ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement has been made and entered into as of this
11th day of April, 1997 by and between M.B.C., Incorporation, a Maryland
Corporation ("Seller"), and News Communications Inc., A New York Corporation
("Buyer").
WHEREAS, Seller is the owner and operator of the Station WYRE-AM, 810 KHz,
licensed to Annapolis, Maryland ("Station"), pursuant to valid license issued by
the Federal Communications Commission ("FCC"); and
WHEREAS, Buyer desires to acquire the business of the Station as a
going concern and all of the real and personal property, assets and rights used,
useful or intended to be used, in the business and operations of the Station and
to secure a transfer or an assignment of the license and other authorizations
issued by the FCC for the operation of the Station ("FCC Licensee"), and Seller
desires to sell, assign, transfer and convey the same to Buyer; and
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Asset Purchase Agreement,
("Agreement"), the parties, intending to be legally bound, agree as follows:
1. Definitions. Unless otherwise stated in this Agreement, the
following terms shall have the following meanings:
a. Assignment Application refers to an application which
Seller and Buyer will jointly file with the FCC requesting its written consent
to the assignment of the FCC Licenses from Seller to Buyer.
i. Assignment Application Fee: Refers to those fees
required to be paid to the FCC for the filing and processing of the Assignment
Application, and in this matter for which the Seller and Buyer shall each pay
one-half.
b. Closing Date (or Closing) for the sale of business of the
Station as a going concern and consummation of the other transactions
contemplated in this Agreement shall be within ten (10) business days after FCC
Consent, as defined hereafter. In the absence of the mutual agreement of Seller
and Buyer to the contrary, the Closing shall take place commencing at 10:00
a.m., local time at 000 Xxxx Xxxxxx, Xxxxxxxxx, XX, or
1
at such other convenient time or place to be mutually agreed upon by Seller and
Buyer.
c. FCC. Refers to the Federal Communication Commission.
d. FCC Consent refers to an order of the FCC which is not
subject to further administrative or judicial review, consenting to the
assignment of the FCC Licenses issued for the operation of the Station from
Seller to Buyer. By written mutual agreement, the parties may choose not to
await the passage of any time for administrative or judicial appeal, and thereby
may deem "FCC Consent" effective for purposes of this Agreement upon the initial
FCC approval of such assignment.
2. Assets Sold and Purchased. Seller, on the Closing Date, will
sell, transfer, convey, assign and deliver to Buyer, good and marketable title,
free and clear of any liens, encumbrances, restrictions or violations of any
kind or type, all of the assets, business and rights of Seller, used or useful
in the operation of the Station (collectively "Purchased Assets"). Without
limiting the generality of the foregoing, there shall be included the following
as the same relate to the Station and the business thereof:
a. The business of the Station as a going concern, including
all rights, title and interest in and to the call letters WYRE-AM;
b. The FCC License and all other licenses, permits and
authorizations, if any, issued by the FCC or any other regulatory agency for the
operation of the Station, including those listed and described in Exhibit A
attached hereto;
c. All of the broadcast, production, studio and transmitting
equipment and systems (including all audio and tape equipment both electronic
and mechanical), and all of the machinery, equipment, tools, vehicles,
furniture and furnishings, and office equipment (and the inventories of supplies
and spare parts relating to each of the foregoing) and described in Exhibit B,
except those used solely by WRNR-FM, (collectively, the "General Equipment").
d. All right, title and interest of Seller in the leases,
contracts, agreements and commitments (excluding any and all contracts or
agreements, expressed or implied, regarding matters of employment) entered into
in the ordinary course of business of the Station,
2
and listed and described on Exhibit C hereto, and any renewals or extensions
thereof, and those personal property leases and other contracts, agreements and
commitments entered into by Seller in connection with the operations of the
Station from the date hereto to the Closing Date (collectively the "Contracts"),
subject to Buyer's approval. Notwithstanding anything written to the contrary,
Buyer agrees and acknowledges that a tower is not included in the assets
purchased. Further, the Seller is entering into a land lease with the city of
Annapolis for the purpose of building a tower and the said lease is not included
in the sale of the assets. However, Seller agrees to provide Buyer, at
settlement with a lease for a minimum term of Twenty (20) years at Five Hundred
Dollars ($500.00) per month, the first Ten (10) years and One Thousand Dollars
($1,000.00) per month the second Ten (10) years. Said lease will also contain a
provision for the Leasee to have the right to cancel the lease at any time by
paying a penality of one years rent as liquidated damages.
