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EXHIBIT 10.135
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OPTION AGREEMENT
BY AND BETWEEN
XXXXX-XXXXXXX BROADCASTING, A
LIMITED PARTNERSHIP
AND
XXXXXX COMMUNICATIONS OF
SACRAMENTO-29, INC.
FOR
TELEVISION STATION KCMY-TV
SACRAMENTO, CALIFORNIA
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SEPTEMBER 6, 1996
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OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Option Agreement") is entered into as of
September 6, 1996 by and between XXXXXX COMMUNICATIONS OF SACRAMENTO-29, INC., a
Florida corporation ("Xxxxxx"), and XXXXX-XXXXXXX BROADCASTING, A LIMITED
PARTNERSHIP, a California limited partnership ("PNB").
RECITALS
A. PNB owns or leases all of the assets (the "Assets") that are
used or useful in the business and operations of Television Station KCMY-TV,
Channel 29, Sacramento, California (the "Station"), including, without
limitation, the licenses issued by the Federal Communications Commission
("FCC") for the Station (the "FCC Licenses").
X. Xxxxxx and PNB have entered into a Time Brokerage Agreement
dated as of the date hereof (the "Time Brokerage Agreement"), pursuant to which
Xxxxxx shall provide programming for broadcast on the Station.
X. Xxxxxx and PNB have entered into a Loan Agreement dated as of
the date hereof (the "Loan Agreement"), pursuant to which Xxxxxx agrees to loan
PNB up to Eight Million Five Hundred Thousand Dollars ($8,500,000).
D. PNB desires to grant to Xxxxxx an exclusive and irrevocable
option to purchase the Assets, including the FCC Licenses, and Xxxxxx desires
to grant to PNB an exclusive and irrevocable option to require Xxxxxx to
purchase the Assets, including the FCC Licenses, on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Grant of Put Option.
(a) Xxxxxx hereby grants to PNB an exclusive and
irrevocable option to require Xxxxxx to acquire the Assets, including the FCC
Licenses (the "Put Option"), for a purchase price of Seventeen Million Dollars
($17,000,000), payable upon the closing of the Option Purchase Agreement (as
defined in Section 3 below).
(b) PNB may deliver to Xxxxxx written notice of PNB's
intention to exercise the Put Option (the "Put Notice") at any time during the
period commencing on the date hereof and ending on May 31, 1998 (the "Put
Termination Date"). In the event that
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PNB fails to give Xxxxxx the Put Notice prior to the Put Termination Date, the
Put Option shall expire.
2. Grant of Call Option.
(a) PNB hereby grants to Xxxxxx an exclusive and irrevocable
option to acquire the Assets, including the FCC Licenses (the "Call Option"),
for a purchase price of Seventeen Million Dollars ($17,000,000), payable upon
the closing of the Option Purchase Agreement.
(b) Xxxxxx may deliver to PNB written notice of Xxxxxx'x
intention to exercise the Call Option (the "Call Notice") at any time during
the period commencing on June 1, 1998 and ending on June 30, 1998 (the "Call
Termination Date"). Notwithstanding the requirement in the preceding sentence,
Xxxxxx may deliver to PNB a Call Notice at any time following (i) a termination
of the Time Brokerage Agreement in accordance with its terms for any reason
other than a material breach by Xxxxxx of its obligations thereunder or a
termination of the Time Brokerage Agreement by Xxxxxx pursuant to Section
6.1(e) thereof, (ii) the deletion or preemption by PNB during any consecutive
30-day period of more than 30 hours of programming supplied by Xxxxxx for
broadcast on the Station pursuant to the Time Brokerage Agreement, other than a
deletion or preemption of programming by PNB for the broadcast of programming
covering natural disasters occurring in Northern California, or (iii) the
delivery by Xxxxxx to PNB of the written notice contemplated by section 7.2 of
the Loan Agreement upon an Event of Default, as that term is defined in the
Loan Agreement. In the event that Xxxxxx fails to give PNB the Call Notice
prior to the Call Termination Date, the Call Option shall expire.
3. Option Purchase Agreement. Within five (5) business days
following Xxxxxx'x receipt of the Put Notice or PNB's receipt of the Call
Notice, as the case may be, PNB and Xxxxxx shall enter into the Option Purchase
Agreement in the form of Schedule A hereto (the "Option Purchase Agreement"),
it being understood that the only change to such form shall be changes, if any,
in the information contained in the Schedules thereto and the addition, if any,
of Schedules thereto that are reasonably required to reflect events occurring
after the date hereof; provided, however, that Xxxxxx shall not be required to
accept any such change or addition that, as a result of any action taken by
PNB, could reasonably be expected to cause a material adverse change in, or
have a material adverse effect on, the assets to be conveyed to Xxxxxx pursuant
to the Option Purchase Agreement, the business or operations of the Station or
the ability of PNB to consummate the transactions contemplated by the Option
Purchase Agreement in accordance with its terms. Upon the execution and
delivery of the Option Purchase Agreement, PNB and Xxxxxx shall perform their
respective obligations thereunder, including, without limitation, filing and
prosecuting an appropriate
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application for FCC consent to the assignment of the FCC Licenses from PNB to
Xxxxxx (the "FCC Consent").
4. Survival of Options.
(a) In the event that the exercise of the Put Option is
not consummated for any reason whatsoever, the Put Option shall nevertheless
remain exercisable by PNB until the Put Termination Date, and PNB may at any
time, and from time to time, prior to such expiration again exercise the Put '
Option as set forth in this Option Agreement and, upon such exercise, Xxxxxx
and PNB shall enter into an Asset Purchase Agreement that is substantially
identical to the Option Purchase Agreement and thereafter diligently proceed to
perform their obligations thereunder.
(b) In the event that the exercise of the Call Option is
not consummated for any reason whatsoever, the Call Option shall nevertheless
remain exercisable by Xxxxxx until the Call Termination Date, and Xxxxxx may at
any time, and from time to time, prior to such expiration again exercise the
Call Option as set forth in this Option Agreement and, upon such exercise, PNB
and Xxxxxx shall enter into an Asset Purchase Agreement that is substantially
identical to the Option Purchase Agreement and thereafter diligently proceed to
perform their obligations thereunder.
5. Control of the Station. Prior to the closing of the
transactions contemplated by the Option Purchase Agreement, Xxxxxx shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of PNB until the closing of the
transactions contemplated by the Option Purchase Agreement.
6. Programming Agreements. In the event that (a) PNB does not
exercise the Put Option on or prior to the Put Termination Date, (b) Xxxxxx
does not exercise the Call Option on or prior to the Call Termination Date, and
(c) the InfoMall TV Network ("inTV") continues to provide infornercial
programming to affiliated television stations on the Call Termination Date,
then PNB may, at any time during the period commencing on the day after the
Call Termination Date and ending on the 5th business day thereafter (the
"Programming Notice Period"), deliver to Xxxxxx written notice (the
"Affiliation Notice") of PNB's intention to enter into an Affiliation
Agreement with inTV. Within five business days following Xxxxxx'x receipt of
the Affiliation Notice, PNB and inTV shall enter into an Affiliation Agreement
on the same terms and conditions contained in the Affiliation Agreement between
inTV and PNB that is in effect on the date hereof; provided that the term of
such Affiliation Agreement shall be for a period of two years from the
execution thereof;
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and provided further that neither party shall be permitted to terminate such
Affiliation Agreement without cause prior to the end of the two-year term.
