ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
on April 28, 1999 by and among GOLDEN WEST BROADCASTERS, a California
corporation ("Seller"), XXXXXXXXXX XXXXX and XXXXXXX X. XXXXXXXXX, AS
CO-TRUSTEES OF THE XXXXX QUALIFIED INTEREST TRUST (collectively, the
"Trustees"), KTNQ/KLVE, INC., a California corporation ("KTNQ-KLVE") and HBC
LICENSE CORPORATION, a Delaware corporation ("HBC") (KTNQ-KLVE and HBC
collectively are referred to herein as "Buyers") and HEFTEL BROADCASTING
CORPORATION, a Delaware corporation ("Heftel" and together with Buyers the
"Buying Parties"), with reference to the following facts:
RECITALS
A. Seller operates radio station KSCA(FM), Glendale, California (the
"Station") pursuant to licenses issued by the Federal Communications Commission
(the "FCC");
B. Seller, Clear Channel Radio, Inc. ("CCR") and Xxxxxxx X. Xxxxxxxxx and
Xxxxx Xxxx Xxxxx, as co-trustees of the Xxxxx Survivor's Trust, predecessor in
interest to the Xxxxx Qualified Interest Trust, entered into an Option
Agreement, dated as of December 23, 1996, (the "Option Agreement"). CCR
assigned its rights under the Option Agreement to Heftel, and Heftel assigned
some of its rights under the Option Agreement to KTNQ-KLVE and the rest of its
rights under the Option Agreement to HBC. This Agreement is being entered into
pursuant to the exercise of the option rights granted to Buyers under the Option
Agreement.
C. Seller desires to sell to KTNQ-KLVE, and KTNQ-KLVE desires to purchase
from Seller, substantially all of the assets used or held for use in connection
with the operation of the Station, with the exception of the FCC Licenses, all
on the terms and subject to the conditions set forth herein.
D. Seller desires to sell to HBC, and HBC desires to purchase from
Seller, the FCC Licenses, all on the terms and subject to the conditions set
forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE 1
PURCHASE OF ASSETS
1.1 TRANSFER OF ASSETS BY SELLER. On the Closing Date, subject to the
conditions contained herein, Seller shall sell, assign, transfer and convey to
KTNQ-KLVE, and KTNQ-KLVE shall purchase from Seller, all of the assets,
properties, interests and rights of Seller which are used or held for use in
connection with the operation of the Station, with the exception of the FCC
Licenses (collectively, the "Purchased Assets"), including, without limitation,
the following:
(a) All furniture, equipment and other tangible personal
property relating to the operation of the Station, including, without
limitation, the property listed on SCHEDULE 1.1(a) attached hereto, together
with any additions thereto made between the date hereof and the Closing Date,
and less any dispositions thereof made in the ordinary course of business
between the date hereof and the Closing Date which are replaced with items of
equal or greater value (collectively, the "Tangible Personal Property");
(b) All of Seller's right, title and interest in and to each
permit, contract, agreement, license and lease, written or oral, relating to the
operation of the Station listed in SCHEDULE 1.1(b) hereto, together with all
contracts, agreements and leases entered into by Seller between the date hereof
and the Closing Date if KTNQ-KLVE agrees to assume such agreement in writing at
the Closing (collectively, the "Contracts"); at KTNQ-KLVE's option, exercisable
by delivery of written notice before the Closing, the Auxiliary Site Lease shall
be included in the Contracts;
(c) All of Seller's right, title and interest in and to all of
its intellectual property associated with the Station, including, but not
limited to, the call letters "KSCA(FM)," together with any associated goodwill
(collectively, the "Intellectual Property");
(d) All files, records, and reports which Seller must retain
under FCC rules and regulations;
(e) All rights of way and other interests of every kind in and
to any real property and buildings thereon leased by Seller and used or held for
use in connection with the business and operations of the Station; and
(f) All goodwill in, and going concern value of, the Station;
(g) All claims and rights against third parties relating to the
Purchased Assets, including, without limitation, all rights under manufacturers'
and vendors' warranties; and
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(h) Any books and records relating to any of the foregoing,
except to the extent that Seller wishes to make, at its expense, a duplicate
copy of such materials.
1.2 TRANSFER OF FCC LICENSES BY SELLER. On the Closing Date, subject
to the conditions contained herein, Seller shall assign, transfer and convey to
HBC, and HBC shall purchase from Seller, all licenses, permits and other
authorizations relating to the Station issued to Seller by the FCC on or prior
to the Closing Date, together with renewals or modifications thereof, including,
without limitation, the licenses, permits and authorizations listed on SCHEDULE
1.2 attached hereto (collectively, the "FCC Licenses");
1.3 EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained herein, it is expressly understood and agreed that the neither the
Purchased Assets nor the FCC Licenses shall include the following assets along
with all right, title and interest therein (collectively, the "Excluded
Assets"):
(a) All cash, cash equivalents or similar type investments of
Seller, such as certificates of deposit, Treasury bills and other marketable
securities on hand and/or in banks;
(b) All of Seller's accounts receivable existing prior to the
TBA Effective Date;
(c) All contracts or agreements to which Seller is a party that
KTNQ-KLVE has not assumed pursuant to the terms of Section 2.1 hereof;
(d) Seller's corporate seal, minute books, charter documents,
corporate stock record books and such other books and records as pertain to the
organization, existence or share capitalization of Seller and duplicate copies
of such records as are necessary to enable Seller to file its tax returns and
reports as well as any other records or materials relating to Seller generally
and not involving the Station's operations;
(e) All pension, profit sharing or cash or deferred (Section
401(k)) plans and trusts and the assets thereof and any other employee benefit
plan or arrangement and the assets thereof, if any maintained by Seller;
(f) Contracts of insurance and all insurance proceeds or claims
made by Seller relating to property or equipment repaired, replaced or restored
by Seller prior to the Closing Date;
(g) Any and all claims (except as set forth in Section 1.1(h))
made by Seller with respect to transactions prior to the Closing Date and the
proceeds thereof, except claims with
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respect to obligations to be assumed by KTNQ-KLVE pursuant to Section 2.1
hereof; and
(h) All other assets of Seller which are not used or held for
use in the operation of the Station.
1.4 NO LIENS. The Purchased Assets shall be transferred to KTNQ-KLVE
free and clear of all Liens and the FCC Licenses shall be transferred to HBC
free and clear of all Liens.
ARTICLE 2
ASSUMPTION OF OBLIGATIONS
2.1 ASSUMPTION OF OBLIGATIONS. In addition to the provisions of
Section 3.4, on the Closing Date, KTNQ-KLVE shall assume and undertake to pay,
satisfy or discharge the obligations and commitments of Seller arising or to be
performed on or after the Closing Date under the Contracts. All of the
foregoing assumed obligations and commitments shall be referred to herein
collectively as the "Assumed Liabilities." If any required approval of or
consent to the assignment of any Contract is not obtained and the Closing
occurs, such Contract shall not be assigned until such consent is obtained, but
on the Closing Date KTNQ-KLVE and Seller shall enter into an equitable
arrangement pursuant to which KTNQ-KLVE shall pay, satisfy, perform, and
discharge Seller's obligations which arise or are to be performed under such
Contract on or after the Closing Date and Seller shall provide to KTNQ-KLVE the
rights and benefits under such Contract arising on or after the Closing Date.
