[DESCRIPTION]Asset Purchase Agreement - Xxxxxx Broadcasting Corporation
___________________________________________________________
ASSET PURCHASE AGREEMENT
dated as of August 31, 1995
by and between
XXXXXX BROADCASTING CORPORATION
(Seller)
and
XXXXX BROADCASTING CORPORATION
(Buyer)
___________________________________________________________
TABLE OF CONTENTS
PAGE
ARTICLE I ASSIGNMENT OF LICENSES AND THE PURCHASE AND SALE OF
ASSETS
1.1 Assignment of Licenses and Transfer
of Assets................................................1
1.2 Excluded Assets............................................3
1.3 Liabilities to be Assumed..................................4
1.4 Purchase Price.............................................4
1.5 Proration of Income and Expenses...........................4
1.6 Allocation of Purchase Price...............................6
1.7 Escrow Deposit.............................................6
ARTICLE II CLOSING, LMA OPERATION AND TERMINATION
2.1 Closing....................................................7
2.2 Transactions at the Closing................................7
2.3 Termination................................................9
2.4 Operation of Station pursuant to
the LMA.................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Due Incorporation.........................................11
3.2 Authority; No Conflict....................................11
3.3 Government Authorizations.................................12
3.4 Compliance with Regulations...............................13
3.5 Personal Property.........................................13
3.6 Real Property.............................................14
3.7 Real Estate Contracts.....................................14
3.8 Consents..................................................14
3.9 Contracts.................................................14
3.10 Environmental.............................................15
3.11 Intellectual Property.....................................16
3.12 Financial Statements......................................16
3.13 Personnel Information; Labor Contracts....................16
3.14 Employee Benefit Plans....................................17
3.15 Litigation................................................17
3.16 Compliance with Laws......................................18
3.17 Insurance.................................................18
3.18 Instruments of Conveyance; Good Title.....................18
3.19 Undisclosed Liabilities...................................18
3.20 Absence of Certain Changes................................18
3.21 Insolvency Proceedings....................................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Due Incorporation.........................................20
4.2 Authority; No Conflict....................................20
4.3 Consents..................................................20
4.4 Litigation................................................21
4.5 Compliance with Laws......................................21
4.6 Qualification.............................................21
4.7 Financing.................................................21
ARTICLE V COVENANTS OF SELLER
5.1 Continued Operation of Station............................21
5.2 Third Party Consents......................................22
5.3 Encumbrances..............................................22
5.4 Assignment of Assets......................................22
5.5 Commission Licenses and Authorizations....................22
5.6 Compensation Increases....................................23
5.7 Insurance.................................................23
5.8 Negotiations with Third Parties...........................23
ARTICLE VI JOINT COVENANTS OF BUYER AND SELLER
6.1 Assignment Application....................................23
6.2 Performance...............................................23
6.3 Conditions................................................23
6.4 Confidentiality...........................................24
6.5 Cooperation...............................................24
6.6 Consents to Assignment....................................24
6.7 Bulk Sales Laws...........................................25
6.8 Employee Matters..........................................25
6.9 Collection of Receivables.................................25
6.10 LMA.......................................................26
ARTICLE VII CONDITIONS TO OBLIGATIONS OF BUYER
7.1 Commission Approvals......................................26
7.2 Performance...............................................26
7.3 Representations and Warranties............................26
7.4 Consents..................................................27
7.5 No Litigation.............................................27
7.6 Documents.................................................27
7.7 Opinions of Counsel.......................................27
7.8 Ancillary Agreements......................................27
7.9 LMA .....................................................27
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF SELLER
8.1 Performance...............................................27
8.2 Representations and Warranties............................28
8.3 Government Approvals......................................28
8.4 Documents.................................................28
8.5 Opinion of Counsel........................................28
8.6 Escrow Agreement..........................................28
8.7 LMA.......................................................28
ARTICLE IX SURVIVAL AND INDEMNIFICATION
9.1 Survival..................................................28
9.2 Indemnification by Seller.................................28
9.3 Indemnification by Buyer..................................29
9.4 Notification of Claims....................................29
9.5 Limitation on Indemnification.............................30
ARTICLE X MISCELLANEOUS
10.1 Assignment................................................31
10.2 Brokerage.................................................31
10.3 Expenses of the Parties...................................31
10.4 Entire Agreement..........................................32
10.5 Headings..................................................32
10.6 Governing Law.............................................32
10.7 Counterparts..............................................32
10.8 Notices...................................................32
10.9 Specific Performance......................................33
10.10 Consent to Jurisdiction...................................34
10.11 Further Assurances........................................34
10.12 Public Announcements......................................34
10.13 Exhibits and Schedules....................................34
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into this 31st day of
August, 1995 by and between XXXXXX BROADCASTING CORPORATION, a
corporation formed under the laws of the State of Delaware ("Seller"),
and XXXXX BROADCASTING CORPORATION, a corporation formed under the laws
of the Commonwealth of Pennsylvania ("Buyer").
R E C I T A L S
WHEREAS, Seller owns and operates and has been duly licensed by
the Federal Communications Commission (the "FCC" or the "Commission") to
operate radio station WWRD(FM), Brunswick, Georgia (the "Station");
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to
purchase, the assets utilized in connection with the operation of the
Station, and Seller and Buyer further desire that Seller assign to Buyer
the licenses and other authorizations issued to Seller by the Commission
for the purpose of operating the Station; and
WHEREAS, simultaneously with the execution of this Agreement,
Seller and Buyer have entered into a Local Marketing Agreement ("LMA");
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
ASSIGNMENT OF LICENSES AND THE
PURCHASE AND SALE OF ASSETS
1.1 ASSIGNMENT OF LICENSES AND TRANSFER OF ASSETS. Seller
agrees to assign, transfer, convey and deliver to Buyer and Buyer agrees
to acquire, accept and receive from Seller, on the Closing Date, all of
Seller's right, title and interest in and to the following station
licenses and the assets relating to the Station (the "Station Assets")
free and clear of all liens and encumbrances:
(a) LICENSES AND AUTHORIZATIONS. All licenses, permits
and other authorizations issued by the FCC or any other state or federal
regulatory agency pertaining to the Station, including, without
limitation, those licenses, permits or authorizations listed in Section
1.1(a) of the disclosure schedule delivered by Seller to Buyer and
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dated of even date herewith (the "Disclosure Schedule"), together with any
renewals, extensions or modifications thereof and additions thereto made
between the date of this Agreement and the Closing Date and any
applications filed at the FCC during such period (the "Licenses"). The
Licenses include the right to use the call letters of the Station,
including but not limited to the call letters WWRD(FM).
(b) TANGIBLE PERSONAL PROPERTY. All of the tangible
personal property owned by Seller and used or useable in the operation of
the Station, including but not limited to the items of personal property
listed in Section 1.1(b) of the Disclosure Schedule, together with all
additions, modifications or replacements thereto made in the ordinary
course of business between the date of this Agreement and the Closing
Date, as hereafter defined (the "Personal Property").
(c) REAL ESTATE CONTRACTS. All of the leasehold
interests in real property leased by Seller and used by the Station,
including all agreements, leases, and contracts of Seller relating to the
tower, transmitter, studio site, and offices of the Station (the "Real
Estate Contracts"), other than security or other deposits made with
respect to such Real Estate Contracts, all as described in Section 1.1(c)
of the Disclosure Schedule. Buyer shall assume, pay and perform all
obligations under such Real Estate Contracts arising after the Closing
Date.
(d) INTELLECTUAL PROPERTY. All of Seller's trade names,
copyrights, trademarks, service marks, patents, patent applications or
other similar rights relating to the operation of the Station including,
but not limited to, those listed in Section 1.1(d) of the Disclosure
Schedule, together with any necessary additions or modifications thereto
between the date hereof and the Closing Date (the "Intellectual
Property").
(e) LEASES AND CONTRACTS. All leases, contracts,
agreements and franchises in effect as of the date of this Agreement
relating to the operation of the Station (other than contracts for the
sale of broadcast time and leases for real property) listed and
identified in Section 1.1(e) of the Disclosure Schedule and those leases,
contracts, agreements and franchises described in Section1.1(h) of this
Agreement (the "Contracts"). Buyer shall assume, pay and perform all
obligations under such Contracts arising after the Closing Date.
(f) CONTRACTS FOR SALE OF BROADCAST TIME. All contracts
for sale of broadcast time on the Station in effect as of the date of this
Agreement that provide for payment by the customer solely on a cash basis
and that are to be in effect on the Closing Date as listed and identified
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in Section 1.1(f) of the Disclosure Schedule (the "Broadcast
Agreements"). Buyer shall assume, pay and perform all obligations under
the Broadcast Agreements arising after the Closing Date, PROVIDED,
HOWEVER, Buyer will not assume any contract for the sale of time entered
into prior to the date of this Agreement pursuant to which payment is to
be received in whole or in part in services, merchandise or other non-
cash considerations ("Trade Agreements"), except as set forth in Section
1.1(f) of the Disclosure Schedule.
