ASSET PURCHASE AGREEMENT
(WROL-AM, BOSTON, MASSACHUSETTS)
This AGREEMENT (this "Agreement") is dated as of December ___, 2000, by
and between XXXXXX BROADCASTING, INC. ("Seller") and SCA LICENSE CORPORATION
("Buyer").
RECITALS:
1. Seller owns and operates radio station WROL-AM licensed to Boston,
Massachusetts (the "Station"), and holds the licenses and authorizations issued
by the FCC for the operation of the Station.
2. Buyer desires to acquire certain assets of the Station, and
Seller is willing to convey such assets to Buyer.
3. The acquisition of the Station is subject to prior approval of
the FCC.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, Seller and Buyer hereby agree as
follows:
ARTICLE 1
TERMINOLOGY
1.1 ACT. The Communications Act of 1934, as amended.
1.2 ADJUSTMENT AMOUNT. As provided in SECTION 2.6, the
amount by which Buyer's account is to be credited or charged, as reflected on
the Adjustment List.
1.3 ADJUSTMENT LIST. As provided in SECTION 2.6, an itemized list
of all sums to be credited or charged against the account of Buyer, with a brief
explanation in reasonable detail of the credits or charges, consistent with the
allocation principle set forth in Section 2.6(a).
1.4 ASSUMED OBLIGATIONS. Such term shall have the meaning defined
in SECTION 2.3.
1.5 BUSINESS DAY. Any calendar day, excluding Saturdays
and Sundays, on which federally chartered banks are
regularly open for business.
1.6 CLOSING. The closing with respect to the transactions
contemplated by this Agreement.
1.7 CLOSING DATE. The date determined as the Closing Date as
provided in SECTION 8.1.
1.8 DOCUMENTS. This Agreement and all Exhibits and Schedules
hereto, and each other agreement, certificate, or instrument delivered pursuant
to or in connection with this Agreement, including amendments thereto that are
expressly permitted under the terms of this Agreement.
1.9 ENVIRONMENTAL ASSESSMENT. Such term shall have the meaning
defined in SECTION 5.10.
1.10 ENVIRONMENTAL LAWS. The Comprehensive Environmental Response
Compensation and Liability Act, the Resource Conservation and Recovery Act, the
Clean Water Act, the Clean Air Act and the Toxic Substances Control Act, the
Federal Insecticide, Fungicide and Rodenticide Act, the Emergency Planning and
Community Right-to-Know Act, the Safe Drinking Water Act, each as amended, and
any other applicable federal, state and local laws, statutes, rules or
regulations concerning or relating to the
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treating, producing, handling, storing, releasing, spilling, leaking, pumping,
pouring, emitting or dumping of Hazardous Materials, or the pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata).
1.11 EXCLUDED ASSETS. Such term shall have the meaning defined in
SECTION 2.2.
1.12 FCC. Federal Communications Commission.
1.13 FCC LICENSES. The licenses, permits and authorizations
of the FCC for the operation of the Station as listed on SCHEDULE 3.8.
1.14 FCC ORDER. An action, order or decision of the FCC, which is a
Final Action, granting its consent to the assignment of the FCC Licenses to
Buyer.
1.15 FINAL ACTION. An action of the FCC that has not been reversed,
stayed, enjoined, set aside, annulled or suspended; with respect to which no
timely petition for reconsideration or administrative or judicial appeal or SUA
SPONTE action of the FCC with comparable effect is pending and as to which the
time for filing any such petition or appeal (administrative or judicial) or for
the taking of any such SUA SPONTE action of the FCC has expired.
1.16 HAZARDOUS MATERIALS. Toxic materials, hazardous wastes,
hazardous substances, pollutants or contaminants, asbestos or asbestos-related
products, polychlorinated biphenyls ("PCBs"), petroleum, crude oil or any
fraction or distillate thereof in excess of legally-defined permissible limits
(as such terms are defined in any applicable federal, state or local laws,
ordinances, rules and regulations, and including any other terms which are or
may be used in any applicable Environmental Laws to define prohibited or
regulated substances).
1.17 INDEMNIFIED PARTY. Any party described in SECTION 9.3 or
SECTION 9.4 against which any claim or liability may be asserted by a third
party which would give rise to a claim for indemnification under the provisions
of this Agreement by such party.
1.18 INDEMNIFYING PARTY. The party to the Agreement (not the
Indemnified Party) that, in the event of a claim or liability asserted by a
third party against the Indemnified Party which would give rise to a claim for
indemnification under the provisions of this Agreement.
1.19 LIEN. Any mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, lien, lease or charge of any kind, whether
voluntarily incurred or arising by operation of law or otherwise, affecting any
Sale Assets or property, including any written or oral agreement to give or
grant any of the foregoing, any conditional sale or other title retention
agreement, and the filing of or agreement to give any financing statement with
respect to any assets or property under the Uniform Commercial Code or
comparable law of any jurisdiction.
1.20 MATERIAL ADVERSE EFFECT. A condition, event or circumstance
which would materially restrict, limit, increase the cost or burden of or
otherwise materially adversely affect or materially impair the right of Buyer to
the ownership, use, control, enjoyment or operation of the Station or the
proceeds therefrom; provided, however, that any condition which requires that
the Station be operated in accordance with a condition similar to those
contained in the present FCC licenses issued for operation of the Station shall
not be deemed a Material Adverse Condition.
1.21 OSHA LAWS. The Occupational Safety and Health Act of 1970, as
amended, and all other federal, state or local laws or ordinances, including
orders, rules and regulations thereunder, regulating or otherwise affecting
health and safety of the workplace.
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1.22 PERMITTED LIEN. For purposes hereof, "Permitted Lien" shall
mean (i) easements, restrictions, and other similar matters which will not
materially adversely affect the use of the Real Property in the ordinary course
of business; (ii) liens for taxes not due and payable or, that are being
contested in good faith by appropriate proceedings; (iii) mechanics,
materialmen's, carriers', warehousemen's, landlords' or other similar liens in
the ordinary course of business for sums not yet due or which are being
contested in good faith by appropriate proceedings; (iv) liens or mortgages that
will be released at Closing; and (v) zoning ordinances and regulations,
including statutes and ordinances relating to the liens of streets and to other
municipal improvements, which will not materially adversely affect the use of
the Real Property in the ordinary course of business, provided that any of the
foregoing alone or in the aggregate do not materially impair the value or
materially interfere with the use of any asset or property of the Seller
material to the operation of its business as it has been and is now conducted.
1.23 PURCHASE PRICE. The consideration to be paid by Buyer to
Seller for purchase of the Sale Assets in an amount equal to Eleven Million
Dollars ($11,000,000) payable pursuant to the terms of SECTION 2.4 and subject
to adjustments pursuant to SECTION 2.6.
1.24 REAL PROPERTY. Such term shall have the meaning defined in
SECTION 3.7.
1.25 RULES AND REGULATIONS. The rules of the FCC as set forth in
Volume 47 of the Code of Federal Regulations, as well as such other policies of
the FCC, whether contained in the Code of Federal Regulations, or not, that
apply to the Station.
1.26 SALE ASSETS. All of the tangible and intangible assets to be
transferred by Seller to Buyer as set forth in SECTION 2.1.
1.27 STATION AGREEMENTS. The agreements, commitments, contracts,
leases and other items described in SECTION 2.1(d) which relate to operation of
the Station.
1.28 TOWER COORDINATES. Such term shall have the meaning defined
in SECTION 3.15 hereof.
ARTICLE II
PURCHASE AND SALE
2.1 SALE ASSETS. On the Closing Date, Seller will sell, transfer,
assign and convey to Buyer, and Buyer will purchase from Seller, free and clear
of all Liens, except Permitted Liens, all of Seller's right, title and interest,
legal and equitable, in and to the tangible and intangible, real, personal and
mixed assets (except Excluded Assets) used or useful in the operation of the
Station including the following:
(a) TANGIBLE PERSONAL PROPERTY. All equipment, parts,
supplies, furniture, fixtures, studio equipment, and other tangible personal
property now or hereinafter owned by Seller and used in the operation of the
Station including, but not limited to the tangible personal property listed on
SCHEDULE 3.6, together with such modifications, replacements, improvements and
additional items, made or acquired between the date hereof and the Closing Date;
(b) REAL PROPERTY AND LEASES. Seller's interests in all of
the real property used in operating the Station including, without limitation,
all right, title and interest of Seller in and to the Station's transmitting
facilities and all Real Property described in SCHEDULE 3.7.
(c) LICENSES AND PERMITS. The FCC Licenses listed on
SCHEDULE 3.8 and all other assignable or transferable governmental permits,
licenses and authorizations (and any renewals, extensions, amendments or
modifications thereof) now held by Seller or hereafter obtained by Seller
between the date
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hereof and the Closing Date, to the extent such other permits, licenses and
authorizations pertain to or are used in the operation of the Station;
(d) STATION AGREEMENTS. All agreements which are listed on
SCHEDULE 3.9 as agreements which Buyer elects to assume; any renewals,
extensions, amendments or modifications of those agreements being assumed which
are made in the ordinary course of Seller's operation of the Station and in
accordance with the terms and provisions of this Agreement;
(e) RECORDS. True and complete copies of all of the books,
records, accounts, files, logs, ledgers, reports of engineers and other
consultants or independent contractors, pertaining to or used in the
operation of the Station (other thancorporate records);
(f) INTELLECTUAL PROPERTY. All of Seller's Intellectual
Property used in, or related to, the Station or Sale Assets. For purposes of
this Agreement, "Intellectual Property" shall mean all of the following relating
to the use or operation of the Station or the Sale Assets: trademarks, service
marks, brand names, trade names, mask works, Internet Domain Name(s), Internet
Web page(s), HTML content located and publicly accessible from the Domain Names,
the visitor e-mail data bases for Internet Domain Names, call letters, slogans,
and other indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdictions to
register the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patentable or not; patents and applications for patents; nonpublic information,
trade secrets or confidential information; writings and other works, whether
copyrightable or not; technology, know-how or computer software programs and
applications used in the Station's business, any similar intellectual property
or proprietary rights, and any claims or causes of action arising out of or
relating to any infringement or misappropriation of any of the foregoing.
