Exhibit 2.12
STOCK PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of June 8, 1999, between
NASSAU BROADCASTING PARTNERS, L.P., a Delaware limited partnership, with an
address at 000 Xxxxxxxxx Xxxx, Xxxxxxxx Xxx, Xxxxxxxxx, Xxx Xxxxxx 00000
("Purchaser"), Jersey Devil Broadcasting Co., a New Jersey corporation with an
address at 0000 Xxxx Xxxx, Xxxxx 000, Xxx Xxxxxx Xxxxxxxx, Xxx Xxxxxx 00000,
Southern Ocean Broadcasting, Inc., a New Jersey corporation with an address at
X.X. Xxx 0000, Xxxx Xxxxx, Xxx Xxxxxx 00000, Route 22, Great American
Communications Co., a New Jersey corporation with an address at 1600 Union, New
Jersey 07803, (collectively referred to herein as "Sellers") and Manahawkin
Communications Corp., a New Jersey corporation with an address at 0000 Xxxxx 00,
Xxxxx, Xxx Xxxxxx 00000 (the "Company").
STATEMENT OF FACTS
1. Sellers are the sole owners of all of the issued and outstanding shares
of the capital stock (the "Shares") of the Company, as follows:
Shares
Jersey Devil Broadcasting, Inc. 100 (Non-Voting)
Southern Ocean Broadcasting, Inc. 100 (Non-Voting)
Great American Communications Co. 100 (Voting)
TOTAL 300
2. The Company is the owner of radio station WCHR-FM on 105.7 MHz, with a
principal community of Manahawkin, New Jersey (the "Station").
3. On February 12, 1997, as amended effective June 16, 1999, the Company,
Sellers and Purchaser entered into an Option Agreement to grant certain rights
in a future sale contingent upon certain judicial approval ("Option Agreement").
4. On February 12, 1997, the Company and Purchaser entered into a Loan and
Security Agreement, pursuant to which the Purchaser loaned to the Company
certain funds to cover the cost of construction of the Station and for working
capital needs (the "Loan Agreement").
5. On February 12, 1997, as amended effective June 16, 1999, the Company
and Sellers, and Purchaser entered into a Time Brokerage Agreement ("TBA"),
pursuant to which Purchaser will provide over the air program services using the
facilities of the Station, and Sellers granted to Purchaser the option to
purchase the Shares pursuant to the conditions contained therein.
6. Purchaser has expressed its intent to exercise its option to purchase
the Shares of Sellers and has, in fact, exercised its option on the Shares of
Jersey Devil and Great American.
7. Subject to the approval of The United States Bankruptcy Court on a
pending request by Southern Ocean, Purchaser intends to exercise its option on
the Southern Ocean Shares and upon receipt of notice of exercise of the option,
Southern Ocean acknowledges that it will be bound by the terms of this
Agreement.
8. Subject to the consent of the Federal Communications Commission (the
"FCC"), Sellers desire to sell the Shares to Purchaser, and Purchaser desires to
purchase the Shares from Sellers, all on the terms and conditions herein
contained.
NOW THEREFORE, in consideration of the promises, mutual covenants and
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. INTENTIONALLY LEFT BLANK.
2. PURCHASE AND SALE, PRICE AND PAYMENT
(a) Purchase and Sale. On the Closing Date (as hereinafter defined),
subject to the terms and conditions of this Agreement, Sellers shall sell to
Purchaser, and Purchaser shall purchase from Sellers, all right, title and
interest, legal or equitable, in and to all of the Shares.
(b) Purchase Price. In full consideration of the sale of the Shares
by Sellers to Purchaser, Purchaser shall pay to Sellers as defined in and
determined pursuant to Section 18.1 of the TBA, as amended, in one or more
cashier's checks or wire transfers as directed by Sellers.
3. DELIVERY; FURTHER ASSURANCES.
(a) Upon execution of this Agreement, Sellers shall deliver (i) all
of the certificates representing the Shares to Xxxxxx Xxxxx LLP (the "Escrow
Agent") to be held by the Escrow Agent until the Closing (or until termination
of this Agreement) in accordance with the Escrow Agreement attached hereto as
Exhibit A; and (ii) Agreements Not to Compete in substantially the form attached
hereto as Exhibit B, executed by each of the Sellers, Xxxx Xxxxxx, Xxxxxxxx X.
Xxxxxx, Xxxx Xxxx Xxxxxx, and Xxxxxxx Xxxxxx.
(b) At the Closing, Sellers shall deliver to Purchaser:
(i) Certificates representing the Shares, duly endorsed in
blank, or in lieu thereof, having affixed thereto stock powers executed in
blank, and in proper form for transfer;
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(ii) All property, assets, records, files, certificates and
other documents, in Sellers' possession, custody or control relating to the
Company, the Station and their business and affairs;
(iii) A Certificate of Good Standing for the Company from the
New Jersey Secretary of State;
(iv) A certificate from Sellers stating that: (i) all
representations and warranties of Sellers as set forth in this Agreement or in
any statement, certificate, schedule, exhibit or other document delivered
pursuant to this Agreement by Sellers are true and correct in all material
respects, as of the Closing Date; and (ii) Sellers have, in all material
respects, performed and complied with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by Sellers at or
prior to the Closing Date;
(v) An opinion of counsel for Sellers, in the form attached
hereto as Exhibit C;
(vi) An opinion of Sellers' FCC Counsel in the form attached
hereto as Exhibit D; and
(viii) All other documents, agreements, certificates and
consents required to be delivered to Purchaser under the provisions of this
Agreement or reasonably requested by Purchaser to effect, evidence or facilitate
the transactions contemplated by this Agreement.
(c) At any time and from time to time after the Closing, at
Purchaser's request and without further consideration, Sellers shall execute and
deliver such other instruments of sale, transfer, conveyance, assignment and
confirmation and take such further action as may be reasonably necessary or
desirable in order to more effectively transfer, convey and assign to Purchaser,
and to confirm Purchaser's title to, the Shares, and to put Purchaser in actual
possession and operating control of the Company.
