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EXHIBIT 10.53
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EXHIBIT 10.53
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of August 31, 1995 by and
between Channel 13 of Flagstaff, Inc., a Florida corporation ("Buyer"), Xxxxxxx
X. Xxxxxxx, M. D., an individual ("Xxxxxxx") and Del Ray Television Company,
Inc., a Maryland corporation ("Del Ray"; Xxxxxxx and Delray are collectively
referred to herein as "Sellers" and individually referred to as a "Seller").
RECITALS
X. Xxxxxxx is the licensee of, and together with Del Ray, owns and
operates television station KWBF-TV, Flagstaff, AZ, (the "Station") pursuant to
licenses issued by the Federal Communications Commission ("FCC").
X. Xxxxxxx desire to sell, and Buyer wishes to buy, substantially all
the assets of Sellers that are used or useful in the business or operations of
the Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1 DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Sellers to payment for the
sale of advertising time run on the Station by Sellers prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) Contracts for the sale of advertising
time on the Station in exchange for merchandise or services entered into in the
ordinary course of business ("Trade Agreements") and that, as of the Closing
Date, do not involve a negative Trade Balance in excess of Ten Thousand Dollars
($10,000) in the aggregate, (ii) all Contracts listed in Schedule 3.7 that are
specifically designated as Contracts to be assumed by Buyer upon its purchase
of the Station, (iii) any Contracts entered into by Sellers between the date of
this Agreement and the Closing Date that Buyer agrees in writing to assume, and
(iv) time sales contracts entered into by Sellers in compliance with Section
5.3.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
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"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which a Seller is a party or which are binding upon a
Seller and which relate to or effect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by a Seller between the date of this Agreement and
the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to a Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that 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
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by a Seller or under which a Seller is licensed or franchised and which are
used or useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local governmental authorities to a Seller in connection with the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests of Sellers in
real property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property of Sellers which
is used or useful in the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date.
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"Trade Balance" means the difference between the aggregate value of
time owed pursuant to the Trade Agreements and the aggregate value of goods and
services to be received pursuant to the Trade Agreements, determined in
accordance with generally accepted accounting principles. The Trade Balance is
"negative" if the value of time owed exceeds the value of goods and services to
be received.
SECTION 2 PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions
set forth in this Agreement, Sellers hereby agree to sell, transfer, and
deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of the
tangible and intangible assets of Sellers used or useful in connection with the
conduct of the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date, but
excluding the assets described in Section 2.2, free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions,
charges, or encumbrances of any nature whatsoever (except for liens for current
taxes not yet due and payable), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Sellers
relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Sellers' proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station;
(g) All choses in action of Sellers relating to the Station;
and
(h) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following assets:
(a) Sellers' cash on hand as of the Closing and all other
cash in any of Sellers's bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that Sellers are required by law to
retain and that pertain to Delray's corporate organization;
(c) Any pension, profit-sharing, or employee benefit plans,
and any collective bargaining agreements;
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(d) The Accounts Receivable as of 11:59 p.m., local time, on
the day prior to the Closing Date ("Sellers' Receivables"); and
(e) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets and the
covenants of Sellers set forth in the Non-competition Agreement referred to in
Section 6.14 shall be One Million Four Hundred Thousand Dollars ($1,400,000),
adjusted as provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, FCC License Fees, real and personal property taxes and
assessments levied against the Assets, property and equipment rentals,
applicable copyright or other fees, sales and service charges, taxes (except
for taxes arising from the transfer of the Assets under this Agreement), and
similar prepaid and deferred items, shall be prorated between Buyer and Sellers
in accordance with the principle that Sellers shall be responsible for all
expenses, costs, and liabilities allocable to the period prior to the Closing
Date, and Buyer shall be responsible for all expenses, costs, and obligations
allocable to the period on and after the Closing Date. Notwithstanding the
preceding sentence, there shall be no adjustment for, and Sellers shall remain
solely liable with respect to, any Contracts not included in the Assumed
Contracts and any other obligation or liability not being assumed by Buyer in
accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon.
2.4 Payment of Purchase Price. The Purchase Price, as adjusted,
shall be paid by Buyer to Sellers at Closing by wire transfer of same-day funds
pursuant to wire instructions which shall be delivered by Sellers to Buyer, at
least two days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Sellers under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Sellers, including (I) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating to the operation of the Station prior to the Closing, (iv)
any obligations or liabilities arising under capitalized leases or other
financing agreements, (v) any obligations or liabilities arising under
agreements entered into other than in the ordinary course of business, (vi) any
obligations or liabilities of Sellers under any employee pension, retirement,
or other benefit plans or collective bargaining agreements, (vii) any
obligation to any employee of the Station for severance benefits, vacation
time, or sick leave accrued prior to the Closing Date, or (viii) any
obligations or liabilities caused by, arising out of, or resulting from any
action or omission of Sellers prior to the Closing, and all such obligations
and liabilities shall remain and be the obligations and liabilities solely of
Sellers.
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SECTION 3 REPRESENTATIONS AND WARRANTIES OF Sellers
Sellers represent and warrant to Buyer as follows:
3.1 Organization, Standing, and Authority. Xxxxxxx is an individual.
Delray is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Maryland, is qualified to conduct business as a
foreign corporation in the State of Arizona and is in good standing under the
laws of the State of Arizona. Sellers have all requisite power and authority
(i) to own, lease, and use the Assets as now owned, leased, and used, (ii) to
conduct the business and operations of the Station as now conducted, and (iii)
to execute and deliver this Agreement, the Escrow Agreement and the documents
contemplated hereby and thereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by Sellers
hereunder and thereunder.
3.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement and the Escrow Agreement by Sellers have been
duly authorized by all necessary actions on the part of Sellers. This
Agreement and the Escrow Agreement have been duly executed and delivered by
Sellers and constitute the legal, valid, and binding obligations of Sellers,
enforceable against them in accordance with their respective terms except as
the enforceability of this Agreement and the Escrow Agreement may be affected
by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally, and by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the Escrow Agreement and the documents contemplated hereby
and thereby(with or without the giving of notice, the lapse of time, or both):
(i) do not require the consent of any third party; (ii) will not conflict with
the Articles of Incorporation or Bylaws of Delray; (iii) will not conflict
with, result in a breach of, or constitute a default under, any law, judgment,
order, ordinance, injunction, decree, rule, regulation, or ruling of any court
or governmental instrumentality (iv) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Sellers are a party
or by which Sellers may be bound; and (v) will not create any claim, liability,
mortgage, lien, pledge, condition, charge, or encumbrance of any nature
whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and complete
list of the Licenses. Sellers have delivered to Buyer true and complete copies
of the Licenses (including any amendments and other modifications thereto).