2.2 RETAINED LIABILITIES. Except as set forth in Sections 2.1 and 3.4,
KTNQ-KLVE expressly does not, and shall not, assume or be deemed to assume,
under this Agreement or otherwise by reason of the transactions contemplated
hereby, any liability, obligation, commitment, undertaking, expense or agreement
of Seller of any nature whatsoever, whether known or unknown or absolute or
contingent. All of such liabilities and obligations shall be referred to herein
collectively as the "Retained Liabilities." Without limiting the generality of
the foregoing, (a) KTNQ-KLVE shall have no obligation or liability to employees
of Seller due to or because of any past service liability, vested benefits,
retirement plan insolvencies or other retirement plan or past employment
obligation under local, state or federal law (including the Employee Retirement
Income Security Act of 1974, as amended) as a result of the purchase of the
Purchased Assets or former employees of Seller becoming employees of KTNQ-KLVE
and (b) KTNQ-KLVE shall have no liability to any employees of Seller under any
employment agreement between Seller and such employee, whether or not listed on
any Schedule attached hereto. Nothing contained herein shall limit the
obligations of KTNQ-KLVE under the TBA to reimburse Seller for certain expenses
or pay certain severance obligations.
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ARTICLE 3
CONSIDERATION
3.1 PURCHASE PRICE. In consideration for the transfer of the Purchased
Assets and the FCC Licenses, Buyers shall pay to Seller an amount (the "Purchase
Price") equal to the greater of (a) $112.5 million or (b) the sum of (i) $105
million plus (ii) an amount equal to the product of the Daily Amount (the
parties acknowledge the Daily Amount may be different for each day) multiplied
by the number of days elapsed from the TBA Effective Date until (but not
including) the Closing Date. The Purchase Price shall be subject to any
adjustment to be made pursuant to Section 3.4 hereof and shall be subject to
adjustment for any damages incurred by a party as a result of termination of the
TBA due to a breach thereof or a termination of the TBA not made in accordance
with the terms thereof. In addition, as consideration for the transfer of the
Purchased Assets to KTNQ-KLVE, KTNQ-KLVE shall assume the Assumed Liabilities.
3.2 PAYMENT OF PURCHASE PRICE. On the Closing Date, KTNQ-KLVE shall
pay the Purchase Price, plus or minus any adjustment to be made pursuant to
Sections 3.1 and 3.4 hereof and minus all payments made under the Option
Agreement, in lawful money of the United States of America by bank cashier's
check or wire-transfer of immediately available funds.
3.3 ALLOCATION OF PURCHASE PRICE. Within 90 days after the Closing,
KTNQ-KLVE and Seller shall mutually determine the allocation of the Purchase
Price in accordance with Treasury Regulation Section 1.1060-1T based upon the
approximate replacement values of the Purchased Assets and the FCC Licenses
determined by a nationally recognized appraisal firm chosen by KTNQ-KLVE and
reasonably acceptable to Seller (it being anticipated that the Purchase Price
will be allocated first to such of the Purchased Assets and the FCC Licenses as
are tangible to the extent of the approximate replacement values thereof on the
Closing Date, with the balance to intangible assets). KTNQ-KLVE shall pay all
fees and expenses of such appraisal firm. Seller and KTNQ-KLVE will report the
federal income tax consequences of the sale and acquisition of the Purchased
Assets and the FCC Licenses under this Agreement in a manner consistent with the
foregoing, and will file Forms 8594 in the manner and at the times required by
Treasury Regulation Section 1.1060-1T. KTNQ-KLVE shall prepare drafts of Form
8594 reflecting the respective Purchase Price allocations determined as provided
above in accordance with Treasury Regulation Section 1.1060-1T for Seller and
KTNQ-KLVE, such draft of Form 8594 to be provided to Seller within 180 days
following the Closing Date, but in no event later than the due date for Seller's
federal income tax return for the period including the Closing Date; and
Seller's consent to such drafts shall not be unreasonably withheld or delayed.
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3.4 PRORATION OF INCOME AND EXPENSES.
(a) Except as otherwise provided herein or in the TBA, all
income and expenses arising from the conduct of the business and operation of
the Station, including, without limitation, all ad valorem, real estate and
other property taxes (but excluding taxes arising by reason of the transfer of
the Purchased Assets and the FCC Licenses as contemplated hereby, which shall be
paid as set forth in Article 11 of this Agreement), business and license fees,
music and other license fees, utility expenses, rents and similar prepaid and
deferred items attributable to the ownership and operation of the Station, shall
be prorated between KTNQ-KLVE and Seller in accordance with generally accepted
accounting principles as of 11:59 p.m., California time, on the date immediately
preceding the Closing Date (the "Effective Time") in accordance with the
principle that Seller shall receive all revenues and be responsible for all
expenses, costs, and liabilities allocable to the period prior to the Effective
Time, and KTNQ-KLVE shall receive all revenues, and be responsible for all
expenses, costs, and obligations, allocable to the period after the Effective
Time, subject to the following:
(i) There shall be no adjustment with respect to any contracts
not included in the Contracts;
(ii) There shall be no adjustment for any expenses or payments
to terminated employees which are the responsibility of KTNQ-KLVE, or for which
KTNQ-KLVE is obligated to reimburse Seller, pursuant to the TBA or for any
revenue to which KTNQ-KLVE is entitled under the TBA; and
(iii) Revenues, expenses, taxes, costs and liabilities earned or
incurred in connection with particular programs and announcements shall be
allocated to the time of performance of such programs and announcements without
regard to the date of payment therefor.
(b) The prorations and adjustments contemplated by this Section,
to the extent practicable, shall be made on the Closing Date. As to those
prorations and adjustments not capable of being ascertained on the Closing Date,
an adjustment and proration shall be made within sixty (60) days of the Closing
Date. In the event of any disputes between the parties as to such adjustments,
the amounts not in dispute shall nonetheless be paid at such time and such
disputes shall be resolved by an independent certified public accountant
mutually acceptable to the parties, and the fees and expenses of such accountant
shall be paid one-half by Seller and one-half by KTNQ-KLVE. The decision of
such accountant shall be conclusive and binding on the parties. All prorations
and adjustments made on the Closing Date shall be paid in the form of an
increase or decrease of the amount payable by KTNQ-KLVE at the Closing. All
prorations and
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adjustments made after the Closing shall be paid within five (5) business
days of the determination thereof.
ARTICLE 4
GOVERNMENTAL CONSENTS
4.1 FCC CONSENT. It is specifically understood and agreed by the
parties hereto that consummation of the transactions contemplated hereby is
expressly conditioned on and is subject to the prior consent and approval of the
FCC ("FCC Consent").
4.2 FCC APPLICATION. Within five business days after execution of this
Agreement, the parties shall file with the FCC an application for assignment of
the FCC Licenses ("FCC Application") from Seller to HBC. The parties shall
thereafter prosecute the FCC Application with all reasonable diligence and
otherwise use commercially reasonable efforts to obtain the grant of the FCC
Application as expeditiously as practicable. If the FCC Consent imposes any
condition on a party hereto, such party shall use commercially reasonable
efforts to comply with such condition. If reconsideration or judicial review is
sought with respect to the FCC Consent, the parties shall oppose such efforts
for reconsideration or judicial review.
4.3 XXXX-XXXXX-XXXXXX FILINGS. If the HSR Act and the rules and
regulations of the Federal Trade Commission require the parties to file
Notification and Report Forms after the execution hereof, as soon as possible
after the date hereof, but in no event later than 30 days after the date hereof,
Buyers and Seller shall prepare and file all documents with the Federal Trade
Commission and the United States Department of Justice as are required to comply
with the HSR Act and shall promptly furnish all materials thereafter requested
by any of the regulatory agencies having jurisdiction over such filings.