4. REPRESENTATIONS AND WARRANTIES BY SELLERS.
As used in this Section 4, reference to Sellers' knowledge shall mean
Sellers' actual knowledge without an independent investigation of the affairs of
the Company. Sellers represent and warrant to Purchaser that the following
statements as to Sellers, the Company and/or the Station are, where applicable,
correct as of the date hereof and will be correct at the Closing Date, and all
Schedules will be updated through the Closing Date:
(a) Licenses. Authorization and Compliance Therewith. The Company
owns and/or has all franchises, licenses, permits, consents, approvals or
authorizations of any public or governmental agency materially necessary to the
conduct by the Company
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of its business as now conducted, including, but not limited to, all FCC permits
necessary to construct the Station and all rights in and to the call letters
WCHR-FM (the "Licenses"), each as set forth on Schedule 4(a) attached hereto,
without any material conflict with the rights of others, all of which are in
full force and effect, except as set forth in Schedule 4(a), and subject to no
lien, charge, encumbrance, or limitation. Without material exception, to the
best of Sellers' knowledge, the Company is in material compliance with all of
its material obligations with respect thereto; and no event has occurred which
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any of the foregoing or would materially adversely affect the
rights of the Company thereunder.
Except as may be provided in Schedule 4(a) and as previously disclosed to
Purchaser, Sellers have no knowledge of any applications or any material
complaints or proceedings pending or to the best of Sellers' knowledge
threatened as of the date hereof before the FCC directly relating to the
business or operation of the Station other than proceedings which generally
affect the broadcast industry. All returns, reports. and statements required to
be filed with the FCC or other governmental agency relating to the Station have
been or will be duly and timely filed, and all said reports, returns and
statements are or will be complete and correct as filed. To Sellers' best
knowledge, the "Public Inspection File" of the Station will be complete and in
full compliance with Section 73.3526 of the FCC's Rules and Regulations on the
Closing Date.
(b) Operations and Assets. The Company has, and will have, no
operations other than construction and operation of the Station. However,
Purchaser expressly acknowledge that as of the Closing Date, sellers might not
have completed construction of the Station. Except as set forth on Schedule
4(b), the Company is the owner of, and will at the Closing Date have good title
to, all of the business, rights, property and assets, real and personal,
tangible and intangible, used or held for use in connection with the business
and operation of the Station, (the "Assets"). No action is pending or, to the
knowledge of Sellers, threatened, which would contest the Company's ownership of
the Assets. The Assets will not at the Closing Date be subject to any contract,
sale or other agreement, except as disclosed in writing to and expressly assumed
or taken subject to by Purchaser hereunder.
(c) Condition of Tangible Personal Property. Attached hereto as
Schedule 4(c) is a list of all equipment, electrical devices, antennas, cables,
vehicles, furniture, fixtures, towers, office materials and supplies, hardware,
tools, spare parts, records, tapes, discs, carts and other tangible personal
property of every kind and description owned by the Company and used or held for
use (including those not in operating condition) in connection with the business
and operations of the Station, if any.
(d) Real Property. The Company owns no real property has no leases
of real property and will acquire no real property or enter into no leases of
real property other than the leases it enters into as lessee with Purchaser.
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(e) Contracts, Leases, Agreements. Etc. To the best of Sellers'
knowledge, each of the contracts, agreements, easements, licenses and leases
(including leases for the Leased Property), if any (collectively, "Contracts"),
to which the Company is a party or to which it may be bound, are set forth on
Schedule 4(e) attached hereto and are valid, binding and enforceable in
accordance with their terms, and the Company is not in any material respect in
default thereunder, and except as set forth on Schedule 4(e), no consents are
required from the parties to such Contracts upon sale of the Shares.
(f) Employees and Agreements Relating to Employment.
(i) Attached hereto as Schedule 4(f) is a listing of: (1) the
names of all persons currently employed by the Company, together with the amount
paid or payable to each such person for their services; (2) any bonus or other
material compensation arrangements and personnel benefits or policies in effect,
for each employee; and (3) a complete copy of each such plan, benefit, and
policy.
(ii) Except as set forth on Schedule 4(f), Sellers have made
no representation to any of the Company's employees concerning their continued
employment, by the Company after the date of this Agreement. Any decision by
Purchaser to employ any of the employees of the Company in the operation of the
Station on or after 12:01 a.m. on the date of this Agreement, other than those
set forth on Schedule 4(f), shall be made in its sole discretion.
(iii) No labor union is currently certified, or otherwise
recognized, as the collective bargaining representative for any of the Company's
employees. Sellers have no actual knowledge of any labor strike, or other
employee or labor controversy or dispute pending which would affect the
operation of the Station.
(iv) The Company is not, and on the Closing Date will not be,
except as disclosed on Schedule 4(f), a party to (a) any labor contract, (b) any
vacation pay, severance pay or other benefit arrangement (including ERISA or
similar plans) with their employees, or (c) any employment contract or agreement
which is not terminable upon termination notice of thirty (30) days.
(g) Litigation. Except as set forth on Schedule 4(g) attached
hereto, as of the date of this Agreement and as of the Closing Date, there are
and there will be no actions, judgments, suits, proceedings, investigations or
inquiries pending or, to the knowledge of Sellers, threatened against or
affecting the Company or questioning the validity of any action taken or to be
taken in connection with the implementation of the provisions of this Agreement,
at law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, agency, court or instrumentality,
domestic or foreign. Sellers do not know or have reasonable grounds to know of
any factors or circumstances which might be the basis of any action, suit or
proceeding; and, to the best of Sellers' knowledge, except as disclosed in
Schedule 4(g), the Company has complied with all applicable statutes and
regulations of all governmental authorities and agencies having jurisdiction
over the Company.
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(h) Compliance with Law. As of the date hereof and as of the Closing
Date: The Company has complied, and is in compliance in all material respects,
with all laws, rules, regulations, and orders of any governmental entity
applicable to the Company and the Assets, including, without limitation, the Act
and rules and regulations thereunder ("Applicable Laws"). The Company has not
been charged with and is not under investigation for any violation of Applicable
Laws, and, to the knowledge of Sellers, there is no any basis for any such
charge or investigation.
