmental assessment and Phase II report (the "Phase II"), which
Phase II environmental assessment may
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include intrusive sampling and testing of the soil and groundwater, integrity
testing of any underground storage tanks and/or an asbestos survey. (The Phase
I and Phase II reports are referred to collectively as the "Environmental
Assessment"). Each of the Phase I and, if necessary, the Phase II shall be
undertaken by the Approved Consultant in accordance with a scope (or scopes) of
work furnished to and approved by Seller prior to the Approved Consultant's
undertaking of the work. If the Buyer undertakes a Phase II environmental
assessment, as provided herein, Buyer shall require that the Approved
Consultant maintains, in full force and effect, general liability insurance
coverage covering claims for bodily injury and property damage that might occur
in the minimum amount of $1 million single limit per occurrence and shall
require that the Approved Consultant cause Seller to be named as an additional
insured under said Policy. A copy of each of the Phase I and Phase II reports
shall be provided to the Seller within three (3) business days of receipt
thereof by the Buyer. The Phase I work shall be completed and a copy of the
Phase I report shall be provided to Seller by no later than September 11, 1995.
Any Phase II work shall be completed and a copy of the Phase II report shall be
provided to Seller by no later than October 6, 1995. In the event that the
Environmental Assessment discloses environmental conditions requiring or
reasonably likely to require remediation or clean-up or further investigation
and the Approved Consultant recommends in the Phase I or Phase II remedial or
further investigatory activities required to cause Seller to be in compliance
with applicable Environmental Laws or, if appropriate, that are reasonably
likely to be required by an environmental regulatory agency with jurisdiction
over the environmental conditions identified in the Environmental Assessments
(collectively, "Remedial Activities"), Buyer and Seller shall share equally
(50% each) all the costs and expenses associated with undertaking said Remedial
Activities; provided, however, that Seller's share of said costs and expenses
shall not exceed $125,000 and provided further that in the event that the costs
and expenses of said Remedial Activities, based upon a written Estimate
prepared by the Approved Consultant and provided to Seller and Buyer, exceeds
$250,000, Buyer shall have the right to terminate this Agreement, upon written
notice to Seller, unless Seller shall agree to bear the costs and expenses of
said Remedial Activities in excess of $250,000.
6.6 Engineering Report. Buyer may, at its option and expense,
retain an engineering firm to conduct a proof of performance study of the
Stations and to prepare a report on each Station's compliance with customary
engineering practices and all applicable FCC rules, regulations, prescribed
practices, and technical standards. If the report discloses any material
deficiencies in the operations or equipment of the Stations, Buyer shall so
notify Seller within ten (10) days of Buyer's receipt of such report.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds or deliver any other consideration to obtain any of the Consents or (ii)
to agree to any adverse change in any License or Assumed Contract to obtain a
Consent required with respect thereto.
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6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Texas shall be complied with by Seller. Any loss, liability,
obligation, or cost suffered by Seller or Buyer as the result of the failure of
Seller or Buyer to comply with the provisions of any bulk sales law applicable
to the transfer of the Assets as contemplated by this Agreement shall be borne
by Seller.
6.9 Noncompetition Agreement. At Closing, Buyer and Seller shall
enter into a Noncompetition Agreement in the form of Schedule 6. 9 Buyer and
Seller shall endeavor in good faith to agree upon the amount of the Purchase
Price to be allocated to Seller's performance of its obligations under the
Noncompetition Agreement within thirty (30) days after the date hereof.
6.10 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to each
parcel of Real Property that Seller owns, Seller acknowledges that Buyer will
obtain, at Buyer's expense, at or prior to Closing, an ALTA Owner's Policy of
Title Insurance Form B-1987 (or equivalent policy acceptable to Buyer), issued
by a title insurer satisfactory to Buyer, in an amount equal to the fair market
value of the property and any improvements thereon (as reasonably determined by
Buyer), insuring title to such parcel in the name of Buyer as of the Closing,
subject only to liens or encumbrances expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained by Buyer pursuant to this Agreement shall
(1) insure title to the Real Property described in the policy and all recorded
easements benefitting such Real Property. (2) contain an "extended coverage
endorsement" insuring over the general exceptions customarily contained in
title policies (if reasonably available in the jurisdiction in which the
property is located), (3) contain an endorsement insuring that the Real
Property described in the policy is the same real estate shown in the survey
delivered with respect to such property, and (4) contain a "contiguity"
endorsement with respect to any Real Property consisting of more than one
record parcel.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Buyer will be entitled to procure a current survey of the
parcel, prepared by a licensed surveyor and conforming to current ALTA Minimum
Detail Requirements for Land Title Surveys, disclosing the location of all
improvements, easements, party walls, sidewalks, roadways, utility lines, and
other matters customarily shown on such surveys, and showing access
affirmatively to public streets and roads.