e. All right, title and interest of Seller in the trade names,
trademarks, service marks, logos, copyrights and patents and all similar
intellectual property rights (including applications and licenses therefor),
together with the goodwill associated therewith (collectively, "Proprietary
Rights");
f. All right, title and interest of Seller in all broadcast,
news, feature and syndication rights, programs, program rights and other
broadcast materials, as well as any tapes associated therewith which have not
expired in accordance with their respective terms as of the Closing Date, and
any and all similar rights acquired by the Station after the date hereof and
before the Closing Date (collectively, "Broadcast Rights"): except Buyer agrees
and acknowledges that the music library of the station is not included in the
assets being sold.
g. All intangible assets, including the computer software,
magnetic media, electronic data processing files, systems and programs, business
lists, sales and operating plans and trade secrets, (collectively, "Intangible
Assets").
h. The rights to any and all slogans, jingles, promotions,
contests, themes and other promotional rights, including
3
materials incorporating or using the same, (collectively, Promotional
Rights");
i. Files and records relating to the operation of the
Stations, including schematics, technical information and engineering data,
programming information, copies of books of account, employment records,
customer lists and files, purchase and sales records and correspondence, copies
of advertising records, files and literature, and FCC logs, files and records;
j. Any and all easements, rights-of-way, permits and consents,
if any, relating to or used in the business and operation of the Station.
k. The rights to any and all utility deposits, other deposits
and prepaid expenses made to third parties in connection with the operations of
the Station; provided, however, as between Buyer and Seller, there shall be an
adjustment pursuant to Paragraph 16.
3. Possession and Control. Subject to the Program Services Agreement
executed herewith between Seller and Buyer, between the date of this Agreement
and the Closing Date, Buyer shall not control the operation of the Station, but
such operations shall be the responsibility of Seller. Buyer shall, however, be
entitled to reasonable inspection of the premises and assets. It is further
understood and agreed that, effective on the Closing Date and thereafter, Seller
shall have no control over, nor right to intervene or participate in, the
operations of Stations, except in the event of default.
4. PURCHASE PRICE AND METHOD OF PAYMENT. The total purchase price of
the assets to be conveyed hereunder shall be the sum of Two Hundred and Sixty
Eight Thousand Five Hundred Dollars ($268,500) to be paid as follows:
4.1 Deposit. Upon Execution hereof, Buyer shall deposit Twenty
Five Thousand Dollars ($25,000) as initial deposit. Buyer shall be willing to
have Seller use said deposit at its sole discretion. Xxxxxxx X. Xxxx will
personally guarantee the return of the deposit by M.B.C. Inc. in the event the
FCC turns down the Assignment of the license to the Buyer, unless such denial is
a result of actions, or omissions by the Buyer, his agents, or the result of the
Buyer not meeting the qualifications required
4
under Section 7.1 of this Agreement, or is not otherwise in default under this
Agreement.
4.2 Payment at Closing. On the closing Date, Buyer shall pay
the total purchase price to Seller of Two Hundred and Sixty Eight Thousand Five
Hundred Dollars ($268,500). Seller acknowledges receipt of Twenty Five Thousand
Dollars ($25,000) of the purchase price from the non-refundable, deposit made at
the execution of this Agreement. The balance of the purchase price of Two
Hundred and Forty Three Thousand Five Hundred Dollars ($243,500) shall be paid
by the Buyer to the Seller at the closing in cash by wire transfer of federal
funds or by cashier's check.
5. ACCOUNTS RECEIVABLE. On the Closing Date, Seller shall provide
Buyer with a list of its accounts receivable which are to be retained by Seller.
5.1 Collecting Accounts Receivable. Seller shall be
responsible for the billing and collecting of its accounts receivable. In the
event any of Seller's payments on account of the accounts receivable are
delivered to Buyer. Buyer shall immediately transmit said payment to the Seller
c/o Xxxxxxx Xxxx or Xxxx Xxxxxxxx M.B.C., Inc., 000 Xxxx Xxxxxx, Xxxxxxxxx, XX
00000 or such other location as Xxxxxxx Xxxx shall, in writing, designate.