(i) Financial Statements. Sellers have heretofore furnished
Purchaser with copies of the financial information of the Company as set forth
on the attached Schedule 4(n) ("Financial Statements"). Except as noted therein
or on Schedule 4(n), the Financial Statements are complete and correct in all
material respects, were prepared in accordance with generally accepted
accounting principals consistently applied throughout the periods indicated, and
present fairly the financial condition of the Company as of the dates thereof.
(j) Taxes. As of the Closing Date, the Company shall have timely and
duly filed with the appropriate governmental agencies all tax returns,
declarations of estimated tax, and tax reports required to be filed by it, and
all taxes and other assessments which the Company is required to pay, withhold
or collect have been timely and duly paid, withheld and collected. There are no
present disputes as to taxes of any nature payable by the Company, and it has
not filed an IRS Form 872 ("Consent Fixing Period of Limitations Upon Assessment
of Income Tax") or otherwise agreed to extend the time for assessment of any
taxes against it for any year.
(k) Existence and Powers. As of the date hereof and as of the
Closing Date, the Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of New Jersey and has the power and
authority to own or lease its properties and to carry on business as now being
conducted. Each of the Sellers has full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and this
Agreement has been duly executed and delivered by Sellers and constitute the
legal, valid and binding obligation of Sellers, enforceable in accordance with
its terms.
(l) No Conflict. As of the date hereof and as of the Closing Date,
neither the execution and delivery of this Agreement by Sellers nor the
consummation of the transaction contemplated hereby in accordance with the terms
hereof (i) will materially conflict with, result in a material breach of, or
constitute a material default under any indenture, mortgage, lease or other
agreement, to which the Company or Sellers are a party or to which they or any
of their properties may be subject or (ii) will result in a material violation
of any order, writ, injunction, decree or award of any court or governmental
authority to which the Company or Sellers or any of their properties may be
subject.
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(m) Charter Documents. Attached hereto as Exhibits F and G,
respectively, are true and complete copies of the Certificate of Incorporation
and the By-Laws of the Company, and all amendments thereto. As of the date
hereof and as of the Closing Date, such Certificate of Incorporation and By-Laws
have not been and will not be modified, amended or revoked and remain in full
force and effect.
(n) No Approvals. Except for the consent of the FCC as to the Great
American stock and the Bankruptcy Court for the Southern Ocean stock, no
approval, consent, withholding of objection or other authorization is required
or as of the Closing Date, will be required from any court, administrative
agency or governmental authority in connection with the execution, delivery or
performance by Sellers of this Agreement and the related agreements referred to
herein.
(o) Ownership of Shares. Sellers own, beneficially and of record,
all of the Shares, and no other person or entity owns beneficially or of record
any interest in any of the Shares. Sellers now have and as of the Closing Date
will have, and will transfer to Purchaser, good, valid and marketable title to
all of the Shares, free and clear of all security interests, claims, liens,
equities, options, proxies and other encumbrances whatsoever, and the Shares,
when so sold and delivered, will be validly issued, fully paid and
nonassessable. There is no transfer restriction, subscription, option, warrant,
convertible security, right, call, contract, voting trust, irrevocable proxy,
voting arrangement, commitment, understanding or agreement (other than this
Agreement) relating to the Shares or their voting, issuance, sale, redemption or
transfer.
(p) Directors and Officers. The present directors and officers of
the Company are set forth on the attached Schedule 4(u). Such persons will be
the directors and officers as of the Closing Date, and the written resignations
of such officers and directors shall be delivered to Purchaser concurrently with
the delivery of the certificates representing the Shares.
(q) Bank Accounts. Attached hereto as Schedule 4(v) is a listing of
all bank accounts of the Company. Sellers shall take any and all action and
execute any documents required to close all accounts within thirty days of the
Closing Date.
(r) Business of Company. The Company shall not engage in any
business other than the operation of the Station to the extent required by the
TBA and this Agreement.
(s) Absence of Certain Changes. Since February 12, 1997, through the
Date of this Agreement, there has not been (i) any material adverse changes in
the property of the Company or any material labor dispute, grievance or
organizational effort affecting the Assets, taken as a whole; (ii) any physical
damage, destruction or loss (not covered by insurance) materially and adversely
affecting the Assets or business of the Company, taken as a whole; (iii) any
sale, assignment, lease or other transfer or disposition of any of the Assets or
Fee Property of the Company except in the ordinary course of business and with
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adequate replacement property being acquired as necessary; or (iv) any waiver of
any right resulting in a materially adverse affect on the Assets.
(t) No Liabilities. As of the Closing Date, the Company shall not
have any outstanding debt, other than amounts owed to Purchaser pursuant to the
Loan Agreement or any accounts payable incurred in the ordinary course of
business.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. Purchaser represents
and warrants to Sellers that the following statements as to the Purchaser are
correct as of the date hereof and, where specifically indicated, will be correct
at the Closing Date:
(a) Powers of Purchaser. As of the date hereof, Purchaser has, and
it will have as of the Closing Date, all the requisite power and authority to
enter into this Agreement and to carry out the transactions contemplated hereby,
and this Agreement has been duly executed and delivered by Purchaser and
constitutes the valid and binding obligation of Purchaser, enforceable in
accordance with its terms.
(b) No Conflicts. As of the date hereof and as of the Closing Date,
neither the execution and delivery of this Agreement by Purchaser nor the
consummation of the transactions contemplated hereby in accordance with the
terms hereof (i) will materially conflict with, result in a material breach of,
or constitute a material default under, any indenture, mortgage, lease or other
agreement, to which Purchaser is a party or to which Purchaser or any of
Purchaser's properties may be subject, or (ii) will result in a material
violation of any order, writ, injunction, decree or award of any court or
governmental authority to which Purchaser or any of Purchaser's properties may
be subject.