(g) OPERATING AND BUSINESS RECORDS. All files, records,
logs and program materials pertaining to the operation of the Station
required to be maintained and kept under the rules of the Commission and
such other files and records as Buyer shall reasonably require for the
continuing business and operation of the Station. Seller shall have the
right to reasonable access to such business records that Seller delivers
to Buyer under this Section 1.1(g) upon Seller's request for five years
after the Closing Date.
(h) FUTURE CONTRACTS. All leases, contracts, agreements
and franchises entered into between the date hereof and the Commencement
Date of the LMA (as such term is defined therein) in the usual and
ordinary course of business.
(i) INVENTORY AND COMPUTER SOFTWARE. All of Seller's
items of inventory related to the business of the Station, including,
without limitation, broadcast programs, as well as all computer software
used or useable by the Station.
(j) OTHER RIGHTS AND PRIVILEGES. Any and all other
franchises, materials, supplies, easements, rights-of-way, licenses, and
other rights and privileges of Seller relating to and used, useable or
necessary in the operation of the Station.
1.2 EXCLUDED ASSETS. There shall be excluded from the sale
transaction described herein the following assets relating to the
Station:
(a) CASH AND DEPOSITS. Cash-on-hand or in banks (or
their equivalents) and other investments belonging to Seller and relating
to the operation of the Station as of the Closing Date.
(b) ACCOUNTS RECEIVABLE. All accounts receivable of the
Seller with regard to the operation of the Station prior to the
Commencement Date of the LMA (as such term is defined therein).
(c) PROPERTY CONSUMED. All property of the Station
disposed of or consumed (including ordinary wear and
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tear) in the ordinary course of business between the date hereof and the
Closing Date.
(d) EXPIRED LEASES, CONTRACTS AND AGREEMENTS. All
contracts described in Sections 1.1(e), (f) and (h) to the Disclosure
Schedule that are terminated or will have expired prior to the Closing
Date in the ordinary course of business.
(e) PENSION AND PROFIT-SHARING PLANS. All pension and
profit-sharing plans, trusts established thereunder and assets thereof,
if any, of Seller.
(f) OTHER EMPLOYEE BENEFIT PLANS. All other employee
benefit plans (including health insurance) of Seller and the assets
thereof.
(g) EMPLOYMENT AND COLLECTIVE BARGAINING AGREEMENTS. All
employment agreements and collective bargaining agreements of Seller.
(h) OTHER ASSETS. Those assets, if any, listed in
Section 1.2(h) of the Disclosure Schedule.
1.3 LIABILITIES TO BE ASSUMED. Except as otherwise provided
herein, Buyer assumes no liabilities or obligations of Seller of any
nature whatsoever, contingent or otherwise, except for obligations
arising after the date hereof in connection with the conduct of the
business and operations of the Station or pursuant to the LMA (the "Post-
Signing Agreements") and post-closing obligations related to Real Estate
Contracts, Contracts, Broadcast Agreements, Trade Agreements and Post-
Signing Agreements (collectively, the "Assumed Contracts") assigned to
and specifically assumed by Buyer.
1.4 PURCHASE PRICE. In consideration of Seller's performance
of this Agreement and the sale, assignment, transfer, conveyance and
delivery of the Station Assets to Buyer free and clear of all liens and
encumbrances, Buyer shall pay to Seller on the Closing Date, by wire
transfer, the sum of One Million Nine Hundred Thousand Dollars
(US$1,900,000.00) (the "Purchase Price").
1.5 PRORATION OF INCOME AND EXPENSES. Subject to the
provisions of the LMA, all income and revenues arising from the Seller's
operations of the Station up to and including 11:59 p.m. (the "Cut-Off
Time") of the day prior to the Commencement Date, and all costs and
expenses arising from the operations of the Station up to and including
11:59 p.m. of the operations of the day prior to the Commencement Date,
will be prorated between Buyer and Seller so that Seller (a)shall be
entitled to receive all income and revenues and all refunds, and
(b)shall be responsible for
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all expenses, costs, liabilities and obligations allocable to the conduct of
the business and the operation of the Station for the period prior to the
Cut-Off Time; and Buyer (x)shall be entitled to receive all income and
revenues and all refunds and (y)shall be responsible for all expenses,
costs, liabilities and obligations allocable to the conduct of the business
and the operation of the Station for the period after the Cut-Off Time. All
income and revenues and costs and expenses arising from the conduct of the
business and operation of the Station shall be allocated to the period during
which the service to which such income and revenue is attributable was
performed. Items to be apportioned pursuant to this paragraph shall
include the following:
(i) all personal property taxes, real estate taxes, water
taxes, ad valorem, and other property taxes or assessments on or with
respect to the assets and property interests to be transferred or
assigned to Buyer hereunder;
(ii) business and license fees including any FCC
Regulatory Fees (and any retroactive adjustments thereof), music license
fees, commissions, wages, salaries and benefits of employees (including
accruals up to the Cut-Off Time for insurance premiums, bonuses,
commissions, sick pay, vacation and severance pay and the like and
related payroll taxes) and similarly prepaid and deferred items;
(iii) liabilities and obligations under all Broadcast
Agreements and any negative balances under the Trade Agreements to be
assigned and assumed hereunder;
(iv) sewer rents and charges for water, electricity and
other utility expenses and fuel;
(v) personal property and equipment rentals, applicable
copyright or other fees, sales and other charges; and
(vi) rents, additional rents and similar prepaid and
deferred items, taxes and other items payable under any lease, contract,
commitment or other agreement or arrangement to be assigned and assumed
hereunder and all other income and expenses attributable to the ownership
and operation of the Station.
Taxes to be apportioned pursuant to this Section1.5 shall be apportioned
in proportion to (x)the number of days in the taxable period before and
including the Cut-Off Time and (y)the number of days in the taxable
period after the Cut-Off Time. No apportionment shall be made pursuant
to this Section of any federal, state, foreign or local income taxes.
Any tax refunds or rebates accruing before the Cut-Off Time for taxes
that were paid prior to Closing shall
Page 6
remain the property of Seller, whether such refund is paid before or after the
Closing Date.
(a) TIME FOR PAYMENT. The prorations and adjustments
contemplated by this Section1.5, to the extent practicable, shall be
made on the Closing Date. Not less than three (3) Business Days prior to
the Closing Date, Seller shall submit to Buyer a written estimate of
adjustments and prorations to be made in accordance with this Article.
Prior to the Closing, Buyer and Seller will attempt in good faith to
agree on an amount of any adjustment and proration payment to 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 90 days after the Closing Date.
(b) DISPUTE RESOLUTION. In the event of any disputes
between the parties as to such adjustments, the amounts not in dispute
shall nonetheless be paid at the time provided in Section1.5(a) and such
disputes shall be determined by an independent certified public
accountant mutually acceptable to the parties whose determination shall
be final, and the fees and expenses of such accountant shall be paid one-
half by Seller and one-half by Buyer.
1.6 ALLOCATION OF PURCHASE PRICE. Buyer and Seller agree that
the Purchase Price shall be allocated among the Station Assets in a
manner to be determined by Buyer and Seller. Buyer and Seller agree to
use such allocation in completing and filing Internal Revenue Service
Form 8594 for federal income tax purposes. Buyer and Seller further
agree that they shall not take any position inconsistent with such
allocation upon examination of any return, in any refund claim, in any
litigation, or otherwise.
1.7 ESCROW DEPOSIT. As security for Buyer's failure to Close
and as an inducement for Seller to perform its obligations hereunder
Buyer shall deposit with Xxxx, Weiss, Rifkind, Wharton& Xxxxxxxx (the
"Escrow Agent") in a separate account maintained for such purpose, an
amount equal to Eighty Four Thousand Seven Hundred Forty Dollars
(US$84,740.00) (the "Escrow Deposit"), which Escrow Deposit shall be held
and disbursed by the Escrow Agent, in the event of a termination of this
Agreement, pursuant to Sections2.3 (c), (d), (e) and (f) herein and,
upon Closing, disbursed to Seller in partial satisfaction of the Purchase
Price. Buyer and Seller agree that the rate of interest in respect of
the Escrow Deposit shall be determined by Buyer and Seller, and further
agree that such interest shall accrue, and be payable, to Buyer.
Page 7
ARTICLE II
CLOSING, LMA OPERATION AND TERMINATION
2.1 CLOSING. The purchase and sale of the Station Assets
contemplated by this Agreement (the "Closing") shall take place at 10:00
a.m. on a mutually agreed upon date and place within five (5) days after
the Commission's approval of the Assignment Application, as defined in
Section 6.1 below, becomes a Final Order, or such other time and place as
shall be mutually agreed upon by the parties (the "Closing Date"). For
purposes of this Agreement, a "Final Order" shall mean any action of the
Commission which has not been reversed, stayed, enjoined, set aside,
annulled or suspended and with respect to which no requests are pending
for administrative or judicial review, reconsideration, appeal or stay,
and the time for filing any such requests and the time for the Commission
to set aside the action on its own motion shall have expired. Buyer may,
at its sole election, waive the requirement that the Commission's
approval of the Assignment Application shall have become a Final Order.
