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EXHIBIT 10.58
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EXHIBIT 10.58
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CHANNEL 13 OF ST. LOUIS, INC.
AND
XXXXXXX BROADCASTING, INC.,
FOR
TELEVISION STATION WCEE-TV,
MT. XXXXXX, ILLINOIS
AUGUST 25, 1995
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Trade Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Assumed Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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3.19 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.20 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.21 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.15 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.17 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.18 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.19 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.20 Personnel Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Title Insurance and Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.12 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.13 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.14 Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.15 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.16 St. Louis DMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER
AND SELLER AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.4 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.2 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.6 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.11 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.13 Guaranty of Xxxxxx Communications Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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LIST OF SCHEDULES
Schedule 2.2 -- Excluded Property
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Financial Matters
Schedule 3.11 -- Insurance Policies
Schedule 3.13 -- Employee Matters
Schedule 6.14 -- Form of Noncompetition Agreement
Schedule 8.2(i) -- Form of Opinions of Seller's
Counsel
Schedule 8.3(d) -- Form of Opinion of Buyer's
Counsel
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the 25th day of August,
1995, by and between Channel 13 of St. Louis, Inc., a Florida corporation
("Buyer"), and XxXxxxx Broadcasting, Inc., an Illinois corporation ("Seller").
RECITALS
A. Seller is the licensee of and owns and operates television
station WCEE-TV, Mt. Xxxxxx, Illinois (the "Station") pursuant to licenses
issued by the Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer desires to buy,
substantially all the assets that are used or useful in the business or
operations of the Station, for the price and on the terms and conditions set
forth in this Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising time run on the Station by Seller prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) Contracts for the sale of advertising
time on the Station in exchange for merchandise or services entered into in the
ordinary course of business ("Trade Agreements") and that, as of the Closing
Date, do not involve a negative Trade Balance in excess of Twenty-Five Thousand
Dollars ($25,000) in the aggregate, (ii) all Contracts listed in Schedule 3.7
that are specifically designated as Contracts to be assumed by Buyer upon its
purchase of the Station, (iii) any Contracts entered into by Seller between the
date of this Agreement and the Closing Date that Buyer agrees in writing to
assume, and (iv) time sales contracts entered into by Seller in compliance with
Section 5.3.
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"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local governmental authorities to Seller in connection with the
conduct of the
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business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the conduct of the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Trade Balance" means the difference between the aggregate value of
time owed pursuant to the Trade Agreements and the aggregate value of goods and
services to be received pursuant to the Trade Agreements, determined in
accordance with generally accepted accounting principles. The Trade Balance is
"negative" if the value of time owed exceeds the value of goods and services to
be received.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of
the tangible and intangible assets used or useful in connection with the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date, but
excluding the assets described in Section 2.2, free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions,
charges, or encumbrances of any nature whatsoever (except for liens for current
taxes not yet due and payable), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
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(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Seller
relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) All choses in action of Seller relating to the
Station; and
(h) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all other
cash in any of Seller's bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that Seller is required by law
to retain and that pertain to Seller's corporate organization;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements;
(d) All property listed on Schedule 2.2 hereto; and
(e) The Accounts Receivable as of 12:01 a.m., local time,
on the Closing Date ("Seller's Receivables").
2.3 Purchase Price. The Purchase Price for the Assets and the
covenants of Seller set forth in the Noncompetition Agreement referred to in
Section 6.14 shall be THREE MILLION TWO HUNDRED THOUSAND DOLLARS ($3,200,000)
adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property
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and equipment rentals, applicable copyright or other fees, sales and service
charges, taxes (except for taxes arising from the transfer of the Assets under
this Agreement), and similar prepaid and deferred items, shall be prorated
between Buyer and Seller in accordance with the principle that Seller shall be
responsible for all expenses, costs, and liabilities allocable to the period
prior to the Closing Date, and Buyer shall be responsible for all expenses,
costs, and obligations allocable to the period on and after the Closing Date.
Notwithstanding the preceding sentence, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts not included
in the Assumed Contracts and any other obligation or liability not being
assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon.
2.4 Payment of Purchase Price. The Purchase Price, as adjusted,
shall be paid by Buyer to Seller at Closing by wire transfer of same-day funds
pursuant to wire instructions which shall be delivered by Seller to Buyer, at
least two days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating to the operation of the Station prior to the Closing, (iv)
any obligations or liabilities arising under capitalized leases or other
financing agreements, (v) any obligations or liabilities arising under
agreements entered into other than in the ordinary course of business, (vi) any
obligations or liabilities of Seller under any employee pension, retirement, or
other benefit plans or collective bargaining agreements, (vii) any obligation
to any employee of the Station for severance benefits, vacation time, or sick
leave accrued prior to the Closing Date, (viii) any obligations or liabilities
caused by, arising out of, or resulting from any action or omission of Seller
prior to the Closing, (ix) any cash program contracts, or (x) any obligation
for a negative Trade Balance above
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$25,000, and all such obligations and liabilities shall remain and be the
obligations and liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Illinois. Seller has all requisite power and authority
(i) to own, lease, and use the Assets as now owned, leased, and used, (ii) to
conduct the business and operations of the Station as now conducted, and (iii)
to execute and deliver this Agreement, the Escrow Agreement and the documents
contemplated hereby and thereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by Seller
hereunder and thereunder. Seller is not a participant in any joint venture or
partnership with any other person or entity with respect to any part of the
operations of the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement and the Escrow Agreement by Seller
have been duly authorized by all necessary actions on the part of Seller and
