ASSET PURCHASE AGREEMENT
Exhibit
10.12
This
Asset Purchase Agreement (the “Agreement”) is made this 24th day of June, 2008,
by and between Xxxxxxxx Broadcasting, Inc., Equity Media Holdings Corporation
(collectively, the “Seller”), and Xxxxx Communications, LLC
(“Buyer”).
WITNESSETH:
WHEREAS,
Seller is the holder of certain licenses and authorizations of eligibility
(the
“Licenses”) issued by the Federal Communications Commission (the “FCC”) for the
following television stations (collectively, the “Stations”);
KUOK-TV
(Facility ID No. 86532), licensed to Woodward, Oklahoma;
KCHM-CA
(Facility ID No. 41376), licensed to Oklahoma City, Oklahoma;
KOKT-LP
(Facility ID No. 64580), licensed to Sulphur, Oklahoma; and
KWDW-LP
(Facility ID No. 36850), licensed to Oklahoma City, Oklahoma.
WHEREAS,
in accordance with applicable FCC requirements, Seller wishes to sell and assign
the Licenses and all assets used solely in the operation of the Stations to
Buyer and Buyer wishes to buy and acquire such assets from Seller;
NOW
THEREFORE, in consideration of the foregoing and of the mutual agreements and
covenants contained herein, the parties, intending to be legally bound, agree
as
follows:
1.
Purchase
and Sale of Assets.
Subject
to the terms and conditions set forth below, Seller agrees to assign, sell
and
transfer to Buyer, and Buyer agrees to purchase from Seller, all of Seller’s
rights, title and interest in and to the assets, properties and business (except
for Excluded Assets) of every kind and description, wherever located, real,
personal, tangible or intangible, used solely by or otherwise relating solely
to
the Stations as
the
same shall exist on the Closing Date (as defined herein) (collectively, the
Station Assets”).
Seller
agrees that the Station Assets on the Closing Date shall be
free and
clear of any and all liens, claims, petitions, charges and encumbrances of
any
nature whatsoever (“Liens”),
and
shall include:
(a)
the
Licenses and any and all other FCC authorizations pertaining to the Stations
set forth
on
Schedule 1(a) hereto;
(b)
any
and all pending applications before the FCC which relate solely to the
Stations;
(c)
all
books and records relating solely to the Stations;
(d)
all
of Seller’s proprietary information, technical information, demographic and
market data, coverage maps, diagrams and the like which relate solely to the
Station or to the future business of the Stations;
(e)
all
of the Seller’s land, leases, land purchase contracts, tower registrations,
tower permits relating solely to the Stations, including but not limited to
all
rights, title and interest under the leases, subleases, licenses, occupancy
agreements or other contracts relating solely to the Stations, as set forth
on
Schedule 1(e) hereto (collectively the “Real Property”);
(f)
all
of the Seller’s right, title and interests under existing agreements, contracts,
commitments, leases relating solely to the operation of the Stations as more
fully described on Schedule 1(f) hereto; and
(g)
all
of the Seller’s supplies, equipment, inventories and other property purchased
but not installed, as and relating solely to the operation of the Stations,
as
set forth on Schedule 1(g) hereto.
In
connection with the purchase of Station Assets, Buyer shall assume and agree
to
pay, perform and discharge when due the following obligations arising in
connection with the Station Assets and operation of the business, as the same
shall exist on the Closing Date (collectively, the “Assumed Liabilities”): (i)
those liabilities arising from the Station Assets that are scheduled by Seller
in Schedule 3.6 set forth herein and agreed upon by both Parties, (ii) all
obligations of Seller under the leases, contacts and other agreements included
in the Station Assets arising and to be performed on or after the Closing Date,
but excluding any such obligations arising or to be performed prior to the
Closing Date.
1.1 Excluded
Assets.
Notwithstanding
the foregoing, the Station Assets shall not include the following:
(a)
cash,
cash equivalents and cash items of any kind whatsoever, certificates of deposit,
money market instruments, bank balances and rights in and to bank accounts,
Treasury bills and marketable securities and other securities;
(b) contracts
of insurance and insurance plans and the assets thereof, promissory notes,
amounts due from employees, bonds, letters of credit or other similar items
and
any cash surrender value in regard thereto;
(c)
corporate records and other books and records that pertain to internal corporate
matters of the Parties and account books of original entry with respect to
the
Stations and all original accounts, checks, payment records, Tax records and
other similar books, records and information relating to operation of each
respective Station’s Business and any other Assets prior to
Closing;
(d)
any
rights of Seller
or its
affiliates as
of the
Closing Date to payment for the sale of advertising time and other goods and
services by the Stations prior to the Closing Date (“Accounts
Receivable”)
(e)
Any
contracts
not set
forth under Schedule 1(f) hereto; and
(f) the
assets of Seller located at Seller’s or Seller’s Affiliate’s master control
facilities located in Little Rock, Arkansas that may be used in the operation
of
the Stations.
