Exhibit 2.5
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 21st day of January, 1999
between MULTICULTURAL RADIO BROADCASTING, INC., a New Jersey corporation
("Seller") and NASSAU BROADCASTING PARTNERS, L.P., a Delaware limited
partnership ("Buyer").
STATEMENT OF FACTS
1. Seller is the licensee and operator of radio station WJHR-AM,
licensed to Flemington, New Jersey (the "Station").
2. Subject to the consent of the Federal Communications
Commission ("FCC"), Buyer desires to acquire the Station, and all of the assets,
leases, contracts, agreements, licenses, and other property used or useful in
the operation of the Station, with certain exceptions as provided herein, and
the Seller desires to transfer such assets to Buyer.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties intending to be legally bound hereby, agree as follows:
1 . SALE AND TRANSFER OF ASSETS.
At the Closing, Seller will sell, assign, transfer and deliver to Buyer
the following:
1.1 ASSETS TO BE TRANSFERRED. Subject to the terms and conditions
of this Agreement, on the Closing Date (as defined in Section 10.1), Seller
shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall
purchase and accept, all of the business, rights, properties and assets, real
and personal, tangible and intangible, of every type and description owned by
Seller and used or held for use in connection with the business and operations
of the Station together with all rights and privileges associated with such
assets and business of the Station, except for Excluded Assets (as defined in
Section 1.2) (collectively, the "Assets"). Without limiting the foregoing, the
Assets shall include the following:
1.1 (a) LICENSES AND AUTHORIZATIONS. Subject to prior FCC
consent, all of the FCC authorizations issued to the Seller, as listed and
described in SCHEDULE 1.1(a) with respect to the Station and their auxiliaries,
including without limitation, all rights in and to the call letters WJHR-AM and
any variations thereof, to the extent that they can be conveyed, and all
applications therefor, together with any renewals, extensions or modifications
thereof and additions thereto or applications filed between the date hereof and
the Closing Date (collectively, "Licenses"). All of Seller's interest in the
Licenses will be assigned to Buyer as hereinafter provided;
1
1.1(b) TANGIBLE PERSONAL PROPERTY. All equipment, electrical
devices, antennas, cables, vehicles, furniture, fixtures, towers, office
materials and supplies, hardware, tools, spare parts, records, tapes, discs,
carts and other tangible personal property of every kind and description owned
by Seller and used or held for use (including those not in operating condition)
in connection with the business and operations of-the Station on the Closing
Date, including without limitation those listed and described on SCHEDULE 1.1(b)
attached hereto or any replacements thereafter acquired prior to the Closing
Date (except as may be consumed in the ordinary course of business) and
including all rights under manufacturers' and vendors' warranties to the extent
transferable;
1.1(c) OWNED REAL PROPERTY. Seller currently leases the real
property which contains the radio station studio and towers, which such lease is
more fully described in Section 1.1(d) below. As part of that lease, Seller has
an option to purchase the real estate. Seller shall exercise its option to
purchase on or before 6/15/00 and close on the purchase on or before the date of
closing hereunder. At the time of closing under the Agreement, Seller agrees to
convey the real property to Buyer. Buyer agrees to pay as additional
consideration the sum of $225,000.00, plus the sum of $2,250.00 per month for
the number of months Seller holds the real estate until closing hereunder, plus
a sum equal to Seller's closing costs actually paid for the acquisition of the
real estate.
In the event Seller is unable to acquire the real
estate prior to closing, Seller shall assign its lease of the premises to Buyer.
1.1(d) LEASED REAL PROPERTY. Any of the leases of real
property with respect to real property leased by Seller and used or held for use
in connection with the business and operations of the Station on the Closing
Date, described on SCHEDULE 1. 1 (d) attached hereto, to the extent such leases
are transferable ("Leased Property"). The lease terms shall continue as set
forth in the leases for the Leased Property;
1.1(e) AGREEMENTS FOR SALE OF TIME: TRADE/BARTER AGREEMENTS.
Those orders and agreements now existing for the sale of advertising time on the
Station, to the extent of the unexpired portion thereof, for cash ("Cash
Agreements") as listed and described in SCHEDULE 1.1(e)-1; those orders,
agreements and arrangements for the exchange of advertising time, to the extent
of the unexpired portion thereof for consideration other than cash ("Trade Out
Agreements"), as listed and described in SCHEDULE 1. 1 (e)-2; all Cash
Agreements and all Trade Out Agreements entered into in the ordinary course of
business between the date hereof and the Closing Date to the extent of the
unexpired portion thereof, provided that trade payables do not exceed trade
receivables; all to the extent transferable or assignable.
1.1(f) OTHER CONTRACTS. All unexpired contracts, agreements,
arrangements, commitments or understandings, written or oral described in
SCHEDULE
2
1.1(f) (including those entered into in the ordinary course of business prior to
the Closing Date) hereto, to the extent transferable or assignable;
1.1(g) INTANGIBLE RIGHTS. Any trademarks, trade names, service
marks, franchises, patents, jingles, slogans, logotypes and other intangible
rights, owned and used or held for use by Seller on the Closing Date in
connection with the business and operations of the Station, including those
listed and described on SCHEDULE 1.1(g) hereto to the extent that Seller has the
right to use and assign them;
1.1(h) PROGRAMMING AND COPYRIGHTS. All programs and
programming materials and elements, music libraries and software of whatever
form or nature owned by Seller and used or held for use in connection with the
business and operation of the Station on the Closing Date, whether recorded on
tape or any other media or intended for live performance, and whether completed
or held in production and any related common law and statutory copyrights owned
by Seller and used or held for use in connection with the business and
operations of the Station, or licensed or sublicensed to Seller in connection
therewith, to the extent that Seller has the right to use and assign them;
1.1(i) FCC RECORDS. All FCC station logs and other records
that relate to the operation of the Station as are required to be maintained
under the rules and regulations of the FCC, including, but not limited to, an
up-to-date and complete local public file;
1.1(j) FILES AND RECORDS. All original files and other records
of Seller relating to the business and operations of the Station owned and in
the possession of Seller (other than records relating to the corporate nature of
Seller such as corporate minutes, corporate tax records and similar corporate
records), including without limitation all available schematics, blueprints,
engineering data, customer lists, reports, specifications, projections,
statistics, promotional graphics, original art work, mats, plates, negatives and
other advertising, marketing or related materials, and copies of all other
technical and financial information concerning the Station and the Assets; and
1.1(k) GOODWILL. All of Seller's goodwill in, and going
concern value of, the Station.
1.2 EXCLUDED ASSETS. There shall be excluded from the Assets, and
retained by Seller, to the extent in existence on the Closing Date the following
assets listed in SCHEDULE 1.2 (collectively, the "Excluded Assets"):
1.2(a) CASH AND INVESTMENTS. All cash on hand or in bank
accounts, and any and all other cash equivalents, including without limitation
certificates of deposit, commercial paper, treasury bills, asset or money market
accounts and all such similar
3
accounts or investments, or notes or other entitlements evidencing loans
receivable and any securities owned or held by Seller;
1.2(b) CERTAIN ASSETS. Pension, profit sharing and savings
plan and trusts and any assets thereof;
1.2(c) CONSIDERATION. The consideration delivered by Buyer to
Seller pursuant to this Agreement;
1.2(d) FILES AND RECORDS. The files and records referred to in
the parenthetical in Section 1.1 (j);
2. PURCHASE PRICE AND PAYMENT.
2.1 PURCHASE PRICE. Buyer shall at Closing pay to Seller as
consideration for all of the Assets to be sold and bought hereunder pursuant to
Section 1.1, the sum of Two Million Five Hundred Thousand Dollars
($2,500,000.00) including any sums for the real estate, if applicable, as
described in Section 1.1(c) ("Purchase Price"), including the funds to be
deposited pursuant to Section 2.2 plus the assumption of liabilities described
elsewhere in this Agreement.