6.11 Sales Tax Filings. Prior to Closing, Seller shall continue to
file Texas and Missouri sales tax returns with respect to the pertinent
Stations in accordance with Seller's past practices and shall concurrently
deliver copies of all such returns to Buyer.
6.12 Access to Books and Records. Seller shall provide Buyer access
and the right to copy for a period of three years from the Closing Date any
books and records relating to the Assets but not included in the Assets. Buyer
shall provide Seller access and the right to copy for
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a period of three years from the Closing Date any books and records relating to
the Assets that are included in the Assets.
6.13 [Intentionally Omitted]
6.14 Compliance with HSR Act. If the transactions contemplated by
this Agreement are subject to the filing requirements of the HSR Act, or the
approval by the U.S. Federal Trade Commission (the "FTC") and the Antitrust
Division of the U.S. Department of Justice (the "DOJ"), Buyer and Seller will
(i) each make such filings as are required under Title II of the HSR Act as
soon as practicable but in no event later than ten (10) days following the date
hereof, (ii) otherwise promptly comply with the applicable requirements under
the HSR Act, including furnishing all information and filing all documents
required thereunder, (iii) furnish to each other copies of those portions of
the documents filed which are not confidential, and (iv) cooperate fully and
use their best efforts to expedite compliance with the HSR Act.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT
CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with the covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents to the assignment of the
Contracts designated as "material contracts" on Schedule 3.7 shall have been
obtained and delivered to Buyer without any adverse change in the terms or
conditions of any agreement or any governmental license, permit, or other
authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all Licenses and there shall not have been any modification of any
License that could have an adverse effect on the Stations or the conduct of its
business and operations. No proceeding shall be pending the effect of which
could be to revoke, cancel, fail to renew, suspend, or modify adversely any
License.
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(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing Date, there shall have been no significant material adverse
change in the assets, properties or business of the Stations, including any
damage, destruction, or loss affecting any assets used or useful in the conduct
of the business or operations of the Stations which would have a material
adverse effect on the operations of the Stations.
(h) HSR Act. If legally required, all filings with the
FTC and the DOJ pursuant to the HSR Act shall have been made and all applicable
waiting periods with respect to such filings (including any extensions thereof)
shall have expired or been terminated and no actions shall have been instituted
which are pending on the Closing Date by the FTC or the DOJ challenging or
seeking to enjoin the consummation of this transaction.
(i) NBC Affiliation. Seller and NBC shall have executed
an amendment to, or renewal agreement with respect to, each of the Stations'
affiliation agreements on terms at least as favorable to Buyer in the aggregate
as those set forth in the term sheet attached hereto as Schedule 7.1(i), and
the network compensation payable thereunder for prime time broadcasts shall be
at least $100,000 (approximately) per Station per year higher than the network
compensation paid to Seller in 1994, as calculated on the basis of (and based
on the assumptions and other matters contained in) the model attached hereto as
Schedule 7.1(i).
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been
granted without the imposition on Seller of any conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
(e) HSR Act. If legally required, all filings
with the FTC and the DOJ pursuant to the HSR Act shall have been made and all
applicable waiting periods with respect to
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such filings (including any extensions thereof) shall have expired or been
terminated and no actions shall have been instituted which are pending on the
Closing Date by the FTC or the DOJ challenging or seeking to enjoin the
consummation of this transaction.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date not earlier than the first business day after the FCC Consent is
granted and not later than five days following the date upon which the FCC
Consent has become a Final Order, to be set by Buyer on at least three days'
written notice to Seller. If Buyer fails to specify the date for Closing
pursuant to the preceding sentence prior to the third day after the date upon
which the FCC Consent becomes a Final Order, the Closing shall take place on
the fifth day after the date upon which the FCC Consent becomes a Final Order.