The Licenses have been validly issued, and Xxxxxxx is the authorized legal
holder thereof. The Licenses listed on Schedule 3.4 comprise all of the
licenses, permits, and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business and operations of
the Station in the manner and to the full extent they are now conducted, and
none of the Licenses is subject to any restriction or condition that would
limit the full operation of the Station as now operated. The Licenses are in
full force and effect, and the conduct of the business and operations of the
Station is in accordance therewith. Sellers have no reason to believe that any
of the Licenses would not be renewed by the FCC or other granting authority in
the ordinary course. On or before June 17, 1993, Sellers made a valid election
of must-carry with respect to each cable system located within the Station's
Area of Dominant Influence, no cable system has advised Sellers of any signal
quality or copyright indemnity or other prerequisite to cable carriage of the
Station's signal and no cable system has declined or threatened to decline such
carriage or failed to respond to a request for carriage or sought any form of
relief from carriage from
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the FCC. The Station's city of license, as determined by the FCC, is not
currently located within the Phoenix, Arizona Area of Dominant Influence as
defined by the 1991-1992 Area of Dominant Influence Market Guide published by
The Arbitron Co., however Flagstaff is within the Phoenix, Arizona Designated
Market Area as defined by the 0000 Xxxxxx Xxxxxx Television Household Estimates
published by Xxxxxxx Media Research. The Sellers shall fully cooperate with
Buyer to obtain carriage of the Station on as many additional cable systems
within the Phoenix ADI as is possible prior to Closing. Further, Sellers shall
fully cooperate with Buyer should Buyer wish to seek an expansion of the
Phoenix ADI to include Flagstaff. Schedule 3.4 also contains a listing of the
cable systems currently carrying the Station along with the approximate number
of subscribers per system.
3.5 Title to and Condition of Real Property. Schedule 3.5 contains a
complete and accurate description of all the Real Property and Sellers'
interests therein (including street address, legal description, owner, and use
and the location of all improvements thereon). The Real Property listed on
Schedule 3.5 comprises all real property interests necessary to conduct the
business and operations of the Station as now conducted. With respect to each
leasehold or subleasehold interest included in the Real Property being conveyed
under this Agreement so long as Sellers fulfill their obligations under the
lease therefor, Sellers have enforceable rights to non-disturbance and quiet
enjoyment, and no third party holds any interest in the leased premises with
the right to foreclose upon Sellers' leasehold or subleasehold interest. All
towers, guy anchors, and buildings and other improvements included in the
Assets are located entirely on the Real Property listed in Schedule 3.5. All
Real Property (including the improvements thereon) (i) is in good condition and
repair consistent with its present use, (ii) is available for immediate use in
the conduct of the business and operations of the Station, and (iii) complies
with all applicable building or zoning codes and the regulations of any
governmental authority having jurisdiction. Sellers have full legal and
practical access to the Real Property. All easements, rights-of-way, and real
property licenses have been properly recorded in the appropriate public
recording offices.
3.6 Title to and Condition of Tangible Personal Property. Schedule
3.6 lists all material items of Tangible Personal Property. The Tangible
Personal Property listed on Schedule 3.6 comprises all material items of
tangible personal property necessary to conduct the business and operations of
the Station as now conducted. Except as described in Schedule 3.6, Sellers own
and have good title to each item of Tangible Personal Property, and none of the
Tangible Personal Property owned by Sellers is subject to any security
interest, mortgage, pledge, conditional sales agreement, or other lien or
encumbrance, except for liens for current taxes not yet due and payable. Each
item of Tangible Personal Property is available for immediate use in the
business and operations of the Station. All items of transmitting and studio
equipment included in the Tangible Personal Property (i) have been maintained
in a manner consistent with generally accepted standards of good engineering
practice, and (ii) will permit the Station and any unit auxiliaries thereto to
operate in accordance with the terms of the FCC Licenses and the rules and
regulations of the FCC, and with all other applicable federal, state, and local
statutes, ordinances, rules, and regulations.
3.7 Assumed Contracts. Schedule 3.7 is a true and complete list of
all Assumed Contracts except contracts with advertisers for the sale of
advertising time on the Station for cash at prevailing rates and which have not
been prepaid and which may be canceled by the Station without penalty on not
more than thirty days' notice. Sellers have delivered to Buyer true and
complete copies of all written Assumed Contracts, true and complete memoranda
of all oral Assumed Contracts (including any amendments and other modifications
to such Assumed Contracts), and a schedule summarizing Sellers' obligations
under trade and barter agreements relating to the Station. Other than the
Assumed Contracts listed on Schedule 3.7, Sellers require no contract, lease,
or other agreement to enable it to
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carry on its business as now conducted. All of the Assumed Contracts are in
full force and effect, and are valid, binding, and enforceable in accordance
with their terms. There is not under any Assumed Contract any default by any
party thereto or any event that, after notice or lapse of time or both, could
constitute a default. Sellers are not aware of any intention by any party to
any Assumed Contract (i) to terminate such contract or amend the terms thereof,
(ii) to refuse to renew the Assumed Contract upon expiration of its term, or
(iii) to renew the Assumed Contract upon expiration only on terms and
conditions which are more onerous than those now existing. Except for the need
to obtain the Consents listed in Schedule 3.3, Sellers have full legal power
and authority to assign their rights under the Assumed Contracts to Buyer in
accordance with this Agreement, and such assignment will not affect the
validity, enforceability, or continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section 6.1
and the other Consents described in Schedule 3.3, no consent, approval, permit,
or authorization of, or declaration to or filing with any governmental or
regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby, (ii) to permit Sellers
to assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct
the business and operations of the Station in essentially the same manner as
such business and operations are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Sellers have delivered to Buyer copies
of all documents establishing or evidencing all Intangibles. Sellers are not
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and there
is no claim or action pending, or to the knowledge of Sellers threatened, with
respect thereto. The Intangibles listed on Schedule 3.9 comprise all
intangible property interests necessary to conduct the business and operations
of the Station as now conducted.
