ASSET PURCHASE AGREEMENT
(WLKY-AM, LOUISVILLE, KENTUCKY)
This AGREEMENT (this "Agreement") is dated as of July , 2000, by and
between TRUTH BROADCASTING CORPORATION ("Seller") and SALEM MEDIA OF KENTUCKY,
INC. ("Buyer").
RECITALS:
1. Seller has entered into an agreement (the "HAP Agreement") to
acquire radio station WLKY-AM, Louisville, Kentucky (the "Station") from
Hearst-Argyle Properties, Inc.
2. Buyer desires to acquire certain assets of the Station, and
Seller is willing to convey such assets to Buyer.
3. The acquisition of the Station is subject to consummation of
the acquisition of the Station from Hearst-Argyle Properties, Inc. and is
further subject to prior approval of the FCC.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer hereby agree as follows:
ARTICLE 1
TERMINOLOGY
1.1 ACT. The Communications Act of 1934, as amended.
1.2 ADJUSTMENT AMOUNT. As provided in SECTION 2.7, the amount by
which Buyer's account is to be credited or charged, as reflected on the
Adjustment List.
1.3 ADJUSTMENT LIST. As provided in SECTION 2.7, an itemized list
of all sums to be credited or charged against the account of Buyer, with a brief
explanation in reasonable detail of the credits or charges.
1.4 ASSUMED OBLIGATIONS. Such term shall have the meaning defined
in SECTION 2.3.
1.5 BUSINESS DAY. Any calendar day, excluding Saturdays and
Sundays, on which federally chartered banks in the city of Louisville, Kentucky
are regularly open for business.
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1.6 BUYER'S THRESHOLD LIMITATION. As provided in SECTION 9.3 (b),
the threshold dollar amount for the aggregate of claims, liabilities, damages,
losses, costs and expenses that must be incurred by Buyer before Seller shall be
obligated to indemnify Buyer. The Buyer's Threshold Limitation shall be Ten
Thousand Dollars ($10,000).
1.7 CLOSING. The closing with respect to the transactions
contemplated by this Agreement.
1.8 CLOSING DATE. The date determined as the Closing Date as
provided in SECTION 8.1.
1.9 DOCUMENTS. This Agreement and all Exhibits and Schedules
hereto, and each other agreement, certificate, or instrument delivered pursuant
to or in connection with this Agreement, including amendments thereto that are
expressly permitted under the terms of this Agreement.
1.10 XXXXXXX MONEY. The amount of One Hundred Thousand Dollars
($100,000).
1.11 ESCROW AGENT. Xxxxxxxx, Xxxxx & Xxxxxxxx, P.L.C.
1.12 ESCROW AGREEMENT. The Escrow Agreement in the form attached as
EXHIBIT A which Seller, Buyer and the Escrow Agent have entered into
concurrently with the execution of this Agreement relating to the deposit,
holding, investment and disbursement of the Xxxxxxx Money.
1.13 EXCLUDED ASSETS. Such term shall have the meaning defined in
SECTION 2.2.
1.14 FCC. Federal Communications Commission.
1.15 FCC LICENSES. The licenses, permits and authorizations of the
FCC for the operation of the Station as listed on SCHEDULE 3.8.
1.16 FCC ORDER. An action, order or decision of the FCC granting
its consent to the assignment of the FCC Licenses to Buyer.
1.17 FINAL ACTION. An action of the FCC that has not been reversed,
stayed, enjoined, set aside, annulled or suspended; with respect to which no
timely petition for reconsideration or administrative or judicial appeal or SUA
SPONTE action of the FCC with comparable effect is pending and as to which the
time for filing any such petition or appeal (administrative or judicial) or for
the taking of any such SUA SPONTE action of the FCC has expired.
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1.18 INDEMNIFIED PARTY. Any party described in SECTION 9.3(a) or
9.4(a) against which any claim or liability may be asserted by a third party
which would give rise to a claim for indemnification under the provisions of
this Agreement by such party.
1.19 INDEMNIFYING PARTY. The party to the Agreement (not the
Indemnified Party) that, in the event of a claim or liability asserted by a
third party against the Indemnified Party which would give rise to a claim for
indemnification under the provisions of this Agreement, may at its own expense,
and upon written notice to the Indemnified Party, compromise or defend such
claim.
1.20 LIEN. Any mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, lien, lease or charge of any kind, whether
voluntarily incurred or arising by operation of law or otherwise,
affecting any Sale Assets or property, including any written or oral agreement
to give or grant any of the foregoing, any conditional sale or other title
retention agreement, and the filing of or agreement to give any financing
statement with respect to any assets or property under the Uniform Commercial
Code or comparable law of any jurisdiction.
1.21 LMA. The Local Programming and Marketing Agreement by and
between Buyer and Seller relative to the programming of the Station.
1.22 MATERIAL ADVERSE CONDITION. A condition which would materially
restrict, limit, increase the cost or burden of or otherwise materially
adversely affect or materially impair the right of Buyer to the ownership, use,
control, enjoyment or operation of the Station or the proceeds therefrom;
provided, however, that any condition which requires that the Station be
operated in accordance with a condition similar to those contained in the
present FCC licenses issued for operation of the Station shall not be deemed a
Material Adverse Condition.
1.23 PERMITTED LIEN. Any statutory lien which secures a payment
not yet due that arises, and is customarily discharged, in the ordinary course
of Seller's business; any easement, right-of-way or similar imperfection in the
Seller's title to its assets or properties that, individually and in the
aggregate, are not material in character or amount and do not and are not
reasonably expected to materially impair the value or materially interfere with
the use of any asset or property of the Seller material to the operation of its
business as it has been and is now conducted.
1.24 PURCHASE PRICE. The consideration to be paid by Buyer to
Seller for purchase of the Sale Assets in an amount equal to One Million Seven
Hundred Fifty Thousand Dollars ($1,750,000).
1.25 REAL PROPERTY. Such term shall have the meaning defined in
SECTION 3.7.
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1.26 RULES AND REGULATIONS. The rules of the FCC as set forth in Volume
47 of the Code of Federal Regulations, as well as such other policies of the
Commission, whether contained in the Code of Federal Regulations, or not, that
apply to the Station.
1.27 SALE ASSETS. All of the tangible and intangible assets to be
transferred by Seller to Buyer as set forth in SECTION 2.1.
1.28 SELLER'S THRESHOLD LIMITATION. As provided in SECTION 9.4(b),
the threshold dollar amount for the aggregate of claims, liabilities, damages,
losses, costs and expenses that must be incurred by Seller before Buyer shall be
obligated to indemnify Seller. The Seller's Threshold Limitation shall be Ten
Thousand Dollars ($10,000).
1.29 STATION AGREEMENTS. The agreements, commitments, contracts,
leases and other items described in SECTION 2.1(d) which relate to operation of
the Station.
1.30 SURVIVAL PERIOD. The term following the Closing Date during
which all representations, warranties, covenants and agreements of the parties
under this Agreement shall survive. The term shall be six (6) months.
1.31 TANGIBLE PERSONAL PROPERTY. The personal property described in
SECTION 2.1(a).
1.32 TOWER COORDINATES. Such term shall have the meaning defined in
SECTION 3.15 hereof.