If the date of Closing determined in accordance with the requirements of this
Section 8.1(a) falls on a date that is not a business day, the Closing shall
occur on the next business day.
(b) Closing Place. The Closing shall be held at the
offices of Xxxxxx Xxxxxxx Xxxxxx Leader & Xxxxxxxx L.L.P., 0000 Xxxxxxxxxxxx
Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, or any other place that is
agreed upon by Buyer and Seller.
8.2 Deliveries By Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed bills of sale,
Bargain and Sale deeds with covenants against Grantor's Acts, motor vehicle
titles, assignments, and other transfer documents which shall be sufficient to
vest good and, with respect to owned Real Property, insurable, title to the
Assets in the name of Buyer, free and clear of all claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges and
encumbrances, except for Permitted Liens;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property upon which the Stations' studios or towers (excluding translators) are
situated;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Seller by its President or any Vice
President, certifying (1) that the representations and warranties of Seller
contained in this Agreement are true and complete in all material respects as
of the Closing Date as though made on and as of that date; and (2) that Seller
has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the
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Closing Date;
(e) Title Insurance and Surveys. The title insurance and
surveys described in Section 6.10, provided that Buyer must obtain these items
within thirty (30) days after the date hereof and notify Seller within that
time period if this condition is not fulfilled;
(f) Tax. Lien. and Judgment Searches. Results of a
search for tax lien, and judgment filings in the Secretary of State's records
of the States of Texas and Missouri and in the records of Orange and Wichita
Counties, Texas and of Jasper County, Missouri. Such searches having been made
no earlier than ten days prior to the Closing Date;
(g) Licenses. Contracts. Business Records. Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its operations and in its possession;
(h) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6. 9 duly executed Seller;
(i) Opinion of Counsel. Opinions of Proskauer, Rose,
Xxxxx & Xxxxxxxxxx and Xxxxxxx & Xxxxxx dated as of the Closing Date,
substantially in the form of Schedule 8.2(i) hereto; and
(j) Authorizing Resolutions. Certified copies of the
resolutions of Seller's board of directors approving the transactions
contemplated by this Agreement.
8.3 Deliveries By Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:;
(a) Purchase Price. The Estimated Purchase Price as
provided in Section 2.4(a);
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts in accordance
with Section 2.5;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by its President or any Vice
President, certifying (1) that the representations and warranties of Buyer
contained in this Agreement are true and complete in all material respects as
of the Closing Date as though made on and as of that date, and (2) that Buyer
has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(d) Noncompetition Agreement. The Noncompetition
Agreement in the form
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of Schedule 6.9, duly executed by Buyer;
(e) Opinion of Counsel. An opinion of Xxxxxx Xxxxxxx
Xxxxxx Leader & Xxxxxxxx L.L.P. dated as of the Closing Date, substantially in
the form of Schedule 8.3(e) hereto; and
(f) Authorizing Resolutions. Certified copies of the
resolutions of Buyer's board of directors approving the transactions
contemplated by this Agreement.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Stations abandoned, if Seller is not
then in material breach, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Material Breach. If Buyer shall be in material
breach of any applicable provision of this Agreement, which breach would
prevent consummation of the transactions contemplated hereby and which Buyer is
not diligently seeking to cure in an expeditious manner.
(b) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(c) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(d) Upset Date. If the Closing shall not have occurred
by the date that is 270 days after the date the application(s) for FCC Consent
is (are) filed.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Stations abandoned, if Buyer is not then
in material breach, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Material Breach. If Seller shall be in material
breach of any applicable provision of this Agreement, which breach would
prevent consummation of the transactions contemplated hereby and which Seller
is not diligently seeking to cure in an expeditious manner.
(b) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(c) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
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(d) Upset Date. If the Closing shall not have occurred
by the date that is 270 days after the date the application(s) for FCC Consent
is (are) filed.