2.2 XXXXXXX MONEY DEPOSIT, LIQUIDATED DAMAGES. Buyer shall
cause to be deposited the sum of One Hundred and Thirty Thousand Dollars
($130,000.00) (the "Escrow Amount") with Xxxxxxx X. Xxxxx, Esq. (the "Escrow
Agent") upon execution of this Agreement. All funds are to be held by the Escrow
Agent in an interest-bearing account until the Closing, as hereinafter defined,
with all interest thereon accruing to Buyer pursuant to the terms of the Escrow
Agreement attached hereto as EXHIBIT A. At the Closing, unless otherwise
provided herein, Escrow Agent shall deliver the Escrow Amount together with any
accrued interest thereon, to Seller in accordance with the terms of the Escrow
Agreement. The accrued interest shall be credited to the Purchase Price.
In the event of rightful termination of this Agreement pursuant to Section
14.1(a), (b) or (c) the Escrow Amount, together with any and all interest
accrued thereon, shall be returned to Buyer. In the event of rightful
termination of this Agreement by Seller as the result of a Buyer's Event of
Default as defined in Section 14.2 and Seller is not in material breach of its
obligations and representations hereunder, Buyer shall cause the Escrow Amount
("Liquidated Damages Amount") to be paid to Seller as liquidated damages, and
not as a penalty, with all interest on the Escrow Amount accruing to the benefit
of the Seller. The parties agree that the Liquidated Damages Amount constitutes
a reasonable sum considering all of the circumstances existing on the date of
this Agreement, including the relationship of the sum to the range of harm to
Seller that could be reasonably anticipated and the anticipation that proof of
actual damages
4
would be costly or inconvenient, in the event of Buyer's inability or failure to
close as provided herein. In placing their initials at the place provided below,
Buyer and Seller each specifically confirms the accuracy of the statements made
above and the fact that each was represented by counsel who explained the
consequences of this liquidated damages provision at the time this Agreement was
made.
SELLER INITIAL HERE
--------
BUYER INITIAL HERE
--------
2.3 METHOD OF PAYMENT OF PURCHASE Price. The Purchase Price shall
be paid at the Closing as follows:
2.3(a) ESCROW AMOUNT. Escrow Agent shall deliver the Escrow
Amount to Seller in accordance with the terms of the Escrow Agreement.
2.3(b) BALANCE OF PURCHASE PRICE. In addition to the Escrow
Amount to be delivered to Seller by the Escrow Agent pursuant to Subsection
2.3(a) hereof, the Buyer shall deliver to Seller a wire transfer payable as
directed by Seller in the amount of Two Million Three Hundred Seventy Thousand
Dollars ($2,370,000.00), plus any sum due for the real estate, if applicable, as
described in Section 1.1(c).
3. NO ASSUMPTION OF LIABILITIES.
The (i) leases described in Section 1.1(d), (ii) orders and agreements
described in Section 1.1(e), (iii) contracts, agreements, arrangements,
commitments and understandings described in Schedule 1.1(f) and (iv) the trade
payables (to the extent they do not exceed trade receivables) of the Seller
outstanding on the Closing Date, are herein referred to as the "Assumed
Obligations" and are the only agreements, contracts, obligations or commitments
of Seller, whether known or unknown, contingent or otherwise that are to be
assumed by Buyer as of the Closing Date. Except for the Assumed Obligations,
Seller shall be solely responsible, and there shall be no assumption of
liability by Buyer, for any agreement, contract, obligation or commitment of
Seller, whether known or unknown, contingent or otherwise, relating to either
the Station or any of the affairs of Seller, including, but not limited to, any
agreement, executed or executory, relating to the exchange of time on the
Station for goods, wares, services, promotions, merchandising or anything other
than cash. Buyer shall not be obligated to perform any contract, agreement,
obligation or commitment of Seller, whether known or unknown, contingent or
otherwise, not specifically assigned to and assumed by Buyer hereunder.
4. SELLER'S REPRESENTATIONS AND WARRANTIES.
5
As used in this Section 4, references to Seller's knowledge shall mean
Seller's knowledge after Seller has exercised due diligence in making inquiries
of its personnel. Seller represents and warrants that the following statements
as to Seller and the Assets and the Station are correct as of the date hereof
and will be correct at the Closing Date.
4.1 LICENSES, AUTHORIZATION AND COMPLIANCE THEREWITH. Seller owns
and/or has all franchises, licenses, permits, consents, approvals or
authorizations of any public or governmental agency materially necessary to the
conduct by Seller of its business as now conducted, including, but not limited
to, the Licenses described in Schedule 1. 1 (a) hereto, without any material
conflict with the rights of others, all of which are in full force and effect
and to the best knowledge of Seller subject to no lien, charge, encumbrance, or
limitation. Without material exception, Seller is in compliance with all of its
obligations with respect thereto; and no event has occurred which permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any of the foregoing or would materially adversely affect the
rights of Seller thereunder.
Except as may be provided in SCHEDULE 1.1 (a), Seller has no knowledge
of any applications or any material complaints or proceedings pending or
threatened as of the date hereof before the FCC directly relating to the
business or operation of the Station other than proceedings which generally
affect the broadcast industry. Further, on the Closing Date, the Station will,
unless otherwise provided in Section 4.8(b) below, be on the air operating at
full licensed power (consistent with the FCC's Rules and Regulations, the
Communications Act of 1934, as amended (the "Act"), and regulations promulgated
thereunder) under their present licenses. All FCC requirements for such
authority will have been met, and there will be no uncorrected FCC violations.
If notice of any such violation (other than violations that involve Buyer) is
received or if Seller hereinafter becomes aware of any such violation prior to
Closing, Seller, at its own expense, shall eliminate and cause to be removed all
such violations by the date of Closing. All returns, reports and statements
required to be filed with the FCC or other governmental agency relating to the
Station have been or will be duly and timely filed, and all said reports,
returns and statements are or will be complete and correct as filed. The "Public
Inspection File" of the Station will be complete and in full compliance with
Section 73.3526 of the FCC's Rules and Regulations on the Closing Date.
4.2 ASSETS/FEE PROPERTY.
4.2(a) ASSETS/RIGHTS, ETC. TO SELL. Seller is the owner of and
will at the Closing Date have good title to the Assets, and will on the Closing
Date have full legal right, power and authority to assign, transfer and sell the
Assets to Buyer, free and clear of all claims, security interests, mortgages,
pledges, liens and other encumbrances of every nature whatsoever. No action is
pending or, to the knowledge of Seller, threatened, which would contest the
ownership of, or right to transfer, any of the Assets. The Assets will not at
the Closing Date be subject to any contract, sale or other agreement, except as
disclosed in writing to and expressly assumed or taken
6
subject to by Buyer hereunder, and the delivery of the Assets to Buyer pursuant
to the provisions of this Agreement will transfer good and valid title thereto,
free and clear of all claims, security interests, mortgages, pledges, liens and
other encumbrances of every nature whatsoever.