its shareholders. This Agreement and the Escrow Agreement have been duly
executed and delivered by Seller and constitute the legal, valid, and binding
obligations of Seller, enforceable against it in accordance with their
respective terms except as the enforceability of this Agreement and the Escrow
Agreement may be affected by bankruptcy, insolvency, or similar laws affecting
creditors' rights generally, and by judicial discretion in the enforcement of
equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the Escrow Agreement and the documents contemplated hereby
and thereby (with or without the giving of notice, the lapse of time, or both):
(i) do not require the consent of any third party; (ii) will not conflict with
any provision of the Articles of Incorporation or Bylaws of Seller; (iii) will
not conflict with, result in a breach of, or constitute a default under, any
law, judgment, order, ordinance, injunction, decree, rule, regulation, or
ruling of any court or governmental instrumentality; (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Seller is a party or by which Seller may be bound; and (v) will not
create any claim, liability, mortgage, lien,
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pledge, condition, charge, or encumbrance of any nature whatsoever upon any of
the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued, and Seller is the authorized
legal holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station in the manner and to the full extent they are now conducted, and
none of the Licenses is subject to any restriction or condition that would
limit the full operation of the Station as now operated. The Licenses are in
full force and effect, and the conduct of the business and operations of the
Station is in accordance therewith. Seller has no reason to believe that any
of the Licenses would not be renewed by the FCC or other granting authority in
the ordinary course. The Station's city of license, as determined by the FCC,
is located within the St. Louis, Missouri, Area of Dominant Influence as
defined by the 1991-1992 Area of Dominant Influence Market Guide published by
The Arbitron Co. On or before June 17, 1993, the Station made a valid election
of must carry with respect to each cable system identified on Schedule 3.4,
and, except as described on Schedule 3.4, no cable system identified on
Schedule 3.4 has advised Seller of any signal quality or copyright indemnity or
other prerequisite to cable carriage of the Station's signal, and, except as
described on Schedule 3.4, no cable system identified on Schedule 3.4 has
declined or threatened to decline such carriage or failed to respond to a
request for carriage or sought any form of relief from carriage from the FCC.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Seller's interests therein (including street address, legal description, owner,
and use and the location of all improvements thereon). The Real Property
listed on Schedule 3.5 comprises all real property interests necessary to
conduct the business and operations of the Station as now conducted. Seller
has good and marketable fee simple title, insurable at standard rates, to all
fee estates (including the improvements thereon) included in the Real Property,
free and clear of all liens, mortgages, pledges, covenants, easements,
restrictions, encroachments, leases, charges, and other claims and encumbrances
of any nature whatsoever, and without reservation or exclusion of any mineral,
timber, or other rights or interests, except for liens for real estate taxes
not yet due and payable and liens disclosed on Schedule 3.5. With respect to
each leasehold or subleasehold interest included in the Real Property being
conveyed under this
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Agreement so long as Seller fulfills its obligations under the lease therefor,
Seller has enforceable rights to nondisturbance and quiet enjoyment, and no
third party holds any interest in the leased premises with the right to
foreclose upon Seller's leasehold or subleasehold interest. All towers, guy
anchors, and buildings and other improvements included in the Assets are
located entirely on the Real Property listed in Schedule 3.5. Seller has
delivered to Buyer true and complete copies of all deeds pertaining to the Real
Property. All Real Property (including the improvements thereon) (i) is in
good condition and repair consistent with its present use, (ii) is available
for immediate use in the conduct of the business and operations of the Station,
and (iii) complies with all applicable building or zoning codes and the
regulations of any governmental authority having jurisdiction. Seller has full
legal and practical access to the Real Property. All easements, rights-of-way,
and real property licenses have been properly recorded in the appropriate
public recording offices.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property necessary to conduct the business and operations
of the Station as now conducted. Except as described in Schedule 3.6, Seller
owns and has good title to each item of Tangible Personal Property, and none of
the Tangible Personal Property owned by Seller is subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for liens for current taxes not yet due and payable.
Except as identified on Schedule 3.6, each item of Tangible Personal Property
is available for immediate use in the business and operations of the Station.
All items of transmitting and studio equipment included in the Tangible
Personal Property (i) have been maintained in a manner consistent with
generally accepted standards of good engineering practice, and (ii) will permit
the Station and any unit auxiliaries thereto to operate in accordance with the
terms of the FCC Licenses and the rules and regulations of the FCC, and with
all other applicable federal, state, and local statutes, ordinances, rules, and
regulations.
3.7 Assumed Contracts. Schedule 3.7 is a true and complete list
of all Assumed Contracts except contracts with advertisers for the sale of
advertising time on the Station for cash at prevailing rates and which have not
been prepaid and which may be canceled by the Station without penalty on not
more than thirty days' notice. Seller has delivered to Buyer true and complete
copies of all written Assumed Contracts, true and complete memoranda of all
oral Assumed Contracts (including any amendments and other modifications to
such Assumed Contracts), and a schedule summarizing Seller's obligations under
trade and barter agreements relating to the
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Station. Other than the Assumed Contracts listed on Schedule 3.7 and cash and
barter programming contracts, Seller requires no contract, lease, or other
agreement to enable it to carry on its business as now conducted. All of the
Assumed Contracts are in full force and effect, and are valid, binding, and
enforceable in accordance with their terms. There is not under any Assumed
Contract any default by any party thereto or any event that, after notice or
lapse of time or both, could constitute a default. Seller is not aware of any
intention by any party to any Assumed Contract (i) to terminate such contract
or amend the terms thereof, (ii) to refuse to renew the Assumed Contract upon
expiration of its term, or (iii) to renew the Assumed Contract upon expiration
only on terms and conditions which are more onerous than those now existing.
Except for the need to obtain the Consents listed in Schedule 3.3, Seller has
full legal power and authority to assign its rights under the Assumed Contracts
to Buyer in accordance with this Agreement, and such assignment will not affect
the validity, enforceability, or continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section
6.1 and the other Consents described in Schedule 3.3, no consent, approval,
permit, or authorization of, or declaration to or filing with any governmental
or regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby, (ii) to permit Seller
to assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct
the business and operations of the Station in essentially the same manner as
such business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Seller has delivered to Buyer copies of
all documents establishing or evidencing all Intangibles. Seller is not
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and there
is no claim or action pending, or to the knowledge of Seller threatened, with
respect thereto. The Intangibles listed on Schedule 3.9 comprise all
intangible property interests necessary to conduct the business and operations
of the Station as now conducted.