ARTICLE II
PURCHASE AND SALE
2.1 SALE ASSETS. On the Closing Date, Seller will sell, transfer,
assign and convey to Buyer, and Buyer will purchase from Seller, free and clear
of all Liens, except Permitted Liens, all of Seller's right, title and interest,
legal and equitable, in and to the tangible and intangible assets (except
Excluded Assets) used or useful in the operation of the Station as specifically
set forth in the following:
(a) TANGIBLE PERSONAL PROPERTY. All equipment, parts,
supplies, furniture, fixtures and other tangible personal property now or
hereinafter owned by Seller and used in the operation of the Station, together
with such modifications, replacements, improvements and additional items, and
subject to such deletions therefrom, made or acquired between the date hereof
and the Closing Date in accordance with the terms and provisions of this
Agreement and the HAP Agreement.
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(b) REAL PROPERTY. Seller's interests in the Real Property
including, without limitation, all right, title and interest of Seller in and
to the Station's transmitting facilities;
(c) LICENSES AND PERMITS. The FCC Licenses and all other
assignable or transferable governmental permits, licenses and authorizations
(and any renewals, extensions, amendments or modifications thereof) now held by
Seller or hereafter obtained by Seller between the date hereof and the Closing
Date, to the extent such other permits, licenses and authorizations pertain to
or are used in the operation of the Station;
(d) STATION AGREEMENTS. All agreements for the sale of
advertising time on the Station entered into in the ordinary course of the
Station's business and all agreements listed on SCHEDULE 3.9; any renewals,
extensions, amendments or modifications of those agreements which are made in
accordance with the terms and provisions of this Agreement and the HAP
Agreement;
(e) RECORDS. True and complete copies of all of the books,
records, accounts, files, logs, ledgers, reports of engineers and other
consultants or independent contractors, pertaining to or used in the operation
of the Station (other than corporate records);
(f) MISCELLANEOUS ASSETS. Any other tangible or intangible
asset, properties or rights of any kind or nature not otherwise described in
this SECTION 2.1 and now or hereinafter owned or used by Seller in the operation
of the Station including, but not limited to, goodwill, call letters, slogans
and other intellectual property of the Station and all other assets acquired by
Seller pursuant to the HAP Agreement.
2.2 EXCLUDED ASSETS. Notwithstanding any provision of this Agreement
to the contrary, Seller shall not transfer, convey or assign to Buyer, but shall
retain all of its right, title and interest in and to, the following assets
owned or held by it on the Closing Date ("Excluded Assets"):
(a) Any and all cash, cash equivalents, cash deposits to
secure contract obligations (except to the extent Seller receives a credit
therefor under SECTION 2.7, in which event the deposit shall be included as part
of the Sale Assets), all inter-company receivables from any affiliate of Seller
and all other accounts receivable, bank deposits and securities held by Seller
in respect of the Station at the Closing Date.
(b) Any and all claims of Seller with respect to transactions
prior to the Closing including, without limitation, claims for tax refunds and
refunds of fees paid to the FCC.
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(c) All prepaid expenses (except to the extent Seller receives
a credit therefor under SECTION 2.7, in which event the prepaid expense shall be
included as part of the Sale Assets).
(d) All contracts of insurance and claims against insurers.
(e) All employee benefit plans and the assets thereof and all
employment contracts.
(f) All contracts that are terminated in accordance with the
terms and provisions of this Agreement or the HAP Agreement or have expired
prior to the Closing Date in the ordinary course of business; and all loans and
loan agreements.
(g) All tangible personal property disposed of or consumed
between the date hereof and the Closing Date in accordance with the terms and
provisions of this Agreement or the HAP Agreement; all tangible personal
property not specifically assumed by Buyer pursuant to Section 2.1(a) above.
(h) Seller's corporate records except to the extent such
records pertain to or are used in the operation of the Station, in which case
Seller shall deliver materially accurate copies thereof to Buyer.
(i) All commitments, contracts and agreements not
specifically assumed by Buyer pursuant to SECTION 2.1(d), above.
(j) All studios and furniture and fixtures.
2.3 ASSUMPTION OF LIABILITIES.
(a) At the Closing, Buyer shall assume and agree to perform,
without duplication of Seller's performance, the following liabilities and
obligations of Seller (the "Assumed Obligations"):
(i) Current liabilities of Seller for which Buyer
receives a credit pursuant to SECTION 2.7, but not in excess of the amount of
such credit.
(ii) Liabilities and obligations arising under the
Station Agreements, if any, assumed by and transferred to Buyer in
accordance with this Agreement, but only to the extent such liabilities and
obligations relate to any period of time after the commencement of the LMA.
(b) Except for the Assumed Obligations, Buyer shall not assume
or in any manner be liable for any duties, responsibilities, obligations or
liabilities of Seller of any kind or nature, whether express or implied, known
or unknown, contingent or
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absolute, including, without limitation, any liabilities to or in connection
with Seller's employees whether arising in connection with the transaction
contemplated hereunder or otherwise.
2.4 XXXXXXX MONEY.
(a) Within five (5) days of the execution of this Agreement,
Buyer shall deposit with Escrow Agent under the Escrow Agreement, in immediately
available funds, the Xxxxxxx Money. The Escrow Agent shall hold the Xxxxxxx
Money under the terms of the Escrow Agreement in trust for the benefit of the
parties hereto. Interest and other earnings on the Xxxxxxx Money shall be
distributed by the Escrow Agent to Buyer from time to time upon the request of
Buyer.
(b) If Closing does not occur, the Xxxxxxx Money shall be
delivered to Seller or returned to Buyer in accordance with SECTION 10.2, and if
Closing does occur, the Xxxxxxx Money shall be applied to payment of the
Purchase Price at Closing as provided in SECTION 2.5.
2.5 PAYMENTS.
(a) The Purchase Price shall be paid by Buyer as follows:
(i) At the Closing, the Xxxxxxx Money shall,
subject to execution and delivery of the closing documents described in
SECTION 8.2, become the property of Seller and shall, pursuant to the Escrow
Agreement, be disbursed to Seller by cashier's check or wire transfer of
immediately available funds.
(ii) At the Closing, the Purchase Price, less the amount
of the Xxxxxxx Money disbursed to Seller, shall be paid to Seller at Closing by
wire transfer of immediately available funds.
(b) Buyer shall pay to Seller, or Seller shall pay to Buyer,
the Adjustment Amount in accordance with SECTION 2.7.
2.6 ALLOCATION OF THE PURCHASE PRICE. Prior to Closing, Buyer and
Seller shall agree to an allocation of the Purchase Price. Buyer and Seller
shall use such allocation for all reporting purposes in connection with federal,
state and local income and, to the extent permitted under applicable law,
franchise taxes. Buyer and Seller agree to report such allocation to the
Internal Revenue Service in the form required by Treasury Regulation Section
1.1060-1T.
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2.7 ADJUSTMENT OF PURCHASE PRICE.
(a) Except as provided in the LMA, all operating income and
operating expenses of the Station shall be adjusted and allocated between Seller
and Buyer, and an adjustment in the Purchase Price shall be made as provided in
this Section, to the extent necessary to reflect the principle that all such
income and expenses attributable to the operation of the Station on or before
the Closing Date shall be for the account of Seller, and all income and expenses
attributable to the operation of the Station after the closing Date shall be for
the account of Buyer.