2.2 TRANSACTIONS AT THE CLOSING.
(a) At the Closing, Seller shall deliver to Buyer the
following:
(i) assignments of the Licenses and other pertinent
authorizations transferring the same to the Buyer in customary form
and substance;
(ii) the certificates contemplated by Sections 7.2 and
7.3;
(iii) a copy of the resolutions of the board of
directors of Seller authorizing the execution, delivery and
performance of this Agreement and the agreements and documents
listed in Section 2.2 of the Disclosure Schedule (the "Ancillary
Agreements"), and the consummation of the transactions contemplated
hereby and thereby, together with a certificate of the Secretary of
Seller, dated as of the Closing Date, that such resolutions were
duly adopted and are in full force and effect;
(iv) a xxxx of sale and all other appropriate
documents and instruments assigning to Buyer good and marketable
title to the Station Assets free and clear of any security
interests, mortgages, liens, pledges, attachments, conditional sales
contracts, claims, charges or encumbrances of any kind whatsoever;
Page 8
(v) the Ancillary Agreements, duly executed by Seller
as appropriate;
(vi) written consents of the respective lessors,
landowners, and any other persons or entities whose consents may be
required to permit Buyer to assume the liabilities, contracts,
leases, licenses, understandings and agreements constituting the
Assumed Contracts provided that Seller shall not be required to
deliver any written consents referred to in Section 3.7(b) herein to
the extent Seller has used reasonable efforts to obtain such
consents.
(vii) evidence satisfactory to Buyer's counsel that no
financing statements are outstanding on the Station Assets;
(viii) all files, records, logs, and program materials
relating to the Station;
(ix) a copy of the resolution of the board of
directors of Xxxxxx Communications Corporation ("OCC") authorizing
the execution, delivery and performance by OCC of an indemnification
agreement contained in Article IX hereof, together with a
certificate of OCC dated as of the Closing Date, that such
resolutions were duly adopted and are in full force and effect;
(x) the opinion of counsel for Seller, dated the
Closing Date, as described in Section 7.8;
(xi) assignments to Buyer of all the Assumed
Contracts; and
(xii) such other documents and instruments as Buyer may
reasonably request to consummate the transactions contemplated hereby.
(b) At the Closing, Buyer shall deliver or cause to be
delivered to Seller the following:
(i) the Purchase Price;
(ii) a copy of the resolutions of the board of
directors of Buyer authorizing the execution, delivery and
performance of this Agreement and the Ancillary Agreements, and the
consummation of the transactions contemplated hereby and thereby,
together with a certificate of the Secretary of Buyer dated as of
Closing Date, that such resolutions were duly adopted and are in
full force and effect;
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(iii) the certificates contemplated by Sections 8.1 and
8.2;
(iv) the Ancillary Agreements, duly executed by Buyer
as appropriate;
(v) the opinion of counsel for Buyer, dated the
Closing Date, as described in Section8.5; and
(vi) such other documents and instruments as Seller
may reasonably request to consummate the transactions contemplated
hereby.
2.3 TERMINATION.
(a) Notwithstanding anything to the contrary contained in
this Agreement, this Agreement may be terminated at any time by:
(i) the mutual written consent of the parties hereto;
(ii) either Buyer or Seller if the Closing does not
occur before June 30, 1996, PROVIDED, HOWEVER, that the party
seeking termination under this Section 2.3(a)(ii) shall not have
prevented the Closing from occurring;
(iii) either Buyer or Seller if the Assignment
Application is not granted within nine (9) months from the date the
FCC Form314 is placed on Commission public notice or is denied by
the Commission by a Final Order or is designated for hearing by the
Commission; PROVIDED, HOWEVER, that the party seeking termination
under this Section 2.3(a)(iii) is not the party which by omission or
commission has caused the Commission to take the action described
above; FURTHER PROVIDED, that in the event the Assignment
Application is designated for hearing by the Commission the
provisions of Section2.3(e) shall apply.
(iv) Buyer, if any of the conditions set forth in
Article VII shall have become incapable of fulfillment, and shall
not have been waived by Buyer, or if Seller shall have breached in
any material respect any of its representations, warranties or
obligations hereunder and such breach shall not have been cured in
all material respects or waived prior to the Closing; or
(v) Seller, if any of the conditions set forth in
Article VIII shall have become incapable of fulfillment, and shall
not have been waived by Seller,
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or if Buyer shall have breached in any material respect any of its
representations, warranties or obligations hereunder and such breach
shall not have been cured in all material respects or waived prior to
the Closing.
(b) In the event of the termination of this Agreement by
Buyer or Seller pursuant to this Section 2.3, written notice thereof
shall promptly be given to the other party and, except as otherwise
provided herein, the transactions contemplated by this Agreement shall be
terminated, without further action by any party.
(c) In the event Seller terminates this Agreement under
Section2.3(a)(ii), (iii) or (v) Buyer shall forfeit the Escrow Deposit
to Seller, except in the event Buyer also has the right to terminate
under Section2.3(a)(ii) or (iii) the Escrow Deposit shall be returned to
Buyer.
(d) In the event Buyer terminates this Agreement under
Section2.3(a)(ii), (iii) or (iv) the Escrow Deposit shall be returned to
Buyer.
(e) The time for Commission approval provided in Section
2.3(a)(iii) notwithstanding, either party may terminate this Agreement
upon written notice to the other, if, for any reason, the Assignment
Application is designated for hearing by the Commission, PROVIDED,
HOWEVER, that written notice of termination must be given within twenty
(20) days after release of the Hearing Designation Order and that the
party giving such notice is not in default and has otherwise complied
with its obligations under this Agreement. Upon termination pursuant to
this Section, the parties shall be released and discharged from any
further obligation hereunder and the Escrow Deposit shall be returned to
the Buyer.
(f) It is further PROVIDED, HOWEVER, that no party may
terminate this Agreement if such party is in default hereunder, or if a
delay in any decision or determination by the Commission respecting the
Assignment Application has been caused or materially contributed to
(i)by any failure of such party to furnish, file or make available to
the Commission information within its control; (ii)by the willful
furnishing by such party of incorrect, inaccurate or incomplete
information to the Commission; and (iii)by any other action taken by
such party for the purpose of delaying the Commission's decision or
determination respecting the Assignment Application. Upon such
termination for failure of the Commission to act, the parties shall be
released and discharged from any further obligation hereunder.
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(g) A party shall be deemed to be in default under this
Agreement only if such party has materially breached or failed to perform
its obligations hereunder, and non-material breaches or failures shall
not be grounds for declaring a party to be in default, postponing the
Closing, or terminating this Agreement.
(h) Neither the rights nor the remedies of either Buyer
or Seller under Sections2.3(c), (d) or (e) shall prejudice any other
rights or remedies either Buyer or Seller may have under this Agreement.
(i) If the Closing occurs, the Escrow Deposit shall be
applied to the Purchase Price at Closing.
4.i OPERATION OF STATION PURSUANT TO THE LMA. Notwithstanding
any provision to the contrary in this Agreement:
(a) As of the Commencement Date of the LMA (as such term is
defined therein) the business and operation of the Station
shall be conducted pursuant to the terms of the LMA;
(b) All liabilities, obligations, contracts or claims that
arise by reason of the LMA (the "LMA Liabilities") shall
not constitute or be the basis of, (i) a breach of a
representation or warranty, or covenant of Seller, or
(ii)the failure of any condition to the obligation of
Buyer to close;
(c) All LMA Liabilities shall be assumed by Buyer as of the
Commencement Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 DUE INCORPORATION. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, and is duly qualified to do business in and is in good
standing in the State of Georgia. Seller has the corporate power and
authority to own and to operate the Station and the Station Assets.
3.2 AUTHORITY; NO CONFLICT. The execution and delivery of
this Agreement and the Ancillary Agreements have been duly and validly
authorized and approved by the
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board of directors of Seller, and Seller has the corporate power and
authority to execute, deliver and perform this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated
hereby and thereby. Neither such execution, delivery or performance
nor compliance by Seller with the terms and provisions hereof, or with
respect to the Ancillary Agreements, will (assuming receipt of all
necessary approvals from the Commission) conflict with or result in a
breach of any of the terms, conditions or provisions of (a) the
Certificate of Incorporation or Bylaws of Seller, (b) any
judgment, order, injunction, decree, regulation or ruling of any
court or other governmental authority to which Seller is subject, or (c)
any material agreement, lease or contract, written or oral, to which
Seller is subject. This Agreement shall constitute the valid and binding
obligation of Seller with respect to the terms hereof, subject to
Commission approval of the transactions contemplated hereby.