2. Purchase
Price and Payment.
(a) The
purchase price for the Station Assets shall be Four Million Dollars ($4,000,000)
(as adjusted pursuant to the purchase price adjustments set forth herein, the
“Purchase Price”) to be paid at Closing via a wire transfer of immediately
available funds, to an account designated in writing by the Seller to Buyer.
Buyer, and affiliates of the Seller, are also entering into contemporaneous
agreements for the assignment of additional stations (including Licenses and
relevant Station Assets), attached on Schedule
2(a)
hereto
(the “Additional Stations”), at the prices set forth therein
and
Buyer is paying to Seller Five Million Dollars ($5,000,000) as described in
Schedule 2(a).
The
Parties agree that only in the event there is a simultaneous Closing on the
Stations and Additional Stations, the combined purchase price shall be in an
amount not to exceed Seventeen Million Five Hundred Thousand Dollars
($17,500,000), subject to the payment provisions set forth on Schedule 2(a).
Otherwise, the Purchase Price set forth in this Section 2(a) and the allocated
values set forth on Schedule
2(a)
shall
apply.
(b) Except
for Seller’s contractual relationship with Xxxxxxx Communications, Inc., for
which it shall be solely responsible, Seller and Buyer each represent and
warrant to the other that neither Buyer nor Seller has engaged any other broker,
finder or agent in connection with the transactions contemplated by this
Agreement.
(c) If,
within the first 12 month period following Closing, Buyer enters into an
agreement to directly or indirectly sell, transfer, assign or otherwise dispose
of (any of the foregoing, a “Transfer”) all or any portion of the capital stock
or assets of the Stations, collectively or individually, to an unaffiliated
third party, fifty percent (50%) of the net proceeds of the purchase price
from
that transaction that are of an amount greater than the Purchase Price
(determined, in the case of a sale of certain of the Station Assets set forth
on
Schedule 2(a), on a proportionate basis;
provided, that in the event the Purchase Price paid by Buyer was reduced as
contemplated by Section 2(a), the Purchase Price for purposes of this Section
2(c) shall also be determined based on such reduced amount) shall
be
paid to Seller within three (3) business days after closing on such future
transfer.
(d) If,
within the second 12 month period following Closing, Buyer enters into an
agreement to directly or indirectly sell, transfer, assign or otherwise dispose
of (any of the foregoing, a “Transfer”) all or any portion of the capital stock
or assets of the Stations, collectively or individually, to an unaffiliated
third party, twenty five percent (25%) of the proceeds of the purchase price
from that transaction that are of an amount greater than the Purchase Price
(determined, in the case of a sale of any certain of the Station Assets set
forth on Schedule 2(a) to be on a proportionate basis) shall be paid to Seller
within three (3) business days after closing on such future
transfer.
(e)
All
revenues and all expenses arising from the Station Assets shall be allocated
between Buyer and Seller in accordance with generally accepted accounting
principles, consistently applied, and to effect the principle that Seller shall
receive all revenues and shall be responsible for all expenses, costs and
liabilities related to the period prior to the Closing Date, or arising out
of
events related to Seller’s ownership of the Station Assets or Seller’s operation
of the Stations prior to the Closing Date, and Buyer shall receive all revenue
and shall be responsible for all expenses, costs and liabilities related to
the
period subsequent to the Closing Date, or arising out of events related to
Buyer’s ownership of the Station Assets or Buyer’s operation of the Stations
subsequent to the Closing Date
3.
Representations and
Warranties of Seller.
Seller
hereby represents and warrants to Buyer, to the best of its actual knowledge,
as
follows:
3.1
Organization,
Standing and Qualification.
Seller
is a corporation organized under the law of the State of Arkansas, has all
requisite power and authority to enter into this Agreement and the other
documents and instruments to be executed and delivered by Seller and to carry
out the transactions contemplated hereby and thereby.
3.2
Authorization
and Binding Obligation.
The
execution, delivery and performance of this Agreement and the other Transaction
Documents (as defined in Section 7(d)) by Seller have been and will be duly
and
validly authorized by all necessary action on the part of Seller. This Agreement
has been duly signed and delivered by Seller and constitutes the legal, valid
and binding obligations of Seller, enforceable in accordance with its terms,
except as the enforceability may be affected by bankruptcy, insolvency or other
similar laws affecting creditors’ rights generally, and by judicial discretion
in the enforcement of equitable remedies.