Notwithstanding anything in this Section 6 to the contrary, if inTV no longer
provides infomercial programming to affiliated television stations as of the
Call Termination Date, then PNB may, at any time during the Programming Notice
Period, deliver to Xxxxxx written notice of PNB's intention to extend the Time
Brokerage Agreement (the "TBA Extension Notice") for a two-year term ending on
the second anniversary of the Call Termination Date. If PNB fails to deliver
either the Affiliation Notice or the TBA Extension Notice prior to the end of
the Programming Notice Period, then neither Xxxxxx nor inTV shall have any
further obligations hereunder. In addition to the foregoing, PNB may deliver
the Affiliation Notice or, if inTV no longer provides infornercial programming
to affiliated television stations, PNB, may deliver the TBA Extension Notice,
within 30 days following a termination by PNB or Xxxxxx of this Option
Agreement, the Time Brokerage Agreement or the Asset Purchase Agreement in
accordance with their respective terms so long as, at the time of any such
termination, PNB is not in default of its obligations under this Option
Agreement, the Time Brokerage Agreement, the Asset Purchase Agreement and the
Loan Agreement.
7. Representations and Warranties of PNB. PNB represents and
warrants to Xxxxxx as follows:
(a) PNB is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of California. PNB
has full partnership power and authority to execute and deliver this Option
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Option Agreement and the consummation of the
transactions contemplated hereby by PNB have been duly and validly authorized
by all necessary partnership action on the part of PNB. This Option Agreement
has been duly and validly executed and delivered by PNB and constitutes a
legal, valid and binding agreement of PNB enforceable against PNB in accordance
with its terms, except as such enforceability may be affected by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
(b) Except for the FCC Consent, there is no requirement
applicable to PNB to make any filing with, or to obtain any permit,
authorization, consent or approval of, any governmental or regulatory authority
or any other third party as a condition to the consummation by PNB of the
transactions contemplated by this Option Agreement and the Option Purchase
Agreement.
(c) Subject to obtaining the FCC Consent, the execution,
delivery and performance of this Option Agreement and the Option Purchase
Agreement by PNB will not
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(i) conflict with PNB's organizational documents or agreements, (ii) conflict
with or result in a default (or give rise to any right of first refusal,
termination, cancellation or acceleration that has not been duly and validly
waived by the holder thereof) under any of the terms, conditions or provisions
of any note, bond, mortgage, agreement, or lease to which PNB is a party or by
which any of the FCC Licenses or the other Assets are bound, or (iii) violate
any statute, law, rule, regulation, order, writ, injunction or decree
applicable to PNB, the FCC Licenses or the other Assets.
8. Representations and Warranties of Xxxxxx. Xxxxxx represents
and warrants to PNB as follows:
(a) Xxxxxx has full corporate power and authority to
execute and deliver this Option Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Option Agreement and
the consummation of the transactions contemplated hereby by Xxxxxx have been
duly and validly authorized by all necessary corporate action on the part of
Xxxxxx. This Option Agreement has been duly and validly executed and delivered
by Xxxxxx and constitutes a legal, valid and binding agreement of Xxxxxx
enforceable against Xxxxxx in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies.
(b) Except for the FCC Consent, there is no requirement
applicable to Xxxxxx to make any filing with, or to obtain any permit,
authorization, consent or approval of, any governmental or regulatory authority
or any other third party as a condition to the consummation by Xxxxxx of the
transactions contemplated by this Option Agreement and the Option Purchase
Agreement.
(c) Subject to obtaining the FCC Consent, the execution,
delivery and performance of this Option Agreement and the Option Purchase
Agreement by Xxxxxx will not (i) conflict with Xxxxxx'x organizational
documents, (ii) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, agreement, or lease to which Xxxxxx is a party or
by which any of its assets are bound, or (iii) violate any statute, law, rule,
regulation, order, writ, injunction or decree applicable to Xxxxxx.
9. Covenants of PNB. PNB will not (i) commit any act that is
inconsistent with the grant of the Call Option to Xxxxxx or the transactions
contemplated by this Option Agreement and the Option Purchase Agreement or (ii)
violate any of the covenants, by any act or failure to act, set forth in
Section 5 of the Option Purchase Agreement. Without limiting the generality of
the foregoing, PNB agrees that from and after the date hereof and
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until the termination of this Option Agreement in accordance with its terms,
PNB will not sell, transfer or otherwise dispose of any assets of the Station,
except in the normal course of business consistent with prior practices, and
PNB will not respond to inquiries or proposals, or enter into or pursue any
discussions, or enter into any agreements (oral or written), with respect to
any sale, transfer or other disposition prohibited by this Section 9.
10. Cooperation. PNB and Xxxxxx shall cooperate fully with each
other and their respective counsel and accountants in connection with any steps
required to be taken as part of their respective obligations under this Option
Agreement and the Option Purchase Agreement and will each use their respective
best efforts to perform or fulfill all conditions and obligations to be
performed or fulfilled by them under this Option Agreement and the Option
Purchase Agreement so that the transactions contemplated hereby shall be
consummated.
11. Specific Performance. The parties recognize that if PNB
breaches this Option Agreement and refuses to perform under the provisions of
this Option Agreement, monetary damages alone would not be adequate to
compensate Xxxxxx for its injury. Xxxxxx 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 Option Agreement. If any
action is brought by Xxxxxx to enforce this Option Agreement, PNB; shall waive
the defense that there is an adequate remedy at law.
12. Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Option 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 PNB: Xxx X. Xxxxxx
Xxxxx-Xxxxxxx Broadcasting, A Limited Partnership
0000 Xxxx Xxxxxx Xxx
Xxxxxxxxxxx, Xxxxxxxxxx 00000
If to Xxxxxx: Xxxxxx X. Xxxxxx
Xxxxxx Communications Corporation
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
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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
12.
13. Entire Agreement; Amendment. This Option Agreement and the
Option Purchase Agreement supersede all prior agreements and understandings of
the parties, oral and written, with respect to its subject matter. This Option
Agreement and the Option Purchase Agreement may be modified only by an
agreement in writing executed by all of the parties hereto. No waiver of
compliance with any provision of this Option Agreement or the Option Purchase
Agreement will be effective unless evidenced by an instrument evidenced in
writing and signed by the parties hereto.
14. Further Assurances. From time to time after the date of
execution hereof, the parties shall take such further action and execute such
further documents, assurances and certificates as either party reasonably may
request of the other to effectuate the purposes of this Option Agreement.
15. Counterparts. This Option Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and shall become
effective when each of the parties hereto shall have delivered to it this
Option Agreement duly executed by the other parties hereto.
16. Headings. The headings in this Option Agreement are for the
sole purpose of convenience of reference and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this
Option Agreement.
