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Exhibit 2.10
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
XXX BROADCASTING, INC.,
AND
XXXXXXX BROADCASTING COMPANY, L.P.
JANUARY 20, 1997
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TABLE OF CONTENTS
Page
1. PURCHASE AND SALE OF PURCHASED ASSETS.................................. 1
1.1. Purchase And Sale Of Purchased Assets....................... 1
1.2. Excluded Assets............................................. 3
1.3. Closing Date................................................ 4
1.4. Purchase Price and Payment; Escrow Deposit; Prorations...... 4
1.5. Assumption of Liabilities and Obligations................... 6
1.6. Deliveries By Seller........................................ 6
1.7. Deliveries By Buyer......................................... 7
1.8. Further Assurances.......................................... 8
2. REPRESENTATIONS AND WARRANTIES OF SELLER............................... 8
2.1. Organization Of Seller...................................... 8
2.2. Authority Of Seller; Absence of Conflicting Agreements...... 8
2.3. Financial Statements........................................ 9
2.4. Operations Since Balance Sheet Date.........................10
2.5. No Undisclosed Liabilities..................................11
2.6. Taxes.......................................................11
2.7. Availability Of Assets And Legality Of Use..................11
2.8. Governmental Permits........................................11
2.9. Real Property...............................................12
2.10. Intentionally Omitted.......................................13
2.11. Condemnation................................................13
2.12. Tangible Personal Property..................................13
2.13. Intentionally Omitted.......................................13
2.14. Intangibles.................................................13
2.15. Intentionally Omitted.......................................13
2.16. Title To Purchased Assets...................................14
2.17. Employees...................................................14
2.18. Employee Relations..........................................14
2.19. Contracts...................................................15
2.20 Status Of Contracts.........................................16
2.21 No Violation, Litigation Or Regulatory Action...............17
2.22 Insurance...................................................17
2.23 Environmental Protection....................................17
2.24 Books And Records...........................................18
2.25 Governmental Reports........................................18
2.26 No Finder...................................................19
2.27 Transactions With Affiliates................................19
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2.28 Full Disclosure.............................................19
3. REPRESENTATIONS AND WARRANTIES OF BUYER................................19
3.1. Organization Of Buyer.......................................19
3.2. Authority Of Buyer..........................................19
3.3. No Finder...................................................20
3.4. Status Of Buyer.............................................21
3.5. Full Disclosure.............................................21
4. ACTION PRIOR TO THE CLOSING DATE.......................................21
4.1. Investigation Of The Business By Buyer......................21
4.2. Preserve Accuracy Of Representations And Warranties.........22
4.3. FCC Consent; Improvements Act Approval; Other Consents And
Approvals...................................................22
4.4. Operations Prior To The Closing Date........................24
4.5. Public Announcement.........................................26
4.6. Interim Financial Statements................................27
4.7. Compliance With Laws........................................27
4.8. Financing and Capital Leases................................27
4.9. No Inconsistent Action......................................27
5. ADDITIONAL AGREEMENTS..................................................27
5.1. Sales, Use And Transfer Taxes; Title Insurance..............27
5.2. Discharge Of Liabilities Of Station.........................28
5.3. Employees; Employee Benefit Plans...........................28
5.4. Seller To Control Operations Prior To Closing Date..........29
5.5. Acquisition Proposals.......................................29
5.6. Copyright Royalty Tribunal Payments.........................30
5.7. Environmental Audit Report; Title Insurance Commitment......30
5.8. Sales Tax Filings...........................................31
5.9. Accounts Receivable.........................................31
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER...........................32
6.1. No Misrepresentation Or Breach Of Covenants And Warranties..32
6.2. Necessary Action............................................32
6.3. No Restraint Or Litigation..................................33
6.4. FCC Final Order.............................................33
6.5. Required Consents...........................................33
6.6. No Material Adverse Change..................................33
6.7. Environmental Audit.........................................33
6.8. Closing Deliveries..........................................34
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7. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER..........................34
7.1. No Misrepresentation Of Breach Of Covenants And Warranties..34
7.2. Corporate Action............................................34
7.3. No Restraint................................................34
7.4. FCC Consent.................................................35
7.5 Closing Deliveries..........................................35
8. INDEMNIFICATION........................................................35
8.1. Indemnification By Seller...................................35
8.2. Indemnification By Buyer....................................37
8.3. Notice Of Claims............................................38
8.4. Third-Party Claims..........................................39
9. TERMINATION AND ESCROW DEPOSIT.........................................40
9.1 Termination.................................................40
9.2 Escrow Deposit..............................................40
9.3. Specific Performance........................................41
10. GENERAL PROVISIONS.....................................................41
10.1. Survival Of Representations, Warranties And Obligations.....41
10.2. Confidential Nature Of Information..........................41
10.3. Governing Law...............................................42
10.4. Notices.....................................................42
10.5. Successors And Assigns......................................43
10.6. Access To Records After Closing.............................44
10.7. Entire Agreement; Amendments................................44
10.8. Interpretation..............................................44
10.9. Waivers.....................................................45
10.10. Expenses....................................................45
10.11. Partial Invalidity..........................................45
10.12. Execution In Counterparts...................................45
10.13. Definitions.................................................45
10.14. Allocation Of Purchase Price................................49
10.15. Risk Of Loss; Damage To Facilities..........................49
10.16. Bulk Sales Law..............................................50
10.17 Time Of Essence.............................................50
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EXHIBITS
A Escrow Agreement
B Xxxx of Sale and Assignment of Assets
C Opinion of Counsel for Seller
D Assignment of Contracts and Assumption Agreement
E Opinion of Counsel for Buyer
SCHEDULES
1.2(K) Computer Programs Constituting Excluded Assets
2.2 Conflicts; Consents
2.3 Financial Statements
2.4(A)(B) Changes in Operations
2.5 Undisclosed Liabilities
2.7 Condition of Assets
2.8 Governmental Permits
2.9 Real Property
2.12 Tangible Personal Property
2.14 Intangibles
2.17 Employees
2.18 Employee Relations
2.19 Contracts
2.21 Legal Proceedings
2.22 Insurance
2.23 Environmental Matters
4.4(b) Conduct of Business
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of January 20, 1997 (this
"Agreement"), is made by and between Xxx Broadcasting, Inc., a Delaware
corporation ("Buyer"), and Xxxxxxx Broadcasting Company, L.P., a Texas limited
partnership ("Seller").
WITNESSETH:
WHEREAS, Seller is engaged in the business of owning and operating
television broadcast station KSTW, Channel 11, Seattle-Tacoma, Washington (the
"Station"); and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, substantially all of the assets, properties and business of the
Station, all on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, it is hereby agreed between Seller and Buyer as follows:
1.
PURCHASE AND SALE OF PURCHASED ASSETS
1.1. PURCHASE AND SALE OF PURCHASED ASSETS
Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Seller shall sell, transfer, assign, convey and
deliver to Buyer, and Buyer shall purchase from Seller, free and clear of all
Encumbrances (except for Permitted Encumbrances), all of the assets, properties
and business (excepting only the Excluded Assets) of every kind and description,
wherever located, real, personal or mixed, tangible or intangible, owned or held
by Seller and used primarily in the operation of the Station as the same shall
exist on the Closing Date (herein collectively called the "Purchased Assets"),
including, without limitation, all right, title and interest of Seller in, to
and under:
(a) The broadcast licenses for the Station including all
auxiliary, earth station and translator licenses and the right to use the call
letters "KSTW" issued by the Federal Communications Commission (the "FCC") and
all other assignable Governmental Permits listed in Schedule 2.8;
(b) 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,
fixtures and other improvements thereon, and any other real property interests
which are used in the business or operations of
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the Station, together with any additions thereto between the date of this
Agreement and the Closing Date (the "Real Property");
(c) All machinery, equipment (including computers and office
equipment), auxiliary and translator facilities, transmitting towers,
transmitters, broadcast equipment, antennas, supplies, inventory (including all
films, programs, records, tapes, recordings, compact discs, cassettes and spare
parts), advertising and promotional materials, engineering plans, records and
data, vehicles, furniture and other tangible personal property owned or leased
by Seller used in or relating to the Station, including without limitation, the
items listed or referred to in Schedule 2.12 (the "Tangible Personal Property");
(d) The trademarks, trade names, service marks, service names,
jingles, licenses and copyrights and other similar intangible property rights
and interests (and all goodwill associated therewith), registered or
unregistered, owned by Seller relating solely to the Station, and the
applications for registration thereof and the licenses relating to any of the
foregoing including, without limitation, the items listed in Schedule 2.14 (the
"Intangibles"), except that the Intangibles shall not include those intangible
rights and interests specified in Section 1.2(g).;
(e) (i) All contracts of Seller for the sale of broadcast time
for advertising or other purposes made in the ordinary course of business and
consistent with past practice, (ii) the contracts, agreements or understandings
listed or described in Schedule 2.19, except for those contracts listed on
Schedule 2.19 that are designated by Buyer as contracts not to be assumed by
Buyer at Closing, and (iii) any other contract, agreement or understanding
(evidenced in writing) entered into by Seller in respect of the Station which
(A) is of the general nature described in subsection (a) (ii), (iii) and (vii)
of Section 2.19 but which, by virtue of its specific terms, is not required to
be listed in Schedule 2.19 or (B) is entered into after the date hereof
consistent with the provisions of Section 4.4 of this Agreement (the "Assumed
Contracts");
(f) All of Seller's rights, claims or causes of action against
third parties arising under warranties from manufacturers, vendors and others in
connection with the Purchased Assets;
(g) The use of the Station's current public telephone numbers,
if practicable and permitted by the applicable telephone company;
(h) All prepaid rentals and other prepaid expenses (except for
prepaid insurance) arising from payments made by Seller in the ordinary course
of the operation of the Station prior to the Closing Date for goods or services
where such goods or services have not been received at the Closing Date;
(i) All commercials and other promotional materials used
solely in the operation of the Station; and
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(j) All books and records of the Station, including, without
limitation, all files, logs, programming information and studies, technical
information and engineering data, news and advertising studies, consulting
reports and sales correspondence, and all files required to be kept at the
Station pursuant to the rules and regulations of the FCC, but excluding any
books and records relating to a business of Seller unrelated to the Station and
excluding any computer records, software and hardware listed in Schedule 1.2(k).
1.2. EXCLUDED ASSETS
Notwithstanding the foregoing, the Purchased Assets shall not
include the following (the "Excluded Assets"):
(a) All of Seller's cash and cash equivalents (including any
marketable securities or certificates of deposit);
(b) All claims, rights and interests of Seller in and to any
refunds for federal, state or local franchise, income or other taxes or fees of
any nature whatsoever for periods prior to the Closing Date;
(c) Any of Seller's rights, claims or causes of action against
third parties relating to the assets, properties, business or operations of the
Station arising out of transactions occurring prior to the Closing Date, except
to the extent and only to the extent any such claims relate to the Purchased
Assets as provided in Section 1.1(f);
(d) All bonds held, contracts or policies of insurance and
prepaid insurance with respect to such contracts or policies;
(e) Seller's corporate seal, corporate minute books, stock
record books, corporate records relating to its incorporation, corporate tax
returns and related documents and supporting work papers and any other records
and returns relating to taxes, assessments and similar governmental levies
(other than real and tangible personal property taxes, assessments and levies
and FCC regulatory fees imposed on the Purchased Assets);
(f) All records prepared in connection with the sale of the
Station, including bids received from others and analyses relating to the
Station and the Purchased Assets;
(g) Any trade name using or incorporating the name "Xxxxxxx"
or derivatives thereof including, without limitation, "Xxxxxxx Broadcasting"
and "GBC";
(h) All records and documents relating to Excluded Assets or
to liabilities of the Station arising prior to the Closing Date;
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(i) Except to the extent Buyer and Seller shall otherwise
specifically agree in writing, Seller's employee benefit agreements, plans or
arrangements listed in Schedule 2.19;
(j) All of Seller's rights and claims to payments made by the
Copyright Royalty Tribunal and related to the operations of the Station arising
out of transactions occurring prior to the Closing Date;
(k) All of Seller's computer programs not related solely to
the Station or not reasonably separable from the programs employed for other of
Seller's stations which are described on Schedule 1.2(k), including without
limitation, the programs used for the general ledger, accounts payable, payroll,
human resources and fixed assets;
(l) Any of Seller's rights under or pursuant to this Agreement
or the other agreements with Buyer contemplated hereby. and
(m) The Accounts Receivable.
1.3. CLOSING DATE
The purchase and sale of the Purchased Assets provided for in
Section 1.1 (the "Closing") shall be consummated at 10:00 a.m., local time, on a
date occurring within ten (10) business days after the FCC Consent has, at
Buyer's option, either become a Final Order or become effective, with the exact
date to be specified by Buyer upon not less than five (5) business days prior
written notice to Seller, or on such other date, as may be agreed upon by Buyer
and Seller (the "Closing Date"), at the offices of Seller located in Nashville,
Tennessee, or at such other place or at such other time as shall be agreed upon
by Buyer and Seller.