3.3
Absence
of Violation, Conflicting Agreements.
The
execution, delivery and performance of this Agreement by Seller (with or without
the giving of notice, lapse of time, or both): do not require the consent of
any
third party other than the FCC and those consents set forth in Schedule
3.3.
3.4
Real
Property. No
real
property other than that listed on Schedule 1(e) is used in, held for use in
connection with, or necessary for the conduct of the business or operation
of
the Station as they are now operated (other than easements, rights of access,
and the like included in the Purchased Assets).
(a) Schedule
3.4(a)
sets
forth a list of each lease or similar agreement under which either Seller is
lessee of, or holds or operates, any Real Property owned by any third Person
as
of the date of this (the “Real
Property Leases).
Seller
has not received any notice of a default, offset or counterclaim under any
Real
Property Lease or any other communication asserting any material non-compliance
with any Real Property Lease.
Except
as set forth on Schedule
3.4(a),
the
Seller’s interests under the Real Property Leases are free and clear of all
Liens other than liens for taxes not yet due and payable. The Seller has
delivered to Buyer true and complete copies of the Real Property Leases,
together, in the case of any subleases or similar occupancy agreements, with
copies of all other leases.
3.5
FCC
and Governmental Matters.
(a)
Seller is the sole holder of the Licenses attached as Schedule
1(a).
Seller
has no other authorizations, construction permits or licenses issued by the
FCC
pertaining to the Stations. Except as set forth under Schedule 1(a), there
is
not pending any action before the FCC to revoke, suspend, cancel, rescind or
modify the Licenses (other than proceedings to amend FCC rules of general
applicability).
(b)
All
regulatory fees, reports and other filings required to be filed with the FCC
by
Seller have been filed.
3.6 Liabilities.
As used
in this Agreement, the term “Liability” means and includes any direct or
indirect indebtedness, guaranty, endorsement, claim, cause of action, loss,
damage, deficiency, cost, expense, obligation or responsibility, fixed or
unfixed, asserted or unasserted, liquidated or unliquidated, secured or
unsecured. Except
as
otherwise set forth under Schedule 3.6, the Seller has no knowledge of any
circumstances, condition, events or arrangements, contractual or otherwise,
which may give rise to material
Liabilities
relating solely to the Station Assets or to which any of the Station Assets
may
be subject either prior to or after the Closing Date. Buyer shall not be
required to assume any Liabilities except (i) those arising under Schedule
3.6
or otherwise explicitly being assumed herein , (ii) those arising on and after
the Closing Date, and (iii) those that arise under contracts being assumed
which
become due pursuant to the terms of such contracts on and after the Closing
Date.
3.7
Absence
of Contracts.
Except
as set forth under Schedule 3.7, Seller is not a party to or bound by any
written, oral or implied contract, agreement, lease, power of attorney,
guaranty, surety arrangement or other commitment relating in any way to any
of
the Station Assets or to the future business of the Station,
except
to the extent they were entered into in the ordinary course consistent with
past
practice and are not material to the Seller or the Station Assets.
3.8
Scope
of Representations and Warranties.
Notwithstanding anything to the contrary contained in this Agreement, it is
the
explicit intent of each party hereto that Seller is making no representation
or
warranty whatsoever, express or implied, including but not limited to any
implied representation or warranty as to condition, merchantability or
suitability as to any of the Station Assets, except those representations and
warranties contained in this Section 3.
4. Representations
and Warranties of Buyer.
Buyer
represents and warrants to Seller as follows:
4.1
Organization
and Standing.
Buyer is
a limited liability company organized under the laws of the State of Tennessee,
and has all requisite corporate power and authority to enter into this Agreement
and the other documents and instruments to be executed and delivered by Buyer
and to carry out the transactions contemplated hereby and thereby.
4.2
Authorization
and Binding Obligation.
The
execution, delivery and performance of this Agreement by Buyer have been duly
and validly authorized by all necessary action on the part of Buyer. This
Agreement has been duly signed and delivered by Buyer and constitutes the legal,
valid and binding obligations of Buyer, enforceable against it in accordance
with its terms, except as the enforceability may be affected by bankruptcy,
insolvency or other similar laws affecting creditors’ rights generally, and by
judicial discretion in the enforcement of equitable remedies.
4.3
Absence
of Violation, Conflicting Agreements.
Buyer’s
execution, delivery and performance of this Agreement (with or without the
giving of notice, lapse of time, or both): (i) do not require the consent of
any
third party other than the FCC; (ii) will not violate any provision of its
Articles of Incorporation or By-laws; (iii) will not violate any applicable
law,
judgment, order, injunction, decree, rule, regulation, ordinance or ruling
of
any court or governmental authority; (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of any agreement, instrument, license or permit to which Buyer is a party
or by which Buyer may be bound, such that Buyer could not acquire the Station
Assets.