6. SELLER'S REPRESENTATIONS FIND WARRANTIES. Seller represents and
warrants that:
6.1 Licenses and Authorizations. Exhibit A contains a complete
list of Commission authorizations which Seller holds with respect to the
Station. The Station's License and the other authorizations listed in Exhibit A,
or extensions or renewals thereof, are in full force and effect. Without
limiting the generality of the foregoing, the Station's Licenses are valid for a
full term ending October 1, 2002 and are subject to no restrictions or
conditions; all ownership reports, employment reports, and other documents
required to be filed by Seller with the Commission with respect to the Station
have been filed and such items as are required to be placed in the Station's
local public records file have been placed in such file. All such reports and
documents are correct in
5
all material respect. At Closing, Seller shall, deliver the Station Public
file to Buyer.
6.2 Title to Personal Property. On the Closing Date, Seller
will have good and marketable title to all of the personal property to be
conveyed pursuant to this Agreement, free and clear of all liens, pledges and
encumbrances whatsoever. The assets, together with all improvements,
replacements and additions thereto from the date hereof to the Closing Date,
constitute all of the tangible personal property used or useful in the operation
of the Station or necessary to operate the Station in accordance with the
Station's License.
6.3. Condition of Personal Property. The assets, except as
specifically stated herein, are serviceable in good operating condition and
repair, reasonable wear and tear excepted. The Station's transmitting and studio
equipment are operating in accordance with the standards of good engineering
practice and the terms and conditions of the Station's licenses, all underlying
construction permits, and the rules, regulations, and policies of the
Commission. All broadcast equipment is type-approved or type-accepted where
such type-approval or type-acceptance is required. None of the assets to be
conveyed have been materially adversely affected in any way as a result of fire,
explosion, earthquake, accident, flood, rain, drought, riot, or public enemy.
Within thirty (30) days of the date hereof, Seller shall permit an engineer or
representative selected by Buyer and paid for by Buyer to inspect and approve
the personal property to be conveyed hereunder.
6.4. Disposal of Assets. Between the date hereof and the
Closing Date, Seller will not sell or agree to sell or otherwise dispose of the
assets which are the subject of this Agreement other than in the ordinary course
of business and only if such assets are replaced, prior to the Closing Date, by
other assets of equal or greater worth and utility.
6.5. Contracts, Agreements, and Leases. The contracts,
agreements, and leases to be assigned to Buyer under this Agreement and listed
in Exhibit C are freely assignable, or, if consent of the other contracting
party to the assignment is required, such consent will be secured at Sellers
sole expense prior to the Closing Date. Those contracts, leases, and agreements
whose stated duration extends beyond the Closing Date will, at Closing, be in
full force and effect and unimpaired
6
by any acts or omissions of Seller or its employees or agents. Said contracts,
agreements, and leases will not be modified without Buyer's written consent.
6.6. Employees. There are no material controversies pending or
threatened between the Seller and any of the Station's employees, except for
those suits, actions or litigation listed in Exhibit D, and Seller is not
aware of any facts which could reasonably result in any such controversy. Seller
has no written pension profit sharing, stock option, bonus, termination day or
other employees benefit plan, practice, agreement, or understanding. Seller will
deliver to Buyer an accurate list of all persons currently employed by the
Station as of the date of this Agreement. Buyer has no obligation to hire any of
Seller's employees.
6.7. No Breach. The execution and performance of this
Agreement will not violate any order, rule, judgment or decree to which Seller
is subject or breach any contract, or agreement to which Seller is a party or by
which Seller is bound.
6.8. Litigation. With the exception of the litigation
described in Exhibit D, there is no litigation, action, suit, or other
proceeding pending which may give rise to any claim against any of the assets to
be conveyed or adversely affect Seller's ability to perform in accordance with
the terms of this Agreement, and Seller is not aware of any facts which could
reasonably result in any such proceeding.
6.9. Administrative Violations. Subject to the Program
Services Agreement, If Seller receives an administrative or other order relating
to any violation of the rules and regulations of the Commission, or of any other
federal, state or local regulatory body, including rules regarding the
employment of labor and equal employment opportunity, it will promptly notify
Buyer of such order and use its best efforts to remove or correct such
violations and will be responsible for the cost of removing same, including the
payment of any fines or back pay that may be assessed for any such violation,
and Seller shall indemnify and hold Buyer harmless with respect to any and all
such violations occurring prior to the Closing Date. As of the date hereof,
Seller is not aware of any such violations any pending investigations concerning
such violations, or of any facts which could reasonably result in such
violations. In the event Seller is
7
required to cure any violations on the licenses, and as a result the FCC does
not issue FCC consent in time to close by December 31, 1997, then said closing
shall be postponed for a period of time on a one-for-one day ratio for each day
needed to cure, but in no event beyond March 31, 1998. If Closing has not
occurred by March 31, 1998 and Buyer is not in default under this Agreement or
the Program Services Agreement, this Agreement shall become null and void and
Buyer and Seller will have no further liability to each other.