(g) MISCELLANEOUS ASSETS. Any other tangible, intangible,
real, personal or mixed asset, property or right of any kind or nature not
otherwise described in this SECTION 2.1 and now or hereinafter owned or used by
Seller in connection with the operation of the Station.
2.2 EXCLUDED ASSETS. Notwithstanding any provision of this
Agreement to the contrary, Seller shall not transfer, convey or assign to Buyer,
but shall retain all of its right, title and interest in and to, the following
assets owned or held by it on the Closing Date ("Excluded Assets"):
(a) Any and all cash, cash equivalents, cash deposits to
secure contract obligations, all inter-company receivables from any affiliate of
Seller and all other accounts receivable, bank deposits and securities held by
Seller in respect of the Station at the Closing Date, that are unrelated to the
operation of the Station after the Closing Date and further provided that such
cash or receivable is not for services on obligations of the Station after the
Closing Date (except to the extent Seller receives a credit therefor under
SECTION 2.6, in which event such cash, receivable, deposit or security shall be
included as part of the Sale Assets).
(b) Any and all claims of Seller with respect to
transactions prior to the Closing including, without limitation, claims for tax
refunds and refunds of fees paid to the FCC.
(c) All prepaid expenses (except to the extent Seller
receives a credit therefor under SECTION 2.6, in which event the prepaid expense
shall be included as part of the Sale Assets).
(d) All contracts of insurance and claims against insurers.
(e) All employee benefit plans and the assets thereof and
all employment contracts.
(f) All contracts that are terminated in accordance with the
terms and provisions of
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this Agreement or have expired prior to the Closing Date in the ordinary course
of business; and all loans and loan agreements.
(g) All tangible personal property disposed of or consumed
between the date hereof and the Closing Date in accordance with the terms and
provisions of this Agreement and in the ordinary course of business.
(h) Seller's corporate records except to the extent such
records pertain to or are used in the operation of the Station, in which case
Seller shall deliver materially accurate copies thereof to Buyer.
(i) All commitments, contracts and agreements not
specifically assumed by Buyer pursuant to SECTION 2.1(d), above.
2.3 ASSUMPTION OF LIABILITIES.
(a) At the Closing, Buyer shall assume and agree to perform,
without duplication of Seller's performance, the following liabilities and
obligations of Seller (the "Assumed Obligations"):
(i) Current liabilities of Seller for which Buyer
receives a credit pursuant to SECTION 2.6, but not in excess of the amount of
such credit;
(ii) Liabilities and obligations arising under
the Station Agreements, if any, assumed by and transferred to Buyer in
accordance with this Agreement, but only to the extent such liabilities and
obligations relate to any period of time after the Closing; and
(iii) The obligations, if any, specifically listed in
SCHEDULE 2.3.
(b) Except for the Assumed Obligations, Buyer shall not
assume or in any manner be liable for any debts, liens, charges, claims,
encumbrances, duties, responsibilities, obligations or liabilities of Seller of
any kind or nature, whether express or implied, known or unknown, contingent or
absolute, including, without limitation, any liabilities to or in connection
with Seller's employees whether arising in connection with the transaction
contemplated hereunder or otherwise.
2.4 PAYMENTS OF PURCHASE PRICE. The Purchase Price shall be paid
by Buyer as follows:
(a) At the Closing, Ten Million Dollars ($10,000,000) of the
Purchase Price shall be paid to Seller by wire transfer of immediately available
funds.
(b) Buyer shall pay to Seller, or Seller shall pay to
Buyer, the Adjustment Amount in accordance with SECTION 2.6.
(c) On or before twelve months after the Closing Date, One
Million Dollars ($1,000,000) of the Purchase Price shall be paid to Seller by
wire transfer of immediately available funds.
2.5 ALLOCATION OF THE PURCHASE PRICE. Buyer and Seller shall agree
to an allocation of the Purchase Price as set forth in SCHEDULE 2.5 hereof.
Buyer and Seller shall use such allocation for all reporting purposes in
connection with federal, state and local income and, to the extent permitted
under applicable law, franchise taxes. Buyer and Seller agree to report such
allocation to the Internal Revenue
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Service in the form required by Treasury Regulation Section 1.1060-1T.
2.6 ADJUSTMENT OF PURCHASE PRICE.
(a) All operating income and operating expenses of the
Station shall be adjusted and allocated between Seller and Buyer, and an
adjustment in the Purchase Price shall be made as provided in this Section,
to the extent necessary to reflect the principle that all such income and
expenses attributable to the operation of the Station on or before the Closing
Date shall be for the account of Seller, and all income and expenses
attributable to the operation of the Station after the closing Date shall be
for the account of Buyer. Any cost or obligation related to any Permitted Lien
shall also be included as part of the adjustment and allocation between Buyer
and Seller.
(b) To the extent not inconsistent with the express
provisions of this Agreement, the allocations made pursuant to this SECTION 2.6
shall be made in accordance with generally accepted accounting principles.
(c) For purposes of making the adjustments pursuant to this
Section, Buyer shall prepare and deliver the Adjustment List to Seller within
forty five (45) days following the Closing Date, or such later date as shall be
mutually agreed to by Seller and Buyer. The Adjustment List shall set forth the
Adjustment Amount. If the Adjustment Amount is a credit to the account of Buyer,
Seller shall pay such amount to Buyer, and if the Adjustment Amount is a charge
to the account of Buyer, Buyer shall pay such amount to Seller. In the event
Seller disagrees with the Adjustment Amount determined by Buyer or with any
other matter arising out of this subsection, and Buyer and Seller cannot within
sixty (60) days resolve the disagreement themselves, the parties will refer the
disagreement to a firm of independent certified public accountants, mutually
acceptable to Seller and Buyer, whose decision shall be final. The fees and
expenses of such accountants shall be paid by the party who does not prevail on
the disputed matters decided by the accountants.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Notwithstanding anything to the contrary in this Agreement, Seller
makes no representation or warranty other than as set forth in this ARTICLE III.
Seller hereby represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING. Seller is a corporation,
validly existing and in good standing under the laws of the State of
____________ and authorized to conduct business in the State of ____________
and each and every jurisdiction where Seller conducts business. Seller has all
requisite power to own, operate and lease its properties and carry on its
business as it is now being conducted and as the same will be conducted until
the Closing.
3.2 AUTHORIZATION AND BINDING EFFECT OF DOCUMENTS. Seller's
execution and delivery of, and the performance of its obligations under, this
Agreement and each of the other Documents, and the consummation by Seller of the
transactions contemplated hereby and thereby, have been duly authorized and
approved by all necessary corporate action on the part of Seller, and no other
corporate proceedings on the part of the Seller are necessary to authorize and
approve this Agreement. As of the date hereof, the Board of Directors of Seller
has determined that the transaction contemplated by this Agreement is advisable
and in the best interest of its stockholders. Seller has the power and authority
to execute, deliver and perform its obligations under this Agreement and each of
the other Documents and to consummate the transactions hereby and thereby
contemplated. This Agreement and each of the other Documents have been, or at or
prior to the Closing will be, duly executed by Seller. The Documents, when
executed and
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delivered by the parties hereto, will constitute legal and valid obligations of
Seller enforceable against it in accordance with their terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights or remedies generally, and except
as may be limited by general principles of equity.
3.3 ABSENCE OF CONFLICTS. The execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents by Seller, and the consummation of the transactions contemplated
hereby and thereby:
(a) do not in any material respect (with or without the
giving of notice or the passage of time or both) violate, or result in the
creation of any Lien other than a Permitted Lien, on any of the Sale Assets
under any provision of law, rule or regulation or any order, judgment,
injunction, decree or ruling applicable to Seller;
(b) do not (with or without the giving of notice or the
passage of time or both) conflict with or result in a breach or termination of,
or constitute a default or give rise to a right of termination or acceleration
under the articles of incorporation or bylaws of Seller or pursuant to any
lease, agreement, commitment or other instrument which Seller is a party to, or
bound by, or by which any of the Sale Assets may be bound, or result in the
creation of any Lien, other than a Permitted Lien, upon any of the Sale Assets.
3.4 GOVERNMENTAL CONSENTS AND CONSENTS OF THIRD PARTIES. Except
for such consents as are required by the FCC and as are disclosed on SCHEDULE
3.4, the execution and delivery of, and the performance of Seller's obligations
under, this Agreement and each of the other Documents by Seller, and the
consummation by Seller of the transactions contemplated hereby and thereby, do
not require the consent, waiver, approval, permit, license, clearance or
authorization of, or any declaration of filing with, any court or public agency
or governmental body or other authority, or the consent of any person under any
agreement, arrangement or commitment of a nature to which Seller is a party or
by which it is bound or by which the Sale Assets are bound or to which they are
subject to, the failure of which to obtain would have a Material Adverse Effect
on the Sale Assets or the operation of the Station.
3.5 SALE ASSETS. The Sale Assets include all of the assets,
properties and rights of every type and description, real, personal and mixed,
tangible and intangible, that are used in the conduct of the business of owning
and operating the Station in the manner in which that business is now conducted,
including, without limitation all of the assets described in SECTION 2.1 with
the exception of the Excluded Assets described in SECTION 2.2.
3.6 TANGIBLE PERSONAL PROPERTY. Except for supplies and other
incidental items which in the aggregate are not of material value, the list of
Tangible Personal Property set forth on SCHEDULE 3.6 is a complete and correct
list of all of the items of tangible personal property (other than Excluded
Assets) used to a material extent in the operation of the Station in the manner
in which it is now operated. In addition:
(a) Seller has good, marketable and valid title to all of the
items of Tangible Personal Property free and clear of all Liens except Permitted
Liens, and including the right to transfer same.
(b) The Tangible Personal Property has been maintained in
accordance with industry practices and is in good operating condition subject
only to ordinary wear and tear.
(c) The Tangible Personal Property complies with applicable
rules and regulations of the FCC and the terms of the FCC Licenses.
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(d) There is no any defect in the condition or operation of
any item of the Tangible Personal Property which is reasonably likely to have a
Material Adverse Effect on the operation of the Station.