4.4
Absence
of Litigation.
There is
no suit, action, proceeding or investigation pending or, to Buyer’s knowledge,
threatened before any federal, state or local court, grand jury, administrative
or regulatory body, arbitration, or mediation panel or similar body, to which
Buyer is a party, which seeks to enjoin or prohibit or otherwise to question
the
validity of any action taken or to be taken by Buyer pursuant to or in
connection with this agreement.
4.5
Financial
Ability.
Buyer
has the funds available to purchase the Stations pursuant to the consideration
provisions set forth under Section 2(a) of this Agreement.
5.
Covenants
of Seller.
Between
the date hereof and the Closing Date, except as contemplated by this Agreement
or with the prior written consent of Buyer, Seller hereby covenants and
agrees:
(a)
to
notify Buyer promptly of the commencement or threat of any claim, suit, action,
arbitration, legal, administrative or other proceeding, governmental
investigation or tax audit against (i) Seller or (ii) any other party that
relates in any way to, or that could reasonably be expected to affect the
Licenses or any of the Station Assets;
(b)
upon
Buyer’s request and at Buyer’s expense, to file an application or applications
or to give written consent to Buyer filing an application or applications with
the FCC for modification of the transmitting facilities of any of the
Stations.
(c)
Notwithstanding any other provision of this Agreement to the contrary, Buyer
acknowledges and agrees that at any time prior to Closing, Seller and its
Affiliates and their respective directors (to the extent acting in their
capacity as such), officers, employees, investment bankers, attorneys,
accountants and other advisors or representatives (collectively,
"Representatives") shall have the right to directly or indirectly: (i) initiate,
solicit and encourage Acquisition Proposals (as defined below), including by
way
of providing access to non-public information pursuant to (but only pursuant
to)
one or more confidentiality agreements; and (ii) enter into and maintain
discussions or negotiations with respect to potential Acquisition Proposals
or
otherwise cooperate with or assist or participate in, or facilitate, any such
inquiries, proposals, discussions or negotiations. As used herein, the term
"Acquisition Proposal" means any inquiry, offer or proposal made by any person,
entity or group at any time relating to any direct or indirect acquisition
of
any or all of the Station Assets. Neither Buyer, its Affiliates nor any of
their
respective Representatives shall cooperate with, and shall not take any action
that interferes with, any actions taken by Seller, its Affiliates and their
respective Representatives pursuant to this Section 5.3(c),
6.
Joint
Covenants.
6.1
Cooperation.
Buyer
and Seller shall cooperate fully with each other and their respective counsel
in
connection with any actions required to be taken as part of their obligations
under this Agreement, including (i) the filing of an application (the “FCC
Application”) with the FCC, (ii) the defense against any petition to deny or
informal objection filed against the FCC Application, and (iii) the Buyer’s
assumption of any leases or other agreements relating to the Stations and
any
third party consents required thereto. Seller and Buyer shall each prepare
its
portion of the FCC Application, which shall be filed with the FCC within ten
(10) business days after the execution of this Agreement. Each party shall
share
equally in the payment of FCC filing fees associated with the FCC Application.
Each party shall pay its own attorney fees incurred in filing and prosecuting
the FCC Application.
7.
Seller’s
Deliveries at Closing.
At
Closing, Seller shall deliver or cause to be delivered to Buyer the following
(collectively, the “Transaction Documents”):
(a)
A
Certificate, dated as of the Closing Date and signed by Seller to the effect
that (i) all representations and warranties of Seller contained in this
Agreement, the Xxxx of Sale, the Transaction Documents, or in any exhibit,
schedule, certificate or other document delivered pursuant hereto, shall be
true
and correct in all material respects on and as of the Closing Date with the
same
force and effect as if made on and as of that date, and (ii) all of the terms,
covenants and conditions to be complied with and performed by the Seller on
or
prior to
the Closing Date shall have been complied with or performed in all material
respects;
(b)
Copies of the Licenses, together with a copy of the FCC’s consent to assignment
of the Licenses to Buyer or its assignee as contemplated by this Agreement
(the
“FCC
Consent”), and all other files, records and correspondence pertaining to the
Licenses or the Stations in Seller’s possession;
(c)
Written evidence reasonably satisfactory to Buyer of the transfer of title
to
the Licenses and the other Station Assets, provided, however, the parties are
in
agreement that Seller is under no obligation to obtain approval of the
assignment of the Univision Affiliation Agreement dated March 30, 2007, by
and
between Seller and Univision Network Limited Partnership, to Buyer;
and
(d)
A
Xxxx of Sale, and other such documents or instruments as Buyer may reasonably
request to carry out the transaction contemplated by this Agreement, including
but not limited to documents evidencing assignment of the leases, contracts
and
Licenses, if so required, except as otherwise provided herein.