(b) To the extent not inconsistent with the express provisions
of this Agreement, the allocations made pursuant to this SECTION 2.7 shall be
made in accordance with generally accepted accounting principles.
(c) For purposes of making the adjustments pursuant to this
Section, Buyer shall prepare and deliver the Adjustment List to Seller within
thirty (30) days following the Closing Date, or such earlier or later date as
shall be mutually agreed to by Seller and Buyer. The Adjustment List shall set
forth the Adjustment Amount. If the Adjustment Amount is a credit to the account
of Buyer, Seller shall pay such amount to Buyer, and if the Adjustment Amount is
a charge to the account of Buyer, Buyer shall pay such amount to Seller. In the
event Seller disagrees with the Adjustment Amount determined by Buyer or with
any other matter arising out of this subsection, and Buyer and Seller cannot
within sixty (60) days resolve the disagreement themselves, the parties will
refer the disagreement to a firm of independent certified public accountants,
mutually acceptable to Seller and Buyer, whose decision shall be final and whose
fees and expenses shall be allocated between and paid by Seller and Buyer,
respectively, to the extent that such party does not prevail on the disputed
matters decided by the accountants.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Notwithstanding anything to the contrary in this Agreement, Seller
makes no representation or warranty other than as set forth in this Article III.
Seller hereby represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING. Seller is a corporation, validly
existing and in good standing under the laws of the State of North Carolina.
Seller has all requisite power to own, operate and lease its properties and
carry on its business as it is now being conducted and as the same will be
conducted until the Closing.
3.2 AUTHORIZATION AND BINDING EFFECT OF DOCUMENTS. Seller's
execution and delivery of, and the performance of its obligations under, this
Agreement and each of the
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other Documents, and the consummation by Seller of the transactions contemplated
hereby and thereby, have been duly authorized and approved by all necessary
corporate action on the part of Seller. Subject only to consummation of the HAP
Agreement, Seller has the power and authority to execute, deliver and perform
its obligations under this Agreement and each of the other Documents and to
consummate the transactions hereby and thereby contemplated. This Agreement and
each of the other Documents have been, or at or prior to the Closing will be,
duly executed by Seller. The Documents, when executed and delivered by the
parties hereto, will constitute legal and valid obligations of Seller
enforceable against it in accordance with their terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights or remedies generally, and except as may be
limited by general principles of equity (regardless of whether enforceability is
sought in a proceeding in equity or at law).
3.3 ABSENCE OF CONFLICTS. The execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents by Seller, and the consummation of the transactions contemplated
hereby and thereby:
(a) do not, to Seller's actual knowledge, in any material
respect (with or without the giving of notice or the passage of time or both)
violate (or result in the creation of any Lien other than a Permitted Lien on
any of the Sale Assets under), any provision of law, rule or regulation or any
order, judgment, injunction, decree or ruling applicable to Seller;
(b) do not (with or without the giving of notice or the
passage of time or both) conflict with or result in a breach or termination of,
or constitute a default or give rise to a right of termination or acceleration
under the Articles of Incorporation or Bylaws of Seller or pursuant to any
lease, agreement, commitment or other instrument which Seller is a party to, or
bound by, or by which any of the Sale Assets may be bound, or result in the
creation of any Lien, other than a Permitted Lien, upon any of the Sale Assets.
3.4 GOVERNMENTAL CONSENTS AND CONSENTS OF THIRD PARTIES. Except for
such consents as are required by the FCC, to Seller's actual knowledge, the
execution and delivery of, and the performance of its obligations under, this
Agreement and each of the other Documents by Seller, and the consummation by
Seller of the transactions contemplated hereby and thereby, do not require the
consent, waiver, approval, permit, license, clearance or authorization of, or
any declaration of filing with, any court or public agency or other authority,
or the consent of any person under any agreement, arrangement or commitment of a
nature to which Seller is a party or by which it is bound or by which the Sale
Assets are bound or to which they are subject to, the failure of which to obtain
would have a material adverse effect on the Sale Assets or the operation of the
Station.
3.5 SALE ASSETS. To Seller's actual knowledge, the Sale Assets
include all of
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the assets, properties and rights of every type and description, real, personal
and mixed, tangible and intangible, that are used to a material extent in the
conduct of the business of owning and operating the Station in the manner in
which that business is now conducted (with the exception of the Excluded Assets
and any asset owned by Buyer and used in the operation of the Station pursuant
to the LMA).
3.6 TANGIBLE PERSONAL PROPERTY. Except for supplies and other
incidental items which in the aggregate are not of material value and except for
studio equipment, to Seller's actual knowledge, the list of Tangible Personal
Property set forth on SCHEDULE 3.6 is a complete and correct list of all of the
items of tangible personal property (other than Excluded Assets and any asset
owned by Buyer and used in the operation of the Station pursuant to the LMA)
used to a material extent in the operation of the Station in the manner in which
it is now operated. At Closing, Seller will have good, marketable and valid
title to all of the items of Tangible Personal Property free and clear of all
Liens except Permitted Liens, and including the right to transfer same.
3.7 REAL PROPERTY. To Seller's actual knowledge, the real property
described on SCHEDULE 3.7 constitutes a complete and correct summary description
in all material respects of all of the interests in real estate used to any
extent in the operation of the Station in the manner in which it has been and is
now operated. Said real property, together with all improvements affixed
thereto, is herein defined as the "Real Property." At Closing, Seller will have
fee simple title to the Real Property. To Seller's knowledge, the Real Property
is not subject to any suit for condemnation or other taking by any public
authority.
3.8 FCC LICENSES. At Closing, Seller will be the holder of the FCC
Licenses listed on SCHEDULE 3.8, and the FCC Licenses (i) will be valid, in good
standing and in full force and effect and constitute all of the licenses,
permits and authorizations required by the Act, the Rules and Regulations or the
FCC for, or used in, the operation of the Station in all material respects as
now operated, and (ii) will constitute all the current licenses and
authorizations issued by the FCC to Seller for or in connection with the current
operation of the Station. Seller has no knowledge of any condition imposed by
the FCC as part of any FCC License which is neither set forth on the face
thereof as issued by the FCC nor contained in the Rules and Regulations
applicable generally to stations of the type, nature, class or location of the
Station. At Closing, no proceedings will be pending or, to the knowledge of the
Seller at Closing, threatened which may result in the revocation, modification,
non-renewal or suspension of any of the FCC Licenses, the denial of any pending
applications, the issuance of any cease and desist order or the imposition of
any fines, forfeitures or other administrative actions by the FCC with respect
to the Station or its operation, other than proceedings affecting the radio
broadcasting industry in general.
3.9 STATION AGREEMENTS. At Closing, each of the Station Agreements
will be in effect and binding upon Seller and, to Seller's knowledge, the other
parties thereto
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(subject to bankruptcy, insolvency, reorganization or other similar laws
relating to or affecting the enforcement of creditors' rights generally). To
Seller's knowledge, no other party to any of the Station Agreements is in
default thereunder in any material respect.