3.10 Financial Statements. Schedule 3.10 hereto contains true and
complete copies of an unaudited (i) balance sheet of Seller as of December 31,
1994, (ii) income statement of Seller for the period from December 28, 1994
through December 31, 1994, and (iii) statement of operations and cash flow for
the Station for the calendar year ended 1994 (collectively, the "Financial
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Statements"). The Financial Statements have been prepared from the books and
records of Seller or the Station, have been prepared in accordance with
generally accepted accounting principles consistently applied and maintained
throughout the periods indicated, accurately reflect the books, records, and
accounts of the Seller or the Station (which books, records, and accounts are
complete and correct), are complete and correct in all material respects, and
present fairly the financial condition of the Station as at their respective
dates and the results of operations for the periods then ended. None of the
Financial Statements understates the true costs and expenses of conducting the
business or operations of the Station, fails to disclose any material
contingent liabilities, or inflates the revenues of the Station.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate
in amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Station against all customary and foreseeable risks. During the past three
years, no insurance policy of Seller on the Assets or the Station has been
canceled by the insurer and no application of Seller for insurance has been
rejected by any insurer.
3.12 Reports. All returns, reports, and statements that the
Station is currently required to file with the FCC or with any other
governmental agency have been filed, and all reporting requirements of the FCC
and other governmental authorities having jurisdiction over Seller and the
Station have been complied with. All of such returns, reports, and statements
are substantially complete and correct as filed. Seller has timely paid to the
FCC all annual regulatory fees payable with respect to the FCC Licenses.
3.13 Personnel.
(a) Employees and Compensation. Schedule 3.13 contains a
true and complete list of all employees of the Station, their job titles, date
of hire, current salary and date and amount of last salary increase. Schedule
3.13 also contains a true and complete list as of the date of this Agreement of
all employee benefit plans or arrangements applicable to the employees of the
Station and all fixed or contingent liabilities or obligations of Seller with
respect to any person now or formerly employed by Seller at the Station,
including pension or thrift plans, individual or supplemental pension or
accrued compensation arrangements, contributions to hospitalization or other
health or life insurance programs, incentive plans, bonus arrangements, and
vacation, sick
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leave, disability and termination arrangements or policies, including workers'
compensation policies, and a description of all fixed or contingent liabilities
or obligations of Seller with respect to any person now or formerly employed at
the Station or any person now or formerly retained as an independent contractor
at the Station. Seller has furnished Buyer with true and complete copies of
all employee handbooks, employee rules and regulations, and summary plan
descriptions of the written plans and arrangements listed in Schedule 3.13, and
with descriptions, in writing, of the unwritten plans and arrangements listed
in Schedule 3.13. At Buyer's request, Seller will furnish Buyer with true and
complete copies of all applicable plan documents, trust documents, and
insurance contracts with respect to the plans and arrangements listed on
Schedule 3.13. All employee benefits and welfare plans or arrangements listed
in Schedule 3.13 were established and have been executed, managed and
administered in accordance with the Internal Revenue Code of 1986, as amended,
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
all other laws. Seller is not aware of the existence of any governmental audit
or examination of any of such plans or arrangements or of any facts which would
lead it to believe that any such audit or examination is pending or threatened.
No action, suit, or claim with respect to any of such plans or arrangements
(other than routine claims for benefits) is pending or, to the knowledge of
Seller, threatened, and Seller possesses no knowledge of any facts which could
give rise to any such action, suit or claim.
(b) Labor Relations. Seller is not a party to or subject
to any collective bargaining agreements with respect to the Station. Seller
has no written or oral contracts of employment with any employee of the
Station, other than those listed in Schedule 3.7. Seller has complied with all
laws, rules, and regulations relating to the employment of labor, including
those related to wages, hours, collective bargaining, occupational safety,
discrimination, and the payment of social security and other payroll related
taxes, and it has not received any notice alleging that it has failed to comply
in any material respect with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the best of its
knowledge, threatened, between it and any employee (singly or collectively) of
the Station. No labor union or other collective bargaining unit represents or
claims to represent any of the employees of the Station. To Seller's
knowledge, there is no union campaign being conducted to solicit cards from
employees to authorize a union to request a National Labor Relations Board
certification election with respect to any employees at the Station.
(c) Liabilities. Seller has no liability of any kind to
or in respect of any employee benefit plan, including withdrawal liability
under Section 4201 of ERISA. Seller has not incurred any
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accumulated funding deficiency within the meaning of ERISA or Section 4971 of
the Internal Revenue Code. Seller has not failed to make any required
contributions to any employee benefit plan. The Pension Benefit Guaranty
Corporation has not asserted that Seller has incurred any liability in
connection with any such plan. No lien has been attached and no person has
threatened to attach a lien on any property of Seller as a result of a failure
to comply with ERISA.
3.14 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and it has paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books adequate
reserves (segregated to the extent required by generally accepted accounting
principles) with respect thereto. There are no governmental investigations or
other legal, administrative, or tax proceedings pursuant to which Seller is or
could be made liable for any taxes, penalties, interest, or other charges, the
liability for which could extend to Buyer as transferee of the business of the
Station, and no event has occurred that could impose on Buyer any transferee
liability for any taxes, penalties, or interest due or to become due from
Seller.
3.15 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry, there is no claim,
legal action, counterclaim, suit, arbitration, governmental investigation or
other legal, administrative, or tax proceeding, nor any order, decree or
judgment, in progress or pending, or to the knowledge of Seller threatened,
against or relating to Seller with respect to its ownership or operation of the
Station or otherwise relating to the Assets or the business or operations of
the Station, nor does Seller know or have reason to be aware of any basis for
the same. In particular, but without limiting the generality of the foregoing,
there are no applications, complaints or proceedings pending or, to the best of
its knowledge, threatened (i) before the FCC relating to the business or
operations of the Station other than rule making proceedings which affect the
television industry generally, (ii) before any federal or state agency relating
to the business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
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3.16 Environmental Matters.