1.4. PURCHASE PRICE AND PAYMENT; ESCROW DEPOSIT; PRORATIONS
(a) The purchase price for the Purchased Assets shall be One
Hundred Sixty Million Dollars ($160,000,000) (the "Purchase Price"), which shall
be paid by Buyer to Seller upon Closing on the Closing Date by wire transfer of
immediately available federal funds.
(b) On the first banking day after the execution of this
Agreement, Buyer shall deliver to the Escrow Agent a good faith deposit in the
amount of Eight Million Dollars ($8,000,000.00) ("Escrow Deposit") which shall
be held pursuant to the terms of the Escrow Agreement attached hereto as Exhibit
A. Upon Closing on the Closing Date, Buyer and Seller shall jointly direct the
Escrow Agent to pay the Escrow Deposit and all interest earned thereon to Buyer.
(c) All revenues arising from the operation of the Station up
until
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midnight on the day prior to the Closing Date, and all expenses arising
from the Station up until midnight on the day prior to the Closing Date,
including business and license fees (including any retroactive adjustments
thereof), utility charges, ad valorem real and personal property taxes and
assessments levied against the Purchased Assets, employee benefits (including
accrued sick and vacation leave for Seller's employees who are employed by
Buyer), property and equipment rentals, applicable copyright or other fees,
sales and service charges, FCC annual regulatory fees, real estate rent and
other similar prepaid and deferred items, shall be prorated between Buyer and
Seller in accordance with the principle that Seller shall receive all revenues,
and all refunds to Seller and deposits of Seller held by third parties, and
shall be responsible for all expenses, costs and liabilities allocable to the
conduct of the business or operations of the Station for the period prior to the
Closing Date, and Buyer shall receive all revenues and shall be responsible for
all expenses, costs and obligations allocable to the conduct of the business or
operations of the Station on the Closing Date and for the period thereafter.
Notwithstanding the foregoing, there shall be no adjustment for, and Seller
shall remain solely liable with respect to, any obligation or liability not
being assumed by Buyer in accordance with Section 1.5. Any prorations 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 one
hundred twenty (120) days after the Closing Date or such other date as the shall
parties mutually agree. There shall be no proration of the payments due under
the film or programming license agreements other than for the calendar month in
which the Closing occurs. Any such prorations shall be based upon the due date
for payments pursuant to the film and program license agreements. For the
purpose of determining the due date for payments due under film or programming
license agreements which are silent as to the day of the month on which payment
is due, such agreements shall be deemed to provide that the payment is due on
the date actually made during the month of Closing. Seller shall prepare and
deliver to Buyer not later than five (5) days before the Closing Date a
preliminary statement of prorations which shall set forth Seller's good faith
estimate of the prorations of Seller as of the Closing Date. The preliminary
prorations statement shall (A) contain all information reasonably necessary to
determine the prorations to the extent such prorations can be determined or
estimated as of the date of the preliminary statement of prorations and such
other information as may be reasonably requested by Buyer, and (B) shall be
certified by Seller, to the best of Seller's knowledge, to be true and complete
as of the date thereof. No later than sixty (60) days after the Closing Date,
Buyer will deliver to Seller a statement setting forth Buyer's determination of
the final prorations. If Seller disputes the amount of the final prorations
determined by Buyer, it shall deliver to Buyer within thirty (30) days after its
receipt of Buyer's statement a statement setting forth its determination of the
amount of the final prorations. If Seller notifies Buyer of its acceptance of
Buyer's statement, or if Seller fails to deliver its statement within the thirty
(30) day period specified in the preceding sentence, Buyer's determination of
the final prorations shall be conclusive and binding on the parties as of the
last day of the thirty (30) day period. Buyer and Seller shall use good faith
efforts to resolve any dispute involving the determination of the prorations. If
the parties are unable to resolve the dispute prior to one hundred twenty (120)
days
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after the Closing Date, Buyer and Seller jointly shall designate an independent
certified public accountant, who shall be knowledgeable and experienced in the
operation of television broadcast stations, to resolve the dispute. The
accountant's resolution of the dispute shall be final and binding on the
parties, and a judgment may be entered thereon in any court of competent
jurisdiction. Any fees of such accountant shall be split equally between the
parties.
1.5. ASSUMPTION OF LIABILITIES AND OBLIGATIONS
On the Closing Date, Buyer shall assume and undertake to pay,
discharge, and perform all obligations and liabilities of Seller (a) under the
Governmental Permits and the Assumed Contracts insofar as they relate to the
time on and after the Closing Date, and (b) that arise out of events related to
Buyer's ownership of the Purchased Assets or its operation of the Station on or
after the Closing Date. Notwithstanding the foregoing, Buyer shall not assume at
any time 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 by Seller of the Station
prior to the Closing (other than those claims referenced in Section 1.1(f)),
(iv) any obligations or liabilities arising under capitalized leases or other
financing agreements, (v) except as provided in Section 5.3, any obligations or
liabilities of Seller under any employee pension, retirement, health and welfare
or other benefit plans or collective bargaining agreements, (vi) except as
provided in Sections 1.4(c) and 5.3, any obligation of Seller to any employee of
the Station for severance benefits, vacation time, or sick leave accrued prior
to the Closing Date, or (vii) 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.
1.6. 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 Xxxx of Sale and
Assignment of Assets in the form of Exhibit B hereto, Assignment of Contracts
and Assumption Agreement in the form of Exhibit D, hereto, deeds, motor vehicle
titles, assignments, and other transfer documents which shall be sufficient to
vest good and marketable title to the Purchased Assets in the name of Buyer,
free and clear of all Encumbrances except for Permitted Encumbrances;
(b) Estoppel Certificates. A manually executed copy of any
instrument evidencing receipt of any estoppel certificate;
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(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 the President or any Vice
President of the general partner of Seller, certifying as to the matters set
forth in Sections 6.1 and 6.6;
(e) Governmental Permits, Contracts, Business Records, Etc.
Copies of all Governmental Permits, Assumed Contracts, blueprints, schematics,
working drawings, plans, projections, engineering records, and all files and
records used by Seller in connection with the operation of the Station;
(f) Opinions of Counsel. The opinion of the law firm of Xxxx
Xxxxx Xxxx & XxXxxx dated as of the Closing Date, substantially in the form of
Exhibit C hereto;
(g) Authorizing Resolutions. Certified copies of the
resolutions of the board of directors of Seller's general partner approving the
transactions contemplated by this Agreement; and
(h) UCC, Tax, Lien, and Judgment Searches. Results of a search
for UCC, tax, lien, and judgment filings in the records of the Secretary of
State's records of the State of Washington and in the records of Xxxxxxxx,
Xxxxxx and King Counties, Washington, and any other Counties in which the
Purchased Assets may be located, with such searches having been made no earlier
than fourteen (14) days prior to the Closing Date.
1.7. 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 1.4;
(b) Assumption Agreement. An Assignment of Contracts and
Assumption Agreement in the form of Exhibit D hereto pursuant to which Buyer
shall assume and undertake to perform obligations under the Assumed Contracts;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by its President or any Vice
President, certifying as to the matters set forth in Section 7.1 of this
Agreement;
(d) Opinion of Counsel. An opinion of Dow, Xxxxxx & Xxxxxxxxx,
PLLC dated as of the Closing Date, substantially in the form of
Exhibit E hereto;
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(e) Authorizing Resolutions. Certified copies of the
resolutions of Buyer's board of directors approving the transactions
contemplated by this Agreement; and
(f) Title Commitments and Surveys. The title commitments and
surveys described in Section 5.7(c).
1.8. FURTHER ASSURANCES
From time to time following the Closing, Seller shall execute
and deliver, or cause to be executed and delivered, to Buyer such other
instruments of conveyance and transfer as Buyer may reasonably request or as may
be otherwise reasonably necessary to more effectively convey and transfer to,
and vest in, Buyer and put Buyer in possession of, any part of the Purchased
Assets.
2.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an incentive to Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, Seller represents and warrants to Buyer as
follows:
2.1. ORGANIZATION OF SELLER
Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Texas, and is
qualified to do business in the State of Washington. Seller has full power and
authority to own or lease and to operate the Station and the Purchased Assets
and to carry on the business of the Station as now conducted. Seller's general
partner, Xxxxxxx Communications, Inc., is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas. Seller is
not a participant in any joint venture with any other person or entity with
respect to any part of the operations of the Station or any of the Purchased
Assets.
2.2. AUTHORITY OF SELLER; ABSENCE OF CONFLICTING AGREEMENTS
(a) Seller has the power and authority to execute and deliver this
Agreement and all of the other agreements and instruments to be executed and
delivered by Seller pursuant hereto (collectively, the "Seller Ancillary
Agreements"), to consummate the transactions contemplated hereby and thereby and
to comply with the terms, conditions and provisions hereof and thereof.
(b) The execution, delivery and performance of this Agreement and the
Seller Ancillary Agreements by Seller have been duly authorized and approved by
all necessary action of Seller and do not require any further authorization or
consent of Seller, its general partner or its partners. This Agreement is, and
each Seller Ancillary
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Agreement when executed and delivered by Seller and the other parties thereto
will be, a legal, valid and binding agreement of Seller enforceable in
accordance with its respective terms except in each case as such enforceability
may be limited by bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting or limiting the enforcement of creditors' rights
generally and except as such enforceability is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(c) Except as set forth in Schedule 2.2, neither the execution and
delivery by Seller of this Agreement and the Seller Ancillary Agreements or the
consummation by Seller of any of the transactions contemplated hereby or thereby
nor compliance by Seller with or fulfillment by Seller of the terms, conditions
and provisions hereof or thereof will:
(i) Conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss of rights
under, or result in the creation or imposition of any Encumbrance upon any of
the Purchased Assets under, the partnership agreement of Seller, the charter or
by-laws of Seller's general partner, any Station Agreement, any Governmental
Permit or any judgment, order, award or decree to which Seller is a party or any
of the Purchased Assets is subject or by which Seller is bound, or any statute,
other law or regulatory provision affecting Seller or the Purchased Assets; or
(ii) Require the approval, consent, authorization or act of,
or the making by Seller of any declaration, filing or registration with, any
third party or any foreign, federal, state or local court, governmental or
regulatory authority or body, except for such of the foregoing as are necessary
pursuant to the Improvements Act or the Communications Act.
2.3. FINANCIAL STATEMENTS
Schedule 2.3 contains (a) the unaudited balance sheet of the
Station as of December 31, 1995 and the related statement of income for the year
then ended and (b) the unaudited balance sheet (the "Balance Sheet") of the
Station as of November 30, 1996 (the "Balance Sheet Date") and the related
statement of income for the 11 months then ended. Except as set forth in
Schedule 2.3, such balance sheets and statements of income have been prepared in
accordance with generally accepted accounting principles consistently applied,
are complete and correct in all material respects, accurately reflect the books,
records and accounts of Seller (which books and records are accurate and
complete in all material respects), and present fairly the financial position
and results of operations of the Station as of their respective dates and for
the respective periods covered thereby subject to the absence of footnotes.
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2.4. OPERATIONS SINCE BALANCE SHEET DATE
(a) Except as set forth in Schedule 2.4(A), to the best of
Seller's knowledge, during the period from the Balance Sheet Date to the date
hereof, inclusive, there has been:
(i) no material adverse change in the financial condition or
the results of operations of the Station; and
(ii) no damage, destruction, loss or claim (whether or not
covered by insurance) or condemnation or other taking which
materially adversely affects the Purchased Assets or the Station.
(b) Except as set forth in Schedule 2.4(B) hereto, since the
Balance Sheet Date, Seller has conducted the business of the Station only in the
ordinary course and in conformity with past practice. Without limiting the
generality of the foregoing, since the Balance Sheet Date, except as set forth
in such Schedule, Seller has not, in respect solely of the Station:
(i) sold, leased, transferred or otherwise disposed of
(including any transfers from Seller to any of its Affiliates),
or mortgaged or pledged, or imposed or suffered to be imposed any
Encumbrance (other than Permitted Encumbrances) on, any of the
Purchased Assets, other than Tangible Personal Property having a
value, in the aggregate, of less than $10,000, sold or otherwise
disposed of for fair value in the ordinary course of the business
of the Station consistent with past practice;
(ii) created, incurred, guaranteed or assumed, or agreed to
create, incur, guarantee or assume, any secured indebtedness for
borrowed money or entered into any capitalized leases;
(iii) accelerated collection of accounts receivable
generated by the Station to a date prior to the date such
collection would have occurred in the ordinary course of
business;
(iv) delayed payment of any account payable or other
liability of the Station beyond its due date or the date when
such liability would have been paid in the ordinary course of
business consistent with past practice;
(v) granted or instituted any increase in any rate of salary
or compensation or any profit sharing, bonus, incentive, deferred
compensation, insurance, pension, retirement, medical, hospital,
disability, welfare or other employee benefit plan other than in
the ordinary course of business consistent with past practices;
or
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(vi) entered into any agreement or made any commitment to
take any action described in subparagraphs (i) through (v) above.
2.5. NO UNDISCLOSED LIABILITIES
Except as set forth in Schedule 2.5, to the best of Seller's
knowledge, Seller is not subject, with respect to the Station, to any liability
(including, without limitation, unasserted claims), whether absolute,
contingent, accrued or otherwise, which is not shown or reserved for in the
Balance Sheet, other than liabilities of the same nature as those set forth in
the Balance Sheet and the notes thereto and incurred in the ordinary course of
business after the Balance Sheet Date.