4.2(b) CONDITION OF TANGIBLE PERSONAL PROPERLY. The equipment
described in SCHEDULE 1.1(b) hereto comprises all the equipment used to operate
the Station as it is presently being operated in material compliance with the
FCC's Rules and Regulations. From the date hereof until Closing, the Station and
equipment will be operated and maintained in accordance with good engineering
practices and to the best of Seller's knowledge in material compliance with all
of the FCC's Rules and Regulations. Except as disclosed in Schedule 1.1(b),
there are no material defects in any of the structures, improvements, electronic
equipment or other tangible personal assets of the Station, all of which are in
operating condition subject to normal wear and tear.
4.2(c) FEE PROPERTY. With respect to the Fee Property:
(i) Seller is not a "foreign person" as that term is
used in Internal Revenue Code Section 1445 ("IRC ss.1445"), and Seller agrees to
furnish Buyer, at or prior to Closing, an Affidavit of Non-Foreign Status or any
other documentation required under IRC ss.1445 to evidence that Seller is not a
"foreign person";
(ii) Except as listed on SCHEDULE 4.2, there are no
leases, rental agreements or other agreements relating to the Fee Property which
are to remain in effect after Buyer takes title to the Fee Property; and
(iii) Seller has not received any written notice with
respect to the Fee Property of any threatened rezoning, annexation, condemnation
or modification proceeding which proceeding is still pending.
4.3 CONTRACTS, LEASES, AGREEMENTS, ETC. Each of the contracts,
agreements, easements, licenses and leases (collectively, "Contracts") described
in Sections 1.1 (d), 1.1 (e) and 1.1 (f) hereto is as to Seller valid, binding
and enforceable in accordance with its terms and Seller is not in any material
respect in default thereunder. Except for Contracts marked with an asterisk on
Schedules 1.1(d), 1.1(e)-l, 1.1(e)-2 and 1.1(f) ("Contract Schedules"), no
consents are required to assign to Buyer Seller's interest in any such Contract.
Each such Contract may be assumed by Buyer without any material adverse change,
and is now, and on the Closing Date will be, in full force and effect.
4.4 EMPLOYEES AND AGREEMENTS RELATING TO EMPLOYMENT.
7
4.4(a) No labor union is currently certified, or otherwise
recognized, as the collective bargaining representative for any of the Station's
employees. Seller has no actual knowledge of any labor strike, or other employee
or labor controversy or dispute pending which would materially affect the
operation of the Station.
4.4(b) Seller is not, and on the Closing Date will not be,
except as disclosed on Schedule 4.4, a party to (a) any labor contract, (b) any
vacation pay, severance pay or other benefit arrangement (including ERISA or
similar plans) with its employees, or (c) any employment contract or agreement
which is not terminable upon termination notice of thirty (30) days.
4.5 LITIGATION. Except as disclosed on SCHEDULE 4.5, there are no
actions, judgments, suits, proceedings, investigations or inquiries pending or,
to the knowledge of Seller , threatened against Seller in connection with this
Station or questioning the validity of any action taken or to be taken in
connection with the implementation of the provisions of this Agreement, at law
or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, agency, court or instrumentality,
domestic or foreign. Seller does not know or have reasonable grounds to know of
any factors or circumstances which might be the basis of any action, suit or
proceeding relating to this station; and, to the best of Seller's knowledge,
except as disclosed in SCHEDULE 4.5, Seller has complied with all applicable
statutes and regulations of all governmental authorities and agencies having
jurisdiction over Seller's ownership and operation of this Station.
4.6 COMPLIANCE WITH LAW.
4.6(a) GENERALLY. Seller has complied and is in compliance in
all material respects with all laws, rules, regulations, and orders of any
governmental entity applicable to Seller, the Assets and the Fee Property,
including, without limitation, the Act and rules and regulations thereunder
("Applicable Laws"). Seller has not been charged with and is not under
investigation for any violation of Applicable Laws, nor, to the knowledge of
Seller, is there any basis for any such charge or investigation.
4.6(b) REAL ESTATE MATTERS. To Seller's best knowledge, all of
the Real Property and all structures, transmitters, towers, equipment and
improvements located thereon conform in all material respects with all
applicable laws and regulations, including, without limitation, environmental,
building and zoning laws and regulations, and no notice or actual knowledge of
any violation of zoning, building or other laws, statutes and ordinances and
regulations relating to such real property has been received or is known and
there is no proposed, pending or threatened condemnation proceeding or similar
action affecting any such Real Property.
4.6(c) HAZARDOUS MATERIALS. Except as disclosed on SCHEDULE
4.6, or as disclosed to Buyer as a result of the environmental inspection
referred to in Section
8
7.3(b), to the best of Seller's knowledge, no hazardous or toxic materials (as
hereinafter defined) exist in any structure located on, or exist on or under the
surface of the Real Property. For purposes of this Agreement, "hazardous or
toxic material" shall mean waste, substances, materials, smoke, gas, pollutants,
contaminants, asbestos or asbestos related products, PCB'S, petroleum, crude oil
(or any fraction or distillate thereof or particulate matter designated as
hazardous, toxic or dangerous, or requiring special handling, treatment or
storage whether or not designated hazardous, toxic or dangerous under any
environmental laws. For purposes of this Agreement "environmental law" shall be
interpreted to mean the Comprehensive Environmental Response Compensation and
Liability Act, any successor to such law, and/or any other applicable federal,
state, or local environmental, health or safety law, rule or regulation
concerning the treating, producing, handling, storing, releasing, spilling,
leaking, pumping, pouring, emitting, or dumping of any waste, substance,
materials, smoke, gas or particulate matter or imposing liability or standards
in connection therewith.
4.7 EXISTENCE AND POWERS; NO CONFLICT. Seller is a New Jersey
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey, and is duly authorized to conduct business in the
State of New Jersey, and has the power and authority to own or lease its
properties and to carry on business as now being conducted, and has all
requisite power and authority to enter into, deliver and perform this Agreement.
The execution, delivery, and performance of this Agreement by Seller has been
duly and validly authorized by the Board of Directors of Seller, and no other
action is required. Except as disclosed on Schedule 4.7, neither the execution
and delivery of this Agreement by Seller, nor the compliance by Seller with the
respective terms thereof: (i) will, to the best of Seller's knowledge, breach
any Applicable Laws; (ii) will conflict with or result in a breach of or
constitute a default (or an event which, with notice or lapse of time, or both,
would become a default) under any of the terms, conditions or provisions of any
judgment, order, arbitration, injunction, decree or ruling of any court or
governmental authority to which Seller or any of the Assets is subject or of
Seller's Articles of Incorporation or any agreement, commitment, arrangement,
lease, insurance policy, or other instrument to which Seller is a party or by
which it is bound; (iii) will result in the creation of any lien, equitable
lien, tax lien, mortgage, charge, security interest or other encumbrance upon
any of the Assets; (iv) to Seller's best knowledge will give to any other person
any interests or rights, including rights of termination or cancellation, in or
with respect to any of the priorities, assets, agreements, contracts or business
of Seller; (v) will result in the loss or adverse modifications of the Licenses
or any other license, franchise, permit or other governmental authorization
granted to or held by Seller; or (vi) require the consent of any person except
as disclosed in this Agreement.
4.8 OPERATION OF STATION.
4.8(a) The Station has been, and shall continue to be,
operated (1) in
9
compliance with the Licenses and the Applicable Laws, and (2) in a manner which
will not expose human beings to any level of non-ionizing radiation higher than
the levels recommended for human exposure in FCC Report & Order ET Docket 93-62,
released August 1, 1996.