3.7 REAL PROPERTY.
(a) The real property described on SCHEDULE 3.7 constitutes
a complete and correct summary description in all material respects of all of
the interests in real estate, including all leases, used to any extent in the
operation of the Station in the manner in which it has been and is now operated.
Said real property, together with all improvements affixed thereto, is herein
defined as the "Real Property."
(b) Seller does not owe any money to any architect,
contractor, subcontractor or materialman for labor or materials performed,
rendered or supplied to or in connection with the Real Property which shall not
be paid in full on or before Closing.
(c) Seller's present use of the Real Property is in
compliance with all applicable zoning codes in effect as of the date hereof, and
Seller has not received any notices of uncorrected violations of the applicable
housing, building, safety or fire ordinances. The Real Property is served by all
utilities, including, without limitation, electricity and water in capacities
adequate for the present use of the Real Property and improvements thereon.
(d) Seller has not made any other agreement for the sale or
lease of, or given any other person an option to purchase or lease or a right of
first refusal to purchase or lease, all or any part of the Real Property, and
Seller has not subjected the Real Property to any liens (other than Permitted
Liens), easements, rights, duties, obligations, covenants, conditions,
restrictions, limitations or agreements not of record.
(e) Seller has good and marketable title to the Real
Property.
3.8 FCC LICENSES. Seller is the holder of the FCC Licenses listed
on SCHEDULE 3.8, and except as set forth on such Schedule, the FCC Licenses (i)
are valid, in good standing and in full force and effect, unimpaired by any act
or omission of Seller, and constitute all of the licenses, permits and
authorizations required by the Act, the Rules and Regulations or the FCC for, or
used in, the operation of the Station in all material respects as now operated,
(ii) constitute all the current licenses and authorizations issued by the FCC to
Seller for or in connection with the current operation of the Station; (iii)
there is no condition imposed by the FCC as part of any FCC License which is
neither set forth on the face thereof as issued by the FCC nor contained in the
Rules and Regulations applicable generally to stations of the type, nature,
class or location of the Station; (iv) the Station is being operated at full
authorized power, in accordance with the terms and conditions of the FCC
Licenses applicable to it and in accordance with the Rules and Regulations,
except to the extent a failure to so comply would not constitute a Material
Adverse Effect; (v) no application, action or proceeding is pending, or, is
threatened which may result in the revocation, modification, non-renewal or
suspension of any of the FCC Licenses, the denial of any pending applications,
the issuance of any cease and desist order or the imposition of any fines,
forfeitures or other administrative actions by the FCC with respect to the
Station or its operation, other than proceedings affecting the radio
broadcasting industry in general; (vi) there is not before the FCC any material
investigation, proceeding, notice of violation or order of forfeiture relating
to the Station; (vii) Seller has complied in all material respects with all
requirements to file reports, applications and other documents with the FCC with
respect to the Station, and all such reports, applications and documents are
complete and correct in all material respects; (viii) there are no matters (A)
which could reasonably be expected to result in the suspension, revocation,
cancellation, modification of or the refusal to renew any of the FCC Licenses or
the imposition of any fines or forfeitures by the FCC, or (B) against Seller
which could reasonably be expected to result in the FCC's refusal to grant
approval of the assignment to Buyer of the FCC Licenses or
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the imposition of any Material Adverse Effect in connection with approval of
such assignment; (ix) there are not any unsatisfied or otherwise outstanding
citations issued by the FCC with respect to the Station or its operation; and
(x) the "Public Inspection File" of the Station is in substantial and material
compliance with Section 73.3526 of the Rules and Regulations. Complete and
accurate copies of all FCC Licenses are attached hereto as a part of SCHEDULE
3.8.
3.9 STATION AGREEMENTS.
(a) SCHEDULE 3.9 sets forth an accurate and complete list of
all material agreements, contracts, arrangements or commitments in effect as of
the date hereof, including all amendments, modifications and supplements thereto
which the Station or its assets or properties are bound by ("Station
Agreements"). Complete and correct copies of all Station Agreements have been
delivered to Buyer.
(b) Except as set forth in the Schedules, and with respect
to all Station Agreements being assumed by Buyer, (i) all Station Agreements are
legal, valid and enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity; (ii) neither Seller, nor, any party thereto is in
material breach of or in material default under any Station Agreements; (iii)
there has not occurred any event which, after the giving of notice or the lapse
of time or both, would constitute a material default under, or result in the
material breach of, any Station Agreements which are, individually or in the
aggregate, material to the operation of the Station; and (iv) Seller holds the
right to enforce and receive the benefits under all of the Station Agreements,
free and clear of all Liens (other than Permitted Liens) but subject to the
terms and provision of each such agreement.
(c) SCHEDULE 3.9 indicates, for each Station Agreement
listed thereon which Agreement is being assumed by Buyer, and whether consent or
approval by any party thereto is required thereunder for consummation of the
transactions contemplated hereby.
(d) Buyer and Seller acknowledge that certain of the Station
Agreements, to be included in the Sale Assets, and the rights and benefits
thereunder necessary or appropriate or relating to the conduct of the business
and activities of Seller and/or the Station may not, by their terms, be
assignable. Anything in this Agreement to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign such Station Agreement,
and Buyer shall not be deemed to have assumed the same or to be required to
perform any obligations thereunder, if an attempted assignment thereof, without
the consent of a third party thereto, would constitute a breach thereof or in
any way affect the rights under such Station Agreement of Buyer or Seller
thereunder. In such event, Seller will cooperate with Buyer to provide for Buyer
all benefits to which Seller is entitled under such Station Agreements, and any
transfer or assignment to Buyer by Seller of any such Station Agreement or any
right or benefit arising thereunder or resulting therefrom which shall require
the consent or approval of any third party shall be made subject to such consent
or approval being obtained. Seller shall, without further consideration
therefor, pay, assign and remit to Buyer promptly all monies, and, to the extent
permitted, all other rights or consideration received or obtained, or which may
be received or obtained in respect of performance of such Station Agreements.
3.10 LITIGATION. There are no actions, suits, claims, investigations or
administrative, arbitration or other proceedings pending or threatened against
Seller which would, individually or in the aggregate if adversely determined,
have a Material Adverse Effect on the Sale Assets or the operation of the
Station, or which would give any third party the right to enjoin the
transactions contemplated by this Agreement. There is no basis for any such
claim, investigation, action, suit or proceeding which would, individually or in
the aggregate if adversely determined, have a Material Adverse Effect on the
Sale Assets or operation of the Station. To the best knowledge of Seller, there
are no existing or pending orders, judgments or decrees of any court or
governmental agency affecting Seller, the Station or any of the Sale
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Assets which would materially adversely affect the Station's operations of the
Sale Assets. Notwithstanding the disclosure of any matter herein, Buyer shall
not assume any liability for any such matter.
3.11 LABOR MATTERS.
(a) Seller is not a party to any collective bargaining
agreement, and there is no collective bargaining agreement that determines the
terms and conditions of employment of any employees of Seller.
(b) With respect to the Station:
(i) There is no labor strike, dispute, slow-down
or stoppage pending or, to the actual knowledge of Seller, threatened against
the Station;
(ii) Except as set forth in SCHEDULE 3.11, there
are neither pending nor threatened, any suits, actions, administrative
proceedings, union organizing activities, arbitrations, grievances, complaint,
charges, claims or other proceedings between Seller and any employees of the
Station or any union representing such employees; and to Seller's actual
knowledge, there are no existing labor or employment or other controversies or
grievances involving employees of the Station which have had or are reasonably
likely to have a Material Adverse Effect on the operation of the Station;
(iii) (A) Seller is in compliance in all material
respects with all laws, rules and regulations relating to the employment of
labor and all employment contractual obligations, including those relating to
wages, hours, collective bargaining, affirmative action, discrimination, sexual
harassment, wrongful discharge and the withholding and payment of taxes and
contributions except for such non-compliance which individually or in the
aggregate would not have a Material Adverse Effect on the business or financial
condition of the Station; (B) Seller has withheld all amounts required by law or
agreement to be withheld from the wages or salaries of its employees; and (C)
Seller is not liable to any present or former employees or any governmental
authority for damages, arrears of wages or any tax or penalty for failure to
comply with the foregoing except for such liability which individually or in the
aggregate would not have a Material Adverse Effect on the business or financial
condition of the Station;
(iv) Buyer's consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof shall not,
as a result of or in connection with the transactions contemplated hereby,
impose upon Buyer the obligation to pay any severance or termination pay under
any agreement, plan or arrangement binding upon Seller.
3.12 EMPLOYEE BENEFIT PLANS. Buyer's consummation of the
transactions contemplated by this Agreement in accordance with the terms
hereof shall not, as a result of or in connection with the transactions
contemplated hereby, impose upon Buyer any obligation under any benefit plan,
contract or arrangement (regardless of whether they are written or unwritten and
funded or unfunded) covering employees or former employees of Seller in
connection with their employment by Seller. For purposes of the Agreement,
"benefit plans" shall include without limitation employee benefit plans within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended, vacation benefits, employment and severance contracts, stock
option plans, bonus programs and plans of deferred compensation.
3.13 COMPLIANCE WITH LAW. The operation of the Station complies in
all material respects with the applicable rules and regulations of the FCC and
all federal, state, local or other laws, statutes, ordinances, regulations,
and any applicable order, writ, injunction or decree of any court, commission,
board, agency or other instrumentality.
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3.14 ENVIRONMENTAL MATTERS; OSHA.
(a) Seller has obtained all material, environmental, health
and safety permits necessary or required for either the operation of the Station
as currently operated or the ownership of the Sale Assets and all such permits
are in full force and effect and Seller is in compliance with all material terms
and conditions of such permits.
(b) There is no proceeding pending or threatened which may
result in the reversal, rescission, termination, modification or suspension of
any environmental or health or safety permits necessary for the operation of the
Station as currently conducted or the ownership of the Sale Assets.
(c) With respect to the Station and the Sale Assets, Seller
is in compliance in all material respects with the provisions of Environmental
Laws.