3.10 COMPLIANCE WITH LAW. To Seller's actual knowledge, the operation
of the Station complies in all material respects with the applicable rules and
regulations of the FCC and all federal, state, local or other laws, statutes,
ordinances, regulations, and any applicable order, writ, injunction or decree of
any court, commission, board, agency or other instrumentality.
3.11 ENVIRONMENTAL MATTERS. To Seller's knowledge, no hazardous or
toxic substance or waste regulated under any applicable environmental, health or
safety law has been generated, stored, transported or released on, in, from or
to the Real Property, and at Closing Seller shall have complied in all material
respects with all environmental, health and safety laws applicable to the
Station.
3.12 TOWER COORDINATES. To Seller's actual knowledge the current
vertical elevation and geographical coordinates of the Station's towers ("the
Tower Coordinates") are properly registered with the FCC and FAA; and (ii) the
Tower Coordinates comply with and correspond to the current vertical elevation
an geographical coordinates authorized by the FAA, FCC and any other
governmental authority, including any federal, state or local authority having
jurisdiction over the Station or said towers.
3.13 BROKER'S OR FINDER'S FEES. No agent, broker, investment banker
or other person or firm acting on behalf of or under the authority of Seller or
any affiliate of Seller is or will be entitled to any broker's or finder's fee
or any other commission or similar fee, directly or indirectly, in connection
with the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Kentucky. Buyer has all requisite corporate power to own, operate and lease its
properties and carry on its business as it is now being conducted and as the
same will be conducted following the Closing.
4.2 AUTHORIZATION AND BINDING EFFECT OF DOCUMENTS. Buyer's execution
and delivery of, and the performance of its obligations under, this Agreement
and each of the
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other Documents, and the consummation by Buyer of the transactions contemplated
hereby and thereby, have been duly authorized and approved by all necessary
corporate action on the part of Buyer. Buyer has the power and authority to
execute, deliver and perform its obligations under this Agreement and each of
the other Documents and to consummate the transactions hereby and thereby
contemplated. This Agreement and each of the other Documents have been, or at or
prior to the Closing will be, duly executed by Buyer. This Agreement and each of
the other Documents to be executed by Buyer have been, or at or prior to the
Closing will be, duly executed by Buyer. The Documents, when executed and
delivered by the parties hereto, will constitute the valid and legally binding
agreement of Buyer, enforceable against Buyer in accordance with their terms,
except as may be limited by bankruptcy, insolvency, or other similar laws
affecting the enforcement of creditors' rights or remedies generally, and except
as may be limited by general principles of equity (regardless of whether such
enforceability is sought in a proceeding in equity or at law).
4.3 ABSENCE OF CONFLICTS. Buyer's execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents and the consummation by Buyer of the transaction contemplated hereby
and thereby:
(a) Do not in any material respect (with or without the giving
of notice or the passage of time or both) violate (or result in the creation of
any claim, lien, charge or encumbrance on any of the assets or properties of
Buyer under) any provision of law, rule or regulation or any order, judgment,
injunction, decree or ruling applicable to Buyer in any manner which would have
a material adverse effect on the assets, business, operation or financial
condition or results of operations of Buyer;
(b) Do not (with or without the giving of notice or the
passage of time or both) conflict with or result in a breach or termination of,
or constitute a default or give rise to a right of termination or acceleration
under, the articles of incorporation or bylaws of Buyer or any lease, agreement,
commitment, or other instrument which Buyer is a party to, bound by, or by which
any of its assets or properties may be bound.
4.4 GOVERNMENTAL CONSENTS AND CONSENTS OF THIRD PARTIES. Except for
the required consent of the FCC, Buyer's execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents and the consummation by Buyer of the transaction contemplated hereby
and thereby, do not require the consent, waiver, approval, permit, license,
clearance or authorization of, or any declaration or filing with, any court or
public agency or other authority, or the consent of any person under any
agreement, arrangement or commitment of any nature to which Buyer is a party or
by which it is bound, the failure of which to obtain would have a material
adverse effect on the assets, business, operation or financial condition or
results of operations of Buyer.
4.5 QUALIFICATION.
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(a) Buyer has no knowledge after due inquiry of any facts
concerning Buyer or any other person with an attributable interest in Buyer (as
such term is defined under the Rules and Regulations) which, under present law
(including the Act) and the Rules and Regulations, would (i) disqualify Buyer
from being the holder of the FCC Licenses, the owner of the Sale Assets or the
operator of the Station upon consummation of the transactions contemplated by
this Agreement, or (ii) raise a substantial and material question of fact
(within the meaning of Section 309(e) of the Act) respecting Buyer's
qualifications.
(b) Without limiting the foregoing SUBSECTION (a), Buyer shall
make the affirmative certifications provided in Section III of FCC Form 314, or
as may be required on any form required by the FCC to obtain its consent to this
transaction, at the time of filing of such form with the FCC as contemplated by
SECTION 5.2.
4.6 BROKER'S OR FINDER'S FEES. No agent, broker, investment banker,
or other person or firm acting on behalf of or under the authority or Buyer or
any affiliate of Buyer is or will be entitled to any broker's or finder's fee or
any other commission or similar fee, directly or indirectly, in connection with
transactions contemplated by this Agreement.
ARTICLE V
TRANSACTIONS PRIOR TO THE CLOSING DATE
5.1 CONDUCT OF THE STATION'S BUSINESS PRIOR TO THE CLOSING DATE.
Subject to the terms and conditions of the LMA, Seller covenants and agrees with
Buyer that between the date Seller consummates the HAP Agreement and the Closing
Date, unless the Buyer otherwise agrees in writing (which agreement shall not be
unreasonably withheld or delayed), Seller shall:
(a) Use reasonable commercial efforts to maintain insurance
upon all of the tangible Sale Assets in such amounts and of such kind comparable
to that in effect on the date hereof with respect to such Sale Assets and with
respect to the operation of the Station, with insurers of substantially the same
or better financial condition;
(b) Operate the Station and otherwise conduct its business in
all material respects in accordance with the terms or conditions of its FCC
Licenses, the Rules and Regulations, the Act and all other rules and
regulations, statutes, ordinances and orders of all governmental authorities
having jurisdiction over any aspect of the operation of the Station, except
where the failure to so operate the Station would not have a material adverse
effect on the Sale Assets or the operation of the Station or on the ability of
Seller to consummate the transactions contemplated hereby;
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(c) Comply in all material respects with all Station
Agreements now or hereafter existing which are material, individually or in the
aggregate, to the operation of the Station;
(d) Promptly notify Buyer of any material default by, or claim
of default against, any party under any Station Agreements which are material,
individually or in the aggregate, to the operation of the Station, and any event
or condition which, with notice or lapse of time or both, would constitute an
event of default under such Station Agreements;
(e) Not mortgage, pledge or subject to any Lien other than a
Permitted Lien (except in the ordinary course of business) any of the Sale
Assets;
(f) Not sell, lease or otherwise dispose of, nor agree to
sell, lease or otherwise dispose of, any of the Sale Assets, except for
dispositions in the ordinary course of business;
(g) Not amend or terminate any Station Agreement, other than
in the ordinary course of business;
(h) Not introduce any material change with respect to the
operation of the Station including, without limitation, any material changes in
the broadcast hours of the Station or any other material change in the Station's
programming policies, except such changes as in the sole discretion of Seller,
exercised in good faith after consultation with Buyer, are required by the
public interest;
(i) Notify Buyer of any material litigation pending or
threatened against Station or any material damage to or destruction of any
assets included or to be included in the Sale Assets of which Seller receives
actual knowledge.