(c) No Approvals. Except for the consent of the FCC, no approval,
consent, withholding of objection or other authorization is required or as of
the Closing Date will be required, from any court, administrative agency or
governmental authority in connection with the execution, delivery or performance
by Purchaser of this Agreement and the related agreements referred to herein.
(d) FCC Qualifications. As of the date hereof and as of the Closing
Date, Purchaser is qualified, and knows of no reason why it should not be found
qualified by the FCC, to be the transferee of control of the Company.
(e) Litigation. As of the date of this Agreement and as of the
Closing Date, there are and there will be no actions, judgments, suits,
proceedings, investigations or inquiries pending or, to the knowledge of
Purchaser, threatened against or affecting the Purchaser or questioning the
validity of any action taken or to be taken in connection with the
implementation of the provisions of this Agreement, at law or in equity, or
before or by any federal, state, municipal or other governmental department,
commission, board, agency, court or instrumentality, domestic or foreign.
Purchaser does not know or have reasonable grounds to know of any factors or
circumstances which might be the basis of any action, suit
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or proceeding; and, to the best of Purchaser's knowledge, Purchaser has complied
with all applicable statutes and regulations of all governmental authorities and
agencies having jurisdiction over the Purchaser.
(f) Absence of Insolvency. As of the date hereof and as of the
Closing Date, no insolvency proceedings of any character, including, without
limitation, bankruptcy, receivership, reorganization, composition or arrangement
with creditors, voluntary or involuntary, affecting the Purchaser or any of its
respective assets or properties, are pending or, to the knowledge of Purchaser,
threatened, and the Purchaser has made no assignment for the benefit or
creditors, nor taken any action with a view to, or which would constitute the
basis for, the institution of any such insolvency proceedings.
6. CONDUCT PRIOR TO CLOSING.
(a) Access and Information. Sellers shall give Purchaser and its
representatives reasonable access throughout the period prior to Closing to the
operations, properties, books, contracts, agreements, leases, commitments and
records of the Company at reasonable times, provided that the normal operations
of the Company's business shall not be disrupted.
(b) Conduct of Station Business. Between the date hereof and
Closing:
(i) Sellers shall produce the consent of any third parties
required by any contract, lease or agreement upon change of ownership of the
Company, if any.
(ii) To the extent required under the TBA, Sellers shall cause
the Company to: (1) conduct the business of the Station in a prudent and
responsible manner in good faith and in compliance with the terms of the
Licenses and Applicable Laws; and (2) Sellers and Purchaser shall keep all of
the Assets to be transferred hereunder in substantially the same operating
condition and repair as of the date hereof, reasonable wear and tear excepted;
(iii) The Company shall not, outside the ordinary course of
business (i) hire additional personnel or unreasonably increase the compensation
or bonuses payable or to become payable to any of the Company's employees,
except as may be required by the FCC; (ii) enter into an agreement to sell,
assign, lease, exchange or otherwise transfer or dispose of any of the Assets;
(iii) enter into any new contract or renegotiate, modify, amend, renew, or
terminate any existing contract, except that the Company may, in the ordinary
and usual course of business, enter into: (1) any contract(s) terminable on
thirty (30) days notice or less without premium or penalty; and (2) any
contract(s) consented to by Purchaser in writing; (iv) change the Station's call
letters, or change the Company's facilities, or apply for any construction
permit(s) with the FCC, without Purchaser's consent, which will not be
unreasonably withheld or delayed, or make any material adverse changes in the
Company's leasehold improvements and other improvements and fixtures, (v) except
as required by law or any governmental agency, disclose any information relating
to the Company to any third party, other than to the Company's authorized
employees, agents and
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professional advisors in the ordinary course of business and other than to
Purchaser and Purchaser's authorized representatives as provided for herein; or
(vi) except for the Loan, borrow monies.
(iv) The parties shall maintain in full force and effect the
insurance described in Schedule 4(j);
(v) Sellers shall give Purchaser notice of any unusual
operating problems or developments affecting the Company between the date hereof
and the Closing Date, including, but not limited to, any problem or development
which would materially adversely affect the Assets, and keep Purchaser fully
apprised of all matters having material financial impact on the Company; and
(vi) Sellers and Purchaser shall conduct the business of the
Station in accordance with the TBA. In the event that there is a conflict
between this Agreement and the TBA with respect to the conduct of the Station,
the TBA shall govern.
(c) Engineering Inspection. It is agreed that within ten (10) days
prior to the Closing Date, provided the Station is on-the air as of that date,
Purchaser's engineer may inspect the Assets to insure that its equipment
complies with all warranties and conditions set forth herein. Sellers agree to
extend full cooperation to said engineer, including such access to the equipment
and to logs pertaining thereto at such time or times as said engineer shall
reasonably request. If Purchaser's engineer reports that the equipment fails to
comply with said warranties, and Sellers dispute the report, Purchaser and
Sellers shall jointly hire and pay a consulting engineer to give a report on the
disputed item(s). The consulting engineer's report shall be final, and Sellers
shall repair any equipment that the consulting engineer reports does not meet
the warranty set forth in Subsection 4.2(b) prior to the Closing; provided,
however, Sellers' obligation to repair shall not exceed Fifteen Thousand Dollars
($15,000). If the repairs required exceed such cap and Sellers refuse to make
such repairs in excess of the cap, Purchaser may, at its sole option, either
proceed with this Agreement or terminate this Agreement and have the Exercise
Payment returned to it.