3.3 GOVERNMENT AUTHORIZATIONS. Section 1.1(a) of the
Disclosure Schedule contains a true and complete list of all the
Licenses, which Seller holds with regular, unconditional renewals thereof
and which were granted for the full license terms and the Licenses are
sufficient for the lawful conduct of the business and operation of the
Station in the manner and to the full extent they are currently
conducted. None of the Licenses is subject to any restriction or
condition which would limit in any material respect the full operation of
the Station as now operated. There are no applications, complaints or
proceedings pending or, to the best of Seller's knowledge, threatened as
of the date hereof before the Commission or any other governmental
authority relating to the business or operations of the Station, other
than applications, complaints or proceedings which generally affect the
broadcasting industry as a whole, and other than reports and forms filed
in the ordinary course of the Station's business. Seller has delivered
to Buyer true and complete copies of the Licenses, including any and all
additions, amendments and other modifications thereto. The Licenses are
validly issued, in good standing, are in full force and effect and are
unimpaired by any act or omission of Seller or its officers, directors or
employees, and Seller has fulfilled and performed all of its obligations
with respect thereto and has full power and authority to operate
thereunder; and the operation of the Station is in accordance with the
Licenses and the Communications Act of 1934, as amended, and the rules,
regulations, and policies of the Federal Communications Commission. To
the knowledge of Seller no proceedings are pending or are threatened
which may result in the revocation, modification, non-renewal or
suspension of any of the Licenses, the denial of any pending
applications, the issuance of any cease and desist order, the imposition
of any administrative actions
Page 13
by the Commission with respect to the Licenses or which may affect
Buyer's ability to continue to operate the Station as it is
currently operated. Seller has taken no action which, to its
knowledge, could lead to revocation or non-renewal of the
Licenses, nor omitted to take any action which, by reason of its
omission, could lead to revocation of the Licenses. All material
reports, forms and statements required to be filed with the Commission
with respect to the Station since the grant of the last renewal of the
Licenses have been filed and are complete and accurate. To the knowledge
of Seller, there are no material facts which, under the Communications
Act of 1934, as amended, or the existing rules and regulations of the
Commission, would disqualify Seller as assignor, and Buyer as assignee,
in connection with the Assignment Application.
For purposes of this Section, the term "material" shall mean
any application, complaint, petition, or other proceeding which could
result in a fine, forfeiture, short term renewal or revocation or non-
renewal of the Licenses or a failure on the part of the FCC to approve
the application.
3.4 COMPLIANCE WITH REGULATIONS. The operation of the Station
is in compliance in all material respects with (i)all applicable
engineering standards required to be met under Commission rules, and (ii)
all other applicable rules, regulations, requirements and policies of the
Commission, the Communications Act of 1934, as amended, and all other
applicable governmental authorities, including, but not limited to, ANSI
Radiation Standards, to the extent required to be met under applicable
Commission rules and regulations; and there are no existing material
claims known to Seller to the contrary.
3.5 PERSONAL PROPERTY. Section 1.1(b) of the Disclosure
Schedule contains a true and complete list of the Personal Property.
Except for those assets designated on Section 1.1(b) of the Disclosure
Schedule as being subject to lease agreements, Seller owns and has, and
will have on the Closing Date, good and marketable title to such Personal
Property, and none of such Personal Property on the Closing Date will be
subject to any security interest, mortgage, pledge, conditional sales
agreement or other lien or encumbrance. The Personal Property is in all
material respects in good operating condition, ordinary wear and tear
excepted, and is available for immediate use in the conduct of the
business and operation of the Station. The technical equipment,
including, without limitation, all transmitters and studio equipment,
constituting part of the Personal Property, has been maintained in
accordance with industry practice and is in good operating condition,
ordinary wear and tear excepted, (except as noted in Section 1.1(b) of
the Disclosure Schedule) and complies in
Page 14
all material respects with all applicable rules and regulations of the
Commission and the terms of the Licenses. The Personal Property
includes such items and equipment necessary to conduct in all
material respects the business and operations of the Station as now
conducted.
3.6 REAL PROPERTY. Neither Seller nor any affiliate of Seller
owns any real property used in connection with the operation of the
Station.
3.7 REAL ESTATE CONTRACTS.
(a) Section1.1(c) of the Disclosure Schedule contains a
true and complete list and summary of all the Real Estate Contracts. The
present use by the Station of all real property leased pursuant to the
Real Estate Contracts conforms in all material respects with all
applicable building, zoning, land use and other laws, ordinances, codes,
orders and regulations, and, to the knowledge of Seller, all other
governmental regulations.
(b) As of the date hereof, Seller has complied in all
material respects with all of the Real Estate Contracts and has not
received or given written notice of any default thereunder from or to any
of the other parties thereto. Seller shall use reasonable efforts to
obtain valid and binding third-party consents, if any are necessary, from
all required third parties to the Real Estate Contracts to be conveyed
and assigned to Buyer as part of the Station Assets.
3.8 CONSENTS. No consent, approval, authorization or order
of, or registration, qualification or filing with, any court, regulatory
authority or other governmental body is required for the execution,
delivery and performance by Seller of this Agreement or the Ancillary
Agreements to which it is a party, other than (i)approval by the
Commission of the Assignment Application as contemplated hereby and
(ii)Seller's filing with the Commission of this Agreement and Buyer's
filing with the Commission of the LMA pursuant to Section73.3613 of the
Commission's rules, if the Assignment Application (including the LMA) is
not filed within thirty days of the execution of this Agreement. Except
as set forth in Section3.8 of the Disclosure Schedule, no consent of any
other party (including, without limitation, any party to any Real Estate
Contract or Contract) is required for the execution, delivery and
performance by Seller of this Agreement, the Escrow Agreement or the
Ancillary Agreements to which it is a party.
3.9 CONTRACTS. Section 1.1(e) of the Disclosure Schedule
contains a true and complete list of all Contracts, and Section 1.1(f)
contains a true and complete
Page 15
list of all Broadcast Agreements and Trade Agreements. Seller
has delivered to Buyer true and complete copies of all written
Contracts, Broadcast Agreements and Trade agreements in the
possession of Seller, including any and all amendments and other
modifications to same. All such Contracts, Broadcast Agreements and
Trade Agreements are valid, binding and enforceable by Seller in
accordance with their respective terms, except as limited by laws
affecting creditors' rights or equitable principles generally. Seller
has complied in all material respects with all such Contracts, Broadcast
Agreements and Trade Agreements, and Seller is not in default beyond any
applicable grace periods under any of same, and to the knowledge of
Seller no other contracting party is in material default under any of
same. Seller has full legal power and authority to assign its respective
rights under such Contracts, Broadcast Agreements and Trade Agreements to
Buyer in accordance with this Agreement on terms and conditions no less
favorable than those in effect on the date hereof, and such assignment
will not materially affect the validity, enforceability and continuity of
any such Contracts, Broadcast Agreements and Trade Agreements, except to
the extent third party consents are required.
3.10 ENVIRONMENTAL. As of the date hereof, Seller has not
unlawfully disposed of any Hazardous Waste, including any Polychlorinated
Biphenyls ("PCBs"), in a manner which has caused, or could cause, Buyer
to incur a material liability under applicable law in connection
therewith; and Seller warrants that the technical equipment included in
the Personal Property does not contain any Hazardous Waste that is
required by law to be removed, or, if any equipment does contain
Hazardous Waste, that such equipment is stored and maintained in
compliance with applicable law. As of the date hereof, Seller has
complied in all material respects with all federal, state and local
environmental laws, rules and regulations applicable to the Station and
its operations, including but not limited to the Commission's guidelines
regarding RF radiation. No Hazardous Waste has been disposed of by
Seller, and, to the best of Seller's knowledge, no Hazardous Waste has
been disposed of by any other person, on the property subject to Real
Estate Contracts in a condition which requires investigation or
remediation pursuant to Environmental Laws. As used herein, the term
"Hazardous Waste" shall mean all materials regulated by any federal,
state, local or foreign laws relating to pollution or protection of human
health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata). If
Seller learns between the date of this Agreement and the Closing Date
that Seller is in breach of the representation and warranty set forth in
this Section 3.11 and such breach is attributable to Seller's action or
failure to act prior to the Commencement
Page 16
Date (as defined in the LMA), Seller shall begin remedial action
promptly, if such is required by Environmental Laws, and shall use
reasonable best efforts to complete such remedial action to the
satisfaction of Buyer before the Closing Date.
3.11 INTELLECTUAL PROPERTY. Section1.1(d) of the Disclosure
Schedule is a true and complete list of all the material Intellectual
Property. Such Intellectual Property has been duly registered in, filed
with, or issued by the appropriate offices within all jurisdictions where
such registration, filing or issuance is necessary to protect such
Intellectual Property from infringement, including, without limitation,
the United States Copyright Office and the United States Patent and
Trademark Office. Seller has not granted any license or other rights
with respect to such Intellectual Property. Seller has not received any
written notice of any infringement or unlawful use of the Intellectual
Property and Seller has not violated or infringed any patent, trademark,
trade secret or copyright held by others or any license, authorization or
permit held by it.