5.2 GOVERNMENTAL CONSENTS. Seller and Buyer shall file with the FCC,
within five (5) business days after the execution of this Agreement or at such
later date as the parties deem appropriate, such applications and other
documents in the name of Seller or Buyer, as appropriate, as may be necessary or
advisable to obtain the FCC Order. Seller and Buyer shall take all commercially
reasonable steps necessary to prosecute such filings with diligence and shall
diligently oppose any objections to, appeals from or petitions to reconsider
such approval of the FCC, to the end that the FCC Order and a Final Action with
respect thereto may be obtained as soon as practicable; provided, however, that
in the event the application for assignment of the FCC Licenses has been
designated for hearing, either Buyer or Seller may elect to terminate this
Agreement pursuant to SECTION 10.1(c). Buyer shall not knowingly take, and
Seller covenants that Seller shall not knowingly take, any action that party
knows or has reason to know would materially and adversely affect or materially
delay issuance of the FCC Order or
14
materially and adversely affect or materially delay its becoming a Final Action
without a Material Adverse Condition, unless such action is requested or
required by the FCC, its staff or the Rules and Regulations. Should Buyer or
Seller become aware of any facts which could reasonably be expected to
materially and adversely affect or materially delay issuance of the FCC Order
without a Material Adverse Condition (including but not limited to, in the case
of Buyer, any facts which would reasonably be expected to disqualify Buyer from
controlling the Station), such party shall promptly notify the other party
thereof in writing and both parties shall cooperate to take all steps necessary
or desirable to resolve the matter expeditiously and to obtain the FCC's
approval of matters pending before it.
5.3 OTHER CONSENTS. Seller shall use its reasonable best efforts to
obtain the consent or waivers to the transactions contemplated by this Agreement
required under any assumed Station Agreements; provided that Seller shall not be
required to pay or grant any material consideration in order to obtain any such
consent or waiver.
5.4 TAX RETURNS AND PAYMENTS. All taxes pertaining to ownership of
the Sale Assets or operation of the Station prior to the Closing Date will be
timely paid; provided that Seller shall not be required to pay any such tax so
long as the validity thereof shall be contested in good faith by appropriate
proceedings and Seller shall have set aside adequate reserves with respect to
any such tax.
5.5 REASONABLE BEST EFFORTS. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its reasonable best efforts
to take all action and to do all things necessary, proper or advisable to
satisfy any condition to the parties' obligations hereunder in its power to
satisfy and to consummate and make effective as soon as practicable the
transactions contemplated by this Agreement.
5.6 FCC REPORTS. Seller shall continue to file, on a current basis
until the Closing Date, all reports and documents required to be filed with the
FCC with respect to the Station. Seller shall provide Buyer with copies of all
such filings within five business days of the filing with the FCC.
5.7 CONVEYANCE FREE AND CLEAR OF LIENS. At or prior to the Closing,
Seller shall obtain executed releases, in suitable form for filing and otherwise
in form and substance reasonably satisfactory to Buyer, of any security
interests granted in the Sale Assets and properties as security for payment of
loans and other obligations or judgments and of any other Liens on the Sale
Assets. At the closing, Seller shall transfer and convey to Buyer all of the
Sale Assets free and clear of all Liens except Permitted Liens.
ARTICLE VI
CONDITIONS PRECEDENT TO THE
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OBLIGATIONS OF BUYER TO CLOSE
Buyer's obligation to close the transaction contemplated by this
Agreement is subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions, unless waived by Buyer in writing:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; CLOSING CERTIFICATE.
(a) The representations and warranties of Seller contained in
this Agreement or in any other Document shall be complete and correct in all
material respects on the date hereof and at the Closing Date with same effect as
though made at such time except for changes that are not materially adverse to
the Station or the Sale Assets taken as a whole.
(b) Seller shall have delivered to Buyer on the Closing Date a
certificate that (i) the condition specified in SECTION 6.1(a) is satisfied as
of the Closing Date, and (ii) except as set forth in such certificate (none of
which exceptions shall be materially adverse to the Station, the Sale Assets or
Seller's ability to consummate the transaction contemplated hereby), the
condition specified in SECTION 6.2 is satisfied as of the Closing Date.
6.2 PERFORMANCE OF AGREEMENTS. Seller shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
6.3 FCC AND OTHER CONSENTS.
(a) The FCC Order shall have been issued by the FCC and shall
have become effective under the rules of the FCC without any Material Adverse
Condition.
(b) Seller shall have satisfied all material conditions which
the FCC Order or any order, ruling or decree of any judicial or administrative
body relating thereto or in connection therewith specifies and requires to be
satisfied by Seller prior to transfer of the FCC Licenses to Buyer.
(c) All other material authorizations, consents, approvals and
clearances of federal, state or local governmental agencies required to permit
the consummation by Buyer of the transactions contemplated by this Agreement
shall have been obtained; all material statutory and regulatory requirements for
such consummation shall have been fulfilled; and no such authorizations,
consents, approvals or clearances shall contain any conditions that individually
or in the aggregate would have a material adverse effect on the operations of
the Station.
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6.4 ADVERSE PROCEEDINGS. Neither Buyer nor any affiliate of Buyer
shall be subject to any ruling, decree, order or injunction restraining,
imposing material limitations on or prohibiting (i) the consummation of the
transactions contemplated hereby or (ii) its participation in the operation,
management, ownership or control of the Station; and no litigation, proceeding
or other action seeking to obtain any such ruling, decree, order or injunction
shall be pending. No governmental authority having jurisdiction shall have
notified any party to this Agreement that consummation of the transaction
contemplated hereby would constitute a violation of the laws of the United
States or of any state or political subdivision or that it intends to commence
proceedings to restrain such consummation or to force divestiture, unless such
governmental authority shall have withdrawn such notice. No governmental
authority having jurisdiction shall have commenced any such proceeding.
6.6 OTHER CONSENTS. Seller shall have obtained in writing and
provided to Buyer on or before the Closing Date, without any condition
materially adverse to Buyer or the Station, the material consents or waivers to
the transactions contemplated by this Agreement required under those Station
Agreements which Buyer has elected to assume.
6.7 DELIVERY OF CLOSING DOCUMENTS. Seller shall have delivered
or caused to be delivered to Buyer on the Closing Date each of the Documents
required to be delivered pursuant to SECTION 8.2.
ARTICLE VII
CONDITIONS PRECEDENT OF THE
OBLIGATION OF SELLER TO CLOSE
The obligation of Seller to close the transaction contemplated by this
Agreement is subject to the satisfaction, on or prior to the closing Date, of
each of the following conditions, unless waived by Seller in writing:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties of Buyer contained in
this Agreement shall be complete and correct in all material respects on the
date hereof and at the Closing Date with the same effect as though made at such
time except for changes that are not materially adverse to Seller.