(d) Seller has not, and no other person or entity, has
caused or permitted materials to be generated, released, stored, treated,
recycled, disposed of, on, under or at such parcels, which materials, if known
to be present, would require clean up, removal or other remedial or responsive
action under Environmental Laws (other than normal office, cleaning and
maintenance supplies in reasonable quantities used and /or stored appropriately
in the buildings or improvements on the Real Property). Seller has not caused
the migration of any materials from the Sale Assets onto or under any property,
which materials, if known to be present, would require cleanup, removal or other
remedial or responsive action under Environmental Laws. There are no underground
storage tanks and no PCBs or friable asbestos in or on the Sale Assets or Real
Property.
(e) Seller is not subject to any judgment, decree, order or
citation with respect to the Sale Assets related to or arising out of
Environmental Laws, and Seller has not received notice that it has been named or
listed as a potentially responsible party by any person or governmental body or
agency in any matter, under Environmental Laws.
(f) Seller has not discharged or disposed of any petroleum
product or solid waste on the Real Property or on the property adjacent to the
Real Property owned by third parties, which may form the basis for any present
or future claim based upon the Environmental Laws in existence on the date
hereof or as of the Closing, or any demand or action seeking clean-up of any
site, location, body of water, surface or subsurface, under any Environmental
Laws or otherwise, or which may subject the owner of the Real Property to claims
by third parties (except to the extent third party liability can be established)
for damages.
(g) No portion of the Sale Assets have ever been used by
Seller, nor by any previous owner of the Sale Assets, or any of them, in
material violation of Environmental Laws or as a landfill, dump site or any
other use which involves the disposal or storage of Hazardous Materials on-site
or in any manner which may have a Material Adverse Effect on the value of the
Real Property or the Sale Assets.
(h) No pesticides, herbicides, fertilizers or other
materials have been used on, applied to or disposed of by Seller on or in the
Sale Assets in material violation of any Environmental Laws (other than normal
office, cleaning and maintenance supplies in reasonable quantities used and/or
stored appropriately in the buildings or improvements on the Real Property).
(i) With respect to the Sale Assets, Seller has disposed of
all waste in full compliance with all Environmental Laws and there is no
existing condition that may form the basis of any present or future claim,
demand or action seeking clean up of any facility, site, location or body of
water, surface or subsurface, for which the Buyer could be liable or responsible
solely as a result of the disposal of
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waste at such site by a prior owner of the Sale Assets.
(j) Seller is in material compliance with all OSHA Laws
applicable to the Sale Assets.
(k) Seller has not received written notice of, nor is it the
subject of, any actions, causes of action, claims, investigations, demands or
notices alleging liability under or non-compliance with Environmental Laws or
that Seller is a potentially responsible party at any superfund site or state
equivalent site with respect to the Real Property or Sale Assets.
(l) Seller has not agreed to indemnify any predecessor or
other party with respect to any environmental liability relating to the Real
Property or Sale Assets.
3.15 TOWER COORDINATES. At Closing, the current vertical elevation
and geographical coordinates of the Station's towers ("the Tower Coordinates")
shall be properly registered with the FCC and Federal Aviation Administration
("FAA"); and the Tower Coordinates shall comply with and correspond to the
current vertical elevation an geographical coordinates authorized by the FAA,
FCC and any other governmental authority, including any federal, state or local
authority having jurisdiction over the Station or said towers.
3.16 FILING OF TAX RETURNS. Seller has filed all federal, state and
local tax returns which are required to be filed, and has paid all taxes and all
assessments to the extent that such taxes and assessments have become due, other
than such returns, taxes and assessments, the failure to file or pay would not,
individually or in the aggregate, have a Material Adverse Effect on Buyer.
3.17 ABSENCE OF INSOLVENCY. No insolvency proceedings of any
character including without limitation, bankruptcy, receivership,
reorganization, composition or arrangement with creditors, voluntary or
involuntary, affecting the Seller or any of the Sale Assets, are pending or
threatened, and Seller has made no assignment for the benefit of creditors, nor
taken any action with a view to, or which would constitute the basis for the
institution of, any such insolvency proceedings.
3.18 BROKER'S OR FINDER'S FEES. Except for as set forth on SCHEDULE
3.18, no agent, broker, investment banker or other person or firm acting on
behalf of or under the authority of Seller or any affiliate of Seller is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee, directly or indirectly, in connection with the transactions contemplated by
this Agreement.
3.19 INSURANCE. There is now, and through the Closing Date there
shall be, in full force and effect with reputable insurance companies fire and
extended coverage insurance with respect to all material tangible Sale Assets
and public liability insurance, all in commercially reasonable amounts, and the
Sale Assets shall be insured to cover the full amount of any loss.
3.20 NO UNDISCLOSED LIABILITIES. As of the Closing Date, Seller has
no liabilities or obligations of any nature, whether or not accrued, contingent
or otherwise, of a type required by GAAP to be reflected on a consolidated
balance sheet that relates to the Station or the Sale Assets except liabilities
or obligations which would not in the aggregate have a Material Adverse Effect
on the Station or Sale Assets.
3.21 ABSENCE OF CERTAIN CHANGES OR EVENTS. As of the Closing Date,
the Station and Sale Assets shall have been conducted and utilized in all
material respects in the ordinary course and there has not been any event,
circumstance, occurrence or development that has had or will have a Material
Adverse Effect on the Station or Sale Assets.
3.22 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by Seller,
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nor any statement made in any document or certificate furnished by Seller
pursuant to this Agreement contains or will contain at the Closing, any untrue
statement of a material fact, or omits or will omit at the Closing, to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware Buyer has all requisite corporate power to own, operate and lease its
properties and carry on its business as it is now being conducted and as the
same will be conducted following the Closing.
4.2 AUTHORIZATION AND BINDING EFFECT OF DOCUMENTS. Buyer's
execution and delivery of, and the performance of its obligations under, this
Agreement and each of the other Documents, and the consummation by Buyer of the
transactions contemplated hereby and thereby, have been duly authorized and
approved by all necessary corporate action on the part of Buyer. Buyer has the
power and authority to execute, deliver and perform its obligations under this
Agreement and each of the other Documents and to consummate the transactions
hereby and thereby contemplated. This Agreement and each of the other Documents
have been, or at or prior to the Closing will be, duly executed by Buyer. The
Documents, when executed and delivered by the parties hereto, will constitute
the valid and legally binding agreement of Buyer, enforceable against Buyer in
accordance with their terms, except as may be limited by bankruptcy, insolvency,
or other similar laws affecting the enforcement of creditors' rights or remedies
generally, and except as may be limited by general principles of equity.
4.3 ABSENCE OF CONFLICTS. Buyer's execution and delivery of,
and the performance of its obligations under, this Agreement and each of the
other Documents and the consummation by Buyer of the transaction contemplated
hereby and thereby:
(a) do not in any material respect (with or without the
giving of notice or the passage of time or both) violate or result in the
creation of any claim, lien, charge or encumbrance on any of the assets or
properties of Buyer under any provision of law, rule or regulation or any order,
judgment, injunction, decree or ruling applicable to Buyer in any manner which
would have a Material Adverse Effect on the assets, business, operation or
financial condition or results of operations of Buyer;
(b) do not (with or without the giving of notice or the
passage of time or both) conflict with or result in a breach or termination of,
or constitute a default or give rise to a right of termination or acceleration
under, the articles of incorporation or bylaws of Buyer or any lease, agreement,
commitment, or other instrument which Buyer is a party to, bound by, or by which
any of its assets or properties may be bound.
4.4 GOVERNMENTAL CONSENTS AND CONSENTS OF THIRD PARTIES. Except
for the required consent of the FCC, Buyer's execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents and the consummation by Buyer of the transaction contemplated hereby
and thereby, do not require the consent, waiver, approval, permit, license,
clearance or authorization of, or any declaration or filing with, any court or
public agency or other authority, or the consent of any person under any
agreement, arrangement or commitment of any nature to which Buyer is a party or
by which it is bound, the failure of which to obtain would have a Material
Adverse Effect on the assets, business, operation or financial condition or
results of operations of Buyer.
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4.5 QUALIFICATION.
(a) Buyer has no knowledge after due inquiry of any facts
concerning Buyer or any other person with an attributable interest in Buyer (as
such term is defined under the Rules and Regulations) which, under present law
(including the Act) and the Rules and Regulations, would (i) disqualify Buyer
from being the holder of the FCC Licenses, the owner of the Sale Assets or the
operator of the Station upon consummation of the transactions contemplated by
this Agreement, or (ii) raise a substantial and material question of fact
(within the meaning of Section 309(e) of the Act) respecting Buyer's
qualifications.
(b) Without limiting the foregoing SUBSECTION (a), Buyer
shall make the affirmative certifications provided in Section III of FCC Form
314, or as may be required on any form required by the FCC to obtain its consent
to this transaction, at the time of filing of such form with the FCC as
contemplated by SECTION 5.2.
4.6 BROKER'S OR FINDER'S FEES. No agent, broker, investment
banker, or other person or firm acting on behalf of or under the authority or
Buyer or any affiliate of Buyer is or will be entitled to any broker's or
finder's fee or any other commission or similar fee, directly or indirectly, in
connection with transactions contemplated by this Agreement.
4.7 LITIGATION. There are no legal, administrative, arbitration or
other proceedings or governmental investigations pending or, to the knowledge of
Buyer, threatened against Buyer that would give any third party the right to
enjoin the transactions contemplated by this Agreement.
4.8 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by Buyer, nor any statement made in any document or certificate
furnished by Buyer pursuant to this Agreement contains or will contain at the
Closing, any untrue statement of a material fact, or omits or will omit at the
Closing, to state any material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which they
were made, not misleading.