2.6. TAXES
Seller has, in respect of the Purchased Assets and the
Station, either filed or obtained extensions for filing pursuant to established
procedures all foreign, federal, state, county or local income, excise,
property, sales, use, franchise or other tax returns and reports which are
required to have been filed by Seller under applicable law on or prior to the
date of this Agreement, and has paid or made provision for the payment of all
taxes which have become due pursuant to such returns or pursuant to any
assessments which have become payable and which are not being contested in good
faith by appropriate proceedings. All monies required to be withheld by Seller
from employees of the Station for income taxes, social security and other
payroll taxes have been collected or withheld, and either paid to the respective
governmental agencies, set aside in accounts for such purpose, or accrued,
reserved against and entered upon the books of Seller.
2.7. AVAILABILITY OF ASSETS AND LEGALITY OF USE
Except for the Excluded Assets, the Purchased Assets
constitute all the assets used in the conduct of the Station's business. Except
as set forth in Schedule 2.7, the Tangible Personal Property and improvements on
the Real Property are in good working condition, reasonable wear and tear in
ordinary usage excepted, and are fit and suitable for the purposes used. Except
as disclosed in Schedule 2.7, (a) all such assets and their uses conform in all
material respects to all applicable laws, regulations, rules, ordinances, codes,
licenses, franchises and permits (including, without limitation, the
Communications Act and all electrical, building, zoning, environmental,
occupational safety and health Requirements of Law), and (b) no notice of any
violation of any of such matters relating to the Purchased Assets or their use
has been received by Seller which remains unresolved.
2.8. GOVERNMENTAL PERMITS
Except as set forth in Schedule 2.8, Seller owns, holds or
possesses the FCC Authorizations and all other governmental licenses,
franchises, permits, privileges,
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immunities, approvals and other authorizations which are necessary to entitle it
to own or lease, operate and use the Purchased Assets and the Station and to
carry on and conduct the Station's business as currently conducted (herein
collectively called "Governmental Permits"). Schedule 2.8 sets forth a list and
brief description of each such Governmental Permit held by Seller as of the date
of this Agreement.
Complete and correct copies of all of the Governmental Permits
listed in Schedule 2.8 have heretofore been delivered to Buyer by Seller. Seller
has fulfilled and performed in all material respects its obligations under each
of such Governmental Permits, and no event has occurred or condition or state of
facts exists which constitutes or, after notice or lapse of time or both, would
constitute a breach or default under any such Governmental Permit. No notice of
cancellation, of default or of any dispute concerning any Governmental Permit,
or of any event, condition or state of facts described in the preceding
sentence, has been received by Seller. Except as set forth in Schedule 2.8, each
of the Governmental Permits is valid, subsisting and in full force and effect,
and, subject to the receipt of the FCC Consent and any other necessary
governmental consents, to the best of Seller's knowledge, may be assigned and
transferred to Buyer in accordance with this Agreement and at the time of
assignment to Buyer will be in full force and effect, in each case without (a)
the occurrence of any breach, default or forfeiture of rights thereunder or (b)
the consent, approval, or act of, or the making of any filing with, any other
governmental body, regulatory commission or other party. The Station is being
operated in all material respects in accordance with the FCC Authorizations and
in compliance in all material respects with the Communications Act, the rules
and regulations thereunder, and all other laws and regulations, federal, state
and local, applicable to the Station. Seller has not received any notice of any
violations of the FCC Authorizations, the Communications Act, the rules and
regulations thereunder or any other applicable laws and regulations. There is no
action by or before the FCC currently pending or, to the best of Seller's
knowledge, threatened to revoke, cancel, rescind, modify or refuse to renew in
the ordinary course any of the FCC Authorizations.
2.9. REAL PROPERTY
Schedule 2.9 contains (i) a brief description of each parcel
of owned Real Property (showing the record title holder, legal description,
location, improvements and any indebtedness secured by a mortgage or other lien
thereon) and Seller's interest therein and (ii) with respect to leased Real
Property a list and brief description of each lease or similar agreement
(showing the rental, expiration date, renewal, the uses being made thereof and
the location of the real property covered by such lease or other agreement).
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2.10. INTENTIONALLY OMITTED
2.11. CONDEMNATION
(a) Neither the whole nor any part of the Real Property owned
by Seller nor, to the best of Seller's knowledge, any Real Property leased by
Seller is subject to any pending suit for condemnation or other taking by any
public authority, nor to the best of Seller's knowledge is any such condemnation
or other taking threatened.
2.12. TANGIBLE PERSONAL PROPERTY
Schedule 2.12 contains a true and complete list of all items
of Tangible Personal Property that: (a) are owned by Seller and have an original
estimated cost of $5,000 or more; or (b) are leased by Seller.
2.13. INTENTIONALLY OMITTED
2.14. INTANGIBLES
Schedule 2.14 contains a true and complete list of the
Intangibles. Seller has delivered to Buyer copies of all documents in its
possession establishing or evidencing the Intangibles. Seller does not own, and
has not applied for, any patents, in connection with the operation of the
Station. No proceedings have been instituted or are pending or, to the best of
Seller's knowledge, are threatened which challenge the validity of the ownership
or use by Seller of any of the Intangibles. Except as set forth in Schedule
2.14, Seller has not licensed anyone to use any of the Intangibles. Except as
set forth in Schedule 2.14 and in Schedule 2.19, Seller owns, or has the
royalty-free right to use, all of the Intangibles, Seller has not received any
notice of conflict with the asserted rights of others, and, to the best of
Seller's knowledge, Seller is not infringing upon any trademarks, trade names,
service names, service marks, copyrights or patents owned by any other person or
persons. Except as set forth in Schedule 2.14, no trademark, service xxxx, trade
name, copyright or patent listed in Schedule 2.14 is subject to any outstanding
order, judgment, decree, stipulation or agreement restricting the use thereof by
Seller or restricting the licensing thereof by Seller to any person.
2.15. INTENTIONALLY OMITTED
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2.16. TITLE TO PURCHASED ASSETS
Seller has good and marketable title to all of the Tangible
Personal Property and the Real Property owned by Seller, free and clear of all
Encumbrances, except for Permitted Encumbrances. On the Closing Date, Seller
shall transfer to Buyer good and marketable title to the Purchased Assets owned
by Seller, subject to no Encumbrances, except for Permitted Encumbrances. To the
best of Seller's knowledge, all towers, guy anchors, and buildings and other
improvements included in the Purchased Assets are located entirely on the Real
Property, and Seller has full legal and practical access to the Real Property.
Seller has delivered to Buyer copies of all deeds, title insurance policies,
leases and similar documents in Seller's possession relating to the Real
Property.
2.17. EMPLOYEES
Schedule 2.17 contains: (a) a list of all individuals employed
by Seller in connection with the Station as of December 31, 1996, and (b) the
then current rate of compensation of, and a description of the fringe benefits
(other than those generally available to employees of Seller under the plans
listed in Schedule 2.19) provided by Seller to, any such employees.
2.18. EMPLOYEE RELATIONS
(a) Except as set forth in Schedule 2.18, Seller is in
compliance in respect of the Station in all material respects with all
applicable laws, rules and regulations which relate to prices, wages, hours,
discrimination in employment and collective bargaining and to the operation of
the Station and is not liable for any arrears of wages or any taxes or penalties
for failure to comply with any of the foregoing.
(b) Except as set forth in Schedule 2.18, as of the date of
this Agreement, (i) no unfair labor practice charge or complaint against Seller
in respect of the Station is pending before the National Labor Relations Board,
any state labor relations board or any court or tribunal, (ii) no strike,
dispute, request for representation, slowdown or stoppage is pending against
Seller in respect of the Station, (iii) no employee grievance is pending against
Seller in respect of the Station and (iv) no arbitration proceeding arising out
of or under any collective bargaining agreement is pending against Seller in
respect of the Station. To the best of Seller's knowledge, no proceedings of the
types described in clauses (i) through (iv) of this Section 2.18(b) have been
threatened.
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2.19. CONTRACTS
(a) Schedule 2.19, provides a true and complete listing of all
contracts with respect to the Station to which Seller is a party or by which
Seller is bound involving:
(i) The purchase, sale or lease of real property;
(ii) The purchase, rental or use of any films,
recordings, television programming or programming services which is not
terminable by Seller without penalty on thirty (30) days' notice or less or
which provides for performance over a period of more than ninety (90) days or
which involves the payment after the date hereof of more than Ten Thousand
Dollars ($10,000);
(iii) The purchase of merchandise, supplies or other
Tangible Personal Property or the receipt of services (other than services
referred to in clause (b) above) which is not terminable by Seller on thirty
(30) days' notice or less or which provides for performance over a period of
more than ninety (90) days or which involves the payment after the date hereof
of more than Ten Thousand Dollars ($10,000);
(iv) The sale of broadcast time for advertising or
other purposes which was not made in the ordinary course of business and
consistent with past practice;
(v) Any guarantee of the obligations of the
Station's customers, suppliers or employees;
(vi) Transactions other than in the ordinary course
of business;
(vii) The purchase, licensing or development of
software;
(viii) Any sales agency, advertising representative
or advertising or public relations contract which is not terminable by Seller
without penalty on thirty (30) days' notice or less or which provides for
payments over a period of more than ninety (90) days or which involves the
payment after the date hereof of more than Ten Thousand Dollars ($10,000);
(ix) Any barter agreement or other agreement with
advertisers for broadcasting or commercial time on the Station in exchange for
goods or services;
(x) Any employee collective bargaining agreement,
employment agreement (other than employment agreements terminable by Seller
without premium or penalty on notice of thirty (30) days or less under which the
only monetary obligation of Seller is to make current wage or salary payments
and provide current fringe
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benefits), consulting advisory or service agreement, deferred compensation
agreement or covenant not to compete;
(xi) Any agreement relating solely to the Station
with employees (other than employment agreements disclosed in response to clause
(x) above or excluded from the scope of clause (x)), agents or attorneys-in-fact
of Seller;
(xii) Any employees' pension, profit-sharing, stock
option, bonus, incentive, stock purchase, welfare, life insurance, severance,
hospital or medical benefit plan or other employee benefit agreement or plan; or
(xiii) Any other agreement, commitment,
understanding or instrument (other than contracts for the sale of broadcast time
for advertising or other purposes which have been made in the ordinary course of
business and consistent with past practice) which Seller reasonably believes is
material to the Station.
(b) Schedule 2.19 also contains a copy of the Station's
syndicated program and feature film "Inventory Report" as of December 31, 1996.
Such report has been prepared in the normal course of the Station's business in
a manner consistent with prior reports, but it has not been audited by or on
behalf of Seller. The information contained in such report with respect to the
contract amount and the unpaid balance is accurate in all material respects. The
other information contained therein is, to the best of Seller's knowledge,
accurate in all material respects. Notwithstanding the foregoing, it is
understood that in the event of any discrepancies between the Inventory Report
and the program contracts listed in Schedule 2.19, the program contracts shall
govern the Station's relationship with the other parties to the program
contracts.
2.20. STATUS OF CONTRACTS
Seller has delivered to Buyer true and complete copies of all written
contracts, and true and complete memoranda of all oral contracts (including any
amendments and other modifications to such contracts), if any. To the best of
Seller's knowledge, all of the Assumed Contracts are in full force and effect,
and are valid, binding, and enforceable in accordance with their terms (subject
in each case to bankruptcy, insolvency, reorganization or similar laws relating
to or affecting the enforcement of creditors' rights generally). To the best of
Seller's knowledge, 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 has not been advised by any third party to any
Assumed Contract that it intends to terminate such Assumed Contract or amend the
terms thereof prior to the end of the current term, or that it intends to refuse
to renew any such Assumed Contract which is automatically renewable upon
expiration of its current term. Except for the need to obtain the consents
listed in Schedule 2.2, Seller has full legal power and authority to assign its
rights under the Assumed Contracts to Buyer in accordance with this Agreement,
and subject to obtaining any required third party consent to the assignment
thereof, such assignment
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will not affect the validity, enforceability, or continuation of any of the
Assumed Contracts.
2.21. NO VIOLATION, LITIGATION OR REGULATORY ACTION
Except as set forth in Schedule 2.21:
(a) Seller has complied in all material respects with all
laws, regulations, rules, writs, injunctions, ordinances, franchises, decrees or
orders of any court or of any foreign, federal, state, municipal or other
government, governmental department, commission, board, bureau, agency or
instrumentality which are applicable to the Purchased Assets or the Station;
(b) There are no actions, suits or proceedings pending or, to
the best of Seller's knowledge, threatened against Seller in respect of the
Purchased Assets or the Station; and
(c) To the best of Seller's knowledge, there are no claims or
investigations pending or threatened against Seller in respect of the Purchased
Assets or the Station; and
(d) There is no action, suit or proceeding pending or, to the
best knowledge of Seller, threatened which questions the legality or propriety
of the transactions contemplated by this Agreement.