6.10. Taxes. Seller has, or by the Closing Date will have paid
and discharged all taxes, assessments, excises and other levies relative to the
assets being sold which, if due and not paid, would interfere with Buyer's full
enjoyment of the assets, facilities, licenses or other items conveyed hereunder,
excepting such taxes, assessments, and other levies which will not be due until
after the Closing Date and which are to be prorated between Seller and Buyer
pursuant to the provisions of Paragraph 16.
6.11. Accounts Payable. At the Closing Date, all accounts
payable of Seller will be paid.
6.12. Operations Prior to Closing. Between the date hereof and
the Closing Date, the Station shall be operated in the normal and usual manner
in accordance with rules, regulations, and policies of the Commission, and the
Stations' business shall be conducted only in the ordinary course. No increase
shall be made in the compensation payable or to become payable to any employee
or agent of the Station other than in the ordinary course of business consistent
with Seller's past practice. No employment contract shall be entered into or
modified by Seller or on behalf of the Station unless agreed to by Buyer. No
other contract or lease shall be entered into by Seller on behalf of the Station
in excess of Five Thousand Dollars ($5,000) without consent of Buyer except the
land lease with the city of Annapolis for the purpose of building a tower and
the sale of said leasehold to a third party which are excluded from this
contract and for which no consent is necessary.
8
6.13. Adverse Developments. Seller shall promptly notify Buyer
of any materially adverse developments with respect to the business or
operations of the Stations.
6.14. Access. Seller will give Buyer and representatives of
Buyer reasonable access during normal business hours throughout the period prior
to the Closing Date to the properties, titles, contracts, books, records and
affairs of Seller. After the closing, Buyer and Seller shall each have
reasonable access to such records of Seller and Buyer for purposes of completing
its bookkeeping and other accounting procedures, and any other purpose for which
such access is reasonably necessary and proper.
6.15. Organization Existence and Power. Seller is a Maryland
Corporation, duly organized, validly existing, and in good standing under the
laws of the State of Maryland and it has full power under its bylaws and all
applicable laws to carry on its business as now being conducted and to enter
into and to perform this Agreement.
6.16. Corporation Authorization. The execution and delivery of
this Agreement has been duly authorized by a majority of the Board of Directors
and the holders of over 2/3 majority vote of the outstanding shares of stock as
evidenced by M.B.C. Incorporated's Corporate Authority Resolution. This
Agreement will be duly executed and delivered to Buyer and constitutes a legal,
valid and binding agreement and is enforceable in accordance with its terms.
6.17. Environmental Matters. To the best of Seller's knowledge
after due inquiry, Seller has not violated and is not in violation of, and the
business and operations of the Station do not violate, any applicable federal,
state or local law, rule, regulation, decree or order relating to air, water or
noise pollution, employee health and safety, or the production, storage,
labeling, transportation or disposition of waste or hazardous or toxic
substances (collectively, "Environmental Laws') and Seller has not and to the
best of Seller's knowledge no other person has stored, disposed of or released
any chemical or hazardous substances, including any "Hazardous Substances",
"Pollutants" or "Contaminants" (as such terms are defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended),
asbestos, petroleum products or polychlorinated biphenyls
9
(collectively, the "Hazardous Materials") on, beneath or about any of the owned
properties of Seller and Seller knows of no condition relating to or resulting
to or resulting from the release or discharge into the soil, surface waters,
ground waters, drinking water supplies, navigable waters, land, surface or
subsurface strata, ambient air or any other environmental medium which has
resulted in any damage, loss, cost, expense, claim, demand, order of liability
to or against Seller or Buyer by any governmental authority or other third party
relating to or resulting from the ownership, use or operation of the Stations or
the Station Assets, or otherwise related to any real property owned by Seller,
irrespective of the cause of such condition and Seller has not received any
notice from any governmental authority or private or public entity advising
Seller that it is potentially responsible for response costs with respect to a
release or threatened release of any Hazardous Material; nor has Seller received
any notice of violation of any Environmental Law, regulation, decree or order
relating to the ownership, use of operation of the Stations or the Stations'
Assets.
6.18 The representations and warranties of Seller in this Agreement
shall be true and correct as of the Closing Date as if made on and as of the
Closing Date.
7. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and
warrants to Seller that:
7.1. Licensee Qualifications. Buyer believes there is no fact
which would, under present law, including the Communications Act of 1934, as
amended, and the present rules and regulations of the Commission, disqualify
Buyer from being the assignee of the Stations' Licenses or the owner and
operator of the Stations, and Buyer will not take any action that Buyer knows,
or has reason to know, would result in such disqualification. Buyer possesses
all of the request qualifications to become a licensee of the Station and knows
of no reason why the FCC should not find the Buyer fully qualified to hold the
license of the Station and Buyer has the financial resources, assurances and
capabilities to consummate and fully perform this agreement in accordance with
its terms. Should Buyer become aware of any such fact it will so inform Seller
and will use its best efforts to remove any such disqualification.
10
7.2. Corporation Existence and Power. On the Closing Date,
Buyer shall be a Corporation, duly organized, validly existing, and in good
standing under the laws of the State of Maryland and it shall have full power
under its corporate charter, bylaws, and all applicable laws to carry on its
business and to enter into and to perform the terms and covenants of this
Agreement.
7.3 No Breach. The execution and performance of this Agreement
will not violate any order, rule, judgment or decree to which Buyer is subject
or breach any contract or agreement to which Buyer is a party or by which Buyer
is bound.
7.4. Litigation. There is no action, suit, investigation or
other proceeding pending or threatened which may adversely affect Buyer's
ability to perform in accordance with the terms of this Agreement, and Buyer is
not aware of any facts which could reasonably result in any such proceeding.
7.5 Disclosure. No representation or warranty made by Buyer
set forth herein or in any exhibit hereto or schedule referred to herein, or in
any certified or other document delivered or to be delivered in connection with
the transaction contemplated by this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary to make the statement not misleading.
7.6 The representations and warranties of Buyer in this
Agreement shall be true and correct as of the Closing Date as if made on and as
of the Closing Date.
8. SELLER'S INDEMNIFICATION. Seller undertakes and agrees to hold
harmless Buyer and its successors and assigns against any and all losses, costs,
liabilities, claims, obligations and expenses, including reasonable attorney's
fees, incurred or assumed by Buyer arising from breach, misrepresentation, or
other violation by Seller of any of the covenants, warranties or representations
contained in this Agreement and for and against any liabilities of Seller or
liens, charges, or encumbrances of any property to be conveyed hereunder. Seller
further undertakes and agrees to indemnify and bold harmless Buyer and its
successors and assigns against any and all liabilities of Seller arising out of
its operations of Station prior to closing, and/or under the
11
contracts, leases, and agreements assigned to Buyer hereunder. The foregoing
indemnity is intended by the Seller to cover all acts, suits, proceedings,
claims, demands, assessments, and adjustments with respect to any and all of the
specific matters in this indemnity set forth and shall be without limitation as
to amount. In the event that any claim is asserted against Buyer, that, if
established, would entitle Buyer to indemnification hereunder, the Buyer shall
promptly give Seller written notice of such claim. Within twenty (20) days
thereafter, Seller shall inform Buyer in writing whether Seller will defend such
claim. Should Seller elect not to defend, Buyer may defend such claim. In either
event, Seller shall be liable for the costs of such defense. This provisions of
this Section 8 shall survive Closing for a period of six months. Buyer shall not
be entitled to indemnification hereunder, except to extend that the aggregate
amount of such claims exceeds Twenty Thousand Dollars ($20,000).
9. BUYER'S INDEMNIFICATION. Buyer undertakes and agrees to hold
harmless Seller against any and all losses, costs, liabilities, claims,
obligations and expenses, including reasonable attorney's fees, incurred or
assumed by Seller arising from breach, misrepresentation, or other violation
by Buyer of any of the covenants, warranties and representations contained in
this Agreement and for and against any liabilities of Buyer. Buyer further
undertakes and agrees to indemnify and hold Seller harmless against any and
all liabilities arising as to its acts or omissions occurring after closing and
in connection with the operation of the Station under the contracts, leases, and
agreements assumed by Buyer hereunder. The foregoing indemnity is intended by
the Buyer to cover all acts, suits, proceedings, claims, demands, assessments,
and adjustments with respect to any and all of the specific matters in this
Indemnity set forth and shall be without limitation as to the amount. In the
event that an claim is asserted against Seller, that, if established, would
entitle Seller to indemnification hereunder, the Seller shall promptly give the
Buyer written notice of such claim. Within twenty (20) days thereafter, Buyer
shall inform Seller in writing whether Buyer will defend such claim. Should
Buyer elect not to defend, Seller may defend such claim. In either event, Buyer
shall be liable for the costs of such defense. This
12
provisions of this Section 9 shall survive Closing for a period of six months,
Seller shall not be entitled to indemnification hereunder, except to extend that
the aggregate amount of such claims exceeds Twenty Thousand Dollars ($20,000).