(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
(b) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis related to the past or present
operations, properties, or facilities of Seller for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or agency thereof)
concerning release or threatened release of hazardous substances, public health
and safety, or pollution or protection of the environment.
(c) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and Seller has not handled or disposed of any substance,
arranged for the disposal of any substance, or owned or operated any property
or facility in any manner that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to any statute) against Seller giving
rise to any such liability) for damage to any site, location, or body of water
(surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
against Seller giving rise to any such liability) under any law, rule, or
regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and Seller has not exposed any employee to any substance or
condition that could form the basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
(under the
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common law or pursuant to statute) against Seller giving rise to any such
liability) for any illness or personal injury to any employee.
(f) In connection with its ownership or operation of the
Station, Seller has obtained and been in compliance in all material respects
with all of the terms and conditions of all permits, licenses, and other
authorizations which are required under, and has complied with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all federal,
state, and local laws, rules, and regulations (including all codes, plans,
judgments, orders, decrees, stipulations, injunctions, and charges thereunder)
relating to public health and safety, worker health and safety, and pollution
or protection of the environment, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes.
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, after due investigation, by any other party on any Real
Property.
3.17 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of
the Station nor the conduct of the business or operations of the Station
conflicts with the rights of any other person or entity.
3.18 Conduct of Business in Ordinary Course. Seller has conducted
the business and operations of the Station only in the ordinary course and has
not:
(a) Suffered any material adverse change in the business,
assets, or properties of the Station, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Station;
(b) Made any material increase in compensation payable or
to become payable to any of the employees of the Station, or any bonus payment
made or promised to any employee of the Station, or
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any material change in personnel policies, employee benefits, or other
compensation arrangements affecting the employees of the Station;
(c) Made any sale, assignment, lease, or other transfer
of any of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(d) Canceled any debts owed to or claims held by Seller
with respect to the Station, except in the normal and usual course of business;
(e) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Station; or
(f) Transferred or granted any right under, or entered
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to the Station.
3.19 Transactions with Affiliates. Seller has not been involved in
any business arrangement or relationship relating to the Station with any
affiliate of Seller, and no affiliate of Seller owns any property or right,
tangible or intangible, which is used in the business of the Station. As used
in this paragraph, "affiliate" has the meaning set forth in Rule 12b-2
promulgated under the Securities and Exchange Act of 1934.
3.20 Broker. Neither Seller nor any person acting on Seller's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement,
except for a commission payable by Seller to Force Communications, Inc.
3.21 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing
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under the laws of the State of Florida and at Closing will be duly qualified to
conduct business as a foreign corporation in the State of Illinois. Buyer has
all requisite power and authority to execute and deliver this Agreement and the
Escrow Agreement and the documents contemplated hereby and thereby, and to
perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement and the Escrow Agreement by Buyer
have been duly authorized by all necessary actions on the part of Buyer. This
Agreement and the Escrow Agreement have been duly executed and delivered by
Buyer and constitute the legal, valid, and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms except as
the enforceability of this Agreement and the Escrow Agreement may be affected
by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the Escrow Agreement and the documents contemplated hereby and thereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with the
Articles of Incorporation or Bylaws of Buyer; (iii) will not conflict with,
result in a breach of, or constitute a default under, any law, judgment, order,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the Station
under the Communications Act of 1934, as now in effect, and the rules,
regulations and policies of the FCC as now in effect and to perform its
obligations hereunder. Buyer knows of no fact that would, under existing law
and the existing rules, regulations,
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policies and procedures of the FCC disqualify Buyer as an assignee of the FCC
Licenses or as the owner and operator of the Station.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station diligently in
the ordinary course of business in accordance with its past practices (except
where such conduct would conflict with the following covenants or with Seller's
other obligations under this Agreement), and in accordance with the other
covenants in this Section 5.
5.2 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station,
except in accordance with past practices.
5.3 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Buyer after Closing, except for (i)
cash time sales agreements made in the ordinary course of business, and (ii)
barter programming agreements entered into by Seller following the date hereof
with the prior written consent of Buyer, which consent shall not be
unreasonably withheld. Prior to the Closing Date, Seller shall deliver to
Buyer a list of all Contracts entered into between the date of this Agreement
and the Closing Date, together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except where no longer
used or useful in the business or operations of the Station or in connection
with the acquisition of replacement property of equivalent kind and value.
5.5 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed prior to the
Closing Date, (ii) liens for current taxes not yet due and payable, and (iii)
mechanics' liens and other similar liens, which shall be removed prior to the
Closing Date.
5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked,
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suspended, or modified, or take any action that could cause the FCC or any
other governmental authority to institute proceedings for the suspension,
revocation, or adverse modification of any of the Licenses. Seller shall not
fail to prosecute with due diligence any applications to any governmental
authority in connection with the operation of the Station.
5.7 Rights. Seller shall not waive any right relating to the
Station or any of the Assets. Seller shall not cause, by any act, any cable
system located within the Station's Area of Dominant Influence to refuse to
carry the Station's signal. At Buyer's request and expense, Seller shall
cooperate with Buyer and use its best efforts to cause the Station to be
carried on the cable systems located within the St. Louis, Missouri Area of
Dominant Influence that do not currently carry the Station.
5.8 No Inconsistent Action. Seller shall not take any action that
is inconsistent with its obligations under this Agreement or that could hinder
or delay the consummation of the transactions contemplated by this Agreement.