(e) Interruption of Service. If any event shall have
occurred that prevented signal transmission by any Station in substantially the
normal and usual manner for a continuous period of three days, provided that
Buyer shall give Seller notice of any termination as a result thereof within
twenty (20) days after it receives notice of such interruption.
(f) [Intentionally Omitted]
(g) Due Diligence Cancellation Right. Buyer shall have
notified Seller within fourteen (14) days after the date of this Agreement that
it desires to cancel this Agreement for any reason in Buyer's sole discretion;
provided that this 14-day period shall be extended if Seller has not furnished
Buyer with full and complete schedules to this Agreement within 7 days after
the date hereof, and in that event, this cancellation date shall be extended
for a period of 7 days following Seller's delivery of full and complete
schedules. Seller agrees to use all reasonable efforts to deliver full and
complete copies of the schedules to Buyer within 7 days after the date hereof.
9.3 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 (excluding Section 9.1(g) which shall be solely
governed by Section 2.6 and not by this Section 9.3) or Section 9.2 and neither
party is in material breach of any provision of this Agreement, the parties
hereto shall not have any further liability to each other with respect to the
purchase and sale of the Assets and the Escrow Deposit shall be returned to
Buyer. If this Agreement is terminated by Seller due to Buyer's material
breach of this Agreement, then the payment of the $500,000 Escrow Deposit by
Buyer to Seller shall be liquidated damages and shall constitute full payment
and the exclusive remedy for any damages suffered by Seller by reason of
Buyer's material breach of this Agreement (including absence of financing).
Seller and Buyer agree in advance that actual damages would be difficult to
ascertain and that the amount of Five Hundred Thousand Dollars ($500,000) is a
fair and equitable amount to reimburse Seller for damages sustained due to
Buyer's material breach of this Agreement. If this Agreement is terminated by
Buyer due to Seller's material breach of any provision of this Agreement, the
Escrow Deposit shall be returned to Buyer and Buyer shall have all rights and
remedies available at law or in equity.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
eighteen months and all indemnity claims must be made within such 18-month
period. Any investigations by or on behalf of any party hereto shall not
constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement, and no notice or information delivered by
Seller shall affect Buyer's right to rely on any representation or warranty
made by Seller or relieve Seller of any obligations under this
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Agreement as the result of a breach of any of its representations and
warranties; provided, however, that Buyer shall be deemed to have waived any
misrepresentation or breach of warranty with respect to which Buyer has actual
knowledge at Closing based upon written disclosure thereof by Seller and Buyer
proceeds to Closing notwithstanding such disclosure by Seller.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting
from the failure of the parties to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Stations prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to breaches of Seller (or events that would constitute a breach after
notice, the passage of time or both) occurring prior the Closing Date.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
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(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Stations on and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as
(a) The party claiming indemnification (the "Claimant)
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five days
after written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall
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extend to the shareholders, directors, officers, employees, and representatives
of any Claimant although for the purpose of the procedures set forth in this
Section 10.4, any indemnification claims by such parties shall be made by and
through the Claimant.
(f) Notwithstanding anything in this Agreement to the
contrary, after the Closing neither party shall indemnify or otherwise be
liable to the other party under Sections 10.2(a) or 10.3(b) hereof, except to
the extent that the liabilities exceeds $100,000 and indemnification shall be
made by the indemnifying party only to the extent of such excess over $100,000;
provided, however, that the foregoing limitation shall not be applicable to the
obligations of Seller to indemnify Buyer against the matters addressed in
Section 3.4 hereof or to the obligation of Seller to pay and discharge any
liabilities to third parties not assumed by Buyer hereunder or to the
obligation of Buyer to pay and discharge any obligation assumed hereunder.
10.5 Specific Performance. The parties recognize that if Seller
breaches its obligation to consummate the transactions contemplated by this
Agreement and refuses to perform under the provisions of this Agreement,
monetary damages alone would not be adequate to compensate Buyer for its
injury. Buyer shall therefore be entitled, in addition to any other remedies
that may be available, including money damages, to obtain specific performance
of the terms of this Agreement. If any action is brought by Buyer to enforce
this Agreement, Seller shall waive the defense that there is an adequate remedy
at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Seller and Buyer shall each pay one-half
of any transfer taxes, recordation taxes, sales taxes, document stamps, or
other charges levied by any governmental entity on account of the transfer of
the Assets from Seller to Buyer, including the filing fees payable upon filing
of the application for FCC Consent. Buyer shall pay the fee imposed by the FTC
in connection with filings made pursuant to the HSR Act, if applicable. Except
as otherwise provided in this Agreement, each party shall pay its own expenses
incurred in connection with the authorization, preparation, execution, and
performance of this Agreement, including all fees and expenses of counsel,
accountants, agents, and representatives.