10. APPLICATION FOR COMMISSION CONSENT. Within ten (10) business
days from the date of this Agreement, Seller and Buyer shall have joined in an
application or amendment of application to be filed with the Commission
requesting its written consent to the assignment of the Station's License from
Seller to Buyer, and they will diligently take all steps necessary or desirable
and proper expeditiously to prosecute such application or applications and to
obtain the Commission's determination that grant of the application or
applications will serve the public interest, convenience and necessity. The
failure of either party to timely file or diligently prosecute its portion of
the assignment application (s) as required by this Paragraph shall be deemed a
material breach of this Agreement.
11. CONTROL OF STATION. This Agreement shall not be consummated
until after the Commission has given its written consent thereto, and between
the date of this Agreement and the Closing Date, Buyer shall not directly or
indirectly control, supervise, direct, the operation of the Station. Such
operation shall be the sole responsibility of Seller. Subject, however, to the
provisions of the Program Services Agreement executed simultaneously herewith
between Seller and Buyer.
12. TERMINATION.
12.1. Absence of Commission Consent. If a Final Order granting
the application (s) described in Paragraph 10 is not secured before March 31,
1998, this Agreement may be terminated at the option of either party upon ten
(10) days written notice to other party, provided, however, that the terminating
party may not terminate this Agreement if it is in default under this Agreement
or if a delay in any decision or determination by the Commission respecting said
application (s) has been caused or materially contributed to by any failure on
the terminating party to promptly furnish, file or make available information
within its control or caused by the willful furnishing by the terminating party
of incorrect, inaccurate or incomplete information to the Commission, or caused
by any action taken by the terminating party for the purpose of delaying any
13
decision or determination respecting said application(s) and such actions shall
be deemed a default under this Agreement. For purposes of this Agreement, "Final
Order" means a written action or order issued by the FCC setting forth the FCC
Consent which is not reserved, stayed, enjoined, set aside, annulled, or
suspended and with respect to which action or order no timely-filed request for
administrative or judicial review or stay is pending, and as to which the time
for filing any such request, or for the FCC to set aside the action or order on
its own motion, has expired.
13. CONDITIONS TO BUYER'S OBLIGATION. The obligation of Buyer
to Consummate this Agreement is subject to the satisfaction of each of the
following conditions, any of which the Buyer has the option to waive.
13.1. Commission Consent. The Commission shall have given its
consent to the transaction contemplate hereby, such consent shall have become a
Final Order, and such consent shall be in full force and effect on the Closing
Date.
13.2. Validity of Licenses. On the Closing Date, Seller shall
be the owner and holder of the Station's License to the extent that such license
can be owned or held by Seller under the Communications Act of 1934, as amended,
and the Stations' License shall be valid for a full license term ending October
1, 2002 and shall not be subject to any restrictions or conditions.
13.3. Condition of Stations. There shall have been no material
change subsequent to the date of this Agreement in the condition of the assets
to be conveyed hereunder except for changes in the ordinary course of the radio
business or normal wear and tear, subject however, to the Program Services
Agreement simultaneously entered into by Buyer and Seller.
13.4. Third Party Consents. Seller shall have obtained all
necessary third party consents to the assignment of all the contracts, leases,
and agreements listed in Exhibit B if necessary, such that Buyer will enjoy all
of the rights and privileges of Seller under those contracts, leases, and
agreements subject only to the same obligations and binding on Seller thereunder
pursuant to the present terms thereof. Buyer agrees to assist Seller in
obtaining third party consents to the extent reasonably deemed necessary by
Seller.
14
13.5. Representations and Warranties. The representations and
warranties of Seller to Buyer shall be true, complete, and correct in all
material respects as of the Closing Date.
13.6. Delivery of Assets. At the closing, Seller shall deliver
or cause to be delivered to Buyer all the assets described in Paragraph 1.
14. CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of
Seller to consummate this Agreement is subject to the satisfaction of each of
the following conditions:
14.1. Commission Consent. the Commission shall have given its
consent to the Assignment contemplated hereby, such consent shall have become a
Final Order, and such consent shall be in full force and effect on the Closing
Date.