8.
Buyer’s
Deliveries at Closing.
At
Closing, Buyer shall deliver or cause to be delivered to Buyer the
following:
(a)
A
Certificate, dated as of the Closing Date and signed by an executive officer
of
Buyer, to the effect that (i) all representations and warranties of the Buyer
contained in this Agreement, or in any exhibit, schedule, certificate or other
document delivered pursuant hereto, shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as if
made
on and as of that date, and (ii) all of the terms, covenants and conditions
to
be complied with and performed by Buyer on or prior to the Closing Date shall
have been complied with or performed in all material respects;
(b)
The
purchase price as provided in Section 2 hereof by wire transfer of immediately
available funds; and
9.
Closing.
9.1
Time
and Place.
The
Closing of the Station Assets by Buyer from Seller ("Closing") shall take place
at a location the parties may mutually specify and may be on the first business
day following twenty (20) days after the date on which the FCC Consent becomes
a
Final Order, or at such earlier time and place as the parties may mutually
agree
in the event Buyer agrees to waive the Final Order (such date, the "Closing
Date"). As used herein a Final Order means a written action or order issued
by
the FCC setting forth the grant of the FCC consent (a) which has not been
reversed, stayed, enjoined, anulled or set aside, and (b) with respect to which
no requests have been filed for administrative or judicial review,
reconsideration, appeal or stay, and the time for filing any such requests
and
for the FCC to set aside or suspend the action on its own motion has
expired
10.
Termination.
10.1
Termination
by Buyer.
Buyer
may terminate this Agreement, if not then in material default, upon written
notice to Seller upon the occurrence of any of the following:
(a)
If
FCC approval is denied or approval has not been received within the period
set
forth in Section 10.2(b) and such denial or failure to receive approval is
in no
part due to any wrongful -act or omission by Buyer; or
(b)
If
the Seller defaults in the observance or in the due and timely performance
of
any of its material covenants or agreements contained herein and such default
has not been cured within twenty (20) days after written notice by the
Buyer.
10.2
Termination
by Seller.
Seller
may terminate this Agreement upon written
notice to Buyer upon the occurrence of any of the following:
(a)
for
any reason whatsoever, subject to responsibility for satisfying the remedies
set
forth under Section 10.4 and Schedule 2(a) herein, provided that no liability
or
obligation shall be owed to Buyer if Buyer is otherwise in breach of its
obligations and duties under this Agreement;
(b)
If
FCC approval is denied or approval has not been received within twelve months
from the date the FCC Application is filed and such denial or failure to receive
approval is in no part due to any act or omission by Seller, provided however,
that Seller, in its sole option, may extend for an additional six month period;
or
(c)
If
the Buyer defaults in the observance or in the due and timely performance of
any
of its material covenants or agreements contained herein, and such default
has
not been cured within twenty (20) days after written notice by the Seller.
10.3
Specific
Performance. The
parties recognize and agree that the Assets are unique and that if, prior to
Closing, Buyer breaches this Agreement and refuses to perform under the
provisions hereof, Seller would be damaged irreparably and the award of monetary
damages alone would not be adequate to compensate Seller for its injury. Seller
shall therefore be entitled to obtain specific performance of the terms of
this
Agreement, and to injunctive or other equitable relief as remedies or any such
breach or failure to perform, without waiving any other rights Seller receives
herein or may have at law or equity.
10.4 Remedies.
Buyer
shall have the right to have the Initial Payment (as defined in Schedule 2(a))
returned to it by Seller only under the following circumstances:
(a) Termination
by Buyer under Section 10.1(a) or 10.1(b);
(b) Termination
by Seller under Section 10.2(a), provided, however, that if Buyer is not
otherwise in default, and Seller terminates this Agreement for the purposes
of
entering into an agreement with an independent third party for the sale of
the
Stations, payment of the Initial Payment to Buyer shall not be due and payable
until consummation of the aforementioned transaction between Seller and that
third party;
(c) Termination
by Seller under 10.2(b), provided Buyer is not otherwise in default under this
Agreement; or
(d) If
there
is a failure to close within 20 days after the FCC Consent becomes a Final
Order, and such failure is solely due to the fault of Seller, or in the event
that Seller fails to enter into a definitive agreement to sell the Stations
to
an unaffiliated third party within 20 days after the FCC Consent becomes a
Final
Order, provided however that Buyer shall have the option to waive the right
to
the return of the Initial Payment, and instead may claim specific performance
of
the terms of this Agreement.
