ASSET PURCHASE AGREEMENT
(KMJI-AM, Sacramento, California)
This AGREEMENT (the "Agreement") is dated as of December 12, 1996 by
and between RADIO SYSTEMS OF PHILADELPHIA, INC. ("Seller") and VISTA
BROADCASTING, INC. ("Buyer").
RECITALS:
1. Seller owns and operates radio station KMJI(AM) licensed to
Sacramento, California (the "Station"), and holds the licenses and
authorizations issued by the FCC for the operation of the Station.
2. Buyer desires to acquire certain assets of the Station, and Seller
is willing to convey such assets to Buyer.
3. The acquisition of the Station is subject to prior approval of the
FCC.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer hereby agree as follows:
ARTICLE 1
TERMINOLOGY
1.1 Act. The Communications Act of 1934, as amended.
1.2 Adjustment Amount. As provided in Section 2.7(b), the amount by
which Buyer's account is to be credited or charged, as reflected on the
Adjustment List.
1.3 Adjustment List. As provided in Section 2.7 (b), an itemized list
of all sums to be credited or charged against the account of Buyer, with a brief
explanation in reasonable detail of the credits or charges.
1.4 Assumed Obligations. Such term shall have the meaning defined in
Section 2.3.
1.5 Business Day. Any calendar day, excluding Saturdays and Sundays, on
which federally chartered banks in the city of Camarillo, California, are
regularly open for business.
1.6 Buyer's Threshold Limitation. As provided in Section 9.3 (b), the
threshold dollar amount for the aggregate of claims, liabilities, damages,
losses, costs and
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expenses that must be incurred by Buyer before Seller shall be obligated to
indemnify Buyer. The Buyer's Threshold Limitation shall be Ten Thousand Dollars
($10,000).
1.7 Closing. The closing with respect to the transactions contemplated
by this Agreement.
1.8 Closing Date. The date determined as the Closing Date as provided
in Section 8.1.
1.9 Documents. This Agreement and all Exhibits and Schedules hereto,
and each other agreement, certificate, or instrument delivered pursuant to or in
connection with this Agreement, including amendments thereto that are expressly
permitted under the terms of this Agreement.
1.10 Xxxxxxx Money. The amount of Seventy Five Thousand Dollars
($75,000).
1.11 Environmental Assessment. Such term shall have the meaning defined
in Section 5.10.
1.12 Environmental Laws. The Comprehensive Environmental Response
Compensation and Liability Act, the Resource Conservation and Recovery Act, the
Clean Water Act, the Clean Air Act and the Toxic Substances Control Act, each as
amended, and any other applicable federal, state and local laws, statutes, rules
or regulations concerning the treating, producing, handling, storing, releasing,
spilling, leaking, pumping, pouring, emitting or dumping of Hazardous Materials.
1.13 Escrow Agent. Xxxx Xxxxxxx & Co., Incorporated.
1.14 Escrow Agreement. The Escrow Agreement in the form attached as
Exhibit A which Seller, Buyer and the Escrow Agent have entered into
concurrently with the execution of this Agreement relating to the deposit,
holding, investment and disbursement of the Xxxxxxx Money.
1.15 Excluded Assets. Such term shall have the meaning defined in
Section 2.2.
1.16 FCC. Federal Communications Commission.
1.17 FCC Licenses. The licenses, permits and authorizations of the FCC
for the operation of the Station as listed on Schedule 3.8.
1.18 FCC Order. An action, order or decision of the FCC granting its
consent to the assignment of the FCC Licenses to Buyer.
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1.19 Final Action. An action of the FCC that has not been reversed,
stayed, enjoined, set aside, annulled or suspended; with respect to which no
timely petition for reconsideration or administrative or judicial appeal or sua
sponte action of the FCC with comparable effect is pending and as to which the
time for filing any such petition or appeal (administrative or judicial) or for
the taking of any such sua sponte action of the FCC has expired.
1.20 Hazardous Materials. Toxic materials, hazardous wastes, hazardous
substances, pollutants or contaminants, asbestos or asbestos-related products,
polychlorinated biphenyls ("PCBs"), petroleum, crude oil or any fraction or
distillate thereof (as such terms are defined in any applicable federal, state
or local laws, ordinances, rules and regulations, and including any other terms
which are or may be used in any applicable environmental laws to define
prohibited or regulated substances).
1.21 Indemnified Party. Any party described in Section 9.3(a) or 9.4(a)
against which any claim or liability may be asserted by a third party which
would give rise to a claim for indemnification under the provisions of this
Agreement by such party.
1.22 Indemnifying Party. The party to the Agreement (not the
Indemnified Party) that, in the event of a claim or liability asserted by a
third party against the Indemnified Party which would give rise to a claim for
indemnification under the provisions of this Agreement, may at its own expense,
and upon written notice to the Indemnified Party, compromise or defend such
claim.
1.23 Lien. Any mortgage, deed of trust, pledge, hypothecation, security
interest, encumbrance, lien, lease or charge of any kind, whether voluntarily
incurred or arising by operation of law or otherwise, affecting any assets or
property, including any written or oral agreement to give or grant any of the
foregoing, any conditional sale or other title retention agreement, and the
filing of or agreement to give any financing statement with respect to any
assets or property under the Uniform Commercial Code or comparable law of any
jurisdiction.
1.24 Material Adverse Condition. A condition which would materially
restrict, limit, increase the cost or burden of or otherwise adversely affect or
materially impair the right of Buyer to the ownership, use, control, enjoyment
or operation of the Station or the proceeds therefrom; provided, however, that
any condition which requires that the Station be operated in accordance with a
condition similar to those contained in the present FCC licenses issued for
operation of the Station shall not be deemed a Material Adverse Condition.
1.25 OSHA Laws. The Occupational Safety and Health Act of 1970, as
amended, and all other federal, state or local laws or ordinances, including
orders, rules
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and regulations thereunder, regulating or otherwise affecting health and safety
of the workplace.
1.26 Permitted Encumbrances. For purposes hereof, "Permitted
Encumbrances" shall mean (i) easements, restrictions, and other similar matters
which will not adversely affect the use of the Real Property in the ordinary
course of business; (ii) liens for taxes not due and payable or, that are being
contested in good faith by appropriate proceedings; (iii) mechanics,
materialmen's, carriers', warehousemen's, landlords' or other similar liens in
the ordinary course of business for sums not yet due or being contested in good
faith by appropriate proceedings; (iv) deposits or pledges to secure the
performance of bids, tenders, contracts (other than for borrowed money), leases,
statutory obligations, surety or appeal bonds or other deposits or pledges for
purposes of a like general nature made or given in the ordinary course of
business: and (v) liens or mortgages that will be released at Closing; (vi)
zoning ordinances and regulations, including statutes and ordinances relating to
the liens of streets and to other municipal improvements, which will not
adversely affect the use of the Real Property in the ordinary course of
business.
1.27 Permitted Lien. Any statutory lien which secures a payment not yet
due that arises, and is customarily discharged, in the ordinary course of
Seller's business; any easement, right-of-way or similar imperfection in the
Seller's title to its assets or properties that, individually and in the
aggregate, are not material in character or amount and do not and are not
reasonably expected to materially impair the value or materially interfere with
the use of any asset or property of the Seller material to the operation of its
business as it has been and is now conducted.
1.28 Purchase Price. The consideration to be paid by Buyer to Seller
for purchase of the Sale Assets in an amount equal to One Million Five Hundred
Thousand Dollars ($1,500,000).
1.29 Real Property. Such term shall have the meaning defined in Section
3.7.
1.30 Rules and Regulations. The rules of the FCC as set forth in Volume
47 of the Code of Federal Regulations, as well as such other policies of the
Commission, whether contained in the Code of Federal Regulations, or not, that
apply to the Station.
1.31 Sale Assets. All of the tangible and intangible assets to be
transferred by Seller to Buyer as set forth in Section 2.1.
1.32 Station Agreements. The agreements, commitments, contracts, leases
and other items described in Section 2.1(d) which relate to operation of the
Station.
1.33 Seller's Threshold Limitation. As provided in Section 9.4(b), the
threshold dollar amount for the aggregate of claims, liabilities, damages,
losses, costs and
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expenses that must be incurred by Seller before Buyer shall be obligated to
indemnify Seller. The Seller's Threshold Limitation shall be Ten Thousand
Dollars ($10,000).
1.34 Survival Period. The term following the Closing Date during which
all representations, warranties, covenants and agreements of the parties under
this Agreement shall survive. The term shall be twelve (12) months.
1.35 Tangible Personal Property. The personal property described in
Section 2.1(a).
ARTICLE II
PURCHASE AND SALE
2.1 Sale Assets. On the Closing Date, Seller will sell, transfer,
assign and convey to Buyer, and Buyer will purchase from Seller, free and clear
of all Liens, except Permitted Liens, all of Seller's right, title and interest,
legal and equitable, in and to the tangible and intangible assets (except
Excluded Assets) used in the operation of the Station as specifically set forth
in the following:
(a) Tangible Personal Property. The tangible personal property
listed on Schedules 3.6, together with such modifications, replacements,
improvements and additional items, and subject to such deletions therefrom, made
or acquired between the date hereof and the Closing Date in accordance with the
terms and provisions of this Agreement;
(b) Real Property. Except as provided on Schedule 3.7,
Seller's interests in the Real Property including, without limitation, all
right, title and interest of Seller in and to the Station's transmitting
facilities;
(c) Licenses and Permits. The FCC Licenses and all other
assignable or transferable governmental permits, licenses and authorizations
(and any renewals, extensions, amendments or modifications thereof) now held by
Seller or hereafter obtained by Seller between the date hereof and the Closing
Date, to the extent such other permits, licenses and authorizations pertain to
or are used in the operation of the Station;
(d) Station Agreements. All agreements which are listed on
Schedule 3.9 as agreements which Buyer is electing to assume; any renewals,
extensions, amendments or modifications of those agreements being assumed which
are made in the ordinary course of Seller's operation of the Station and in
accordance with the terms and provisions of this Agreement;
(e) Records. True and complete copies of all of the books,
records, accounts, files, logs, ledgers, reports of engineers and other
consultants or independent
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contractors, pertaining to or used in the operation of the Station (other than
corporate records);
2.2 Excluded Assets. Notwithstanding any provision of this Agreement to
the contrary, Seller shall not transfer, convey or assign to Buyer, but shall
retain all of its right, title and interest in and to, the following assets
owned or held by it on the Closing Date ("Excluded Assets"):
(a) Any and all cash, cash equivalents, cash deposits to
secure contract obligations (except to the extent Seller receives a credit
therefor under Section 2.7, in which event the deposit shall be included as part
of the Sale Assets), all inter-company receivables from any affiliate of Seller
and all other accounts receivable, bank deposits and securities held by Seller
in respect of the Station at the Closing Date.