3.10 Financial Statements. Schedule 3.10 hereto contains true and
complete copies of financial statements including balance sheets, statements of
operations and a statement of operating cash flow for the period ending December
31, 1994 and March 31, 1995 (collectively, the "Financial Statements"). The
Financial Statements have been prepared from the books and records of Sellers,
have been prepared in accordance with generally accepted accounting principles
consistently applied and maintained throughout the periods indicated, accurately
reflect the books, records, and accounts of the Station (which books, records,
and accounts are complete and correct), are complete and correct in all material
respects, and present fairly the financial condition of the Station as at their
respective dates and the results of operations for the periods then ended. None
of the Financial Statements understates the true costs and expenses of
conducting the business or operations of the Station, fails to disclose any
material contingent liabilities, or inflates the revenues of the Station.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Sellers that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate
in amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Station against all customary and foreseeable risks. During the past three
years, no insurance policy of Sellers on the Assets or the Station has been
canceled by the insurer and no application of Sellers for insurance has been
rejected by any insurer.
3.12 Reports. All returns, reports, and statements that the Station
is currently required to file with the FCC or with any other governmental agency
have been filed, and all reporting
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requirements of the FCC and other governmental authorities having jurisdiction
over Sellers and the Station have been complied with. All of such returns,
reports, and statements are substantially complete and correct as filed.
Sellers have timely paid to the FCC all annual regulatory fees payable with
respect to the FCC Licenses.
3.13 Personnel.
(a) Employees and Compensation. Schedule 3.13 contains a
true and complete list of all employees of the Station, their job titles, date
of hire, current salary and date and amount of last salary increase. Schedule
3.13 also contains a true and complete list as of the date of this Agreement of
all employee benefit plans or arrangements applicable to the employees of the
Station and all fixed or contingent liabilities or obligations of Sellers with
respect to any person now or formerly employed by Sellers at the Station,
including pension or thrift plans, individual or supplemental pension or
accrued compensation arrangements, contributions to hospitalization or other
health or life insurance programs, incentive plans, bonus arrangements, and
vacation, sick leave, disability and termination arrangements or policies,
including workers' compensation policies, and a description of all fixed or
contingent liabilities or obligations of Sellers with respect to any person now
or formerly employed at the Station or any person now or formerly retained as
an independent contractor at the Station. Sellers have furnished Buyer with
true and complete copies of all employee handbooks, employee rules and
regulations, and summary plan descriptions of the written plans and
arrangements listed in Schedule 3.13, and with descriptions, in writing, of the
unwritten plans and arrangements listed in Schedule 3.13. At Buyer's request,
Sellers will furnish Buyer with true and complete copies of all applicable plan
documents, trust documents, and insurance contracts with respect to the plans
and arrangements listed on Schedule 3.13. All employee benefits and welfare
plans or arrangements listed in Schedule 3.13 were established and have been
executed, managed and administered in accordance with the Internal Revenue Code
of 1986, as amended, the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and all other laws. Sellers are not aware of the existence
of any governmental audit or examination of any of such plans or arrangements
or of any facts which would lead it to believe that any such audit or
examination is pending or threatened. No action, suit, or claim with respect
to any of such plans or arrangements (other than routine claims for benefits)
is pending or, to the knowledge of Sellers, threatened, and Sellers possess no
knowledge of any facts which could give rise to any such action, suit or claim.
(b) Labor Relations. Sellers are not a party to or subject
to any collective bargaining agreements with respect to the Station. Sellers
have no written or oral contracts of employment with any employee of the
Station, other than those listed in Schedule 3.7. Sellers have complied with
all laws, rules, and regulations relating to the employment of labor, including
those related to wages, hours, collective bargaining, occupational safety,
discrimination, and the payment of social security and other payroll related
taxes, and they have not received any notice alleging that it has failed to
comply in any material respect with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the best of their
knowledge, threatened, between Sellers and any employee (singly or
collectively) of the Station. No labor union or other collective bargaining
unit represents or claims to represent any of the employees of the Station. To
Sellers' knowledge, there is no union campaign being conducted to solicit cards
from employees to authorize a union to request a National Labor Relations Board
certification election with respect to any employees at the Station.
(c) Liabilities. Sellers have no liability of any kind to or
in respect of any employee benefit plan, including withdrawal liability under
Section 4201 of ERISA. Sellers have not incurred any accumulated funding
deficiency within the meaning of ERISA or Section 4971 of the Internal Revenue
Code. Sellers have not failed to make any required contributions to any
employee benefit
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plan. The Pension Benefit Guaranty Corporation has not asserted that Sellers
have incurred any liability in connection with any such plan. No lien has been
attached and no person has threatened to attach a lien on any property of
Sellers as a result of a failure to comply with ERISA.
3.14 Taxes. Sellers have filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns relating to the Station which are required to be filed, and they have
paid or caused to be paid all taxes shown on those returns or on any tax
assessment received by them to the extent that such taxes have become due, or
have set aside on their books adequate reserves (segregated to the extent
required by generally accepted accounting principles) with respect thereto.
There are no governmental investigations or other legal, administrative, or tax
proceedings pursuant to which Sellers are or could be made liable for any taxes,
penalties, interest, or other charges, the liability for which could extend to
Buyer as transferee of the business of the Station, and no event has occurred
that could impose on Buyer any transferee liability for any taxes, penalties, or
interest due or to become due from Sellers.
3.15 Claims and Legal Actions. Except for any FCC rule-making
proceedings generally affecting the broadcasting industry, there is no claim,
legal action, counterclaim, suit, arbitration, governmental investigation or
other legal, administrative, or tax proceeding, nor any order, decree or
judgment, in progress or pending, or to the knowledge of Sellers threatened,
against or relating to Sellers with respect to the ownership or operation of the
Station or otherwise relating to the Assets or the business or operations of the
Station, nor do Sellers know or have reason to be aware of any basis for the
same. In particular, but without limiting the generality of the foregoing,
there are no applications, complaints or proceedings pending or, to the best of
their knowledge, threatened (i) before the FCC relating to the business or
operations of the Station other than rule making proceedings which affect the
radio industry generally, (ii) before any federal or state agency relating to
the business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.16 Environmental Matters.
(a) Sellers have complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Sellers in connection with the ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
(b) To the best of Sellers' knowledge, Sellers have no
liability relating to the ownership and operation of the Station (and there is
no basis related to the past or present operations, properties, or facilities
of Sellers for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against Sellers giving
rise to any such liability) under any law, rule, or regulation of any federal,
state, or local government (or agency thereof) concerning release or threatened
release of hazardous substances, public health and safety, or pollution or
protection of the environment.