ARTICLE 5
CLOSING
5.1 CLOSING DATE. Except as otherwise agreed upon by the parties
hereto, the consummation of the transactions contemplated herein (the "Closing")
shall occur within five (5) business days after the FCC Consent shall have
become a Final Order, subject to extension to allow Seller to comply with
Section 15.1 (the "Closing Date"). As used herein, the term "Final Order" means
a written action or order issued by the FCC setting forth the FCC Consent and
(a) which has not been reversed, stayed, enjoined, set aside, annulled or
suspended, and (b) with respect to which (i) no requests have been filed for
administrative or judicial review, reconsideration, appeal or stay, and the time
for filing any such requests and for the FCC to set aside the action on its own
motion (whether upon reconsideration or otherwise) has expired, or (ii) in the
event of
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review, reconsideration, appeal or stay, the time for further review,
reconsideration or appeal has expired or such requests have been withdrawn or
denied. Notwithstanding the foregoing, at KTNQ-KLVE's election the Closing
shall occur within five (5) business days after the date on which public
notice of the grant of FCC Consent is given (even though the FCC Consent
shall not have become a Final Order), subject to extension to allow Seller to
comply with Section 15.1. In addition, notwithstanding anything to the
contrary contained herein, if a party has a condition to its obligations
which has not been satisfied by the 5th business day after the date on which
public notice of the grant of the FCC Consent is given or the date on which
the FCC Consent becomes a Final Order, as the case may be, such party may
extend the Closing Date for such time as is necessary to cause such condition
to be satisfied. All actions taken at the Closing will be considered as
having been taken simultaneously and no such actions will be considered to be
completed until all such actions have been completed.
5.2 CLOSING PLACE. The Closing shall be held at such place as the
parties hereto may agree.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyers as follows:
6.1 ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and has
the requisite corporate power to carry on its business as it is now being
conducted.
6.2 AUTHORITY.
(a) Seller has the corporate power and authority to enter into
this Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Seller and the consummation by Seller of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Seller. This Agreement has been duly executed and delivered by Seller and
constitutes a valid and binding obligation of Seller, enforceable against Seller
in accordance with its terms.
(b) Except as set forth in SCHEDULE 6.2(b) attached hereto, the
execution and delivery by Seller of this Agreement do not, and the consummation
of the transactions contemplated hereby will not, (i) conflict with, or result
in a violation of, any provision of the Articles of Incorporation or Bylaws of
Seller, (ii) constitute or result in a material breach of or material default
(or an event which with notice or lapse of time, or both, would constitute a
material default) under, or
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result in the termination or suspension of, or accelerate the performance
required by, or result in a right of termination, cancellation or
acceleration of any contract or agreement of Seller, (iii) create any Lien
upon any of the Purchased Assets or the FCC Licenses, or (iv) constitute, or
result in, a violation of any judgment, ruling, order, writ, injunction,
decree, statute, law, rule or regulation applicable to Seller or any of its
properties or assets, other than in the cases of clauses (ii) and (iv) a
breach, default, termination or suspension, acceleration of performance,
cancellation or violation which would not adversely affect the Purchased
Assets or the FCC Licenses, Buyers' use or enjoyment of the Purchased Assets
or the FCC Licenses or the ability of Seller to complete the sale of the
Purchased Assets and FCC Licenses to Buyers pursuant to this Agreement.
(c) No consent, approval, order or authorization of, notice to,
or registration, declaration of filing with, any governmental entity is
necessary in connection with the execution and delivery of this Agreement by
Seller or the consummation of the transactions contemplated hereby by Seller,
except for the FCC Consent and the filings which may be required under the HSR
Act.
6.3 STATION LICENSES. SCHEDULE 1.1(c) attached hereto contains a true
and complete list of the FCC Licenses. Seller is the authorized legal holder of
the FCC Licenses. The FCC Licenses are in full force and effect. The FCC
Licenses are all of the licenses, permits or other authorizations required under
the Communications Act and the rules and regulations of the FCC to operate the
Station as currently operated. No proceedings are pending or, to the best
knowledge of Seller, threatened which may result in the revocation,
modification, non-renewal or suspension of any of the FCC Licenses. Except as
caused by non-compliance by Buyers with the TBA, the Station is operating in
compliance in all material respects with the Communications Act and all FCC
rules and regulations, including, but not limited to, the timely filing of all
accurate reports required by the FCC. The representations and warranties
contained in this Section 6.3 are subject to SCHEDULE 6.3 attached hereto.
6.4 EQUIPMENT. SCHEDULE 1.1(a) attached hereto contains a true and
complete list of the Tangible Personal Property. Seller (a) is the lawful owner
of all of the Tangible Personal Property it purports to own, and (b) has valid
leasehold interests in the Tangible Personal Property it purports to lease, in
all cases free and clear of any Liens. Seller will not be a party to any
equipment financing leases as of the Closing Date.
6.5 CONTRACTS. Seller is not in violation or breach of, nor has Seller
received in writing any claim or threat that it has breached any of the terms
and conditions of, any Contract, including any real property leases. To the
best knowledge of
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Seller, no other party to any Contract is in default thereunder or breach
thereof. Seller has delivered to Heftel a true, accurate and complete copy
of each Contract. Except as set forth in SCHEDULE 6.5 attached hereto,
neither the execution and delivery by Seller of this Agreement nor the
consummation by Seller of the transactions contemplated under this Agreement
requires the consent of any party to a Contract. With respect to the
Transmitter Site Lease, (a) such lease is in full force and effect and is
valid, binding and enforceable in accordance with its terms, (b) to the best
knowledge of Seller, no event has occurred or condition exists that, with
notice or lapse of time or both, would become a breach or default by either
party to such lease, (c) Seller's interest in such lease is not subject to
any Liens, and (d) the term thereof has been extended to May 30, 1999 and the
term "Master Sublease" as used therein means the KCET Sublease. The rights
under the Transmitter Site Lease provide sufficient access to the tower and
other facilities for the Station which are located on the premises described
in such lease without the need to obtain any other access rights. Seller has
not received any notice that any of the Senior Leases are being terminated.
6.6 INTELLECTUAL PROPERTY. None of the Intellectual Property was
granted to Seller pursuant to any licensing or sublicensing agreement under
which Seller is the licensee or the sublicensee. No person has a right to
receive a royalty or similar payment in respect of any Intellectual Property
pursuant to any contractual arrangements entered into by Seller. Seller has not
granted to any other person any right to use the Intellectual Property pursuant
to any licensing or sublicensing agreement. No notices have been received by
Seller that Seller's use of the Intellectual Property infringes upon or
otherwise violates any proprietary rights of others. To the best knowledge of
Seller, no third-party is infringing on the Intellectual Property. The
Intellectual Property, including any registered marks or applications, is owned
by Seller free and clear of any Liens. The representations and warranties
contained in this Section 6.6 are subject to SCHEDULE 6.6 attached hereto.
6.7 BROKERS. Seller has not entered into any contract, agreement,
arrangement or understanding with any person or entity which will result in the
obligation to pay any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement.
6.8 LITIGATION. There are no claims, actions, suits, litigation, labor
disputes, arbitrations, proceedings or investigations pending or, to the best
knowledge of Seller, threatened against Seller which would have an adverse
effect on Buyers' ability to purchase the Purchased Assets or the FCC Licenses,
Buyers' ability to full use and enjoyment of the Purchased Assets or the FCC
Licenses or the ability of Seller to sell the Purchased Assets or the FCC
Licenses to Buyers pursuant
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to this Agreement. Seller is not subject to any order, judgment, writ,
injunction or decree of any court or governmental agency or entity.
6.9 INSURANCE. Seller maintains the insurance policies relating to the
Station and the Purchased Assets bearing the policy numbers, for the terms, with
the companies, in the amounts, and providing the general coverage set forth on
SCHEDULE 6.9 attached hereto. All of such policies are in full force and effect
and Seller is not in default of any material provision thereof. Seller has not
received notice from any issuer of any such policies of its intention to cancel,
terminate or refuse to renew any policy issued by it.
