ASSET PURCHASE AGREEMENT
ASSET
PURCHASE AGREEMENT,
made
and entered into this __ day of March, 2007 (the “Agreement”), by and between
The River Broadcasting Company, Inc., 000 Xxxxxxx Xxx Xxxxx, Xxxxx Xxxxx Xxxx,
#00, Xxxxxxxxxx, XX 00000 (“Seller”) and The Marketing Group, 0000
00xx
Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 or its assignee, Debut Broadcasting,
Inc.,
an entity under common control as The Marketing Group (The Marketing Group
together with Debut Broadcasting, Inc. referred to as “Buyer”).
WITNESSETH:
WHEREAS,
Seller
operates radio broadcast Stations WIQQ FM 102.3 MHz in Xxxxxx, MS, WBAQ FM
97.9
MHz and WNIX AM 0000 xXx xx Xxxxxxxxxx, XX (the “Stations”) and is authorized to
operate the Stations pursuant to licenses issued by the Federal Communications
Commission (the “FCC”); and
WHEREAS,
Seller
desires to sell to Buyer, and Buyer desires to purchase from Seller,
substantially all of the assets used and/or useful in connection with the
operation of the Stations, all on the terms and subject to the conditions set
forth herein, including prior approval of the FCC.
NOW,
THEREFORE,
in
consideration of the foregoing premises and the mutual covenants and agreements
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE
I
PURCHASE
OF ASSETS
1.1 Transfer
of Assets.
On the
Closing Date (as defined in Section 5.1 hereof), Seller shall sell, assign,
transfer and convey to Buyer or its designated assignee, and Buyer shall
purchase and assume from Seller, substantially all of the assets, properties,
interests and rights held by Seller which are used and/or useful in
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connection
with the operation of the Stations, as the same shall exist on the Closing
Date,
including but not limited to the following (but excluding the Excluded Assets
specified in Section 1.3 hereof), all such assets being referred to herein
as
the “Stations Assets”:
1.1.1 All
licenses, permits and other authorizations issued by the FCC and any other
federal, state or local government authority (the “Stations Licenses”) to Seller
in connection with and necessary for the conduct of the business and the
operation of the Stations, together with renewals or modifications of such
Stations Licenses between the date hereof and the Closing Date, including but
not limited to those listed on Schedule 1.1.1 attached hereto;
1.1.2 All
equipment, machinery, office furniture and fixtures, office materials and
supplies, inventory, spare parts and other tangible personal property of every
kind and description, and Seller’s rights therein, of Seller with respect to the
Stations, together with any improvements or replacements thereof and additions
thereto, made between the date hereof and the Closing Date in accordance with
this Agreement, including but not limited to those listed on Schedule 1.1.2
hereto;
1.1.3 All
contracts, agreements and leases, written or oral, relating to the operation
of
the Stations which are listed in Schedule 1.1.3 hereto (the “Assumed
Contracts”), together with all contracts, agreements and leases entered into or
acquired by Seller between the date hereof and the Closing Date which Buyer
has
agreed to assume in writing at Closing;
1.1.4 All
of
Seller’s right, title and interest in and to the call letters “WIQQ, WBAQ and
WNIX,” trademarks, trade names, service marks, franchises, copyrights, including
registrations and applications for registration of any of them, jingles, logos
and slogans or licenses to use same (the “Intangible Personal Property”),
together with any associated goodwill and any additions thereto between the
date
hereof and the Closing Date, including but not limited to those described on
Schedule 1.1.4 attached hereto;
1.1.5 All
real
property, buildings, fixtures and other improvements thereon, leasehold
interests, easements, licenses, rights of access, rights of way, improvements
and other real property interests, which are held or owned by the Seller and
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used
and/or useful in the operation of the Stations as of the date hereof and
the
Closing Date as described on Schedule 1.1.5 attached hereto (the “Real
Property”);
1.1.6 All
books,
files, records and logs relating to the conduct of the Stations’ business and
the operation of the Stations (collectively the “Stations Records”). For three
years following Closing, Seller shall have reasonable access to such books,
files, records and logs for inspection and duplication at Seller’s expense
during normal business hours, and to the originals if required, for the purposes
of bookkeeping, tax return preparation and accounting procedures, and for such
other purposes as may be customary or reasonably necessary; and
1.1.7 All
accounts receivable arising in connection with the operation of the Stations
prior to the Closing Date and outstanding and uncollected as of the Closing
Date
(the “Accounts Receivable”).
1.2 No
Liens. Except
as
set forth on Schedule 1.2 (the “Permitted Liens”), and subject to Section 1.1.3
hereof, the Stations Assets shall be transferred to Buyer free and clear of
all
debts, security interests, mortgages, trusts, claims, pledges, or other liens,
liabilities and encumbrances whatsoever (collectively, the
"Liens").
1.3 Excluded
Assets. Notwithstanding
anything to the contrary contained herein, it is expressly understood and agreed
that the Stations Assets shall not include the following assets along with
all
rights, title and interest therein which shall be referred to as the "Excluded
Assets":
1.3.1
All
cash,
cash equivalents or similar type investments of Seller, such
as
certificates of deposit, Treasury bills and other marketable securities on
hand
and/or in banks;
1.3.2 All
contracts that have terminated or expired prior to the Closing Date in the
ordinary course of business and as permitted hereunder;
1.3.3 All
other
contracts of Seller, including employment contracts, whether written or oral,
not assumed by Buyer pursuant to the terms of Section 2.1 hereof;
1.3.4 All
pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts
and the assets thereof and any
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other
employee benefit plan or arrangement and the assets thereof, if any maintained
by Seller; and
1.3.5 All
contracts of insurance and all insurance proceeds relating to claims made by
Seller prior to the Closing Date.
1.3.6 Seller’s
books and records pertaining to the organization, existence or capitalization
of
Seller, and duplicate copies of such records as are necessary to enable Seller
to file tax returns and reports, provided, however, that Seller will cooperate
with Buyer’s reasonable requests for such information in connection with Buyer’s
compliance with Securities Exchange Commission requirements related to Buyer’s
public offering of securities.
ARTICLE
2
ASSUMPTION
OF OBLIGATIONS
2.1 Assumption
of Obligations. Subject
to the provisions of this Article 2 and Section 3.5, on the Closing Date, Buyer
shall assume and undertake to pay, satisfy or discharge the liabilities,
obligations and commitments of Seller arising or to be performed on or after
the
Closing Date under (i) the Stations Licenses and Assumed Contracts and (ii)
any
other contracts entered into by Seller between the date hereof and the Closing
Date which Buyer may in its sole discretion expressly agree in writing to
assume. All of the foregoing liabilities and obligations shall be referred
to
herein collectively as the "Assumed Liabilities."
2.2 Retained
Liabilities. Except
as
set forth in Section 2.1 hereof, Buyer expressly does not, and shall not, assume
or be deemed to assume any other liability, obligation, commitment, undertaking,
expense or agreement of Seller of any kind or nature, absolute or contingent,
known or unknown, and the execution and performance of this Agreement shall
not
render Buyer liable for any such liability, obligation, undertaking, expense
or
agreement. All of such liabilities and obligations shall be referred to herein
collectively as the "Retained Liabilities." Without limiting the generality
of
the foregoing, it is understood and agreed that Buyer is not agreeing to, and
shall not, assume any liability or
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obligation
of Seller to Seller's employees under any existing written or oral agreements
with Seller, including any such liability or obligation in respect of wages,
salaries, bonuses, accrued vacation or sick pay or any other matter other
than
liabilities and obligations arising following the Closing.