3.12 FINANCIAL STATEMENTS. Section 3.12 of the Disclosure
Schedule contains a copy of the unaudited statements of income, and the
related balance sheets for Seller for the period after Seller acquired
the Station through June 30, 1995 (the "Financial Statements"). The
Financial Statements have been prepared in all material respects in
accordance with generally accepted accounting principles and in
accordance with the policies and procedures of the Corporation applicable
thereto, consistently applied. The Financial Statements present fairly
the financial condition and results of operations of the Station for the
periods indicated in all material respects.
3.13 PERSONNEL INFORMATION; LABOR CONTRACTS.
(a)Section 3.13 of the Disclosure Schedule contains a
true and complete list of all persons employed at the Station as of the
date hereof, including the date of hire, a description of material
compensation arrangements (other than employee benefit plans, if any, set
forth in Section 3.14 of the Disclosure Schedule) and a list of other
terms of any and all material agreements affecting such persons.
(b) Seller is not a party to any contract with any labor
organization, nor has Seller agreed to recognize any union or other
collective bargaining unit, nor has any union or other collective
bargaining unit been certified as representing any of Seller's employees.
Seller has no knowledge of any organizational effort
Page 17
currently being made or threatened by or on behalf of any labor union with
respect to employees of the Station. During the past two years, Seller has
not experienced any strikes, work stoppages, grievance proceedings, claims of
unfair labor practices filed, or other significant labor difficulties of
any nature.
(c) Seller has complied in all material respects with
all laws relating to the employment of labor, including, without
limitation, the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and those laws relating to wages, hours, collective
bargaining, unemployment insurance, workers' compensation, equal
employment opportunity and the payment and withholding of taxes.
3.14 EMPLOYEE BENEFIT PLANS. Section 3.14 of the Disclosure
Schedule contains a true and complete list and summary, as of the date of
this Agreement, of all employee benefit plans (as that term is defined in
Section 3(3) of ERISA) applicable to the employees of Seller. Seller
maintains no other employee benefit plan. Each of Seller's employee
benefit plans has been operated and administered in all material respects
in accordance with its terms and applicable law, including, without
limitation, ERISA and the Internal Revenue Code.
3.15 LITIGATION. Except as set forth in Section3.15 of the
Disclosure Schedule, Seller is not subject to any judgment, award, order,
writ, injunction, arbitration decision or decree, and there is no
litigation, proceeding or investigation pending or, to the best of
Seller's knowledge, threatened against Seller or the Station in any
federal, state or local court, or before any administrative agency or
arbitrator (including, without limitation, any proceeding which seeks the
forfeiture of, or opposes the renewal of, any of the Licenses), or before
any other tribunal duly authorized to resolve disputes, which would
reasonably be expected to have any material adverse effect upon the
business, property, assets or condition (financial or otherwise) of the
Station or which seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken pursuant to or in connection
with this Agreement. In particular, but without limiting the generality
of the foregoing, except as set forth in Section3.16 of the Disclosure
Schedule, there are no applications, complaints or proceedings pending
or, to the best of Seller's knowledge, threatened before the Commission
or any other governmental organization with respect to the business or
operation of the Station which would reasonably be expected to have any
material adverse effect upon the Station Assets, other than applications,
complaints or proceedings which affect the broadcast industry generally.
Page 18
3.16 COMPLIANCE WITH LAWS. Seller has not received any notice
asserting any non-compliance with any applicable statute, rule or
regulation (federal, state or local) whether or not related to the
business or operation of the Station which would have any material
adverse effect on the business or operation of the Station. Seller is
not in default with respect to any judgment, order, injunction or decree
of any court, administrative agency or other governmental authority or to
any other tribunal duly authorized to resolve disputes in any respect
material to the transactions contemplated hereby. Seller is in
compliance in all material respects with all laws, regulations and
governmental orders whether or not applicable to the conduct of the
business and operation of the Station and any other business or
operations conducted by Seller.
3.17 INSURANCE. Section 3.17 of the Disclosure Schedule
contains a true and complete list of all Seller's insurance policies.
All such policies are in full force and effect and Seller has received no
notice of cancellation with respect thereto.
3.18 INSTRUMENTS OF CONVEYANCE; GOOD TITLE. The instruments
to be executed by Seller and delivered to Buyer at Closing, conveying the
Station Assets to Buyer, will be in a form sufficient to transfer good
and marketable title to the Station Assets free and clear of all
liabilities, obligations and encumbrances in all material respects,
except as provided herein.
3.19 UNDISCLOSED LIABILITIES. To knowledge of the Seller,
there has been no failure to disclose any material obligations of Seller,
except obligations incurred in the ordinary and usual course of business.
3.20 ABSENCE OF CERTAIN CHANGES. Except as disclosed in
Section3.20 of the Disclosure Schedule, between the Balance Sheet Date
and the date of this Agreement there has not been:
(a) Any material adverse change in the working capital,
financial condition, business, results of operations, assets or
liabilities of the Seller;
(b) Except with reference to the LMA, any change in the
manner in which the Station conducts its business and operations other
than changes in the ordinary and usual course of business consistent with
past practice;
(c) Any amendment to the Certificate of Incorporation or
Bylaws of the Seller;
Page 19
(d) Any material contract or commitment, to which the
Seller is a party, entered into, modified or terminated, except in the
ordinary and usual course of business;
(e) Any creation or assumption of any mortgage, pledge
or other lien or encumbrance upon any of the Station Assets except in the
ordinary and usual course of business;
(f) Any sale, assignment, lease, transfer, or other
disposition of any of the Station Assets, except in the ordinary and
usual course of business;
(g) The incurring of any material liabilities or
obligations, except items incurred in the ordinary and usual course of
business;
(h) The write-off or determination to write off as
uncollectible any accounts receivable or portion thereof, except for
write-offs in the ordinary course of business consistent with past
practice at a rate no greater than during the twelve months prior to the
Balance Sheet Date;
(i) The cancellation of any debts or claims, or waiver
of any rights, having an aggregate value in excess of $10,000;
(j) The disposition, lapse or termination of any
Intellectual Property;
(k) The increase or promise to increase the rate of
commissions, fixed salary or wages, draw, bonus or other compensation
payable to any employee of the Seller, except in the ordinary and usual
course of business consistent with past practice; or
(l) Any change in any method of accounting or accounting
practice used by the Seller.
3.21INSOLVENCY PROCEEDINGS. No insolvency proceedings of any
character including, without limitation, bankruptcy, receivership,
reorganization, composition or arrangement with creditors, voluntary or
involuntary, affecting Seller or the Station Assets are pending or, to
Seller's knowledge, threatened, and Seller has made no assignment for the
benefit of creditors, nor taken any action with a view to, or which would
constitute the basis for, the institution of any such insolvency
proceedings.
Page 20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 DUE INCORPORATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth
of Pennsylvania and as of the Closing Date shall be duly qualified to do
business in and be in good standing in the Commonwealth of Pennsylvania
and the States of Georgia, Florida and Oklahoma.
4.2 AUTHORITY; NO CONFLICT. The execution and delivery of
this Agreement and the Ancillary Agreements have been duly and validly
authorized and approved by the board of directors of Buyer, and Buyer has
the corporate power and authority to execute, deliver and perform this
Agreement and the Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby. The execution, delivery, performance
hereof, and compliance by Buyer with the terms and provisions hereof, or
with respect to the Ancillary Agreements, thereof, will not (assuming
receipt of all necessary approvals from the Commission) conflict with or
result in a breach of any of the terms, conditions or provisions of
(a)the Certificate of Incorporation or Bylaws of Buyer, (b)any
judgment, order, injunction, decree, regulation or ruling of any court or
other governmental authority to which Buyer is subject, or (c)any
material agreement, lease or contract, written or oral, to which Buyer is
subject. This Agreement will constitute the valid and binding obligation
of Buyer with respect to the terms hereof, subject to Commission approval
of the transactions contemplated hereby.
4.3 CONSENTS. No consent, approval, authorization or order
of, or registration, qualification or filing with, any court, regulatory
authority or other governmental body is required for the execution,
delivery and performance by Buyer of this Agreement or the Ancillary
Agreements to which it is a party, other than (i)the approval by the
Commission of the Assignment Application as contemplated hereby and
(ii)Seller's filing with the Commission of this Agreement and Buyer's
filing with the Commission of the LMA pursuant to Section73.3613 of the
Commission's rules, if the Assignment Application (including the LMA) is
not filed within thirty days of the execution of this Agreement. Except
as set forth in Section4.3 of the Disclosure Schedule, no consent of any
other party is required for the execution, delivery and performance by
Buyer of this Agreement or the Ancillary Agreements to which it is a
party.
Page 21
4.4 LITIGATION. There is no litigation, proceeding or
investigation pending or, to the best of Buyer's knowledge, threatened
against Buyer in any federal, state or local court, or before any
administrative agency or arbitrator, or before any other tribunal duly
authorized to resolve disputes, that would reasonably be expected to have
any material adverse effect upon the ability of Buyer to perform its
obligations hereunder, or that seeks to enjoin or prohibit, or otherwise
questions the validity of, any action taken or to be taken pursuant to or
in connection with this Agreement.