(b) Any and all claims of Seller with respect to transactions
prior to the Closing including, without limitation, claims for tax refunds and
refunds of fees paid to the FCC.
(c) All prepaid expenses (except to the extent Seller receives
a credit therefor under Section 2.7, in which event the prepaid expense shall be
included as part of the Sale Assets).
(d) All contracts of insurance and claims against insurers.
(e) All employee benefit plans and the assets thereof and all
employment contracts.
(f) All contracts that are terminated in accordance with the
terms and provisions of this Agreement or have expired prior to the Closing Date
in the ordinary course of business; and all loans and loan agreements.
(g) All tangible personal property disposed of or consumed
between the date hereof and the Closing Date in accordance with the terms and
provisions of this Agreement; all tangible personal property not specifically
assumed by Buyer pursuant to Section 2.1(a) above.
(h) Seller's corporate records except to the extent such
records pertain to or are used in the operation of the Station, in which case
Seller shall deliver accurate copies thereof to Buyer.
(i) All commitments, contracts and agreements not specifically
assumed by Buyer pursuant to Section 2.1(d), above.
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(j) All real property not specifically assumed by Buyer
pursuant to Station 2.1(b) above.
2.3 Assumption of Liabilities.
(a) At the Closing, Buyer shall assume and agree to perform,
without duplication of Seller's performance, the following liabilities and
obligations of Seller (the "Assumed Obligations"):
(i) Current liabilities of Seller for which Buyer
receives a credit pursuant to Section 2.7, but not in excess of the amount of
such credit.
(ii) Liabilities and obligations arising under the
Station Agreements, if any, assumed by and transferred to Buyer in accordance
with this Agreement, but only to the extent such liabilities and obligations
relate to any period of time after the Closing Date.
(b) Except for the Assumed Obligations, Buyer shall not assume
or in any manner be liable for any duties, responsibilities, obligations or
liabilities of Seller of any kind or nature, whether express or implied, known
or unknown, contingent or absolute, including, without limitation, any
liabilities to or in connection with Seller's employees whether arising in
connection with the transaction contemplated hereunder or otherwise.
2.4 Xxxxxxx Money.
(a) Concurrently with the execution of this Agreement, Buyer
has deposited with Escrow Agent under the Escrow Agreement, in immediately
available funds, the Xxxxxxx Money. The Escrow Agent shall hold the Xxxxxxx
Money under the terms of the Escrow Agreement in trust for the benefit of the
parties hereto. Interest and other earnings on the Xxxxxxx Money shall be
distributed by the Escrow Agent to Buyer from time to time upon the request of
Buyer.
(b) If Closing does not occur, the Xxxxxxx Money shall be
delivered to Seller or returned to Buyer in accordance with Section 10.2, and if
Closing does occur, the Xxxxxxx Money shall be applied to payment of the
Purchase Price at Closing as provided in Section 2.5.
2.5 Payments.
(a) The Purchase Price shall be paid by Buyer as follows:
(i) At the Closing, the Xxxxxxx Money shall, subject
to execution and delivery of the closing documents described in Section 8.2,
become the
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property of Seller and shall, pursuant to the Escrow Agreement, be disbursed to
Seller by cashier's check or wire transfer of immediately available funds.
(ii) At the Closing the Purchase Price, less the
amount of the Xxxxxxx Money disbursed to Seller, shall be paid to Seller at
Closing by wire transfer of immediately available funds.
(b) Buyer shall pay to Seller, or Seller shall pay to Buyer,
the Adjustment Amount in accordance with Section 2.7.
2.6 Allocation of the Purchase Price. Prior to Closing, Buyer and
Seller shall agree to an allocation of the Purchase Price. Buyer and Seller
shall use such allocation for all reporting purposes in connection with federal,
state and local income and, to the extent permitted under applicable law,
franchise taxes. Buyer and Seller agree to report such allocation to the
Internal Revenue Service in the form required by Treasury Regulation ss.
1.1060-1T. Seller and Buyer acknowledge that the allocation will be the result
of arms length bargaining regarding the fair value of the Sale Assets; not
materially different in result from the results of an independent appraisal
undertaken by Seller at its expense.
2.7 Adjustment of Purchase Price.
(a) All operating income and operating expenses of the Station
shall be adjusted and allocated between Seller and Buyer, and an adjustment in
the Purchase Price shall be made as provided in this Section, to the extent
necessary to reflect the principle that all such income and expenses
attributable to the operation of the Station on or before the Closing Date shall
be for the account of Seller, and all income and expenses attributable to the
operation of the Station after the closing Date shall be for the account of
Buyer.
(b) To the extent not inconsistent with the express provisions
of this Agreement, the allocations made pursuant to this Section 2.7 shall be
made in accordance with generally accepted accounting principles.
(c) For purposes of making the adjustments pursuant to this
Section, Buyer shall prepare and deliver the Adjustment List to Seller within
thirty (30) days following the Closing Date, or such earlier or later date as
shall be mutually agreed to by Seller and Buyer. The Adjustment List shall set
forth the Adjustment Amount. If the Adjustment Amount is a credit to the account
of Buyer, Seller shall pay such amount to Buyer, and if the Adjustment Amount is
a charge to the account of Buyer, Buyer shall pay such amount to Seller. In the
event Seller disagrees with the Adjustment Amount determined by Buyer or with
any other matter arising out of this subsection, and Buyer
and Seller cannot within sixty (60) days resolve the disagreement themselves,
the parties will refer the disagreement to a firm of independent certified
public accountants,
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mutually acceptable to Seller and Buyer, whose decision shall be final and whose
fees and expenses shall be allocated between and paid by Seller and Buyer,
respectively, to the extent that such party does not prevail on the disputed
matters decided by the accountants.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
3.1 Organization and Good Standing. Seller is a corporation, validly
existing and in good standing under the laws of the State of Pennsylvania, and
is qualified to do business and in good standing under the laws of the State of
California and all other jurisdictions where the failure to be qualified to do
business and in good standing would have a material adverse effect on the
Station. Seller has all requisite power to own, operate and lease its properties
and carry on its business as it is now being conducted and as the same will be
conducted until the Closing.
3.2 Authorization and Binding Effect of Documents. The execution and
delivery of, and the performance of its obligations under, this Agreement and
each of the other Documents by Seller, and the consummation by Seller of the
transactions contemplated hereby and thereby, have been duly authorized and
approved by all necessary corporate action on the part of Seller. Seller has the
power and authority to execute, deliver and perform its obligations under this
Agreement and each of the other Documents and to consummate the transactions
hereby and thereby contemplated. This Agreement and each of the other Documents
have been, or at or prior to the Closing will be, duly executed by Seller. This
Agreement constitutes (and each of the other Documents, when so executed and
delivered, will constitute) legal and valid obligations of Seller enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights or remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
3.3 Absence of Conflicts. The execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents by Seller, and the consummation by Seller of the transactions
contemplated hereby and thereby:
(a) do not in any material respect (with or without the giving
of notice or the passage of time or both) violate (or result in the creation of
any Lien other than a Permitted Lien on any of the Sale Assets under), any
provision of law, rule or regulation or any order, judgment, injunction, decree
or ruling applicable to Seller;
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(b) do not (with or without the giving of notice or the
passage of time or both) conflict with or result in a breach or termination of,
or constitute a default or give rise to a right of termination or acceleration
under the Articles of Incorporation or Bylaws of Seller or pursuant to any
lease, agreement, commitment or other instrument which Seller is a party to, or
bound by, or by which any of the Sale Assets may be bound, or result in the
creation of any Lien, other than a Permitted Lien, upon any of the Sale Assets.
3.4 Governmental Consents and Consents of Third Parties. Except as set
forth on Schedule 3.4, Schedule 3.8 and Schedule 3.9, and to Seller's actual
knowledge, the execution and delivery of, and the performance of its obligations
under, this Agreement and each of the other Documents by Seller, and the
consummation by Seller of the transactions contemplated hereby and thereby, do
not require the consent, waiver, approval, permit, license, clearance or
authorization of, or any declaration of filing with, any court or public agency
or other authority, or the consent of any person under any agreement,
arrangement or commitment of a nature to which Seller is a party or by which
it is bound or by which the Sale Assets are bound or to which they are subject
to, the failure of which to obtain would have a material adverse effect on the
Sale Assets or the operation of the Station.
3.5 Intentionally Omitted
3.6 Tangible Personal Property. Except as set forth on Schedule 3.6:
(a) Seller has good, marketable and valid title to all of the
items of Tangible Personal Property free and clear of all Liens except Permitted
Liens, and including the right to transfer same.
(b) The Tangible Personal Property has been maintained in
accordance with industry practices and is in good operating condition subject to
ordinary wear and tear.
(c) The Tangible Personal Property complies with applicable
rules and regulations of the FCC and the terms of the FCC Licenses.
(d) Seller has no knowledge of any defect in the condition or
operation of any item of the Tangible Personal Property which is reasonably
likely to have a material adverse effect on the operation of the Station.
3.7 Real Property.
(a) The real property described on Schedule 3.7 constitutes a
complete and correct summary description in all material respects of all of the
interests in real
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estate (other than any real property leased by Seller pursuant to a lease
described in Schedule 3.9) used to any extent in the operation of the Station in
the manner in which it has been and is now operated. Said real property,
together with all improvements affixed thereto, is herein defined as the "Real
Property."