(b) Buyer shall have delivered to Seller on the Closing Date a
certificate that (i) the condition specified in SECTION 7.1(a) is satisfied as
of the Closing Date, and (ii) except as set forth in such certificate (none of
which exceptions shall be materially adverse to Buyer's ability to consummate
the transaction contemplated hereby), the conditions specified in SECTION 7.2
are satisfied as of the Closing Date.
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7.2 PERFORMANCE OF AGREEMENTS. Buyer shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
7.3. FCC AND OTHER CONSENTS.
(a) The FCC Order shall have been issued by the FCC and shall
have become effective under the rules of the FCC without any condition
materially adverse to Seller.
(b) Conditions which the FCC Order or any order, ruling or
decree of any judicial or administrative body relating thereto or in connection
therewith specifies and requires to be satisfied by Buyer prior to transfer of
the FCC Licenses to Buyer shall have been satisfied by Buyer.
(c) All other authorizations, consents, approvals and
clearances of all federal, state and local governmental agencies required to
permit the consummation by Seller of the transactions contemplated by this
Agreement shall have been obtained; all statutory and regulatory requirements
for such consummation shall have been fulfilled; and no such authorizations,
consents, approvals or clearances shall contain any conditions that individually
or in the aggregate would have any material adverse effect on Seller.
7.4 ADVERSE PROCEEDINGS. Seller shall not be subject to any ruling,
decree, order or injunction restraining, imposing material limitations on or
prohibiting the consummation of the transactions contemplated hereby. No
governmental authority having jurisdiction shall have notified any party to this
Agreement that consummation of the transactions contemplated hereby would
constitute a violation of the laws of the United States or of any state or
political subdivision or that it intends to commence proceedings to restrain
such consummation or to force divestiture, unless such governmental authority
shall have withdrawn such notice. No governmental authority having jurisdiction
shall have commenced any such proceeding.
7.5 DELIVERY OF CLOSING DOCUMENTS AND PURCHASE PRICE. Buyer shall
have delivered or caused to be delivered to Seller on the Closing Date each of
the Documents required to be delivered pursuant to SECTION 8.3, and Seller shall
have received payment of the Purchase Price with the form of payment set forth
in SECTION 2.5.
ARTICLE VIII
CLOSING
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8.1 TIME AND PLACE. Unless otherwise agreed to in advance by the
parties, Closing shall take place in person or via facsimile at the offices of
Buyer in Camarillo, California, or at such other place as the parties agree, at
10:00 A.M. Pacific Time on the date (the "Closing Date") that is the later of
(i) the fifth Business Day after the Applicable Date or (ii) the date as soon as
practicable following satisfaction or waiver of the conditions precedent
hereunder. The "Applicable Date" shall be the date on which issuance of the FCC
Order without any Material Adverse Condition or condition materially adverse to
Seller has become effective.
8.2 DOCUMENTS TO BE DELIVERED TO BUYER BY SELLER. At the Closing,
Seller shall deliver or cause to be delivered to Buyer the following:
(a) Certified resolutions of Seller's Board of Directors
approving the execution and delivery of this Agreement and each of the other
Documents and authorizing the consummation of the transactions contemplated
hereby and thereby.
(b) The certificate required by SECTION 6.1(b).
(c) A xxxx of sale, warranty deed and other instruments of
transfer and conveyance transferring to Buyer the Tangible Personal Property and
the Real Property.
(d) Executed releases, in suitable form for filing and
otherwise in form and substance reasonably satisfactory to Buyer, of any
security interests granted in the Sale Assets as security for payment of loans
and other obligations and of any other Liens (other than Permitted Liens).
(e) An instrument or instruments assigning to Buyer all right,
title and interest of Seller in and to all Station Agreements being assumed by
Buyer.
(f) An instrument assigning to Buyer all right, title and
interest of Seller in the FCC Licenses, all pending applications relating to the
Station before the FCC, and any remaining Sale Assets not otherwise conveyed.
(g) An instrument assigning to Buyer all rights, title
and interest of Seller to the assets described in SECTION 2.1(f) hereof.
(h) An instrument assigning to Buyer all of Seller's
rights to indemnification under the HAP Agreement.
(h) Such additional information and materials as Buyer shall
have reasonably requested.
8.3 DOCUMENTS TO BE DELIVERED TO SELLER BY BUYER. At the Closing,
Buyer shall deliver or cause to be delivered to Seller the following:
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(a) Certified resolutions of Buyer's Board of Directors
approving the execution and delivery of this Agreement and each of the other
Documents and authorizing the consummation of the transaction contemplated
hereby and thereby.
(b) The Purchase Price as set forth in SECTION 2.5.
(c) The agreement of Buyer assuming the obligations under any
Station Agreements being assumed by Buyer.
(d) The certificate required under SECTION 7.1(b).
(e) Such additional information and materials as Seller shall
have reasonably requested.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
9.1 SURVIVAL OF REPRESENTATION AND WARRANTIES. All representations,
warranties, covenants and agreements contained in this Agreement or in any other
Document shall survive the Closing for the Survival Period and the Closing shall
not be deemed a waiver by either party of the representations, warranties,
covenants or agreements of the other party contained herein or in any other
Document. No claim may be brought under this Agreement or any other Document
unless written notice describing in reasonable detail the nature and basis of
such claim is given on or prior to the last day of the Survival Period. In the
event such a notice is so given, the right to indemnification with respect
thereto under this Article shall survive the Survival Period until such claim is
finally resolved and any obligations with respect thereto are fully satisfied.
Notwithstanding the foregoing, the provisions for survival and the making of
claims shall not apply to the agreements whereby Buyer assumes the obligations
under SUBSECTION 8.3(c), each of which agreements shall be governed by its own
terms.
9.2 INDEMNIFICATION IN GENERAL. Buyer and Seller agree that the
rights to indemnification and to be held harmless set forth in this Agreement
shall, as between the parties hereto and their respective successors and
assigns, be exclusive of all rights to indemnification and to be held harmless
that such party (or its successors or assigns) would otherwise have by statute,
common law or otherwise.
9.3 INDEMNIFICATION BY SELLER.
(a) Subject to the provisions of SUBSECTION (b) below and
SECTION 10.2 below, Seller shall indemnify and hold harmless Buyer and any
officer, director, agent,
20
employee and affiliate thereof with respect to any and all demands, claims,
actions, suits, proceedings, assessments, judgments, costs, losses, damages,
liabilities and expenses (including reasonable attorneys' fees) relating to or
arising out of:
(i) Any breach or non-performance by Seller of any
of its representations, warranties, covenants or agreements set forth in
this Agreement or any other Documents; or
(ii) The ownership or operation by Seller of the
Station or the Sale Assets on or prior to the Closing Date; or
(iii) All other liabilities and obligations of Seller
other than the Assumed Obligations.
(b) Except for any amounts owed by Seller to Buyer under
SECTION 2.7, if Closing occurs, Seller shall not be obligated until the
aggregate amount of such claims, liabilities, damages, losses, costs and
expenses exceeds Buyer's Threshold Limitation, in which case Buyer shall then be
entitled to indemnification of the entire aggregate amount.