11.2 Notices. All notices, demands, and Requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Mr. Xxxxxx Xxxxx
President
Price Communications Corporation
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00 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
With a copy to: Xxxxx X. Xxxxxxx, Esq.
Proskauer, Rose, Xxxxx & Xxxxxxxxxx
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
If to Buyer: Xx. Xxxxxxx X. Xxxxxxxx
USA Broadcast Group, L.L.C.
000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
and
Mr. Xxxxxx Xxxx
USA Broadcast Group, L.L.C.
000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxx
Leader & Xxxxxxxx, L.L.P.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.2.
11.3 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto,
except that Buyer may assign its rights and obligations under this Agreement
(including by operation of a transfer of control) without Seller's consent to
any entity controlled by or under common control with Buyer so long as the
assignment or transfer of control is pro forma in nature, does not materially
affect the qualifications of the Buyer and does not materially affect either
the FCC processing or the Closing. Buyer's assignment of its rights and
obligations under this Agreement shall not relieve Buyer of any of its
obligations under this Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
11.4 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
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evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.5 Governing Law. This agreement shall be governed, construed,
and enforced in accordance with the laws of the State of New York (without
regard to any choice of law or conflict of law provisions (whether of the State
of New York or any other jurisdiction) that would cause the application of laws
of any jurisdiction other than the State of New York).
11.6 CONSENT TO JURISDICTION. THE PARTIES AGREE THAT NONEXCLUSIVE
JURISDICTION AND VENUE IN ANY ACTION BROUGHT BY ANY PARTY PURSUANT TO THIS
AGREEMENT WILL PROPERLY LIE IN ANY FEDERAL OR STATE COURT LOCATED IN NEW YORK,
NEW YORK. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY WITH RESPECT TO SUCH ACTION. THE PARTIES IRREVOCABLY AGREE THAT VENUE
WOULD BE PROPER IN SUCH COURT, AND HEREBY WAIVE ANY OBJECTION THAT SUCH COURT
IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH ACTION. EACH
PARTY FURTHER AGREES THAT DELIVERY IN ACCORDANCE WITH SECTION 11.2 OF ANY
PROCESS REQUIRED BY ANY SUCH COURT WILL CONSTITUTE VALID AND LAWFUL SERVICE OF
PROCESS AGAINST SUCH PARTY, WITHOUT NECESSITY FOR SERVICE BY ANY OTHER MEANS
PROVIDED BY STATUTE OR RULE OF COURT.
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent. In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties,
and no presumption or burden of proof will arise favoring or disfavoring any
person or entity by virtue of the authorship of any of the provisions of this
Agreement.
11.10 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.11 Waiver of Compliance; Consents. Except as otherwise provided
in this
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Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be
waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.11.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.13 Press Releases. Except as otherwise required by law, neither
party shall publish any press release, make any other public announcement or
otherwise communicate with any news media concerning this Agreement or the
transactions contemplated hereby without the prior written consent of the other
party; provided, however, that nothing contained herein shall prevent either
party from promptly making all filings with governmental authorities as may, in
its judgment, be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, in which case the other party shall be first notified in writing.
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IN WITNESS WHEREOF, this Agreement has been executed by Seller and
Buyer as of the date first written above.
PRICE COMMUNICATIONS CORPORATION
By:
-------------------------------
Name:
Title:
TEXOMA BROADCASTING CORP.
By:
-------------------------------
Name:
Title:
SOUTHEAST TEXAS BROADCASTING CORP.
By:
-------------------------------
Name:
Title:
TRI-STATE BROADCASTING CORP.
By:
-------------------------------
Name:
Title:
USA BROADCAST GROUP, L.L.C.
By:
-------------------------------
Name:
Title:
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