5.9 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Assets and to all other properties, equipment, books,
records, Contracts, and documents relating to the Station for the purpose of
audit and inspection, including inspections incident to the environmental study
described in Section 6.5 and the engineering study described in Section 6.6,
and will furnish or cause to be furnished to Buyer or its authorized
representatives all information with respect to the affairs and business of the
Station that Buyer may reasonably request (including any financial reports and
operations reports produced with respect to the affairs and business of the
Station). Without limiting the generality of the foregoing, Seller shall give
Buyer and its counsel, accountants and other authorized representatives
reasonable access to Seller's financial records and Seller's employees,
counsel, accountants and other representatives for the purpose of preparing and
auditing such financial statements as Buyer determines, in its sole judgment,
are required or advisable to comply with federal or state securities laws and
the rules and regulations of securities markets as a result of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
5.10 Maintenance of Assets. Seller shall use its best efforts and
take all reasonable actions to maintain all of the Assets in good condition
(ordinary wear and tear excepted), and use, operate, and maintain all of the
Assets in a reasonable manner and in accordance with the terms of the FCC
Licenses, all rules and regulations of the FCC and generally accepted standards
of good
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engineering practice. Seller shall maintain inventories of spare parts and
expendable supplies at levels consistent with past practices. If any loss,
damage, impairment, confiscation, or condemnation of or to any of the Assets
occurs, Seller shall repair, replace, or restore the Assets to their prior
condition as represented in this Agreement as soon thereafter as possible, and
Seller shall use the proceeds of any claim under any insurance policy solely to
repair, replace, or restore any of the Assets that are lost, damaged, impaired,
or destroyed.
5.11 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets.
5.12 Consents. Seller shall obtain the Consents and the estoppel
certificates described in Section 8.2(b), without any change in the terms or
conditions of any Contract or License that could be less advantageous to the
Station than those pertaining under the Contract or License as in effect on the
date of this Agreement. Seller shall promptly advise Buyer of any difficulties
experienced in obtaining any of the Consents and of any conditions proposed,
considered, or requested for any of the Consents. Upon Buyer's request, Seller
shall cooperate with Buyer and use it best efforts to obtain from the lessors
under each Real Property lease such estoppel certificates and consents to the
collateral assignment of the lessee's interest under each such lease as Buyer's
senior lenders may request.
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in writing
of any unusual or material developments with respect to the business or
operations of the Station, and of any material change in any of the information
contained in Seller's representations and warranties contained in Section 3 of
this Agreement.
5.15 Financial Information. Seller shall furnish to Buyer within
thirty days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense and a
statement of operating cash flow for the month just ended and such other
financial information (including information on payables and receivables) as
Buyer may reasonably request. All financial information delivered by Seller to
Buyer pursuant to this Section shall be prepared from the books and records of
Seller in accordance with generally accepted accounting principles consistently
applied, shall accurately reflect the books, records, and accounts of the
Station, shall be complete and correct in all material respects, and shall
present fairly the financial condition of the Station as at their respective
dates and the results of operations for the periods then ended.
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5.16 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.17 Financing Leases. Seller will satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain good title to the Assets leased by Seller pursuant
to those leases so that those Assets shall be transferred to Buyer at Closing
free of any interest of the lessors.
5.18 Programming. Seller shall not make any material changes in
the broadcast hours or in the percentages of types of programming broadcast by
the Station, or make any other material change in the Station's programming
policies, except such changes as in the good faith judgment of the Seller are
required by the public interest.
5.19 Preservation of Business. Seller shall use its best efforts
to preserve the business and organization of the Station and use its best
efforts to keep available to the Station its present employees and to preserve
the audience of the Station and the Station's present relationships with
suppliers, advertisers, and others having business relations with it, to the
end that the business, operations, and prospects of the Station shall be
unimpaired at the Closing Date. The ordinary and customary operating,
marketing, promotional, sales, and advertising practices of the Station shall
be maintained.
5.20 Personnel Recommendations. Seller shall promptly notify Buyer
as personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the date of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their best efforts to obtain a grant of the application as
expeditiously as practicable. Each party agrees to comply with any condition
imposed on it by the FCC Consent, except that no party shall be
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required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by the party of any of its representations, warranties, or covenants
under this Agreement, and (2) compliance with the condition would have a
material adverse effect upon it. Buyer and Seller shall oppose any requests
for reconsideration or judicial review of the FCC Consent. If the Closing
shall not have occurred for any reason within the original effective period of
the FCC Consent, and neither party shall have terminated this Agreement under
Section 9, the parties shall jointly request an extension of the effective
period of the FCC Consent. No extension of the FCC Consent shall limit the
exercise by either party of its rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing.
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
(b) If any damage or destruction of the Assets or any
other event occurs which (i) causes the Station to cease broadcasting
operations for a period of three or more days or (ii) prevents in any material
respect signal transmission by the Station in the normal and usual manner and
Seller fails to restore or replace the Assets so that normal and usual
transmission is resumed within seven days of the damage, destruction or other
event, Buyer,
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in its sole discretion, may (x) terminate this Agreement forthwith without any
further obligations hereunder upon written notice to Seller, in which event all
funds held by the Escrow Agent pursuant to the Escrow Agreement, including all
interest and other proceeds from the investment of such funds, shall be
immediately returned to Buyer, or (y) proceed to consummate the transaction
contemplated by this Agreement and complete the restoration and replacement of
the Assets after the Closing Date, in which event Seller shall deliver to Buyer
all insurance proceeds received in connection with such damage, destruction or
other event.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and expense,
retain an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey of the properties of the Station. If the survey discloses
any material environmental hazard or material possibility of future liability
for environmental damages or clean-up costs, Buyer shall so notify Seller as
soon as practicable.
6.6 Engineering Study. Buyer may, at its option and expense,
retain an engineering firm to conduct a proof of performance study of the
Station and to prepare a report on the Station's compliance with customary
engineering practices and all applicable FCC rules, regulations, prescribed
practices, and technical standards. If the survey discloses any material
deficiencies in the operations or equipment of the Station, Buyer shall so
notify Seller as soon as practicable.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no
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obligation (i) to expend funds to obtain any of the Consents or (ii) to agree
to any adverse change in any License or Assumed Contract to obtain a Consent
required with respect thereto.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Illinois shall be complied with by Seller. Any loss, liability,
obligation, or cost suffered by Seller or Buyer as the result of the failure of
Seller or Buyer to comply with the provisions of any bulk sales law applicable
to the transfer of the Assets as contemplated by this Agreement shall be borne
by Seller.