(d) Risk of Loss. The risk of any loss, damage or destruction to any
of the Assets from fire or other casualty or cause shall be borne by the Company
at all times prior to 12:01 a.m. on the Closing Date. Upon the occurrence of any
loss or damage to any material portion of the Assets as a result of fire,
casualty or other cause prior to Closing, Sellers shall notify Purchaser of same
in writing immediately, stating with particularity the extent of such loss or
damage incurred, the cause thereof if known, and the extent to which
restoration, replacement and repair of the Assets lost or destroyed will be
reimbursed under any insurance policy with respect thereto. Subject to the
provisions hereof, Purchaser shall have the option (but not the obligation), in
the event the loss or damage exceeds One Hundred Thousand Dollars ($100,000.00)
and the property cannot be substantially repaired or restored within thirty (30)
days, exercisable within ten (10) days after receipt of such notice from Sellers
to: (i) postpone the Closing until such time
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as the property has been completely repaired, replaced or restored, unless the
same cannot be reasonably effected within two (2) months of notification; (ii)
elect to consummate the Closing and accept the property in its "then" condition,
in which event Sellers shall at the Closing assign any and all rights under any
insurance claim covering the loss and pay over any proceeds under any such
insurance policy theretofore received by the Company with respect thereto; or
(iii) rescind this Agreement at no cost or expense to Purchaser and declare the
Agreement of no further binding force and effect, and have the Deposit Payment
returned to it, if such repairs, replacements or restorations are not completed
within ninety (90) days after the date specified herein as the Closing Date,
provided that such repairs, replacements or restorations are necessary to the
normal operation of the Stations. In the event Purchaser elects to postpone the
Closing Date as provided in clause (i) of this Subsection, the parties hereto
will cooperate to extend the time during which this Agreement must be closed as
specified in the consent of the FCC referred to herein.
(e) Confidentiality. Between the date of this Agreement and the
Closing Date, Purchaser will maintain strict confidentiality with respect to all
documents and information furnished by or on behalf of the Company or the
Sellers (except for documents or information required to be disclosed by law),
and, if this Agreement is terminated, Purchaser shall return to Sellers all such
documents and information. Notwithstanding the foregoing, Purchaser may make
disclosure that may be required: (i) by its lenders; (ii) in the preparation of
federal, state and local tax returns; (iii) pursuant to any federal or state
securities laws; or (iv) as may be necessary to advise any of Purchaser's
investors or advisors, provided that, in such case, Purchaser shall advise the
investors of the confidentiality of the information.
(f) Prohibited Action. Between the date of this Agreement and the
Closing Date, neither Purchaser nor Sellers will commit any act or omission that
would: (i) prevent the Company from transferring control of the Licenses or, as
to Purchaser, as owner or operator of the Company, the Station and the Assets,
(ii) jeopardize the validity of the Licenses; or (iii) interfere with the
existing relationships between the Station and its advertisers, suppliers and
others.
(g) Board of Directors. Simultaneously with the execution of this
Agreement, Sellers shall elect Xxxxx X. Xxxxxxxxxx, Xx., or his designee, to the
Board of Directors of the Company. The Sellers' shall continue to elect Xxxxx X.
Xxxxxxxxxx, Xx. to the Board through the Closing Date or sooner upon termination
of this Agreement.
7. CLOSING
(a) Closing Date. Unless the parties require additional time to cure
pursuant to Sections 11(b)(1)(iii), 6(c)(i), 6(c)(iv), or 6(d) or unless both
parties consent to a later Closing, Closing shall occur by the latest of the
following, on a day designated by Purchaser: (i) six months after the Exercise
Date; or (ii) within five (5) calendar days of the date upon which the approval
of the FCC required for the consummation of the
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transactions contemplated herein shall become a "Final Order," provided however,
"Final Order" means the date on which the consent of the FCC is no longer
subject to administrative or judicial reconsideration, review, appeal or stay.
The parties hereby agree and stipulate that, absent the pendency of any
petition, application or motion seeking reconsideration, review, appeal or stay
of the Consent, and absent any FCC action reconsidering, reviewing, staying or
modifying the Consent, such Consent shall be treated as final as of 12:01 A.M.
on the forty-first day after the date of public notice issued by the FCC
approving the assignment of the Licenses to Buyer. The Closing shall take place
at the Trenton, New Jersey offices of Xxxxxx & Xxxxxxxx, A Professional
Corporation, at 9:00 A.M. local time, or such other time or place as mutually
agreed, provided, however, that the parties acknowledge tht in the event the
Bankruptcy Court has not yet given its approval to the option to acquire the
Southern Ocean Shares as of the date of the FCC consent to grant of the Transfer
Application, the closing of the sale of The Southern Ocean Shares to Purchaser
shall occur as seen as possible after receipt of all necessary Bankruptcy Court
approvals and in no event later then ten (10) days after such approvals..
(b) Condition to Obligations of Purchaser. The obligation of
Purchaser to consummate the purchase of the Shares at the Closing shall be
subject to the performance, in all material respects, on or prior to the Closing
Date, of all of the covenants and agreements as set forth elsewhere in this
Agreement to be performed by Sellers, and upon the following additional
conditions:
(i) The representations and warranties of Sellers are true or
shall be true in all material respects as of the dates set forth in Section 4
and the Sellers shall have updated all Schedules through the Closing Date;
(ii) Except for normal wear and tear, there shall not have
occurred any material adverse change in the condition of the Assets as a result
of actions by other than the Purchaser;
(iii) The consents required from all governmental agencies
(including, without limitation, the Final Order of the FCC) to Purchaser's
acquisition of the Shares shall have been granted, without any condition
materially adverse to Purchaser, and such consents shall be valid and
outstanding on the Closing Date;
(iv) No action or proceeding shall be pending or threatened,
challenging the validity of this Agreement or seeking to delay the consummation
of any of the transactions for which this Agreement provides, which in the
reasonable opinion of Purchaser is material to the transactions contemplated by
this Agreement;
(v) Sellers shall have obtained and delivered to Buyer the
written consents of all requisite parties to assign and transfer to Buyer those
Contracts material to the operation of the Stations without conditions
materially adverse to Buyer, if any;
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(vi) Sellers shall have in all material respects performed and
complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to and on the Closing
Date; and
Purchaser shall have the right to waive any or all of the foregoing
conditions of Closing at its sole option and risk.
(c) Condition to Obligations of Sellers. The obligation of Sellers
to consummate the sale of the Shares at the Closing shall be subject to the
payment by Purchaser of the Purchase Price and the receipt of the consents
required from all governmental agencies (including, without limitation, the
Final Order of the FCC) to Purchaser's acquisition of the Shares, and such
consents shall be valid and outstanding on the Closing Date.