17. Governing Law; Venue. This Option Agreement shall be
construed under and in accordance with the laws of the State of California,
without giving effect to the principles of conflicts of law. PNB and Xxxxxx
hereby irrevocably submit to the exclusive jurisdiction and venue of the state
and federal district courts for Sacramento, California for the purposes of any
action or proceeding arising out of or relating to this Option Agreement or the
subject matter hereof. PNB and Xxxxxx hereby waive and agree not to assert, by
way of motion, as a defense or otherwise, in any such action or proceeding, any
claim that (A) they are not personally subject to the jurisdiction of such
courts, (B) the action or proceeding is brought in an inconvenient forum or (C)
the venue of the action or proceeding is improper. PNB and Xxxxxx agree that,
notwithstanding any right or privilege they may possess at any time, they and
their property are and shall be generally subject to suit on account of the
obligations they have assumed hereunder. PNB and Xxxxxx agree that service in
person or by certified or registered U.S. mail to its address set forth in
Section 12, or as subsequently changed as provided therein, shall constitute
valid in personam service upon PNB and Xxxxxx and their
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successors and assigns in any action or proceeding with respect to any matter
as to which they have submitted to jurisdiction hereunder. The obligations of
PNB and Xxxxxx under this Section shall survive any termination of this
Agreement.
18. Benefit and Binding Effect; Assignability. This Option
Agreement shall inure to the benefit of and be binding upon PNB, Xxxxxx and
their respective successors and permitted assigns. No party hereto may assign
this Option Agreement without the prior written consent of the other parties
hereto, except that Xxxxxx at any time prior to the consummation of the
transactions contemplated by this Option Agreement may assign its rights and
obligations under this Option Agreement without PNB's consent to (a) any entity
controlled by or under common control with Xxxxxx or (b) any other entity
designated by Xxxxxx, so long as Xxxxxx determines, in the exercise of
reasonable business judgment, that such entity possesses the financial
capacity, and the requisite qualifications under the Communications Act of
1934, as amended, and the rules and regulations promulgated thereunder, to
consummate the transactions contemplated by this Option Agreement and the
Option Purchase Agreement; provided, however, that Xxxxxx Communications
Corporation hereby agrees to guarantee the performance by Xxxxxx'x assignee of
Xxxxxx'x obligations hereunder in the event that Xxxxxx'x assignee fails to
perform such obligations. Upon any permitted assignment by a party in
accordance with this Section 18, all references to "Xxxxxx" herein shall be
deemed to be references to Xxxxxx'x assignee and all references to "PNB"
herein shall be deemed to be references to PNB's assignee, as the case may be.
Notwithstanding the foregoing, Xxxxxx may, at its sole cost and expense, assign
its rights, benefits, duties or obligations hereunder to its lenders as
collateral security for the obligations of Xxxxxx to such lenders.
19. Confidentially. Except as necessary for the consummation of
the transaction contemplated by this Option Agreement, and except as and to the
extent required by law, each party will keep confidential any information
obtained from the other party in connection with the transactions contemplated
by this Option Agreement. If this Option Agreement is terminated, each party
will return to the other party all information obtained by the such party from
the other party in connection with the transactions contemplated by this Option
Agreement.
20. Press Release. No party shall publish any press release, make
any other public announcement or otherwise communicate with any news media
concerning this Option Agreement or the transactions contemplated hereby or the
transactions contemplated by the Loan Agreement and the Time Brokerage
Agreement without the prior written consent of the other party.
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21. Termination.
(a) Xxxxxx may, at its option and expense, retain a consultant
selected by Xxxxxx to perform a Phase I environmental survey of the properties
of the Station. If such survey, which shall be completed no later than forty
(40) days following the execution of this Option Agreement, discloses any
material environmental hazard or material possibility of future liability for
environmental damages or clean-up costs, Xxxxxx shall so notify PNB in writing
(the "Environmental Notice") on or before the date that is 45 days following
execution of this Option Agreement.
(b) Xxxxxx may, at its option and expense, retain an engineering
firm selected by Xxxxxx to conduct a proof of performance study of the Station
and to prepare a report on the Station's compliance with customary engineering
practices and all applicable FCC rules, regulations, prescribed practices, and
technical standards. If the study or report, which shall be completed no later
than forty (40) days following the execution of this Option Agreement,
discloses any material deficiencies in the operations or equipment of the
Station, Xxxxxx shall so notify PNB in writing (the "Engineering Notice") on
or before the date that is 45 days following execution of this Option Agreement.
(c) This Option Agreement may be terminated by Xxxxxx and the
purchase and sale of the Station abandoned if:
(i) Xxxxxx shall have notified PNI3 of material environmental
hazards or the material possibility of future liability for
environmental damages or clean-up costs, as indicated in the
environmental study described in Section 21(a), and the cause thereof
shall not have been remedied within thirty (30) days following the date
the Environmental Notice is given to PNB.
(ii) Xxxxxx shall have notified PNB of material deficiencies in
the operations or equipment of the Station, as indicated in the
engineering study described in Section 21(b), and the cause thereof shall
not have been remedied within thirty (30) days following the date the
Engineering Notice is given to PNB.
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IN WITNESS WHEREOF the parties hereto have executed this Option
Agreement as of the date first above written.
XXXXXX COMMUNICATIONS OF
SACRAMENTO-29, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President
XXXXX-XXXXXXX BROADCASTING, A
LIMITED PARTNERSHIP
By: Xxxxx-Xxxxxxx Broadcasting, Inc.,
its general partner
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: President
XXXXXX COMMUNICATIONS CORPORATION HEREBY
JOINS IN THE EXECUTION OF THE FOREGOING
AGREEMENT SOLELY TO AGREE TO THE GUARANTY SET
FORTH IN SECTION 18 HEREOF, AS OF THE DATE
FIRST ABOVE WRITTEN.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx
President
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SCHEDULE A
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
XXXXXX COMMUNICATIONS OF
SACRAMENTO-29, INC.