ARTICLE V
TRANSACTIONS PRIOR TO THE CLOSING DATE
5.1 CONDUCT OF THE STATION'S BUSINESS PRIOR TO THE CLOSING DATE.
Seller covenants and agrees with Buyer that between the date hereof and the
Closing Date, unless the Buyer otherwise agrees in writing (which agreement
shall not be unreasonably withheld or delayed), Seller shall:
(a) Use reasonable commercial efforts to maintain insurance
upon all of the Sale Assets in such amounts and of such kind to cover the full
amount of any loss with respect to such Sale Assets and with respect to the
operation of the Station, with insurers of substantially the same or better
financial condition;
(b) Operate the Station and otherwise conduct its business
in all material respects in accordance with the terms or conditions of its FCC
Licenses, the Rules and Regulations, the Act and all other rules and
regulations, statutes, ordinances and orders of all governmental authorities
having jurisdiction over any aspect of the operation of the Station, except
where the failure to so operate would not have a Material Adverse Effect on the
Sale Assets or the operation of the Station or on the ability of Seller to
consummate the transactions contemplated hereby;
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(c) Comply in all material respects with all Station
Agreements now or hereafter existing;
(d) Promptly notify Buyer of any material default by, or
claim of default against, any party under any Station Agreements and any event
or condition which, with notice or lapse of time or both, would constitute an
event of default under such Station Agreements;
(e) Not mortgage, pledge or subject to any Lien other than
a Permitted Lien any of the Sale Assets;
(f) Not sell, lease or otherwise dispose of, nor agree to
sell, lease or otherwise dispose of, any of the Sale
Assets;
(g) Not amend or terminate any Station Agreement;
(h) Not introduce any material change with respect to the
operation of the Station including, without limitation, any material changes in
the broadcast hours of the Station or any other material change in the Station's
programming policies, except such changes as in the sole discretion of Seller,
exercised in good faith after consultation with Buyer, are required by the
public interest;
(i) Notify Buyer of any complaints, investigations, hearing
or any material litigation pending or threatened against Station or any material
damage to or destruction of any assets included or to be included in the Sale
Assets.
5.2 GOVERNMENTAL CONSENTS. Seller and Buyer shall file with the
FCC, within ten (10) business days after the execution of this Agreement, such
applications and other documents in the name of Seller or Buyer, as appropriate,
as may be necessary or advisable to obtain the FCC Order. Seller and Buyer shall
take all commercially reasonable steps necessary to prosecute such filings with
diligence and shall diligently oppose any objections to, appeals from or
petitions to reconsider such approval of the FCC, to the end that the FCC Order
and a Final Action with respect thereto may be obtained as soon as practicable;
provided, however, that in the event the application for assignment of the FCC
Licenses has been designated for hearing, either Buyer or Seller may elect to
terminate this Agreement pursuant to SECTION 10.1(C). Buyer shall not knowingly
take, and Seller covenants that Seller shall not knowingly take, any action that
such party knows or has reason to know would materially and adversely affect or
materially delay issuance of the FCC Order or materially and adversely affect or
materially delay its becoming a Final Action without a Material Adverse Effect,
unless such action is requested or required by the FCC, its staff or the Rules
and Regulations. Should Buyer or Seller become aware of any facts which could
reasonably be expected to materially and adversely affect or materially delay
issuance of the FCC Order without a Material Adverse Effect (including but not
limited to, in the case of Buyer, any facts which would reasonably be expected
to disqualify Buyer from controlling the Station), such party shall promptly
notify the other party thereof in writing and both parties shall cooperate to
take all steps necessary or desirable to resolve the matter expeditiously and to
obtain the FCC's approval of matters pending before it. Subject to the terms and
conditions herein provided, Buyer and Seller shall promptly determine whether
any filings are required to be made with, or consents, permits, authorizations
or approvals are required to be obtained from, any other governmental agency or
regulatory body of the federal, state and local jurisdictions in connection with
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and take all reasonable actions necessary to
obtain any required permits, authorizations or appraisals.
5.3 OTHER CONSENTS. Seller shall use its reasonable best efforts
to obtain the consent or waivers to the transactions contemplated by this
Agreement required under any assumed Station Agreements; provided that Seller
shall not be required to pay or grant any material consideration in order to
15
obtain any such consent or waiver.
5.4 TAX RETURNS AND PAYMENTS. All taxes pertaining to ownership of
the Sale Assets or operation of the Station prior to the Closing Date will be
timely paid; provided that Seller shall not be required to pay any such tax so
long as the validity thereof shall be contested in good faith by appropriate
proceedings and Seller shall have set aside adequate reserves with respect to
any such tax to the reasonable satisfaction of Buyer.
5.5 ACCESS PRIOR TO THE CLOSING DATE. Prior to the Closing, Buyer
and its representatives may make such reasonable investigation of the assets and
business of the Station and the Sale Assets as it may desire; and Seller shall
give to Buyer, its engineers, counsel, accountants and other representatives
reasonable access during normal business hours throughout the period prior to
the Closing to personnel and all of the assets, books, records and files of or
pertaining to the Station and the Sale Assets, provided that (i) Buyer shall
give Seller reasonable advance notice of each date on which Buyer or any such
other person or entity desires such access, (ii) each person (other than an
officer of Buyer) shall, if requested by Seller, be accompanied by an officer or
their representative of Buyer approved by Seller, which approval shall not be
unreasonably withheld, (iii) the investigations at the offices of Seller shall
be reasonable in number and frequency, and (iv) all investigations shall be
conducted in such a manner as not to physically damage any property or
constitute a disruption of the operation of the Station or Seller. Seller shall
furnish to Buyer during such period all documents and copies of documents and
information concerning the business and affairs of Seller and the Station as
Buyer may reasonably request. No investigation or information furnished pursuant
to this SECTION 5.5 shall affect any representations or warranties made by the
Seller herein.
5.6 CONFIDENTIALITY; PRESS RELEASE. All information, data and
materials furnished or to be furnished to either party with respect to the other
party in connection with this transaction or pursuant to this Agreement are
confidential. Each party agrees that prior to Closing (a) it shall not disclose
or otherwise make available, at any time, any such information, data or material
to any person who does not have a confidential relationship with such party; (b)
it shall protect such information, data and material with a high degree of care
to prevent the disclosure thereof; and (c) if, for any reason, this transaction
is not consummated, all information, data or material concerning the other party
obtained by such party, and all copies thereof, will be returned to the other
party. After Closing, neither party will disclose or otherwise make available to
any person any of such information, data or material concerning the other party,
except as may be necessary or appropriate in connection with the operation of
the Station by Buyer. Each party shall use its reasonable efforts to prevent the
violation of any of the foregoing confidentiality provisions by its respective
representatives. Notwithstanding the foregoing, nothing contained herein shall
prohibit Buyer or Seller from:
(i) using such information, data and materials in
connection with any action or proceeding brought or any claim asserted by Buyer
or Seller in respect of any breach by the other of any representation, warranty
or covenant made in or pursuant to this Agreement; or
(ii) supplying or filing such information, data or
materials to or with the FCC or SEC or any other valid governmental or court
authority to the extent required by law or reasonably necessary to obtain any
consent, waiver, amendment, modification, approval, authorization, permit or
license which may be necessary to effectuate this Agreement, and to consummate
the transaction contemplated herein.
In the event that either party determines in good faith that a press release or
other public announcement is desirable under any circumstances, the parties
shall consult with each other to determine the appropriate timing, form and
content of such release or announcement and thereafter may make such release or
announcement.
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5.7 REASONABLE BEST EFFORTS. Subject to the terms and conditions
of this Agreement, each of the parties hereto will use its reasonable best
efforts to take all action and to do all things necessary, proper or advisable
to satisfy any condition to the parties' obligations hereunder in its power to
satisfy and to consummate and make effective as soon as practicable the
transactions contemplated by this Agreement.
5.8 FCC REPORTS. Seller shall continue to file, on a current basis
until the Closing Date, all reports and documents required to be filed with the
FCC with respect to the Station. Seller shall provide Buyer with copies of all
such filings within five business days of the filing with the FCC.
5.9 CONVEYANCE FREE AND CLEAR OF LIENS. At or prior to the
Closing, Seller shall obtain executed releases, in suitable form for filing and
otherwise in form and substance reasonably satisfactory to Buyer, of any
security interests granted in the Sale Assets and properties as security for
payment of loans and other obligations or judgments and of any other Liens on
the Sale Assets. At the closing, Seller shall transfer and convey to Buyer all
of the Sale Assets free and clear of all Liens except Permitted Liens.
5.10 ENVIRONMENTAL ASSESSMENT. Not later than forty-five (45) days
after execution of this Agreement, Buyer may obtain a Phase I ("the Phase I")
environmental assessment of the Sale Assets by an environmental engineer
selected by Buyer. Within fourteen (14) days after Buyer's receipt of the Phase
I, if the Phase I indicates environmental conditions may exist on, under or
affect such properties that may constitute a violation or breach of Seller's
representations and warranties contained in SECTION 3.14 of this Agreement or
cause the condition contained in SECTION 6.9 to not be satisfied, then Buyer
shall be entitled to obtain a Phase II ("the Phase II") environmental assessment
of the Real Property, or any portion thereof. (The Phase I and the Phase II, if
obtained, shall be referred to herein as the "Environmental Assessment"). Buyer
shall commission and pay the cost of such Environmental Assessment and shall
provide a copy to Seller. The Environmental Assessment shall be subject to the
confidentiality provisions of SECTION 5.6. If after appropriate inquiry into the
previous ownership of and uses of the Real Property consistent with good
commercial or customary practice, the engineer concludes that environmental
conditions exist on, under or affecting such properties that would constitute a
violation or breach of Seller's representations and warranties contained in
SECTION 3.14 of this Agreement or cause the condition contained in SECTION 6.9
to not be satisfied, then Buyer may elect to proceed with the Closing or
terminate the Agreement at the sole option of Buyer.
5.11 NO INCONSISTENT ACTIVITIES. Seller agrees that it shall not,
nor shall it authorize or permit any officer, director, employee, investment
banker, attorney, advisor or agent, to directly or indirectly, solicit, initiate
or encourage the submission of, or participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal by any party to acquire the Station or the Sale Assets.
ARTICLE VI
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
Buyer's obligation to close the transaction contemplated by this
Agreement is subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions, unless waived by Buyer in writing:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES;
CLOSING CERTIFICATE.
(a) The representations and warranties of Seller contained in
this Agreement or in any other Document shall be complete and correct in all
material respects on the date hereof and at the
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Closing Date with the same effect as though made at such time except for changes
that do not have a Material Adverse Effect on the Station or the Sale Assets
taken as a whole.