Sellers shall have the right to waive all of the foregoing condition of
Closing at its sole option and risk.
(d) No Right of Reversion. Both Sellers and Purchaser agree that the
Sellers have retained no right of reversion for the WCHR-FM licenses, no right
to assignment of such licenses, and have not reserved the right to use the
facilities of the Company after the Closing Date for any reason whatsoever.
8. APPLICATION FOR FCC APPROVAL.
(a) Filing and Prosecution of Application. Within ten (10 business)
days of the date hereof, Purchaser and the Company shall join in an application
to the FCC requesting the FCC's written consent, as applicable (the "FCC
Consent", to the sale of the Shares to Purchaser, and to the consummation of the
transactions contemplated by this Agreement (the " Transfer Application"). All
parties shall promptly respond to any requests for the submission of additional
information and shall vigorously oppose any protests, petition to deny, petition
for reconsideration or appeal of the FCC Consent may be filed. Purchaser and
Sellers shall proceed with due diligence and promptly take all steps necessary
to the expeditious prosecution of such application to a favorable conclusion,
using their best efforts throughout.
(b) Expenses. Each party shall bear its own expenses in connection
with the preparation of the applicable sections of the Transfer Application and
in connection with the prosecution of such application. Sellers and Purchaser
will divide and pay equally the filing and grant fees charged by the FCC.
(c) Designation for Hearing. If, for any reason, the Transfer
Application is designated for hearing by the FCC or if the parties are notified
by the FCC in writing of its intention to designate the Application, either
party, if not then in default, shall have the right by written notice within
fifteen (15) days of such designation for hearing, to terminate this Agreement.
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(d) Control of Station. The Sellers shall retain complete and
unfettered control over the operation of the Station until this Agreement is
consummated and this Agreement shall not be consummated until receipt of the FCC
Consent to the Transfer Application.
(e) Best Efforts. Each party hereto agrees to use its best efforts
in the performance and fulfillment of all terms and conditions of this Agreement
and the TBA applicable to such party and in filing the Transfer Application ,
and agrees to execute such other and further documents as may be reasonably
required to carry out the intent of this Agreement.
(f) Renegotiation to Conform to FCC Policies. In the event the FCC
determines at any time that any provision of this Agreement or of the TBA is
violates of FCC policies and regulations, the parties agree that they will
negotiate in good faith to remove the provision found violative or replace it
with a provision consistent with FCC policies and regulations while the TBA
remains in full force and effect.
9. BULK SALES LAW.
Purchaser hereby waives compliance by Sellers with the provisions of all
Bulk Sales Laws, or other similar provisions, provided, however, that Sellers
agree to indemnify and hold Purchaser harmless for any claims arising
thereunder.
10. INDEMNIFICATION.
(a) Survival of Representations and Warranties. All covenants and
agreements pertaining to matters to be performed after Closing and all
representations and warranties contained in this Agreement shall survive for a
period not to exceed two (2) years after the Closing Date ("Survival Period"),
except that the representations and warranties (a) with respect to title, if
any, or (b) which the party making the same knew or would have, through the
exercise of reasonable diligence, known to be false shall continue indefinitely.
No claim which is the subject of the Survival Period may be brought under this
Agreement or with respect to the transactions described herein 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
notice is so given, the right to indemnification with respect thereto under this
Section 10 shall survive the Survival Period until such claim is finally
resolved and any obligations with respect thereto are fully satisfied.
(b) Indemnity by Sellers. Sellers agree to pay and discharge and to
save and protect Purchaser and its partners, officers, directors, shareholders
and affiliates free and harmless from all obligations, claims and demands
(including reasonable attorneys' fees incurred by Purchaser with respect
thereto) (collectively "Sellers' Obligations") against, arising out of or in
connection with any material breach or violation by Sellers of any covenant,
agreement or warranty herein contained, or the inaccuracy of any material
representation of Sellers made in this Agreement.
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(c) Indemnity by Purchaser. Purchaser agrees to pay and discharge
and to save and protect Sellers free and harmless from all obligations, claims,
and demands (including but not limited to attorney fees incurred by Sellers with
respect thereto) against, arising out of or in connection with any material
breach of violation by Purchaser of any covenant, agreement or warranty herein
contained or the inaccuracy of any material representation of Purchaser made in
this Agreement.
(d) Indemnification Procedure: Right of Offset. In the event that
any party hereto asserts a claim for indemnification hereunder, such party
seeking indemnification shall give written notice to the indemnifying party
specifying the nature and the amount, if known, of the claim asserted. The
indemnifying party shall then have the right, using counsel reasonably
satisfactory to the party seeking indemnification, to investigate, secure,
contest or settle the claim alleged by such third party (hereinafter called a
"contest"), provided that the party seeking indemnification may participate
voluntarily, at its own expense, in any such contest through representatives and
counsel of its own choice, and, provided further, that any such action by the
indemnifying party relating to the contest shall be without prejudice to the
party seeking indemnification.
Except as provided otherwise in Section 10(d), the indemnifying
party shall bear all costs of such contests and shall indemnify and hold the
party seeking indemnification harmless against and from all costs, fees, and
expenses of such contest. Unless and until the indemnifying party elects to
prosecute the contest, the party seeking indemnification shall have the full
right, at its option, to do so and to look to the indemnifying party under the
provisions of this Agreement for the amount of the costs, if any, of prosecuting
the contest. The failure of the indemnifying party to respond in writing to the
aforesaid notice of the party seeking indemnification with respect to such
contest within twenty (20) days after the receipt thereof shall be deemed an
election not to prosecute the same. If the indemnifying party fails to prosecute
the contest and the party seeking indemnification does not prosecute the contest
or does so and the decision is rendered against it, the amount paid by the party
seeking indemnification to the third party in settlement or satisfaction of the
contest shall be deemed a valid claim hereunder. In the event that the contest
involves any Sellers' Obligations, Purchaser shall have the right to offset the
amount of the costs, if any, incurred by Purchaser in prosecuting the contest
together with any sums owed in connection with the resolution or settlement
thereof against amounts which may be owed by Purchaser to Sellers.