4.5 COMPLIANCE WITH LAWS. Buyer is not in default with
respect to any judgment, order, injunction or decree of any court,
administrative agency or other governmental authority or of any other
tribunal duly authorized to resolve disputes in any respect material to
the transactions contemplated hereby. Buyer is not in violation of any
law, regulation or governmental order, the violation of which would have
a material adverse effect on Buyer or its ability to perform its
obligations pursuant to this Agreement.
4.6 QUALIFICATION. To the best of Buyer's knowledge, Buyer is
legally, technically, financially and otherwise qualified to be the
assignee of the Licenses and the other Station Assets, and, prior to the
Closing Date, Buyer will exercise its best efforts to refrain from doing
any act which would disqualify Buyer from being the assignee of the
Licenses and the other Station Assets.
4.7 FINANCING. Buyer possesses adequate financial resources
necessary to fund the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF SELLER
Between the date of this Agreement and the Closing Date, Seller
shall have complete control of the Station and its operations, and Seller
covenants as follows with respect to such period:
5.1 CONTINUED OPERATION OF STATION. Subject to the LMA,
Seller shall continue to operate the Station under the terms of the
Licenses in the manner in which the Station has been operated heretofore,
in the usual and ordinary course of business, in conformity with all
material applicable laws, ordinances, regulations, rules and orders, and
in a manner so as to preserve and xxxxxx the goodwill and business
relationships of the Station and Seller, including, without limitation,
relationships with
Page 22
advertisers, suppliers, customers, and employees. Seller shall file
with the Commission and any other applicable governmental authority
all material applications and other documents required to be filed
in connection with the continued operation of the Station. Seller
shall not enter into or amend any contracts or commitments involving
expenditures by the Seller in an aggregate amount in excess of $10,000
except in accordance with the terms of the LMA.
5.2 THIRD PARTY CONSENTS. Seller shall use commercially
reasonable efforts to obtain from any third party waivers, permits,
licenses, approvals, authorizations, qualifications, orders and consents
necessary for the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements, including, without limitation,
approval from the Commission of the Assignment Application contemplated
hereby.
5.3 ENCUMBRANCES. Seller shall not suffer or permit the
creation of any mortgage, conditional sales agreement, security interest,
lease, lien, hypothecation, deed of trust or pledge, encumbrance,
restriction, liability, charge, or imperfection of title with respect to
the Station Assets.
5.4 ASSIGNMENT OF ASSETS. Seller shall not sell, assign,
lease or otherwise transfer or dispose of any Station Assets, whether now
owned or hereafter acquired, except for retirements in the normal and
usual course of business or in connection with the acquisition of similar
property or assets, as provided for herein.
5.5COMMISSION LICENSES AND AUTHORIZATIONS. Seller shall not
by any act or omission surrender, modify adversely, forfeit or fail to
renew under regular terms the Licenses, cause the Commission or any other
governmental authority to institute any proceeding for the revocation,
suspension or modification of any such License, fail to prosecute with
due diligence any pending applications with respect to the Licenses at
the Commission or any other applicable governmental authority, or fail to
object or respond to any filing with the Commission that may have a
material adverse effect on the Licenses. Between the date of execution
of this Agreement and the Closing Date, Seller shall provide Buyer with
(i)copies of any reports, notices, correspondence, or other written
materials it sends to or receives from the Commission, (ii)a summary of
any oral communications with the Commission affecting the Licenses, and
(iii)copies of any applications or other filings by third parties that
may have a material adverse effect on the Licenses.
Page 23
5.6COMPENSATION INCREASES. Seller shall not permit any
increase in the rate of commissions, fixed salary or wages, draw or other
compensation payable to any employees of Seller other than in the
ordinary course of business consistent with past practice.
5.7INSURANCE. Seller shall maintain at all times between the
date hereof and the Closing Date all policies listed in Section3.18 of
the Disclosure Schedule or else replace such policies with comparable
policies.
5.8NEGOTIATIONS WITH THIRD PARTIES. Seller shall not, before
Closing or the termination of this Agreement, enter into discussions with
respect to any sale or offer of the Station, any Station Assets or any
stock of Seller to any third party, nor shall Seller offer the Station,
any Station Assets or any stock of Seller to any third party.
ARTICLE VI
JOINT COVENANTS OF BUYER AND SELLER
Buyer and Seller covenant and agree that between the date
hereof and the Closing Date, they shall act in accordance with the
following:
6.1 ASSIGNMENT APPLICATION. As promptly as practicable after
the date of this Agreement, and in no event later than ten (10) days
after execution of this Agreement, Seller and Buyer shall join in and
file an application on FCC Form314 with the Commission requesting its
consent to the assignment of the Licenses from Seller to Buyer (the
"Assignment Application"). Seller and Buyer agree to prosecute the
Assignment Application with all reasonable diligence and to use their
best efforts to obtain prompt Commission grant of the Assignment
Application filed at the Commission.
6.2 PERFORMANCE. Buyer and Seller shall perform all acts
required of them under this Agreement and refrain from taking or omitting
to take any action that would violate their representations and
warranties hereunder or render same inaccurate as of the Closing Date.
6.3 CONDITIONS. If any event should occur, either within or
without the control of any party hereto, which would prevent fulfillment
of the conditions placed upon the obligations of any party hereto to
consummate the transactions contemplated by this Agreement, the parties
hereto shall use their best efforts to cure the event as expeditiously as
possible.
Page 24
6.4 CONFIDENTIALITY. Buyer and Seller shall each keep
confidential all information they obtain with respect to any other party
hereto in connection with this Agreement and the negotiations preceding
this Agreement, and will use such information solely in connection with
the transactions contemplated by this Agreement. If the transactions
contemplated hereby are not consummated for any reason, each party hereto
shall return to the party so providing, without retaining a copy thereof,
any schedules, documents or other written information obtained from the
party so providing such information in connection with this Agreement and
the transactions contemplated hereby. Notwithstanding the foregoing, no
party shall be required to keep confidential or return any information
which (i)is known or available through other lawful sources, (ii)is or
becomes publicly known through no fault of the receiving party or its
agents, (iii)is required to be disclosed pursuant to an order or request
of a judicial or governmental authority (provided the disclosing party is
given reasonable prior notice), or (iv)is developed by the receiving
party independently of the disclosure by the disclosing party.
6.5 COOPERATION. Buyer and Seller shall cooperate fully and
with each other in taking any actions to obtain the required consent of
any governmental instrumentality or any third party necessary or helpful
to accomplish the transactions contemplated by this Agreement; PROVIDED,
HOWEVER, that no party shall be required to take any action which would
have a material adverse effect upon it or any entity affiliated with it.
6.6 CONSENTS TO ASSIGNMENT. To the extent that any Assumed
Contract or other contract identified in the Disclosure Schedule that is
to be assigned under this Agreement is not capable of being sold,
assigned, transferred, delivered or subleased without the waiver or
consent of any third person withholding same (including a government or
governmental unit), or if such sale, assignment, transfer, delivery or
sublease or attempted sale, transfer, delivery or sublease would
constitute a breach thereof or a violation of any law or regulation, this
Agreement and any assignment executed pursuant hereto shall not
constitute a sale, assignment, transfer, delivery or sublease or an
attempted sale, assignment, transfer, delivery or sublease thereof. In
those cases where consents, assignments, releases and/or waivers have not
been obtained at or prior to the Closing Date to the transfer and
assignment to Buyer of such contracts, Buyer may in its sole discretion
elect to have this Agreement and any assignments executed pursuant
hereto, to the extent permitted by law, constitute an equitable
assignment by Seller to Buyer of all of Seller's rights, benefits, title
and interest in and to such contracts, and where necessary
Page 25
or appropriate, Buyer shall be deemed to be Seller's agent for the purpose
of completing, fulfilling and discharging all of Seller's rights and
liabilities arising after the Closing Date under such contracts. Seller
shall use its reasonable best efforts to provide Buyer with the benefits
of such contracts (including, without limitation, permitting Buyer to
enforce any rights of Seller arising under such contracts), and Buyer
shall, to the extent Buyer is provided with the benefits of such
contracts, assume, perform and in due course pay and discharge all debts,
obligations and liabilities of Seller under such contracts.
6.7 BULK SALES LAWS. Buyer hereby waives compliance by Seller
with the provisions of the "bulk sales" or similar laws of any state.
Seller agrees to indemnify Buyer and hold it harmless against any and all
claims, losses, damages, liabilities, costs and expenses incurred by
Buyer or any affiliate as a result of any failure to comply with any
"bulk sales" or similar laws.
6.8 EMPLOYEE MATTERS. While under no obligation to hire any
employees of the Station, Buyer shall make reasonable efforts to offer
employment at will to certain employees of the Station. Upon review of a
full list of employees and salaries, Buyer shall notify Seller of those
employees to whom it will so offer employment as soon as practicable.