AND
XXXXX-XXXXXXX BROADCASTING, A
LIMITED PARTNERSHIP
FOR
TELEVISION STATION KCMY-TV
SACRAMENTO, CALIFORNIA
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SEPTEMBER 6, 1996
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . 2
'Closing Date" . . . . . . . . . . . . . . . . . . . . . 2
"Consent" . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . 2
"FC" . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . 2
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles " . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . 3
"Loan Documents" . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . 3
"Time Brokerage Agreement" . . . . . . . . . . . . . . . 3
"Transaction Document" . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . 6
2.5 Assumption of Liabilities and Obligations . . . 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . 7
3.4 Governmental Licenses . . . . . . . . . . . . . 7
3.5 Title to and Condition of Real Property . . . . 8
3.6 Title to and Condition of Tangible Personal
Property . . . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . 8
3.8 Consents . . . . . . . . . . . . . . . . . . . . 9
3.9 Intangibles . . . . . . . . . . . . . . . . . . 9
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Page
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3.10 [Reserved] . . . . . . . . . . . . . . . . . . . 9
3.11 Insurance . . . . . . . . . . . . . . . . . . . 9
3.12 Reports . . . . . . . . . . . . . . . . . . . . 10
3.13 Personnel . . . . . . . . . . . . . . . . . . . 10
3.14 Taxes . . . . . . . . . . . . . . . . . . . . . 12
3.15 Claims and Legal Actions . . . . . . . . . . . . 12
3.16 Environmental Matters . . . . . . . . . . . . . 13
3.17 Compliance with Laws . . . . . . . . . . . . . . 14
3.18 Conduct of Business in Ordinary Course . . . . 14
3.19 Transactions with Affiliates . . . . . . . . . . 14
3.20 Broker . . . . . . . . . . . . . . . . . . . . . 15
3.21 Full Disclosure . . . . . . . . . . . . . . . . 15
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . 15
4.1 Organization, Standing, and Authority . . . . . 15
4.2 Authorization and Binding Obligation . . . . . . 15
4.3 Absence of Conflicting Agreements . . . . . . . 15
4.4 Broker . . . . . . . . . . . . . . . . . . . . . 16
4.5 Full Disclosure . . . . . . . . . . . . . . . . 16
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . 16
5.1 Generally . . . . . . . . . . . . . . . . . . . 16
5.2 Compensation . . . . . . . . . . . . . . . . . . 16
5.3 Contracts . . . . . . . . . . . . . . . . . . . 16
5.4 Disposition of Assets . . . . . . . . . . . . . 16
5.5 Encumbrances . . . . . . . . . . . . . . . . . . 17
5.6 Licenses . . . . . . . . . . . . . . . . . . . . 17
5.7 Rights . . . . . . . . . . . . . . . . . . . . . 17
5.8 No Inconsistent Action . . . . . . . . . . . . . 17
5.9 Access to Information . . . . . . . . . . . . . 17
5.10 Maintenance of Assets . . . . . . . . . . . . . 18
5.11 Insurance . . . . . . . . . . . . . . . . . . . 18
5.12 Consents . . . . . . . . . . . . . . . . . . . . 18
5.13 Books and Records . . . . . . . . . . . . . . . 18
5.14 Notification . . . . . . . . . . . . . . . . . . 18
5.15 Financial Information . . . . . . . . . . . . . 18
5.16 Compliance with Laws . . . . . . . . . . . . . . 18
5.17 Financing Leases . . . . . . . . . . . . . . . . 19
5.18 Preservation of Business . . . . . . . . . . . . 19
5.19 Collection of Accounts Receivable . . . . . . . 19
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SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . 19
6.1 FCC Consent . . . . . . . . . . . . . . . . . . 19
6.2 Control of the Station . . . . . . . . . . . . 19
6.3 Risk of Loss . . . . . . . . . . . . . . . . . 20
6.4 Confidentiality . . . . . . . . . . . . . . . . 20
6.5 Cooperation . . . . . . . . . . . . . . . . . . 20
6.6 Bulk Sales Law . . . . . . . . . . . . . . . . 20
6.7 Access to Books and Records . . . . . . . . . . 20
6.8 Appraisal . . . . . . . . . . . . . . . . . . . 21
6.9 Noncompetition Agreement . . . . . . . . . . . 21
6.10 HSR Act Filing . . . . . . . . . . . . . . . . 21
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . 21
7.1 Conditions to Obligations of Buyer . . . . . . . 21
7.2 Conditions to Obligations of Seller . . . . . . 23
SECTION 8. CLOSING AND CLOSING DELIVERIES. . . . . . . . . . . 23
8.1 Closing . . . . . . . . . . . . . . . . . . . . 23
8.2 Deliveries by Seller . . . . . . . . . . . . . 24
8.3 Deliveries by Buyer . . . . . . . . . . . . . . 25
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . 26
9.1 Termination by Seller . . . . . . . . . . . . . 26
9.2 Termination by Buyer . . . . . . . . . . . . . 26
9.3 Rights on Termination . . . . . . . . . . . . . 27
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . 27
10.1 Representations and Warranties . . . . . . . . 27
10.2 Indemnification by Seller . . . . . . . . . . . 27
10.3 Indemnification by Buyer . . . . . . . . . . . 28
10.4 Procedure for Indemnification . . . . . . . . . 28
10.5 Specific Performance . . . . . . . . . . . . . 29
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . 29
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 30
11.1 Fees and Expenses . . . . . . . . . . . . . . . 30
11.2 Notices . . . . . . . . . . . . . . . . . . . . 30
11.3 Benefit and Binding Effect . . . . . . . . . . 31
11.4 Further Assurances . . . . . . . . . . . . . . . 31
- iii -
16
Page
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11.5 Governing Law; Venue . . . . . . . . . . . . . . 31
11.6 Headings . . . . . . . . . . . . . . . . . . . . 32
11.7 Gender and Number . . . . . . . . . . . . . . . 32
11.8 Entire Agreement . . . . . . . . . . . . . . . . 32
11.9 Waiver of Compliance; Consents . . . . . . . . . 32
11.10 Press Release . . . . . . . . . . . . . . . . . 32
11.11 Counterparts . . . . . . . . . . . . . . . . . . 33
- iv -
17
LIST OF SCHEDULES
Schedule 2.2 - Excluded Property
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.5 - Real Property
Schedule 3.6 - Tangible Personal Property
Schedule 3.7 - Contracts
Schedule 3.9 - Intangibles
Schedule 3.1 - Insurance-Policies
Schedule 3.13 - Employee Matters
Schedule 3.15 - Legal Actions
Schedule 3.19 - Affiliate Transactions
Schedule 6.13 - Form of Noncompetition Agreement
Schedule 8.2(g) - Form of Opinions of Seller's Counsel
Schedule 8.3(d) - Form of Opinion of Buyer's Counsel
18
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the day of 199_, by and
between XXXXXX COMMUNICATIONS OF SACRAMENTO-29, INC., a Florida corporation
("Buyer"), and XXXXX-XXXXXXX BROADCASTING, A LIMITED PARTNERSHIP, a California
limited partnership ("Seller").
RECITALS
A. Seller is the licensee of and owns and operates television
station KCMY-TV, Sacramento, California (the "Station"), pursuant to licenses
issued by the Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer desires to buy, substantially
all the assets that are used or useful in the business or operations of the
Station, 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 rights of Seller to payment for the
sale of advertising time run on the Station by Seller as of 11:59 p.m.,
Sacramento time, on the day prior to the effective date of the Time Brokerage
Agreement (as defined below).
"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 specifically designated on Schedule 3.7 as Contracts that are to be
assumed by Buyer upon its purchase of the Station, (ii) any Contracts entered
into by Seller between the date of this Agreement and the Closing Date that
Buyer agrees in writing to assume, and (iii) time sales contracts entered into
by Seller in compliance with Section 5.3.
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"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, nongovernmental 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 Station, and
(i) which are in effect on the date of this Agreement or (H) 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 Station.
"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.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, 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 Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
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"Licenses" means all licenses, permits, and other authorizations issued
by the FCC, 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 Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Loan Documents" means, collectively, the Loan Agreement dated as of
the date hereof between Buyer and Seller (the "Loan Agreement") and the
Promissory Note, Security Agreement, Collateral Assignment, Pledge Agreements
and the other agreements executed and delivered pursuant to the Loan Agreement.
"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 Station, 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 Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Time Brokerage Agreement" means the Time Brokerage Agreement dated as
of the date hereof between Buyer and Seller.
"Transaction Documents" means the Time Brokerage Agreement and the Loan
Documents.
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 Station, 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 liens for current taxes not
yet due and payable), including the following:
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(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 Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) All choses in action of Seller relating to the Station,
other than those referred to in Section 2.2(e) below; and
(h) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station.