9.4 INDEMNIFICATION BY BUYER.
(a) Subject to the provisions of SUBSECTION (b) below and
SECTION 10.2 below, Buyer shall indemnify and hold harmless Seller and any
officer, director, agent, employee and affiliate thereof with respect to any and
all demands, claims, actions, suits, proceedings, assessments, judgments, costs,
losses, damages, liabilities and expenses (including reasonable attorneys' fees)
relating to or arising out of:
(i) Any breach or non-performance by Buyer of any
of its representations, warranties, covenants or agreements set forth in this
Agreement or any other Document; or
(ii) The ownership or operation of the Station after
the Closing Date or Buyer's operation of the Station after the commencement of
the LMA; or
(iii) All other liabilities or obligations of Buyer.
(b) Except for any amounts owed by Buyer to Seller under
SECTION 2.7, if Closing occurs, Buyer shall not be obligated until the aggregate
amount of such claims, liabilities, damages, losses, costs and expenses exceeds
Seller's Threshold Limitation, in which case Seller shall then be entitled to
indemnification of the entire aggregate amount.
9.5 INDEMNIFICATION PROCEDURES. In the event that an Indemnified
Party may be entitled to indemnification hereunder with respect to any asserted
claim of, or obligation or liability to, any third party, such party shall
notify the Indemnifying Party
21
thereof, describing the matters involved in reasonable detail, and the
Indemnifying Party shall be entitled to assume the defense thereof upon written
notice to the Indemnified Party with counsel reasonably satisfactory to the
Indemnified Party; provided, that once the defense thereof is assumed by the
Indemnifying Party, the Indemnifying Party shall keep the Indemnified Party
advised of all developments in the defense thereof and any related litigation,
and the Indemnified Party shall be entitled at all times to participate in the
defense thereof at its own expense. If the Indemnifying Party fails to notify
the Indemnified Party of its election to defend or contest its obligation to
indemnify under this ARTICLE IX, the Indemnified Party may pay, compromise, or
defend such a claim without prejudice to any right it may have hereunder.
ARTICLE X
TERMINATION; LIQUIDATED DAMAGES
10.1 TERMINATION. If Closing shall not have previously occurred, this
Agreement shall terminate upon the earliest of:
(a) the giving of written notice from Seller to Buyer, or from
Buyer to Seller, if:
(i) Seller gives such termination notice and is not
at such time in material default hereunder, or Buyer gives such termination
notice and Buyer is not at such time in material default hereunder; and
(ii) Either:
(A) any of the representations or warranties
contained herein of Buyer (if such termination notice is given by Seller), or of
Seller (if such termination notice is given by Buyer), are inaccurate in any
respect and materially adverse to the party giving such termination notice
unless the inaccuracy has been induced by or is the result of actions or
omissions of the party giving such termination notice; or
(B) Any material obligation to be performed
by Buyer (if such termination notice is given by Seller) or by Seller (if such
termination notice is given by Buyer) is not timely performed in any material
respect unless the lack of timely performance has been induced by or is the
result of actions or omissions of the party giving such termination notice; or
(C) Any condition (other than those referred
to in foregoing CLAUSES (A) and (B)) to the obligation to close the transaction
contemplated herein of the party giving such termination notice has not been
timely satisfied; and any such inaccuracy, failure to perform or
non-satisfaction of a condition neither has been cured
22
nor satisfied within twenty (20) days after written notice thereof from the
party giving such termination notice nor waived in writing by the party giving
such termination notice.
(b) Written notice from Seller to Buyer, or from Buyer to
Seller, at any time after one year from the date this Agreement is executed;
provided that termination shall not occur upon the giving of such termination
notice by Seller if Seller is at such time in material default hereunder or upon
the giving of such termination notice by Buyer if Buyer is at such time in
material default hereunder.
(c) Written notice from Seller to Buyer, or from Buyer to
Seller, at any time following a determination by the FCC that the application
for consent to assignment of the FCC Licenses has been designated for hearing;
provided that the party which is the subject of the hearing (or whose alleged
actions or omissions resulted in the designation for hearing) may not elect to
terminate under this subsection (c).
(d) The written election by Buyer under ARTICLE XI.
10.2 OBLIGATIONS UPON TERMINATION.
(a) In the event this Agreement is terminated pursuant to
SECTION 10.1(a)(ii)(A) or (B), the aggregate liability of Buyer for breach
hereunder shall be limited as provided in SUBSECTIONS (c) AND (e), below and the
aggregate liability for Seller for breach hereunder shall be limited as provided
in SUBSECTIONS (d) and (e), below. In the event this Agreement is terminated for
any other reason, neither party shall have any liability hereunder.
(b) Upon termination of this Agreement, Buyer shall be
entitled to the return of the Xxxxxxx Money from the Escrow Agent under the
Escrow Agreement (i) if such termination is effected by Buyer's giving of valid
written notice to Seller pursuant to SUBSECTIONS 10.1(a), (b) (c) or (d), or
(ii) if such termination is effected by Seller's giving of valid written notice
to Buyer pursuant to SUBSECTIONS 10.1(a)(ii)(C), 10.1(b) OR 10.1(c). If Buyer is
entitled to the return of the Xxxxxxx Money, Seller shall cooperate with Buyer
in taking such action as is required under the Escrow Agreement in order to
effect such return from the Escrow Agent.
(c) If this Agreement is terminated by Seller's giving of
valid written notice to Buyer pursuant to SUBSECTION 10.1(a)(ii)(A) OR (B),
Buyer agrees that Seller shall be entitled to receive upon such termination, as
liquidated damages and not as a penalty, the Xxxxxxx Money ("Liquidated Damages
Amount"). SELLER'S RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT SHALL CONSTITUTE
PAYMENT OF LIQUIDATED DAMAGES HEREUNDER AND NOT A PENALTY, AND SHALL BE SELLER'S
SOLE REMEDY AT LAW OR IN EQUITY FOR BUYER'S BREACH HEREUNDER IF CLOSING DOES NOT
OCCUR. BUYER AND SELLER EACH ACKNOWLEDGE AND AGREE THAT THE LIQUIDATED DAMAGE
AMOUNT IS
23
REASONABLE IN LIGHT OF THE ANTICIPATED HARM WHICH WILL BE CAUSED BY BUYER'S
BREACH OF THIS AGREEMENT, THE DIFFICULTY OF PROOF OF LOSS, THE INCONVENIENCE AND
NON-FEASIBILITY OF OTHERWISE OBTAINING AN ADEQUATE REMEDY, AND THE VALUE OF THE
TRANSACTION TO BE CONSUMMATED HEREUNDER.
(d) Notwithstanding any provision of this Agreement to the
contrary, if this Agreement is terminated by Buyer's giving of written notice to
Seller pursuant to SECTION 10.1(a) (ii) (A) OR (B), Buyer shall not be entitled
to damages or indemnification from Seller.
(e) In any dispute between Buyer and Seller as to which party
is entitled to all or a portion of the Xxxxxxx Money, the prevailing party shall
receive, in addition to that portion of the Xxxxxxx Money to which it is
entitled, an amount equal to interest on that portion at the rate of 10% per
annum, calculated from the date the prevailing party's demand for all or a
portion of the Xxxxxxx Money is received by the Escrow Agent.
10.3 TERMINATION NOTICE. Each notice given by a party pursuant to
SECTION 10.1 to terminate this Agreement shall specify the Subsection (and
clause or clauses thereof) of SECTION 10.1 pursuant to which such notice is
given.