Further,
the right to have the Initial Payment returned shall also include any additional
payments made by Buyer on the Purchase Price.
10.5
Effect
of Termination.
If this
Agreement is validly terminated pursuant to this Section 10, this Agreement
will
forthwith become null and void, and except as otherwise set forth herein, there
will be no further liability or obligation on the part of Seller or Buyer (or
any of their respective officers, directors, employees, agents or other
representatives or Affiliates).
11.
Indemnification.
11.1
Seller’s
Indemnification.
Seller
shall indemnify, defend and hold Buyer and its officers, directors, employees
or
agents harmless from and against any and all loss, cost, liability, damage
and
expense (including legal and other expenses incident thereto) of every kind,
nature or description arising out of: (a) the breach of any representation
or
warranty of Seller set forth in this Agreement or in any schedule or certificate
delivered to Buyer pursuant hereto; (b) the breach of any of the covenants
or
agreements by Seller contained in or arising out of this Agreement or the
transactions contemplated hereby; or (c) the ownership of the Licenses prior
to
the Closing Date, and the conduct of the business of the Stations prior to
the
Closing Date, including, but not limited to, any liability, judgment or damages
against Seller, its officers, directors, employees or agents, as a result of
litigation involving the Seller prior to the Closing Date.
11.2
Buyer’s
Indemnification.
Buyer
shall indemnify, defend and hold Seller and its employees or agents harmless
from and against any and all loss, cost, liability, damage and expense
(including legal and other expenses incident thereto) of every kind, nature
or
description arising out of (a) the breach of any representation or warranty
of
Buyer set forth in this Agreement; or (b) the ownership of the Licenses after
the Closing Date and the conduct of the Stations after the Closing Date; or
(c)
the breach of any of the covenants or agreements by Buyer contained in or
arising out of this Agreement or the transactions contemplated
thereby,
including, without limitation, any failure to timely pay or perform the Assumed
Liabilities.
11.3 Indemnification
Procedure.
In the
event of any claim for indemnification hereunder, the claiming Party (the
“Indemnified Party”) will promptly notify the indemnifying Party (the
“Indemnifying Party”) in writing of the basis for the amount of the claim,
including the name of any third party involved. The Indemnifying Party will
have
the right, to be exercised within thirty (30) days of notice, if liability
to a
third party is involved, to defend or compromise such matter at the sole cost
and expenses of the Indemnifying Party, and the Indemnified Party must cooperate
fully in such defense. The Indemnified Party will not settle or compromise
any
claim by a third party for which it is entitled to indemnification without
the
prior consent of the Indemnifying
Party,
unless
suit has been instituted and the Indemnifying Party has not assumed control
of
the suit. The Parties agree that no amount shall be payable under this Section
11 unless and until the aggregate amount of all indemnifiable losses otherwise
payable exceeds One Hundred Thousand Dollars ($100,000) (the “Deductible”), and
then only to the extent such claims exceed the Deductible. The aggregate amount
that either Party shall be required to indemnify and hold harmless the other
Party shall not exceed the amount of Four Hundred Thousand Dollars ($400,000),
provided that such limitation shall not apply to repayment obligations to Buyer
for return of payments on the Purchase Price. Further, Buyer shall be prevented
from seeking indemnification from Seller for matters of which the Buyer has
or
should have had knowledge based on Xxxxx Xxxxx’x previous position as
CEO,
President
and/or Chairman
of the Board of Directors of Equity Media Holdings Corporation. To
the
extent that any losses that are subject to indemnification pursuant to this
Section 11.3 are covered by insurance, the Indemnified Party shall use
commercially reasonable efforts to obtain the maximum recovery under such
insurance; provided that the Indemnified Party shall nevertheless be entitled
to
bring a claim for indemnification under this Article in respect of such claims
and the time limitations set forth in this Section for bringing a claim of
indemnification under this Agreement shall be tolled during the pendency of
such
insurance claim. The existence of a claim by the Indemnified Party for monies
from an insurer or against a third party in respect of any loss shall not,
however, delay any payment pursuant to the indemnification provisions contained
herein and otherwise determined to be due and owing by the Indemnifying Party.
If the Indemnified Party has received the payment required by this Agreement
from the Indemnifying Party in respect of any loss and later receives proceeds
from insurance or other amounts in respect of such loss, then it shall hold
such
proceeds or other amounts in trust for the benefit of the Indemnifying Party
and
shall pay to the Indemnifying Party, as promptly as practicable after receipt,
a
sum equal to the amount of such proceeds or other amount received, up to the
aggregate amount of any payments received from the Indemnifying Party pursuant
to this Agreement in respect of such Loss. Notwithstanding any other provisions
of this Agreement, it is the intention of the parties that no insurer or any
other third party shall be (i) entitled to a benefit it would not be entitled
to
receive in the absence of the foregoing indemnification provisions, or (ii)
relieved of the responsibility to pay any claims for which it is
obligated.