4.8(b) Seller shall give prompt written notice to Buyer if (i)
the transmission of the regular broadcast programming of the Station in the
normal and usual manner is interrupted or discontinued other than as a result of
weekly routine maintenance or public utility company activity, (ii) the Station
is operated at less than seventy-five (75%) of its licensed operating power for
a period in excess of (A) twenty-four (24) consecutive hours or (B) an aggregate
of seventy-two (72) hours in any thirty (30) day period; (iii) the Station
operates at reduced power for ten (10) days, thereby requiring written
notification to the FCC pursuant to Section 73.1560(d) of the FCC Rules; or (iv)
the programming format of the Station is materially changed.
4.9 INSURANCE. Buyer will obtain any and all insurance.
Notwithstanding the foregoing, existing insurance policies, set forth on
Schedule 4.9, are now and on the Closing Date will be in effect in accordance
with their terms without default.
4.10 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 its respective assets or properties,
are pending or, to the knowledge of Seller threatened, and Seller has made no
assignment for the benefit or creditors, nor taken any action with a view to, or
which would constitute the basis for, the institution of any such insolvency
proceedings.
4.11 INTANGIBLES. Seller has the right to use all the patents,
copyrights, service or trademarks and trade names, call letters, logos, slogans
and other intangible property or rights ("Intangibles") presently used in
conjunction with the operation of the Station, together with any goodwill
associated therewith. To the best of Seller's knowledge, these Intangibles are
subject to no pending or threatened challenge and none of the Intangibles is
being infringed by the activities or operations of any third person, and none is
subject to any outstanding order, judgment, decree, stipulation or agreement
restricting the use thereof.
4.12 FINANCIAL STATEMENTS. Seller has furnished Buyer with copies
of the following financial statements: WJHR 1998 Income and Expenses and WJHR
1999 Projections and Expenses. The Financial Statements are complete and correct
in all material respects, were prepared on a GAAP basis and present fairly the
financial position and results of operation of Seller at the dates and for the
periods to which they relate. Seller represents that Seller has retained work
papers, files, ledgers and other records and that Seller will make the same
reasonably available to Buyer for purposes
10
of review of the same by Buyer or Buyer's representatives in connection with
this Agreement or Buyer's pending public offering of certain securities.
4.13 TAXES. As of the Closing Date, Seller shall have timely and
duly filed with the appropriate governmental agencies all tax returns,
declarations of estimated tax, and tax reports required to be filed by it, and
all taxes and other assessments which Seller is required to pay, withhold or
collect have been timely and duly paid, withheld and collected. There are no
present disputes as to taxes of any nature payable by Seller with respect to the
Station, and it has not filed an IRS Form 872 ("Consent Fixing Period of
Limitations Upon Assessment of Income Tax") or otherwise agreed to extend the
time for assessment of any taxes against it for any year. Any additional taxes,
interest, penalties, assessments and deficiencies that shall become due and
payable with respect to any tax return or tax obligation of Seller shall be the
sole responsibility of Seller.
4.14 ABSENCE OF CERTAIN CHANGES. There has not been (i) any
material adverse change in the property of Seller or any material labor dispute,
grievance or organizational effort affecting the Assets, taken as a whole; (ii)
any physical damage, destruction or loss (not covered by insurance) materially
and adversely affecting the Assets or business of Seller, taken as a whole;
(iii) any sale, assignment, lease or other transfer or disposition of any of the
assets or properties of Seller, except in the ordinary course of business and
with adequate replacement property being acquired as necessary; or (iv) any
waiver of any right resulting in a materially adverse affect on the Assets.
5. BUYER'S REPRESENTATIONS AND WARRANTIES.
Buyer represents and warrants that the following statements as to Buyer
are correct as of the date hereof and will be correct at the Closing Date:
5.1 FCC QUALIFICATIONS. Buyer is qualified and knows of no reason
why Buyer should not be found to be qualified to acquire the Licenses.
5.2 EXISTENCE AND POWERS; NO CONFLICT. Buyer is a limited
partnership duly formed, validly existing and in good standing under the laws of
the State of Delaware and is authorized to do business in the State of New
Jersey and has the power and authority to own or lease its properties and to
carry on business as now being conducted, and has all requisite power and
authority to enter into, deliver and perform this Agreement. The execution,
delivery, and performance of this Agreement by Buyer have been duly and validly
authorized by Buyer's corporate general partner and no other action is required.
Neither execution and delivery of this Agreement by Buyer, nor the compliance by
Buyer with the respective terms thereof: (i) will, to Buyer's best knowledge,
breach any Applicable Laws; (ii) will conflict with or result in a breach of or
constitute a default (or an event which, with notice or lapse of time, or both,
would
11
become a default), under any of the terms, conditions or provisions of, any
judgment order arbitration injunction, decree or ruling of any court or
governmental authority to which buyer is subject, or any of Buyer's partnership
agreement, or any contract commitment arrangement or agreement to which Buyer is
party or by which it may be bound; or (iii) require the consent of any person
except as disclosed in this Agreement.
5.3 DISCLOSURE. No covenant, representation or warranty made by
Buyer in this Agreement and no statement made in any certificate or document
furnished or to be furnished by Buyer in connection with the transactions
contemplated by this Agreement contains or will contain as of the date made and
the Closing Date any untrue statement of a material fact or omits or will omit
to state any material fact necessary to make such representation, warranty or
statement not misleading to Seller.
5.4 LITIGATION. Except as disclosed on SCHEDULE 5.4, there are no
actions, judgments, suits, proceedings, investigations or inquiries pending or,
to the knowledge of Buyer, threatened against or affecting Buyer or questioning
the validity of any action taken in connection with the implementation of the
provisions of this Agreement, at law or in equity, or before or by any federal,
state, municipal or other governmental department, commission, board, agency,
court or instrumentality, domestic or foreign. Buyer does not know or have
reasonable grounds to know of any factors or circumstances which might be the
basis of any action, suit or proceeding; and, to the best of Buyer's knowledge,
except as disclosed in SCHEDULE 5.4, Buyer has complied with all applicable
statutes and regulations of all governmental authorities and agencies having
jurisdiction over Buyer.
5.5 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 Buyer or any of its respective assets or properties,
are pending or, to the knowledge of Buyer, threatened, and Buyer has made no
assignment for the benefit or creditors, nor taken any action with a view to, or
which would constitute the basis for, the institution of any such insolvency
proceedings.
6. CONDUCT PRIOR TO CLOSING.
6.1 ACCESS AND INFORMATION. Upon reasonable, advance notice,
Seller shall give Buyer and its representatives reasonable access throughout the
period prior to Closing to the operations, properties, books, contracts,
agreements, leases, commitments and records of the Station at reasonable times,
provided that the normal operations of Seller's business shall not be disrupted.
In addition, Seller shall deliver to Buyer copies of all of the Station's
monthly operating statements and monthly sales reports, as may exist; and
furnish such additional information concerning the Station as Buyer may from
time to time reasonably request. Notwithstanding the foregoing, Buyer shall not
communicate with Seller's customers without Seller's advance written consent.