6.10 LABOR, EMPLOYMENT CONTRACTS AND BENEFIT PROGRAMS.
(a) There are no collective bargaining agreements, or written or
oral agreements, relating to the terms and conditions of employment or
termination of employment, covering any employees, consultants or agents of
Seller relating to the Station, except as listed and described in SCHEDULE
6.10(a) attached hereto. Seller has provided to Heftel a copy of all of the
agreements listed on SCHEDULE 6.10(a) together with any amendments or
modifications thereof. Except as listed and described in SCHEDULE 6.10(a), none
of the employees of Seller relating to the Station have written employment
contracts. There is no strike, picketing, slowdown or work stoppage by or
concerning the employees of Seller relating to the Station pending against or
involving Seller. Except as permitted by the Settlement Agreement with AFTRA
described in SCHEDULE 6.10(a), Seller has no knowledge of any organizational
effort currently being made or threatened respecting any of the employees of
Seller relating to the Station.
(b) All handbooks, policies and procedures of Seller relating to
all aspects of employment of employees of Seller relating to the Station,
including but not limited to compensation, benefits, equal employment
opportunity and safety, are listed and described in SCHEDULE 6.10(b) attached
hereto.
(c) Seller has provided to KTNQ-KLVE the names of all present
employees of Seller and the positions, total annual compensation and accrued
vacation and sick time of each.
6.11 ABSENCE OF MATERIAL CHANGE. Except as caused by non-compliance by
Buyers with the TBA, since the date of the Option Agreement:
(a) Seller has not taken any action with respect to the Station
outside of the ordinary and usual course of business, except as related to the
transactions contemplated hereby;
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(b) Seller has not granted a security interest in the Purchased
Assets or the FCC Licenses to secure any borrowings of Seller or any obligation
or liability of others;
(c) Seller has with respect to the Station paid all of its debts
and obligations under the Contracts as they became due;
(d) Seller has not waived any right of substantial value under
the Contracts; and
(e) Seller has maintained its books, accounts and records with
respect to the Contracts in the usual, customary and ordinary manner.
6.12 SHAREHOLDERS. The Trustees, as co-trustees of the Xxxxx Qualified
Interest Trust, are the sole shareholders of Seller.
6.13 REAL PROPERTY. Seller has no interest in any real property other
than the Antenna Leases. Neither Seller nor, to the best knowledge of Seller,
any of Seller's lenders possess a title insurance policy with respect to such
interests. To the best knowledge of Seller, the real property on which the
tower for the Station is located is owned by Katella, Katella leases such
property to BALP pursuant to the Ground Lease, BALP leases such property to RMBC
pursuant to the RMBC Lease, RMBC leases such property to Metromedia pursuant to
the Metromedia Sublease, Metromedia leases such property to Fox pursuant to the
Fox Sublease, Fox leases such property to KCET pursuant to the KCET Sublease and
KCET leases a portion of such property to Seller pursuant to the Transmitter
Site Lease.
6.14 SALES TAX. Seller has not made any sales which would cause the
sale of the Purchased Assets or the FCC Licenses to Buyers hereunder to fail to
be exempt from sales tax under California law.
6.15 SCHEDULES. The Schedules attached hereto are the same as the
Schedules attached to the Option Agreement, except for the changes indicated in
the redlined Schedules attached hereto, changes which are not materially adverse
to Buyers, and changes which are not due to the actions or omissions of Seller,
and are accurate and complete as of the date hereof.
6.16 DISCLOSURE. No provision of this Agreement relating to Seller, the
Station, the Purchased Assets or the FCC Licenses or any other document,
Schedule or other written information furnished by Seller to Buyers in
connection with the execution, delivery and performance of this Agreement, or
the consummation of the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated in order
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to make the statement, in light of the circumstances in which it is made, not
misleading. Except for facts affecting the radio industry generally and
except for facts or circumstances caused by non-compliance by Buyers with the
TBA, there is no fact now known to Seller relating to the Station which in
Seller's reasonable opinion adversely affects the condition of the Purchased
Assets, the status of the FCC Licenses for the Station or the ownership,
operation, financial condition or business of the Station which has not been
disclosed to Buyers or set forth in the Schedules attached hereto.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BUYING PARTIES
Buying Parties jointly and severally represent and warrant to Seller as
follows:
7.1 ORGANIZATION, STANDING AND POWER. KTNQ-KLVE is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and has the requisite corporate power to carry on its business as it
is now being conducted. Each of HBC and Heftel is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power to carry on its business as it is now
being conducted.
7.2 AUTHORITY.
(a) Each Buying Party has all requisite corporate power and
authority to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Buying Parties and the consummation by Buying Parties of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of each Buying Party. This Agreement has been duly
executed and delivered by each Buying Party and constitutes a valid and binding
obligation of each Buying Party enforceable against each Buying Party in
accordance with its terms.
(b) No consent, approval, order or authorization of, notice to,
or registration, declaration or filing with, any governmental entity or any
third party is necessary in connection with the execution and delivery of this
Agreement by Buying Parties or the consummation by Buying Parties of the
transactions contemplated hereby, except the FCC Consent and the filings
required under the HSR Act.
7.3 BROKERS. No Buying Party has entered into any contract, agreement,
arrangement or understanding with any person or entity which will result in the
obligation to pay any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement.
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7.4 LITIGATION. There are no claims, actions, suits, litigation, labor
disputes, arbitrations, proceedings or investigations pending or, to the best
knowledge of each Buying Party, threatened against any Buying Party relating to
the transactions contemplated by this Agreement.
7.5 QUALIFICATION. There are no facts which, under the Communications
Act or the existing rules and regulations of the FCC, would disqualify HBC as an
assignee of the FCC Licenses.
ARTICLE 8
COVENANTS
8.1 OPERATION OF BUSINESS. Except as caused by non-compliance by
Buyers with the TBA, notwithstanding anything to the contrary contained herein,
between the date of this Agreement and the Closing Date, Seller:
(a) except in accordance with Section 1.1, shall not sell or
otherwise dispose of any of the Purchased Assets or FCC Licenses or xxxxx x Xxxx
thereon or permit a Lien to remain on the Purchased Assets or the FCC Licenses
if such Lien was placed thereon as a result of the actions or omissions of
Seller;
(b) shall not commit any act or omit to do any act which will
cause a breach of any Contract;
(c) shall not amend or renew any Contract or terminate the lease
for the Station's main transmitter site;
(d) will operate in the ordinary course of business, consistent
with past practice, and will take no actions to diminish materially the goodwill
of the business of the Station;
(e) will operate the Station in material compliance with the
Communications Act and the FCC's rules and regulations;
(f) will maintain the insurance coverage listed on SCHEDULE 6.9
in full force and effect through the Closing Date; and
(g) will take all action necessary to maintain the FCC Licenses
in full force and effect without material modification.
8.2 ACCESS TO INFORMATION. From the date hereof to the Closing Date,
Seller shall afford, and shall cause its respective officers, directors,
employees and agents to afford, to KTNQ-KLVE and the officers, employees and
agents of KTNQ-KLVE complete access at all reasonable times to Seller's
officers, employees,
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independent contractors, agents, properties and to Seller's books, records
and contracts relating to the Station.
8.3 CONFIDENTIALITY.
(a) Each Buying Party shall hold, and shall cause its officers,
employees and agents and representatives, including, without limitation,
attorneys, accountants, consultants and financial advisors who obtain such
information to hold, in confidence, and not use for any purpose other than
evaluating the transactions contemplated by this Agreement or performing its
obligations hereunder or under the TBA, any confidential information of Seller
or the Trustees, which for the purposes hereof shall not include any information
which (i) is or becomes generally available to the public other than as a result
of disclosure by a Buying Party or one of its affiliates in violation of its
obligations under this subsection, (ii) becomes available to a Buying Party on a
nonconfidential basis from a source, other than Seller, the Trustees or
affiliates of Seller, which has represented that such source is entitled to
disclose it, or (iii) was known to a Buying Party on a nonconfidential basis
prior to its disclosure to a Buying Party hereunder. If this Agreement is
terminated, Buying Parties shall deliver, and cause their officers, employees,
agents, and representatives, including, without limitation, attorneys,
accountants, consultants and financial advisors who obtain confidential
information of Seller or the Trustees to deliver, to Seller all such
confidential information that is written (including copies or extracts thereof),
whether such confidential information was obtained before or after the execution
hereof. Buying Parties shall be jointly and severally liable for a breach of
this Section 8.3 by any Buying Party.