6.9 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to
each parcel of Real Property that Seller owns, Seller will obtain and deliver
to Buyer, at Seller's expense, at or prior to Closing, an ALTA Owner's Policy
of Title Insurance Form B-1987 (or equivalent policy acceptable to Buyer),
issued by a title insurer satisfactory to Buyer, in an amount equal to the fair
market value of the property and any improvements thereon (as reasonably
determined by Buyer), insuring title to such parcel to be in the name of Buyer
as of the Closing, subject only to liens or encumbrances expressly permitted by
this Agreement.
(b) General Requirements as to Title Insurance Policies.
Each title insurance policy obtained and delivered to Buyer pursuant to this
Agreement shall (1) insure title to the Real Property described in the policy
and all recorded easements benefitting such Real Property, (2) contain an
"extended coverage endorsement" insuring over the general exceptions
customarily contained in title policies, (3) contain an ALTA Zoning Endorsement
3.1 (or equivalent), (4) contain an endorsement insuring that the Real Property
described in the policy is the same real estate shown in the survey delivered
with respect to such property, (5) contain an inflation endorsement, (6)
contain a "contiguity" endorsement with respect to any Real Property consisting
of more than one record parcel, and (7) not be subject to any survey exception
or any defect or encroachment disclosed by a survey delivered with respect to
the property.
(c) Surveys. With respect to each parcel of Real
Property, as to which a title insurance policy is to be procured pursuant to
this Agreement, Seller will procure a current survey of the parcel, prepared by
a licensed surveyor and conforming to current ALTA Minimum Detail Requirements
for Land Title Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters customarily
shown on such surveys, and showing access affirmatively to public streets and
roads.
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(d) Other Matters. At Buyer's request and expense,
Seller will cooperate with Buyer and use its best efforts to cause all lease
agreements relating to the Real Property to be recorded in the appropriate
public recording offices and to obtain from the lessors under such lease
agreements such estoppel certificates and consents to the collateral assignment
of the lessee's interest under each such lease as Buyer's lenders may
reasonably request.
6.10 Sales Tax Filings. Seller shall continue to file Illinois
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.
6.11 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of three years from the Closing Date
any books and records relating to the Assets. Buyer shall provide Seller
access and the right to copy for a period of three years from the Closing Date
any books and records relating to assets not included in the Assets.
6.12 Appraisal. Buyer and Seller agree to allocate the Purchase
Price for tax and recording purposes in accordance with an appraisal to be
conducted by an appraisal firm selected and paid for by Buyer with experience
in the valuation and appraisal of television station assets.
6.13 Broker. Buyer and Seller each represents and warrants that
neither it nor any person or entity acting on its behalf has incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement, except for a commission
payable to Force Communications, Inc. by Seller. Seller shall pay on or before
the Closing Date all fees or commissions payable to Force Communications, Inc.
in connection with the transactions contemplated by this Agreement.
6.14 Noncompetition Agreement. At Closing, Buyer and Seller shall
enter into a Noncompetition Agreement in the form of Schedule 6.14 and $64,000
of the Purchase Price shall be allocated to the covenants of Seller set forth
therein on the Closing Date.
6.15 Collection of Accounts Receivable.
(a) Collection. At the Closing, Seller shall designate
Buyer as its agent solely for the purposes of collecting Seller's Receivables.
Buyer shall make reasonable efforts to collect Seller's Receivables during the
"Collection Period," which shall be the period beginning on the Closing Date
and ending on the last day of the sixth calendar month beginning after the
Closing Date. Buyer shall not be obligated to use any extraordinary efforts to
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collect any of Seller's Receivables or to refer any of Seller's Receivables to
a collection agency or attorney for collection, and Buyer shall not make any
such referral or compromise, nor settle or adjust the amount of any of Seller's
Receivables, except with the approval of Seller. During the Collection Period,
neither Seller nor its agents shall make any direct solicitation with respect
to Seller's Receivables.
(b) Payments. All collections of Seller's Receivables by
Buyer shall be applied first to any account specifically identified by the
account debtor or, if none is designated, to the oldest invoice of the account
debtor, unless such invoice is in dispute. On or before the tenth day after
the end of each full calendar month during the Collection Period, Buyer shall
furnish to Seller (i) a list of the amounts collected before the end of such
month with respect to Seller's Receivables, and (ii) the amount collected
during such month with respect to Seller's Receivables. On or before the
twentieth day after the end of the Collection Period, Buyer shall furnish
Seller with a list of all of Seller's Receivables which remain uncollected at
the end of the Collection Period.
(c) Further Obligations. After the expiration of the
Collection Period, Buyer shall have no further obligation hereunder other than
to make the payment under Section 6.15(b) and to remit to Seller any payments
with respect to any of Seller's Receivables that Buyer subsequently receives,
and Seller itself shall act to collect any of Seller's Receivables that
continue to remain uncollected.
6.16 St. Louis DMA. Seller shall use its best efforts to cause
Xxxxxxx Media Research ("Xxxxxxx") to redesignate the location of the Station
from the Paducah-Cape Girardeau-Harrisburg-Mt. Xxxxxx Designated Market Area
(the "Paducah DMA"), as defined by the 0000 Xxxxxx Xxxxxx Television Household
Estimates published by Xxxxxxx, to the St. Louis Designated Market Area (the
"St. Louis DMA"), as defined by Xxxxxxx, as soon as practicable following the
date hereof and shall promptly deliver to Buyer copies of all correspondence
among Seller, its counsel and Xxxxxxx relating to such efforts.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER
AND SELLER AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
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(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents designated as "material" on
Schedule 3.3 shall have been obtained and delivered to Buyer without any
materially adverse change in the terms or conditions of any agreement or any
governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all Licenses and there shall not have been any modification of any
License that could have a material adverse effect on the Station or the conduct
of its business and operations. No proceeding shall be pending the effect of
which could be to revoke, cancel, fail to renew, suspend, or modify adversely
any License.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing Date, there shall have been no material adverse change in the
assets, or properties of the Station, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Station.