14.2. Representations and Warranties. The representations and
warranties of Buyer to Seller shall be true, complete, and correct in all
material respects as of the Closing Date.
14.3. Payments. Buyer shall deliver the purchase price as
provided in Paragraph 4.
14.4. Closing Documents. Buyer and Seller shall deliver all
the closing documents specified in Paragraph 15 and all other required
documents, all of which documents shall be duly executed.
15. CLOSING DOCUMENTS. On the Closing Date at the closing place,
(a) Seller shall deliver to Buyer:.
(i) An assignment transferring all of the interests of
Seller in and to the Station's License, and all
other licenses, permits and authorizations issued
by any other regulatory agencies which are issued
or useful in the operation of the Stations;
(ii) A xxxx of sale conveying to Buyer all of the
fixed and tangible
15
personal assets to be acquired by Buyer in a form
usual and customary in the State of Maryland and
reasonably satisfactory to Buyer's counsel;
(iii) One or more assignments assigning to Buyer all of
the leases, contracts, and other agreements to
be assigned to Buyer hereunder;
(iv) An assignment of Seller's accounts;
(v) An Assignment conveying the
intangible assets to be assigned to
Buyer hereunder;
(vi) All other closing documents
reasonably requested.
(vii) Station's Public File
(b) Buyer shall deliver to Seller:
(i) The purchase price as set forth in
Paragraph 4;
(ii) One or more agreements, reasonably satisfactory to
Seller's counsel, by which Buyer assumes and
agrees to perform all of the obligations of Seller
accruing on and after the Closing Date under the
contracts, leases and other agreements to be
assigned to Buyer hereunder.
The parties shall also execute such other documents and perform such other
acts, before and after closing, as may be necessary for the implementation and
consummation of this Agreement.
16
16. ADJUSTMENT AT SETTLEMENT.
16.1 ADJUSTMENTS. Subject to the provisions of the Program
Services Agreement between Buyer and Seller, the operation of the Station and
the income and expenses attributable thereto up to the close of business on the
day before the Closing Date shall be for the account of Seller and thereafter
for the account of Buyer. Expenses including, but not limited to, such items as
power and utilities charges, time sales agreements, taxes, insurance premiums,
frequency discounts, fees, (if any), and wages, sales commissions, payroll taxes
and vacation pay and other fringe benefits of employees of Seller who enter
into the employment of Buyer shall be prorated between Seller and Buyer, and all
other income and expenses attributable to the ownership and operation of the
Station. This proration shall be made and paid, on the Closing Date, as
adjustments to the Purchase Price. Prepaid and unused portions of Trade
Agreements shall be adjusted as of the Closing Date. Security deposits and other
prepaid items shall be accounted for and adjusted as of the closing date.
16.2 Governmental filing or Grant Fees. All filing or
grant fees imposed by the FCC shall be split equally between Seller and Buyer.
In the event the parties choose to use the same attorney to file the FCC
application then the legal fees should be divided equally between them.
17. CONDITIONS. If any event should occur, either within or without
the knowledge or control of any party hereto, which would prevent fulfillment of
the conditions upon the obligations of any party hereto or consummation of the
transactions contemplated by this Agreement, the parties hereto will use their
reasonable best offers to cure same as expeditiously as possible.
18. COOPERATION. The parties hereto shall cooperate fully with each
other in preparing filing, prosecuting, and taking any other actions necessary
with respect to, any applications, requests, or actions which are or may be
necessary to obtain the consent of any governmental instrumentality, or any
third party to, or are or may be necessary or helpful in order to accomplish the
transactions contemplated by this Agreement.
19. REMEDIES.
17
19.1 Seller's Remedies. Buyer recognizes that Seller's
property to be sold hereunder cannot be readily obtained on the open market and
that Seller will be irreparably injured if this Agreement is not specifically
enforced. Therefore, in the event that Buyer does not perform or settle under
this Agreement Seller may institute any action specifically to enforce Buyer's
performance under this Agreement, provided that Seller is not in material
default of this Agreement. The parties agree that this remedy shall be in
addition to any other relief to which the Seller might otherwise be entitled for
Buyer's failure to consummate this Agreement.