(b) Seller shall hold, and shall cause its officers, employees
and agents and representatives, including, without limitation, attorneys,
accountants, consultants and financial advisors who obtain such information to
hold, in confidence, and not use for any purpose other than evaluating the
transactions contemplated by this Agreement, any confidential information of
each Buying Party, which for the purposes hereof shall not include any
information which (i) is or becomes generally available to the public other than
as a result of disclosure by Seller or one of its affiliates in violation of its
obligations under this subsection, (ii) becomes available to Seller on a
nonconfidential basis from a source, other than a Buying Party or its
affiliates, which has represented that such source is entitled to disclose it,
or (iii) was known to Seller on a nonconfidential basis prior to its disclosure
to Seller hereunder. If this Agreement is terminated, Seller shall deliver, and
cause its officers, employees, agents, and representatives, including, without
limitation, attorneys, accountants, consultants and financial advisors who
obtain confidential information of Buying Parties to deliver, to Heftel
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all such confidential information that is written (including copies or
extracts thereof), whether such confidential information was obtained before
or after the execution hereof.
(c) If a person who receives confidential information is
requested or becomes legally compelled (by oral questions, interrogatories,
requests for information or documents, subpoena, criminal or civil investigative
demand or similar process) to disclose any of such confidential information,
such person will provide the other party with prompt written notice so that such
other party may seek a protective order or other appropriate remedy or waive
compliance with Section 8.3(a) or (b), as the case may be. If such protective
order or other remedy is not obtained, or if the applicable party waives
compliance with Section 8.3(a) or (b), as the case may be, the person subject to
the request will furnish only that portion of such confidential information
which is legally required and will exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded such
confidential information.
8.4 NOTIFICATION OF CERTAIN MATTERS. Seller shall give prompt notice
to Buying Parties of the discovery of (i) any material inaccuracy in any
representation or warranty made by it, (ii) any material failure of Seller to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement or (iii) any legal proceedings related
to the Station or the transactions contemplated hereby. Buying Parties shall
give prompt notice to Seller of the discovery of (1) any material inaccuracy in
any representation or warranty made by any of them,(2) any material failure of
any Buying Party to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it under this Agreement or (3) any legal
proceedings related to the Station or the transactions contemplated hereby.
Notwithstanding the foregoing, no notification made under this Section shall
affect the representations or warranties or covenants or agreements of the
parties or the conditions to the obligations of the parties hereunder.
8.5 CONSENTS AND APPROVALS. Seller and Buying Parties shall use
commercially reasonable efforts to obtain any and all consents, transfers,
authorizations, or approvals required for the consummation of the transactions
contemplated by this Agreement. Buying Parties and Seller will cooperate with
each other in obtaining, and will provide all information necessary to obtain,
such consents.
8.6 CONTROL OF STATION. From the date hereof to the Closing Date, no
Buying Party shall, directly or indirectly, control, supervise or direct the
operation of the Station. Such operation, including complete control and
supervision of all Station programs, employees and policies, shall be the sole
responsibility of Seller. Notwithstanding the foregoing, the
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parties have entered into the TBA, pursuant to which Seller has granted to
Heftel (or its permitted assignee) the right to program the Station in
accordance with the Communications Act and the rules and regulations of the FCC.
8.7 NEWS RELEASES. Except for announcements required by applicable
law, prior to the Closing Date, any news releases pertaining to the transactions
contemplated hereby shall be reviewed and approved by Heftel and Seller, or
their respective representatives, and shall be acceptable to them prior to the
dissemination thereof.
8.8 BUYERS' COVENANT. Buying Parties agree that none of them shall
take any action which would cause HBC to be disqualified under the
Communications Act or the FCC's rules or regulations as an assignee of the FCC
Licenses.
ARTICLE 9
CONDITIONS
9.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYERS. The obligations of
Buyers to consummate the transactions contemplated by this Agreement are subject
to the fulfillment, prior to or at the Closing, of each of the following
conditions, except to the extent KTNQ-KLVE shall have waived in writing
satisfaction of such condition:
(a) The representations and warranties made by Seller in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and on the Closing Date as though such representations and
warranties were made on such date.
(b) Seller shall have performed and complied in all material
respects with all covenants, agreements, representations, warranties and
undertakings required by this Agreement to be performed or complied with by it
prior to or at the Closing.
(c) No action, suit or proceeding before any court or any
governmental or regulatory authority shall have been completed which restrains,
enjoins, rescinds, prevents or changes the transactions contemplated hereby in a
material manner.
(d) Seller shall have delivered to Buyers all of the documents
required by Section 10.1 hereof.
(e) The conditions set forth in Section 5.1 regarding the FCC
Consent shall have been satisfied.
(f) Any applicable waiting period under the HSR Act shall have
expired or been terminated.
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9.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations of
Seller to consummate the transactions contemplated by this Agreement are subject
to the fulfillment, prior to or at the Closing, of each of the following
conditions, except to the extent Seller shall have waived in writing
satisfaction of such condition:
(a) The representations and warranties made by Buying Parties in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and on the Closing Date as though such representations and
warranties were made on such date.
(b) Buying Parties shall have performed and complied in all
material respects with all covenants, agreements, representations, warranties
and undertakings required by this Agreement to be performed or complied with by
any of them prior to or at the Closing.
(c) No action, suit or proceeding before any court or any
governmental or regulatory authority shall have been completed which restrains,
enjoins, rescinds, prevents or changes the transactions contemplated hereby in a
material manner.
(d) Buying Parties shall have delivered to Seller all of the
documents required by Section 10.2 hereof.
(e) The conditions set forth in Section 5.1 regarding the FCC
Consent shall have been satisfied.
(f) Any applicable waiting period under the HSR Act shall have
expired or been terminated.
ARTICLE 10
CLOSING DELIVERIES
10.1 DELIVERIES BY SELLER. At the Closing, Seller shall deliver or
cause to be delivered to Buyers the following:
(a) Xxxx of Sale, assignment and other good and sufficient
instruments of conveyance, transfer and assignment, all in form and substance
reasonably satisfactory to counsel for KTNQ-KLVE, as shall be effective to vest
in KTNQ-KLVE title in and to the Purchased Assets and to vest in HBC title in
and to the FCC Licenses.
(b) A certificate, executed by an officer of Seller, in such
detail as KTNQ-KLVE shall reasonably request, certifying to the fulfillment or
satisfaction of the conditions set forth in Sections 9.1(a), (b) and (c). The
delivery of such certificate shall constitute a representation and warranty of
Seller as to the statements set forth therein.
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(c) Resolutions of the Board of Directors of Seller authorizing
the execution, delivery and performance of this Agreement by Seller, certified
by the corporate secretary of Seller.
(d) Updated Schedules to this Agreement reflecting any changes
necessary to render the information contained therein true and accurate on the
Closing Date.
(e) Originals or copies of all program, operations,
transmissions, or maintenance logs and all other records required to be
maintained by the FCC with respect to the Station, including the Station's
public file, shall be left at the Station and thereby delivered to Buyers.
(f) An opinion of Jeffer, Mangels, Xxxxxx & Marmaro LLP covering
the following matters:
(i) Seller is a corporation validly existing and in
good standing under the laws of the State of California and has the requisite
corporate power to carry on its business as it is being conducted on the
Closing Date;
(ii) Seller has the corporate power and authority to enter
into this Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Seller and the consummation by Seller of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Seller; and
(iii) This Agreement constitutes a valid and binding
obligation of Seller and the Trustees.