12
6.2 CONDUCT OF STATION BUSINESS. Between the date hereof and
Closing:
6.2(a) Seller shall make all reasonable efforts to produce the
consent of any third parties necessary for the assignment to Buyer of any
contract, lease or agreement marked with an asterisk and listed on the Contract
Schedules;
6.2(b) Seller shall (i) conduct the business of the Station in
a prudent and responsible manner in good faith and operate and maintain the
Station and the Assets in accordance with good engineering and Seller's past
practices and in compliance with the terms of the Licenses and Applicable Laws;
(ii) keep all of the Assets to be transferred hereunder in substantially the
same operating condition and repair as of the date hereof, reasonable wear and
tear excepted; and (iii) use all reasonable efforts to preserve the customers,
goodwill and business reputation of the Station;
6.2(c) Seller shall not outside the ordinary course of
business (i) hire additional personnel or unreasonably increase the compensation
or bonuses payable to any of the Station's employees; (ii) enter into an
agreement to sell, assign, lease, exchange or otherwise transfer or dispose of
any of the Assets; (iii) enter into any new contract or renegotiate, modify,
amend, renew, or terminate any existing contract, except that Seller may, in the
ordinary and usual course of business, enter into: (1) agreements for the sale
of time on the Station for such rates and on such terms as are consistent with
Seller's normal and usual practices; (2) any contract(s) terminable on thirty
(30) days notice or less without premium or penalty; or (3) any contract(s)
consented to by Buyer in writing; (iv) change the Station's call letters, or
change the Station's facilities, or apply to the FCC for any construction
permit(s) (except that this limitation shall not apply to an application for
extension of time to construct under a construction permit outstanding as of the
date of this Agreement, without Buyer's consent, which will not be unreasonably
withheld or delayed, or make any material adverse changes in the Station's
leasehold improvements and other improvements and fixtures; or (v) except as
required by law or any governmental agency, disclose any information relating to
the Station to any third party, other than to Seller's authorized employees,
agents and professional advisors in the ordinary course of business and other
than to Buyer and Buyer's authorized representatives as provided for herein;
6.2(d) Seller shall maintain in full force and effect the
insurance described in SCHEDULE 4.9; and
6.2(e) Seller shall give Buyer notice of any unusual operating
problems or developments affecting Seller between the date hereof and the
Closing Date, including, but not limited to, any problem or development which
would materially adversely affect the Assets, and keep Buyer fully apprised of
all matters having material financial impact on Seller.
13
6.3 BUYER'S INSPECTIONS AND APPROVALS.
6.3(a) Seller agrees to convey and Buyer agrees to accept such
title to the Fee Property as the title company shall be willing to insure on its
standard from and at standard rates, such title to be subject to (i) all
standard exclusions and printed exceptions in the standard form of owner's
policy of title insurance; (ii) encroachments and all other matters that would
be disclosed by a current and accurate survey of the Fee Property; (iii) liens
for taxes and assessments not yet due and payable; (iv) easements for public
utilities affecting the Fee Property; (v) all easements, covenants, restrictions
and rights-of-way affecting the Fee Property; and (vi) both (a) any applicable
zoning ordinances, other land use laws and regulations, and (b) those matters,
if any, which are waived by Buyer pursuant to this Paragraph 6 ( the foregoing
title matters are hereinafter referred to as the "Permitted Title Exceptions").
Within thirty (30) days of the Closing Date, the Buyer shall order, at Buyer's
sole cost and expense, a title commitment from a title insurance company
authorized to do business in the Commonwealth of Pennsylvania (the
"Commitment"). If the Commitment reveals a defect in title which is not one of
the Permitted Title Exceptions, or if prior to the Closing Date a defect in
title arises after the date of the Commitment, either of which defect is not one
of the Permitted Title Exceptions, Buyer may either waive such defect or give
prompt (within ten (10) days of receipt of such commitment or endorsement (time
being of the essence) written notice to Seller of such defect in title,
whereupon Seller shall attempt to cure such defect prior to the Closing. If
Seller is unable or unwilling to cure, on or before the Closing Date, any defect
as to which Buyer has notified Seller as hereinabove provided and if Buyer does
not waive such defect, this Agreement may be terminated, at the Buyer's sole
option, the Escrow Amount shall be returned to Buyer, and thereafter neither
party shall have any liability or obligation to the other pursuant to this
Agreement except for those obligations specifically stated to survive
cancellation or termination.
If Seller is unable or unwilling to cure, on or before the
Closing Date, any defect as to which Buyer has notified Seller as hereinabove
provided and if Buyer does not waive such defect, Buyer shall use such portion
of the Purchase Price on the to pay or discharge any liens or encumbrances that
are not Permitted Title Exceptions or waived by Buyer, and shall deliver to
Buyer at Closing instruments in recordable form and sufficient to satisfy such
liens or encumbrances of record, together with the cost of recording or filing
said instruments. If agreed by Buyer, at Buyer's sole option, Seller may deposit
sufficient monies with Buyer's title company acceptable to and required by it to
assure their discharge, but only if the title company will insure title to the
Fee Property clear of such matters or insure against their enforcement out of
the Fee Property.
6.3(b) ENVIRONMENTAL AUDIT. Buyer shall perform, at its
expense, such environmental investigations and audits (an "Audit") of the Real
Property as it deems appropriate, including, without limitation (i) conditions
with respect to contamination or
14
pollution of surface or ground waters, soil and air, (ii) the disposal,
presence, release or threat of release of hazardous or toxic material thereon,
and (iii) compliance with environmental laws or other Applicable Laws. If the
Audit discloses a condition which materially contradicts the representations in
Section 4.6(c), Buyer may, at its sole option, either:
(1) Elect to consummate the purchase of all the Assets
in which case Seller shall bear the cost of remediating such condition in an
amount not to exceed $25,000 and such amount shall be deducted from the Purchase
Price; or
(2) Terminate this Agreement, in which case the Escrow
Amount shall be returned to Buyer, and thereafter neither party shall have any
liability or obligation to the other pursuant to this Agreement except for those
obligations specifically stated to survive cancellation or termination.
6.3(c) ENGINEERING INSPECTION. It is agreed that within ten
(10) days prior to the Closing Date, Buyer's engineer may inspect the property
transferred to insure that the equipment complies with all warranties and
conditions set forth herein. Seller agrees to extend full cooperation to said
engineer, including such access to the equipment and to logs pertaining thereto
at such time or times as said engineer shall reasonably request. If Buyer's
engineer reports that the equipment fails to comply with said warranties, and
Seller disputes the report, Buyer and Seller shall jointly hire and pay a
consulting engineer to give a report on the disputed item(s). The consulting
engineer's report shall be final, and Seller shall repair any equipment that the
consulting engineer reports does not meet the warranty set forth in Subsection
4.2(b) prior to the Closing; provided, however, Seller's obligation to repair
shall not exceed Fifteen Thousand Dollars ($15,000). If the repairs required
exceed such amount and Seller refuses to make such repairs in excess of the cap,
Buyer may, at its sole option, either proceed with this Agreement or terminate
this Agreement and have the Escrow Amount returned to it.