19.2 Buyer's Remedies. Seller agrees that the assets and
authorizations contracted to be conveyed hereunder cannot be readily obtained on
the open Market and that Buyer will be irreparably injured if this Agreement is
not specifically enforced. Therefore, in the event that Seller does not perform
or settle under this Agreement, Buyer may institute any action specifically to
enforce Seller's performance under this Agreement, provided that Buyer is not in
material default of this Agreement. The remedy described in this Paragraph shall
be in addition to any other remedies that Buyer might otherwise be entitled to
pursue.
20. DAMAGE. Subject to the provisions of the Program Services
Agreement, the risk of natural loss or damage to the fixed and tangible assets
to be sold to Buyer hereunder shall be upon Seller at times prior to closing,
reasonable wear and tear expected. In the event of such loss or damage, Seller
shall promptly notify Buyer thereof and repair, replace or restore any such
property to its former condition as soon as possible after its loss and prior to
the Closing Date. Sellers will use proceeds of its insurance policies to acquire
assets of equal age and value, in the event of loss or damage.
21. EXPENSES. Except as otherwise provided herein, all expenses
involved in the preparation and consummation of this Agreement shall be borne by
the party incurring same. Any Commission filing or grant fees for the
application (s) required by this Agreement shall be shared equally by Seller and
Buyer. Seller and Buyers shall share the recording costs for bills of sale and
other instruments of transfer and all stamp taxes. Buyer shall pay for the
sales taxes.
18
22. ASSIGNABILITY. Buyer may freely assign its rights and
obligations hereunder to a corporation, limited partnership, or other business
association owned by the Buyer or its shareholders provided, however, that such
assignment shall neither necessitate any postponement of the date for filing the
assignment application described in Paragraph 10 nor unreasonably delay
Commission processing of that application nor relieve Buyer of its obligations
under this Agreement. Neither Buyer nor Seller may make any other assignment of
its rights and obligations hereunder without the prior written consent of the
other.
23. BROKERAGE. Seller and Buyer represent and warrant to each other
that there are no finders, consultants or brokers involved in this transaction.
24. NOTICES. All necessary notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be in writing
and shall be sent by certified or registered mail, postage prepaid or nationally
recognized recognized courier service, addressed as follows;
(a) If to Seller: Xxxx Xxxxxxxx
0000 Xxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
with copy to: Xxxxxxx Xxxx
0000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
with copy to: Xxx Xxx
00 Xxxxxxxxxxxx xxxxx
Xxxxx Xxxxx, XX 00000
(b) If to Buyer: Xxxxxx X. Xxxx, Xx.
News Communications, Inc.
000-00 Xxxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxxxx, XX 00000
with copy to: Xxxxxx Xxxxxx
00 Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
19
25. ENTIRE AGREEMENT. This Agreement supersedes any prior agreements
between the parties and contains all of the terms agreed upon with respect to
the subject matter hereof. This agreement may not be altered or amended except
by an instrument in writing signed by the party against whom enforcement of any
such charge is sought.
26. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signature of each such counterpart
were on the same instrument.
27. HEADINGS. The headings of the paragraphs of this Agreement are
for convenience only and in no way modify, interpret or construe the meaning of
specific provision of the Agreement.
28. EXHIBITS. The Exhibits to this Agreement are a material part
hereof.
29. CHOICE OF LAWS. This Agreement is to be construed and governed
by the laws of the State of Maryland.
30. TIME IS OF THE ESSENCE. The parties agree that time is of the
essence with respect to the performance of each and every obligation as set
forth herein.
31. Severability. If any provision contained in this Agreement is
held to be invalid, illegal or unenforceable in any respect by any court or
other authority, then such provision shall be deemed limited to the extent that
such court or other authority deems it reasonable and enforceable, and so
limited shall remain in full force and effect. In the event that such court or
other authority shall deem any such provision wholly unenforceable, this shall
not affect any other provision hereof, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions had not been
contained herein unless the invalidity or unenforceability of such provision or
provisions causes the terms of this Agreement to conflict with the underlying
business agreement of the parties as reflected in the Agreement as written.
MBC INCORPORATED NEWS COMMUNICATIONS, INC.
By: /s/ [ILLEGIBLE] By: /s/ Xxxxxx X. Xxxx Xx.
---------------------- -----------------------------
Xxxxxx X Xxxx, Xx.
20
EXHIBIT A
LICENSES AND AUTHORIZATIONS
AM Broadcast Station License
Station WYRE-AM 810 KHz
BPLST-910215MD, expires October 1, 2002 - STL for AM call sign WME-839
BZ-910815AA, expires October 1, 2002 - WYRE-AM
21