2.22. INSURANCE
Schedule 2.22 contains a list of all insurance policies of
Seller that insure any part of the Purchased Assets or the business of the
Station. Such policies insure against such risks and losses as are in the
judgment of Seller, prudent for the Purchased Assets and the Station. All such
policies are currently in full force and effect, and Seller shall keep such
insurance policies in full force and effect through the Closing Date.
2.23. ENVIRONMENTAL PROTECTION
Except as set forth in Schedule 2.23, to the best of Seller's
knowledge:
(a) Neither the Station nor any of its present properties,
assets or operation, are subject to any order from or agreement with any
governmental authority, regulatory body or private party respecting (i) any
environmental, health or safety Requirements of Law, (ii) any Remedial Action or
(iii) any Liabilities and Costs arising from the Release or threatened Release
of a Contaminant into the environment;
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(b) There is not now, nor has there ever been on or in the
Purchased Assets:
(i) any Release of any Contaminant on, in, under or from
such properties;
(ii) any underground storage tanks or surface impoundments;
(iii) any asbestos containing material; or
(iv) any polychlorinated biphenyls (PCBs) used in
hydraulic oils, electrical transformers or other equipment;
(c) Seller has not received in respect of the Purchased Assets
or the Station any notice or claim to the effect that it is or may be liable to
any Person as a result of the Release or threatened Release of a Contaminant
into the environment and Seller is unaware of any fact that would support a
charge that it is so liable or that it has not complied with applicable
Requirements of Law; or
(d) None of the Purchased Assets or operations of the Station
is the subject of any investigation by any governmental authority or regulatory
body evaluating whether any Remedial Action is needed to respond to a Release or
threatened Release of a Contaminant into the environment nor, is any such
investigation threatened.
2.24. BOOKS AND RECORDS
The books and records of Seller relating to the Station have
been maintained in accordance with applicable legal, regulatory and accounting
requirements, reflect only valid transactions, are complete and correct and
accurately reflect the basis for the financial position and results of
operations of the Station.
2.25. GOVERNMENTAL REPORTS
All notices, reports, forms and other statements required to
be filed by Seller with the FCC or with any other governmental authority
relating to the Station have been filed and complied with in all material
respects and are complete and correct in all material respects as filed. Seller
has timely paid to the FCC all annual regulatory fees payable with respect to
the FCC Authorizations.
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2.26. NO FINDER
Except for Xxxxxxx Xxxxx & Co., neither Seller nor any party
acting on its behalf has paid or become obligated to pay any fee or commission
to any broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.
2.27. TRANSACTIONS WITH AFFILIATES
Seller has not been involved in any business arrangement or
relationship relating to the Station with The Oklahoma Publishing Company, and,
except for customary general, administrative and corporate headquarter type
services (such as accounting, audit, benefits and legal services) provided by
Seller's Affiliates, with any Affiliate of Seller. Neither the Oklahoma
Publishing Company nor any Affiliate of Seller owns any property or right,
tangible or intangible, which is used in the business of the Station.
2.28. 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 knowingly will contain any
untrue statement of a material fact, or omits or will omit to state any material
fact required to make any statement made herein or therein not misleading.
3.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer hereby represents and
warrants to Seller and agrees as follows:
3.1. ORGANIZATION OF BUYER
Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, will be qualified to do
business in the State of Washington on or before the Closing Date, and has full
corporate power and authority to own or lease and to operate and use its
properties and assets and to carry on its business as now conducted.
3.2. AUTHORITY OF BUYER
(a) Buyer has the corporate power and authority to execute and
deliver this Agreement and all of the other agreements and instruments to be
executed and
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delivered by Buyer pursuant hereto (collectively, the "Buyer Ancillary
Agreements"), to consummate the transactions contemplated hereby and thereby
and to comply with the terms, conditions and provisions hereof and thereof.
(b) The execution, delivery and performance of this Agreement
and the Buyer Ancillary Agreements by Buyer have been duly authorized and
approved by all necessary corporate action on behalf of Buyer's Board of
Directors and do not require any further authorization or consent of Buyer or
its stockholder(s). This Agreement is, and each Buyer Ancillary Agreement when
executed and delivered by Buyer and the other parties thereto, will be the
legal, valid and binding agreement of Buyer enforceable in accordance with its
respective terms except in each case as such enforceability may be limited by
bankruptcy, moratorium, insolvency, reorganization or other similar laws
affecting or limiting the enforcement of creditors' rights generally and except
as such enforceability is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(c) Neither the execution and delivery of this Agreement or
any Buyer Ancillary Agreement by Buyer or the consummation by Buyer of any of
the transactions contemplated hereby or thereby nor compliance by Buyer with or
fulfillment by Buyer of the terms, conditions and provisions hereof or thereof
will:
(i) Conflict with, result in a breach of the terms,
conditions or provisions of, or constitute a default, an
event of default or an event creating rights of
acceleration, termination or cancellation or a loss of
rights under, the charter or by-laws of Buyer or any
material agreement or any judgment, order, award or decree
to which Buyer is a party or any of its properties is
subject or by which Buyer is bound; or
(ii) Require the approval, consent, authorization or
act of, or the making by Buyer of any declaration, filing or
registration with, any third party or any foreign, federal,
state or local court, governmental authority or regulatory
body, except for such of the foregoing as are necessary
pursuant to the Improvements Act or the Communications Act.
3.3. NO FINDER
Neither Buyer nor any party acting on its behalf has paid or
become obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of the transactions contemplated by this
Agreement.
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3.4. STATUS OF BUYER
Buyer is now and on the Closing Date will be legally and
financially qualified to purchase, own, operate and control the Station pursuant
to the Communications Act, and the rules, regulations and policies of the FCC.
To the best of Buyer's knowledge, Buyer is qualified, under existing law and the
existing rules, regulations, written policies and procedures of the FCC, to
acquire the FCC Authorizations and to own and operate the Station. Buyer shall
not knowingly and willingly take any action which would cause the FCC or any
other governmental authority to institute proceedings against Buyer with respect
to Buyer's legal qualifications to become the licensee of the Station or
knowingly take any other action which would result in Buyer being in
noncompliance in any material respect with the ownership requirements of the
Communications Act, or the rules and regulations and written policies of the FCC
(or any other governmental authority having jurisdiction) which would impair
Buyer's qualification to be the assignee of the FCC Authorizations.
3.5. 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 knowingly will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make any statement made herein or therein not misleading.
4.
ACTION PRIOR TO THE CLOSING DATE
The respective parties hereto covenant and agree to take the following
actions between the date hereof and the Closing Date:
4.1. INVESTIGATION OF THE BUSINESS BY BUYER
Seller shall afford to the officers, employees and authorized
representatives of Buyer (including, without limitation, independent public
accountants, attorneys and consultants) reasonable access during normal business
hours, and upon not less than 24-hours prior notice, to the offices, properties,
employees and business and financial records (including computer files,
retrieval programs and similar documentation) of the Station to the extent Buyer
shall reasonably deem necessary and or desirable and shall furnish to Buyer or
its authorized representatives such additional information concerning the
Purchased Assets and the operations of the Station as Buyer shall reasonably
deem necessary. Buyer agrees that any such investigation shall be conducted in
such a manner as not to interfere unreasonably with the operations of the
Station. Any investigation by or on behalf of any party shall not
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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.
4.2. PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES
Each of the parties hereto shall refrain from taking any
action which would render any representation or warranty contained in Article 2
or 3 of this Agreement inaccurate as of the Closing Date. Each party shall
promptly notify the other of any action, suit or proceeding that shall be
instituted or threatened against such party to restrain, prohibit or otherwise
challenge the legality of any transaction contemplated by this Agreement. Seller
shall promptly notify Buyer of any lawsuit, claim, proceeding or investigation
that is threatened, brought, asserted or commenced against Seller which would
have been listed in Schedule 2.21 if such lawsuit, claim, proceeding or
investigation had arisen prior to the date hereof.
4.3. FCC CONSENT; IMPROVEMENTS ACT APPROVAL; OTHER CONSENTS AND
APPROVALS
(a) As promptly as practicable after the date hereof but in
any event no later than twenty (20) days thereafter, Buyer and Seller shall file
with the FCC applications requesting its consent to the assignment of the FCC
Authorizations (and any extensions or renewals thereof) to Buyer from Seller.
Buyer and Seller will cooperate in the preparation of such applications
(including the furnishing to each other of copies of such application prior to
filing) and will diligently take, or cooperate in the taking of, all necessary,
desirable and proper steps, provide any additional information reasonably
required and otherwise use their best efforts to obtain promptly the requested
consent and approval of the FCC. Any fees assessed by the FCC incident to the
filing or grant of such applications shall be borne equally by Seller and Buyer,
with each party responsible for one-half of any such fees so assessed. Seller
and Buyer shall make available to the other, promptly after the filing thereof,
copies of all reports filed on or prior to the Closing Date with the FCC by
Seller or Buyer, as the case may be, in respect of the Station. Buyer agrees not
to take or fail to take any action which would adversely affect Buyer's legal
qualifications to purchase, own, operate or control the Station pursuant to the
Communications Act, and the rules, regulations and policies of the FCC.
(b) As promptly as practicable after the date hereof but in no
event no later than twenty (20) days thereafter, Buyer and Seller shall file
with the Federal Trade Commission and the Antitrust Division of the Department
of Justice the notifications and other information required to be filed by such
commission or department under the Improvements Act, or any rules and
regulations promulgated thereunder, with respect to the transactions
contemplated hereby. Each of Buyer and Seller covenants to file as
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promptly as practicable such additional information as may be requested to be
filed by such commission or department. Each of Buyer and Seller warrants that
all such filings by it will be, as of the date filed, true and accurate in all
material respects and in accordance with the requirements of the Improvements
Act and any such rules and regulations. Each party shall pay one-half of the
filing fees payable under the Improvements Act in connection with the
notifications and information described in this Section 4.3(b).
(c) Seller shall use its best efforts promptly to obtain all
consents from parties to the Assumed Contracts and all consents or permits from
governmental authorities, which are required by the terms thereof or this
Agreement for the due and punctual consummation of the transactions contemplated
by this Agreement without (i) any change in the terms or conditions of any
Assumed Contract as in effect on the date of this Agreement, or (ii) the payment
of any fee or other monetary consideration by Buyer to third parties to Assumed
Contracts. Seller shall promptly advise Buyer of any difficulties experienced in
obtaining any of the consents and the estoppel certificates listed in Schedule
2.2 and of any conditions proposed or requested for any of such consents. To the
extent necessary or required, Buyer shall cooperate with Seller in obtaining
such consents and estoppel certificates, provided, however, that Buyer shall not
be required to agree to any change in the terms of any Assumed Contract or to
pay any fee or other consideration to a third party to obtain any consent or
estoppel certificate. Buyer's cooperation shall include, without limitation,
signing and delivering consent forms which may be provided by third parties to
such Assumed Contracts pursuant to which, Buyer shall agree to assume and
perform such Assumed Contracts on and after the Closing Date. Seller shall also
cooperate with and assist Buyer and its authorized representatives in order to
provide, to the extent reasonably requested by Buyer, an efficient transfer of
control and management of the Station and to avoid any undue interruption in the
activities and operations of the Station following the Closing Date.
(d) In the event that Seller is unable to obtain a necessary
consent from a third party to the assignment of an Assumed Contract to Buyer by
the Closing Date ("Consent-Pending Contract"), Seller shall so advise Buyer, and
Buyer shall designate in writing which, if any, of the Consent-Pending Contracts
it wishes to receive the benefits of and perform on and after the Closing Date.
Such Consent-Pending Contracts will be treated as Assumed Contracts for the
purposes of this Agreement and Buyer will be responsible for and will timely
perform the financial obligations under such Consent-Pending Contracts to the
extent arising on and after the Closing Date. Seller shall not assign any such
Consent-Pending Contract to Buyer unless and until the consent from the third
party to such Consent-Pending Contract is actually received. Buyer and Seller
shall cooperate with one another to provide to Buyer the benefits of such
Consent-Pending Contract until such time of the actual assignment thereof by
Seller to Buyer following receipt of the necessary third-party consent.
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(e) If any of Contract Nos. 4, 5, 15, 24, 34, 56, 82, 102, 103
and 130, listed on Schedule 2.19, should become a Consent-Pending Contract, and
consent to the assignment to Buyer has not been obtained from the third party to
any such contract by the earlier of (i) the date Buyer determines it is unable
to enjoy the benefit of any such contract without the assignment thereof or (ii)
the date one hundred and eighty (180) days after the Closing Date, Seller shall
indemnify Buyer with respect to all Loss and Expense resulting from the
non-assignment of such contract.
(f) If Buyer does not so elect to receive the benefits of a
Consent-Pending Contract, it shall not be responsible for the performance
thereof and such contract shall not be treated as an Assumed Contract if and
until the necessary third-party consent to the assignment thereof by Seller to
Buyer is received as described in the following sentence. If within one hundred
eighty (180) days after the Closing Date, any necessary third-party consent
shall be received by Seller, such Consent-Pending Contract shall be assigned to
and assumed by Buyer effective as of the date of the third party's consent to
the assignment thereof. In the event that within one hundred eighty (180) days
after the Closing Date any necessary third-party consent shall not be received
by Seller, such Consent-Pending Contract shall not be assigned to Buyer (unless
Buyer shall request in writing otherwise) and shall be treated as a contract not
to be assumed by Buyer, and Seller shall remain responsible for such
Consent-Pending Contract.