(g) An estoppel certificate executed by each of KCET and Fox
containing the following information:
(i) The lease or leases to which it is a party are in
full force and effect;
(ii) To its knowledge, no party to such lease(s) or any
other agreement related to the property is in default thereof;
(iii) Stating the expiration date of the lease(s);
(iv) No consent by Fox or KCET to the assignment of the
Transmitter Site Lease to KTNQ-KLVE is necessary; and
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(v) To its knowledge, no proceedings are pending which
would effect the use of the property as a site for a broadcasting tower.
(h) An estoppel certificate executed by Metromedia containing
the following information:
(i) The lease or leases to which it is a party are in
full force and effect;
(ii) To its knowledge, no party to such lease(s) or any
other agreement related to the property is in default thereof;
(iii) Stating the expiration date of the lease(s);
(iv) No consent by Metromedia to the assignment of the
Transmitter Site Lease to KTNQ-KLVE is necessary;
(v) To its knowledge, no proceedings are pending which
would effect the use of the property as a site for a broadcasting tower; and
(vi) To its knowledge, attached to the certificate are
the Ground Lease and the RMBC Lease.
(i) A Certification of Trust pursuant to California Probate Code
Section 18100.5 executed by the Trustees.
10.2 DELIVERIES BY KTNQ-KLVE. At the Closing, KTNQ-KLVE shall deliver
or cause to be delivered to Seller the following:
(a) The payment required under Section 3.2 hereof.
(b) An Assignment and Assumption Agreement reasonably
satisfactory in form and substance to counsel to Seller effecting the assumption
of the Assumed Liabilities on the terms and conditions hereof.
(c) A certificate, executed by an officer of each Buying Party,
in such detail as Seller shall reasonably request, certifying to the fulfillment
or satisfaction by Buying Parties of the conditions set forth in Sections
9.2(a), (b) and (c). The delivery of such certificate shall constitute a
representation and warranty of Buying Parties as to the statements set forth
therein.
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ARTICLE 11
TRANSFER TAXES, FEES AND EXPENSES
11.1 EXPENSES. Except as set forth in Section 11.2 hereof, each party
hereto shall be solely responsible for all costs and expense incurred by it in
connection with the negotiation and preparation of this Agreement and the
documents contemplated hereby and completion of the transactions contemplated
thereby, including, without limitation, attorneys' fees and costs related to any
governmental filings or any response to requests made by a governmental agency
in connection with such filings.
11.2 GOVERNMENTAL FILING OR GRANT FEES. Any filing or grant fees
imposed by any governmental authority the consent of which is required to
complete the transactions contemplated hereby shall be borne by Buying Parties.
ARTICLE 12
INDEMNIFICATION AND SPECIFIC PERFORMANCE
12.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in this Agreement shall survive the Closing for a period of
six months from the Closing Date; provided, however, the representation and
warranty regarding title to any of the Purchased Assets or the FCC Licenses
shall survive until the expiration of all applicable statutes of limitation.
The right of any party to recover Damages on any claim shall not be affected by
the termination of any representations and warranties as set forth above
provided that notice of the existence of such claim has been given by the
Indemnified Party to the Indemnifying Party prior to such termination.
12.2 INDEMNIFICATION OF BUYERS BY SELLER. Subject to Section 12.4, from
and after the Closing Date, Seller shall indemnify and hold Buyers and their
attorneys, affiliates, representatives, agents, officers, directors, successors
or assigns harmless from and against any Damages resulting from, arising out of
or incurred with respect to:
(a) A breach of any representation, warranty, covenant or
agreement of Seller contained herein, subject to notice of a claim being given
before the expiration of the applicable period specified in Section 12.1 hereof
with respect to the representations or warranties by Seller contained herein;
(b) The Retained Liabilities; or
(c) Except as provided by the TBA, any and all claims,
liabilities or obligations of any nature, absolute or contingent, relating to
the business and operation of the Station as conducted by Seller before the
Closing Date.
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Notwithstanding the foregoing, Seller shall not have any indemnity obligations
for expenses or liabilities for which Buyers are responsible under the TBA.
12.3 INDEMNIFICATION OF SELLER BY BUYING PARTIES. Subject to
Section 12.4, from and after the Closing Date, Buying Parties jointly and
severally shall indemnify and hold Seller and its attorneys, affiliates,
representatives, agents, officers, directors, successors or assigns, harmless
from and against any Damages resulting from, arising out of, or incurred with
respect to:
(a) A breach of any representation, warranty, covenant or
agreement by any Buying Party contained herein, subject to notice of a claim
being given before the expiration of the applicable period specified in Section
12.1 hereof with respect to the representations and warranties made by any
Buying Party herein;
(b) The Assumed Liabilities; or
(c) Any and all claims, liabilities or obligations of any
nature, absolute or contingent, relating to the business and operation of the
Station as conducted by Buyers on or after the Closing Date.
12.4 LIMITATIONS ON INDEMNIFICATION LIABILITIES.
(a) The indemnification obligations of Seller under Section
12.2(a) shall not be effective until the aggregate dollar amount of all Damages
indemnified against under such Section exceeds $100,000, at which time, all
Damages in excess of $100,000 shall be subject to such indemnification
obligations. The maximum amount payable by Seller for indemnity under Section
12.2(a) shall be $20 million.
(b) The indemnification obligations of Buying Parties under
Section 12.3(a) shall not be effective until the aggregate dollar amount of all
Damages indemnified against under such Section exceeds $100,000, at which time,
all Damages in excess of $100,000 shall be subject to such indemnification
obligations. The maximum amount payable by Buying Parties for indemnity under
Section 12.3(a) shall be $20 million.
12.5 PROCEDURES.
(a) Promptly after the receipt by a party (the "Indemnified
Party") of notice of (i) any claim or (ii) the commencement of any action or
proceeding which may entitle such party to indemnification under this Section,
such party shall give the other party (the "Indemnifying Party") written notice
of such claim or the commencement of such action or proceeding and shall permit
the Indemnifying Party to assume the defense of any
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such claim or any litigation resulting from such claim. The failure to give
the Indemnifying Party timely notice under this subsection shall not preclude
the Indemnified Party from seeking indemnification from the Indemnifying
Party unless, and then only to the extent, such failure has materially
prejudiced the Indemnifying Party's ability to defend the claim or
litigation. If such claim does not arise from the claim of a third party,
the Indemnifying Party shall have 30 days after such notice to cure the
conditions giving rise to such claim to the Indemnified Party's satisfaction.
Failure by the Indemnifying Party to notify an Indemnified Party of its
election to defend any such claim or action by a third party within 30 days
after notice thereof shall have been given to the Indemnifying Party shall be
deemed a waiver by the Indemnifying Party of its rights to defend such claim
or action.
(b) If the Indemnifying Party assumes the defense of any such
claim or litigation resulting therefrom with counsel reasonably acceptable to
the Indemnified Party, the Indemnified Party may participate, at its expense, in
the defense of such claim or litigation provided that the Indemnifying Party
shall direct and control the defense of such claim or litigation. The
Indemnified Party shall cooperate and make available all books and records
reasonably necessary and useful in connection with the defense. Except with the
prior written consent of the Indemnified Party, the Indemnifying Party shall
not, in the defense of such claim or any litigation resulting therefrom, consent
to the entry of any judgment (other than a judgment of dismissal on the merits
without cost) or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all Damages in respect of such claim or
litigation.
(c) If the Indemnifying Party shall not assume the defense of
any such claim or litigation resulting therefrom, the Indemnified Party may, but
shall have no obligation to, defend against such claim or litigation in such
manner as it may deem appropriate; provided, however, the Indemnified Party may
not compromise or settle such claim or litigation without the Indemnifying
Party's prior written consent.
12.6 INDEMNITY PAYMENTS. The parties agree that any payments made
pursuant to this Article 12 will be treated by the parties on all applicable tax
returns as an adjustment to the Purchase Price.