(b) Seller shall have delivered to Buyer on the Closing Date
a certificate that (i) the condition specified in SECTION 6.1(a) is satisfied as
of the Closing Date, and (ii) except as set forth in such certificate (none of
which exceptions shall be a Material Adverse Effect on the Station, the Sale
Assets or Seller's ability to consummate the transaction contemplated hereby),
the condition specified in SECTION 6.2 is satisfied as of the Closing Date.
6.2 PERFORMANCE OF AGREEMENTS. Seller shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
6.3 FCC AND OTHER CONSENTS.
(a) The FCC Order shall have been issued by the FCC and
shall have become a Final Action without any Material Adverse Effect.
(b) Seller shall have satisfied all material conditions
which the FCC Order or any order, ruling or decree of any judicial or
administrative body relating thereto or in connection therewith specifies and
requires to be satisfied by Seller prior to transfer of the FCC Licenses to
Buyer.
(c) All other material authorizations, consents, approvals
and clearances of federal, state or local governmental agencies required to
permit the consummation by Buyer of the transactions contemplated by this
Agreement including, without limitation, the assignment of any FCC Authorization
requested by Buyer, shall have been obtained; all material statutory and
regulatory requirements for such consummation shall have been fulfilled; and no
such authorizations, consents, approvals or clearances shall contain any
conditions that individually or in the aggregate would have a Material Adverse
Effect on the operations of the Station.
6.4 ADVERSE PROCEEDINGS. Neither Buyer nor any affiliate of Buyer
shall be subject to any ruling, decree, order or injunction restraining,
imposing material limitations on or prohibiting (i) the consummation of the
transactions contemplated hereby or (ii) its participation in the operation,
management, ownership or control of the Station; and no litigation, proceeding
or other action seeking to obtain any such ruling, decree, order or injunction
shall be pending. No governmental authority having jurisdiction shall have
notified any party to this Agreement that consummation of the transaction
contemplated hereby would constitute a violation of the laws of the United
States or of any state or political subdivision or that it intends to commence
proceedings to restrain such consummation or to force divestiture, unless such
governmental authority shall have withdrawn such notice. No governmental
authority having jurisdiction shall have commenced any such proceeding.
6.5 OPINION OF SELLER'S FCC COUNSEL. Buyer shall have received
from Seller's FCC counsel an opinion, dated the Closing Date, in form and
substance reasonably satisfactory to Buyer's FCC counsel, to the effect that:
(a) The FCC Licenses listed on SCHEDULE 3.8 are valid, in
good standing and in full force and effect and include all material licenses,
permits and authorizations which are necessary under the Rules and Regulations
for Seller to operate the Station in the manner in which the Station is
currently being operated.
(b) To counsel's knowledge, no condition has been imposed by
the FCC as part of any FCC License which is not set forth on the face thereof as
issued by the FCC or contained in the Rules
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and Regulations applicable generally to stations of the type, nature, class or
location of the Station.
(c) No proceedings are pending or, to counsel's knowledge,
are threatened which may result in the revocation, modification, non-renewal of,
suspension of, or the imposition of a Material Adverse Effect upon, any of the
FCC Licenses, the denial of any pending applications, the issuance of any cease
and desist order or the imposition of any fines, forfeitures or other
administrative actions by the FCC which would materially adversely affect the
continued operation of the Station, other than proceedings affecting the radio
broadcasting industry in general.
6.6 OTHER CONSENTS. Seller shall have obtained in writing and
provided to Buyer on or before the Closing Date, without any condition
materially adverse to Buyer or the Station, the material consents or waivers to
the transactions contemplated by this Agreement required under those Station
Agreements which Buyer has elected to assume.
6.7 DELIVERY OF CLOSING DOCUMENTS. Seller shall have delivered
or caused to be delivered to Buyer on the Closing Date each of the Documents
required to be delivered pursuant to SECTION 8.2.
6.8 NO CESSATION OF BROADCASTING.
(a) Between the date hereof and the Closing Date, the
Station shall not have for a period of more than ten (10) continuous days, (i)
ceased broadcasting on its authorized frequency, (ii) lost substantially all of
its normal broadcasting capability or (iii) been broadcasting at a power level
of 50% or less of its FCC authorized level. Seller shall promptly notify Buyer
of the occurrence of any one or more of the foregoing events or conditions, and
the non-fulfillment of the condition precedent set forth in this Subsection
caused by the occurrence of the events specified in Seller's notice shall be
deemed waived by Buyer unless, within fifteen (15) days after Buyer's receipt of
Seller's written notice, Buyer notifies Seller in writing to the contrary.
(b) In addition, during the five (5) days immediately
preceding the Closing Date, the Station shall have been operating continuously
with substantially all of its normal broadcasting capability except for
cessation or reductions for insignificant periods of time resulting from
occurrences (such as lightning strikes) over which Seller has no control. Seller
shall have the right to delay Closing for a period not to exceed thirty (30)
days if Seller reasonably determines that any action to restore the Station
substantially all of its normal broadcasting capability can be completed during
such delay period.
6.9 ENVIRONMENTAL CONDITIONS. The Environmental Assessment
obtained by Buyer pursuant to SECTION 5.10 hereof shall not have disclosed any
material violation of any Environmental Law which is not removed or cured by
Seller prior to Closing.
6.10 ATLA POLICY. Seller shall have furnished to Buyer, at Seller's
expense, an ATLA Title Insurance Policy, dated as of the Closing, that title to
the Real Property is consistent with the representations and warranties set
forth in Sections 3.7(d) and (e).
ARTICLE VII
CONDITIONS PRECEDENT OF THE
OBLIGATION OF SELLER TO CLOSE
The obligation of Seller to close the transaction contemplated by this
Agreement is subject to the satisfaction, on or prior to the closing Date, of
each of the following conditions, unless waived by Seller in writing:
19
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties of Buyer contained in
this Agreement shall be complete and correct in all material respects on the
date hereof and at the Closing Date with the same effect as though made at such
time except for changes that are not materially adverse to Seller.
(b) Buyer shall have delivered to Seller on the Closing Date
a certificate that (i) the condition specified in SECTION 7.1(a) is satisfied as
of the Closing Date, and (ii) except as set forth in such certificate (none of
which exceptions shall be a Material Adverse Effect on Buyer's ability to
consummate the transaction contemplated hereby), the conditions specified in
SECTION 7.2 are satisfied as of the Closing Date.
7.2 PERFORMANCE OF AGREEMENTS. Buyer shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
7.3 FCC AND OTHER CONSENTS.
(a) The FCC Order shall have been issued by the FCC and
shall have become effective under the rules of the FCC, without any condition
materially adverse to Seller.
(b) Conditions which the FCC Order or any order, ruling or
decree of any judicial or administrative body relating thereto or in connection
therewith specifies and requires to be satisfied by Buyer prior to transfer of
the FCC Licenses to Buyer shall have been satisfied by Buyer.
(c) All other authorizations, consents, approvals and
clearances of all federal, state and local governmental agencies required to
permit the consummation by Seller of the transactions contemplated by this
Agreement shall have been obtained; all statutory and regulatory requirements
for such consummation shall have been fulfilled; and no such authorizations,
consents, approvals or clearances shall contain any conditions that individually
or in the aggregate would have any material adverse effect on Seller.
7.4 ADVERSE PROCEEDINGS. Seller shall not be subject to any
ruling, decree, order or injunction restraining, imposing material limitations
on or prohibiting the consummation of the transactions contemplated hereby. No
governmental authority having jurisdiction shall have notified any party to this
Agreement that consummation of the transactions contemplated hereby would
constitute a violation of the laws of the United States or of any state or
political subdivision or that it intends to commence proceedings to restrain
such consummation or to force divestiture, unless such governmental authority
shall have withdrawn such notice. No governmental authority having jurisdiction
shall have commenced any such proceeding.
7.5 DELIVERY OF CLOSING DOCUMENTS AND PURCHASE PRICE. Buyer shall
have delivered or caused to be delivered to Seller on the Closing Date each of
the Documents required to be delivered pursuant to SECTION 8.3, and Seller shall
have received payment of the Purchase Price with the form of payment set forth
in SECTION 2.4.
ARTICLE VIII
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CLOSING
8.1 TIME AND PLACE. Unless otherwise agreed to in advance by the
parties, Closing shall take place in person or via facsimile at the offices of
Buyer's counsel in Westlake Village, California, or at such other place as the
parties agree, at 10:00 A.M. Pacific Time on the date (the "Closing Date") that
is the later of (i) the fifth Business Day after the Applicable Date or (ii) the
date as soon as practicable following satisfaction or waiver of the conditions
precedent hereunder. The "Applicable Date" shall be the date on which issuance
of the FCC Order without any Material Adverse Effect or condition materially
adverse to Seller has become effective.
8.2 DOCUMENTS TO BE DELIVERED TO BUYER BY SELLER. At the
Closing, Seller shall deliver or cause to be delivered to Buyer the following:
(a) Certified resolutions of Seller's Board of Directors and
Shareholders approving the execution and delivery of this Agreement and each of
the other Documents and authorizing the consummation of the transactions
contemplated hereby and thereby.
(b) The certificate required by SECTION 6.1(b).
(c) A xxxx of sale and other instruments of transfer
and conveyance transferring to Buyer the Tangible Personal Property.
(d) Executed releases, in suitable form for filing and
otherwise in form and substance reasonably satisfactory to Buyer, of any
security interests granted in the Sale Assets as security for payment of loans
and other obligations and of any other Liens (other than Permitted Liens).
(e) An instrument or instruments assigning to Buyer all
right, title and interest of Seller in and to all Station Agreements being
assumed by Buyer, and all Real Property, including leases for the Real Property.
(f) An instrument assigning to Buyer all right, title and
interest of Seller in the FCC Licenses, all pending applications relating to the
Station before the FCC, and any remaining Sale Assets not otherwise conveyed.
(g) An instrument assigning to Buyer all rights, title and
interest of Seller to the assets described in SECTIONS 2.1(f) AND (g) hereof.
(h) The opinion of Seller's FCC counsel, dated the Closing
Date, to the effect set forth in SECTION 6.5.
(i) True and correct copies of all records as described in
SECTION 2.1(e) hereof.