(h) St. Louis DMA. Xxxxxxx shall have officially
redesignated the location of the Station from the Paducah DMA to the St. Louis
DMA.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true
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and complete in all material respects at and as of the Closing Date as though
made at and as of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date, to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than (x) January 31, 1996, if the FCC
Consent has become a Final Order on or before January 31, 1996, or (y) ten
business days following the date upon which the FCC Consent has become a Final
Order, if the FCC Consent becomes a Final Order after January 31, 1996;
provided, however, that in no event shall the Closing take place prior to
January 2, 1996.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Xxxxxx & Xxxxxxxxx, 0000 Xxxxxx-xxxxx Xxxxxx, X.X., Xxxxx 000,
Xxxxxxxxxx, X.X. 00000, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets in
the name of Buyer, free and clear of all mortgages, liens, restrictions,
encumbrances, claims, and obligations except for liens for current taxes not
yet due and payable;
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(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are designated to indicate that estoppel
certificates are required under this paragraph;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Seller by its President, certifying (1)
that the representations and warranties of Seller contained in this Agreement
are true and complete in all material respects as of the Closing Date as though
made on and as of that date; and (2) that Seller has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date;
(e) Title Insurance and Surveys. The title insurance and
surveys described in Section 6.9;
(f) Tax, Lien, and Judgment Searches. Results of a
search for tax, lien, and judgment filings in the Secretary of State's records
of the State of Illinois as well as the records of those counties in Illinois
in which any of the Assets are located, such searches having been made no
earlier than fifteen days prior to the Closing Date;
(g) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its operations;
(h) Accounts Receivable. A complete and accurate list of
the Station's accounts receivable as of a date no more than five business days
prior to the Closing Date, including, with respect to each of the accounts
receivable, the account number, date of issuance, name and address of account
debtor, aggregate amount, and balance due;
(i) Opinion of Counsel. An Opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(i)
hereto;
(j) Noncompetition Agreement. The Noncompetition
Agreement in the form as Schedule 6.14, duly executed on behalf of Seller;
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(k) Lenders Certificates. Such certificates and
confirmations to Buyer's senior lenders as Buyer may reasonably request in
connection with obtaining financing for the performance of its payment
obligations hereunder; and
(l) St. Louis DMA. A copy of an official report or other
document published or issued by Xxxxxxx that formally redesignates the location
of the Station from the Paducah DMA to the St. Louis DMA.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.4;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts arising on or
after the Closing Date;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by its Chairman or President,
certifying (1) that the representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date, and (2) that Buyer has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
(e) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.14 duly executed by Buyer and the payment
of $64,000 to Seller thereunder.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations
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of Seller set forth in this Agreement have not been reasonably satisfied or
waived in writing by Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by March 31, 1996.
(d) Xxxxxxx. If Xxxxxxx shall have determined that the
location of the Station shall not be redesignated from the Paducah DMA to the
St. Louis DMA; provided, however, that Seller's right to terminate this
Agreement pursuant to this Section 9.1(d) shall not be effective unless Seller
provides written notice to Buyer of such termination within ten (10) business
days following such determination by Xxxxxxx.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been reasonably satisfied or waived in
writing by Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by March 31, 1996.
(d) Interruption of Service. If any event shall have
occurred that prevented signal transmission of the Station as described in
Section 6.3(b).
(e) Environmental Hazards. Buyer shall have notified
Seller of material environmental hazards or the material possibility of
environmental damages or clean-up costs, as indicated in the environmental
study described in Section 6.5, within 30 days prior to the Closing Date, and
the cause thereof shall not have been remedied prior to the Closing Date.
(f) Technical Deficiencies. Buyer shall have notified
Seller of material deficiencies in the operations or equipment of the Station,
as indicated in the engineering study described in Section 6.6, within 30 days
prior to the Closing Date, and the
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cause thereof shall not have been remedied prior to the Closing Date.
(g) Xxxxxxx. If Xxxxxxx shall have determined that the
location of the Station shall not be redesignated from the Paducah DMA to the
St. Louis DMA; provided, however, that Buyer's right to terminate this
Agreement pursuant to this Section 9.2(g) shall not be effective unless Buyer
provides written notice to Seller of such termination within ten (10) business
days following such determination by Xxxxxxx.
9.3 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of any provision of this Agreement, the parties hereto shall not have any
further liability to each other with respect to the purchase and sale of the
Assets. If this Agreement is terminated by Seller due to Buyer's material
breach of any provision of this Agreement, then the payment to Seller of
$300,000 pursuant to Section 9.4 below shall be liquidated damages and shall
constitute full payment and the exclusive remedy for any damages suffered by
Seller by reason of Buyer's material breach of this Agreement. Seller and
Buyer agree in advance that actual damages would be difficult to ascertain and
that the amount of $300,000 is a fair and equitable amount to reimburse Seller
for damages sustained due to Buyer's material breach of this Agreement. If
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this Agreement is terminated by Buyer due to Seller's material breach of any
provision of this Agreement, Buyer shall have all rights and remedies available
at law or equity.
9.4 Escrow Deposit. Simultaneous with the execution and delivery
of this Agreement, Buyer has deposited with First Union National Bank of
Florida (the "Escrow Agent") the sum of $300,000 in accordance with an Escrow
Agreement among Buyer, Seller and the Escrow Agent (the "Escrow Agreement").
All such funds deposited with the Escrow Agent shall be held and disbursed in
accordance with the terms of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section
9.1 or 9.2 and Buyer is not in material breach of any provision of this
Agreement, all amounts held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent, shall be disbursed to or at the direction of
Buyer.