4.4. OPERATIONS PRIOR TO THE CLOSING DATE
(a) Except as approved by Buyer pursuant to Section 4.4(b)
below, Seller shall operate and carry on the business of the Station only in the
ordinary course consistent with past practices. Consistent with the foregoing,
Seller shall retain ownership of and maintain the Purchased Assets in good
operating condition and repair (wear and tear in ordinary usage excepted), and
shall use its best efforts consistent with good business practice to retain the
Station's libraries of films and other programming, to maintain the business
organization of the Station intact and to preserve the goodwill of the
suppliers, contractors, licensors, employees, customers, distributors and others
having business relations with the Station.
(b) Notwithstanding Section 4.4(a), except as expressly
contemplated by this Agreement, except as set forth in Schedule 4.4(b) or except
with the express prior written approval of Buyer, Seller shall not, in respect
of the Station:
(i) make any material change in the operations of the
Station;
(ii) make any capital expenditure, or enter into any
contract or commitment therefor, in excess of $10,000 in the
aggregate;
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(iii) enter into any contract, agreement, undertaking
or commitment (or any extension or renewal thereof) which
would have been required to be set forth in Schedule 2.19 if
in effect on the date hereof, other than leases, contracts
or other agreements that are entered into by Seller in the
ordinary course of business or that do not give rise to a
liability in excess of Fifty Thousand Dollars ($50,000) in
the aggregate annually;
(iv) amend or consent to the amendment of any contract,
agreement, undertaking or commitment listed in Schedule
2.19, the effect of which is to cause the terms of such
contract, agreement, undertaking or commitment to be
materially less favorable to Seller or Buyer than prior to
such amendment or consent to amendment;
(v) sell, lease, transfer or otherwise dispose of or
mortgage or pledge, or impose any Encumbrance on, any of the
Purchased Assets, other than (A) Tangible Personal Property
having a value, in the aggregate, of less than Ten Thousand
Dollars ($10,000) sold or otherwise disposed of or consumed
in the ordinary course of the business consistent with past
practice, (B) minor amounts of Tangible Personal Property
having a value, in the aggregate, of less than Ten Thousand
Dollars ($10,000) which are replaced due to defect or
obsolescence with Tangible Personal Property of
substantially the same nature or equal or greater quality in
the ordinary course of the business consistent with past
practice and the provisions of this Section 4.4 and (C)
Permitted Encumbrances;
(vi) create, incur, guarantee or assume, or agree to
create, incur, guarantee or assume, any indebtedness for
borrowed money in respect of the Station or enter into any
capitalized leases;
(vii) make any change in the compensation of the
employees of the Station, other than changes made in
accordance with existing agreements and normal compensation
practices;
(viii) make any change in the accounting policies
applied in the preparation of the financial statements
contained in Schedule 2.3;
(ix) cancel or agree to cancel without fair
consideration therefor any debts owed to or claims held by
Seller in respect of the Station (including the settlement
of any claims or litigation which could have a material
adverse effect on the operation or future prospects of the
Station);
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(x) accelerate collection of any notes or accounts
receivable generated by the Station to a date prior to the
date such collection would have occurred in the ordinary
course of business consistent with past practice;
(xi) delay payment of any account payable or other
liability of the Station beyond its due date or the date
when such liability would have been paid in the ordinary
course of business consistent with past practice;
(xii) institute any increase in any profit sharing,
bonus, incentive, deferred compensation, insurance, pension,
retirement, medical, hospital, disability, welfare or other
employee benefit plan with respect to employees of the
Station other than (A) as required by law, and (B) changes
made in accordance with normal practices that are not, in
the aggregate, material in amount or effect, or changes
which affect Seller's employees on a company-wide basis; or
(xii) cause or permit, by any act or failure to act,
any of the Governmental Permits to expire or to be revoked,
suspended, or modified, or take any action that would cause
the FCC or any other governmental authority to institute
proceedings for the suspension, revocation, or adverse
modification of any of the Governmental Permits.
4.5. PUBLIC ANNOUNCEMENT
Neither Buyer nor Seller shall, without the approval of the
other, make any press release or other public announcement concerning the
transactions contemplated by this Agreement, except as and to the extent that
any such party shall be so obligated by law or by the rules, regulations or
policies of any national securities exchange or association, in which case the
other party shall be advised and the parties shall use their best efforts to
cause a mutually agreeable release or announcement to be issued; provided,
however, that the parties hereby acknowledge and agree that communications
between and among employees of Buyer and Seller and their attorneys,
representatives and agents necessary to consummate the transactions contemplated
hereby shall not be deemed a public announcement for purposes of this Section
4.5. Upon the execution and delivery of this Agreement, Seller and Buyer will
cooperate in respect of the issuance of a mutually acceptable press release
relating to the transactions contemplated by this Agreement.
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4.6. INTERIM FINANCIAL STATEMENTS
Seller shall promptly deliver to Buyer copies of any monthly,
quarterly or annual financial statements relating solely to the Station that may
be prepared by it during the period from the date hereof through the Closing
Date. Such financial statements shall fairly present the financial position and
results of operations of the Station as at the dates and for the periods
indicated, and shall be prepared on a basis consistent and in accordance with
the basis upon which the financial statements included in Schedule 2.3 were
prepared.
4.7. COMPLIANCE WITH LAWS
Neither Seller nor Buyer shall take any action in respect of
the Purchased Assets or the operations, employees or business of the Station
which violates, in any material respect, any law, regulation, rule, writ,
injunction, ordinance, franchise, decree or order of any court or of any
foreign, federal, state, municipal or other government, governmental department,
commission, board, bureau, agency or instrumentality applicable to the Purchased
Assets or the operations, employees or business of the Station.
4.8. FINANCING AND CAPITAL LEASES.
Seller will satisfy at or prior to Closing all outstanding
obligations under capital and financing leases, if any, with respect to any of
the Purchased Assets and obtain good title to the Purchased Assets leased by
Seller pursuant to those leases so that those Purchased Assets shall be
transferred to Buyer at Closing free of any interest of the lessors; it being
understood and agreed that the leases described as items 2.B and 2.C in Schedule
2.12 are not considered to be capital or financing leases.
4.9. 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.
ADDITIONAL AGREEMENTS
5.1. SALES, USE AND TRANSFER TAXES; TITLE INSURANCE
Any sales, use or other transfer taxes payable by reason of
transfer and conveyance of the Purchased Assets or the Station hereunder and any
documentary stamps or transfer taxes payable by reason of the real estate or
interests therein included in the Purchased Assets shall be paid one-half by
Seller and one-half by Buyer. The costs of the commitments for title insurance
and surveys described in
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Section 5.7 shall be paid by Buyer. Seller shall cooperate with and provide its
reasonable assistance to Buyer in obtaining elimination of or extended coverage
over standard exceptions contained in such title insurance policies.
5.2. DISCHARGE OF LIABILITIES OF STATION
Seller covenants and agrees that it will pay and discharge,
and hold Buyer harmless from, each and every liability and obligation of Seller
in respect of the Station or the Purchased Assets arising from events occurring
prior to the Closing Date.
5.3. EMPLOYEES; EMPLOYEE BENEFIT PLANS
(a) As far in advance of the Closing Date as possible, Buyer
shall furnish Seller with a schedule identifying each employee of Seller listed
on Schedule 2.17 that Buyer does not intend to offer employment to as of
Closing. Severance pay for certain of Station's employees hired by Buyer shall
be treated in the manner set forth in Schedule 2.19.
(b) As of the Closing Date, Seller shall terminate the
employment of all of the Station's employees, except for any of those it plans
to continue to employ in locations other than at the Station. Except to the
extent otherwise provided in this Agreement, Seller shall be responsible for and
shall cause to be discharged and satisfied in full all amounts owed to any of
the terminated employees through the Closing on account of termination,
including any wages, salaries, severance benefits, accrued vacation, payments
under any employment, incentive, compensation or bonus agreements, benefits
under any employee benefit agreement, plan or arrangement, except to the extent
that such discharge may be prohibited by applicable law. In addition, to the
extent required by law, Seller shall retain full responsibility and liability
for offering and providing "continuation coverage" to any "qualified
beneficiary" who is terminated by Seller and who is covered by a "group health
plan" sponsored or contributed to by Seller and who has experienced a
"qualifying event" or is receiving "continuation coverage" on or prior to the
Closing Date. "Continuation coverage," "qualified beneficiary," "qualifying
event" and "group health plan" all shall have the meanings given such terms
under Section 4980B of the Code and Section 601 et seq. of ERISA. Seller shall
hold Buyer and any entity required to be combined with Buyer (within the meaning
of Section 414(b), (c), (m) or (o) of the Code) harmless from and fully
indemnify them against any costs, expenses, losses, damages and liabilities
incurred or suffered by them directly or indirectly, including, but not limited
to, reasonable attorneys' fees and expenses, which relate to continuation
coverage for terminated employees not hired by Buyer or, if hired by Buyer, do
not elect to be covered under Buyer's plans, and arise as a result of any action
or omission by Seller. Between the date hereof and the Closing Date Buyer and
Seller shall negotiate in good faith the transfer of 401K plan assets of
employees of Station who enter the employment of Buyer from Seller's 401K plan
to Buyer's 401K plan, and, if Buyer and
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Seller agree to make such transfer, this Agreement shall be amended to reflect
such arrangement.
(c) Buyer shall offer health insurance coverage, on terms and
conditions determined by Buyer, to all of the employees of the Station employed
by Buyer on a basis of (thirty) 30 or more hours per week. For purposes of
providing such coverage, Buyer shall waive all preexisting condition limitations
for all such employees who are covered by Seller's health care plan as of the
Closing Date (other than known preexisting conditions that were excluded by
Seller's health care plan) and shall provide such health care coverage effective
as of the Closing Date without the application of any eligibility period for
coverage. In addition, Buyer shall credit all payments made by such employees
toward deductible, co-payment and out-of-pocket limits under Buyer's health care
plans for the plan year that includes the Closing Date.
(d) Seller shall retain, pay, perform and indemnify and hold
Buyer harmless from and against all liabilities under any employee benefit plans
which are employee welfare benefit plans (within the meaning of ERISA) for all
claims incurred through the Closing Date, which claims arise out of any
"Incident" occurring prior to the Closing Date, whether or not such claims are
submitted for payment or reimbursement on or before the Closing Date. For the
purposes hereof, the term "Incident" means and includes, without limitation,
death, accident, disease, injury, unemployment, dental care, illness and
disability.
(e) Notwithstanding the foregoing provisions of this Section
5.3, nothing contained in this Agreement shall be construed to create any
obligation on the part of Buyer to employ or retain any employees of the Station
on or after the Closing Date.
5.4. SELLER TO CONTROL OPERATIONS PRIOR TO CLOSING DATE
At all times commencing on the date hereof and ending on the
Closing Date, the operation, management, control and supervision of all
programs, equipment, operations and other activities of the Station shall be the
sole responsibility and shall remain within the complete control and discretion,
of Seller. Neither Buyer nor any of its employees, agents or representatives,
directly or indirectly, shall (or have any right to) control, direct or
otherwise supervise, or attempt to control, direct or otherwise supervise any of
the management or operations of the Station.
5.5. ACQUISITION PROPOSALS
After the date hereof, provided there has been no material
uncured breach or default by Buyer under this Agreement, Seller shall not (nor
will it permit any of its officers, directors, agents or Affiliates, or any
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of Seller or of all or any portion of its property, to),
directly or indirectly, solicit, initiate or encourage any inquiries or the
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making of any proposals from, engage or participate in any negotiations or
substantive discussions with, provide any confidential information or data to,
or enter into (or authorize) any agreement or agreement in principle with any
person (other than Buyer and its Affiliates), or announce any intention to do
any of the foregoing, with respect to any offer or proposal to acquire all or
any part of the Station or the Purchased Assets whether by merger, purchase of
assets or otherwise.
5.6. COPYRIGHT ROYALTY TRIBUNAL PAYMENTS
Buyer agrees promptly upon receipt to remit to Seller any
payments received by Buyer as a Copyright Royalty Tribunal payment attributable
to Seller's ownership and operation of the Station prior to the Closing Date.
5.7. ENVIRONMENTAL AUDIT REPORT; TITLE INSURANCE COMMITMENT
(a) Buyer shall cause to be undertaken within thirty (30) days
after the date hereof, with respect to each parcel of Real Property identified
in Schedule 2.9, an environmental audit report prepared at Buyer's cost by
EnecoTech, or another nationally or regionally recognized environmental
consultant selected by Buyer (the name of which shall be provided to Seller by
Buyer reasonably in advance of its selection by Buyer), in order to confirm
whether, with respect to such parcel of Real Property, there has been any
discharge or release of noise, pollutants, contaminants or hazardous or toxic
substances or wastes into ambient air, water or land, or other manufacturing,
processing, distribution, use, treatment, storage, disposal, transportation or
handling of pollutants, contaminants or hazardous or toxic substances or wastes
("Environmental Hazard"). Buyer shall deliver a copy of such report to Seller
promptly after its receipt by Buyer.