6.4(a) RISK OF LOSS/ASSETS. The risk of any loss, damage or
destruction to any of the Assets from fire or other casualty or cause shall be
borne by the Seller at all times prior to 12:01 a.m. on the Closing Date. Upon
the occurrence of any loss or damage to any material portion of the Assets as a
result of fire, casualty or other cause prior to Closing, Seller shall notify
Buyer of same in writing immediately, stating with particularity the extent of
such loss or damage incurred, the cause thereof if known, and the extent to
which restoration, replacement and repair of the Assets lost or destroyed will
be reimbursed under any insurance policy with respect thereto. Subject to the
provisions hereof, Buyer shall have the option (but not the obligation), in the
event the loss or damage exceeds One Hundred Thousand Dollars ($100,000.00) and
the property cannot be substantially repaired or restored within one hundred
twenty (120) days, exercisable within ten (10) days after receipt of such notice
from Seller to: (i) postpone the Closing until such time as the property has
been completely repaired,
15
replaced or restored, unless the same cannot be reasonably effected within two
(2) months of notification; (ii) elect to consummate the Closing and accept the
property in its "then" condition, in which event Seller shall at the Closing
assign all rights under any insurance claim covering the loss and pay over any
proceeds under any such insurance policy theretofore received by Seller with
respect thereto; or (iii) rescind this Agreement at no cost or expense to Buyer
and declare the Agreement of no further binding force and effect, if such
repairs, replacements or restorations are not completed within ninety (90) days
after the date specified herein as the Closing Date, provided that such repairs,
replacements or restorations are necessary to the normal operation of the
Station. In the event Buyer elects to postpone the Closing Date as provided in
clause (i) of this Subsection, the parties hereto will cooperate to extend the
time during which this Agreement must be closed as specified in the consent of
the FCC referred to herein.
6.5 CONFIDENTIALITY. Between the date of this Agreement and the
Closing Date, Buyer will continue to maintain strict confidentiality with
respect to all documents and information furnished by or on behalf of Seller
(except for documents of information required to be disclosed by law; subject to
Seller's right to contest such requirement), and, if this Agreement is
terminated, Buyer shall return to Seller all such documents and information.
Notwithstanding the foregoing, Buyer may make disclosure that may be required:
(i) by its lenders; (ii) pursuant to any federal or state securities laws; or
(iii) as may be necessary to advise any of Buyer's investors or advisors;
provided, that, in such case, Buyer shall advise the investors of the
confidentiality of the information, who must, as a condition of receiving such
information, agree to keep such information confidential.
6.6 PROHIBITED ACTION. Between the date of this Agreement and the
Closing Date, neither Buyer nor Seller will commit any act or omission that
would: (i) disqualify them as parties to an assignment of the Licenses or, as to
Buyer, as owner or operator of the Station and the Assets; (ii) jeopardize the
validity of the Licenses; or (iii) interfere with the existing relationships
between the Station and its advertisers, suppliers and others.
7. APPLICATION FOR FCC APPROVAL.
7.1 FILING AND PROSECUTION OF APPLICATION. No later than 90 days
prior to the expiration of the Time Brokerage Agreement executed
contemporaneously herewith, Buyer and Seller shall join in an application to the
FCC requesting the FCC's written consent to the assignment of the Licenses of
the Station to Buyer and to the consummation of the transactions contemplated by
this Agreement ("Application"). Both parties shall promptly respond to any
requests for the submission of additional information and shall vigorously
oppose any protests, petition to deny, petition for reconsideration or appeal of
the FCC's consent and approval that may be filed. Buyer and Seller shall proceed
with due diligence and promptly take all steps necessary to the
16
expeditious prosecution of such application to a favorable conclusion, using
their best efforts throughout.
7.2 EXPENSES. Each party shall bear its own expenses in connection
with the preparation of the applicable sections of the Application and in
connection with the prosecution of such application. Seller and Buyer will
divide and pay equally the license transfer application fees charged by the FCC,
provided that Seller's share shall not exceed $725.
7.3 EXTENSION OF CLOSING DATE. If for any reason, the application
is not approved within 90 days, the date for closing will be extended until the
application is finally approved or denied (which is hereby defined to be a final
order denying the application which is not subject to appeal) and the Time
Brokerage executed contemporaneously herewith will be extended a like amount of
time and only when or if the application is finally denied, then either party
may, if not then in default, have the right by written notice 15 days in advance
to terminate this Agreement.
7.4 CONTROL OF STATION. This Agreement shall not be consummated
until the FCC has given its written consent to the assignment of the Licenses of
the Station. Buyer shall not, directly or indirectly, control, supervise, direct
or attempt to control, supervise or direct the operation of the Station prior to
Closing, but such operation shall be the sole responsibility of the Seller.
Both the Seller and Buyer agree that the Seller has retained
no rights of reversion of the WJHR-AM license, and no right to the reassignment
of the WJHR-AM license in the future, and has not reserved the right to use the
facilities of WJHR-AM in the future for any reason whatsoever.
7.5 BEST EFFORTS. Each party hereto agrees to use its best efforts
in the performance and fulfillment of all terms and conditions of this
transaction applicable to such party and in filing an application for the FCC's
consent, and agrees to execute such other and further documents as may be
reasonably required to carry out the intent of this Agreement.
8. BULK SALES LAW.
Buyer hereby waives compliance by Seller with the provisions of all
Bulk Sales Laws, or other similar provisions, provided, however that Seller
agrees to indemnify and hold Buyer harmless for any claims arising thereunder,
except for the Accounts Payable assumed by Buyer hereunder.
9. OBLIGATIONS UNDER CONTINUING CONTRACTS.
17
Buyer shall execute and deliver to Seller at the Closing an assumption
by Buyer of Seller's obligations for the period on and after the Closing or as
to the assumed Accounts Payable prior to Closing under (i) the continuing
contracts, leases and agreements described in Section 1.1(e) and 1.1(f) hereof;
(ii) all contracts described in Section 1.1(f) hereof; (iii) Accounts Payable
outstanding on the Closing Date; and (iv) all other continuing contracts
theretofore entered into by the Seller permitted by the terms hereof in the
regular course of its business; all to the extent transferable. From and after
the Closing Date, Buyer shall perform all obligations under said contracts,
leases and agreements, and shall indemnify and hold harmless Seller from any and
all claims, liabilities and obligations, losses, damages or expenses arising out
of said contracts, agreements and leases accruing by reason of matters occurring
on and after the Closing Date. Except for the Assumed Obligations, Seller shall
remain liable for, and shall indemnify and hold harmless Buyer from, any and all
claims, liabilities, obligations, losses, damages or expenses accruing by reason
of matters occurring prior to the Closing Date under said contracts, agreements
and leases.
10. CLOSING.
Subject to the terms and conditions herein stated, the parties agree as
follows:
10.1 CLOSING DATE. The Closing of the transactions contemplated
herein shall be held on a date in time as specified by the Buyer in writing to
the Seller that is no more than ten calendar (10) days after the date upon which
the approval of the FCC required for the consummation of the transactions
contemplated herein shall become a "Final Order," but the Closing Date shall be
no later than November 18, 2001, or a later date as specified in Section 7.3 on
which Buyer and Seller mutually agree, provided, however, that "Final Order"
means an action by the FCC or its staff which is no longer subject to
administrative or judicial review, reconsideration or appeal. The Closing shall
take place at the Trenton offices of Xxxxxx & Xxxxxxxx at 10:30 a.m. local time,
or at such other time or place as mutually agreed. In the event the parties are
unable to complete the Closing on or before the date otherwise provided in this
Section 10.1, either party may request a brief extension (up to five business
days) of that date and the other party shall not unreasonably withhold its
consent to such extension, provided that the party requesting such extension is
not already in default under the terms of this Agreement. Buyer or Seller may,
with the consent of the other, waive the requirement that the Commission's
approval of the Application shall have become a Final Order prior to the Closing
Date in order to proceed with the Closing, but agree that if closing takes place
prior to the approval becoming a "Final Order", the Unwind Agreement attached
hereto and marked EXHIBIT B shall be executed.