ARTICLE XI
CASUALTY
Subject to the last sentence of this Article XI, upon the occurrence of
any casualty loss, damage or destruction material to the operation of the
Station prior to the Closing, Seller shall promptly give Buyer written notice
setting forth in detail the extent of such loss, damage or destruction and the
cause thereof if known. Seller shall use its reasonable efforts to promptly
commence and thereafter to diligently proceed to repair or replace any such
lost, damaged or destroyed property. In the event that such repair or
replacement is not fully completed prior to the Closing Date, Buyer may elect to
postpone the Closing until Seller's repairs have been fully completed or to
consummate the transactions contemplated hereby on the Closing Date, in which
event Seller shall assign to Buyer the portion of the insurance proceeds (less
all reasonable costs and expenses, including without limitation attorney's fees,
expenses and court costs incurred by Seller to collect such amounts), if any,
not previously expended by Seller to repair or replace the damaged or destroyed
property (such assignment of proceeds to take place regardless of whether
24
the parties close on the scheduled or deferred Closing Date) and Buyer shall
accept the damaged Sale Assets in their damaged condition. In the event the
loss, damage or destruction causes or will cause the Station to be off the air
for more than seven (7) consecutive days or fifteen (15) total days, whether or
not consecutive, then Buyer may elect either (i) to consummate the transactions
contemplated hereby on the Closing Date, in which event Seller shall assign to
Buyer the portion of the insurance proceeds (less all reasonable costs and
expenses, including without limitation attorney's fees, expenses and court
costs, incurred by Seller to collect such amounts), if any, not previously
expended by Seller to repair or replace the damaged or destroyed property, and
Buyer shall accept the damaged Sale Assets in their damaged condition, or (ii)
to terminate this Agreement. Notwithstanding the foregoing, the provisions of
this Article XI shall not apply to any loss, damage or destruction to the extent
it is caused by Buyer as operator of the Station pursuant to the LMA.
ARTICLE XII
CONTROL OF STATION
Subject to the terms and conditions of the LMA, between the date of
this Agreement and the Closing Date, Buyer shall not control, manage or
supervise the operation of the Station or conduct of its business, all of which
shall remain the sole responsibility and under the control of Seller, subject to
Seller's compliance with this Agreement.
ARTICLE XIII
MISCELLANEOUS
13.1 FURTHER ACTIONS. From time to time before, at and after the
Closing, each party, at its expense and without further consideration, will
execute and deliver such documents to the other party as the other party may
reasonably request in order more effectively to consummate the transactions
contemplated hereby.
13.2 PAYMENT OF EXPENSES.
(a) Any fees assessed by the FCC in connection with the
filings contemplated by SECTION 5.2 or consummation of the transactions
contemplated hereby shall be shared equally between Seller and Buyer.
25
(b) All state or local sales or use, stamp or transfer, grant
and other similar taxes payable in connection with consummation of the
transactions contemplated hereby shall be paid by the party primarily liable
under applicable law to pay such tax.
(c) Except as otherwise expressly provided in this Agreement,
each of the parties shall bear its own expenses, including the fees of any
attorneys and accountants engaged by such party, in connection with this
Agreement and the consummation of the transactions contemplated herein.
13.3 SPECIFIC PERFORMANCE. Seller acknowledges that the Station is of
a special, unique, and extraordinary character, and that any breach of this
Agreement by Seller could not be compensated for by damages. Accordingly, if
Seller shall breach its obligations under this Agreement, Buyer shall be
entitled, in addition to any of the remedies that it may have, to enforcement of
this Agreement (subject to obtaining any required approval of the FCC) by decree
of specific performance or injunctive relief requiring Seller to fulfill its
obligations under this Agreement. In any action by Buyer to equitably enforce
the provisions of this Agreement, Seller shall waive the defense that there is
an adequate remedy at law or equity and agrees that Buyer shall have the right
to obtain specific performance of the terms of this Agreement without being
required to prove actual damages, post bond or furnish other security.
13.4 NOTICES. All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered by
courier or sent by registered or certified mail, first class, postage prepaid,
or by telex, cable, telegram, facsimile machine or similar written means of
communication, addressed as follows:
(a) If to Seller, to:
c/o Xxxxxx Xxxxxxxx, Xx.
Truth Broadcasting Corporation
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxx-Xxxxx, XX 00000
(b) if to Buyer, to:
c/o Salem Communications Corporation
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
00
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Block, Esq.
Vice President and General Counsel
or such other address with respect to any party hereto as such party may from
time to time notify (as provided above) to the other party hereto. Any such
notice, demand or communication shall be deemed to have been given (i) if so
mailed, as of the close of the third (3rd) business day following the date
mailed, and (ii) if personally delivered or otherwise sent as provided above, on
the date received.
13.5 ENTIRE AGREEMENT. This Agreement, the Schedules and Exhibits
hereto, and the other Documents constitute the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede any prior negotiations, agreements, understandings or
arrangements between the parties with respect to the subject matter hereof.
13.6 BINDING EFFECT; BENEFITS. Except as otherwise provided herein,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors or assigns. Except to the extent
specified herein, nothing in this Agreement, express or implied, shall confer on
any person other than the parties hereto and their respective successors or
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
13.7 ASSIGNMENT. This Agreement and any rights hereunder shall not be
assignable by either party hereto without the prior written consent of the other
party.
13.8 GOVERNING LAW. This Agreement shall in all respects be governed
by and construed in accordance with the laws of the State of Kentucky, including
all matters of construction, validity and performance.
13.9 AMENDMENTS AND WAIVERS. No term or provision of this Agreement
may be amended, waived, discharged or terminated orally but only by an
instrument in writing signed by the party against whom the enforcement of such
amendment, waiver, discharge or termination is sought. Any waiver shall be
effective only in accordance with its express terms and conditions.
13.10 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person or entity or any circumstance, is invalid or
unenforceable in any jurisdiction, (i) a suitable and equitable provision shall
be substituted therefor in order to carry out, so far as may be valid and
enforceable, the extent and purpose of such invalid and unenforceable provision,
and (ii) the remainder of this Agreement and the application of such provision
to other persons, entities or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the
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validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
13.11 HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
13.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by either party on separate counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
13.13 REFERENCES. All references in this Agreement to Articles and
Sections are to Articles and Sections contained in this Agreement unless a
different document is expressly specified.
13.14 SCHEDULES AND EXHIBITS. Unless otherwise specified herein, each
Schedule and Exhibit referred to in this Agreement is attached hereto, and each
such Schedule and Exhibit is hereby incorporated by reference and made a part
hereof as if fully set forth herein.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written.
"SELLER" "BUYER "
TRUTH BROADCASTING CORPORATION SALEM MEDIA OF KENTUCKY, INC.
By: By:
------------------------------ --------------------------------
Xxxxxx X. Xxxxxxxx, Xx. Xxxx X. Xxxxxxxxx
President Executive Vice President
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LIST OF SCHEDULES
SCHEDULE 3.6 Tangible Personal Property
SCHEDULE 3.7 Description of Real Property
SCHEDULE 3.8 FCC Licenses
SCHEDULE 3.9 Station Agreements
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