12.7 SOLE REMEDY. After the Closing, indemnity hereunder shall be the
sole remedy for a breach of a representation, warranty, covenant or agreement of
a party.
12.8 SPECIFIC PERFORMANCE. Seller recognizes that, in the event Seller
defaults in the performance of its obligations to close under this Agreement,
monetary damages will not be an
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adequate remedy. Therefore, unless either Buyer is in material breach of
this Agreement, Buyers shall be entitled to obtain specific performance of
the terms of this Agreement. In any action to enforce specifically the
performance of this Agreement, Seller waives the defense that there is
another adequate remedy at law or equity and agrees that Buyers shall have
the right to obtain specific performance of Seller's obligations to close
under the terms of this Agreement without being required to prove actual
damages, post bond or furnish other security. As a condition to seeking
specific performance, Buyers shall not be required to have tendered the
Purchase Price, but shall be required to demonstrate that it is ready,
willing and able to do so and to perform its other obligations hereunder in
accordance with the terms hereof. If the parties close under this Agreement
as a result of an order for specific performance or otherwise, Buyers shall
still be entitled to bring an action for indemnification of Damages under
Section 12.2.
ARTICLE 13
TERMINATION RIGHTS
13.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date only as follows (provided the terminating party is not in
material breach of any of its obligations, representations, warranties or duties
hereunder):
(a) By mutual written consent of the parties;
(b) Subject to Section 15.2, by written notice from Buying
Parties or Seller, if a court of competent jurisdiction or governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action is not subject to
appeal or further administrative or judicial review;
(c) By written notice from Buying Parties, if Seller fails to
perform or breaches any of its material obligations or duties under this
Agreement and Seller has not cured such failure to perform or breach within 30
days after delivery of written notice from Buying Parties or upon a material
breach of any representation and warranty of Seller contained herein, in either
case such that the conditions set forth in Sections 9.1(a) and (b) would not be
satisfied;
(d) By written notice from Seller, if any Buying Party fails to
perform or breaches any of its material obligations or duties under this
Agreement and such Buying Party has not cured such failure to perform or breach
within 30 days after delivery of written notice from Seller or upon a material
breach of any representation and warranty of any Buying Party
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contained herein, in either case such that the conditions set forth in
Sections 9.2(a) and (b) would not be satisfied;
(e) By written notice from Buying Parties or Seller, if the FCC
denies the FCC Application in a decision which is not subject to appeal or
further administrative or judicial review;
(f) Subject to Section 15.2, by written notice from Seller or
Buying Parties, if the Federal Trade Commission or the United States Department
of Justice prohibits the acquisition of the Purchased Assets pursuant to this
Agreement under a decision, order or decree which is not subject to appeal or
further administrative or judicial review; or
(g) By any party which was not in material breach of the TBA at
the time of the termination thereof if the Closing has not occurred on or before
the later of (i) one year from the date hereof, or (ii) one year from the date
of the termination of the TBA; the parties agree the termination right under
this subparagraph (g) only applies if the TBA is terminated.
13.2 LIABILITY OF PARTIES. Upon a termination of this Agreement in
accordance with its terms no party shall have any liability hereunder, except
(a) as provided in Section 8.3, (b) for liability for a breach of such party's
representations and warranties contained herein and (c) for liability for
nonperformance of any of such party's obligations, covenants or agreements
contained herein. Nothing contained herein shall limit the obligations of
Seller under the Option Agreement to refund payments made under the Option
Agreement.
13.3 SURVIVAL. Notwithstanding anything to the contrary contained
herein, the provisions of Section 8.3 and Article 15 shall survive the
termination hereof.
ARTICLE 14
DEFINITIONS
The following terms shall have the following meaning:
"Antenna Leases" shall mean the Transmitter Site Lease and the Auxiliary
Site Lease.
"Auxiliary Site Lease" shall mean the Radio Transmission Site and Joint
Occupancy Agreement, dated April 12, 1983, between Golden West Television, Inc.,
a California corporation, and Seller.
"BALP" shall mean Branford Associates Limited Partnership.
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"Communications Act" shall mean the Communications Act of 1934, as amended.
"Daily Amount" shall mean $13,698.63; provided, however, (i) for any day on
which Heftel (or its permitted assignee) is unable to broadcast its programming
on the Station under the TBA because of preemption thereof by Seller or because
the Station is unable to broadcast (except if the reason for the inability to
broadcast is a capital expenditure was not made under the TBA due to Heftel (or
its permitted assignee) not consenting to such expenditure), the "Daily Amount"
shall be reduced by an amount equal to (1) $570.78, multiplied by (2) the number
of hours (rounded to the nearest whole number) for which Heftel (or its
permitted assignee) is unable to broadcast its programming on the Station under
the TBA and (ii) for each day on which the TBA is not in effect due to a
termination thereof, the "Daily Amount" shall be zero.
"Damages" shall mean any liability, loss, cost, expense, judgment, order,
settlement, obligation, deficiency, claim, suit, proceeding (whether formal or
informal), investigation, Lien or other damage, including, without limitation,
attorney's fees and expenses. Notwithstanding the foregoing, "Damages" shall
not include any consequential damages, including, but not limited to, loss of
future revenue or income, cost of capital or loss of business reputation or
opportunity.
"Fox" shall mean Fox Television Stations, Inc.
"Fox Sublease" shall mean the Sublease, dated March 3, 1986, between Fox
and Metromedia, as amended.
"Ground Lease" shall mean the Ground Lease Agreement, dated November 1,
1983, between Katella and XXXX.
"XXX Xxx" shall mean Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Katella" shall mean Katella Realty Corporation.
"KCET" shall mean Community Television of Southern California, a California
non-profit corporation.
"KCET Sublease" shall mean the Master Sublease, dated October 1, 1994,
between Fox and KCET.
"Liens" shall mean all claims, liens, encumbrances, security interests,
mortgages, or pledges of any kind except for (i) rights of the lessor of the
Station's main transmitter site, and (ii) rights of any parties to any Contract
set forth in such Contract.
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"Metromedia" shall mean Metromedia Company, successor-in-interest to
Metromedia, Inc.
"Metromedia Sublease" shall mean the Sublease and Agreement dated November
1, 1983, between Metromedia and RMBC.
"RMBC" shall mean X.X. Xxxxxxxx Corporation.
"RMBC Lease" shall mean the Lease and Agreement, dated November 1, 1983,
between RMBC and BALP.
"Senior Leases" shall mean the Ground Lease, the RMBC Lease, the Metromedia
Sublease, the Fox Sublease and the KCET Sublease collectively.
"TBA" shall mean the First Amended and Restated Time Brokerage Agreement,
dated as of December 1, 1998, between Seller and Heftel, as permitted assignee
of CCR, and consented to by CCR pursuant to a letter dated as of December 1,
1998 to Heftel and Seller.
"TBA Effective Date" shall mean February 5, 1997.
"Transmitter Site Lease" shall mean the Sublease, dated February 1, 1992,
between KCET and Seller, as amended by a First Amendment dated December 4, 1996.
Each of the following terms shall have the meanings set forth in the
Section opposite such term:
Term Section
---- -------
Agreement Preamble
Assumed Liabilities 2.1
Buyers Preamble
Buying Parties Preamble
Closing 5.1
Closing Date 5.1
Contracts 1.1(b)
Effective Time 3.4(a)
Excluded Assets 1.2
FCC Recital A
FCC Application 4.2
FCC Consent 4.1
FCC Licenses 2.1
Final Order 5.1
HBC Preamble
Heftel Preamble
Indemnified Party 12.5(a)
Indemnifying Party 12.5(a)
Intellectual Property 1.1(d)
KTNQ-KLVE Preamble
Option Agreement Recital B
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Purchased Assets 1.1
Purchase Price 3.1
Retained Liabilities 2.2
Seller Preamble
Station Recital A
Tangible Personal Property 1.1(a)
Trustees Preamble
ARTICLE 15
MISCELLANEOUS PROVISIONS
15.1 RISK OF LOSS. The risk of loss or damage to any of the Purchased
Assets prior to the Closing Date shall be upon the Seller. In consultation with
KTNQ-KLVE, Seller shall repair, replace and restore any such damaged or lost
Purchased Asset to the condition necessary to cause Buyers to be able to
broadcast under the FCC Licenses. If the provisions of this Section conflict
with the TBA, the TBA shall control.