(b) Seller does not owe any money to any architect,
contractor, subcontractor or materialman for labor or materials performed,
rendered or supplied to or in connection with the Real Property within the past
four (4) months which shall not be paid in full on or before Closing. Except as
set forth on Schedule 3.7, there is no work being done at or materials being
supplied to the Real Property at the date hereof other than routine maintenance
projects having an aggregate cost through completion thereof of no more than Ten
Thousand Dollars ($10,000).
(c) To the best of Seller's knowledge the present use of the
Real Property is in compliance with all applicable zoning codes in effect as of
the date hereof, and Seller has not received any notices of uncorrected
violations of the applicable housing, building, safety or fire ordinances. The
Real Property is served by electricity and water in capacities adequate for the
present use of the Real Property and improvements thereon. Except as set forth
on Section 3.7, Seller has not made any other agreement for the sale or lease
of, or given any other person an option to purchase or lease or a right of first
refusal to purchase or lease, all or any part of the Real Property, and except
as set forth on Schedule 3.7, Seller has not subjected the Real Property to any
liens (other than Permitted Liens), easements, rights, duties, obligations,
convenants, conditions, restrictions, limitations or agreements not of record.
3.8 FCC Licenses. Seller is the holder of the FCC Licenses listed on
Schedule 3.8, and except as set forth on such Schedule, the FCC Licenses (i) are
valid, in good standing and in full force and effect and constitute all of the
licenses, permits and authorizations required by the Act, the Rules and
Regulations or the FCC for, or used in, the operation of the Station in all
material respects as now operated, and (ii) constitute all the current licenses
and authorizations issued by the FCC to Seller for or in connection with the
current operation of the Station. Seller has no knowledge of any condition
imposed by the FCC as part of any FCC License which is neither set forth on the
face thereof as issued by the FCC nor contained in the Rules and Regulations
applicable generally to stations of the type, nature, class or location of the
Station. Except as disclosed on Schedule 3.8, the Station is being operated at
full authorized power, in accordance with the terms and conditions of the FCC
Licenses applicable to it and in accordance with the Rules and Regulations.
Except as set forth on Schedule 3.8, no proceedings are pending or, to the
knowledge of the Seller, are threatened which may result in the revocation,
modification, non-renewal or suspension of any of the FCC Licenses, the denial
of any pending applications, the issuance of any cease and desist order or the
imposition of any fines, forfeitures or other administrative actions by the FCC
with respect to the Station or its operation, other than proceedings affecting
the radio broadcasting industry in general. Seller has complied in all material
respects with
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all requirements to file reports, applications and other documents with the FCC
with respect to the Station, and all such reports, applications and documents
are complete and correct in all material respects. Seller has no knowledge of
any matters (i) which could reasonably be expected to result in the suspension
or revocation of or the refusal to renew any of the FCC Licenses or the
imposition of any fines or forfeitures by the FCC, or (ii) against Seller which
could reasonably be expected to result in the FCC's refusal to grant approval of
the assignment to Buyer of the FCC Licenses or the imposition of any Material
Adverse Condition in connection with approval of such assignment. There are not
any unsatisfied or otherwise outstanding citations issued by the FCC with
respect to the Station or its operation. Complete and accurate copies of all FCC
Licenses are attached as a part of Schedule 3.8. The "Public Inspection File" of
the Station is complete and in substantial and material compliance with Section
73.3526 of the Rules and Regulations.
3.9 Station Agreements.
(a) Schedule 3.9 sets forth an accurate and complete list of
the station agreements. Complete and correct copies of all such agreements,
contracts, arrangements or commitments that are in writing, including all
amendments, modifications and supplements thereto, have been delivered to Buyer.
(b) Except as set forth in the Schedules, and with respect to
all Station Agreements being assumed by Buyer, (i) all Station Agreements are
legal, valid and enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity regardless of whether enforcement is sought in any
proceeding at law or in equity; (ii) neither Seller nor, to the knowledge of
Seller, any other party thereto, is in material breach of or in material default
under any Station Agreements; (iii) to the knowledge of Seller, there has not
occurred any event which, after the giving of notice or the lapse of time or
both, would constitute a material default under, or result in the material
breach of, any Station Agreements which are, individually or in the aggregate,
material to the operation of the Station; and (iv) Seller holds the right to
enforce and receive the benefits under all of the Station Agreements, free and
clear of all Liens (other than Permitted Liens) but subject to the terms and
provision of each such agreement.
(c) Schedule 3.9 indicates, for each Station Agreement listed
thereon which is being assumed by Buyer, whether consent or approval by any
party thereto is required thereunder for consummation of the transactions
contemplated hereby.
3.10 Litigation. There are no claims, investigations or administrative,
arbitration or other proceedings pending or, to the actual knowledge of Seller,
threatened against Seller which would, individually or in the aggregate if
adversely determined, have a material adverse effect on the Sale Assets or the
operation of the Station, or which
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would give any third party the right to enjoin the transactions contemplated by
this Agreement. To the actual knowledge of Seller, there is no basis for any
such claim, investigation, action, suit or proceeding which would, individually
or in the aggregate if adversely determined, have a material adverse effect on
the Sale Assets or operation of the Station. There are no existing or, to the
actual knowledge of Seller, pending orders, judgments or decrees of any court or
governmental agency affecting Seller, the Station or any of the Sale Assets.
3.11 Labor Matters.
(a) Seller is not a party to any collective bargaining
agreement, and there is no collective bargaining agreement that determines the
terms and conditions of employment of any employees of Seller.
(b) Except as disclosed on Schedule 3.11:
(i) There is no labor strike, dispute, slow-down or
stoppage pending or, to the knowledge of Seller, threatened against the Station;
(ii) There are neither pending nor, to the actual
knowledge of Seller threatened, any suits, actions, administrative proceedings,
union organizing activities, arbitrations, grievances or other proceedings
between Seller and any employees of the Station or any union representing such
employees; and there are no existing labor or employment or other controversies
or grievances involving employees of the Station which have had or are
reasonably likely to have a material adverse effect on the operation of the
Station;
(iii) With respect to the Station, (A) Seller is in
compliance in all material respects with all laws, rules and regulations
relating to the employment of labor and all employment contractual obligations,
including those relating to wages, hours, collective bargaining, affirmative
action, discrimination, sexual harassment, wrongful discharge and the
withholding and payment of taxes and contributions except for such
non-compliance which individually or in the aggregate would not have a material
adverse effect on the business or financial condition of the Station; (B) Seller
has withheld all amounts required by law or agreement to be withheld from the
wages or salaries of its employees; and (C) Seller is not liable to any present
or former employees or any governmental authority for damages, arrears of wages
or any tax or penalty for failure to comply with the foregoing except for such
liability which individually or in the aggregate would not have a material
adverse effect on the business or financial condition of the Station;
(iv) Buyer's consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof shall not, as
a result of or in connection with the transactions contemplated hereby, impose
upon Buyer the obligation
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to pay any severance or termination pay under any agreement, plan or arrangement
binding upon Seller.
3.12 Employee Benefit Plans. Buyer's consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof shall not, as
a result of or in connection with the transactions contemplated hereby, impose
upon Buyer any obligation under any benefit plan, contract or arrangement
(regardless of whether they are written or unwritten and funded or unfunded)
covering employees or former employees of Seller in connection with their
employment by Seller. For purposes of the Agreement, "benefit plans" shall
include without limitation employee benefit plans within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended,
vacation benefits, employment and severance contracts, stock option plans, bonus
programs and plans of deferred compensation.
3.13 Compliance with Law. Except as set forth on Schedule 3.13, the
operation of the Station complies in all material respects with the applicable
rules and regulations of the FCC and all federal, state, local or other laws,
statutes, ordinances, regulations, and any applicable order, writ, injunction or
decree of any court, commission, board, agency or other instrumentality.
3.14 Environmental Matters; OSHA.
(a) Except as set forth on Schedule 3.14, Seller has obtained
all material, environmental, health and safety permits necessary or required for
either the operation of the Station as currently operated or the ownership of
the Real Property and all such permits are in full force and effect and Seller
is in compliance with all material terms and conditions of such permits.
(b) There is no proceeding pending or, to Seller's actual
knowledge, threatened which may result in the reversal, rescission, termination,
modification or suspension of any environmental or health or safety permits
necessary for the operation of the Station as currently conducted or the
ownership of the Real Property.
(c) With respect to the Station and the lease of the Real
Property, Seller is in compliance in all material respects with the provisions
of Environmental Laws.
(d) During Seller's occupancy of the Real Property, Seller has
not, and to Seller's actual knowledge, no other person or entity has caused or
permitted materials to be generated, released, stored, treated, recycled,
disposed of on, under or at such parcels, which materials, if known to be
present, would require clean up, removal or other remedial or responsive action
under Environmental Laws (other than normal office, cleaning and maintenance
supplies in reasonable quantities used and /or stored appropriately in the
buildings or improvements on the Real Property). Seller has not caused the
migration of any materials from the Real Property onto or under any property
14
adjacent to the Real Property which materials, if known to be present, would
require cleanup, removal or other remedial or responsive action under
Environmental Laws. There are no underground storage tanks and no PCBs or
friable asbestos on such property.
(e) Except as set forth on Schedule 3.14, Seller is not
subject to any judgment, decree, order or citation with respect to the Station
or the Real Property related to or arising out of Environmental Laws, and Seller
has not received notice that it has been named or listed as a potentially
responsible party by any person or governmental body or agency in any matter
arising under Environmental Laws.
(f) Seller has not discharged or disposed of any petroleum
product or solid waste on the Real Property or on the property adjacent to the
Real Property owned by third parties, which, to the best of Seller's knowledge,
may form the basis for any present or future claim based upon the Environmental
Laws in existence on the date hereof or as of the Closing, or any demand or
action seeking clean-up of any site, location, body of water, surface or
subsurface, under any Environmental Laws or otherwise, or which may subject the
owner of the Real Property to claims by third parties (except to the extent
third party liability can be established) for damages.