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 or savings accounts; any insurance policies, letters of
credit, or other similar items and cash surrender value in regard thereto; and
any stocks, bonds, certificates of deposit and similar investments;
(b) The Accounts Receivable;
(c) All books and records that Seller is required by law to
retain and that pertain to Seller's organization;
(d) Any pension, profit-sharing, or employee benefit plans, and
any collective bargaining agreements;
(e) All choses in action of Seller with respect to which, as of
the Closing Date, Seller has incurred any loss, liability, cost or expense;
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(f) All assets, if any, purchased by Seller pursuant to Section
7. 10(a) of the Time Brokerage Agreement in the event that Buyer fails to
exercise the ATV Option referred to therein; and
(g) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets and the
covenants of Seller set forth in the Noncompetition Agreement referred to in
Section 6.13 shall be Seventeen Million Dollars ($17,000,000), adjusted as
provided below, less the total outstanding principal balance, all accrued but
unpaid interest and all fees, expenses or other charges payable by Seller to
Buyer as of the Closing Date pursuant to the terms of the Loan Documents:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses, other than
expenses for which Buyer is obligated to reimburse Seller under the Time
Brokerage Agreement. All expenses arising from the operation of the Station,
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), FCC annual
Irregulatory fees 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 (subject to reimbursement by Buyer to the extent
provided under the Time Brokerage Agreement), 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 and any other obligation or
liability not being assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments will,
insofar as feasible, be determined and paid on the Closing Date, with final
settlement and payment by the appropriate party occurring no later than ninety
(90) days after the Closing Date or such other date as the parties shall
mutually agree upon. Seller shall prepare and deliver to Buyer not later than
five (5) days before the Closing Date a preliminary settlement statement which
shall set forth Seller's good faith estimate of the adjustments to the Purchase
Price under Section 2.3(a). The preliminary settlement statement (i) 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 (ii)
shall be certified by Seller to be true and complete in all material respects as
of the date thereof.
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2.4 Payment of Purchase Price. The Purchase Price, as adjusted,
shall be paid by Buyer to Seller at Closing by wire transfer of same-day funds
pursuant to wire instructions which shall be delivered by Seller to Buyer, at
least two (2) days prior to the Closing Date.
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 Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any 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 Station prior to the Closing, (iv) any
obligations or liabilities arising under capitalized leases or other financing
agreements, (v) any obligations or liabilities arising under agreements entered
into other than in the ordinary course of business, (vi) any obligations or
liabilities of Seller under any employee pension, retirement, health and welfare
or other benefit plans or collective bargaining agreements, (vii) any obligation
to any employee of the Station for severance benefits, vacation time, or sick
leave accrued prior to the Closing Date, or (viii) any obligations or
liabilities caused by, arising out of, or resulting from any action or omission
of Seller prior to the Closing, and all such obligations and liabilities shall
remain and, be the obligations and liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authori1y. Seller is a limited
partnership duly organized, validly existing, and in good standing under the
laws of the State of California. 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 Station 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 operations of the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by Seller have been duly authorized by all
necessary actions on the part of Seller and its partners. This Agreement has
been duly executed and delivered by Seller and constitutes the legal, valid, and
binding obligations of Seller, enforceable against it in accordance with its
terms except as the enforceability of this Agreement may be
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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, the execution, delivery, and performance 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 any provision of the Certificate of
Limited Partnership or Limited Partnership Agreement 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, accelerate or permit the acceleration of any performance required
by the terms of, or give rise to any right of first refusal that has not been
duly and validly waived by the holder thereof, any 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, and Seller is the authorized
legal holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station 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
limit the full operation of the Station as now operated. The Licenses are in
full force and effect, and the conduct of the business and operations of the
Station is in accordance therewith. Seller has no reason to believe that any
of the Licenses would not be renewed by the FCC or other granting authority in
the ordinary course. The Station's city of license, as determined by the FCC,
is located within the Sacramento-Stockton-Modesto Area of Dominant Influence
(the "Sacramento ADI") as defined by the 1991-1992 Area of Dominant Influence
Market Guide published by The Arbitron Co. and the Sacramento-Stockton-Modesto
Designated Market Area as defined by the 0000 Xxxxxx Xxxxxx Television
Household Estimates published by Xxxxxxx Media Research. On or before June 17,
1993, Seller made a valid election of must carry with respect to each cable
system located within the Station's Area of Dominant Influence, no cable system
has advised Seller of any signal quality or copyright indemnity or other
prerequisite to cable carriage of the Station's signal, and no cable system has
declined
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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.(1)
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 street address, legal description, owner, and use
and the location of all improvements thereon). The Real Property listed on
Schedule 3.5 comprises all real property interests necessary to conduct the
business and operations of the Station as now conducted. The Real Property
does not include any fee estates. With respect to each leasehold or
subleasehold interest included in the Real Property being conveyed under this
Agreement so long as Seller fulfills its obligations under the lease therefor,
Seller has enforceable rights to nondisturbance and quiet enjoyment. 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. As of
September 6, 1996, all Real Property (including the improvements thereon) (i)
was in good condition and repair consistent with its present use, (ii) was
available for immediate use in the conduct of the business and operations of
the Station, and (iii) complied 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 Station 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 Station. As of September 6, 1996, all items of transmitting
and studio equipment included in the Tangible Personal Property (i) had been
maintained in a manner consistent with generally accepted standards of good
engineering practice, and (ii) permitted the Station and any auxiliary broadcast
facilities related to the Station to operate in accordance with the terms of the
FCC Licenses and the rules and regulations of the FCC, and with all other
applicable federal, state, and local statutes, ordinances, rules, and
regulations.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts except contracts with advertisers for the sale of advertising time on
the Station for cash at prevailing rates and which have not been prepaid and
which may be canceled by the Station without
--------------------
(1) In the event this Asset Purchase Agreement is executed and delivered
after October 1, 1996, then "June 17, 1993" shall be deleted from this sentence
and "October 1, 1996" shall be substituted in its place.
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penalty on not more than thirty days' notice. Seller has delivered to Buyer
true and complete copies of all written Contracts, true and complete memoranda
of all oral Contracts (including any amendments and other modifications to such
Contracts), and a schedule summarizing Seller's obligations under trade and
barter agreements relating to the Station. Other than the Contracts listed on
Schedule 3.7 and cash programming contracts, Seller requires no contract,
lease, or other agreement to enable it to carry on its business as now
conducted. All of the Assumed Contracts are in full force and effect, and are
valid, binding, and enforceable in accordance with their terms. There is not
under any Assumed Contract any default by any party thereto or any event that,
after notice or lapse of time or both, could constitute a default. Seller is
not aware of any intention by any party to any Assumed Contract (i) to
terminate such contract or amend the terms thereof, (ii) to refuse to renew the
Assumed Contract upon expiration of its term, or (iii) to renew the Assumed
Contract upon expiration only on terms and conditions which are more onerous
than those now existing. Except for the need to obtain the Consents listed in
Schedule 3.3, 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 and the other Consents described in Schedule 3.3 and any filing required
under the HSR Act, no 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 Station 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 valid
and in good standing and uncontested. Seller has delivered to Buyer copies of
all documents establishing or evidencing all Intangibles. 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 Station as now conducted.
3. 3.10 [Reserved].
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 Station. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in
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Schedule 3.11 are adequate in amount with respect to, and for the fill value
(subject to customary deductibles) of, the Assets, and insure the Assets and
the business of the Station against all customary and foreseeable risks.
During the three-year period ending on September 6, 1996, no insurance policy
of Seller on the Assets or the Station has been canceled by the insurer and no
application of Seller for insurance has been rejected by any insurer.
3.12 Reports. All returns, reports, and statements that the
Station is 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
Station have been complied with. 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 Personnel.
(a) All of Seller's Employee Plans and Compensation
Arrangements are listed in Schedule 3.13, 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. Descriptions of any unwritten Employee Plans or
Compensation Arrangements also are provided in Schedule 3.13. Schedule 3.13
also contains a true and complete list of all employees of the Station, their
job description, date of hire, salary and amount and date of last salary
increase.