The parties hereto shall make mutually available to each other all
relevant information in their possession relating to any such contest and shall
cooperate in the defense thereof.
11. TERMINATION BEFORE CLOSING; DEFAULT AND REMEDIES.
(a) Termination before Closing. If Closing shall not have previously
occurred, this Agreement may be terminated and rescinded and the Seller shall be
given possession of the Shares within ten (10) days of termination:
15
(i) Pursuant to Section 6;
(ii) By Purchaser, upon the occurrence of a Sellers' Event of
Default (as defined in Section 11(b)) if the Purchaser is not then in default,
or upon failure of a condition precedent to Purchasers' obligation to close set
forth in Section 7(b); or
(iii) By Sellers, upon the occurrence of a Purchaser's Event
of Default (as defined in Section 11(b)) if the Sellers are not then in default,
or upon failure of a condition precedent to Sellers' obligation to close set
forth in Section 7(c).
(b) Default and Remedies.
(i) Purchaser's Event of Default. The failure by Purchaser to
consummate the transactions contemplated by this Agreement in violation of the
provisions of this Agreement shall constitute a material default of this
Agreement by Purchaser ("Purchaser's Event of Default"). The failure by
Purchaser to perform any other of its obligations under this Agreement, where
such failure shall continue for a period of ten (10) days after delivery of
written notice of demand therefor from Seller to Purchaser; provided, however,
that if more than ten (10 days are reasonably required to cure such failure,
then Purchaser shall not be deemed to be in default thereof if Purchaser, in
good faith, has commenced such cure within said ten (10) day period and
thereafter diligently prosecutes such cure to completion.
(ii) Sellers' Event of Default. The occurrence of any one or
more of the following events shall constitute a material default of this
Agreement by Sellers ("Sellers' Event of Default"):
(1) The material breach of any material representation
or warranty by Sellers hereunder unless such breach is cured prior to the
Closing Date;
(2) The failure by Sellers to consummate the
transactions contemplated by this Agreement in violation of the terms of this
Agreement;
(3) The failure by Sellers to perform any other of its
obligations under this Agreement, where such failure shall continue for a period
of ten (10) days after delivery of written notice of demand therefor from
Purchaser to Sellers; provided, however, that if more than ten (10) days are
reasonably required to cure such failure, then Sellers shall not be deemed to be
in default thereof if Sellers, in good faith, have commenced such cure within
said ten (10) day period and thereafter diligently prosecutes such cure to
completion and completes such cure prior to Closing.
(iii) Purchaser's Right Upon Default. Sellers acknowledge that the
Company is of a special, unique, and extraordinary character, and that any
breach of this Agreement by Sellers could not be compensated for by damages.
Accordingly, upon the occurrence of a Sellers' Event of Default, Purchaser shall
be entitled, in addition to rescission or any other remedies that it may have,
to enforcement of this Agreement (subject
16
to obtaining any required approval of the FCC) by a decree of specific
performance or injunctive relief requiring Sellers to fulfill its obligations
under this Agreement. In any action to specifically enforce Sellers' obligation
to close the transaction contemplated by this Agreement, Sellers shall waive the
defense that there is an adequate remedy at law or in equity and agrees that
Purchaser shall be entitled to obtain specific performance of Sellers'
obligation to close hereunder without being required to prove actual damages. As
a condition to seeking specific performance, Purchaser shall not be required to
tender the Purchase Price but shall be required to demonstrate that Purchaser is
ready, willing and able to tender the Purchase Price and consummate the purchase
of the Shares as contemplated hereunder. Nothing in this subsection shall be
construed to limit Purchaser's ability to xxx Xxxxxxx for damages.
(v) Sellers' Right Upon Default. Upon the occurrence of a
Purchaser's Event of Default, Sellers shall have only the rights set forth in
Sections 11(a) and 11(b)(vi)
(vi) Liquidated Damages. In the event of termination of this
Agreement for any reason whatsoever and the Sellers are not in breach, the
Sellers shall be entitled to retain the Initial Payments, defined in and paid
pursuant to the Option Agreement, and the Option Payment, defined in and paid
pursuant to as amended June 16, 1999, (the "Liquidated Damages Amount"), as
liquidated damages, and not as a penalty, in accordance with Section 18.1 of
the TBA. The parties agree that the Liquidated Damages Amount constitutes a
reasonable sum considering all of the circumstances existing on the date of this
Agreement, including the relationship of the sum to the range of harm to Sellers
that could be reasonably anticipated and the anticipation that proof of actual
damages would be costly or inconvenient. In placing their initials at the place
provided below, Buyer and Sellers each specifically confirms the accuracy of the
statements made above and the fact that each was represented by counsel who
explained the consequences of this liquidated damages provision at the time this
Agreement was made. The Sellers' remedy for default by the Purchaser shall be
limited to Liquidated Damages and return of possession of the Shares.
SELLERS INITIAL HERE [INITIAL]
----------
BUYER INITIAL HERE [INITIAL]
----------
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12. ACCESS TO BOOKS AND RECORDS.
After the Closing Date, Purchaser and Sellers shall each allow the other
reasonable access during normal business hours upon reasonable prior notice to
their respective books and records pertaining to the operation of the Stations
prior to the Closing Date and shall retain such records for a period of not less
than three (3) years after the Closing Date.
13. NOTICES.
All notices and other communications hereunder shall be in writing and be
deemed to have been duly given if delivered personally or by overnight courier
or sent by telecopy or mailed by registered mail, postage prepaid, addressed as
follows:
(a) If to Sellers, to:
Xx. Xxxx Xxxxxx
President
Jersey Devil Broadcasting Co.
c/o 0000 Xxxx Xxxx Xxxxx 000
Xxx Xxxxxx Xxxxxxxx, XX 00000
Xxxx Xxxx Xxxxxx, Esquire
President
Southern Ocean Broadcasting, Inc.