(c) To the best of Sellers's knowledge, Sellers have no
liability relating to the ownership and operation of the Station (and Sellers
have not handled or disposed of any substance, arranged for the disposal of any
substance, or owned or operated any property or facility in any
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manner that could form the basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand (under the
common law or pursuant to any statute) against Sellers giving rise to any such
liability) for damage to any site, location, or body of water (surface of
subsurface) or for illness or personal injury.
(d) To the best of Sellers' knowledge, Sellers have no
liability relating to the ownership and operation of the Station (and there is
no basis for any present or future charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand against Sellers giving rise to any
such liability) under any law, rule, or regulation of any federal, state, or
local government (or agency thereof) concerning employee health and safety.
(e) To the best of Sellers' knowledge, Sellers have no
liability relating to its ownership and operation of the Station (and Sellers
have not exposed any employee to any substance or condition that could form the
basis for any present or future charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand (under the common law or pursuant to
statute) against Sellers giving rise to any such liability) for any illness or
personal injury to any employee.
(f) In connection with its ownership or operation of the
Station, Sellers have obtained and been in compliance with all of the terms and
conditions of all permits, licenses, and other authorizations which are
required under, and has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables which are contained in, all federal, state, and local laws, rules,
and regulations (including all codes, plans, judgments, orders, decrees,
stipulations, injunctions, and charges thereunder) relating to public health
and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Sellers in
connection with its ownership and operation of the Station or, to the best of
Sellers' knowledge, by any other party on any Real Property.
3.17 Compliance with Laws. Sellers have complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership and
operation of the Station. Neither the ownership or use of the properties of the
Station nor the conduct of the business or operations of the Station conflicts
with the rights of any other person or entity.
3.18 Conduct of Business in Ordinary Course. Since January 1, 1995,
Sellers have conducted the business and operations of the Station only in the
ordinary course and have not:
(a) Suffered any material adverse change in the business,
assets, or properties of the Station, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Station;
(b) Made any material increase in compensation payable or to
become payable to any of the employees of the Station, or any bonus payment
made or promised to any employee of the
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Station, or any material change in personnel policies, employee benefits, or
other compensation arrangements affecting the employees of the Station;
(c) Made any sale, assignment, lease, or other transfer of
any of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(d) Canceled any debts owed to or claims held by Sellers with
respect to the Station, except in the normal and usual course of business;
(e) Suffered any material write-down of the value of any
Assets or any material write-off as uncollectible of any accounts receivable of
the Station; or
(f) Transferred or granted any right under, or entered into
any settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or modified any
existing right relating to the Station.
3.19 Transactions with Affiliates. Except as disclosed on Schedule
3.19, Sellers have not been involved in any business arrangement or relationship
relating to the Station with any affiliate of Sellers, and no affiliate of
Sellers owns any property or right, tangible or intangible, which is used in the
business of the Station. As used in this paragraph, "affiliate" has the meaning
set forth in Rule 12b-2 promulgated under the Securities and Exchange Act of
1934.
3.20 Broker. Neither Sellers nor any person acting on Sellers' behalf
has incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement, except for a
commission payable by Sellers to Media Venture Partners.
3.21 Full Disclosure. No representation or warranty made by Sellers
in this Agreement or in any certificate, document, or other instrument furnished
or to be furnished by Sellers pursuant hereto contains or will contain any
untrue statement of a material fact, or omits or will omit to state any material
fact and required to make any statement made herein or therein not misleading.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida and at Closing will be duly qualified to conduct business as a
foreign corporation in the State of Arizona. Buyer has all requisite power and
authority to execute and deliver this Agreement and the Escrow Agreement and
the documents contemplated hereby and thereby, and to perform and comply with
all of the terms, covenants, and conditions to be performed and complied with
by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement and the Escrow Agreement by Buyer have been
duly authorized by all necessary actions on the part of Buyer. This Agreement
and the Escrow Agreement have been duly executed and delivered by Buyer and
constitute the legal, valid, and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms except as the
enforceability of this Agreement
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and the Escrow Agreement may be affected by bankruptcy, insolvency, or similar
laws affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the Escrow Agreement and the documents contemplated hereby and thereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with the
Articles of Incorporation or Bylaws of Buyer; (iii) will not conflict with,
result in a breach of, or constitute a default under, any law, judgment, order,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4 Full Disclosure. No representation or warranty made by Buyer in
this Agreement or in any certificate, document, or other instrument furnished
or to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
and required to make any statement made herein or therein not misleading.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the Station
under the Communications Act of 1934, as now in effect, and the rules,
regulations and policies of the FCC as now in effect. Buyer knows of no fact
that would, under existing law and the existing rules, regulations, policies
and procedures of the FCC disqualify Buyer as an assignee of the FCC Licenses
or as the owner and operator of the Station.
SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Sellers agree that, between the date of this
Agreement and the Closing Date, Sellers shall operate the Station diligently in
the ordinary course of business in accordance with past practices (except where
such conduct would conflict with the following covenants or with Sellers' other
obligations under this Agreement), and in accordance with the other covenants
in this Section 5.
5.2 Compensation. Sellers shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Station,
except in accordance with past practices.
5.3 Contracts. Sellers will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Buyer after Closing, except for cash
time sales agreements made in the ordinary course of business. Prior to the
Closing Date, Sellers shall deliver to Buyer a list of all Contracts entered
into between the date of this Agreement and the Closing Date, together with
copies of such Contracts.
5.4 Disposition of Assets. Sellers shall not sell, assign, lease, or
otherwise transfer or dispose of any of the Assets, except where no longer used
or useful in the business or operations of the Station or in connection with
the acquisition of replacement property of equivalent kind and value.
5.5 Encumbrances. Sellers shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets,
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except for (i) liens disclosed on Schedule 3.5 and Schedule 3.6, which shall be
removed prior to the Closing Date, (ii) liens for current taxes not yet due and
payable, and (iii) mechanics' liens and other similar liens, which shall be
removed prior to the Closing Date.
5.6 Licenses. Sellers shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Sellers shall not fail to prosecute with
due diligence any applications to any governmental authority in connection with
the operation of the Station.
5.7 Rights. Sellers shall not waive any right relating to the
Station or any of the Assets. Sellers shall not cause, by any act or failure
to act, any cable system located within the Station's Area of Dominant
Influence to refuse to carry the Station's signal.
5.8 No Inconsistent Action. Sellers shall not take any action that
is inconsistent with its obligations under this Agreement or that could hinder
or delay the consummation of the transactions contemplated by this Agreement.