ARTICLE
3
PURCHASE
PRICE
3.1 Purchase
Price. Subject
to certain adjustments pursuant to Sections 3.2 and 3.5 below, the purchase
price for the transfer of the Stations Assets from Seller to Buyer shall be
One
Million Dollars ($1,000,000) (the "Purchase Price") plus the payment for the
Accounts Receivable specified in Section 3.2.2.2.
3.2 Payment
of Purchase Price. The
Purchase Price shall be paid as follows:
3.2.1 Pursuant
to the Letter of Intent dated January 2, 2007 and to secure the performance
of
the obligations therein between Seller and Buyer, Buyer delivered an irrevocable
letter of credit from Regions Bank in the principal amount of Ten Thousand
Dollars ($10,000) (the “Initial Letter of Credit”) to Seller. Concurrently with
the execution of this Agreement, Buyer shall deliver a second irrevocable letter
of credit from Regions Bank to Seller in the principal amount of Fifty Thousand
Dollars ($50,000) to secure the performance of the obligations between Seller
and Buyer as more particularly described in this Agreement (the “Second Letter
of Credit”). Concurrently with the delivery of the Second Letter of Credit to
Seller, Seller shall return the Initial Letter of Credit to Buyer.
3.2.2 At
Closing, Buyer shall pay to Seller the Purchase Price, as follows:
3.2.2.1 One
Million Dollars ($1,000,000), by wire transfer of immediately available funds,
plus or minus any adjustments to be made pursuant to Section 3.5 hereof;
and
3.2.2.2 No
later
than one (1) day prior to the Closing Date, Seller shall deliver to Buyer a
complete and detailed itemization of all Accounts Receivables outstanding as
of
the Closing Time, in an aged accounts receivable format, arising from
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the
operations of the Station prior to the Closing Time. At Closing, Buyer
shall assign such Accounts Receivable to Buyer, and Buyer shall pay Seller
eighty percent (80%) of the aggregate value of the aged Accounts Receivable
outstanding for not more than 90 days and any other Accounts Receivable that
Buyer may accept (the “Assigned Accounts Receivable”). Buyer may exclude from
the Assigned Accounts Receivable those Accounts Receivable which the debtor
has
expressly disputed in writing,
and any
barter agreements.
3.3 Second
Letter of Credit.
3.3.1 In
the
event that this Agreement is terminated by Seller prior to the Closing because
of Buyer’s refusal or inability to close or pursuant to Section 15.1.1.1,
Seller, if not in material default or breach of this Agreement, shall be
entitled to receive or draw down against the full amount of the Second Letter
of
Credit in accordance with its terms as liquidated damages and not as a penalty.
Buyer
and
Seller each acknowledge and agree that the liquidated damage amount is Seller's
sole remedy for Buyer's breach hereof and that such amount is reasonable in
light of the anticipated harm which would be caused by Buyer's breach of this
Agreement, the difficulty of proof of loss, the inconvenience and nonfeasability
of otherwise obtaining an adequate remedy, and the value of the transaction
to
be consummated hereunder. In
addition, Seller shall be entitled to recover from Buyer court costs and
reasonable attorneys’ fees, incurred by it in enforcing its rights to liquidated
damages hereunder, plus interest at the Prime Rate on the amount of any judgment
obtained against Buyer from the date of default until the date of payment of
the
judgment. “Prime Rate” shall mean a per annum rate equal to the “prime rate” as
published in the Money Rates column of the Eastern Edition of The
Wall Street Journal (or
the
average of such rates if more than one rate is indicated).
3.3.2 In
the
event of a termination of this Agreement for a reason other than as described
in
Section 3.3.1, then Seller shall not be entitled to draw down against the Second
Letter of Credit and Seller shall return the Second Letter of Credit to
Buyer.
3.4 Allocation
of Purchase Price. The
Purchase Price shall be allocated in accordance with Exhibit A hereto.
3.5 Proration
of Income and Expenses. Except
as
otherwise
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provided
herein, on the Closing Date, there shall be prorated all revenue and expenses
arising from the conduct of the business and operation of the Stations,
including expenses related to the Stations Licenses and Real Property, and
other
prepaid and deferred items. Such prorations shall be based upon the principle
that Seller shall be responsible for all liabilities and obligations and
entitled to all revenue incurred or accruing in connection with the operation
of
the Stations until the Closing Date, and Buyer shall be responsible for such
liabilities and obligations and entitled to all revenue incurred by Buyer
thereafter. Such prorations shall include, without limitation, all ad valorem,
real estate and other property taxes, business and license fees, FCC regulatory
fees, utility expenses, payments of rent, utilities, insurance, salaries, taxes,
music and license fees, and other charges. In this regard, Seller shall pay
the
costs of all engineering studies, ownership reports, employment reports, or
other reports or FCC filings required by virtue of Seller's ownership of the
Stations prior to the Closing Date, and Buyer shall pay the costs of all
engineering studies, ownership reports, employment reports, or other reports
or
FCC filings required by virtue of Buyer's ownership of the Stations after the
Closing Date. Any
filing or grant fees imposed by any governmental authority, the consent of
which
is required for the transactions contemplated by this Agreement, including
all
filing fees incurred pursuant to Section 4.2, shall be borne equally by Buyer
and Seller. Seller shall have fully performed or terminated all barter
agreements prior to Closing, except for those barter obligations expressly
set
forth in the Assumed Contracts.
3.5.1
Seller agrees to the payment of $ 28,669 to Buyer at Closing for the repair
of
the AM transmitter site described in the engineering studies performed by Xxx
Xxxxxxx. Seller shall not be responsible for any payment in excess of $28,669,
for the AM repairs described herein.
ARTICLE
4
GOVERNMENTAL
CONSENTS
4.1 FCC
Consent.
It is
specifically understood and agreed by Buyer and Seller that the Closing and
the
assignment of the FCC Licenses and the transfer of the Stations Assets is
expressly conditioned on and is subject to the prior consent and approval of
the
FCC ("FCC Consent") without the imposition of any conditions on
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the
transfer of the FCC Licenses which are materially adverse to Buyer or
Seller.
4.2 FCC
Application.
Within
ten (10) business days after execution of this Agreement, Seller and Buyer
shall
file with the FCC an application for assignment of the FCC Licenses (the
"Assignment Application") from Seller to Buyer. Seller and Buyer shall
thereafter prosecute the Assignment Application with all reasonable diligence
and otherwise use their best efforts to
obtain
the grant of the Assignment Application as expeditiously as practicable. If
the
FCC Consent imposes any condition on either party hereto, such party shall
use
its best efforts to comply with such condition; provided, however, that neither
party shall be required to comply with any condition that would have a material
adverse effect upon it. If reconsideration or judicial review is sought with
respect to the FCC Consent, the party affected shall vigorously oppose such
efforts for reconsideration or judicial review; provided, however, that nothing
in this Section 4.2 shall be construed to limit either party's right to
terminate this Agreement pursuant to Article 15 hereof.