X.X. Xxx 0000
Xxxx Xxxxx, XX 00000
Xx. Xxxxxxxx X. Xxxxxx
Great American Communications Co.
c/o JL Media 0000 Xxxxx 00 Xxxxx, XX 00000
with a copy to:
Xxxxxxx Xxxx Xxxxx, Esq.
Xxxxxx Xxxxx LL.P.
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
(b) If to Purchaser, to:
Xxxxx X. Xxxxxxxxxx, Xx.
Nassau Broadcasting Partners, L.P.
000 Xxxxxxxxx Xxxx, Xxxxxxxx 0
Xxxxxxxxx, XX 00000
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with a copy to:
Xxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxxx. P.C.
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
P.O. Box 1298
Trenton, NJ 08607-1298
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 business day following the date so mailed,
and (ii) if personally delivered or otherwise sent as provided above, on the
date delivered or sent if sent by telecopy and on the next business day after
the date sent in all other cases.
14. CONTROL OF STATION.
Notwithstanding that certain duties shall be delegated to the Purchaser
under the TBA, between the date hereof and the Closing Date, Sellers shall
retain complete and unfettered control over the operation of the Station.
15. EXPENSES.
Unless otherwise agreed to in writing by the parties hereto, each party
shall pay its own costs and expenses, including any and all legal and accounting
fees, of its performance and compliance with all conditions and agreements
contained herein on its or their part to be performed or complied with.
16. BROKERS.
Purchaser and Sellers acknowledge and represent and warrant to each other
that Xxxxxxxxx & Company is the sole "Broker" in this transaction. Purchaser and
Sellers each represent to the other that there is no other finder, consultant or
broker involved in this transaction and that they have not agreed to pay any
other finder, consultant or broker fee in connection with this transaction.
If any other finder, consultant or broker claims a fee, the party whose actions
led to that claim will bear sole responsibility for paying or settling that
claim and shall indemnify the other party against the same. Sellers shall be
solely responsible for the Broker's fees.
17. DISCLOSURE OF EXHIBITS AND SCHEDULES.
Notwithstanding anything to the contrary contained in this Agreement or in
any of the Exhibits and Schedules, any information disclosed in one Exhibit or
Schedule, as the case may be, shall be deemed to be disclosed in all Exhibits
and Schedules. Certain information set forth in the Exhibits and Schedules, as
the case may be, is included solely for informational purposes and may not be
required to be disclosed pursuant to this Agreement.
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The disclosure of any information shall not be deemed to constitute an
acknowledgment that such information is required to be disclosed in connection
with the representations and warranties made by Sellers in this Agreement or is
material, nor shall such information be deemed to establish a standard of
materiality. Except as expressly set forth in this Agreement, there are no
representations or warranties, express or implied, being made by Sellers.
18. MISCELLANEOUS.
(a) Complete Agreement. This Agreement, the Schedules and Exhibits
hereto, together with the TBA and the Loan Agreement, constitute the final,
integrated understanding and agreement of the parties with respect to the
subject matter hereof, supersede all prior agreements, covenants, arrangements,
letters, communications, representations or warranties, whether oral or written,
and may not be modified, amended or terminated except by a written agreement
specifically referring to this Agreement signed by the parties hereto.
(b) No Waivers. No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature. No failure on the part of any party to
exercise, and no delay in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege, and no waiver whatever shall
be valid unless in writing signed by the party or parties to be charged and then
only to the extent specifically set forth in such writing. All remedies, rights,
powers and privileges, either under this Agreement or by law or otherwise
afforded the parties to this Agreement, shall be cumulative and shall not be
exclusive of any remedies, rights, powers and privileges provided by law. Each
party hereto may exercise all such remedies afforded to it in any order of
priority.
(c) No Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that neither party may transfer or assign its rights or
delegate its performance hereunder without the prior written consent of the
other party, except that Purchaser shall be entitled to assign its rights
hereunder at the Closing. This agreement shall be for the sole benefit of the
parties hereto and their respective successors and assigns, and shall not be
construed to provide any benefits to any third parties.
(d) Headings. Paragraph headings contained herein are for the
purposes of convenience only and are not intended to define or limit the
contents of any Schedule, Exhibit, Section or paragraph.
(e) Further Assurances. Each party hereto shall cooperate and shall
take such further action and shall execute and deliver such further documents as
may reasonably be requested by any other party in order to carry out the
provisions and purposes of this Agreement.
20
(f) Choice of Law. This Agreement and all amendments thereto shall
be governed by and construed in accordance with the laws of the State of New
Jersey without regard to principles of conflicts of law.
(g) Severability. Any provisions of this Agreement or any of the
other documents delivered in connection with this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provision of this Agreement or such other document or
affecting the validity or enforceability of such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
ATTEST: MANAHAWKIN COMMUNICATIONS
CORPORATION
By: /s/ XXXXXXXX X. XXXXXX
----------------------------------- -----------------------------------
XXXXXXXX XXXXXX, President
SELLERS:
ATTEST: JERSEY DEVIL BROADCASTING CO.
/s/ XXXX XXXXXXXX By: /s/ XXXX X. XXXXXX
----------------------------------- -----------------------------------
XXXX X. XXXXXX, President
ATTEST: GREAT AMERICAN Communication CO.
By: /s/ XXXXXXXX X. XXXXXX
----------------------------------- -----------------------------------
XXXXXXXX XXXXXX, President
PURCHASER:
ATTEST: SOUTHERN OCEAN BROADCASTING, INC.
/s/ XXXXXX [ILLEGIBLE] By: /s/ XXXX XXXX XXXXXX, Pres.
----------------------------------- -----------------------------------
XXXX XXXX XXXXXX, President
ATTEST: NASSAU BROADCASTING PARTNERS, L.P.
By: Nassau Broadcasting Inc., its
General Partner
By: /s/ XXXXX X. XXXXXXXXXX
----------------------------------- -----------------------------------
XXXXX X. XXXXXXXXXX, President
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