5.9 Access to Information. Sellers shall give Buyer and its counsel,
accountants, engineers, and other authorized representatives reasonable access
to the Assets and to all other properties, equipment, books, records,
Contracts, and documents relating to the Station for the purpose of audit and
inspection, including inspections incident to the environmental study described
in Section 6.6 and the engineering study described in Section 6.7, and will
furnish or cause to be furnished to Buyer or its authorized representatives all
information with respect to the affairs and business of the Station that Buyer
may reasonably request (including any financial reports and operations reports
produced with respect to the affairs and business of the Station). Without
limiting the generality of the foregoing, Sellers shall give Buyer and its
counsel, accountants and other authorized representatives reasonable access to
Sellers' financial records and Sellers' employees, counsel, accountants and
other representatives for the purpose of preparing and auditing such financial
statements as Buyer determines, in its sole judgment, are required or advisable
to comply with federal or state securities laws and the rules and regulations
of securities markets as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
5.10 Maintenance of Assets. Sellers shall use their best efforts and
take all reasonable actions to maintain all of the Assets in good condition
(ordinary wear and tear excepted), and use, operate, and maintain all of the
Assets in a reasonable manner and in accordance with the terms of the FCC
Licenses, all rules and regulations of the FCC and generally accepted standards
of good engineering practice. Sellers shall maintain inventories of spare
parts and expendable supplies at levels consistent with past practices. If any
loss, damage, impairment, confiscation, or condemnation of or to any of the
Assets occurs, Sellers shall repair, replace, or restore the Assets to their
prior condition as represented in this Agreement as soon thereafter as possible,
and Sellers shall use the proceeds of any claim under any insurance policy
solely to repair, replace, or restore any of the Assets that are lost, damaged,
impaired, or destroyed.
5.11 Insurance. Sellers shall maintain the existing insurance
policies on the Station and the Assets.
5.12 Consents. Sellers shall obtain the Consents and the estoppel
certificates described in Section 8.2(b), without any change in the terms or
conditions of any Contract or License that could be less advantageous to the
Station than those pertaining under the Contract or License as in effect on
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the date of this Agreement. Sellers shall promptly advise Buyer of any
difficulties experienced in obtaining any of the Consents and of any conditions
proposed, considered, or requested for any of the Consents. Upon Buyer's
request, Sellers shall cooperate with Buyer and use their best efforts to
obtain from the lessors under each Real Property lease such estoppel
certificates and consents to the collateral assignment of the lessee's interest
under each such lease as Buyer's senior lenders may request.
5.13 Books and Records. Sellers shall maintain their books and
records relating to the Station in accordance with past practices.
5.14 Notification. Sellers shall promptly notify Buyer in writing of
any unusual or material developments with respect to the business or operations
of the Station, and of any material change in any of the information contained
in Sellers' representations and warranties contained in Section 3 of this
Agreement.
5.15 Financial Information. Sellers shall furnish to Buyer within
twenty days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense and a statement
of Operating Cash Flow for the month just ended and such other financial
information (including information on payables and receivables) as Buyer may
reasonably request. All financial information delivered by Sellers to Buyer
pursuant to this Section shall be prepared from the books and records of Sellers
in accordance with generally accepted accounting principles consistently
applied, shall accurately reflect the books, records, and accounts of the
Station, shall be complete and correct in all material respects, and shall
present fairly the financial condition of the Station as at their respective
dates and the results of operations for the periods then ended.
5.16 Compliance with Laws. Sellers shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.17 Financing Leases. Sellers will satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain good title to the Assets leased by Sellers pursuant
to those leases so that those Assets shall be transferred to Buyer at Closing
free of any interest of the lessors.
5.18 Programming. Sellers shall not make any material changes in the
broadcast hours or in the percentages of types of programming broadcast by the
Station, or make any other material change in the Station's programming
policies, except such changes as in the good faith judgment of the Sellers are
required by the public interest.
5.19 Preservation of Business. Sellers shall use their best efforts
to preserve the business and organization of the Station and use their best
efforts to keep available to the Station its present employees and to preserve
the audience of the Station and the Station's present relationships with
suppliers, advertisers, and others having business relations with it, to the end
that the business, operations, and prospects of the Station shall be unimpaired
at the Closing Date. The ordinary and customary operating, marketing,
promotional, sales, and advertising practices of the Station shall be
maintained.
5.20 Collection of Accounts Receivable. Sellers shall collect the
accounts receivable of the Station only in the ordinary course consistent with
its past practices and will not take any action designed or likely to accelerate
the collection of its accounts receivable.
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5.21 Personnel Recommendations. Sellers shall promptly notify Buyer
as personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC.
(b) Sellers and Buyer shall promptly prepare an appropriate
application for the FCC Consent and shall file the application with the FCC
within five (5) business days of the execution of this Agreement. The parties
shall prosecute the application with all reasonable diligence and otherwise use
their best efforts to obtain a grant of the application as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by
the FCC Consent, except that no party shall be required to comply with a
condition if (1) the condition was imposed on it as the result of a
circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Sellers shall oppose any requests for reconsideration or
judicial review of the FCC Consent. If the Closing shall not have occurred for
any reason within the original effective period of the FCC Consent, and neither
party shall have terminated this Agreement under Section 9, the parties shall
jointly request an extension of the effective period of the FCC Consent. No
extension of the FCC Consent shall limit the exercise by either party of its
rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Sellers until the Closing.
6.3 Accounts Receivable.
(a) Collection. At the Closing, Sellers shall designate
Buyer as its agent solely for the purposes of collecting Sellers' Receivables.
Buyer shall make reasonable efforts to collect Sellers' Receivables during the
"Collection Period," which shall be the period beginning on the Closing Date
and ending on the last day of the sixth calendar month beginning after the
Closing Date. Buyer shall not be obligated to use any extraordinary efforts to
collect any of Sellers' Receivables or to refer any of Sellers' Receivables to
a collection agency or attorney for collection, and Buyer shall not make any
such referral or compromise, nor settle or adjust the amount of any of Sellers'
Receivables, except with the approval of Sellers. During the Collection
Period, neither Sellers nor their agents shall make any direct solicitation
with respect to Sellers' Receivables. All payments received from advertisers
on the Station shall first be applied to Sellers' Receivables, if any, due from
such advertisers.