(g) No portion of the Real Property has ever been used by
Seller, nor, to the best of Seller's knowledge, by any previous occupant of the
Real Property, in material violation of Environmental Laws or as a landfill,
dump site or any other use which involves the disposal or storage of Hazardous
Materials on-site or in any manner which may materially adversely affect the
value of the Real Property.
(h) No pesticides, herbicides, fertilizers or other materials
have been used on, applied to or disposed of by Seller on the Real Property in
material violation of any Environmental Laws (other than normal office, cleaning
and maintenance supplies in reasonable quantities used and/or stored
appropriately in the buildings or improvements on the Real Property).
(i) With respect to the Station or the Real Property, Seller
has disposed of all waste in full compliance with all Environmental Laws and, to
the best of Seller's knowledge, there is no existing condition that may form the
basis of any present or future claim, demand or action seeking clean up of any
facility, site, location or body of water, surface or subsurface, for which the
Buyer could be liable or responsible solely as a result of the disposal of waste
at such site by a prior owner of the Real Property.
(j) Seller is in material compliance with all OSHA Laws
applicable to the Real Property and the operations of the Station.
3.15 Tower Coordinates. The current vertical elevation and geographical
coordinates of the Station's towers ("the Tower Coordinates") are as set forth
on
15
Schedule 3.15 hereto. Seller further represents and warrants that (i) the Tower
Coordinates are accurate within one (1) foot vertically and one (1) second
geographically; and (ii) the Tower Coordinates comply with and correspond to the
current vertical elevation an geographical coordinates authorized by the FAA,
FCC and any other governmental authority, including any federal, state or local
authority having jurisdiction over the Station or said towers.
3.16 Filing of Tax Returns. Seller has filed all Federal, State and
local tax returns which are required to be filed, and has paid all taxes and all
assessments to the extent that such taxes and assessments have become due, other
than such returns, taxes and assessments, the failure to file or pay would not,
individually or in the aggregate, have a material adverse effect on Buyer.
3.17 Absence of Insolvency. No insolvency proceedings of any character
including without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary, affecting
the Seller or any of the Sale Assets, are pending or, to the best knowledge of
Seller, threatened, and Seller has made no assignment for the benefit of
creditors, nor taken any action with a view to, or which would constitute the
basis for the institution of, any such insolvency proceedings.
3.18 Broker's or Finder's Fees. Except as set forth in Schedule 3.18,
no agent, broker, investment banker or other person or firm acting on behalf of
or under the authority of Seller or any affiliate of Seller is or will be
entitled to any broker's or finder's fee or any other commission or similar fee,
directly or indirectly, in connection with the transactions contemplated by this
Agreement.
3.19 Insurance. There is now in full force and effect with reputable
insurance companies fire and extended coverage insurance with respect to all
material tangible Sale Assets and public liability insurance, all in
commercially reasonable amounts.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization and Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California. Buyer has all requisite corporate power to own, operate and lease
its properties and carry on its business as it is now being conducted and as the
same will be conducted following the Closing.
4.2 Authorization and Binding Effect of Documents. Buyer's execution
and delivery of, and the performance of its obligations under, this Agreement
and each of
16
the other Documents, and the consummation by Buyer of the transactions
contemplated hereby and thereby, have been duly authorized and approved by all
necessary corporate action on the part of Buyer. This Agreement and each of the
other Documents to be executed by Buyer have been, or at or prior to the Closing
will be, duly executed by Buyer. The Documents, when executed and delivered by
the parties hereto, will constitute the valid and legally binding agreement of
Buyer, enforceable against Buyer in accordance with their terms, except as may
be limited by bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors' rights generally, and except as may be limited by
general principles of equity (regardless of whether such enforceability is
sought in a proceeding in equity or at law).
4.3 Absence of Conflicts. Buyer's execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents and the consummation by Buyer of the transaction contemplated hereby
and thereby:
(a) Do not in any material respect (with or without the giving
of notice or the passage of time or both) violate (or result in the creation of
any claim, lien, charge or
encumbrance on any of the assets or properties of Buyer under) any provision of
law, rule or regulation or any order, judgment, injunction, decree or ruling
applicable to Buyer in any manner which would have a material adverse effect on
the assets, business, operation or financial condition or results of operations
of Buyer;
(b) Do not (with or without the giving of notice or the
passage of time or both) conflict with or result in a breach or termination of,
or constitute a default or give rise to a right of termination or acceleration
under, the articles of incorporation or bylaws of Buyer or any lease, agreement,
commitment, or other instrument which Buyer is a party to, bound by, or by which
any of its assets or properties may be bound.
4.4 Governmental Consents and Consents of Third Parties. Except for the
required consent of the FCC, Buyer's execution and delivery of, and the
performance of its obligations under, this Agreement and each of the other
Documents and the consummation by Buyer of the transaction contemplated hereby
and thereby, do not require the consent, waiver, approval, permit, license,
clearance or authorization of, or any declaration or filing with, any court or
public agency or other authority, or the consent of any person under any
agreement, arrangement or commitment of any nature to which Buyer is a party or
by which it is bound, the failure of which to obtain would have a material
adverse effect on the assets, business, operation or financial condition or
results of operations of Buyer.
4.5 Qualification.
(a) Buyer has no knowledge after due inquiry of any facts
concerning Buyer or any other person with an attributable interest in Buyer (as
such term is defined under the Rules and Regulations) which, under present law
(including the Act) and the
17
Rules and Regulations, would (i) disqualify Buyer from being the holder of the
FCC Licenses, the owner of the Sale Assets or the operator of the Station upon
consummation of the transactions contemplated by this Agreement, or (ii) raise a
substantial and material question of fact (within the meaning of Section 309(e)
of the Act) respecting Buyer's qualifications.
(b) Without limiting the foregoing Subsection (a), Buyer shall
make the affirmative certifications provided in Section III of FCC Form 314 at
the time of filing of such form with the FCC as contemplated by Section 5.2.
4.6 Broker's or Finder's Fees. Except as set forth in Schedule 3.18, no
agent, broker, investment banker, or other person or firm acting on behalf of or
under the authority or Buyer or any affiliate of Buyer is or will be entitled to
any broker's or finder's fee or any other commission or similar fee, directly or
indirectly, in connection with transactions contemplated by this Agreement.
4.7 Litigation. There are no legal, administrative, arbitration or
other proceedings or governmental investigations pending or, to the knowledge of
Buyer, threatened against Buyer that would give any third party the right to
enjoin the transactions contemplated by this Agreement.
ARTICLE V
TRANSACTIONS PRIOR TO THE CLOSING DATE
5.1 Conduct of the Station's Business Prior to the Closing Date. Seller
covenants and agrees with Buyer that between the date hereof and the Closing
Date, unless the Buyer otherwise agrees in writing (which agreement shall not be
unreasonably withheld), Seller shall:
(a) Use reasonable commercial efforts to maintain insurance
upon all of the tangible Sale Assets in such amounts and of such kind comparable
to that in effect on the date hereof with respect to such Sale Assets and with
respect to the operation of the Station, with insurers of substantially the same
or better financial condition;
(b) Operate the Station and otherwise conduct its business in
all material respects in accordance with the terms or conditions of its FCC
Licenses, the Rules and
Regulations, the Act and all other rules and regulations, statutes, ordinances
and orders of all governmental authorities having jurisdiction over any aspect
of the operation of the Station, except where the failure to so operate the
Station would not have a material adverse effect on the Sale Assets or the
operation of the Station or on the ability of Seller to consummate the
transactions contemplated hereby;
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(c) Comply in all material respects with all Station
Agreements now or hereafter existing which are material, individually or in the
aggregate, to the operation of the Station;
(d) Promptly notify Buyer of any material default by, or claim
of default against, any party under any Station Agreements which are material,
individually or in the aggregate, to the operation of the Station, and any event
or condition which, with notice or lapse of time or both, would constitute an
event of default under such Station Agreements;
(e) Not mortgage, pledge or subject to any Lien other than a
Permitted Lien (except in the ordinary course of business) any of the Sale
Assets;
(f) Not sell, lease or otherwise dispose of, nor agree to
sell, lease or otherwise dispose of, any of the Sale Assets, except for
dispositions in the ordinary course of business;
(g) Not amend or terminate any Station Agreement, other than
in the ordinary course of business;
(h) Not introduce any material change with respect to the
operation of the Station including, without limitation, any material changes in
the broadcast hours of the Station or any other material change in the Station's
programming policies, except such changes as in the sole discretion of Seller,
exercised in good faith after consultation with Buyer, are required by the
public interest;
(i) Notify Buyer of any material litigation pending or
threatened against Station or Seller or any material damage to or destruction of
any assets included or to be included in the Sale Assets of which Seller
receives actual knowledge.
5.2 Governmental Consents. Seller and Buyer shall file with the FCC,
within five (5) business days after the execution of this Agreement, such
applications and other documents in the name of Seller or Buyer, as appropriate,
as may be necessary or advisable to obtain the FCC Order. Seller and Buyer shall
take all commercially reasonable steps necessary to prosecute such filings with
diligence and shall diligently oppose any objections to, appeals from or
petitions to reconsider such approval of the FCC, to the end that the FCC Order
and a Final Action with respect thereto may be obtained as soon as practicable;
provided, however, that in the event the application for assignment of the FCC
Licenses has been designated for hearing, either Buyer or Seller may elect to
terminate this Agreement pursuant to Section 10.1(c). Buyer shall not knowingly
take, and Seller covenants that Seller shall not knowingly take, any action that
party knows or has reason to know would materially and adversely affect or
materially delay issuance of the FCC Order or materially and adversely affect or
materially delay its becoming a Final Action without a Material Adverse
Condition, unless such action is
19
requested or required by the FCC, its staff or the Rules and Regulations. Should
Buyer or Seller become aware of any facts which could reasonably be expected to
materially and adversely affect or materially delay issuance of the FCC Order
without a Material Adverse Condition (including but not limited to, in the case
of Buyer, any facts which would reasonably be expected to disqualify Buyer from
controlling the Station), such party shall promptly notify the other party
thereof in writing and both parties shall cooperate to take all steps necessary
or desirable to resolve the matter expeditiously and to obtain the FCC's
approval of matters pending before it.