ARTICLE
5
CLOSING
5.1 Closing.
Subject
to the terms and conditions of this Agreement, including Section 15.1 hereof
and
except as otherwise mutually agreed upon by Seller and Buyer, the closing of
the
transactions contemplated herein (the "Closing") shall occur on a date agreed
upon by Buyer and Seller within ten (10) business days after the date on which
the FCC Consent shall have been given, pursuant to delegated authority (the
"Closing Date"); provided, however, that in the event that informal objections
or petitions to deny are filed against the Assignment Application, the Closing
shall, at Buyer’s option, occur within ten (10) business days after the date on
which the FCC Consent shall have become a Final Order. A “Final Order” means an
action of the FCC approving the Assignment Application, which is no longer
subject to reconsideration or review by the FCC or any court or other
governmental authority. The Closing shall be held at the offices of the
Stations, or at such place as the parties hereto may agree.
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ARTICLE
6
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
hereby makes the following representations and warranties to Seller, all of
which have been relied upon by Seller in entering into this Agreement and,
except as specifically otherwise provided, all of which shall be true and
correct on the Closing Date:
6.1 Organization
and Standing. The
Marketing Group is a corporation duly organized, validly existing and in good
standing under the laws of the State of Tennessee, and is qualified to do
business in each jurisdiction in which the Stations Assets are located. Debut
Broadcasting, Inc. is a corporation duly organized, validly existing and in
good
standing under the laws of the State of Delaware and is qualified to do business
in each jurisdiction in which the Stations Assets are located.
6.2 Authorization
and Binding Obligation.
Buyer’s
execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on its part and upon the obtaining of all necessary approvals of the
transactions contemplated by this Agreement, this Agreement will constitute,
and
the other agreements to be executed in connection herewith will constitute,
the
valid and binding obligation of Buyer enforceable in accordance with their
terms.
6.3 Absence
of Conflicting Agreement.
Except
as set forth in Article 4 with respect to FCC and other governmental consents,
the execution, delivery and performance of this Agreement by Buyer: (a) do
not
and will not require the consent of any third party; (b) will not conflict
with,
result in a breach of, or constitute a violation of or a default under, the
provisions of Buyer’s organizational documents; (c) do not and will not conflict
with, result in a breach of, or constitute a violation of or default under,
any
applicable law, judgment, order, injunction, decree, rule, regulation or ruling
of any governmental authority to which Buyer is a party; and (d) do not and
will
not, either alone or with the giving of notice or the passage of time, or both,
conflict with, constitute grounds for termination of or result in a breach
of
the terms, conditions or provisions of, or constitute a default
9
under,
any contract, agreement, instrument, license or permit to which Buyer is
now
subject.
6.4 FCC
Qualifications.
To the
best of Buyer’s knowledge, it is qualified under the Communications Act of 1934,
as amended, and under the rules and regulations of the FCC, to be the licensee
of, acquire, own and operate the Stations. There are no facts that would, under
existing law and the rules, regulations, policies and procedures of the FCC,
disqualify Buyer as an assignee of the Stations Licenses or as the owner and
operator of the Stations. No waiver of any FCC rule or policy is necessary
for
the FCC Consent to be obtained. There is no action, suit or proceeding pending
or threatened against Buyer which questions the legality or propriety of the
transactions contemplated by this Agreement or could materially adversely affect
the ability of Buyer to perform its obligations hereunder.
6.5
Absence
of Litigation.
There is
no claim, litigation, proceeding or investigation pending or, to the best of
Buyer’s knowledge, threatened against Buyer which seeks to enjoin or prohibit,
or which otherwise questions the validity of, any action taken or to be taken
in
connection with this Agreement.
6.6
Bankruptcy.
No
insolvency proceedings of any character, including without limitation,
bankruptcy, receivership, reorganization, composition or arrangement with
creditors, voluntary or involuntary, affecting Buyer are pending or, to the
best
of Buyer’s knowledge, threatened, and Buyer has not made any assignment for the
benefit of creditors or taken any action which would constitute the basis for
the institution of such insolvency proceedings.
ARTICLE
7
REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller
hereby makes the following representations and warranties to Buyer, all of
which
have been relied upon by Buyer in entering into this Agreement and, except
as
specifically otherwise provided, all of which shall be true and correct on
the
Closing Date:
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7.1 Organization
and Standing.
Seller
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Mississippi. Seller has the power and authority to own,
lease and operate the Stations Assets and to carry on the business of the
Stations as proposed to be conducted by Seller between the date hereof and
the
Closing Date.
7.2 Authorization
and Binding Obligation.
Seller
has the power and authority to enter into and perform this Agreement and the
transactions contemplated hereby, and Seller's execution, delivery and
performance of this Agreement, and the transactions contemplated hereby have
been duly and validly authorized by all necessary action on its part. This
Agreement has been duly executed and delivered by Seller and this Agreement
constitutes, and the agreements to be executed in connection herewith will
constitute the valid and binding obligation of Seller enforceable in accordance
with their terms, except as limited by laws affecting the enforcement of
creditors’ rights or equitable principles generally.
7.3 Absence
of Conflicting Agreements. Except
as
set forth in Article 4 with respect to FCC and other governmental consents,
the
execution, delivery and performance of this Agreement by Seller: (a) do not
and
will not require the consent of any third party; (b) will not conflict with,
result in a breach of, or constitute a violation of or a default under, the
provisions of Seller’s organizational documents; (c) do not and will not
conflict with, result in a breach of, or constitute a violation of or default
under, any applicable law, judgment, order, injunction, decree, rule, regulation
or ruling of any governmental authority to which Seller is a party or by which
it or the Stations Assets are bound; and (d) do not and will not, either alone
or with the giving of notice or the passage of time, or both, conflict with,
constitute grounds for termination of or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
agreement, instrument, license or permit to which Seller or the Stations Assets
is now subject; and (e) will not result in the creation of any lien, charge
or
encumbrance on any of the Stations Assets.
7.4 Government
Authorizations. Except
as
otherwise provided,
Schedule
1.1.1 hereto contains a true and complete list of the Stations Licenses, which
are required for the lawful conduct of the business and operation of the
Stations in the manner and to the
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full
extent they are proposed to be conducted by Buyer. Seller is the authorized
legal holder of the Stations Licenses listed in Schedule 1.1.1. Except as
otherwise provided on Schedule 1.1.1, the Stations Licenses listed in Schedule
1.1.1 are in good standing, in full force and effect and sufficient for the
operation of the Stations as presently operated by Buyer. The operation of
the
Stations is in material compliance with the Stations Licenses and the underlying
construction permits. Except as otherwise provided on Schedule 1.1.1, no
proceedings are pending or to Seller’s knowledge, threatened, nor, to Seller's
knowledge, do any facts exist which may result in the revocation, modification,
non-renewal or suspension of any of the Stations Licenses, the issuance of
any
cease and desist order, the imposition of any administrative actions by the
FCC
with respect to the FCC Licenses or which may affect Buyer's ability to operate
the Stations in accordance with the Stations Licenses and the FCC's
rules.
7.5 Tangible
Personal Property. Schedule
1.1.2 hereto contains a list of all material tangible personal property owned,
leased or held by Seller and used and/or useful in the conduct of the business
and operation of the Stations. The Tangible Personal Property which is leased
is
identified as such on Schedule 1.1.2. The Tangible Personal Property is all
of
the tangible personal property necessary to operate the Stations in the manner
in which it is presently operated. Except for the Tangible Personal Property
leased by Seller, Seller owns and has, and will have on the Closing Date, good
and marketable title to all of the Tangible Personal Property (and to all other
tangible personal property and assets to be transferred to Buyer hereunder),
and
none of such property at the Closing will be subject to any security interest,
mortgage, pledge, or other lien or encumbrance. Except as identified on Schedule
1.1.2, to Seller's knowledge, all material items of the Tangible Personal
Property are in good repair and normal operating condition (ordinary wear and
tear excepted) and are available for immediate use in the conduct of the
business and operation of the Stations in its customary manner and in accordance
with its licenses and the rules, regulations and policies of the Commission
and
all other governmental authorities having jurisdiction thereof.