11.4
Survival. The
representations and warranties set forth herein shall survive the Closing for
a
period of twelve months after the Closing,
and
shall terminate on such date except to the extent that any claims for
indemnification in respect of a breach of any such representation or warranty
is
made on or before such date, in which case such representation or warranty
shall
survive until the resolution of such claim.
12.
Assignability.
(a) Each
Party agrees that the entirety of the other Party’s unperformed rights, duties,
powers,
benefits
and obligations under this Agreement are assignable to a commonly owned
affiliate, provided that Party agrees to accept such assignment and assume
all
such obligations hereunder. In addition, Buyer recognizes that Seller may assign
its rights hereunder to a third party upon Seller providing prior written notice
to Buyer, and that Buyer may assign its rights hereunder to a third party only
upon obtaining the prior written consent of Seller and the Collateral Agent
(as
defined herein). Notwithstanding
anything to the contrary herein , Seller (or any of its trustees or successors)
shall have the right, without any notice to Buyer or any of its affiliates,
to
freely and without limitation, assign this Agreement to any person or entity,
including, without limitation, the to Xxxxx Fargo Bank, National Association,
as
collateral agent for the lenders (including any successor thereto, the
“Collateral Agent”) under the Third Amended and Restated Credit Agreement, dated
as of February 13, 2008, among EMHC, Seller, certain other subsidiaries of
EMHC,
and the financial institutions party thereto (as amended, supplemented and
otherwise modified from time to time, the “Credit Agreement”). Each of Seller
and Purchaser agrees and acknowledges that (i) this Agreement constitutes an
“executory contract” as such term is used in Title 11 of the United States Code
(as amended, the “Bankruptcy Code”), is not a financial accommodations contract
for purposes of the Bankruptcy Code and is capable of both assumption and
assignment pursuant to section 365 of the Bankruptcy Code and (ii) the rights
of
Seller under this Agreement may be exercised (without the necessity of
assumption) by Seller (or any of its trustees or successors) under the
Bankruptcy Code and any applicable provisions of bankruptcy or non-bankruptcy
law or by an unrelated third party, provided, however, that in the event the
trustee fails to honor this Agreement or does not enter into an agreement to
assign the Stations to a third party, whereby the Stations remain with the
Licensee, the Initial Payment, and any additional payments on the Purchase
Price, shall be returned to Buyer. Purchaser agrees that neither it nor any
of
its affiliates shall, directly or indirectly, (i) object to, delay, or take
any
other action to interfere, directly or indirectly, in any respect of the
exercise of any rights or powers hereunder and/or the assumption and/or
assignment of this Agreement pursuant to any provision of the Bankruptcy Code
or
any other provision or principle of bankruptcy or non-bankruptcy law, or (ii)
encourage any person or entity to do any of the foregoing.
(b)
Buyer
hereby acknowledges that Seller will grant a security interest in all of its
rights under this Agreement to Xxxxx Fargo Bank, National Association, as
collateral agent for the lenders (including any successor thereto, the
"Collateral Agent") under the Third Amended and Restated Credit Agreement,
dated
as of February 13, 2008, among Equity Media Holdings Corporation, a Delaware
corporation (“EMHC”), Seller, certain other subsidiaries of EMHC, and the
financial institutions party thereto (as amended, supplemented and otherwise
modified from time to time, the "Credit Agreement"), and Buyer hereby consents
to the granting of such security interest. Buyer further agrees that, following
such grant, (x) Buyer shall execute and deliver any and all instruments,
certificates and documents, and take any and all actions, as the Seller or
the
Collateral Agent may reasonably request from time to time to ensure that the
Collateral Agent has and maintains a first priority security interest in the
rights of the Seller under this Agreement and (y) the Collateral Agent shall
have the right, both prior to and following any default under the Credit
Agreement and without any further action by any other party hereto, to exercise
the rights of the Seller under this Agreement and to enforce the obligations
of
Buyer hereunder.
13.
Taxes.
Seller
shall be solely responsible for any sales, use or transfer tax due as a result
of this transaction.
14.
Other
Provisions.
14.1
Fees.