10.2 SELLER'S OBLIGATIONS AT CLOSING. At the Closing, Seller shall
execute and deliver or cause to be delivered to Buyer the following, in a form
and substance reasonably approved by counsel for Buyer:
18
10.2(a) A Xxxx of Sale for all tangible personal property to
be transferred hereunder, pursuant to Section 1.1(b), containing a warranty of
title and covenant against all liens, encumbrances and restrictions of any kind
whatsoever.
10.2(b) A duly acknowledged bargain and sale deed with
covenants against grantor's acts conveying the Real Property to Buyer.
10.2(c) One or more assignments assigning to Buyer the
Licenses and intangible property to be acquired by Buyer hereunder;
10.2(d) One or more assignments assigning to Buyer the
Contracts to be assigned to Buyer hereunder together with all necessary consents
thereto and the original copies of said Contracts;
10.2(e) A certificate from Seller stating that: (i) all
representations and warranties of Seller as set forth in this Agreement or in
any statement, certificate, schedule, exhibit or other document delivered
pursuant to this Agreement by Seller are true and correct in all material
respects, as of the Closing Date; and (ii) Seller has, in all material respects,
performed and complied with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by Seller at or prior the
Closing Date;
10.2(f) An opinion of Shook, Hardy & Bacon, LLP, counsel for
Seller, in the form attached hereto as EXHIBIT C, on matters other than FCC
Matters;
10.2(g) OPINION OF SELLER'S FCC COUNSEL. An opinion of Shook,
Hardy & Bacon, LLP in the form attached hereto as EXHIBIT D; -
10.2(h) FILES & RECORDS. Copies of all of the files, records
and logs referred to in Sections 1.1(i) and 1.1(j) hereof and copies of all of
the Licenses;
10.2(i) OTHER DOCUMENTS. Such other documents or instruments
as counsel for Buyer may reasonably request and in a form reasonably acceptable
to Buyer's counsel, which documents are necessary to carry into effect the
provisions of this Agreement.
10.3 BUYER'S OBLIGATIONS AT CLOSING. At the Closing, Buyer shall
execute and deliver or cause to be delivered to Seller the following in a form
and substance reasonably acceptable to Seller's counsel:
10.3(a) The Purchase Price as set forth in Section 2 of this
Agreement consisting of: (i) Executed instructions to the Escrow Agent directing
it to release to Seller the Escrow Amount in the amount of One Hundred Thirty
Thousand Dollars ($130,000) and any interest earned on the escrow; and (ii) Two
Million Three Hundred
19
Seventy Thousand Dollars ($2,370,000), including any sums for the real estate,
if applicable, as described in Section 1.1(c) as the balance of the Purchase
Price, less any amount of interest earned on the escrow, payable by wire
transfer;
10.3(b) One or more assumptions assuming the Contracts and
Accounts Payable being assigned by Seller;
10.3(c) A certificate from Buyer stating that: (i) all
representations and warranties of Buyer as set forth in this Agreement or any
statement, certificate, or other document delivered pursuant to this Agreement
by Buyer are true and correct in all material respects as of the Closing Date;
and (ii) Buyer has, in all material respects, performed and complied with all
covenants, agreements, and conditions required by this Agreement to be performed
or complied with by Buyer at or prior to the Closing Date;
10.3(d) OTHER DOCUMENTS. Such other documents or instruments
as counsel for Seller may reasonably request and in a form acceptable to
Seller's counsel, which documents are necessary to carry into effect the
provisions of this Agreement.
10.4 CONDITION TO OBLIGATIONS OF BUYER. The obligation of Buyer to
consummate the purchase of the Assets at the Closing shall be subject to the
performance, in all material respects, on or prior to the Closing Date, of all
of the covenants and agreements as set forth elsewhere in this Agreement to be
performed by Seller, and upon the following additional conditions:
10.4(a) The representations and warranties of Seller shall be
true in all material respects as of the Closing Date; and
10.4(b) There shall not have occurred any material adverse
change in the condition of the Assets; and
10.4(c) The consents required from all governmental agencies
(including, without limitation, unless waived, the Final Order of the FCC) to
Buyer's acquisition of the Assets shall have been granted, without any condition
materially adverse to Buyer, and such consents shall be valid and outstanding on
the Closing Date; and
10.4(d) No action or proceeding shall be pending, challenging
the validity of this Agreement or seeking to delay the consummation of any of
the transactions for which this Agreement provides, which in the reasonable
opinion of Buyer is material to the transactions contemplated by this Agreement;
and
10.4(e) All equipment to be transferred hereunder (i) is in
reasonably good working order; (ii) is in material compliance with all
applicable FCC Rules and Regulations; and (iii) has passed the engineering
review set forth in Section 6.3(c); and
20
10.4(f) Seller shall have in all material respects performed
and complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to and on the Closing
Date; and
10.4(g) All of the requirements of Section 10.2 shall have
been met. Buyer shall have the right to waive any or all of the foregoing
conditions of Closing at its sole option and risk.
10.5 CONDITION TO OBLIGATIONS OF SELLER. The obligation of Seller
to consummate the sale of the Assets at the Closing shall be subject to the
performance, in all material respects, on or prior to the Closing Date, of all
of the covenants and agreements as set forth elsewhere in this Agreement to be
performed by Buyer, and upon the following additional conditions:
10.5(a) The representations and warranties of Buyer shall be
true in all material respects as of the Closing Date; and
10.5(b) The consents required from all governmental agencies
(including, without limitation, unless waived, the Final Order of the FCC) to
Buyer's acquisition of the Assets shall have been granted, without any condition
materially adverse to Seller, and such consents shall be valid and outstanding
on the Closing Date; and
10.5(c) Buyer shall have in all material respects performed
and complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to and on the Closing
Date; and
10.5(d) All of the requirements of Section 10.3 shall have
been met.
Seller shall have the right to waive any or all of the foregoing
conditions of Closing at its sole option and risk.
10.6 FURTHER ASSURANCE. From time to time, upon request and without
further consideration on or after the Closing Date, Seller and Buyer will
execute and deliver such other instruments of conveyance and transfer and take
such other action as may be reasonably required more effectively to convey,
transfer to and vest in the Buyer, and to put the Buyer in possession and
operating control of, any part of the Assets, and, in the case of contracts and
rights, if any, which cannot be transferred effectively without the consent of
third parties which is unobtainable, to use good faith efforts to secure to the
Buyer the benefits thereof.
11. OTHER CLOSING OBLIGATIONS.
21
11.1 PRORATIONS. Except as otherwise provided herein, the Buyer, by
virtue of its obligation specified in the Time Brokerage Agreement executed even
date herewith, shall be entitled to all income earned prior to and after the
Closing Date and shall similarly be responsible for reimbursement of all
liabilities and obligations incurred or payable in connection with the operation
of the station from the date of the Time Brokerage Agreement to the Closing Date
and thereafter.
11.1 (a) For reimbursement, real and personal property taxes
and utility charges relating to the Station; and
11.1 (b) For reimbursement, FCC annual regulatory fees payable
in 2001.