7.6 Real
Property. Schedule
1.1.5 hereto contains a list of all of the Real Property and is all of the
real
property necessary to operate the Stations in the manner in which it is
presently authorized to operate. Seller owns and has, and will have on the
Closing Date, good and marketable title to all the owned Real
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Property
and none of such property at the Closing will be subject to any Liens other
than
Permitted Liens. None of the Real Property is subject to any contract, option
or
commitment for sale or lease to any party other than Buyer. Seller has received
no notice of, and has no knowledge of, any violation of or noncompliance
with
any restrictive covenants, zoning, building and other laws and regulations
of
applicable governmental authorities having jurisdiction in connection with
the
Real Property. The buildings, towers and appurtenances, and other fixtures
used
in the operation of the Stations are in good working order and repair without
any defects which would prevent the operation, use and function thereof in
a
normal and expected manner. To Seller’s knowledge, the improvements on the owned
Real Property are contained entirely within the bounds of the owned Real
Property and do not encroach upon any property, the title or use of which
will
not be conveyed to Buyer hereunder. All utilities necessary for Buyer’s use of
the Real Property are installed and in working order. No condemnation
proceedings have been instituted or, to Seller’s knowledge, threatened against
the Real Property.
7.7 Contracts.
Schedule
1.1.3 hereto contains a list of all of the Assumed Contracts. Each of the
Assumed Contracts are valid, binding and enforceable by Seller in accordance
with their respective terms. Seller is not in material breach or default
thereof, there is no claim of breach or default, and Seller has no knowledge
of
any act or omission which has occurred or which has been threatened which could
result in a breach or default thereof. Those Assumed Contracts requiring the
consent of a third party to assignment which Seller and Buyer agree are critical
to the consummation of the transactions contemplated hereby are identified
as
"Material Contracts" and are so marked on Schedule 1.1.3. Notwithstanding the
foregoing, if it is discovered before Closing that Seller failed to list a
contract in Schedule 1.1.3 other than a Material Contract which was required
to
be listed, then Buyer may elect in its sole discretion to accept or reject
such
contract.
7.8 Intangible
Personal Property. Schedule
1.1.4 hereto contains a list of all material intangible personal property
applied for, issued to or owned by the Seller or under which Seller is a
licensee and used in the conduct of the business and included in the Stations
Assets. The Intangible Personal Property is all of the intangible personal
property used in the operation of the Stations in the manner conducted by
Seller. Seller has the right to use all of such property and to Seller’s
knowledge, such use does not infringe on or violate any other party's
rights.
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7.9 Insurance.
All of
the assets to be sold to Buyer which are of an insurable character are insured
by financially sound and reputable insurance companies against loss or damage
by
fire and other risks to the extent and in the manner customary for properties
and assets of that nature. All such insurances policies are listed on Schedule
7.9 hereto and are in current force and effect and full coverage thereunder
shall remain in effect through the Closing.
7.10 Taxes.
Seller has,
in
respect of the Station’s business, filed all federal, state, local and foreign
income, franchise, sales, use, property, excise, payroll and other tax returns
required by law and has paid in full all taxes, estimated taxes, interest,
assessments, and penalties due and payable pursuant to such returns or
assessments. All returns and forms which have been filed have been true and
correct in all material respects and no tax or other payment in a material
amount other than as shown on such returns and forms are required to be paid
and
have been paid by Seller.
7.11 Environmental.
To Seller's
knowledge, (i) Seller has not unlawfully disposed of any Hazardous Materials
(defined herein) at the Real
Property included
in the Stations Assets, (ii) the technical equipment included in the Stations
Assets does not contain any polychlorinated
biphenyls (PCBs),
(iii) there are no underground tanks at the Real Property of the Stations.
As
used
herein, the term "Hazardous Materials" shall mean all chemicals, petroleum,
crude oil or any fraction thereof, hydrocarbons, polychlorinated biphenyls
(PCBs), asbestos, asbestos-containing materials and/or products, urea
formaldehyde, or any substances which are classified as "hazardous" or "toxic"
under CERCLA; hazardous waste as defined under the Solid Waste Disposal Act,
as
amended 42 U.S.C. § 6901; air pollutants regulated under the Clean Air Act, as
amended, 42 U.S.C. § 7401, et
seq, pollutants
as defined under the Clean Water Act, as amended, 33 U.S.C. § 1251, et
seq, any
pesticide as defined by Federal Insecticide, Fungicide, and Rodenticide Act,
as
amended, 7 U.S.C. §
136,
et
seq, any
hazardous chemical substance or mixture or imminently hazardous substance or
mixture regulated by the Toxic Substances Control Act, as amended, 15 U.S.C.
§2601, et Seq, any substance listed in the United States Department of
Transportation Table at 45 CFR 172 10I; any chemicals included in regulations
promulgated under the above listed statutes; any explosives, radioactive
material, and any chemical regulated by state statutes similar to
14
the
federal statutes listed above and regulations promulgated under such state
statutes.
7.12 Employee
and Labor Relations.
7.12.1 Seller
is
not a party to any contract with any labor organization, nor has Seller agreed
to recognize any union or other collective bargaining unit, nor has any union
or
other collective bargaining unit been certified as representing any of Seller's
employees. Seller has no knowledge of any organizational effort currently being
made or threatened by or on behalf of any labor union with respect to employees
of Seller.
7.12.2 Seller
has complied in all material respects with all applicable laws, rules and
regulations relating to the employment of labor, including those relating to
wages, hours, collective bargaining, unemployment insurance, workers'
compensation and payment and withholding of taxes in connection with the
operation of the Stations.
7.12.3 Seller
has not promised to any employee of the Stations that Buyer will be hiring
any
such employee or otherwise made any offer of employment to any employee of
the
Stations on behalf of Buyer. All employees of the Stations shall be terminable,
without liability to Buyer, on and as of the Closing Date. Buyer will have
no
liability to any present or past employee of the Stations for retirement,
pension, bonus, termination, vacation, or other pay, or for hospitalization,
major medical, life or other insurance or other employee benefits.
7.13 Litigation.
There
is
no litigation or proceeding or investigation pending or, to Seller’s knowledge,
threatened against Seller or the Stations in any federal, state or local court,
or before any administrative agency or arbitrator (including, without
limitation, any proceeding which seeks the forfeiture of, or opposes the renewal
of, any of the Stations Licenses), or before any other tribunal duly authorized
to resolve disputes, or which seeks to enjoin or prohibit, or otherwise
questions the validity of, any action taken or to be taken pursuant to or in
connection with this Agreement.
7.14 Compliance
with Law. The
operation of the Stations and all of the Stations Assets are in compliance
in
all material respects with all applicable federal, state and local laws,
ordinances and regulations, including the Communications Act of
15
1934,
as
amended and all rules and regulations issued thereunder. Without limiting
the
generality of the foregoing, Seller has timely filed all FCC reports and
other
documents required to be filed by any governmental authority with respect
to the
Stations and Seller has maintained its local public inspection file in full
compliance with FCC requirements.
7.15 Shareholders.
Xxxxxx
X.
Xxxx (80%) and Xxxxx Xxxx (20%) are the only shareholders of
Seller.
7.16
Accuracy
of Information.