Seller shall be responsible for all salary and benefits of the employees
of the Station who do not accept, or are not offered, employment with
Buyer. Seller shall be responsible for all salary and other compensation
due to be paid for work for Seller for employees of the Station who
become employees of Buyer and Buyer shall be responsible for the salary
and other compensation due to be paid for work for Buyer on or after the
date of hire by Buyer for such employees. Seller shall be responsible
for severance payments which may be applicable under its employee benefit
plans to any employees not so offered employment and hired by Buyer.
6.9 COLLECTION OF RECEIVABLES. Buyer and Seller agree that
Buyer shall collect all accounts receivable (the "Receivable Amounts") of
the Seller with regard to the operation of the Station prior to the
Commencement Date of the LMA (as such term is defined therein) and which
remain outstanding as of the date hereof, and Buyer and Seller further
agree that Buyer shall remit such Receivable Amounts to Seller on a
monthly basis within ten (10) days after the end of any month in which
such Receivable Amounts are collected. Buyer shall provide Seller with
monthly reports in respect of the collection of such Receivable Amounts
for up to six (6) months following the Closing Date.
Page 26
6.10 LMA. Buyer and Seller shall enter into a definitive LMA
as of the date hereof pursuant to which Buyer shall provide program and
other services to the Station as of the Commencement Date (as such term
is defined in the LMA) until Closing unless earlier terminated in
accordance with the terms of this Agreement or the LMA.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYER
The performance of the obligations of the Buyer hereunder is
subject, at the election of the Buyer, to the following conditions
precedent:
7.1 COMMISSION APPROVALS. Notwithstanding anything herein to
the contrary, the consummation of this Agreement is conditioned upon
(a)a grant by the Commission of the Assignment Application, and
(b)compliance by the parties with the conditions, if any, imposed by the
Commission in connection with the grant of the Assignment Application
(provided that neither party shall be required to accept or comply with
any condition which would be unreasonably burdensome or which would have
a materially adverse effect upon it). All required governmental filings
shall have been made, and all requisite governmental approvals for the
consummation of the transactions contemplated hereby shall have been
granted. The Licenses shall be in unconditional full force and effect,
shall be valid for the balance of the current license term applicable
generally to radio stations licensed to communities located in the State
of Georgia, and shall be unimpaired by any acts or omissions of Seller's
employees or agents, or Seller.
7.2 PERFORMANCE. The Station Assets shall have been
transferred to Buyer by Seller, and all of the terms, conditions and
covenants to be complied with or performed by Seller on or before the
Closing Date shall have been duly complied with and performed in all
material respects, and Buyer shall have received from Seller a
certificate or certificates to such effect, in form and substance
reasonably satisfactory to Buyer.
7.3 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller to Buyer shall be true, complete and correct in all
material respects as of the Closing Date with the same force and effect
as if then made, and Buyer shall have received from Seller a certificate
or certificates to such effect, in form and substance reasonably
satisfactory to Buyer.
Page 27
7.4 CONSENTS. Seller shall have received all consents
(including landlords' consents for the studio and tower sites) specified
in Section3.9 of the Disclosure Schedule.
7.5 NO LITIGATION. No litigation, proceeding, or
investigation of any kind shall have been instituted or, to Seller's
knowledge, threatened which would materially adversely affect the ability
of Seller to comply with the provisions of this Agreement or would
materially adversely affect the operation of the Station.
7.6 DOCUMENTS. Seller shall have obtained, executed, where
necessary, and delivered to Buyer, where applicable, all of the
documents, reports, orders and statements required of it herein, as well
as any other documents (including collateral assignments) required by any
entity providing financing for the transactions contemplated by this
Agreement and the Ancillary Agreements.
7.7 OPINIONS OF COUNSEL. Seller shall have delivered to Buyer
an opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel to
Seller, substantially in the form attached hereto as ExhibitA. In
addition, Seller shall have delivered to Buyer a written opinion of
Haley, Bader & Xxxxx, Seller's FCC counsel, dated as of the Closing Date
substantially in the form attached hereto as ExhibitB.
7.8ANCILLARY AGREEMENTS. Buyer and Seller shall have entered
into the Ancillary Agreements on terms and conditions satisfactory to
Buyer.
7.9LMA. The LMA has not been terminated by the Buyer in
accordance with the terms thereof.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SELLER
The performance of the obligations of Seller hereunder is
subject, at the election of Seller, to the following conditions
precedent:
8.1 PERFORMANCE. All of the terms, conditions and covenants
to be complied with or performed by Buyer on or before the Closing Date
shall have been duly complied with and performed in all material
respects, and Seller shall have received from Buyer a certificate or
certificates to such effect, in form and substance reasonably
satisfactory to Seller.
Page 28
8.2 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer to Seller shall be true, complete and correct in all
material respects as of the Closing Date with the same force and effect
as if then made, and Seller shall have received from Buyer a certificate
or certificates to such effect, in form and substance reasonably
satisfactory to Seller.
8.3 GOVERNMENT APPROVALS. All required governmental filings
shall have been made and all requisite governmental approvals for the
consummation of the transactions contemplated hereby shall have been
granted.
8.4 DOCUMENTS. Buyer shall have obtained, executed, where
necessary, and delivered to Seller, where applicable, all of the
documents, reports, orders and statements required of it herein.
8.5 OPINION OF COUNSEL. Buyer shall have delivered to Seller
an opinion of counsel to Buyer substantially in the form attached hereto
as ExhibitC addressed to and reasonably satisfactory to Seller.
8.6 ESCROW AGREEMENT. Seller and Buyer shall have entered
into an Escrow Agreement substantially in the form attached hereto as
ExhibitD.
8.7LMA. The LMA has not been terminated by the Seller in
accordance with the terms thereof.
ARTICLE IX
SURVIVAL AND INDEMNIFICATION
9.1 SURVIVAL. The representations and warranties provided for
in this Agreement shall survive the Closing for 9months from the Closing
Date (such 9-month period being the "Indemnification Period") for the
benefit of the parties hereto and their successors and assigns. The
covenants and agreements of the parties hereto shall survive the Closing
in accordance with their terms.
9.2 INDEMNIFICATION BY SELLER. From and after the Closing
Date, Seller and OCC agree to and shall jointly and severally indemnify,
defend and hold Buyer harmless, and shall reimburse Buyer for and against
any and all actions, losses, expenses, damages, liabilities, penalties or
assessments, judgments and costs (including reasonable legal expenses
related thereto) resulting from or arising out of:
(a) Any breach by Seller of any representation or
warranty contained in this Agreement, any
Page 29
Ancillary Agreement or in any certificate furnished to or to be furnished
pursuant hereto or in connection with the transactions contemplated hereby;
(b) Any failure to comply with any covenant of Seller
contained in this Agreement, any Ancillary Agreement or in any
certificate furnished or to be furnished pursuant hereto or in connection
with the transactions contemplated hereby; and
(c) Any liabilities of any kind or nature, absolute or
contingent, not assumed by Buyer, including, without limitation, any
liabilities relating to or arising from the business and operation of the
Station by Seller prior to the Closing Date and not assumed by the Buyer
pursuant to the LMA.
9.3 INDEMNIFICATION BY BUYER. From and after the Closing
Date, Buyer agrees to and shall indemnify, defend and hold Seller
harmless, and shall reimburse Seller for and against any and all actions,
losses, expenses, damages, liabilities, penalties or assessments,
judgments and costs (including reasonable legal expenses related thereto)
resulting from or arising out of:
(a) Any breach by Buyer of any representation or warranty
contained in this Agreement, any Ancillary Agreement or in any
certificate furnished or to be furnished pursuant hereto or in connection
with the transactions contemplated hereby;
(b) Any failure to comply with any covenant of Buyer
contained in this Agreement, any Ancillary Agreement or in any
certificate furnished or to be furnished pursuant hereto or in connection
with the transactions contemplated hereby; and
(c) Any liabilities of any kind or nature, absolute or
contingent, relating to or arising from the business and operation of the
Station (i) subsequent to the Commencement Date of the LMA, as defined in
the LMA and assumed by the Buyer pursuant thereto, and (ii) subsequent to
the Closing Date.
9.4 NOTIFICATION OF CLAIMS.
(a)A party entitled to be indemnified pursuant to
Sections9.2 or 9.3 (the "Indemnified Party") shall notify the party
liable for such indemnification (the "Indemnifying Party") in writing of
any claim or demand which the Indemnified Party has determined has given
or could give rise to a right of indemnification under this Agreement.
Subject to the Indemnifying Party's right to defend in good faith third
party claims as hereinafter
Page 30
provided, the Indemnifying Party shall satisfy its obligations under this
ArticleIX within thirty (30) days after the receipt of a written notice
thereof from the Indemnified Party.