(c) If this Agreement is terminated by Seller due to
Buyer's material breach of this Agreement, then all amounts held by the Escrow
Agent pursuant to the Escrow Agreement shall be disbursed to or at the
direction of Seller as liquidated damages under Section 9.3 above and any
interest or other proceeds from the investment of funds held by the Escrow
Agent shall be disbursed by the Escrow Agent to or at the direction of Buyer.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
twelve months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Seller shall affect Buyer's right to rely on any representation or warranty
made by Seller or relieve Seller of any obligations under this Agreement as the
result of a breach of any of its representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Seller hereby
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agrees to indemnify and hold Buyer harmless against and with respect to, and
shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting
from the failure of the parties to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to events occurring prior the Closing Date.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closing.
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(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five days
after written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate
in the defense of any third party
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claim, it shall be bound by the results obtained by the Claimant with respect
to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other
remedies that may be available, including money damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by Buyer
to enforce this Agreement, Seller shall waive the defense that there is an
adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. All fees payable
to the Escrow Agent pursuant to the terms of the Escrow Agreement shall be paid
by Buyer. Buyer and Seller shall each pay one- half of all filing fees
required by the FCC in connection with the application for FCC Consent. Except
as otherwise provided in this Agreement, each party shall pay its own expenses
incurred in connection with the authorization, preparation, execution, and
performance of this Agreement, including all fees and expenses of counsel,
accountants, agents, and representatives, and each party shall be responsible
for all fees or commissions payable to any finder, broker, advisor, or similar
person retained by or on behalf of such party.
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11.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Xxxxxxx X. XxXxxxx, Xx., President
XxXxxxx Broadcasting, Inc.
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxx Xxxx Xxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxx, Esq.
Xxxxx Xxxxx & Xxxxx
0000 X. Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
If to Buyer: Xxxxx X. Xxxx, Chairman
The Christian Network, Inc.
00000 00xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxx X. Xxxxx, Xx., Esq.
Dow, Xxxxxx & Xxxxxxxxx
0000 00xx Xx., X.X.
Xxxxxxxxxx, X.X. 00000
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement to one or more subsidiaries or commonly controlled affiliates of
Buyer without seeking or obtaining Seller's prior approval in which event Buyer
shall have no further obligation hereunder and Buyer may collaterally assign
its rights and interests hereunder to its senior lenders without seeking or
obtaining Seller's prior approval. Upon any permitted assignment by Buyer or
Seller in accordance with this Section 11.4, all references to"Buyer" herein
shall be deemed to be references to Buyer's assignee and all
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44
references to "Seller" herein shall be deemed to be references to Seller's
assignee, as the case may be. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.6 Consent to Jurisdiction and Service of Process. All judicial
proceedings brought against Buyer or Seller arising out of or relating to this
Agreement may be brought in any state or federal court of competent
jurisdiction in the State of Florida and, by execution and delivery of this
Agreement, Buyer and Seller each accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and waives any defense of forum non conveniens and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement. Seller designates and appoints Xxxxxxx X. XxXxxxx, Xx.,
and Buyer designates and appoints Xxxxx X. Xxxx, and such other persons as may
hereafter be selected by Buyer or Seller, as its respective agent to receive on
its behalf service of all process in any such proceedings in any such court,
such service being hereby acknowledged by Buyer and Seller to be effective and
binding service in every respect. A copy of any such process so served shall
be mailed by registered mail to Buyer or Seller at its address provided in
Section 11.3, except that, unless otherwise provided by applicable law, any
failure to mail such copy shall not affect the validity of service of process.
If any agent appointed by Buyer or Seller refuses to accept service, Buyer and
Seller hereby agree that service upon it by mail shall constitute sufficient
notice. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of either party to bring
proceedings against the other in the courts of any other jurisdiction.
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
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11.9 Entire Agreement. This Agreement, the schedules hereto, all
documents, certificates, and other documents to be delivered by the parties
pursuant hereto, and the Escrow Agreement collectively represent the entire
understanding and agreement between Buyer and Seller with respect to the
subject matter hereof. This Agreement supersedes all prior negotiations
between the parties and cannot be amended, supplemented, or changed except by
an agreement in writing that makes specific reference to this Agreement and
which is signed by the party against which enforcement of any such amendment,
supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgement be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.13 Guaranty of Xxxxxx Communications Corp.
(a) In consideration of the execution and delivery of
this Agreement by Seller, Xxxxxx Communications Corp. ("PCC") agrees as
follows:
(1) PCC hereby guarantees the full, complete and
timely performance by Buyer of its obligations hereunder, including Buyer's
obligation to pay the Purchase Price, as provided in Section 2.3. If any
default shall be made by Buyer in the
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performance of such obligations, then PCC will itself perform or cause to be
performed such obligations upon receipt of notice from Seller.
(2) PCC waives presentment, protest, demand, or
action or delinquency in respect of Buyer's obligations under this Agreement.
PCC waives all notices of protest, notices of dishonor, and notices of
acceptance of this guaranty.
(3) This guaranty shall be deemed a continuing
guaranty, and the above consent and waivers of PCC shall remain in full force
and effect until the satisfaction in full of Buyer's obligations under this
Agreement.
(b) PCC hereby represents and warrants to seller that
this Agreement has been duly and validly executed and delivered by PCC and
constitutes its legal, valid and binding agreement, enforceable in accordance
with its terms, except as the enforceability of this Agreement may be affected
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally, and by judicial discretion in the enforcement of equitable remedies.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
CHANNEL 13 OF ST. LOUIS, INC.
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Name: Xxxxx X. Xxxx
Title: Chairman
XXXXXXX BROADCASTING, INC.
By: /s/ Xxxxxxx X. XxXxxxx, Xx.
---------------------------------------
Name: Xxxxxxx X. XxXxxxx, Xx.
Title: President
AS TO SECTION 11.13 ONLY:
XXXXXX COMMUNICATIONS CORP.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Pasxon
Title: Chairman