No
representation or warranty made by Seller hereunder or any information furnished
or to be furnished to Buyer or any principal or agent of Buyer in connection
with the transaction contemplated herein contains or will contain any untrue
statement of material fact or omits or will omit to state a material fact
necessary to make the information herein not misleading. Notwithstanding the
generality of the foregoing, all financial information given to Buyer fairly
reflects the condition of Seller as of the date hereof and fairly presents
the
results of operation of the Stations for the periods reflected therein, and
since the date of the most recent financial statement given to Buyer there
have
been no material adverse changes in the financial position of the
Stations.
7.17
Bankruptcy.
No
insolvency proceedings of any character, including without limitation,
bankruptcy, receivership, reorganization, composition or arrangement with
creditors, voluntary or involuntary, affecting Seller are pending or, to the
best of Seller’s knowledge, threatened, and Seller has not made any assignment
for the benefit of creditors or taken any action which would constitute the
basis for the institution of such insolvency proceedings.
16
ARTICLE
8
COVENANTS
8.1 Seller
Affirmative Covenants. Seller
covenants and agrees with respect to the Stations that, between the date hereof
and the Closing Date, except as expressly permitted by this Agreement or with
the prior written consent of Buyer, it shall act in accordance with the
following:
8.1.1 Seller
shall conduct the business and operation of the Stations in the ordinary course
of business consistent with past practice and with the intent of preserving
the
ongoing operations and assets, listeners, advertisers and business of the
Stations.
8.1.2 Seller
shall operate the Stations in material accordance with FCC rules and regulations
and the Stations Licenses and with all other laws, regulations, rules and orders
and remove and assume all responsibility and costs for removing any and all
violations thereof, including the payment of any fines assessed or other
sanctions that may be imposed therefor.
8.1.3 Seller
shall provide Buyer prompt written notice of any material change in any of
the
information contained in the representations and warranties made in Article
7
hereof or any Schedules referred to herein or attached hereto.
8.1.4 Seller
shall give prompt notice to Buyer of any unusual or material developments with
respect to the business or operation of the Stations.
8.1.5 Seller
shall give or cause the Stations to give Buyer and Buyer's counsel, accountants,
engineers and other representatives, at Buyer's reasonable request, and as
authorized by the management of Seller, reasonable access during normal business
hours to all of Seller's personnel, properties, books, contracts, reports and
records including financial information and tax returns relating to the
Stations, to all buildings and equipment relating to the Stations, and to the
Stations’ employees in order that Buyer may have full opportunity to make such
investigation as it desires of the affairs of the Stations and to furnish Buyer
with information, and copies of all documents and agreements including but
not
limited to financial and operating
17
data
and
other information concerning the financial condition, results of operations
and
business of the Stations, that Buyer may reasonably request. The rights of
Buyer
under this Section 8.1.5 shall not be exercised in such a manner as to interfere
unreasonably with or disrupt the business or operation of the
Stations.
8.1.6 Seller
shall use commercially reasonable efforts to perform all of the Assumed
Contracts according to their respective material terms and, if necessary, renew
the same; provided, however, that, at Buyer's request, Seller will give
protective notices of cancellation with respect to the Contracts which Buyer
is
not to assume.
8.1.7 Seller
shall use commercially reasonable efforts to maintain the Tangible Personal
Property in its present condition, subject to reasonable wear and tear and
to
dispositions in the normal course of business, and keep in effect all current
insurance policies with respect thereto, and restore, repair or replace any
lost
or substantially damaged item of Tangible Personal Property in accordance with
Section 16.2.
8.2 Seller
Negative Covenants. Seller
covenants and agrees with respect to the Stations that between the date hereof
and the Closing Date, except as expressly permitted by this Agreement or with
the prior written consent of Buyer, it shall act in accordance with the
following:
8.2.1 Seller
shall not cause or permit by any act, or failure to act, any of the Stations
Licenses to expire, be surrendered, adversely modified, or otherwise terminated,
or the FCC to institute any proceedings for the suspension, revocation or
adverse modification of any of the Stations Licenses.
8.2.2 Seller
shall not create or permit any Lien affecting the Stations Assets, except for
Permitted Liens or those in existence on the date of this Agreement, all of
which will be removed on or prior to the Closing Date.
8.2.3 Seller
shall not: (i) enter into any commitment for capital expenditures for which
Buyer would be liable after the Closing Date; (ii) enter into any collective
bargaining agreement or, through negotiation or otherwise, make any commitment
or incur any liability to any labor organization relating to any Stations
employee (to the extent the foregoing does not violate applicable
18
law);
or (iii) enter into any contract or commitment in relation to the Stations’
business or employees to which Buyer will be bound or which will adversely
affect Buyer's operation of the Stations following the Closing other than
agreements cancelable without penalty prior to the Closing
Date.
8.2.4 Seller
shall not, other than in the ordinary course of business, sell or dispose of
or
commit to sell or dispose of any of the Stations Assets unless, in the case
of
the Tangible Personal Property, the same are replaced by assets of equal quality
and usefulness.
8.2.5 Seller
shall not increase the salary, benefits or other compensation payable to any
Stations employee, except to the extent consistent with existing practice or
as
may be required by applicable law, and Seller shall promptly notify Buyer upon
taking any such action.
8.3. Seller
Non-compete. At
Closing, Seller and Seller’s principals shall enter into a non-compete agreement
in the form attached hereto as Exhibit B, which shall bar Seller and its
principals, Xxxxxx X. Xxxx (a/k/a Xxxxxx Xxxx, III) and Xxxxx Xxxx, from having
an ownership interest or investment in, or serving as an officer, director
or
employee of, or serving as a consultant or advisor to, any radio broadcast
business whose city of license, studio or transmitter site is located within
fifty (50) miles of Greenville, Mississippi, for a period of one (1) year from
the Closing Date. Said agreement shall further bar Seller and Seller’s
principals for a period of one (1) year after Closing from hiring or soliciting
to hire any person employed by Buyer and whose duties relate substantially
to
the Stations. The portion of the purchase price allocated to the foregoing
non-compete agreement shall be in accordance with Exhibit A hereto.
8.4. Buyer
Covenants. Buyer
covenants and agrees that, between the date hereof and the Closing Date, except
as expressly permitted by this Agreement or with the prior written consent
of
Seller, it shall act in accordance with the following:
8.4.1.
Notification.
Buyer
shall notify Seller of any litigation, arbitration or administrative proceeding
pending or threatened against Buyer which challenges the transactions
contemplated hereby, including any challenges to the FCC Application, and shall
use reasonable efforts to remove any such impediment to the transactions
contemplated by this
19
Agreement.
8.4.2.
No
Inconsistent Action.
Buyer
shall not take any action materially inconsistent with its obligations under
this Agreement or that would hinder or delay the consummation of the
transactions contemplated by this Agreement.
ARTICLE
9
JOINT
COVENANTS
Buyer
and
Seller covenant and agree that between the date hereof and the Closing Date,
they shall act in accordance with the following:
9.1 Conditions.
If
any
event should occur, either within or without the control of any party hereto,
which would prevent fulfillment of the conditions upon the obligations of any
party hereto to consummate the transactions contemplated by this Agreement,
the
parties hereto shall use their best efforts to cure the event as expeditiously
as possible.