(j) The ATLA Policy required by Section 6.10.
(k) Such additional information and materials as Buyer shall
have reasonably requested, including without limitation, evidence that all
consents and approvals required as a condition to Buyer's obligation to close
hereunder have been obtained.
8.3 DOCUMENTS TO BE DELIVERED TO SELLER BY BUYER.
At the Closing, Buyer shall deliver or cause to be delivered to Seller the
following:
21
(a) Certified resolutions of Buyer's Board of Directors
approving the execution and delivery of this Agreement and each of the other
Documents and authorizing the consummation of the transaction contemplated
hereby and thereby.
(b) The Purchase Price as set forth in SECTION 2.4.
(c) The agreement of Buyer assuming the obligations under
any Station Agreements being assumed by Buyer.
(d) The certificate required under SECTION 7.1(b).
(e) Such additional information and materials as Seller
shall have reasonably requested.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
9.1 SURVIVAL OF REPRESENTATION AND WARRANTIES. All
representations, warranties, covenants and agreements contained in this
Agreement or in any other Document shall survive the Closing for the Survival
Period and the Closing shall not be deemed a waiver by either party of the
representations, warranties, covenants or agreements of the other party
contained herein or in any other Document. No claim may be brought under this
Agreement or any other Document unless written notice describing in reasonable
detail the nature and basis of such claim is given on or prior to the last day
of the Survival Period. In the event such a notice is so given, the right to
indemnification with respect thereto under this Article shall survive the
Survival Period until such claim is finally resolved and any obligations with
respect thereto are fully satisfied. For purposes of this agreement the
"Survival Period" shall be twelve (12) months after the Closing Date except as
follows:
(a) Any representation and warranty contained in this
Agreement shall be subject to the twelve (12) month Survival Period, except that
any representation or warranty of Buyer of Seller as to (i) such party's
qualification and authority to consummate the transactions contemplated hereby,
(ii) title of the parties to the Station or Sale Assets , or (iii) any tax
obligation of Seller, the Survival Period shall be indefinite; and,
(b) As to any representation and warranty relating to any
Station Agreement, the Survival Period shall be for the presently existing term
of such Station Agreement plus any applicable period of time under any
applicable law governing the bringing of claims under such Station Agreement.
9.2 INDEMNIFICATION IN GENERAL. Buyer and Seller agree that the
rights to indemnification and to be held harmless set forth in this Agreement
shall, as between the parties hereto and their respective successors and
assigns, be exclusive of all rights to indemnification and to be held harmless
that such party (or its successors or assigns) would otherwise have by statute,
common law or otherwise.
9.3 INDEMNIFICATION BY SELLER.
Seller shall indemnify and hold harmless Buyer and any
officer, director, agent, employee and affiliate thereof with respect to any and
all demands, claims, actions, suits, proceedings, assessments, judgments, costs,
losses, damages, liabilities and expenses (including reasonable attorneys' fees)
relating to or arising out of:
22
(i) Any breach or non-performance by Seller
of any of its representations, warranties, covenants or agreements set forth in
this Agreement or any other Documents; or
(ii) The ownership or operation by Seller of
the Station or the Sale Assets on or prior to the Closing Date; or
(iii) All other liabilities and obligations of Seller
other than the Assumed Obligations; or
(iv) Noncompliance by Seller with the provisions of
the Bulk Sales Act, if applicable, in connection with the transaction
contemplated hereby; or
(v) Any violation of any Environmental Laws during
the xxxx Xxxxxx occupied the Real Property.
9.4 INDEMNIFICATION BY BUYER.
Buyer shall indemnify and hold harmless Seller and any
officer, director, agent, employee and affiliate thereof with respect to any and
all demands, claims, actions, suits, proceedings, assessments, judgments, costs,
losses, damages, liabilities and expenses (including reasonable attorneys' fees)
relating to or arising out of:
(i) Any breach or non-performance by Buyer of any
of its representations, warranties, covenants or agreements set forth in this
Agreement or any other Document; or
(ii) The ownership or operation of the Station after
the Closing Date; or
(iii) All other liabilities or obligations of Buyer
pursuant to the terms of this Agreement.
9.5 INDEMNIFICATION PROCEDURES. In the event that an Indemnified
Party may be entitled to indemnification hereunder with respect to any asserted
claim of, or obligation or liability to, any third party, such party shall
notify the Indemnifying Party thereof, describing the matters involved in
reasonable detail, and the Indemnifying Party shall be entitled to assume the
defense thereof upon written notice to the Indemnified Party with counsel
reasonably satisfactory to the Indemnified Party; provided, that once the
defense thereof is assumed by the Indemnifying Party, the Indemnifying Party
shall keep the Indemnified Party advised of all developments in the defense
thereof and any related litigation, and the Indemnified Party shall be entitled
at all times to participate in the defense thereof at its own expense. If the
Indemnifying Party fails to notify the Indemnified Party of its election to
defend, or contests its obligation to indemnify under this ARTICLE IX, the
Indemnified Party may pay, compromise, or defend such a claim without prejudice
to any right it may have hereunder.
ARTICLE X
TERMINATION; LIQUIDATED DAMAGES
10.1 TERMINATION. If Closing shall not have previously occurred,
this Agreement shall terminate upon the earliest of:
(a) the giving of written notice from Seller to Buyer, or
from Buyer to Seller, if:
23
(i) Seller gives such termination notice and is
not at such time in material default hereunder, or Buyer gives such termination
notice and Buyer is not at such time in material default hereunder; and
(ii) Either:
(A) any of the representations or
warranties contained herein of Buyer (if such termination notice is given by
Seller), or of Seller (if such termination notice is given by Buyer), are
inaccurate in any respect and materially adverse to the party giving such
termination notice unless the inaccuracy has been induced by or is the result of
actions or omissions of the party giving such termination notice; or
(B) Any material obligation to be
performed by Buyer (if such termination notice is given by Seller) or by Seller
(if such termination notice is given by Buyer) is not timely performed in any
material respect unless the lack of timely performance has been induced by or is
the result of actions or omissions of the party giving such termination notice;
or
(C) Any condition (other than those
referred to in foregoing CLAUSES (A) and (B)) to the obligation to close the
transaction contemplated herein of the party giving such termination notice has
not been timely satisfied; and any such inaccuracy, failure to perform or
non-satisfaction of a condition neither has been cured nor satisfied within
twenty (20) days after written notice thereof from the party giving such
termination notice nor waived in writing by the party giving such termination
notice.
(b) Written notice from Seller to Buyer, or from Buyer to
Seller, at any time after nine (9) months from the date this Agreement is
executed; provided that termination shall not occur upon the giving of such
termination notice by Seller if Seller is at such time in material default
hereunder or upon the giving of such termination notice by Buyer if Buyer is at
such time in material default hereunder.
(c) Written notice from Seller to Buyer, or from Buyer to
Seller, at any time following a determination by the FCC that the application
for consent to assignment of the FCC Licenses has been designated for hearing;
provided that the party which is the subject of the hearing (or whose alleged
actions or omissions resulted in the designation for hearing) may not elect to
terminate under this subsection (c).
(d) The written election by Buyer under SECTION 5.10 or
ARTICLE XI.
10.2 OBLIGATIONS UPON TERMINATION.
(a) In the event this Agreement is terminated pursuant to
SECTION 10.1(a)(ii)(A) or (B), the aggregate liability of Buyer for breach
hereunder shall be limited as provided in SUBSECTION (b) below and the aggregate
liability for Seller for breach hereunder shall be limited as provided in
SUBSECTION (c) below. In the event this Agreement is terminated for any other
reason, neither party shall have any liability hereunder, except that if a party
acts in bad faith, such party shall be liable for the attorneys' fees and
expenses incurred by the other party.
(b) If this Agreement is terminated by Seller's giving of
valid written notice to Buyer pursuant to SUBSECTION 10.1(a)(ii)(A) OR (B),
Buyer agrees that Seller shall be entitled to receive upon such termination, as
liquidated damages and not as a penalty, the sum of $550,000 ("Liquidated
Damages Amount"). SELLER'S RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT SHALL
CONSTITUTE PAYMENT OF LIQUIDATED DAMAGES HEREUNDER AND NOT A PENALTY, AND SHALL
BE SELLER'S SOLE REMEDY AT LAW OR IN EQUITY FOR BUYER'S BREACH
24
HEREUNDER IF CLOSING DOES NOT OCCUR. BUYER AND SELLER EACH ACKNOWLEDGE AND AGREE
THAT THE LIQUIDATED DAMAGE AMOUNT IS REASONABLE IN LIGHT OF THE ANTICIPATED HARM
WHICH WILL BE CAUSED BY BUYER'S BREACH OF THIS AGREEMENT, THE DIFFICULTY OF
PROOF OF LOSS, THE INCONVENIENCE AND NON-FEASIBILITY OF OTHERWISE OBTAINING AN
ADEQUATE REMEDY, AND THE VALUE OF THE TRANSACTION TO BE CONSUMMATED HEREUNDER.
(c) Notwithstanding any provision of this Agreement to the
contrary, but subject to the provisions of the following sentences, if this
Agreement is terminated by Buyer's giving of written notice to Seller pursuant
to SECTION 10.1(a) (ii) (A) OR (B), Buyer shall not be entitled to damages or
indemnification from Seller. Subject to the following sentence, if Seller
attempts to terminate this Agreement under circumstances where it is not
entitled to do so, or if Seller, by its own action, causes a breach of warranty
or fails to satisfy a condition (including without limitation a refusal to
consummate the transaction after Buyer has satisfied all conditions to Seller's
obligation to close and Buyer has demonstrated its willingness and ability to
close on the terms set forth in this Agreement and Buyer is not in default
hereunder) with the intent of creating a situation whereby Buyer elects to
terminate under SECTION 10.1(a) (ii) (A) OR (B) and Buyer does so elect to
terminate, the monetary damages, if any, to which Buyer shall be entitled shall
be limited to direct and actual damages and shall in no event exceed the
Liquidated Damages Amount in the aggregate. If a circumstance described in the
preceding sentence should arise and if Buyer establishes that the action of
Seller described therein was taken intentionally in order to allow Seller to
sell or enter into negotiations to sell the Station to another party, the
damages to which Buyer shall be entitled shall not be limited to direct and
actual damages.