(b) Subject to Buyer's rights under Section 6.7 hereof,
(i) Seller shall use its best efforts to remediate to the extent reasonably
possible prior to the Closing Date the wetlands area adjacent to the Tacoma
studio in accord with the Report and Decision of the City of Tacoma issued on
May 18, 1995 ("Wetlands Remediation") and any Environmental Hazard, in the
report of such environmental consultant which constitutes a violation of
federal, state or local law, rule or regulation with respect to sites which are
used for the same kinds of purposes for which Seller is currently using the
site, (ii) in the event that Seller is unable to complete the Wetlands
Remediation or the remediation of such an Environmental Hazard on or prior to
the Closing Date it shall indemnify Buyer from and against any Loss or Expense
estimated to be incurred by Buyer in order to complete such remedial action
following the Closing Date, and (iii) in the event that Buyer and Seller are
unable to agree upon the reasonable cost of completing such remediation, the
matter shall be submitted to a nationally recognized environmental consultant
selected by Buyer and Seller whose decisions shall be final and binding upon the
parties.
(c) Buyer shall cause to be prepared within thirty (30) days
after the date hereof, with respect to each parcel of Real Property described in
Schedule 2.9, (i)
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a commitment for the issuance of an ALTA Form B-1970 owner's title insurance
policy subject to any standard exceptions, and/or such other exceptions with
respect to which the insurer shall provide extended or standard affirmative
coverage, written by a title insurance company of national or regional standing
selected by Buyer in an amount satisfactory to Buyer and providing that, upon
the satisfaction of the conditions specified therein, Buyer will have good and
marketable title thereto, free and clear of Encumbrances, except Permitted
Encumbrances, and (ii) survey(s) dated (or updated) as of a recent date with
respect to each such parcel acceptable such that such title insurance company
takes no exception, or affirmatively insures over any exceptions, for matters of
survey. Buyer shall deliver copies of such title insurance commitment and
surveys to Seller promptly after Buyer's receipt thereof.
5.8. SALES TAX FILINGS
Prior to Closing, Seller shall continue to file Washington
sales tax returns with respect to the Station in accordance with Seller's past
practices and shall concurrently deliver copies of all such returns to Buyer.
5.9. ACCOUNTS RECEIVABLE
(a) At the Closing, Seller shall designate Buyer as its agent
solely for purposes of collecting the Accounts Receivable existing as of the
Closing Date. Seller shall deliver to Buyer, on or prior to the Closing Date, a
complete and detailed statement of the Accounts Receivable. Buyer shall make
reasonable best efforts to collect the Accounts Receivable during the
"Collection Period," which shall be the period beginning on the Closing Date and
ending on the last day of the fourth calendar month following the Closing Date.
All amounts received from accounts with respect to which Buyer continues to sell
advertising time on the Station, or otherwise maintains a business relationship,
on and after the Closing Date shall be applied first to the payment in full of
any outstanding Account Receivable balance for such account, except that any
such amounts collected by Buyer from an advertiser who is also indebted to Buyer
may be applied to Buyer's account where (i) Seller received a written notice of
dispute from such advertiser with respect to the account prior to the Closing or
Buyer receives a written notice of dispute from such advertiser with respect to
the Account within three (3) days after payment is due by such advertiser for an
account billed after the Closing, (ii) such dispute is a bona fide dispute
between Seller and the advertiser, (iii) the advertiser specifies that the
payment is to be applied to Buyer's account, and (iv) such specification by the
advertiser was not made by the advertiser as a result of the actions of Buyer.
Buyer shall not be obligated to use any extraordinary efforts to collect any of
the Accounts Receivable or to refer any of the Accounts Receivable to a
collection agency or to an attorney for collection. Buyer shall incur no
liability to Seller for any uncollected Accounts Receivable. During the
Collection Period, neither Seller nor its agents shall make any direct
solicitation of any of the Accounts Receivable for collection purposes.
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(b) Buyer shall deposit on a monthly basis into an account
identified by Seller at the time of Closing the amounts collected during the
Collection Period with respect to the Accounts Receivable. On or before the
fifth day following the end of each calendar month in the Collection Period,
Buyer shall furnish Seller with a list of the amounts collected during such
calendar month with respect to the Accounts Receivable. Seller shall be entitled
to inspect and/or audit the records maintained by Buyer pursuant to this Section
5.9 from time to time, upon reasonable advance notice. On or before the fifth
day following the end of each calendar month in the Collection Period, Buyer
shall furnish Seller with a list of, and pay over to Seller, the amounts
collected during such calendar month with respect to the Accounts Receivable.
(c) Following the expiration of the Collection Period, Buyer
shall have no further obligations under this Section 5.9, except that Buyer
shall immediately pay over to Seller any amounts subsequently paid to it with
respect to any Accounts Receivable. Following the Collection Period, Seller may
pursue collections of all Accounts Receivable.
6.
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement shall, at the option of
Buyer, be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
6.1. NO MISREPRESENTATION OR BREACH OF COVENANTS AND WARRANTIES
There shall have been no material breach by Seller in the
performance of any of its covenants and agreements herein; each of the
representations and warranties of Seller contained or referred to herein shall
be true and correct in all material respects on the Closing Date as though made
on the Closing Date (except to the extent that they expressly speak as of a
specific date or time other than the Closing Date, in which case they need only
have been true and correct in all material respects as of such specified date or
time), except for changes therein specifically permitted by this Agreement or
resulting from any transaction expressly consented to in writing by Buyer or any
transaction permitted by Section 4.4 of this Agreement.
6.2. NECESSARY ACTION
Seller shall have taken all action necessary to approve the
transactions contemplated by this Agreement.
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6.3. NO RESTRAINT OR LITIGATION
(a) Any applicable waiting period under the Improvements Act
shall have expired or have been terminated and there shall not be in effect any
preliminary or permanent injunction or other order, decree or ruling by a court
of competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, no statute, rule, regulation or executive order shall have
been promulgated or enacted by a government authority and there shall not be in
effect any temporary restraining order of a court of competent jurisdiction,
which, in any case, restrains or prohibits the transactions contemplated hereby.
(b) Except as set forth in or contemplated by Schedule 2.21,
there shall be no lawsuits, claims, suits, proceedings or investigations pending
against Seller which would, individually or in the aggregate, have a material
adverse effect on the Purchased Assets or the Station or on Buyer's ability to
operate the Station.
(c) Except as set forth in or contemplated by Schedule 2.21,
there shall be no action, suit or proceeding pending which questions the
legality or propriety of the transactions contemplated hereby.
6.4. FCC FINAL ORDER
The FCC Consent shall have been granted, without any condition
or qualification which is materially adverse to Buyer or to the operations of
the Station, and shall have become a Final Order.
6.5. REQUIRED CONSENTS
Seller shall have obtained the consents and estoppel
certificates, in form and substance reasonably satisfactory to Buyer designated
as material on Schedule 2.2.
6.6. NO MATERIAL ADVERSE CHANGE
Except as set forth in Schedule 2.4(A), since the date of this
Agreement, there shall have been no damage, destruction, loss or claim (whether
or not covered by insurance) or condemnation or other taking which materially
adversely affects the Purchased Assets, the Station or the business of the
Station in each case taken as a whole.
6.7. ENVIRONMENTAL AUDIT
The environmental audit report prepared pursuant to Section
5.7(a) shall have confirmed that there has been no Environmental Hazard
constituting a violation of any federal, state or local laws, rule or regulation
with respect to sites which are used
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for the same kinds of purposes for which Seller is currently using the Real
Property, or in the event that such an Environmental Hazard has been disclosed,
Seller shall have remediated such Environmental Hazard, or Seller shall have
agreed to pay or reimburse Buyer for the reasonable estimated costs and expenses
thereof and such Environmental Hazard shall be capable of being remediated
6.8. CLOSING DELIVERIES
Seller shall have made or stand willing to make all the
deliveries set forth in Section 1.6.
7.
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement shall, at the option of
Seller, be subject to the satisfaction on or prior to the Closing Date, of the
following conditions:
7.1. NO MISREPRESENTATION OF BREACH OF COVENANTS AND WARRANTIES
There shall have been no material breach by Buyer in the
performance of any of its covenants and agreements herein; each of the
representations and warranties of Buyer contained or referred to in this
Agreement shall be true and correct in all material respects on the Closing Date
as though made on the Closing Date, except for changes therein specifically
permitted by this Agreement or resulting from any transaction expressly
consented to in writing by Seller or any transaction contemplated by this
Agreement.
7.2. CORPORATE ACTION
Buyer shall have taken all corporate action necessary to
approve the transactions contemplated by this Agreement.
7.3. NO RESTRAINT
(a) Any applicable waiting period under the Improvements Act
shall have expired or been terminated and there shall not be in effect any
preliminary or permanent injunction or other order, decree or ruling by a court
of competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, no statute, rule, regulation or executive order shall have
been promulgated or enacted by a government authority and there shall not be in
effect any temporary restraining order of a court of competent jurisdiction,
which, in any case, restrains or prohibits the transactions contemplated hereby.
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(b) Except as set forth in or contemplated by Schedule 2.21,
there shall be no action, suit or proceeding pending which questions the
legality or propriety of the transactions contemplated hereby.
7.4. FCC CONSENT
(a) The FCC Consent shall have been granted and become
effective, without any condition or qualification which is materially adverse to
Seller.
7.5. CLOSING DELIVERIES
Buyer shall have made or stand willing to make all the
deliveries set forth in Section 1.7
8.
INDEMNIFICATION
8.1. INDEMNIFICATION BY SELLER
Seller agrees to indemnify and hold harmless Buyer from and
against any and all (a) liabilities, losses, costs or damages ("Loss") and (b)
reasonable attorneys' and accountants' fees and expenses, court costs and all
other reasonable out-of-pocket expenses ("Expense") incurred by Buyer in
connection with or arising from:
(i) any breach by Seller of, or any other failure of
Seller to perform, any of its covenants, agreements or
obligations in this Agreement or in any agreement or
instrument contemplated hereby;
(ii) any breach of any warranty or the inaccuracy of
any representation of Seller contained or referred to in
this Agreement or any certificate delivered by or on behalf
of Seller pursuant hereto;
(iii) the failure of Seller to perform any obligation
of Seller or the Station not assumed by Buyer pursuant to
this Agreement; or
(iv) (A) the occupancy, operation, use or control of
any of the Real Property prior to the Closing Date or (B)
the operation of the Station prior to the Closing Date, in
each case incurred or imposed as a requirement of or in
connection with the compliance with any environmental,
health or safety Requirement of Law, including, without
limitation, any Release or storage of any Contaminant on, at
or from (1) any Real Property (including, without
limitation, all facilities, improvements, structures, and
equipment thereon, surface water thereon
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or adjacent thereto and soil or groundwater thereunder) or
any conditions whatsoever on, under or in such real property
or (2) any Real Property or facility owned by a third party
at which Contaminants generated by the Station were sent
prior to the Closing Date;
provided, however, that Seller shall not be required to indemnify and hold
harmless pursuant to clause (ii) with respect to Loss and Expense incurred by
Buyer until the aggregate amount of such Loss and Expense exceeds One Hundred
Sixty Thousand Dollars ($160,000), provided, however, that if such amount
exceeds One Hundred Sixty Thousand Dollars ($160,000), Seller shall be liable to
Buyer for the entirety of the amount claimed and not just that portion in excess
of One Hundred Sixty Thousand Dollars ($160,000) and, provided, further, that
the aggregate amount that Seller shall be required to indemnify and hold
harmless pursuant to clause (ii) with respect to Loss and Expense incurred by
Buyer shall not exceed the Purchase Price. The indemnification provided for in
this Section 8.1 shall terminate on the first anniversary of the Closing Date
(and no claims shall be made by Buyer under this Section 8.1 thereafter), except
that the indemnification by Seller shall continue in any event as to:
(A) any breach of any warranty or the inaccuracy of any
representation of Seller contained or referred to in
Sections 2.2, 2.16 or 2.23, as to all of which no time
limitation shall apply other than the full period of any
applicable statute of limitations;
(B) the covenants of Seller set forth in Sections 5.1,
5.2, 5.3, 10.2 or 10.10, as to all of which no time
limitation shall apply other than the full period of any
applicable statute of limitations;
(C) any Loss or Expense incurred by Buyer in connection
with or arising out of the failure of Seller to perform any
obligation of Seller or the Station not assumed by Buyer
pursuant to this Agreement, as to which no time limitation
shall apply;
(D) any Loss or Expense incurred by Buyer as a result
of any third-party claim, action suit or proceeding
(including any claim, action, suit or proceeding by or
before any foreign, federal, state, municipal or other
government, governmental department, commission, board,
bureau, agency or instrumentality) which arises out of or
relates to the operation of the Station or the ownership of
the Purchased Assets or the Station prior to the Closing
Date, as to which no time limitation shall apply other than
the full period of any applicable statute of limitations;
(E) any Loss or Expense incurred by Buyer in connection
with or arising from the matters described in clause (iv) of
this
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Section 8.1, as to which no time limitation shall apply
other than the full period of any applicable statute of
limitations; and
(F) any Loss or Expense of which Buyer has notified
Seller in accordance with the requirements of Section 8.3 on
or prior to the date such indemnification would otherwise
terminate in accordance with this Section 8.1, as to which
the obligation of Seller shall continue until the liability
of Seller shall have been determined pursuant to this
Article 8, and Seller shall have reimbursed Buyer for the
full amount of such Loss and Expense in accordance with this
Article 8.