(b) Payments to Sellers. On or before the fifteenth day
after the end of each full calendar month during the Collection Period, Buyer
shall furnish to Sellers (i) a list of the amounts collected before the end of
such month with respect to Sellers' Receivables, and (ii) the amount collected
during such month with respect to Sellers' Receivables. On or before the
fifteenth day after the end of the Collection Period, Buyer shall furnish
Sellers with a list of all of Sellers' Receivables which remain uncollected at
the end of the Collection Period.
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(c) Further Obligations. After the expiration of the
Collection Period, Buyer shall have no further obligation hereunder other than
to make the payment under Section 6.3(b) and to remit to Sellers any payments
with respect to any of Sellers' Receivables that Buyer subsequently receives,
and Sellers itself shall act to collect any of Sellers' Receivables that
continue to remain uncollected.
6.4 Risk of Loss. (a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Sellers at all times prior to the Closing.
(b) If any damage or destruction of the Assets or any other event
occurs which (i) causes the Station to cease broadcasting operations for a
period of three or more days or(ii) prevents in any material respect signal
transmission by the Station in the normal and usual manner and Sellers fail to
restore or replace the Assets so that normal and usual transmission is resumed
within seven days of the damage, destruction or other event, Buyer, in its sole
discretion, may (x) terminate this Agreement forthwith without any further
obligations hereunder upon written notice to Sellers, in which event all funds
held by the Escrow Agent pursuant to the Escrow Agreement, including all
interest and other proceeds from the investment of such funds, shall be
immediately returned to Buyer, or (y) proceed to consummate the transaction
contemplated by this Agreement and complete the restoration and replacement of
the Assets after the Closing Date, in which event Sellers shall deliver to
Buyer all insurance proceeds received in connection with such damage,
destruction or other event.
6.5 Confidentiality. Except as necessary for the consummation of the
transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.6 Environmental Audit. Buyer may, at its option and expense,
retain an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey of the properties of the Station. If the survey discloses
any material environmental hazard or material possibility of future liability
for environmental damages or clean-up costs, Buyer shall so notify Sellers as
soon as practicable.
6.7 Engineering Study. Buyer may, at its option and expense, retain
an engineering firm to conduct a proof of performance study of the Station and
to prepare a report on the Station's compliance with customary engineering
practices and all applicable FCC rules, regulations, prescribed practices, and
technical standards. If the survey discloses any material deficiencies in the
operations or equipment of the Station, Buyer shall so notify Sellers as soon
as practicable.
6.8 Cooperation. Buyer and Sellers shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Sellers shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i)
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to expend funds to obtain any of the Consents or (ii) to agree to any adverse
change in any License or Assumed Contract to obtain a Consent required with
respect thereto.
6.9 Bulk Sales Law. Buyer hereby wives compliance by Seller with the
provisions of the "Bulk Sales" or similar laws of the State of Arizona.
Sellers agree 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 Sellers' failure to comply with any such "Bulk
Sales" or similar laws.
6.10 Real Property Leases. At Buyer's request and expense, Sellers
will cooperate with Buyer and use their best efforts to cause all lease
agreements relating to the Real Property to be recorded in the appropriate
public recording offices and to obtain from the lessors under such lease
agreements such estoppel certificates and consent agreement(s) to the collateral
assignment of the lessee's interest under each such lease as Buyer's lenders may
reasonably request.
6.11 Sales Tax Filings. Sellers shall continue to file Arizona sales
tax returns with respect to the Station in accordance with Sellers' past
practices and shall concurrently deliver copies of all such returns to Buyer.
6.12 Access to Books and Records. Sellers shall provide Buyer access
and the right to copy for a period of three years from the Closing Date any
books and records relating to the Assets. Buyer shall provide Sellers access
and the right to copy for a period of three years from the Closing Date any
books and records relating to the Assets.
6.13 Appraisal. Buyer and Sellers agree to allocate the Purchase
Price for tax and recording purposes in accordance with an appraisal to be
conducted by an appraisal firm selected and retained by Buyer with experience
in the valuation and appraisal of television station assets.
6.14 Broker. Buyer and Sellers each represents and warrants that
neither it nor any person or entity acting on its behalf has incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement, except for a commission payable
to Media Venture Partners by Sellers.
6.15 Non-competition Agreement. At Closing, Buyer and Sellers shall
enter into a Non-competition Agreement in the form of Schedule 6.16 and $28,000
of the Purchase Price shall be allocated to the covenants of Sellers set forth
therein on the Closing Date.
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS AT
CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at
the Closing are subject at Buyer's option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Sellers contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
(b) Covenants and Conditions. Sellers shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
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(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof, Sellers shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Sellers shall be the holder
of all Licenses and there shall not have been any modification of any License
that could have an adverse effect on the Station or the conduct of its business
and operations. No proceeding shall be pending the effect of which could be to
revoke, cancel, fail to renew, suspend, or modify adversely any License.
(f) Deliveries. Sellers shall have made or stand willing to
make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement and
the Closing Date, there shall have been no material adverse change in the
business, assets, or properties of the Station, including any damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Station.
7.2 Conditions to Obligations of Sellers. All obligations of Sellers
at the Closing are subject at Sellers' option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
(b) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to
make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Sellers of any conditions that need not be complied
with by Sellers under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
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SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00 a.m.
on a date, to be set by Buyer on at least five days' written notice to Sellers,
that is (1) not earlier than the first business day after the FCC Consent is
granted, and (2) not later than ten business days following the date upon which
the FCC Consent has become a Final Order. If Buyer fails to specify the date
for Closing pursuant to the preceding sentence prior to the fifth business day
after the date upon which the FCC Consent becomes a Final Order, the Closing
shall take place on the tenth business day after the date upon which the FCC
Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the offices
of Dow, Xxxxxx & Xxxxxxxxx in Washington D.C., or any other place that is
agreed upon by Buyer and Sellers.