(b) Each Employee Plan and Compensation Arrangement has
been administered in 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 the
existence of any 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 pending or 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
Station, 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 seg. of XXXXX.
00
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(x) Xxxxxx as described in Schedule 3.13, 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 former employees of
Seller at the Station.
(e) Except as described in Schedule 3.13, with respect to each
Employee Plan and, to the extent applicable, each Compensation Arrangement: (i)
each Employee Plan that is 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; 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, including, but not
limited to, contributions thereto with respect to the plan year ending
immediately 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), (in) or (o) of the Code)
contributes or to which Seller or any entity related to Seller (under the terms
of Sections 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 Station; (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 employees, former employees, officers, directors,
partners and shareholders of Seller or any entity related to Seller (under the
terms of Section 414(b), (c), (m) or (o) of the Code) employed or previously
employed at the Station 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.
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(g) Seller is not a party to or subject to any collective
bargaining agreements with respect to the Station. Seller has no written or
oral contracts of employment with any employee of the Station, other than those
listed in Schedule 3.7. Seller has complied 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 Seller has
not received any notice alleging that it has failed to comply in any material
respect with any such laws, rules, or regulations. No controversies, disputes,
or proceedings are pending or, to the best of Seller's knowledge, threatened,
between Seller and any employee (singly or collectively) of the Station. No
labor union or other collective bargaining unit represents or claims to
represent any of the employees of the Station. To the best of Seller's
knowledge, there is no union campaign being conducted to represent any
employees of 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 the Station.
3.14 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 it has paid or caused to be
paid all taxes shown on those returns or on any tax assessment received by it
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 Station, and no event has occurred that could impose on
Buyer any transferee liability for any taxes, penalties, or interest due or to
become due from Seller. Seller is not required to pay California sales tax
with respect to the business or operations of the Station.
3.15 Claims and Legal Actions. Except as set forth on
Schedule 3.15 and except for any FCC rulemaking proceedings generally affecting
the broadcasting industry, 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 or relating to Seller with respect
to its ownership or operation of the Station or otherwise relating to the
Assets or the business or operations of the Station, nor does Seller know or
have reason to be aware of any basis for the same. In particular, but without
limiting the generality of the foregoing, 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 Station 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
Station involving charges of illegal discrimination under any federal or state
employment laws or regulations, or (iii) before any
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federal, state, or local agency relating to the business or operations of the
Station involving zoning issues under any federal, state, or local zoning law,
rule, or regulation.
3.16 Environmental Matters.
(a) As of September 6, 1996, Seller had 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. 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 Station alleging any failure to comply with any
such law, rule, or regulation.
(b) To the best of Seller's knowledge, as of September 6,
1996, Seller had no liability relating to its ownership and operation of the
Station (and there was no basis related to the past or present operations,
properties, or facilities of Seller for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
against Seller giving rise to any such liability) under any 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) To the best of Seller's knowledge, as of September 6,
1996, Seller had no liability relating to its ownership and operation of the
Station (and Seller had not handled or disposed of any substance, arranged for
the disposal of any substance, or owned or operated any property or facility in
any manner that could form the basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
(under the common law or pursuant to any statute) against Seller giving rise to
any such liability) for damage to any site, location, or body of water (surface
of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, as of September 6,
1996, Seller had no liability relating to its ownership and operation of the
Station (and there was no basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand against
Seller giving rise to any such liability) under any law, rule, or regulation of
any federal, state, or local government (or agency thereof) concerning employee
health and safety.
(e) In connection with its ownership or operation of the
Station, as of September 6, 1996, Seller had obtained and been in compliance in
all material respects with all of the terms and conditions of all permits,
licenses, and other authorizations which are required under, and had complied
with all other limitations, restrictions, conditions,
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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.
(f) As of September 6, 1996, 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 Station or, to
the best of Seller's knowledge, by any other party on any Real Property.
3.17 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the-ownership and
operation of the Station. Neither the ownership or use of the properties of the
Station nor the conduct of the business or operations of the Station conflicts
with the rights of any other person or entity.
3.18 Conduct of Business in Ordinary Course. Seller has not:
(a) Caused or permitted by any act or failure to act any
material adverse change in the business, assets, or properties of the Station,
including any damage, destruction, or loss affecting any assets used or useful
in the conduct of the business of the Station;
(b) Made any sale, assignment, lease, or other transfer
of any of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor; or
(c) Made any material write-down of the value of any
Assets; or
(d) 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 the Station.
3.19 Transactions with Affiliates. Except as set forth on Schedule
3.19, Seller has not been involved in any business arrangement or relationship
relating to the Station with any
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affiliate of Seller, and no affiliate of Seller owns any property or right,
tangible or intangible, which is used in the business of the Station. As used
in this paragraph, "affiliate" has the meaning set forth in Rule 12b-2
promulgated under the Securities and Exchange Act of 1934.
3.20 Broker. Neither Seller nor any person 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.
3.21 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
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 corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida and at Closing will be duly qualified to conduct business as a
foreign corporation in the State of California. 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.
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 making any filing required under the HSR Act, 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 Articles 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,
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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 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 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 STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station diligently in
the ordinary course of business in accordance with its past practices (except
where such conduct has been expressly delegated to Buyer pursuant to the terms
of the Time Brokerage Agreement or would conflict with the following covenants
or with Seller's other obligations under this Agreement), and in accordance
with the other covenants in this Section 5.
5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station,
except in accordance with past practices.
5.3 Contracts. Seller will not enter into any contract or
commitment relating to the Station 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 will be binding on Buyer after Closing, except for cash
time sales agreements made in the ordinary course of business. 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.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except where no longer
used or useful in the business or operations of the Station or in connection
with the acquisition of replacement property of equivalent kind and value.
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5.5 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
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed prior to the
Closing Date, (ii) liens for current taxes not yet due and payable, and (iii)
mechanics' liens and other similar liens, which shall be removed prior to the
Closing Date.
5.6 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
due diligence any applications to any governmental authority in connection with
the operation of the Station.
5.7 Rights. Seller shall not waive any right relating to the
Station or any of the Assets. Buyer shall have a reasonable opportunity to
consult with Seller concerning Seller's decision to elect must carry or
retransmission consent for the Station with respect to cable television systems
located in the Sacramento ADI, and Seller shall not make any such election
without Buyer's approval. Seller shall not cause, by any act or failure to
act, any cable system located within the Sacramento ADI to refuse to carry the
Station's signal.
5.8 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.
5.9 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Assets and to all other properties, equipment, books,
records, Contracts, and documents relating to the Station for the purpose of
audit and inspection and, upon reasonable notice to Seller, will furnish or
cause to be furnished to Buyer or its authorized representatives all
information with respect to the affairs and business of the Station that Buyer
may reasonably request (including any financial reports and operations reports
produced with respect to the affairs and business of the Station). Without
limiting the generality of the foregoing, upon reasonable notice to Seller,
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
sole 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. Nothing herein shall be deemed to permit
Buyer to have access to any documents or other materials not relating to the
properties, books or records of Buyer or the transactions contemplated
hereunder.
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5.10 Maintenance of Assets. Seller shall not cause or permit, by
any act or failure to act, any loss, damage or impairment of the Assets
(ordinary wear and tear excepted). 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, other than a loss, damage or impairment resulting from actions
taken by Buyer pursuant to the Time Brokerage Agreement, 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.