5.3 Other Consents. Seller shall use its reasonable best efforts to
obtain the consent or waivers to the transactions contemplated by this Agreement
required under any assumed Station Agreements; provided that Seller shall not be
required to pay or grant any material consideration in order to obtain any such
consent or waiver.
5.4 Tax Returns and Payments.
(a) All taxes pertaining to ownership of the Sale Assets or
operation of the Station prior to the Closing Date will be timely paid; provided
that Seller shall not be required to pay any such tax so long as the validity
thereof shall be contested in good faith by appropriate proceedings and Seller
shall have set aside adequate reserves with respect to any such tax.
5.5 Access Prior to the Closing Date. Prior to the Closing, Buyer and
its representatives may make such reasonable investigation of the assets and
business of Seller as it may desire; and Seller shall give to Buyer, its
engineers, counsel, accountants and other representatives reasonable access
during normal business hours throughout the period prior to the Closing to
personnel and all of the assets, books, records and files of or pertaining to
the Station, provided that (i) Buyer shall give Seller reasonable advance notice
of each date on which Buyer or any such other person or entity desires such
access, (ii) each person (other than an officer of Buyer) shall, if requested by
Seller, be accompanied by an officer or their representative of Buyer approved
by Seller, which approval shall not be unreasonably withheld, (iii) the
investigations at the offices of Seller shall be reasonable in number and
frequency, and (iv) all investigations shall be conducted in such a manner as
not to physically damage any property or constitute a disruption of the
operation of the Station or Seller. Seller shall furnish to Buyer during such
period all documents and copies of documents and information concerning the
business and affairs of Seller and the Station as Buyer may reasonably request.
5.6 Confidentiality; Press Release. All information, data and materials
furnished or to be furnished to either party with respect to the other party in
connection with this transaction or pursuant to this Agreement are confidential.
Each party agrees that prior to Closing (a) it shall not disclose or otherwise
make available, at any time, any such information, data or material to any
person who does not have a confidential relationship with such party; (b) it
shall protect such information, data and material with
20
a high degree of care to prevent the disclosure thereof; and (c) if, for any
reason, this transaction is not consummated, all information, data or material
concerning the other party obtained by such party, and all copies thereof, will
be returned to the other party. After Closing, neither party will disclose or
otherwise make available to any person any of such information, data or material
concerning the other party, except as may be necessary or appropriate in
connection with the operation of the Station by Buyer. Each party shall use its
reasonable efforts to prevent the violation of any of the foregoing
confidentiality provisions by its respective representatives. Notwithstanding
the foregoing, nothing contained herein shall prohibit Buyer or Seller from:
(i) using such information, data and materials in
connection with any action or proceeding brought or any claim asserted by Buyer
or Seller in respect of any breach by the other of any representation, warranty
or covenant made in or pursuant to this Agreement; or
(ii) supplying or filing such information, data or
materials to or with the FCC or any other valid governmental or court authority
to the extent reasonably necessary to obtain any consent, waiver, amendment,
modification, approval, authorization, permit or license which may be necessary
to effectuate this Agreement, and to consummate the transaction contemplated
herein.
In the event that either party determines in good faith that a press release or
other public announcement is desirable under any circumstances, the parties
shall consult with each other to determine the appropriate timing, form and
content of such release or announcement and thereafter may make such release or
announcement.
5.7 Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its reasonable best efforts
to take all action and to do all things necessary, proper or advisable to
satisfy any condition to the parties' obligations hereunder in its power to
satisfy and to consummate and make effective as soon as practicable the
transactions contemplated by this Agreement.
5.8 FCC Reports. Seller shall continue to file, on a current basis
until the Closing Date, all reports and documents required to be filed with the
FCC with respect to the Station. Seller shall provide Buyer with copies of all
such filings within five business days of the filing with the FCC.
5.9 Conveyance Free and Clear of Liens. At or prior to the Closing,
Seller shall obtain executed releases, in suitable form for filing and otherwise
in form and substance reasonably satisfactory to Buyer, of any security
interests granted in the Sale Assets and properties as security for payment of
loans and other obligations or judgments and of any other Liens on the Sale
Assets. At the closing, Seller shall transfer and convey to Buyer all of the
Sale Assets free and clear of all Liens except Permitted Liens.
21
5.10 Environmental Assessment. Not later than forty-five (45) days
after execution of this Agreement, Buyer may obtain a Phase I ("the Phase I")
environmental assessment of the Real Property by an environmental engineer
selected by Buyer. Within fourteen (14) days after Buyer's receipt of the Phase
I, if the Phase I indicates environmental conditions may exist on, under or
affect such properties that may constitute a violation or breach of Seller's
representations and warranties contained in Section 3.14 of this Agreement or
cause the condition contained in Section 6.9 to not be satisfied, then Buyer
shall be entitled to obtain a Phase II ("the Phase II") environmental assessment
of the Real Property, or any portion thereof. (The Phase I and the Phase II, if
obtained, shall be referred to herein as the "Environmental Assessment"). Buyer
shall commission and pay the cost of such Environmental Assessment and shall
provide a copy to Seller. The Environmental Assessment shall be subject to the
confidentiality provisions of Section 5.6. If after appropriate inquiry into the
previous ownership of and uses of the Real Property consistent with good
commercial or customary practice, the engineer concludes that environmental
conditions exist on, under or affecting such properties that would constitute a
violation or breach of Seller's representations and warranties contained in
Section 3.14 of this Agreement or cause the condition contained in Section 6.9
to not be satisfied, then notwithstanding any other provisions of this Agreement
to the contrary Seller shall reimburse Buyer for the cost of the Phase II, and,
subject to the following sentence, Seller shall at its sole cost and expense (up
to a maximum amount of Twenty-Five Thousand Dollars ($25,000)) remove, correct
or remedy any condition or conditions which constitute a violation or breach of
Seller's representations and warranties contained in Section 3.14 prior to the
Closing Date and provide to Buyer at Closing a certificate from an environmental
abatement firm reasonably acceptable to Buyer that such removal, correction or
remedy has been completed so that Seller's representations and warranties
contained in Section 3.14 will be true as of the Closing Date and the condition
contained in Section 6.9 will be satisfied as of the Closing Date. In the event
the cost of removal, correction or remedy of the environmental conditions
exceeds Twenty-Five Thousand Dollars ($25,000), Buyer may elect to proceed with
the Closing but shall not be obligated to close under any circumstances which
would require Buyer to assume ownership of the Station under conditions where
there exist any uncured violations of warranties, representations or covenants
with respect to environmental matters.
If Seller is required under this Section 5.10 to remedy any violation
at a site for which a person other than Seller, such as the tenant or any other
occupant of any real property is primarily responsible under applicable law,
Buyer and Seller shall cooperate in seeking to enforce any right of contribution
or other remedy they may have against such person. Seller shall not be obligated
under this Section 5.10 to undertake any remediation unless Buyer shall have
notified Seller of the existence of the condition requiring remediation within
30 days after Buyer's receipt of the Environmental Assessment in its final form.
22
ARTICLE VI
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
Buyer's obligation to close the transaction contemplated by this
Agreement is subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions, unless waived by Buyer in writing:
6.1 Accuracy of Representations and Warranties; Closing Certificate.
(a) The representations and warranties of Seller contained in
this Agreement or in any other Document shall be complete and correct in all
material respects on the date hereof and at the Closing Date with same effect as
though made at such time except for changes that are not materially adverse to
the Station or the Sale Assets taken as a whole, and except as follows:
(i) as to Section 3.14(d), (f), (g), (h) or (i) the
accuracy or inaccuracy of this representation as of the date of this Agreement
or as of the Closing Date shall not be a condition to Closing if (A) the item is
removed on or before Closing, all costs associated with such removal, clean up
or other action have been paid in full by Seller and all required certificates
of removal or completion or other certificates demonstrating that all required
action under Section 5.10 has been completed have been received from applicable
regulatory authorities, or (B) to the extent removal, clean up or other action
cannot be completed and/or governmental or regulatory certificates obtained
prior to Closing (which Closing may be delayed by Seller by not more than thirty
(30) days if Seller reasonably determines that any necessary action can be
completed during such delay period), a portion of the Purchase Price equal to
the estimated costs of completion and/or certification (to be determined by an
independent consulting engineer) is escrowed under an agreement negotiated in
good faith by the parties and the amount so escrowed is used to pay all costs of
completion; provided, however, that in no event shall Buyer be required to
consummate the Agreement if the removal, clean up or other action would likely
result in a disruption of Buyer's ability to broadcast at substantially full
power from its transmitter site for material periods of time;
(ii) as to Section 3.14(j), the accuracy or
inaccuracy of this representation shall not be a condition to Closing if the
noncompliance is cured on or before Closing or if the Seller remains liable for
the noncompliance after the Closing; and
(iii) as to Sections 3.6 and 3.7, the accuracy or
inaccuracy of the representations(s) shall not be a condition to Closing if the
amount to cure or repair the matter is reasonably estimated at less than Fifty
Thousand Dollars ($50,000) in the aggregate and the Purchase Price is reduced
accordingly (if the amount can be accurately
23
determined) or a reasonable reserve is placed into escrow pending cure or repair
or Buyer and Seller make other arrangements which are reasonable under the
circumstances. In addition, Seller may elect to delay Closing for a period not
to exceed thirty (30) days if Seller reasonably determines that any action
necessary to cure or repair can be completed during such delay period; provided
that the reduction or escrow described in the preceding sentence shall apply to
the extent any cure or repair is not completed within such delay period.