9.2 Confidentiality.
Buyer
and
Seller shall each keep confidential all information obtained by it with respect
to the other in connection with this Agreement and the negotiations preceding
this Agreement, and will use such information solely in connection with the
transactions contemplated by this Agreement, and if the transactions
contemplated hereby are not consummated for any reason, each shall return to
the
other, without retaining a copy thereof, any schedules, documents or other
written information obtained from the other in connection with this Agreement
and the transactions contemplated hereby. Notwithstanding the foregoing, neither
party shall be required to keep confidential or return any information which
(i)
is known or available through other lawful sources, not bound by a
confidentiality agreement with the disclosing party or (ii) is or becomes
publicly known through no fault of the receiving party or its agents, (iii)
is
required to be disclosed pursuant to an order or request of a judicial or
governmental authority (provided the disclosing party is given reasonable prior
notice), or (iv) is developed by the receiving party independently of the
disclosure by the disclosing party.
20
9.3 Cooperation.
Buyer
and
Seller shall cooperate fully with one another in taking any actions, including
actions to obtain the required consent of any governmental instrumentality
or
any third party necessary or helpful to accomplish the transactions contemplated
by this Agreement; provided, however, that no party shall be required to take
any action which would have a material adverse effect upon it. To the extent
that any Assumed Contract, except Material Contracts, may not be assigned
without the consent of any third party, and such consent is not obtained prior
to Closing, this Agreement and any assignment executed pursuant hereto shall
not
constitute an assignment thereof, but to the extent permitted by law shall
constitute an equitable assignment by Seller and assumption by Buyer of Seller’s
rights and obligations under the applicable Assumed Contract, with Seller making
available to Buyer the benefits thereof and Buyer performing the obligations
thereunder on Seller’s behalf.
9.4
Control
of Stations.
Prior to
the Closing Date, Buyer shall not directly or indirectly control, supervise,
or
direct, or attempt to control, supervise, or direct, the operations of the
Stations. Such operations shall be the sole responsibility of Seller and,
subject to the provisions of this Article 9, shall be in its complete
discretion.
ARTICLE
10
CONDITIONS
OF CLOSING BY BUYER
The
performance of the obligations of Buyer hereunder are subject to the
satisfaction of each of the following express conditions precedent, provided
that Buyer may, at its election, waive any of such conditions at Closing,
notwithstanding that such condition is not fulfilled on the Closing
Date:
10.1 Representations,
Warranties and Covenants.
10.1.1 All
representations and warranties of Seller contained herein or in any Schedule
or
document delivered pursuant hereto, shall be true and complete in all material
respects as of the date hereof and on and as of the Closing Date as if made
on
and
21
as
of
that date, except for changes expressly permitted or contemplated by the
terms
of this Agreement.
10.1.2 All
of
the terms, covenants and conditions to be complied with and performed by Seller
on or prior to Closing Date shall have been complied with or performed in all
material respects.
10.2 Governmental
Consents. The
conditions specified in Sections 4.1 and 4.2 of this Agreement shall have been
satisfied.
10.3 Governmental
Authorizations. Seller
shall be the holder of the Stations Licenses and all other material licenses,
permits and other authorizations listed in Schedule 1.1.1, and there shall
not
have been any modification of any of such licenses, permits and other
authorizations which has a material adverse effect on the Stations or the
conduct of its business and operation. No proceeding shall be pending which
seeks or the effect of which reasonably could be to revoke, cancel, fail to
renew, suspend or modify adversely the Stations Licenses or any other material
licenses, permits or other authorizations relating to the Station.
10.4 Adverse
Proceedings.
No
suit, action, claim or governmental proceeding shall be pending against, and
no
order, decree or judgment of any court, agency or other governmental authority
shall have been rendered against, any party hereto which would render it
unlawful, as of the Closing Date, to effect the transactions contemplated by
this Agreement in accordance with its terms.
10.5 Third-Party
Consents.
Seller
shall have obtained and shall have delivered to Buyer all third-party consents
to the Material Contracts.
10.6 Closing
Deliveries.
Seller
shall have delivered, caused to be delivered, or stand willing to deliver to
Buyer, on the Closing Date, each of the documents required to be delivered
pursuant to Article 13.
10.7 No
Material Adverse Change.
Since
the date of this Agreement, there shall not have occurred, whether or not within
Seller’s control, any material adverse change in the Stations
Assets.
22
10.8
Liens.
The
Station Assets shall be free and clear of all Liens, except the Permitted
Liens.
10.9
Preliminary
Title Report.
Seller
shall have obtained and delivered to Buyer a preliminary report of a title
insurance company reasonably acceptable to Buyer to insure the title to the
Real
Property included in the Station Assets and owned by the Seller without any
liens or encumbrances, other than the Permitted Liens and current taxes or
assessments. The costs and expenses incurred in connection with obtaining such
report shall be borne one-half by Seller and one-half by Buyer.
ARTICLE
11
CONDITIONS
OF CLOSING BY SELLER
The
performance of the obligations of Seller hereunder are subject to the
satisfaction of each of the following express conditions precedent, provided
that Seller may, at its election, waive any of such conditions at Closing,
notwithstanding that such condition is not fulfilled on the Closing
Date:
11.1 Representations,
Warranties and Covenants.
11.1.1 All
representations and warranties of Buyer made in this Agreement or in any
Schedule or document delivered pursuant hereto, shall be true and complete
in
all material respects as of the date hereof and on and as of the Closing Date
as
if made on and as if made on and as of that date, except for changes expressly
permitted or contemplated by the terms of this Agreement.
11.1.2 All
of
the terms, covenants and conditions to be complied with and performed by Buyer
on or prior to the Closing Date shall have been complied with or performed
in
all material respects.
11.2 Governmental
Consents. The
conditions specified in Sections 4.1 and 4.2 of this Agreement shall have been
satisfied.
11.3 Adverse
Proceedings. No
suit,
action, claim or governmental proceeding shall be pending against, and no other,
decree or judgment of any court, agency or other governmental authority shall
have been rendered against any party hereto which
23
would
render it unlawful, as of the Closing Date, to effect the transactions
contemplated by this Agreement in accordance with its terms.
11.4 Closing
Deliveries. Buyer
shall have delivered, caused to be delivered, or stand willing to deliver to
Seller, on the Closing Date, the Purchase Price and each of the documents
required to be delivered pursuant to Article 13.
ARTICLE
12
TRANSFER
TAXES; FEES AND EXPENSES
12.1 Expenses.
Except
as
set forth in Sections 3.5 and 12.2 hereof, each party hereto shall be solely
responsible for all costs and expenses incurred by it in connection with the
negotiation, preparation and performance of and compliance with the terms of
this Agreement.
12.2 Transfer
Taxes: Governmental Filing or Grant Fees. All
costs
of transferring the Stations Assets in accordance with this Agreement, including
recordation, transfer and documentary taxes and fees, and any excise, sales
or
use taxes shall be borne one-half by Seller and one-half by Buyer.
ARTICLE
13
CLOSING
DELIVERIES
13.1 Seller's
Deliveries. At
the
Closing, Seller shall deliver or cause to be delivered to Buyer the
following:
13.1.1 Bills
of
Sale and other instruments of assignment and transfer, all in a form normal
and
customary in the State of Tennessee and satisfactory to Buyer’s counsel, as
shall be effective to vest in Buyer or its permitted assignees, good and
marketable title in and to the Stations Assets transferred pursuant to this
Agreement in accordance with the terms of this Agreement;
13.1.2 A
special
warranty deed conveying title to the Real Property to Buyer;
13.1.3 A
certificate, dated the Closing Date, and substantially in the form of Exhibit
C,
of the Secretary of Seller certifying as to the resolutions of the Board of
Directors of
24
Seller
approving the execution and delivery of this Agreement and each of the other
documents and agreements referred to herein and authorizing the consummation
of
the transactions contemplated hereby and thereby;
13.1.4 A
certificate of an officer of Seller, dated the Closing Date, in form and
substance reasonably satisfactory to Buyer certifying to the fulfillment of
the
conditions specified in Section 10.1.