10.3 TERMINATION NOTICE. Each notice given by a party pursuant to
SECTION 10.1 to terminate this Agreement shall specify the Subsection (and
clause or clauses thereof) of SECTION 10.1 pursuant to which such notice is
given.
ARTICLE XI
CASUALTY
Upon the occurrence of any casualty loss, damage or destruction
material to the operation of the Station or the Sale Assets prior to the
Closing, Seller shall promptly give Buyer written notice setting forth in detail
the extent of such loss, damage or destruction and the cause thereof if known.
Seller shall use its reasonable efforts to promptly commence and thereafter to
diligently proceed to repair or replace any such lost, damaged or destroyed
property. In the event that such repair or replacement is not fully completed
prior to the Closing Date, Buyer may elect at its sole option to postpone the
Closing until Seller's repairs have been fully completed if such event shall
occur within sixty (60) days or to consummate the transactions contemplated
hereby on the Closing Date, in which event Seller shall assign to Buyer the
portion of the insurance proceeds (less all reasonable costs and expenses,
including without limitation attorney's fees, expenses and court costs incurred
by Seller to collect such amounts), if any, not previously expended by Seller to
repair or replace the damaged or destroyed property (such assignment of proceeds
to take place regardless of whether the parties close on the scheduled or
deferred Closing Date) and Buyer shall accept the damaged Sale Assets in their
damaged condition provided that Seller has satisfied its insurance obligations
in SECTION 5.1(a) hereof. In the event Seller is unable to complete the repairs
within sixty (60) days, Buyer shall have the option to terminate this Agreement.
In the event the loss, damage or destruction causes or will cause the Station to
be off the air for more than seven (7) consecutive days or fifteen (15) total
days during a one month period, whether or not consecutive, then Buyer may elect
either (i) to consummate the transactions contemplated hereby on the Closing
Date, in which event Seller shall
25
assign to Buyer the portion of the insurance proceeds (less all reasonable costs
and expenses, including without limitation attorney's fees, expenses and court
costs, incurred by Seller to collect such amounts), if any, not previously
expended by Seller to repair or replace the damaged or destroyed property, and
Buyer shall accept the damaged Sale Assets in their damaged condition, or (ii)
to terminate this Agreement.
ARTICLE XII
CONTROL OF STATION
Between the date of this Agreement and the Closing Date, Buyer shall
not control, manage or supervise the operation of the Station or conduct of its
business, all of which shall remain the sole responsibility and under the
control of Seller, subject to Seller's compliance with this Agreement.
ARTICLE XIII
1031 EXCHANGE
Seller agrees to cooperate with Buyer as reasonably requested by Buyer
to assist Buyer in consummating a tax deferred exchange under Section 1031 of
the INTERNAL REVENUE CODE of 1986, and the comparable provisions of applicable
state law, provided Seller shall incur no additional liabilities, expenses or
costs as a result of or connected with such exchange.
ARTICLE XIV
MISCELLANEOUS
14.1 FURTHER ACTIONS. From time to time before, at and after the
Closing, each party, at its expense and without further consideration, will
execute and deliver such documents to the other party as the other party may
reasonably request in order more effectively to consummate the transactions
contemplated hereby.
14.2 ACCESS AFTER THE CLOSING DATE. After the Closing and for a
period of twelve (12) months, Buyer shall provide Seller, Seller's counsel,
accountants and other representatives with reasonable access during normal
business hours to the books, records, property, personnel, contracts,
commitments and documents of the Station pertaining to transactions occurring
prior to the Closing Date, that are the responsibility and obligation of the
Seller, when requested by Seller, and Buyer shall retain such books and records
for the normal document retention period of Buyer. At the request and expense of
Seller, Buyer shall deliver copies of any such books and records to Seller.
14.3 PAYMENT OF EXPENSES.
(a) Any fees assessed by the FCC in connection with the
filings contemplated by SECTION 5.2 or consummation of the transactions
contemplated hereby shall be shared equally between Seller and Buyer.
(b) All state or local sales or use, stamp or transfer, grant
and other similar taxes payable in connection with consummation of the
transactions contemplated hereby shall be shared equally between Seller and
Buyer.
26
(c) Except as otherwise expressly provided in this
Agreement, each of the parties shall bear its own expenses, including the fees
of any attorneys and accountants engaged by such party, in connection with this
Agreement and the consummation of the transactions contemplated herein.
14.4 SPECIFIC PERFORMANCE. Seller acknowledges that the Station and
the Sale Assets are of a special, unique, and extraordinary character, and that
any breach of this Agreement by Seller could not be compensated for by damages.
Accordingly, if Seller shall breach its obligations under this Agreement, Buyer
shall be entitled, in addition to any of the remedies that it may have, to
enforcement of this Agreement (subject to obtaining any required approval of the
FCC) by decree of specific performance or injunctive relief requiring Seller to
fulfill its obligations under this Agreement. In any action by Buyer to
equitably enforce the provisions of this Agreement, Seller shall waive the
defense that there is an adequate remedy at law or equity and agrees that Buyer
shall have the right to obtain specific performance of the terms of this
Agreement without being required to prove actual damages, post bond or furnish
other security.
14.5 NOTICES. All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered by
courier or sent by registered or certified mail, first class, postage prepaid,
or by telex, cable, telegram, facsimile machine or similar written means of
communication, addressed as follows:
(a) If to Seller, to:
(b) If to Buyer, to:
c/o SCA License Corporation
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Block, Esq.
Vice President & General Counsel
Telephone: (805) 987-0400 ext. 106
Facsimile No.: (000) 000-0000
or such other address with respect to any party hereto as such party may from
time to time notify (as provided above) to the other party hereto. Any such
notice, demand or communication shall be deemed to have been given (i) if so
mailed, as of the close of the third (3rd) business day following the date
mailed, and (ii) if personally delivered or otherwise sent as provided above, on
the date received.
14.6 ENTIRE AGREEMENT. This Agreement, the Schedules and Exhibits
hereto, and the other Documents constitute the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede any prior negotiations, agreements, understandings or
arrangements between the parties with respect to the subject matter hereof.
14.7 BINDING EFFECT; BENEFITS. Except as otherwise provided herein,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors or assigns. Except to the extent
specified herein, nothing in this Agreement, express or implied, shall confer on
any person other than the parties hereto and their respective successors or
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
27
14.8 ASSIGNMENT. This Agreement and any rights hereunder shall not
be assignable by either party hereto without the prior written consent of the
other party.
14.9 GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of
California, including all matters of construction, validity and performance.
14.10 BULK SALES. Buyer hereby waives compliance by Seller with the
provisions of the Bulk Sales Act and similar laws of any state or jurisdiction,
if applicable. Seller shall, in accordance with ARTICLE IX, indemnify and hold
Buyer harmless from and against any and all claims made against Buyer by reason
of such non-compliance.
14.11 AMENDMENTS AND WAIVERS. No term or provision of this Agreement
may be amended, waived, discharged or terminated orally but only by an
instrument in writing signed by the party against whom the enforcement of such
amendment, waiver, discharge or termination is sought. Any waiver shall be
effective only in accordance with its express terms and conditions.
14.12 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person or entity or any circumstance, is invalid or
unenforceable in any jurisdiction, (i) a suitable and equitable provision shall
be substituted therefor in order to carry out, so far as may be valid and
enforceable, the extent and purpose of such invalid and unenforceable provision,
and (ii) the remainder of this Agreement and the application of such provision
to other persons, entities or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
14.13 HEADINGS. Except as provided in ARTICLE I, the captions in
this Agreement are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
14.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by either party on separate counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. Fax signatures shall be deemed the same as original signatures.
This Agreement is not binding until executed by both parties hereto.
14.15 REFERENCES. All references in this Agreement to Articles and
Sections are to Articles and Sections contained in this Agreement unless a
different document is expressly specified.
14.16 SCHEDULES AND EXHIBITS. Unless otherwise specified herein,
each Schedule and Exhibit referred to in this Agreement is attached hereto, and
each such Schedule and Exhibit is hereby incorporated by reference and made a
part hereof as if fully set forth herein.
14.17 ATTORNEYS' FEES. If any action at law or equity is brought,
whether in a judicial proceeding or arbitration or reference, to enforce or
interpret any provision of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and expenses from the other
party, which fees and expenses shall be in addition to any other relief which
may be awarded.
14.18 ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association under its
Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. Any
arbitration shall be conducted in Ventura County, California.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written.
"SELLER" "BUYER "
XXXXXX BROADCASTING, INC. SCA LICENSE CORPORATION
By:_______________________
Name: By:________________________________
Title: Name:
Title:
29
LIST OF SCHEDULES
SCHEDULE 2.3 List of liabilities assumed by Buyer
SCHEDULE 2.5 Agreed allocation of purchase price
SCHEDULE 3.4 Consents
SCHEDULE 3.6 List of Tangible Personal Property
SCHEDULE 3.7 Description of Real Property
SCHEDULE 3.8 List of FCC licenses, permits & authorizations
SCHEDULE 3.9 List of Station Agreements
SCHEDULE 3.10 List of pending or threatened suits, actions or
administrative proceedings
SCHEDULE 3.11 Employee Matters
SCHEDULE 3.18 Brokers or finders' fees
30
SCHEDULE 2.3
LIABILITIES ASSUMED BY BUYER
31
SCHEDULE 2.5
AGREED ALLOCATION OF PURCHASE PRICE
32
SCHEDULE 3.4
CONSENTS
33
SCHEDULE 3.6
TANGIBLE PERSONAL PROPERTY
34
SCHEDULE 3.7
DESCRIPTION OF REAL PROPERTY
35
SCHEDULE 3.8
FCC LICENSES
36
SCHEDULE 3.9
STATION AGREEMENTS
37
SCHEDULE 3.10
LIST OF PENDING OR THREATENED SUITS, ACTIONS OF
ADMINISTRATIVE PROCEEDINGS
38
SCHEDULE 3.11
EMPLOYEE MATTERS
39
SCHEDULE 3.18
BROKER'S FEES
40