(b) Seller shall have delivered to Buyer on the Closing Date a
certificate that (i) the condition specified in Section 6.1(a) is satisfied as
of the Closing Date, and (ii) except as set forth in such certificate (none of
which exceptions shall be materially adverse to the Station, the Sale Assets or
Seller's ability to consummate the transaction contemplated hereby), the
condition specified in Section 6.2 is satisfied as of the Closing Date, and
further except that as to Section 6.2, non-satisfaction of the condition(s)
shall not be a condition to Closing if the amount to cure or repair the matter
is reasonably estimated at less than Fifty Thousand Dollars ($50,000) in the
aggregate and the Purchase Price is reduced accordingly (if the amount can be
accurately determined) or a reasonable reserve is placed into escrow pending
cure or repair or Buyer and Seller make other arrangements which are reasonable
under the circumstances. In addition, Seller may elect to delay Closing for a
period not to exceed thirty (30) days if Seller reasonably determines that any
action necessary to cure or repair can be completed during such delay period;
provided that the reduction or escrow described in the preceding sentence shall
apply to the extent any cure or repair is not completed within such delay
period.
6.2 Performance of Agreements. Seller shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
6.3 FCC and Other Consents.
(a) The FCC Order shall have been issued by the FCC and shall
have become a Final Action without any Material Adverse Condition.
(b) Conditions which the FCC Order or any order, ruling or
decree of any judicial or administrative body relating thereto or in connection
therewith specifies and requires to be satisfied by Seller prior to transfer of
the FCC Licenses to Buyer shall have been satisfied by Seller.
(c) All other authorizations, consents, approvals and
clearances of federal, state or local governmental agencies required to permit
the consummation by Buyer of the transactions contemplated by this Agreement
including, without limitation, the assignment of any FCC Authorization requested
by Buyer, shall have been obtained; all statutory and regulatory requirements
for such consummation shall have been fulfilled;
24
and no such authorizations, consents, approvals or clearances shall contain any
conditions that individually or in the aggregate would have a material adverse
effect on the operations of the Station.
6.4 Adverse Proceedings. Neither Buyer nor any affiliate of Buyer shall
be subject to any ruling, decree, order or injunction restraining, imposing
material limitations on or prohibiting (i) the consummation of the transactions
contemplated hereby or (ii) its participation in the operation, management,
ownership or control of the Station; and no litigation, proceeding or other
action seeking to obtain any such ruling, decree, order or injunction shall be
pending or shall have been threatened in writing. No governmental authority
having jurisdiction shall have notified any party to this Agreement that
consummation of the transaction contemplated hereby would constitute a violation
of the laws of the United States or of any state or political subdivision or
that it intends to commence proceedings to restrain such consummation or to
force divestiture, unless such governmental authority shall have withdrawn such
notice. No governmental authority having jurisdiction shall have commenced any
such proceeding.
6.5 Opinion of Seller's FCC Counsel. Buyer shall have received from
Seller's FCC counsel an opinion, dated the Closing Date, in form and substance
reasonably satisfactory to Buyer's FCC counsel, to the effect that:
(a) The FCC Licenses listed on Schedule 3.8 are valid, in good
standing and in full force and effect and include all licenses, permits and
authorizations which are necessary under the Rules and Regulations for Seller to
operate the Station in the manner in which the Station is currently being
operated.
(b) To counsel's knowledge, no condition has been imposed by
the FCC as part of any FCC License which is not set forth on the face thereof as
issued by the FCC or contained in the Rules and Regulations applicable generally
to stations of the type, nature, class or location of the Station.
(c) No proceedings are pending or, to counsel's knowledge, are
threatened which may result in the revocation, modification, non-renewal of,
suspension of, or the imposition of a Material Adverse Condition upon, any of
the FCC Licenses, the denial of any pending applications, the issuance of any
cease and desist order or the imposition of any fines, forfeitures or other
administrative actions by the FCC with respect to the Station or its operation,
other than proceedings affecting the radio broadcasting industry in general.
In rendering such opinion, counsel shall be entitled to rely upon
Seller's representations and warranties in this Agreement and to limit its
inquiry to its files and such FCC files and records as are available to it as of
10:00 o'clock A.M. Eastern time the business day immediately preceding the
Closing Date. Counsel may state that, as to
25
any factual matters embodied in, or forming a basis for any legal opinion
expressed in, such opinion, counsel's knowledge is based solely on such inquiry.
6.6 Other Consents. Seller shall have obtained in writing and provided
to Buyer on or before the Closing Date, without any condition materially adverse
to Buyer or the Station, the consents or waivers to the transactions
contemplated by this Agreement required under those Station Agreements which
Buyer has elected to assume.
6.7 Delivery of Closing Documents. Seller shall have delivered or
caused to be delivered to Buyer on the Closing Date each of the Documents
required to be delivered pursuant to Section 8.2.
6.8 No Cessation of Broadcasting.
(a) Between the date hereof and the Closing Date, the Station
shall not have for a period of more than ten (10) days in the aggregate (i)
ceased broadcasting on its authorized frequency, (ii) lost substantially all of
its normal broadcasting capability or (iii) been broadcasting at a power level
of 50% or less of its FCC authorized level. Seller shall promptly notify Buyer
of the occurrence of any one or more of the foregoing events or conditions, and
the non-fulfillment of the condition precedent set forth in this Subsection
caused by the occurrence of the events specified in Seller's notice shall be
deemed waived by Buyer unless, within fifteen (15) days after Buyer's receipt of
Seller's written notice, Buyer notifies Seller in writing to the contrary.
(b) In addition, during the five (5) days immediately
preceding the Closing Date, the Station shall have been operating continuously
with substantially all of its normal broadcasting capability except for
cessation or reductions for insignificant periods of time resulting from
occurrences (such as lightning strikes) over which Seller has no control. Seller
shall have the right to delay Closing for a period not to exceed thirty (30)
days if Seller reasonably determines that any action to restore the Station
substantially all of its normal broadcasting capability can be completed during
such delay period.
6.9 Environmental Conditions. The Environmental Assessment obtained by
Buyer pursuant to Section 5.10 hereof shall not have disclosed any material
violation of any Environmental Law at the Real Property which is not removed or
cured by Seller prior to Closing.
ARTICLE VII
CONDITIONS PRECEDENT OF THE
OBLIGATION OF SELLER TO CLOSE
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The obligation of Seller to close the transaction contemplated by this Agreement
is subject to the satisfaction, on or prior to the closing Date, of each of the
following conditions, unless waived by Seller in writing:
7.1 Accuracy of Representations and Warranties.
(a) The representations and warranties of Buyer contained in
this Agreement shall be complete and correct in all material respects on the
date hereof and at the Closing Date with the same effect as though made at such
time except for changes that are not materially adverse to Seller.
(b) Buyer shall have delivered to Seller on the Closing Date a
certificate that (i) the condition specified in Section 7.1(a) is satisfied as
of the Closing Date, and (ii) except as set forth in such certificate (none of
which exceptions shall be materially adverse to Buyer's ability to consummate
the transaction contemplated hereby), the conditions specified in Section 7.2
are satisfied as of the Closing Date.
7.2 Performance of Agreements. Buyer shall have performed in all
material respects all of its covenants, agreements and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing Date.
7.3. FCC and Other Consents.
(a) The FCC Order shall have been issued by the FCC and shall
have become effective under the rules of the FCC.
(b) Conditions which the FCC Order or any order, ruling or
decree of any judicial or administrative body relating thereto or in connection
therewith specifies and requires to be satisfied by Buyer prior to transfer of
the FCC Licenses to Buyer shall have been satisfied by Buyer.
(c) All other authorizations, consents, approvals and
clearances of all federal, state and local governmental agencies required to
permit the consummation by Seller of the transactions contemplated by this
Agreement shall have been obtained; all statutory and regulatory requirements
for such consummation shall have been fulfilled; and no such authorizations,
consents, approvals or clearances shall contain any conditions that individually
or in the aggregate would have any material adverse effect on Seller.
7.4 Adverse Proceedings. Seller shall not be subject to any ruling,
decree, order or injunction restraining, imposing material limitations on or
prohibiting the consummation of the transactions contemplated hereby. No
governmental authority having jurisdiction shall have notified any party to this
Agreement that consummation of the transactions contemplated hereby would
constitute a violation of the laws of the
27
United States or of any state or political subdivision or that it intends to
commence proceedings to restrain such consummation or to force divestiture,
unless such governmental authority shall have withdrawn such notice. No
governmental authority having jurisdiction shall have commenced any such
proceeding.
7.5 Delivery of Closing Documents and Purchase Price. Buyer shall have
delivered or caused to be delivered to Seller on the Closing Date each of the
Documents required to be delivered pursuant to Section 8.3, and Seller shall
have received payment of the Purchase Price with the form of payment set forth
in Section 2.5.
ARTICLE VIII
CLOSING
8.1 Time and Place. Unless otherwise agreed to in advance by the
parties, Closing shall take place in person or via facsimile at the offices of
Buyer's counsel in Camarillo, California, or at such other place as the parties
agree, at 10:00 A.M. Pacific Time on the date (the "Closing Date") that is the
later of (i) the fifth Business Day after the Applicable Date or (ii) the date
as soon as practicable following satisfaction or waiver of the conditions
precedent hereunder. The "Applicable Date" shall be the date on which issuance
of the FCC Order without any Material Adverse Condition has become a Final
Action.
8.2 Documents to be Delivered to Buyer by Seller. At the Closing,
Seller shall deliver or cause to be delivered to Buyer the following:
(a) Certified resolutions of Seller's Board of Directors (and
shareholders, if required by applicable law) approving the execution and
delivery of this Agreement and each of the other documents and authorizing the
consummation of the transactions contemplated hereby and thereby.
(b) The certificate required by Section 6.1(b).
(c) A xxxx of sale and other instruments of transfer and
conveyance transferring to Buyer the Tangible Personal Property.
(d) Executed releases, in suitable form for filing and
otherwise in form and substance reasonably satisfactory to Buyer, of any
security interests granted in the Sale Assets as security for payment of loans
and other obligations and of any other Liens (other than Permitted Liens).