13.1.5 The
Stations Records, including the originals or copies of all program, operations,
transmissions, or maintenance logs and all other records required to be
maintained by the FCC with respect to the Stations, including the Stations’
public file, shall be left at the Stations and thereby delivered to Buyer;
13.1.6 A
certified check made payable to Buyer in the amount of $28,669 in accordance
with Section 3.5.1; and
13.1.7 Such
additional information and materials as Buyer shall have reasonably
requested.
13.2 Buyer's
Deliveries. At
the
Closing, Buyer shall deliver or cause to be delivered to Seller the
following:
13.2.1 The
Purchase Price as described in Section 3 hereof;
13.2.2 A
certificate, dated the Closing Date, and substantially in the form of Exhibit
D,
of the Secretary of Buyer certifying as to the resolutions of the Board of
Directors of Buyer approving the execution and delivery of this Agreement and
each of the other documents and agreements referred to herein and authorizing
the consummation of the transactions contemplated hereby and
thereby;
13.2.3 A
certificate of an officer of Buyer, dated the Closing Date, in form and
substance reasonably satisfactory to Seller, certifying to the fulfillment
of
the conditions specified in Section 11.1.
13.2.4 Such
additional information and materials as Seller shall have reasonably
requested.
25
ARTICLE
14
INDEMNIFICATION
14.1 Seller's
Indemnities. Notwithstanding
the Closing, Seller
hereby agrees to indemnify, defend and hold harmless Buyer and its assignee
with
respect to any and all demands, claims, actions, suits, proceedings,
assessments, judgments, costs, losses, damages, liabilities and expenses
(including, without limitation, interest, penalties, court costs and reasonable
attorneys' fees) ("Damages") asserted against, resulting from, imposed upon
or
incurred by Buyer directly or indirectly relating to or arising out
of:
14.1.1 The
material breach by Seller of any of its representations or warranties, or
failure by Seller to perform any of its covenants, conditions or agreements
set
forth in this Agreement;
14.1.2 The
Retained Liabilities;
14.1.3 Any
and
all claims, liabilities or obligations of any nature, absolute or contingent,
relating to the business and operation of the Stations prior to the Closing
Date;
14.1.4 Any
failure to comply with any “bulk sales” laws applicable to the transactions
contemplated hereby;
14.1.5 A
claim
by any person or entity based on any arrangement or agreement to pay a
commission, finder's fee or similar payment in connection with this Agreement
made or alleged to have been made by Seller.
14.2 Buyer's
Indemnities. Notwithstanding
the Closing,
Buyer hereby
agrees to indemnify, defend and hold harmless Seller with respect to any and
all
Damages asserted against, resulting from, imposed upon or incurred by Seller
directly or indirectly relating to or arising out of:
14.2.1 The
material breach by Buyer of any of its representations, warranties, or failure
by Buyer to perform any of its covenants, conditions or agreements set forth
in
this Agreement;
14.2.2 The
Assumed Liabilities;
26
14.2.3 Any
and
all claims, liabilities or obligations of any nature, absolute or contingent,
relating to the business and operation of the Stations as conducted by Buyer
on
and after the Closing Date; and
14.2.4 A
claim
by any person or entity based on any arrangement or agreement to pay a
commission, finder's fee or similar payment in connection with this Agreement
made or alleged to have been made by Buyer.
14.3 Survival
of Representations and Warranties. The
representations and warranties contained herein shall be deemed and construed
to
be continuous and survive the Closing for a period of one (1) year following
the
Closing Date. No claim may be brought under this Agreement unless written notice
describing in reasonable detail the nature and basis of such claim is given
on
or prior to the last day of the applicable survival period. In the event such
notice is given, the right to indemnification with respect thereto shall survive
the applicable survival period until such claim is finally resolved and any
obligations thereto are fully satisfied.
14.4 Procedures.
14.4.1 Within
[thirty (30) days] after the receipt by either party of notice of (a) any claim
or (b) the commencement of any action or proceeding which may entitle such
party
to indemnification under this Section, such party (the "Indemnified Party")
shall give the other party (the "Indemnifying Party) written notice of such
claim or the commencement of such action or proceeding and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting from such claim. The failure to give the Indemnifying Party timely
notice under this Section 14.4.1 shall not preclude the Indemnified Party from
seeking indemnification from the Indemnifying Party unless such failure has
materially prejudiced the Indemnifying Party's ability to defend the claim
or
litigation.
14.4.2 If
the
Indemnifying Party assumes the defense of any such claim or litigation resulting
therefrom with counsel reasonably acceptable to the Indemnified Party, the
obligations of the Indemnifying Party as to such claim shall be limited to
taking all steps necessary in the defense or settlement of such claim or
litigation resulting therefrom and to holding the Indemnified Party harmless
from and against any losses, damages and liabilities
27
caused
by
or arising out of any settlement approved by the Indemnifying Party or any
judgment in connection with such claim or litigation resulting therefrom;
however, the Indemnified Party may participate, at its expense, in the defense
of such claim or litigation provided that the Indemnifying Party shall direct
and control the defense of such claim or litigation. The Indemnified Party
shall
cooperate and make available all books and records reasonably necessary and
useful in connection with the defense. The Indemnifying Party shall not,
in the
defense of such claim or any litigation resulting therefrom, consent to entry
of
any judgment, except with the written consent of the Indemnified Party, or
enter
into any settlement, except with the written consent of the Indemnified Party,
which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party of a release from all
liability in respect of such claim or litigation.
14.4.3 If
the
Indemnifying Party shall not assume the defense of any such claim or litigation
resulting therefrom, the Indemnified Party may, but shall have no obligation
to,
defend against such claim or litigation in such manner as it may deem
appropriate, and the Indemnified Party may compromise or settle such claim
or
litigation without the Indemnifying Party's consent.
14.5 Assignment
of Claims. In
the
event that any of the Damages for which an Indemnifying Party is responsible
or
allegedly responsible hereunder are recoverable or potentially recoverable
against any third party at the time when payment is due under this Article
14,
then the Indemnified Party shall assign any and all rights that it may have
that
are related in any fashion to the Damages or the facts or circumstances giving
rise thereto to the Indemnifying Party as a condition to any payment due under
this Article 14, or, if such rights are not assignable under applicable law
or
otherwise, the Indemnified Party hereunder shall attempt in good faith to
collect any and all damages and losses on account thereof from such third party
for the benefit of, and at the expense and direction of, the Indemnifying
Party.
ARTICLE
15
TERMINATION
RIGHTS
15.1 Termination.
28
15.1.1 This
Agreement may be terminated by either Buyer or Seller, if the party seeking
to
terminate is not in material default or breach of this Agreement, upon written
notice to the other upon the occurrence of any of the following:
15.1.1.1
if any condition set forth herein to the obligations of the party seeking to
terminate has not been satisfied or waived on or prior to the Closing Date;
or
15.1.1.2
if the FCC denies the Assignment Application; or
15.1.1.3
if there shall be in effect any judgment, final decree or order that would
prevent or make unlawful the Closing of this Agreement; or
15.1.1.4
if the Closing has not occurred within six (6) months after the date on which
the Assignment Application is accepted for filing by the FCC.