8.2. INDEMNIFICATION BY BUYER
Buyer agrees to indemnify and hold harmless Seller from and
against any and all Loss and Expense incurred by Seller in connection with or
arising from:
(a) any breach by Buyer of, or other failure of Buyer to
perform, any of its covenants, agreements or obligations in this
Agreement or any Buyer Ancillary Agreement;
(b) any breach of any warranty or the inaccuracy of any
representation of Buyer contained or referred to in this
Agreement or in any certificate delivered by or on behalf of
Buyer pursuant hereto; or
(c) the failure of Buyer to perform any obligation arising
on or after the Closing Date in respect of the ownership and
operation of the Station by Buyer on and after the Closing Date;
provided, however, that, except with respect to the treatment of the Escrow
Deposit as Seller's liquidated damages for certain of Buyer's defaults under
Section 9.2 hereof, Buyer shall not be required to indemnify and hold harmless
pursuant to clause (b) above with respect to Loss and Expense incurred by Seller
until the aggregate amount of such Loss and Expense exceeds One Hundred Sixty
Thousand Dollars ($160,000), provided, however, that if such amount exceeds One
Hundred Sixty Thousand Dollars ($160,000), Buyer shall be liable to Seller for
the entirety of the amount claimed and not just that portion in excess of One
Hundred Sixty Thousand Dollars ($160,000), and provided further, that the
aggregate amount that Buyer shall be required to indemnify and hold harmless
pursuant to clause (b) shall not exceed the Purchase Price. The indemnification
provided for in this Section 8.2 shall terminate on the first anniversary of the
Closing Date (and no claims shall be made by Seller under this Section 8.2
thereafter), except that the indemnification by Buyer shall continue in any
event as to:
(i) any breach of any warranty or the inaccuracy of any
representation of Buyer contained or referred to in Section 3.2
and the
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covenants of Buyer set forth in Sections 5.1, 10.2 or 10.10, as to all
of which no time limitation shall apply other than the full period of
any applicable statute of limitations;
(ii) any Loss or Expense incurred by Seller in connection with or
arising out of the failure of Buyer to perform any obligation arising
on and after the Closing Date as to which no time limitation shall
apply other than the full period of any applicable statute of
limitations; and
(iii) any Loss or Expense of which Seller has notified Buyer in
accordance with the requirements of Section 8.3 on or prior to the
date such indemnification would otherwise terminate in accordance with
this Section 8.2, as to which the obligation of Buyer shall continue
until the liability of Buyer shall have been determined pursuant to
this Article 8, and Buyer shall have reimbursed Seller for the full
amount of such Loss and Expense in accordance with this Article 8.
8.3. NOTICE OF CLAIMS
(a) If Buyer or Seller believes that it has suffered or
incurred any Loss or incurred any Expense, Buyer or Seller shall so notify the
other promptly in writing describing such Loss or Expense, the amount thereof,
if known, and the method of computation of such Loss or Expense, all with
reasonable particularity and containing a reference to the provisions of this
Agreement or other agreement, instrument or certificate delivered pursuant
hereto in respect of which such Loss or Expense shall have occurred.
(b) If any action at law or suit in equity is instituted by or
against a third party with respect to which Buyer or Seller intends to claim any
liability or expense as Loss or Expense under this Article 8, Buyer or Seller,
as the case may be, shall promptly notify the indemnifying party of such action
or suit. The failure of any party to give any notice required by this Section
8.3 shall not affect any of such party's rights under this Article 8 except to
the extent such failure is actually prejudicial to the rights or obligations of
the other party.
(c) The amount to which an indemnified person shall be
entitled under this Article 8 shall be determined: (i) by written agreement
between Seller and Buyer, (ii) by a final judgment or decree of any court of
competent jurisdiction or (iii) by any other means to which Seller and Buyer
shall agree. The judgment or decree of a court shall be deemed final when the
time for appeal, if any, shall have expired and no appeal shall have been taken
or when all appeals taken have been finally determined. The indemnified party
shall have the burden of proof in establishing the amount of the Loss and
Expense suffered by it.
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8.4. THIRD PARTY CLAIMS
(a) Subject to paragraph (b) of this Section 8.4, the party
indemnified under this Article 8 shall have the right to conduct and control,
through counsel of its choosing, any third party claim, action or suit, and the
party indemnified may compromise or settle the same, provided that the
indemnified party shall give the indemnifying party advance notice of any
proposed compromise or settlement. The indemnified party shall permit the
indemnifying party to participate in the defense of any such action or suit
through counsel chosen by it, provided that the fees and expenses of such
counsel shall be borne by the indemnifying party. Subject to paragraph (b) of
this Section 8.4, any compromise or settlement with respect to a claim for money
damages effected after the indemnifying party by notice to the indemnified party
shall have disapproved such compromise or settlement shall discharge the
indemnifying party from liability with respect to the subject matter thereof,
and no amount in respect thereof shall be claimed as Loss or Expense under this
Article 8.
If the remedy sought in any action or suit referred to in paragraph (a) of
this Section 8.4 is solely money damages and will have no continuing effect on
the business of the indemnified party, the indemnifying party shall have 15
business days after receipt of the notice referred to in Section 8.3 (a) to
notify the indemnified party that it elects to conduct and control such action
or suit. If the indemnifying party does not give the foregoing notice, the
indemnified party shall have the right to defend, contest, settle or compromise
such action or suit in the exercise of its exclusive discretion, and the
indemnifying party shall, upon request from the indemnified party, promptly pay
to the indemnified party in accordance with the other terms of this Article 8
the amount of any Loss resulting from its liability to the third party claimant
and all related Expense. If the indemnifying party gives the foregoing notice,
the indemnifying party shall have the right to undertake, conduct and control,
through counsel of its own choosing and at the sole expense of the indemnifying
party, the conduct and settlement of such action or suit, and the indemnified
party shall cooperate with the indemnifying party in connection therewith;
provided that (x) the indemnifying party shall not thereby permit to exist any
lien, encumbrance or other adverse charge upon any asset of the indemnified
party; (y) the indemnifying party shall permit the indemnified party to
participate in such conduct or settlement through counsel chosen by the
indemnified party, but the fees and expenses of such counsel shall be borne by
the indemnified party except as provided in clause (z) below; and (z) the
indemnifying party shall agree promptly to reimburse to the extent required
under this Article 8 the indemnified party for the full amount of any Loss
resulting from such action or suit and all related Expense incurred by the
indemnified party, except fees and expenses of counsel for the indemnified party
incurred after the assumption of the conduct and control of such action or suit
by the indemnifying party. So long as the indemnifying party is contesting any
such action or suit in good faith, the indemnified party shall not pay or settle
any such action or suit. Notwithstanding the foregoing, the indemnified party
shall have the right to pay or settle any such action or suit, provided that in
such event the indemnified party shall waive any right to indemnity
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therefor by the indemnifying party, and no amount in respect thereof shall be
claimed as Loss or Expense under this Article 8.
9.
TERMINATION AND ESCROW DEPOSIT
9.1. TERMINATION
Notwithstanding anything contained in this Agreement to the
contrary, subject to clauses (c) and (d) below, this Agreement may be terminated
at any time prior to the Closing: (a) by the mutual consent of Buyer and of
Seller; (b) by Buyer in the event of a material breach by Seller of any of its
agreements, representations or warranties contained in this Agreement or if any
of Seller's representations or warranties contained in this Agreement shall have
been inaccurate in any material respect when made and such material breach or
inaccuracy shall not have been cured by Seller within forty-five (45) days of
receipt of written notice from Buyer of such breach or inaccuracy; provided,
however, that this notice and right to cure shall not apply to Seller's
obligations to consummate this Agreement on the Closing Date if all of the
conditions in Article 7 have been satisfied or waived; (c) by Seller in the
event of a material breach by Buyer of any of its agreements, representations or
warranties contained in this Agreement or if any of Buyer's representations or
warranties contained in this Agreement shall have been inaccurate in any
material respect when made and such material breach or inaccuracy shall not have
been cured by Buyer within forty-five (45) days of receipt of written notice
from Seller of such breach or inaccuracy; provided, however, that this notice
and right to cure shall not apply to Buyer's obligations to consummate this
Agreement on the Closing Date if all of the conditions in Article 6 have been
satisfied or waived; or (d) by Buyer or Seller if the Closing shall not have
occurred on or before the earlier of (i) ten (10) business days following the
occurrence of the FCC Final Order, or (ii) if the FCC Final Order shall not have
occurred on or before (A) August 31, 1997, if the assignment application for FCC
Consent is uncontested, or (B) December 31, 1997, in the event that said
assignment application is contested, or (iii) such later date as may be mutually
agreed to by Buyer and Seller.
9.2. ESCROW DEPOSIT
(a) Buyer acknowledges and agrees that, in light of the
transactions provided for in this Agreement, Seller's actual damages are
impossible to calculate with any precision. Accordingly, in the event that this
Agreement is terminated by Seller pursuant to clause (c) of Section 9.1 solely
as a result of Buyer's material uncured breach of its warranties,
representations, obligations and agreements in a manner which would prevent
Buyer from consummating the Closing pursuant to this Agreement, or in the event
that Buyer fails or refuses to consummate the Closing of this Agreement on the
Closing Date, provided that each of the conditions precedent to Buyer's
obligations set forth in Article 6 have been satisfied and/or the failure to
have satisfied
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any such conditions results solely from Buyer's actions or omissions, then, upon
written notice to Buyer, Seller shall have the right to retain the Escrow
Deposit and accrued interest thereon as Seller's liquidated damages and sole and
exclusive remedy.
9.3. 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.
GENERAL PROVISIONS
10.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND OBLIGATIONS
All representations, warranties, covenants and obligations
contained in this Agreement shall survive the consummation of the transactions
contemplated by this Agreement; provided, however, that, except as otherwise
provided in Article 8, the representations and warranties contained in Articles
2 and 3 of this Agreement (other than the representations and warranties
contained in Sections 2.2, 2.16, 2.23 or 3.2 which shall survive indefinitely)
shall terminate as of the first anniversary of the Closing Date. Except as
otherwise provided herein, no claim shall be made for the breach of any
representation or warranty contained in Article 2 or 3 after the date on which
such representations and warranties terminate as set forth in this Section.
10.2. CONFIDENTIAL NATURE OF INFORMATION
The Confidentiality Agreement by Buyer dated October 30, 1996,
shall remain in full force and effect to the extent not superseded by this
Agreement. Each party further hereby agrees that it will treat in confidence all
documents, materials and other information which it shall have obtained
regarding the other party during the course of the negotiations leading to the
consummation of the transactions contemplated hereby (whether obtained before or
after the date of this Agreement), the investigation provided for herein and the
preparation of this Agreement and other related documents, and, in the event the
transactions contemplated hereby shall not be consummated, each party will
return to the other party all copies of nonpublic documents and materials which
have been furnished in connection therewith. The obligation of each party to
treat such documents, materials and other information in confidence shall not
apply to any information which (a) such party can demonstrate was
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already lawfully in its possession prior to the disclosure thereof by the other
party, (b) is known to the public and did not become so known through any
violation of a legal obligation, (c) became known to the public through no fault
of such party, (d) is later lawfully acquired by such party from other sources
or (e) such party is required to disclose any such information pursuant to
judicial order or, in the opinion of counsel, pursuant to applicable law.
Without limiting the right of either party to pursue all other legal and
equitable rights available to it for violation of this Section 10.2 by the other
party, it is agreed that other remedies cannot fully compensate the aggrieved
party for such a violation of this Section 10.2 and that the aggrieved party
shall be entitled to injunctive relief to prevent a violation or continuing
violation thereof.
10.3. GOVERNING LAW
This Agreement and the transactions contemplated hereby shall
be governed by and construed in accordance with the laws of the State of
Delaware without reference to its choice of law rules.
10.4. NOTICES
All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered when
delivered personally or by messenger or seventy-two (72) hours after having been
sent by registered or certified mail or when delivered by private courier
addressed as follows:
If to Buyer: to:
Xxx Broadcasting, Inc.
0000 Xxxx Xxxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
with a copy to:
Dow, Xxxxxx & Xxxxxxxxx, PLLC 0000 Xxx Xxxxxxxxx
Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxx, Esq.
If to Seller, to:
Gaylord Broadcasting Company, L.P.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
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with a copy to:
Gaylord Broadcasting Company, L.P.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
with a copy to:
Xxxx Xxxxx Xxxx & XxXxxx
1301 K Street, N.W.
Xxxx Xxxxx - Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
or to such other address as such party may indicate by a notice delivered to the
other parties hereto.