8.2 Deliveries by Sellers. Prior to or on the Closing Date, Sellers
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets in
the name of Buyer, free and clear of all mortgages, liens, restrictions,
encumbrances, claims, and obligations except for liens for current taxes not
yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property and estoppel certificates of contracting parties to those Assumed
Contracts listed in Schedule 3.7 that are designated to indicate that estoppel
certificates are required under this paragraph;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Xxxxxx by its President, certifying (1)
that the representations and warranties of Sellers contained in this Agreement
are true and complete in all material respects as of the Closing Date as though
made on and as of that date; and (2) that Sellers have in all material respects
performed and complied with all of their obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date;
(e) Tax, Lien, and Judgment Searches. Results of a search
for tax, lien, and judgment filings in the Secretary of State's records of the
State of Arizona and in the records of those counties in Arizona in which any
of the Assets are located, such searches having been made no earlier than
fifteen days prior to the Closing Date;
(f) Licenses, Contracts, Business Records, Etc. Copies of
all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Sellers in connection with its operations;
(g) Accounts Receivable. A complete and accurate list of the
Station's accounts receivable as of a date no more than five business days
prior to the Closing Date, including, with
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respect to each of the accounts receivable, the account number, date of
issuance, name and address of account debtor, aggregate amount, and balance
due;
(h) Opinion of Counsel. An Opinion of Sellers' counsel dated
as of the Closing Date, substantially in the form of Schedule 8.2(h) hereto;
(j) Non-competition Agreement. The Non-competition Agreement
in the form as Schedule 6.15, duly executed on behalf of Sellers; and
(k) Lenders Certificates. Such certificates and
confirmations to Buyer's senior lenders as Buyer may reasonably request in
connection with obtaining financing for the performance of its payment
obligations hereunder.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Sellers the following, in form and substance reasonably
satisfactory to Sellers and their counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.4(a);
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Sellers' obligations under the Licenses and Assumed Contracts arising on or
after the Closing Date;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by its President, certifying (1) that
the representations and warranties of Buyer contained in this Agreement are
true and complete in all material respects as of the Closing Date as though
made on and as of that date, and (2) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel dated
as of the Closing Date, substantially in the form of Schedule 8.3(g) hereto.
(e) Non-competition Agreement. The Non-competition Agreement
in the form of Schedule 6.15 duly executed by Buyer and the payment of $28,000
to Sellers thereunder.
SECTION 9 TERMINATION
9.1 Termination by Sellers. This Agreement may be terminated by
Sellers and the purchase and sale of the Station abandoned, if Sellers are not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Sellers set
forth in this Agreement have not been satisfied or waived in writing by
Sellers.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
April 30, 1996.
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9.2 Termination by Buyer. This Agreement may be terminated by Buyer
and the purchase and sale of the Station abandoned, if Buyer is not then in
material default, upon written notice to Sellers, upon the occurrence of any of
the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement have not been satisfied or waived in writing by Buyer.
(b) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred by
April 30, 1996.
(d) Interruption of Service. If any event shall have
occurred that prevented signal transmission of the Station in the normal and
usual manner as described in Section 6.4(b) above.
(e) Environmental Hazards. Buyer shall have notified Sellers
of material environmental hazards or the material possibility of environmental
damages or clean-up costs, as indicated in the environmental study described in
Section 6.6, within 30 days prior to the Closing Date, and the cause thereof
shall not have been remedied prior to the Closing Date.
(f) Technical Deficiencies. Buyer shall have notified
Sellers of material deficiencies in the operations or equipment of the Station,
as indicated in the engineering study described in Section 6.7, within 30 days
prior to the Closing Date, and the cause thereof shall not have been remedied
prior to the Closing Date.
9.3 Rights on Termination. If this Agreement is terminated pursuant
to Section 9.1 or Section 9.2 and neither party is in material breach of any
provision of this Agreement, the parties hereto shall not have any further
liability to each other with respect to the purchase and sale of the Assets.
If this Agreement is terminated by Sellers due to Buyer's material breach of
any provision of this Agreement, then the payment to Sellers of $100,000
pursuant to Section 9.4(c) below shall be liquidated damages and shall
constitute full payment and the exclusive remedy for any damages suffered by
Sellers by reason of Buyer's material breach of this Agreement. Sellers and
Buyer agree in advance that actual damages would be difficult to ascertain and
that the amount of $100,000 is a fair and equitable amount to reimburse Sellers
for damages sustained due to Buyer's material breach of this Agreement. If
this Agreement is terminated by Buyer due to Sellers' material breach of any
provision of this Agreement, Buyer shall have all rights and remedies available
at law or equity.
9.4 Escrow Deposit. Simultaneously with the execution and delivery
of this Agreement, Buyer has deposited with Escrow Agent the sum of $100,000 in
accordance with an Escrow Agreement among Buyer, Sellers and the Escrow Agent
(the "Escrow Agreement"). All such funds deposited with the Escrow Agent shall
be held and disbursed in accordance with the terms of the Escrow Agreement and
the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent pursuant to
the Escrow Agreement, including any interest or other proceeds from the
investment of funds held by the Escrow Agent, shall be disbursed to or at the
direction of Buyer.
(b) If this Agreement is terminated pursuant to Section 9.1 or 9.2
and Buyer is not in material breach of any provision of this Agreement, all
amounts held by the Escrow Agent pursuant
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to the Escrow Agreement, including any interest or other proceeds from the
investment of funds held by the Escrow Agent, shall be disbursed to or at the
direction of Buyer.
(c) If this Agreement is terminated by Sellers due to Buyer's
material breach of this Agreement, then all amounts held by the Escrow Agent
pursuant to the Escrow Agreement shall be disbursed to or at the direction of
Sellers as liquidated damages under Section 9.3 above and any interest or other
proceeds from the investment of funds held by the Escrow Agent shall be
disbursed by the Escrow Agent to or at the direction of Buyer.
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
eighteen months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Sellers shall affect Buyer's right to rely on any representation or warranty
made by Sellers or relieve Sellers of any obligations under this Agreement as
the result of a breach of any of its representations and warranties.
10.2 Indemnification by Sellers. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or any
information Buyer may have, Sellers hereby agrees to indemnify and hold Buyer
harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Sellers contained in this Agreement or in any certificate,
document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Sellers not assumed by Buyer
pursuant to this Agreement, including any liabilities arising at any time under
any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting from
the failure of Sellers to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts which
relate to events occurring prior the Closing Date.
(e) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees
and expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Sellers or
any information Sellers may have, Buyer hereby agrees to indemnify and hold
Sellers harmless against and with respect to, and shall reimburse Sellers for:
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(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Sellers under this Agreement.
(b) Any and all obligations of Sellers assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for indemnification
shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim.
If the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant within five days after
written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to which
the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
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(e) The indemnifications rights provided in Sections 10.2 and
10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Sellers
breach this Agreement and refuse to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other
remedies that may be available, including money damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by Buyer
to enforce this Agreement, Sellers shall waive the defense that there is an
adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party which
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses.