(e) Required instruments of transfer and conveyance
transferring to Buyer the Real Property.
28
(f) An instrument or instruments assigning to Buyer all right,
title and interest of Seller in and to all Station Agreements being assumed by
Buyer.
(g) An instrument assigning to Buyer all right, title and
interest of Seller in the FCC Licenses, all pending applications relating to the
station before the FCC, and any remaining Sale Assets not otherwise conveyed.
(h) The opinion of Seller's FCC counsel, dated the Closing
Date, to the effect set forth in Section 6.5.
(i) Such additional information and materials as Buyer shall
have reasonably requested, including without limitation, evidence that all
consents and approvals required as a condition to Buyer's obligation to close
hereunder have been obtained.
8.3 Documents to be Delivered to Seller by Buyer. At the Closing, Buyer
shall deliver or cause to be delivered to Seller the following:
(a) Certified resolutions of Buyer's Board of Directors
approving the execution and delivery of this Agreement and each of the other
Documents and authorizing the consummation of the transaction contemplated
hereby and thereby.
(b) The Purchase Price as set forth in Section 2.5.
(c) The agreement of Buyer assuming the obligations under any
Station Agreements being assumed by Buyer.
(d) The certificate required under Section 7.1(b).
Such additional information and materials as Seller shall have
reasonably requested.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
9.1 Survival of Representation and Warranties. All representations,
warranties, covenants and agreements contained in this Agreement or in any other
Document shall survive the Closing for the Survival Period and the Closing shall
not be deemed a waiver by either party of the representations, warranties,
covenants or agreements of the other party contained herein or in any other
Document. No claim may be brought under this Agreement or any other Document
unless written notice describing in reasonable detail the nature and basis of
such claim is given on or prior to the last day
29
of the Survival Period; except for claims by Buyer for any amounts owed by
Seller to Buyer under Section 9.3(a)(v), which claims may be made at any time.
In the event such a notice is so given, the right to indemnification with
respect thereto under this Article shall survive the Survival Period until such
claim is finally resolved and any obligations with respect thereto are fully
satisfied. Notwithstanding the foregoing, the provisions for survival and the
making of claims shall not apply to the agreements whereby Buyer assumes the
obligations under Subsection 8.3(c), each of which agreements shall be governed
by its own terms.
9.2 Indemnification in General. Buyer and Seller agree that the rights
to indemnification and to be held harmless set forth in this Agreement shall, as
between the parties hereto and their respective successors and assigns, be
exclusive of all rights to indemnification and to be held harmless that such
party (or its successors or assigns) would otherwise have by statute, common law
or otherwise.
9.3 Indemnification by Seller.
(a) Subject to the provisions of Subsection (b) below and
Section 10.2 below, Seller shall indemnify and hold harmless Buyer and any
officer, director, agent, employee and affiliate thereof with respect to any and
all demands, claims, actions, suits, proceedings, assessments, judgments, costs,
losses, damages, liabilities and expenses (including reasonable attorneys' fees)
relating to or arising out of:
(i) Any breach or non-performance by Seller of any of
its representations, warranties, covenants or agreements set forth in this
Agreement or any other Documents; or
(ii) The ownership or operation by Seller of the
Station or the Sale Assets on or prior to the Closing Date; or
(iii) All other liabilities and obligations of Seller
other than the Assumed Obligations; or
(iv) Noncompliance by Seller with the provisions of
the Bulk Sales Act, if applicable, in connection with the transaction
contemplated hereby; or
(v) Any violation of any Environmental Laws by Seller
or the existence of any Hazardous Materials on the Real Property on or before
Closing.
(b) Except for any amounts owed by Seller to Buyer under
Section 9.3(a) (iv), Section 9.3(a)(v) and Section 2.7, if Closing occurs,
Seller shall not be obligated (a) until the aggregate amount of such claims,
liabilities, damages, losses, costs and expenses exceeds Buyer's Threshold
Limitation, in which case Buyer shall then be entitled to
30
indemnification of the entire aggregate amount, or (b) for any amounts in excess
of the Purchase Price.
9.4 Indemnification by Buyer.
(a) Subject to the provisions of Subsection (b) below and
Section 10.2 below, Buyer shall indemnify and hold harmless Seller and any
officer, director, agent, employee and affiliate thereof with respect to any and
all demands, claims, actions, suits, proceedings, assessments, judgments, costs,
losses, damages, liabilities and expenses (including reasonable attorneys' fees)
relating to or arising out of:
(i) Any breach or non-performance by Buyer of any of
its representations, warranties, covenants or agreements set forth in this
Agreement or any other Document; or
(ii) The ownership or operation of the Station after
the Closing Date; or
(iii) All other liabilities or obligations of Buyer.
(b) Except for any amounts owed by Buyer to Seller under
Section 2.7, if Closing occurs, Buyer shall not be obligated (a) until the
aggregate amount of such claims, liabilities, damages, losses, costs and
expenses exceeds Seller's Threshold Limitation, in which case Seller shall then
be entitled to indemnification of the entire aggregate amount, or (b) for any
amount in excess of the Purchase Price.
9.5 Indemnification Procedures. In the event that an Indemnified Party
may be entitled to indemnification hereunder with respect to any asserted claim
of, or obligation or liability to, any third party, such party shall notify the
Indemnifying Party thereof, describing the matters involved in reasonable
detail, and the Indemnifying Party shall be entitled to assume the defense
thereof upon written notice to the Indemnified Party with counsel reasonably
satisfactory to the Indemnified Party; provided, that once the defense thereof
is assumed by the Indemnifying Party, the Indemnifying Party shall keep the
Indemnified Party advised of all developments in the defense thereof and any
related litigation, and the Indemnified Party shall be entitled at all times to
participate in the defense thereof at its own expense. If the Indemnifying Party
fails to notify the Indemnified Party of its election to defend or contest its
obligation to indemnify under this Article IX, the Indemnified Party may pay,
compromise, or defend such a claim without prejudice to any right it may have
hereunder.
ARTICLE X
TERMINATION; LIQUIDATED DAMAGES
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10.1 Termination. If Closing shall not have previously occurred, this
Agreement shall terminate upon the earliest of:
(a) the giving of written notice from Seller to Buyer, or from
Buyer to Seller, if:
(i) Seller gives such termination notice and is not
at such time in material default hereunder, or Buyer gives such termination
notice and Buyer is not at such time in material default hereunder; and
(ii) Either:
(A) any of the representations or warranties
contained herein of Buyer (if such termination notice is given by Seller), or of
Seller (if such termination notice is given by Buyer), are inaccurate in any
respect and materially adverse to the party giving such termination notice
unless the inaccuracy has been induced by or is the result of actions or
omissions of the party giving such termination notice; or
(B) Any material obligation to be performed
by Buyer (if such termination notice is given by Seller) or by Seller (if such
termination notice is given by Buyer) is not timely performed in any material
respect unless the lack of timely performance has been induced by or is the
result of actions or omissions of the party giving such termination notice; or
(C) Any condition (other than those referred
to in foregoing Clauses (A) and (B)) to the obligation to close the transaction
contemplated herein of the party giving such termination notice has not been
timely satisfied; and any such inaccuracy, failure to perform or
non-satisfaction of a condition neither has been cured nor satisfied within
twenty (20) days after written notice thereof from the party giving such
termination notice nor waived in writing by the party giving such termination
notice.
(b) Written notice from Seller to Buyer, or from Buyer to
Seller, at any time after June 30, 1997 provided that termination shall not
occur upon the giving of such termination notice by Seller if Seller is at such
time in material default hereunder or upon the giving of such termination notice
by Buyer if Buyer is at such time in material default hereunder.
(c) Written notice from Seller to Buyer, or from Buyer to
Seller, at any time following a determination by the FCC that the application
for consent to assignment of the FCC Licenses has been designated for hearing;
provided that the party which is the subject of the hearing (or whose alleged
actions or omissions resulted in the designation for hearing) may not elect to
terminate under this subsection (c).
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(d) The written election by Buyer under Article XI.
10.2 Obligations Upon Termination.
(a) In the event this Agreement is terminated pursuant to
Section 10.1(a)(ii)(A) or (B), the aggregate liability of Buyer for breach
hereunder shall be limited as provided in Subsections (c) and (e), below and the
aggregate liability for Seller for breach hereunder shall be limited as provided
in Subsections (d) and (e), below. In the event this Agreement is terminated for
any other reason, neither party shall have any liability hereunder.
(b) Upon termination of this Agreement, Buyer shall be
entitled to the return of the Xxxxxxx Money from the Escrow Agent under the
Escrow Agreement (i) if such termination is effected by Buyer's giving of valid
written notice to Seller pursuant to Subsections 10.1(a), (b) (c) or (d) , or
(ii) if such termination is effected by Seller's giving of valid written notice
to Buyer pursuant to Subsections 10.1(a)(ii)(C), 10.1(b) or 10.1(c). If Buyer is
entitled to the return of the Xxxxxxx Money, Seller shall cooperate with Buyer
in taking such action as is required under the Escrow Agreement in order to
effect such return from the Escrow Agent.
(c) If this Agreement is terminated by Seller's giving of
valid written notice to Buyer pursuant to Subsection 10.1(a)(ii)(A) or (B),
Buyer agrees that Seller shall be entitled to receive upon such termination, as
liquidated damages and not as a penalty, the Xxxxxxx Money ("Liquidated Damages
Amount"). SELLER'S RECEIPT OF THE XXXXXXX MONEY SHALL CONSTITUTE PAYMENT OF
LIQUIDATED DAMAGES HEREUNDER AND NOT A PENALTY, AND SHALL BE SELLER'S SOLE
REMEDY AT LAW OR IN EQUITY FOR BUYER'S BREACH HEREUNDER IF CLOSING DOES NOT
OCCUR. BUYER AND SELLER EACH ACKNOWLEDGE AND AGREE THAT THE LIQUIDATED DAMAGE
AMOUNT IS REASONABLE IN LIGHT OF THE ANTICIPATED HARM WHICH WILL BE CAUSED BY
BUYER'S BREACH OF THIS AGREEMENT, THE DIFFICULTY OF PROOF OF LOSS, THE
INCONVENIENCE AND NON-FEASIBILITY OF OTHERWISE OBTAINING AN ADEQUATE REMEDY, AND
THE VALUE OF THE TRANSACTION TO BE CONSUMMATED HEREUNDER.