5.11 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets.
5.12 Consents. Seller shall 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
Station 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 proposed,
considered, or requested for any of the Consents. Upon Buyer's request, Seller
shall cooperate with Buyer and use it best efforts to obtain from the lessors
under each Real Property lease such estoppel certificates and consents to the
collateral assignment of the lessee's interest under each such lease as Buyer's
senior lenders may request.
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in writing
of any unusual or material developments with respect to the business or
operations of the Station, and of any material change in any of the information
contained in Seller's representations and warranties contained in Section 3 of
this Agreement.
5.15 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 such financial information (including
information on payables and receivables) as Buyer may reasonably request. All
financial information delivered by Seller to Buyer pursuant to this Section
shall accurately reflect the books, records, and accounts of the Station and
shall be complete and correct in all material respects.
5.16 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 Station.
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5.17 Financing Leases. Seller will satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain good title to the Assets leased by Seller pursuant
to those leases so that those Assets shall be transferred to Buyer at Closing
free of any interest of the lessors.
5.18 Preservation of Business. Seller shall use its best efforts
to preserve that portion of the business and organization of the Station not
delegated to Buyer pursuant to the Time Brokerage Agreement and use its best
efforts to keep available to the Station its employees and to preserve the
Station's present relationships with suppliers and others having business
relations with it, to the end that the business and operations of the' Station
shall be unimpaired at the Closing Date.
5.19 Collection of Accounts Receivable. Seller shall collect the
accounts receivable of the Station only in the ordinary course consistent with
its past practices and will not take any action designed or likely to
accelerate the collection of its accounts receivable.
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 FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their best efforts to obtain a grant of the application 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 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 Station. Prior to Closing, Buyer
shall not, directly or indirectly, control, supervise, direct, or attempt to
control, supervise, or direct, the
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operations of the Station; such operations, including complete control and
supervision of all of the Station 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, other than any loss, damage
or impairment resulting from actions taken by Buyer pursuant to the Time
Brokerage Agreement, 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, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the 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 all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 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 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.
6.6 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of California 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.
6.7 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 that are not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of three years from the Closing Date any books and records relating to the
Assets.
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6.8 Appraisal. Buyer and Seller shall retain Bond & Xxxxxx
("B&P") to conduct an appraisal of the Assets (the "B&P Appraisal"). Buyer and
Seller agree to allocate the Purchase Price for tax and recording purposes in
accordance with the B&P Appraisal unless Buyer or Seller notifies the other in
writing within ten (10) business days following its receipt of the B&P
Appraisal of any reasonable, good faith objection to the allocation set forth
in the B&P Appraisal (the "Objection Notice"). The Objection Notice shall
describe in reasonable detail the basis for the objection. Buyer and Seller
shall mutually designate, no later than ten (10) business days following
receipt of an Objection Notice, a second appraisal firm (the "Alternate
Appraiser") with experience in the valuation and appraisal of television
station assets to conduct the appraisal. Buyer and Seller agree to abide by
the appraisal produced by the Alternate Appraiser and allocate the Purchase
Price for tax and recording purposes in accordance with such appraisal. The
fee Section and expenses of B&P shall be paid by Buyer, unless Seller delivers
to Buyer an Objection Notice, in which event Seller shall pay the fees and
expenses of B&P. The fees and expenses of any Alternate Appraiser shall be
paid one-half by Buyer and one-half by Seller.
6.9 Noncompetition Agreement. At Closing, Buyer and Seller shall
enter into a Noncompetition Agreement in the form of Schedule 6.13 and $340,000
of the Purchase Price shall be allocated to the covenants of Seller set forth
therein on the Closing Date.
6.10 HSR Act Filing. Seller and Buyer agree to (a) file, or cause
to be filed, with ,the U.S. Department of Justice ("DOJ") and Federal Trade
Commission ("FTC") all filings, if any, which are required in connection with
the transactions contemplated hereby under the HSR Act within ten (10) business
days of the date of this Agreement; (b) submit to the other party, prior to
filing, their respective HSR Act filings to be made hereunder, and to discuss
with the other any comments the reviewing party may have; (c) cooperate with
each other in connection with such HSR Act filings, which cooperation shall
include furnishing the other with any information or documents in such party's
possession that may be reasonably required in connection with such filings; (d)
promptly file, after any request by the FTC or DOJ and after appropriate
negotiation with the FTC or DOJ of the scope of such request, any information
or documents requested by the FTC or DOJ; and (e) furnish each other with any
correspondence from or to, and notify each other of any other communications
with, the FTC or DOJ which relates to the transactions contemplated hereunder,
and to the extent practicable, to permit each other to participate in any
conferences with the FTC or DOJ.
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:
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(a) Representations and Warranties. All 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 date, except insofar as any representation or warranty of Seller (i)
was true and complete in all material respects at and as of the date hereof but
shall not be true and complete in all material respects at and as of the
Closing Date as a result of actions taken by Buyer pursuant to the Time
Brokerage Agreement or (ii) expressly relates to any specified earlier date
only.
(b) Covenants and Conditions. Seller 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) Consents. All Consents 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 Station or the conduct of its
business and operations. No proceeding shall be pending or threatened the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any License.
(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 material adverse change
resulting from any action taken by Seller in the business, assets, or
properties of the Station, including any damage, destruction, or loss affecting
any assets used or useful in the conduct of the business of the Station.
(h) HSR Act. If applicable, the waiting period under the
HSR Act shall have expired without unresolved action by the DOJ or the FTC to
prevent the Closing.
(i) Transaction Documents. The Time Brokerage Agreement
shall be in full force and effect and Seller shall have complied in all
material respects with its obligations thereunder and there shall exist no
Event of Default (as defined in the Loan Agreement).
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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 date.
(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 applicable, the waiting period under the
HSR Act shall have expired without unresolved action by the DOJ or the FTC to
prevent the Closing.
(f) Time Brokerage Agreement. The Time Brokerage
Agreement shall be in full force and effect, and Buyer shall have complied in
all material respects with its obligations thereunder.
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, to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than ten business days following the date
upon which the FCC Consent has become a Final Order, subject to satisfaction or
waiver of all other conditions precedent to the holding of the Closing. If
Buyer fails to specify the date for Closing prior to the fifth business day
after the date upon which the FCC Consent becomes a Final Order, the Closing
shall take place on the tenth business day after the date upon which the FCC
Consent becomes a Final Order. Notwithstanding the foregoing, if the waiting
period under the HSR Act shall not have expired on or before the date that is
the tenth business day after the date on which the FCC Consent becomes a Final
Order, the Closing shall take place at 10:00 a.m. on a date to be
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set by Buyer, on at least five days' written notice to Seller, that is not
earlier than the first business day and not later than the tenth business day
after the date such waiting period shall have expired.
(b) Closing Place. The Closing shall be held at the
offices of McQuaid, Metzler, XxXxxxxxx & Van Zandt, L.L.P., Xxx Xxxxxxxx Xxxxx,
00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, or any other place that is agreed upon
by Buyer and Seller; provided, however, that Buyer and Seller shall use their
reasonable best efforts to conduct the Closing by mail.