15.1.2 This
Agreement may be terminated by mutual agreement of the parties
hereto.
15.1.3. Buyer
may
terminate this Agreement pursuant to Section 16.2 hereunder.
15.1.4. Seller
may terminate this Agreement pursuant to Sections 3.3.1 and 16.2
hereunder.
15.2 Liability.
The
termination of this Agreement under Section 15.1 shall not relieve any party
of
any liability for breach of this Agreement prior to the date of
termination.
ARTICLE
16
MISCELLANEOUS
PROVISIONS
16.1 Specific
Performance. Seller
and Buyer each recognize and acknowledge that, in the event that Seller shall
fail to perform its obligations to consummate the transaction
contemplated
29
hereby,
and Buyer is not also in material default hereunder, money damages alone
will
not be adequate to compensate Buyer for its injury. Seller agrees and
acknowledges that Buyer shall be entitled, in lieu of bringing suit at law
or
equity for money or other damages including costs and expenses incurred by
Buyer
in the preparation and negotiation of this Agreement and in contemplation
of the
Closing hereunder, to obtain specific performance of the terms of this Agreement
and of Seller's obligation to consummate the transaction contemplated hereby.
If
any action is brought by Buyer to enforce this Agreement, Seller shall waive
the
defense that there is an adequate remedy at law. As a condition to seeking
specific performance, Buyer shall have demonstrated that it is willing and
able
to tender the Purchase Price and perform its other closing obligations in
all
respects.
16.2 Risk
of Loss. The
risk
of loss or damage to any of the Stations Assets prior to the Closing Date shall
be upon Seller. In the event of such loss or damage prior to the Closing, Seller
shall, at its expense, and in consultation with Buyer, repair, replace and
restore any such damaged or lost Stations Asset to its prior condition as soon
as possible and in no event later than the Closing Date. In the event any such
loss or damage requires the Stations to be taken off the air or to operate
with
reduced power for more than seven (7) days, Buyer may in its sole election
(a)
terminate this entire Agreement with no further obligation to Seller or (b)
postpone the Closing for up to ninety (90) days, at the conclusion of which
period of postponement Buyer may terminate the Agreement if the loss or damage
has not been fully repaired and restored. If Seller is unable or fails to
restore or replace lost or damaged Station Assets prior to the Closing due
to
catastrophic loss in excess of $250,000, either party may elect to terminate
this Agreement with no further obligation under this Agreement.
16.3 Further
Assurances. After the
Closing, Seller shall from time to time, at the request of and expense to Buyer,
execute and deliver such other instruments of conveyance and transfer and take
such other actions as may reasonably be requested in order to more effectively
consummate the transactions contemplated hereby to vest in Buyer good and
marketable title to the assets being transferred hereunder, and Buyer shall
from
time to time, at the request of and expense to Seller, execute and deliver
such
other instruments and take such other actions as may reasonably be requested
in
order to more effectively relieve Seller of any obligations being assumed by
Buyer hereunder.
30
16.4 Benefit
and Assignment. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Seller may
assign
its interest under this Agreement with the prior written consent of Buyer,
which
consent shall not be unreasonably withheld.
16.5 Headings.
The
headings set forth
in
this Agreement are for convenience only and will not control or affect the
meaning or construction of the provisions of this Agreement.
16.6 Governing
Law. The
construction and performance of this Agreement shall be governed by the laws
of
the State of Tennessee without giving effect to the choice of law principles
thereof, except that the construction and performance of any issues pertaining
to the Real Property shall be governed by laws of the State of
Mississippi.
16.7 Notices.
All
notices,
elections
and other communications permitted or required under this Agreement shall be
in
writing and shall be deemed effectively given or delivered upon personal
delivery or twenty-four (24) hours after delivery to a courier service which
guarantees overnight delivery or five (5) days after deposit with the U.S.
Post
Office, by registered or certified mail, postage prepaid, and, in the case
of
courier or mail delivery, addressed as follows (or at such other address for
a
party as shall be specified by like notice):
To
Seller:
Xxxxxx
X.
Xxxx
The
River
Broadcasting Company Inc.
000
Xxxxxxx Xxx Xxxxx
Xxxxx
Xxxxx Xxxx, #00
Xxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000 (c/o Xxxxxx XxXxxxx)
With
a
copy (which shall
not
constitute notice) to:
Xxxxxxxxx
Xxxxxx & Xxxxxx PLLC
0000
X
Xxxxxx, XX
Xxxxx
000
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxx, Esq.
31
Fax:
(000) 000-0000
To
Buyer:
Xxxxxx
X.
Xxxxxxxx
Xxxxxx
X.
Xxxxxx
The
Marketing Group
0000
00xx
Xxxxxx
Xxxxx
Xxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
With
a
copy (which shall not
constitute
notice) to:
Xxxxxxx
X. Xxxx
Rush
Law
Group
0000
00xx
Xxxxxx
Xxxxx
Xxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
16.8 No
Third Party Beneficiaries.
Nothing
herein expressed or implied is intended or shall be construed to confer upon
give to any person or entity other than the parties hereto and their successors
or permitted assigns, any rights or remedies under or by reason of this
Agreement.
16.9 Severability.
The
parties agree that if one or more provisions contained in this Agreement shall
be deemed or held to be invalid, illegal or unenforceable in any respect under
any applicable law, this Agreement shall be construed with the invalid, illegal
or unenforceable provision deleted, and the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected or impaired thereby; provided, however, that if the removal of the
offending provision or provisions materially alters the burdens or benefits
of
either party, the parties agree to negotiate in good faith such modifications
to
this Agreement as are appropriate to insure the burdens and benefits of each
party are reasonably comparable to those originally contemplated and
expected.
16.10 Amendments
and Waivers.
No
amendment, waiver of compliance with any provision or condition hereof or
consent
32
pursuant
to this Agreement shall be effective unless evidenced by an instrument in
writing signed by the party against whom enforcement of any waiver, amendment,
change, extension or discharge is sought.
16.11 Entire
Agreement.
This
Agreement and the Exhibits and Schedules attached hereto and the ancillary
documents provided for herein embody the entire agreement and understanding
of
the parties hereto relating to the matter provided for herein and supersede
any
and all prior agreements, arrangements and understandings relating to the
matters provided for herein.
16.12 No
Broker.
Buyer
and Seller hereby mutually represent that there are no finders or brokers
involved in this transaction and that neither Seller nor Buyer has agreed to
pay
any brokers’ or finders’ fees in connection with this transaction.
16.13 Attorneys’
Fees.
In the
event of commencement of suit by either party to enforce the provisions of
this
Agreement, the prevailing party shall be entitled to receive attorneys' fees
and
costs of collection as the court in which such suit is brought may adjudge
reasonable in addition to all other relief granted.
16.14 Time
of Essence. Time
is
of the essence with respect to every provision of this
Agreement.
33
16.15 Counterparts.
This
Agreement may be signed in counterpart originals, which collectively shall
have
the same legal effect as if all signatures had appeared on the same physical
document.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the date and year first above
written.
| THE RIVER BROADCASTING COMPANY, INC. | THE MARKETING GROUP |
| By: /s/ Xxxxx Xxxx, Xx. | By: /s/ Xxxxxx X. Xxxxxxxx |
| Name: Xxxxx Xxxx, Xx. | Name: Xxxxxx X. Xxxxxxxx |
| Title: Vice President | Title: President |