(d) Notwithstanding any provision of this Agreement to the
contrary, but subject to the provisions of the following sentences, if this
Agreement is terminated by Buyer's giving of written notice to Seller pursuant
to Subsection 10.1(a), Buyer shall not be entitled to damages or indemnification
from Seller. Subject to the following sentence, if Seller attempts to terminate
this Agreement under circumstances where it is not entitled to do so, or if
Seller, by its own action, causes a breach of warranty or fails to satisfy a
condition (including without limitation a refusal to consummate the transaction
after Buyer has satisfied all conditions to Seller's obligation to close and
Buyer has
33
demonstrated its willingness and ability to close on the terms set forth in this
Agreement and Buyer is not in default hereunder) with the intent of creating a
situation whereby Buyer elects to terminate under Section 10.1(a) and Buyer does
so elect to terminate, the monetary damages, if any, to which Buyer shall be
entitled shall be limited to direct and actual damages and shall in no event
exceed Seventy Five Thousand Dollars ($75,000) in the aggregate. If a
circumstance described in the preceding sentence should arise and if Buyer
establishes that the action of Seller described therein was taken intentionally
in order to allow Seller to sell or enter into negotiations to sell the Station
to another party, the damages to which Buyer shall be entitled shall not be
limited to direct and actual damages.
(e) In any dispute between Buyer and Seller as to which party
is entitled to all or a portion of the Xxxxxxx Money, the prevailing party shall
receive, in addition to that portion of the Xxxxxxx Money to which it is
entitled, an amount equal to interest on that portion at the rate of 10% per
annum, calculated from the date the prevailing party's demand for all or a
portion of the Xxxxxxx Money is received by the Escrow Agent.
10.3 Termination Notice. Each notice given by a party pursuant to
Section 10.1 to terminate this Agreement shall specify the Subsection (and
clause or clauses thereof) of Section 10.1 pursuant to which such notice is
given.
ARTICLE XI
CASUALTY
Upon the occurrence of any casualty loss, damage or destruction
material to the operation of the Station prior to the Closing, Seller shall
promptly give Buyer written notice setting forth in detail the extent of such
loss, damage or destruction and the cause thereof if known. Seller shall use its
reasonable efforts to promptly commence and thereafter to diligently proceed to
repair or replace any such lost, damaged or destroyed property. In the event
that such repair or replacement is not fully completed prior to the Closing
Date, Buyer may elect to postpone the Closing until Seller's repairs have been
fully completed or to consummate the transactions contemplated hereby on the
Closing Date, in which event Seller shall assign to Buyer the portion of the
insurance proceeds (less all reasonable costs and expenses, including without
limitation attorney's fees, expenses and court costs incurred by Seller to
collect such amounts), if any, not previously expended by Seller to repair or
replace the damaged or destroyed property (such assignment of proceeds to take
place regardless of whether the parties close on the scheduled or deferred
Closing Date) and Buyer shall accept the damaged Sale Assets in their damaged
condition. In the event the loss, damage or destruction causes or will cause the
Station to be off the air for more than seven (7) consecutive days or fifteen
(15) total days, whether or not consecutive, then Buyer may elect either (i) to
consummate the transactions contemplated hereby on the Closing Date, in which
event Seller shall assign to Buyer the portion of the insurance proceeds (less
all reasonable costs and expenses,
34
including without limitation attorney's fees, expenses and court costs, incurred
by Seller to collect such amounts), if any, not previously expended by Seller to
repair or replace the damaged or destroyed property, and Buyer shall accept the
damaged Sale Assets in their damaged condition, or (ii) to terminate this
Agreement.
ARTICLE XII
CONTROL OF STATION
Between the date of this Agreement and the Closing Date, Buyer shall
not control, manage or supervise the operation of the Station or conduct of its
business, all of which shall remain the sole responsibility and under the
control of Seller, subject to Seller's compliance with this Agreement.
ARTICLE XIII
MISCELLANEOUS
13.1 Further Actions. From time to time before, at and after the
Closing, each party, at its expense and without further consideration, will
execute and deliver such documents to the other party as the other party may
reasonably request in order more effectively to consummate the transactions
contemplated hereby.
13.2 Access After the Closing Date. After the Closing and for a period
of twelve (12) months, Buyer shall provide Seller, Seller's counsel, accountants
and other representatives with reasonable access during normal business hours to
the books, records, property, personnel, contracts, commitments and documents of
the Station pertaining to transactions occurring prior to the Closing Date when
requested by Seller, and Buyer shall retain such books and records for the
normal document retention period of Buyer. At the request and expense of Seller,
Buyer shall deliver copies of any such books and records to Seller.
13.3 Payment of Expenses.
(a) Any fees assessed by the FCC in connection with the
filings contemplated by Section 5.2(a) or consummation of the transactions
contemplated hereby shall be shared equally between Seller and Buyer.
(b) All state or local sales or use, stamp or transfer, grant
and other similar taxes payable in connection with consummation of the
transactions contemplated hereby shall be paid by the party primarily liable
under applicable law to pay such tax.
(c) Except as otherwise expressly provided in this Agreement,
each of the parties shall bear its own expenses, including the fees of any
attorneys and accountants
35
engaged by such party, in connection with this Agreement and the consummation of
the transactions contemplated herein.
13.4 Specific Performance. Seller acknowledges that the Station is of a
special, unique, and extraordinary character, and that any breach of this
Agreement by Seller could not be compensated for by damages. Accordingly, if
Seller shall breach its obligations under this Agreement, Buyer shall be
entitled, in addition to any of the remedies that it may have, to enforcement of
this Agreement (subject to obtaining any required approval of the FCC) by decree
of specific performance or injunctive relief requiring Seller to fulfill its
obligations under this Agreement. In any action by Buyer to equitably enforce
the provisions of this Agreement, Seller shall waive the defense that there is
an adequate remedy at law or equity and agrees that Buyer shall have the right
to obtain specific performance of the terms of this Agreement without being
required to prove actual damages, post bond or furnish other security.
13.5 Notices. All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered by
courier or sent by registered or certified mail, first class, postage prepaid,
or by telex, cable, telegram, facsimile machine or similar written means of
communication, addressed as follows:
(a) if to Seller, to:
Radio Systems of Philadelphia, Inc.
c/o American Radio Systems
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, President
Facsimile: (000) 000-0000
Copy (which shall not constitute notice) to:
Radio Systems of Philadelphia, Inc.
c/o American Radio Systems Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Vice President/General Counsel
Facsimile: (000) 000-0000
(b) if to Buyer, to:
Salem Communications Corporation
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxx X. Block, Esq.
Corporate Counsel
36
or such other address with respect to any party hereto as such party may from
time to time notify (as provided above) to the other party hereto. Any such
notice, demand or communication shall be deemed to have been given (i) if so
mailed, as of the close of the third (3rd) business day following the date
mailed, and (ii) if personally delivered or otherwise sent as provided above, on
the date received.
13.6 Entire Agreement. This Agreement, the Schedules and Exhibits
hereto, and the other Documents constitute the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede any prior negotiations, agreements, understandings or
arrangements between the parties with respect to the subject matter hereof.
13.7 Binding Effect; Benefits. Except as otherwise provided herein,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors or assigns. Except to the extent
specified herein, nothing in this Agreement, express or implied, shall confer on
any person other than the parties hereto and their respective successors or
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
13.8 Assignment. This Agreement and any rights hereunder shall not be
assignable by either party hereto without the prior written consent of the other
party.
13.9 Governing Law. This Agreement shall in all respects be governed by
and construed in accordance with the laws of the State of California, including
all matters of construction, validity and performance.
13.10 Bulk Sales. Buyer hereby waives compliance by Seller with the
provisions of the Bulk Sales Act and similar laws of any state or jurisdiction,
if applicable. Seller shall, in accordance with Article IX, indemnify and hold
Buyer harmless from and against any and all claims made against Buyer by reason
of such non-compliance.
13.11 Amendments and Waivers. No term or provision of this Agreement
may be amended, waived, discharged or terminated orally but only by an
instrument in writing signed by the party against whom the enforcement of such
amendment, waiver, discharge or termination is sought. Any waiver shall be
effective only in accordance with its express terms and conditions.
13.12 Severability. Any provision of this Agreement which is
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such unenforceability without invalidating the remaining
provisions hereof, and any such
37
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto hereby waive any provision of law now or
hereafter in effect which renders any provision hereof unenforceable in any
respect.
13.13 Headings. The captions in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by either party on separate counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
13.15 References. All references in this Agreement to Articles and
Sections are to Articles and Sections contained in this Agreement unless a
different document is expressly specified.
13.16 Schedules and Exhibits. Unless otherwise specified herein, each
Schedule and Exhibit referred to in this Agreement is attached hereto, and each
such Schedule and Exhibit is hereby incorporated by reference and made a part
hereof as if fully set forth herein.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written.
"SELLER" "BUYER "
RADIO SYSTEMS OF VISTA BROADCASTING, INC.
PHILADELPHIA, INC.
By:/s/Xxxxxx X. Xxxxx By:/s/Xxxx X. Xxxxxxxxx
------------------------------ ---------------------------
Xxxxxx X. Xxxxx Xxxx X. Xxxxxxxxx
President Executive Vice President
38
LIST OF SCHEDULES
Schedule 3.4 Required Consents
Schedule 3.6 Tangible Personal Property.
Schedule 3.7 Description of Real Property.
Schedule 3.8 FCC Licenses.
Schedule 3.9 Station Agreements.
Schedule 3.11 Labor Matters.
Schedule 3.13 Legal Matters.
Schedule 3.14 Environmental Matters.
Schedule 3.15 Tower Coordinates
39