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 warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets in
the name of Buyer, free and clear of all claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges or encumbrances,
except for liens for current taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are designated to indicate that estoppel
certificates are required under this paragraph;
(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 an officer of Seller or
Seller's general partner, certifying (1) that all 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 at and as of that date,
except insofar as any representation or warranty of Seller (i) was true and
complete in all material respects at and as of the date hereof but is not be
true and complete in all material respects at and as of the Closing Date as a
result of actions taken by Buyer pursuant to the Time Brokerage Agreement or
(ii) expressly relates to any specified earlier date only; and (2) that Seller
has 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;
(e) Tax, Lien, and Judgment Searches. Results of a
search for tax, lien, and judgment filings in the Secretary of State's records
of the State of California as well as
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the records of those counties in California in which any of the Assets are
located, such searches having been made no earlier than fifteen days prior to
the Closing Date;
(f) 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;
(g) Opinion of Counsel. An Opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(g)
hereto;
(h) Noncompetition Agreement. The Noncompetition
Agreement in the form as Schedule 6.13, duly executed on behalf of Seller; and
(i) Lenders Certificates. Such certificates and
confirmations to Buyer's senior lenders as Buyer may reasonably request in
connection with obtaining financing for the performance of its payment
obligations hereunder at no cost or expense to Seller; provided, however, that
Seller shall not be required to deliver under this section any signature of a
third party on, or consent to, any document.
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 Purchase Price as provided in
Section 2.3;
(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 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 Station on
or after the Closing Date;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by an officer of Buyer,
certifying (1) that all representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects at and as of the
Closing Date as though made at and as of that date, and (2) that Buyer has
performed and complied in all material respects with all of its covenants,
agreements and conditions required by this Agreement to be performed or
complied with by it prior to or on the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
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(e) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.13 duly executed by Buyer and the payment
of $340,000 to Seller thereunder.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) 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.
(b) 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.
(c) Upset Date. If the Closing shall not have occurred by
June 30, 1999.
(d) Breach. Without limiting Seller's rights under this
Agreement, if Buyer has failed to cure any material breach of any of its
representations, warranties or covenants under this Agreement within fifteen
days after Buyer received written notice of such breach from Seller.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) 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.
(b) 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.
(c) Upset Date. If the Closing shall not have occurred by
June 30, 1999.
(d) Interruption of Service. If Seller shall have taken
any action that prevented signal transmission of the Station in the normal and
usual manner for a continuous period of seven days.
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(e) Breach. Without limiting Buyer's rights under this
Agreement, if Seller has failed to cure any material breach of any of its
representations, warranties or covenants under this Agreement within fifteen
days after Seller received written notice of such breach from Buyer.
9.3 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material
breach 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.
If this Agreement is terminated by Buyer due to Seller's material breach of
this Agreement, Buyer shall have all rights and remedies available at law or
equity. If this Agreement is terminated by Seller due to Buyer's material
breach of this Agreement, Seller shall have all rights and remedies available
at law or 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. 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. 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 Agreement as the
result of a breach of any of its representations and warranties.
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 Seller to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets.
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(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to events 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.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station 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 follows:
(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
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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 extend to the shareholders, partners, 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.
10.5 Specific Performance. The parties recognize that if Seller
breaches 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
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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. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of all filing fees required by the FCC in connection
with the FCC Consent. Buyer shall pay all filing fees required by the FTC or
DOJ under the HSR Act. 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, and each
party shall be responsible for all fees or commissions payable to any other
finder, broker, advisor, or similar person retained by or on behalf of such
party.
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: Xxx X. Xxxxxx
Xxxxx-Xxxxxxx Broadcasting, A Limited Partnership
0000 Xxxx Xxxxxx Xxx
Xxxxxxxxxxx, XX 00000
With a copy to: Xxxxx X. Xxxxxxx, Esq.
McQuaid, Metzler, XxXxxxxxx & Van Zandt, L.L.P.
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
If to Buyer: Xxxxxx X. Xxxxxx, Chairman
Xxxxxx Communications of Sacramento-29, Inc.
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, XX 00000
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With a copy to: Xxxx X. Xxxxx, Xx., Esq.
Dow, Xxxxxx & Xxxxxxxxx
A Professional Limited Liability Company
0000 Xxx Xxxxxxxxx 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;
provided, however, that Buyer may assign its rights and obligations under this
Agreement, in whole or in part, without seeking or obtaining Seller's prior
approval, to (a) one or more subsidiaries or commonly controlled affiliates of
Buyer or (b) any other entity designated by Buyer, so long as Buyer determines,
in the exercise of reasonable business judgment, that such entity possesses the
financial capacity, and the requisite qualifications under the Communications
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
to consummate the transactions contemplated by this Agreement; provided,
however, that Xxxxxx Communications Corporation hereby agrees to guarantee the
performance by Buyer's assignee of Buyer's obligations hereunder in the event
that Buyer's assignee fails to perform such obligations. Notwithstanding the
foregoing, Buyer may, at its sole cost and expense, collaterally assign its
rights and interests hereunder to its lenders without seeking or obtaining
Seller's prior approval. Upon any permitted assignment by Buyer or Seller in
accordance with this Section 11.4, all references to "Buyer" herein shall be
deemed to be references to Buyer's assignee and all references to "Seller"
herein shall be deemed to be references to Seller's assignee, as the case may
be. 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
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.5 Governing Law; Venue. This agreement shall be governed,
construed, and enforced in accordance with the laws of the State of California
(without regard to the choice of law provisions thereof). Seller and Buyer
hereby irrevocably submit to the exclusive jurisdiction and venue of the state
and federal district courts for Sacramento, California for the purposes of any
action or proceeding arising out of or relating to this Agreement or the
subject matter hereof. Buyer and Seller waive and agree not to assert, by way
of motion, as
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a defense or otherwise, in any such action or proceeding, any claim that (a)
they are not personally subject to the jurisdiction of such courts, (b) the
action or proceeding is brought in an inconvenient forum or (c) the venue of
the action or proceeding is improper. Seller and Buyer agree that,
notwithstanding any right or privilege they may possess at any time, they and
their property are and shall be generally subject to suit on account of the
obligations they have assumed hereunder. Seller and Buyer agree that service
in person or by certified or registered U.S. mail to its address set forth in
Section 11.2, or as subsequently changed as provided therein, shall constitute
valid in personam service upon Seller and Buyer and their successors and
assigns in any action or proceeding with respect to any matter as to which they
have submitted to jurisdiction hereunder. The obligations of Seller and Buyer
under this Section shall survive any termination of this Agreement.
11.6 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.
11.7 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.
11.8 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.
11.9 Waiver of Compliance; Consents. Except as otherwise provided
in this 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 11.10.
11.10 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this
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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 judgement be required or advisable in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
1.11 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset Purchase
Agreement as of the day and year first above written.
XXXXXX COMMUNICATIONS OF
SACRAMENTO-29, INC.
By:
------------------------------------------
Xxxxx X. Xxxxxx
President
XXXXX-XXXXXXX BROADCASTING, A
LIMITED PARTNERSHIP
By: Xxxxx-Xxxxxxx Broadcasting, Inc.,
its general partner
By:
--------------------------------
Name:
Title:
XXXXXX COMMUNICATIONS CORPORATION HEREBY
JOINS IN THE EXECUTION OF THE FOREGOING
AGREEMENT SOLELY TO AGREE TO THE GUARANTY SET
FORTH IN SECTION 11.3 HEREOF, AS OF THE DATE
FIRST ABOVE WRITTEN.
By:
------------------------------------------
Xxxxx X. Xxxxxx
President