15.2 BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. No party may voluntarily or involuntarily assign its
interest under this Agreement without the prior written consent of the other
parties, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, (a) either Buyer may assign its rights hereunder, without the consent
of Seller or the Trustees, to Heftel or any of its wholly-owned subsidiaries and
(b) if no Buying Party is in material breach of any of its obligations,
representations, warranties or duties hereunder and the acquisition of the
Purchased Assets by KTNQ-KLVE or the FCC Licenses by HBC is prohibited by law,
Buyers may assign their rights hereunder, without the consent of Seller or the
Trustees, to an entity which is financially capable of performing the
obligations of Buyers hereunder. No assignment by either Buyer hereunder shall
relieve that Buyer or Heftel of its obligations hereunder. Notwithstanding
anything to the contrary contained herein, no assignment of any rights hereunder
may be made unless the rights of the assigning party under the Option Agreement
are also assigned to the same person.
15.3 HEADINGS. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
15.4 GOVERNING LAW. This Agreement and the rights of the parties hereto
shall be governed by, and construed in accordance with, the laws of the State of
California without giving effect to the choice of law principles thereof.
15.5 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
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15.6 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
15.7 ATTORNEYS' FEES. Should any party hereto institute any action or
proceeding at law or in equity to enforce any provision of this Agreement,
including an action for declaratory relief, or for damages by reason of an
alleged breach of any provision of this Agreement, or otherwise in connection
with this Agreement, or any provision hereof, the prevailing party shall be
entitled to recover from the losing party or parties reasonable attorneys' fees
and costs for services rendered to the prevailing party in such action or
proceeding.
15.8 MULTIPLE COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
15.9 NOTICES. Unless applicable law requires a different method of
giving notice, any and all notices, demands or other communications required or
desired to be given hereunder by any party shall be in writing. Assuming that
the contents of a notice meet the requirements of the specific Section of this
Agreement which mandates the giving of that notice, a notice shall be validly
given or made to another party if served either personally or if deposited in
the United States mail, certified or registered, postage prepaid, or if
transmitted by telegraph, telecopy or other electronic written transmission
device or if sent by overnight courier service, and if addressed to the
applicable party as set forth below. If such notice, demand or other
communication is served personally, service shall be conclusively deemed given
at the time of such personal service. If such notice, demand or other
communication is given by mail, service shall be conclusively deemed given
seventy-two (72) hours after the deposit thereof in the United States mail. If
such notice, demand or other communication is given by overnight courier, or
electronic transmission, service shall be conclusively deemed given at the time
of confirmation of delivery. The addresses for the parties are as follows:
If to Seller:
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxx. Xxxxxx Xxxxx
Telecopier: (000) 000-0000
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with a copy to:
Jeffer, Mangels, Xxxxxx & Marmaro LLP
2121 Avenue of the Stars, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to the Trustees:
Gursey, Xxxxxxxxx & Co., LLP
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Co-Trustee
Telecopier No.: (000) 000-0000
with a copy to:
Jeffer, Mangels, Xxxxxx & Xxxxxxx LLP
2121 Avenue of the Stars, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to any Buying Party:
0000 Xxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xx. XxXxxxx X. Xxxxxxxx, Xx.
Telecopier No.: (000) 000-0000
Any party hereto may change its or his address for the purpose of receiving
notices, demands and other communications as herein provided, by a written
notice given in the aforesaid manner to the other party hereto.
15.10 INCORPORATION BY REFERENCE. All Schedules attached hereto or to be
delivered in connection herewith are incorporated herein by this reference.
15.11 WAIVERS. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver.
No waiver shall be binding unless executed in writing by the party making the
waiver.
15.12 NO THIRD PARTY BENEFICIARIES. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give to any person or entity
other than the parties hereto and their successors or permitted assigns, any
rights or remedies under or by reason of this Agreement.
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15.13 ENTIRE AGREEMENT. This Agreement, the Schedules attached hereto,
the TBA, the Option Agreement and the other ancillary documents provided for
herein, constitute the entire agreement and understanding of the parties hereto
relating to the matters provided for herein and supersede any and all prior
agreements, arrangements, negotiations, discussions and understandings relating
to the matters provided for herein. To the extent this Agreement conflicts with
the TBA or the Option Agreement, this Agreement shall control.
15.14 RULE OF CONSTRUCTION. Each party and counsel for each party have
reviewed this Agreement. The parties hereto hereby agree that the normal rule
of construction, which requires a court to resolve any ambiguities against the
drafting party, shall not apply in interpreting this Agreement.
15.15 NEUTER AND GENDER. In this Agreement, the masculine, feminine or
neuter gender shall each be deemed to include the others when the context so
requires.
15.16 REFERENCE TO BUYING PARTIES. In the context of references herein to
representations, warranties, covenants, obligations or duties of any Buying
Parties under, or any Buying Party's non-compliance with, the Option Agreement
or the TBA, Buying Parties shall be deemed to include any of their assigns under
this Agreement or the TBA.
ARTICLE 1
GUARANTEES
16.1 GUARANTEE OF THE TRUSTEES. The Trustees, as co-trustees of the
Xxxxx Qualified Interest Trust, hereby guarantee the obligations of Seller
hereunder; provided, however, Buyers hereby agree the monetary liability of the
co-trustees under this guarantee shall be limited to the assets of the Xxxxx
Qualified Interest Trust.
16.2 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEES. The Trustees
represent and warrant to Buyers that (a) they have the power and authority to
enter into this Agreement, to perform their obligations hereunder and to
consummate the transactions contemplated hereby and (b) this Agreement has been
duly executed and delivered by the Trustees and constitutes a valid and binding
obligation of the Trustees, enforceable against the Trustees in accordance with
its terms.
16.3 GUARANTEE OF HEFTEL. Heftel hereby absolutely and unconditionally
guarantees payment and performance of all of the obligations of Buyers hereunder
whether now existing or hereafter arising. This guaranty is a guaranty of
payment not merely a guaranty of collection. Seller shall be entitled to
collect from, or take action against, Heftel without first being obligated to
pursue any collection from, or take any action
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against, either Buyer or any other person liable for the obligations of
Buyers hereunder. Heftel hereby waives its rights of subrogation,
reimbursement, indemnification, and contribution and any other rights and
defenses that are or may become available to it by reason of Section 2787 to
2855, inclusive, of the California Civil Code.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
GOLDEN WEST BROADCASTERS, a
California corporation
By: /s/ Xxxxxxxxxx Xxxxx
------------------------------------
Xxxxxxxxxx Xxxxx, President
/s/ Xxxxxxxxxx Xxxxx
---------------------------------------
XXXXXXXXXX XXXXX, as
co-trustee of the Xxxxx
Qualified Interest Trust
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
XXXXXXX X. XXXXXXXXX, as
co-trustee of the Xxxxx
Qualified Interest Trust
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KTNQ/KLVE, INC., a California
corporation
By: /s/ XxXxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: XxXxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title:
--------------------------------
HBC LICENSE CORPORATION, a Delaware
corporation
By: /s/ XxXxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: XxXxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title:
--------------------------------
HEFTEL BROADCASTING CORPORATION, a
Delaware corporation
By: /s/ XxXxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: XxXxxxx X. Xxxxxxxx, Xx.
---------------------------------
Title:
--------------------------------
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