10.5. SUCCESSORS AND ASSIGNS
(a) The rights of either party under this Agreement shall not
be assignable by such party hereto prior to the Closing without the written
consent of the other (which consent shall not be unreasonably withheld or
delayed), except that upon written notice to Seller all or any portion of the
rights of Buyer hereunder may be assigned prior to the Closing, without the
consent of Seller, to any Affiliate of Buyer, provided that (i) the assignee
shall assume in writing all of Buyer's obligations to Seller hereunder; (ii)
Seller's obligations under this Agreement shall be subject to the delivery by
such assignee, on or prior to the Closing Date, of a certificate signed on its
behalf containing representations and warranties similar to those made by Buyer
in Article 3 and an opinion of Dow, Xxxxxx & Xxxxxxxxx, P.L.L.C. with respect to
the assignee which is similar to the opinion with respect to Buyer set forth in
Exhibit E; and (iii) Buyer shall guarantee the performance of this Agreement by
any such assignee. Following the Closing, either party may assign any of its
rights hereunder, but no such assignment shall relieve it of its obligations
hereunder.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and permitted assigns. The
successors and permitted assigns hereunder shall include, without limitation, in
the case of Buyer, any permitted assignee as well as the successors in interest
to such permitted assignee (whether by merger, liquidation (including successive
mergers or liquidations) or otherwise). Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon any person other than
the parties and successors and assigns permitted by this Section 10.5 any right,
remedy or claim under or by reason of this Agreement.
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10.6. ACCESS TO RECORDS AFTER CLOSING
For a period of six (6) years after the Closing Date, Seller
and its representatives shall have reasonable access to all of the books and
records of the Station transferred to Buyer hereunder to the extent that such
access may reasonably be required by Seller in connection with matters relating
to or affected by the operations of the Station prior to the Closing Date. Such
access shall be afforded by Buyer upon receipt of reasonable advance notice and
during normal business hours. Seller shall be solely responsible for any costs
or expenses incurred by it pursuant to this Section 10.6. If Buyer shall desire
to dispose of any of such books and records prior to the expiration of such
six-year period, Buyer shall, prior to such disposition, give Seller a
reasonable opportunity, at Seller's expense, to segregate and remove such books
and records as Seller may select.
For a period of six (6) years after the Closing Date, Buyer
and its representatives shall have reasonable access to all of the books and
records relating to the Station which Seller or any of its Affiliates may retain
after the Closing Date. Such access shall be afforded by Seller and its
Affiliates upon receipt of reasonable advance notice and during normal business
hours. Buyer shall be solely responsible for any costs and expenses incurred by
it pursuant to this Section 10.6. If Seller or any of its Affiliates shall
desire to dispose of any of such books and records prior to the expiration of
such six-year period, Seller shall, prior to such disposition, give Buyer a
reasonable opportunity, at Buyer's expense, to segregate and remove such books
and records as Buyer may select.
10.7. ENTIRE AGREEMENT; AMENDMENTS
This Agreement and the Exhibits and Schedules referred to
herein and the documents delivered pursuant hereto contain the entire
understanding of the parties hereto with regard to the subject matter contained
herein or therein, and supersede all prior agreements, understandings or intents
between or among any of the parties hereto. The parties hereto, by mutual
agreement in writing, may amend, modify and supplement this Agreement.
10.8. INTERPRETATION
Article titles and headings to sections herein are inserted
for convenience of reference only and are not intended to be a part of or to
effect the meaning or interpretation of this Agreement. The Schedules and
Exhibits referred to herein shall be construed with and as an integral part of
this Agreement to the same extent as if they were set forth verbatim herein.
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10.9. WAIVERS
Any term or provision of this Agreement may be waived, or the
time for its performance may be extended, in a writing signed by the party or
parties entitled to the benefit thereof. The failure of any party hereto to
enforce at any time any provision of this Agreement shall not be construed to be
a waiver of such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of any party thereafter to enforce
each and every such provision. No waiver of any breach of this Agreement shall
be held to constitute a waiver of any other or subsequent breach.
10.10. EXPENSES
Each party hereto will pay all of its own costs and expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions contained herein
on its part to be performed or complied with, including the fees, expenses and
disbursements of its counsel and accountants.
10.11. PARTIAL INVALIDITY
Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had never been contained herein
unless the deletion of such provision or provisions would result in such a
material change as to cause completion of the transactions contemplated hereby
to be unreasonable.
10.12. EXECUTION IN COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be considered an original instrument, but all of which shall
be considered one and the same agreement, and shall become binding when one or
more counterparts have been signed by each of the parties and delivered to each
of Seller and Buyer.
10.13. DEFINITIONS
As used in this Agreement, the following terms have the
meanings specified or referred to in this Section 10.13:
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"Accounts Receivable" means the accounts held by Seller as
of the Closing Date for advertising and programming aired on the Station and for
production and other services provided by Seller prior to the Closing Date.
"Affiliate" means, with respect to any person, any other
person which directly or indirectly controls, is controlled by or is under
common control with such person, excluding, with respect to Seller, The Oklahoma
Publishing Company.
"Assumed Contracts" has the meaning specified in
Section 1.1(e).
"Balance Sheet" has the meaning specified in Section 2.3.
"Balance Sheet Date" has the meaning specified in Section 2.3.
"Buyer" has the meaning specified in the first paragraph of
this Agreement.
"Buyer Ancillary Agreements" has the meaning specified in
Section 3.2(a).
"Closing" has the meaning specified in Section 1.3.
"Closing Date" has the meaning specified in Section 1.3.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Period" has the meaning specified in Section 5.9.
"Communications Act" means the Communications Act of 1934,
as amended.
"Consent-Pending Contract" has the meaning specified in
Section 4.3(d).
"Contaminant" means any waste, pollutant, hazardous
substance, toxic substance, hazardous waste, special waste, petroleum or
petroleum-derived substance or waste, or any constituent of any such substance
or waste.
"Encumbrance" means any lien, claim, charge, security
interest, mortgage, pledge, easement, conditional sale or other title retention
agreement, defect in title, covenant or other restrictions of any kind.
"Environmental Hazard" has the meaning specified in
Section 5.7(a).
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"ERISA" means the Employment Retirement Income Security Act
of 1974, as amended.
"Escrow Agent" means NationsBank, N.A.
"Escrow Agreement" means the escrow agreement in the form of
Exhibit A attached hereto.
"Escrow Deposit" has the meaning specified in Section 1.4(b).
"Event of Loss" has the meaning specified in Section 10.15.
"Excluded Assets" has the meaning specified in Section 1.2.
"Expense" has the meaning specified in Section 8.1.
"FCC" has the meaning specified in Section 1.1(a).
"FCC Authorizations" means those Governmental Permits issued
by the FCC.
"FCC Consent" means action by the FCC granting its consent
to the assignment to Buyer (or an Affiliate of Buyer) of the FCC Authorizations
as contemplated by this Agreement pursuant to appropriate applications filed by
the parties with the FCC.
"Final Order" means a written action or order issued by the
FCC, setting forth the FCC Consent, (a) which has not been reversed, stayed,
enjoined, set aside, annulled or suspended, and (b) with respect to which (i) no
requests have been filed 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, or (ii) in the
event of review, reconsideration or appeal, the FCC's order has been affirmed
and become final by expiration of the time for further review, reconsideration
or appeal.
"Governmental Permits" has the meaning specified in
Section 2.8.
"Improvements Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Intangibles" has the meaning specified in Section 1.1(d).
"Liabilities and Costs" means all liabilities,
investigations, responsibilities, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including, without
limitation, attorney, expert and
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consulting fees and expenses, costs of investigation and feasibility studies),
fines, penalties and monetary sanctions, interest, direct or indirect, known or
unknown, absolute or contingent, past, present or future.
"Loss" has the meaning specified in Section 8.1.
"Permitted Encumbrance" means (a) liens for taxes,
assessments or other governmental charges which are not yet due and payable but
excluding all liens attributable to Seller's employee benefit agreements, plans
or arrangements listed in Schedule 2.19, (b) easements, rights-of-way,
covenants, consents, conditions, reservations, encroachments, minor defects or
irregularities in title, variations and other restrictions affecting the use of
any Real Property or any Tangible Personal Property existing as of the date
hereof, which in the aggregate do not materially impair the use of any Purchased
Asset for the purposes for which it is or may reasonably be expected to be held,
and (c) the leases and licenses set forth in Schedule 2.19 other than the
University Bank installment purchase agreement for the Chyron and other studio
equipment which shall be paid in full on or before the Closing Date as required
by Section 4.8.
"Person" means any person, employee, individual,
corporation, partnership, trust, or any other non-governmental entity or any
governmental or regulatory authority or body.
"Purchased Assets" has the meaning specified in Section 1.1.
"Purchase Price" has the meaning specified in Section 1.4.
"Real Property" has the meaning specified in Section 1.1(b).
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any property,
including the movement of Contaminants through or in the air, soil, surface
water, groundwater or property.
"Remedial Action" means actions required to (a) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (b) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; or
(c) perform pre-remedial studies and investigations and post-remedial monitoring
and care.
"Requirements of Law" means any foreign, federal, state or
local law, rule or regulation, Governmental Permit or other binding
determination of any governmental or regulatory authority or body.
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"Seller" has the meaning specified in the first paragraph of
this Agreement.
"Seller Ancillary Agreements" has the meaning specified in
Section 2.2.
"Station" has the meaning specified in the first recital to
this Agreement.
"Tangible Personal Property" has the meaning specified in
Section 1.1(c).
"To the best of Buyer's knowledge" or any similar formulation
means to the actual knowledge, after due inquiry into the areas of their
respective responsibility, including without limitation review of their
internal files and records, of Xxxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxx.
"To the best of Seller's knowledge" or any similar
formulation means to the actual knowledge, after due inquiry into the areas of
their respective responsibility, including without limitation review of their
internal files and records, of the officers of Seller's general partner and
Station's General Manager, Business Manager and Chief Engineer.
"Wetlands Remediation" has the meaning specified in
Section 5.7(b).
10.14. ALLOCATION OF PURCHASE PRICE
The consideration paid by Buyer for the Purchased Assets
shall be allocated in the manner set forth in a written notice to Seller from
Buyer delivered promptly after the Closing Date and as reasonably agreed to by
Seller.
10.15. RISK OF LOSS; DAMAGE TO FACILITIES
The risk of loss or damage to any of the Purchased Assets
shall be on Seller prior to the Closing Date and thereafter shall be on Buyer.
If any of the Purchased Assets is damaged or destroyed prior to the Closing Date
(any such event being referred to as an "Event of Loss"), Seller, at its
expense, shall use reasonable efforts to replace or repair the item with
comparable property of like value or quality as soon as practicable before the
Closing Date. If any Event of Loss shall materially affect the operations of the
Station and repair or replacement cannot be accomplished by the scheduled
Closing Date but can be accomplished within sixty (60) days after that date, the
Closing Date shall be postponed for that 60-day period; if, however, the repair
or replacement cannot be accomplished within that sixty (60) day period, Buyer
may elect by written notice to Seller within twenty (20) days after Buyer has
received notice that any Event of Loss has occurred:
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(a) To postpone the Closing for a period not more than one
hundred twenty (120) days beyond the Closing Date specified in Section 1.3,
until such time as the Purchased Assets which are the subject of the Event of
Loss have been substantially restored to their condition immediately prior to
the Event of Loss;
(b) To consummate the Closing on the scheduled Closing Date
and accept all of the Purchased Assets as is, in which event Seller shall assign
to Buyer at the Closing all of its rights under any insurance policies and to
all insurance proceeds covering the Event of Loss (less amounts due to Seller
for repairs or replacements of the property prior to the Closing); or
(c) To terminate this Agreement without liability on the
part of Seller or Buyer.
If any damage to the Purchased Assets would require that the
Station be taken off the air for a period exceeding seven (7) calendar days,
Seller shall promptly notify Buyer in writing. In that event, Buyer may elect by
written notice by Buyer to Seller given within ten (10) days after the date of
such notice from Seller (i) to terminate this Agreement without liability on the
part of Seller or Buyer, (ii) to postpone the Closing as provided in Section
10.15(a) or (iii) to consummate the Closing as provided in Section 10.15(b).
If the Closing Date is postponed beyond the time specified
in Section 1.3, the parties shall file with the FCC a request to extend the
effective period of the FCC Consent.
10.16. BULK SALES LAW
Buyer hereby waives compliance by Seller with any applicable
bulk sales law, and Seller hereby agrees to indemnify and hold harmless Buyer
(or any Affiliate thereof) from and against any claims or liabilities asserted
against Buyer (or any Affiliate thereof) by any creditor of Seller or the
Station by reason of such noncompliance.
10.17. TIME OF ESSENCE
Time is of the essence in the performance of this Agreement.
THE NEXT PAGE IS THE SIGNATURE PAGE
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
BUYER:
XXX BROADCASTING, INC.
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------
Xxxxxxx X. Xxxxxxx, President
SELLER:
XXXXXXX BROADCASTING COMPANY, L.P.
By: XXXXXXX COMMUNICATIONS, INC.,
its General Partner
By: /s/ XXXX XXXXXXXXX
--------------------------------
Xxxx Xxxxxxxxx, Vice President
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