Should
any party default in the performance of any of the terms or conditions of this
Agreement, which default results in the filing of a lawsuit for damages,
specific performance, or other permitted remedy, the prevailing party in such
lawsuit shall be entitled to its reasonable legal fees and expenses, including
such fees and expenses at the appellate level. Except as otherwise provided
in
this Agreement, each Party hereto shall pay its own expenses incurred in
connection with the authorization, preparation, execution and performance of
this Agreement, including, without limitation, all fees and expenses of counsel,
accountants, agents and representatives.
14.2
Benefit
and Binding Effect.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, heirs and assigns.
14.3
Governing
Law.
This
Agreement shall be governed, construed and enforced in accordance with the
laws
of the State of Delaware, without regard to the choice of law provisions
thereof.
14.4
Construction.
The
parties acknowledge and agree that this Agreement has been fully negotiated
between them and shall not be interpreted or construed against the drafting
party.
14.5
Notices.
All
notices, demands, requests or other communication required or permitted
hereunder shall be in writing and sent by certified, express or registered
mail,
return receipt requested, postage prepaid, overnight air courier service,
personal delivery, or via facsimile (with proof of transmission) to the address
specified below (or to such other address which a party shall specify to the
other party in accordance herewith):
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If
to Buyer:
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Xxxxx
Communications, LLC
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000
Xxxxxxx Xxxxxx
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Xxxxx
000
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Xxxxxxxxxxx,
XX 00000
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Attn:
Xxxxx Xxxxx
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If
to Seller:
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Xxxxxxxx
Broadcasting, Inc.
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Equity
Media Holdings Corporation
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#0
Xxxxxxxxxxx Xxxxx, Xxxxx 000
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Xxxxxx
Xxxx, XX 00000
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Attn:
Xxxx Xxxx
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Notice
shall be deemed to have been given on the date of personal delivery, the date
set forth in the records of the delivery service, or on the return
receipt.
14.6
Multiple
Counterparts and Facsimile Signatures
This
Agreement may be signed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same Agreement.
Counterpart signatures to the Agreement delivered and received by facsimile
shall be acceptable and binding to both parties.
14.7
Entire
Agreement.
This
Agreement, the Schedules and Exhibits hereto, and all documents to be delivered
by the parties pursuant hereto, collectively represent the entire understanding
and agreement between Buyer and Seller with respect to the subject matter
hereof. This Agreement supersedes all prior memoranda and agreements between
the
parties hereto, and may not be modified, supplemented or amended, except by
a
written instrument signed by each of the parties hereto designating specifically
the terms and provisions so modified, supplemented or amended.
14.8
Captions.
The
section captions and headings in this Agreement are for convenience and
reference purposes only and should not affect in any way the meaning or
interpretation of his Agreement.
14.9
No Waiver.
Unless
otherwise specifically agreed in writing to the contrary: (i) the failure of
any
party at any time to require performance by the other of any provision of this
Agreement shall not affect such party’s right thereafter to enforce the same;
(ii) no waiver by any party of any default by another shall be taken or held
to
be a waiver by such party of any other preceding or subsequent default; and
(iii) no extension of time granted by any party for the performance of any
obligation or act by any other party shall be deemed to be an extension of
time
for the performance of any other obligation or act hereunder.
14.10
Further
Assurances.
The
parties acknowledge that FCC consent is required to transfer of the Licenses,
and agree not to effect such transfer before such consent has been obtained.
At
and after the Closing Date, Buyer and Seller will, without further
consideration, execute and deliver such further instruments and documents and
do
such other acts and things that the other party may reasonably request in order
to effect or confirm the transactions contemplated by this
Agreement.
14.11.
Confidentiality.
Each
Party agrees to maintain in confidence any non-public information received
from
any other party, and to use such non-public information only for purposes of
consummating the transactions contemplated by this Agreement. Such
confidentiality obligations will not apply to (i) information which was known
to
the one party or their respective agents prior to receipt from another party;
(ii) information which is or becomes generally known without the breach of
this
Section by any party; (iii) information acquired by a party or their respective
agents from a third party who was not bound to an obligation of confidentiality;
and (iv) disclosure required by law. Notwithstanding
the foregoing, Seller and its Affiliates shall be entitled to provide all
reasonable information, including any information that would be otherwise
restricted by this Section 14.11, to its lenders, administrative agent and
collateral agent under the Credit Agreement and other financing
sources.
14.12
Interpretation.
The
language used in this Agreement shall be deemed to be the language chosen by
the
parties to express their mutual intent. In the event that an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof
shall arise favoring or disfavoring any person or entity by virtue of the
authorship of any of the provisions of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and first year above written.
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By:
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Name:
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Title:
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EQUITY
MEDIA HOLDINGS CORPORATION
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By:
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Name:
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Title:
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XXXXX
COMMUNICATIONS, LLC
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By:
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Name:
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Title:
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