(b) If the Indemnified Party shall notify the
Indemnifying Party of any claim or demand pursuant to Section9.4(a), and
if such claim or demand relates to a claim or demand asserted by a third
party against the Indemnified Party which the Indemnifying Party
acknowledges is a claim or demand for which it must indemnify or hold
harmless the Indemnified Party under Sections9.2 or 9.3, the
Indemnifying Party shall have the right to employ counsel acceptable to
the Indemnified Party to defend any such claim or demand asserted against
the Indemnified Party. The Indemnified Party shall have the right to
participate in the defense of any such claim or demand. The Indemnifying
Party shall notify the Indemnified Party in writing, as promptly as
possible (but in any case before the due date for the answer or response
to a claim) after the date of the notice of claim given by the
Indemnified Party to the Indemnifying Party under Section9.4(a) of its
election to defend in good faith any such third party claim or demand.
So long as the Indemnifying Party is defending in good faith any such
claim or demand asserted by a third party against the Indemnified Party,
the Indemnified Party shall not settle or compromise such claim or
demand. The Indemnified Party shall make available to the Indemnifying
Party or its agents all records and other materials in the Indemnified
Party's possession reasonably required by it for its use in contesting
any third party claim or demand. Whether or not the Indemnifying Party
elects to defend any such claim or demand, the Indemnified Party shall
have no obligations to do so. Upon payment of any claim or demand
pursuant to this ArticleIX, the Indemnifying Party shall, to the extent
of payment, be subrogated to all rights of the Indemnified Party.
9.5 LIMITATION ON INDEMNIFICATION. Notwithstanding any
provision contained herein, (a)if Buyer has actual knowledge of a breach
by Seller of any representation, warranty, covenant or agreement
hereunder and Buyer closes notwithstanding such breach, Seller shall not
be responsible for any claim arising from such breach and Buyer shall not
be indemnified for such breach hereunder, and (b)if Seller has actual
knowledge of a breach by Buyer of any representation, warranty, covenant
or agreement hereunder and Seller closes notwithstanding such breach,
Buyer shall not be responsible for any claim arising from such breach and
Seller shall not be indemnified for such breach hereunder.
Page 31
ARTICLE X
MISCELLANEOUS
10.1 ASSIGNMENT.
(a)This Agreement shall not be assigned or conveyed by
either party hereto to any other person or entity without the prior
written consent of the other parties hereto; PROVIDED, HOWEVER, that
Buyer may assign this Agreement without Seller's prior consent to one or
more corporations or other entities controlled by Buyer. Subject to the
foregoing, this Agreement shall be binding and shall inure to the benefit
of the parties hereto, their successors and assigns.
(b) Notwithstanding anything to the contrary set forth
herein, Buyer may assign and transfer to any entity providing financing
for the transactions contemplated by this Agreement (or any refinancing
of such financing) as security for such financing all of the interest,
rights and remedies of Buyer with respect to this Agreement and the
Ancillary Agreements to the extent permitted by law, and Seller shall
expressly consent to such assignment. Any such assignment will be made
for collateral security purposes only and will not release or discharge
Buyer from any obligations it may have pursuant to this Agreement.
Notwithstanding anything to the contrary set forth herein, Buyer may
(i)authorize and empower such financing sources to assert, either
directly or on behalf of Buyer, any claims Buyer may have against Seller
under this Agreement and (ii)make, constitute and appoint one agent bank
in respect of such financing (and all officers, employees and agents
designated by such agent) as the true and lawful attorney and agent-in-
fact of Buyer for the purpose of enabling the financing sources to assert
and collect any such claims.
10.2 BROKERAGE. Seller and Buyer warrant and represent to one
another that, with the exception of Xxxx Xxxxxxx, broker for the Seller,
there has been no broker in any way involved in the transactions
contemplated hereby and that no one other than Xxxx Xxxxxxx is or will be
entitled to any fee or other compensation in the nature of a brokerage
fee or finder's fee as a result of the Closing hereunder. Seller shall
be wholly responsible for any brokerage or other fee due to Xxxx Xxxxxxx.
10.3 EXPENSES OF THE PARTIES. It is expressly understood and
agreed that all expenses of preparing this Agreement and of preparing and
prosecuting the Assignment Application with the Commission, and all other
expenses, whether or not the transactions contemplated hereby are
Page 32
consummated, shall be borne solely by the party who shall have incurred
the same and the other party shall have no liability in respect thereto,
except as otherwise provided herein. All costs of transferring the
Station Assets in accordance with this Agreement, including recordation,
transfer and documentary taxes and fees, and any excise, sales or use
taxes, shall be borne equally by Seller and Buyer. Any filing or grant
fees imposed by any governmental authority the consent of which is
required for the transactions contemplated hereby shall be borne equally
by Seller and Buyer.
10.4 ENTIRE AGREEMENT. This Agreement, together with any
related Schedules or Exhibits, contains all the terms agreed upon by the
parties with respect to the subject matter herein, and supersedes all
prior agreements and understandings among the parties and may not be
changed or terminated orally. No attempted change, termination or waiver
of any of the provisions hereof shall be binding unless in writing and
signed by the party against whom the same is sought to be enforced.
10.5 HEADINGS. The headings set forth in this Agreement have
been inserted for reference only and shall not be deemed to limit or
otherwise affect, in any manner, or be deemed to interpret in whole or in
part, any of the terms or provisions of this Agreement. Unless otherwise
specified herein, the section references contained herein refer to
sections of this Agreement.
10.6 GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the internal laws of the State of NewYork.
10.7 COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be
deemed an original, but all of such shall constitute one and the same
instrument.
10.8 NOTICES. Any notices or other communications shall be in
writing and shall be considered to have been duly given when deposited
into first class, certified mail, postage prepaid, return receipt
requested, delivered personally (which shall include delivery by Federal
Express or other recognized overnight courier service that issues a
receipt or other confirmation of delivery) or delivered via facsimile
machine;
Page 33
IF TO SELLER:
Xx. Xxxxx X. Xxxxxx
Xxxxxx Communications Corp.
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxx
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
IF TO BUYER:
Xxxxxxx X. Xxxxx
Xxxxx Broadcasting Corporation
Xxxxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Phone: (000) 000-0000
With a copy to:
Xxxxx X. Pool
Xxxxxx Xxxxxxxxx, P.C.
0000 Xxx XXX Xxxxx
Xxxxxxxxxx, XX 00000
Any party may at any time change the place of receiving notice
by giving notice of such change to the other as provided herein.
10.9 SPECIFIC PERFORMANCE. Seller acknowledges that the
Station is of a special, unique and extraordinary character and that
damages are inadequate to compensate Buyer for Seller's breach of this
Agreement. Accordingly, in the event of a material breach by Seller of
its representations, warranties, covenants and agreements under this
Agreement, Buyer may xxx at law for damages or, at Buyer's sole election,
Buyer may seek a decree of specific performance requiring Seller to
fulfill its obligations under this Agreement, and Seller agrees to waive
its defense that an adequate remedy at law exists; PROVIDED, HOWEVER,
that if Buyer chooses to pursue a remedy at law for damages, Buyer shall
not also pursue a decree of specific performance and recoverable damages
shall not exceed ten percent (10%)of the Purchase Price.
Page 34
10.10 CONSENT TO JURISDICTION. Seller and Buyer hereby submit
to the nonexclusive jurisdiction of the courts of the State of NewYork
and the federal courts of the United States of America located in such
state solely in respect of the interpretation and enforcement of the
provisions hereof and of the documents referred to herein, and hereby
waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such
document, that they are not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or
that this Agreement or any of such documents may not be enforced in or by
said courts or that the Station property is exempt or immune from
execution, that the suit, action or proceeding is brought in an
inconvenient forum, or that the venue of the suit, action or proceeding
is improper.
10.11 FURTHER ASSURANCES. Seller and Buyer agree to execute
all such documents and take all such actions after the Closing Date as
any other party shall reasonably request in connection with carrying out
and effectuating the intent and purpose hereof and all transactions and
things contemplated by this Agreement, including, without limitation, the
execution and delivery of any and all confirmatory and other documents in
addition to those to be delivered on the Closing Date and all actions
which may reasonably be necessary or desirable to complete the
transactions contemplated hereby.
10.12 PUBLIC ANNOUNCEMENTS. No public announcement (including
an announcement to employees) or press release concerning the
transactions provided for herein and in the LMA shall be made by either
party without the prior approval of the other party, except as required
by law.
10.13 EXHIBITS AND SCHEDULES. The Exhibits and Schedules are a
part of this Agreement as if fully set forth herein. All references
herein to Sections, subsections, clauses, Exhibits and Schedules shall be
deemed references to such parts of this Agreement, unless the context
shall otherwise require.
IN WITNESS WHEREOF, the parties hereto have executed or have
caused this Agreement to be executed by a duly authorized officer on the
day and year first above written.
SELLER
XXXXXX BROADCASTING CORPORATION
By:
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
BUYER
XXXXX BROADCASTING CORPORATION
By:
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
IN WITNESS WHEREOF, Xxxxxx Communications Corporation has
caused this Agreement to be executed by a duly authorized officer on the
day and year first above written for the sole purpose of being bound by
the provisions of ArticleIX hereof.
XXXXXX COMMUNICATIONS CORPORATION
By:
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