10.7 Threshold. Neither Buyer nor Sellers shall be entitled to
recover under this Agreement for any indemnification claims until the aggregate
losses, liabilities or damages exceed Fifty Thousand Dollars ($50,000) (the
"Threshold"), whereupon Buyer or Sellers shall be entitled to indemnification
hereunder for indemnification claims from the other party for any losses,
liabilities or damages suffered by such party in excess of the Threshold.
10.8 Maximum Liability. Buyer's or Sellers' maximum liability for
indemnification claims under this Agreement shall be One Million Four Hundred
Fifty Thousand Dollars ($1,400,000).
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Sellers
to Buyer pursuant to this Agreement shall be paid by the party upon which such
tax is imposed by law. Except as otherwise provided in this Agreement, each
party shall pay its own expenses incurred in connection with the authorization,
preparation, execution, and performance of this Agreement, including all fees
and expenses of counsel, accountants, agents, and representatives, and each
party shall be responsible for all fees or commissions payable to any finder,
broker, advisor, or similar person retained by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary below,
any dispute arising out of or related to this Agreement that Sellers and Buyer
are unable to resolve by themselves shall be settled by arbitration by a panel
of three (3) neutral arbitrators who shall be selected in accordance with the
procedures set forth in the commercial arbitration rules of the American
Arbitration Association. The persons selected as arbitrators shall have prior
experience in the broadcasting industry but need not be professional
arbitrators, and persons such as lawyers, accountants, brokers and bankers shall
be acceptable. Before undertaking to resolve the dispute, each arbitrator shall
be duly sworn faithfully and fairly to hear and examine the matters in
controversy and to make a just award according to the best of his or her
understanding. The arbitration hearing shall be conducted in accordance with
the commercial arbitration rules of the American Arbitration Association. The
written decision of a majority of the arbitrators shall be final and binding on
Sellers and Buyer. The costs and expenses of the arbitration proceeding shall
be assessed between Sellers and Buyer in a manner to be decided by a majority of
the arbitrators, and the assessment shall be set forth in the decision and award
of the arbitrators. Judgment on the award, if it is not paid within thirty
days,
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may be entered in any court having jurisdiction over the matter. No action at
law or suit in equity based upon any claim arising out of or related to this
Agreement shall be instituted in any court by Sellers or Buyer against the
other except (i) an action to compel arbitration pursuant to this Section, (ii)
an action to enforce the award of the arbitration panel rendered in accordance
with this Section, or (iii) a suit for specific performance pursuant to Section
10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed to
have been given on the date of personal delivery or the date set forth in the
records of the delivery service or on the return receipt, and (d) addressed as
follows:
If to Sellers: Xxxxxxx X. Xxxxxxx, M.D.
0000 Xxxxxx Xxx., Xxxxx 000
Xxxxxxxx, XX 00000
With a copy to: Xxxxxx Xxxxx, Esq.
Wilkinson, Barker, Xxxxxx & Xxxxx
0000 Xxx Xxxx Xxx., X.X.
Xxxxxxxxxx, X.X. 00000
If to Buyer: Channel 13 of Flagstaff, Inc.
00000 00xx Xxxxxx, Xxxxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxx Xxxxx, Esq.
Dow, Xxxxxx & Xxxxxxxxx
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign this
Agreement without the prior written consent of the other party hereto; provided,
however, that Buyer may assign its rights and obligations under this Agreement
to one or more subsidiaries or commonly controlled affiliates of Buyer without
seeking or obtaining Sellers' prior approval in which event Buyer shall have no
further obligation hereunder and Buyer may collaterally assign its rights and
interests hereunder to its senior lenders without seeking or obtaining Sellers'
prior approval. Upon any permitted assignment by Buyer or Sellers in accordance
with this Section 11.4, all references to"Buyer" herein shall be deemed to be
references to Buyer's assignee and all references to "Sellers" herein shall be
deemed to be references to Sellers's assignee, as the case may be. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Sellers, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to this
Agreement.
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11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ARIZONA (WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for ease
of reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless of
the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and all
documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Sellers with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 11.10.
11.11 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgement be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
11.11 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
11.12 Guaranty of Xxxxxx Communications Corporation.
(a) As an inducement for Seller to enter into this Agreement
and in consideration of other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Xxxxxx Communications Corporation
("PCC") agrees as follows:
(1) PCC hereby guarantees the full, complete, and
timely performance by Buyer of each and every obligation of Buyer under this
Agreement. If any default shall be made by Buyer in the performance of any of
such obligations, then PCC will itself perform or cause to be
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performed such obligation upon receipt of notice from Sellers or either Company
specifying in summary form the default.
(2) PCC waives presentment, protest, demand, or
action or delinquency in respect of any of the obligations of Buyer under this
Agreement. PCC waives all notices of nonperformance, notices of protest,
notices of dishonor, and notices of acceptance of this guaranty. Upon any
default by Buyer in its obligations under this Agreement, Sellers may proceed
directly and at once against PCC without proceeding first against Buyer.
(3) This guaranty shall be deemed a continuing
guaranty, and the above consents and waivers of PCC shall remain in full force
and effect until the satisfaction in full of all obligations of Buyer under
this Agreement.
(b) PCC hereby represents and warrants to Sellers and the
Companies as follows:
(1) This Agreement has been duly and validly
executed and delivered by PCC and constitutes its legal, valid, and binding
agreement, enforceable in accordance with its terms, except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, and by judicial discretion
in the enforcement of equitable remedies.
(2) The execution, delivery and performance by PCC
of this Agreement (A) do not require the consent of any third party; (B) will
not conflict with any provision of the Certificate of Incorporation or Bylaws
of PCC; (C) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, ordinance, injunction, decree, rule,
regulation or ruling of any court of governmental instrumentality; and (D) will
not conflict with, constitute grounds for termination of, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license, or
permit to which PCC is a party of by which PCC may be bound.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
Channel 13 of Flagstaff, Inc.
By: /s/ Xxxxx X. Xxxx /s/ Xxxxxxx X. Xxxxxxx, M.D.
--------------------------------- ----------------------------------
Xxxxxxx X. Xxxxxxx, M.D.
Its: Chairman
--------------------------------
Del Ray Television Company, Inc. For Purposes of Section 11.12 Only
Xxxxxx Communications Corporation
By: /s/ Xxxxxxx X. Xxxxxxx, M.D. By: /s/ Xxxxxx X. Pasxon
--------------------------------- -----------------------------
Its: President
--------------------------------
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