Within thirty (30) days after the Closing, Buyer shall deliver to Seller a
statement setting forth in reasonable detail the basis for prorations pursuant
to this Section, and Buyer shall pay to Seller, or Seller shall pay to Buyer, as
the case may be, any net amount due as the result of the proration statement
(or, if there is a dispute, the undisputed amount thereof. If Seller disputes
Buyer's determinations, or, if at any time after delivery of Buyer's statement
of determinations any party determines that any item included in the proration
is inaccurate or that an additional item should be included in the prorations,
the parties shall confer with regard to the matter and an appropriate adjustment
and payment shall be made as agreed upon by them or, if they are unable to
resolve the matter, by a firm of independent certified public accountants
mutually agreeable to the parties, whose decision on the matter shall be binding
and whose fees and expenses shall be borne equally by them.
Under the supervision of Buyer, Seller shall, in a manner consistent
with past practices, collect all accounts receivable after the Closing Date and
shall promptly pay all commissions, bonuses and other sales related expenses,
and shall provide Buyer with an accounting of all collected and uncollected
accounts receivable. Buyer shall have no obligation to pursue such collections.
11.2 FEES, SALES AND TRANSFER TAXES. All filing and recording fees
in connection with any instrument of conveyance or transfer delivered pursuant
to this Agreement shall be paid by Buyer. Transfer taxes, if any, with the
personal property and intangible assets sold and transferred hereunder shall be
paid by Buyer. Transfer taxes in respect to the real property sold and
transferred hereunder shall be paid by Seller. Sales taxes, if any, in respect
to the Assets sold and transferred hereunder shall be paid by Buyer. Buyer shall
pay the premium for a standard owner's policy of title on the Fee Property; if
Buyer desires an ALTA Policy, Buyer shall pay the additional premium therefor.
11.3 OTHER TAXES. Any and all sales taxes, unemployment insurance
and social security taxes, and all other taxes due any state, federal or local
government by Seller on or before the Closing Date shall be paid by Seller when
due.
22
12. ALLOCATION OF PURCHASE PRICE.
The purchase price shall be allocated among the Assets in accordance
with EXHIBIT D hereto. Each of the parties hereto agrees to prepare and file its
tax returns reflecting the allocations in a manner consistent with this
Agreement, including preparation and filing of IRS Form 8594.
13. INDEMNIFICATION.
13.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All covenants and
agreements pertaining to matters to be performed after Closing and all
representations and warranties contained in this Agreement shall survive for a
period not to exceed three (3) years after the Closing Date ("Survival Period")
except that the representations and warranties with respect to title shall
continue indefinitely. (This provision does not include title to the Fee
Property.) No claim may be brought under this Agreement or with respect to the
transactions described herein unless written notice describing in reasonable
detail the nature and basis of such claim is given in good faith on or prior to
the last day of the Survival Period. In the event such notice is so given, the
right to indemnification with respect thereto under this Section 13 shall
survive the Survival Period until such claim is finally resolved and any
obligations with respect thereto are fully satisfied.
13.2 INDEMNITY BY SELLER. Subject to 13.1, Seller agrees to pay and
discharge and to save and protect Buyer and its officers, directors,
shareholders and affiliates free and harmless from all obligations, claims and
demands (including reasonable attorneys fees incurred by Buyer with respect
thereto) (collectively "Seller's Obligations") against, arising out of or in
connection with (a) any lease, contract or other agreement of Seller not
required to be assumed by Buyer pursuant to this Agreement; (b) the ownership of
the Station and the Assets that shall arise or accrue prior to the Closing
(except for the Assumed Obligations) and (c) any material breach or violation by
Seller of any covenant, agreement or warranty herein contained, or the
inaccuracy of any representation. of Seller made in this Agreement.
13.3 INDEMNITY BY BUYER. Subject to 13.1, Buyer agrees to pay and
discharge and to save and protect Seller and its officers, directors,
shareholders and affiliates free and harmless from all obligations, claims, and
demands (including but not limited to attorneys fees incurred by Seller with
respect thereto) against, arising out of or in connection with (a) any lease,
contract, Accounts Payable or other agreement of Seller required to be to be
assumed by Buyer pursuant to this Agreement; (b) that shall arise or accrue
against or in connection with the ownership or operation of the Station and the
Assets from and after the Closing; and (c) any material breach of violation by
Buyer of any covenant, agreement or warranty herein contained or the inaccuracy
of any representation of Buyer made in this Agreement.
23
13.4 INDEMNIFICATION PROCEDURE, RIGHT OF OFFSET. In the event that
any party hereto asserts a claim for indemnification hereunder, such party
seeking indemnification shall give written notice to the indemnifying party
specifying the nature and the amount, if known, of the claim asserted. The
indemnifying party shall then have the right, using counsel reasonably
satisfactory to the party seeking indemnification, to investigate, secure,
contest or settle the claim alleged by such i third party (hereinafter called a
.. contest"), provided that the party seeking indemnification may participate
voluntarily, at its own expense, in any such contest through representatives and
counsel of its own choice, and, provided further, that any such action by the
indemnifying party relating to the contest shall be without prejudice to the
party seeking indemnification.
Except as provided otherwise in the immediately preceding sentence, and
subject to 13.1, the indemnifying party shall bear all costs of such contests
and shall indemnify and hold the party seeking indemnification harmless against
and from all costs, fees, and expenses of such contest. Unless and until the
indemnifying party elects to prosecute the contest, the party seeking
indemnification shall have the full right, at its option, to do so and to look
to the indemnifying party under the provisions of this Agreement for the amount
of the costs, if any, of prosecuting the contest. The failure of the
indemnifying party to respond in writing to the aforesaid notice of the party
seeking indemnification with respect to such contest within twenty (20) days
after the receipt thereof shall be deemed an election not to prosecute the same.
If the indemnifying party fails to prosecute the contest and the party seeking
indemnification does not prosecute the contest or does so and the decision is
rendered against it, the amount paid by the party seeking indemnification to the
third party in settlement or satisfaction of the contest shall be deemed a valid
claim hereunder. In the event that the contest involves any Seller's
Obligations, Buyer shall have the right to offset the amount of the costs, if
any, incurred by Buyer in prosecuting the contest together with any sums owed in
connection with the resolution or settlement thereof against amounts which may
be owed by Buyer to Seller.
The parties hereto shall make mutually available to each other all
relevant information in their possession relating to any such contest and shall
cooperate in the defense thereof.
14. TERMINATION BEFORE CLOSING; DEFAULT AND REMEDIES.
14.1 TERMINATION BEFORE CLOSING. If Closing shall not have
previously occurred, this Agreement may be terminated:
14.1(a) If the Closing has not occurred prior to the time
provided for in Section 10.1;
14.1(b) Pursuant to Section 7.3 hereof;
24
14.1(c) By Buyer, upon the occurrence of a Seller's Event of
Default (as defined in Section 14.2(a)), upon failure of a condition precedent
to Buyer's obligation to close set forth in Section 10.4 or upon failure of a
condition precedent to Seller's obligation to close set forth in Section 10.5(c)
or 10.5(e);
14.1(d) By Seller, upon the occurrence of a Buyer's Event of
Default (as defined in Section 14.2) or upon failure of a condition precedent to
Seller's obligation to close set forth in Section 11. 5.
In the event of termination pursuant to Section 14.1(d) above upon the
occurrence of a Buyer's Event of Default as defined in Section 14.2, Seller
shall be entitled to retain the Escrow Amount as liquidated damages as provided
in Section 2.2 hereof. In the event of termination of this Agreement for any
other reason, Buyer shall be entitled to return of the Escrow Amount as provided
in Section 2.2 hereof.
14.2 DEFAULT AND REMEDIES
14.2(a) The occurrence of any one or more of the following
events shall constitute a material default of this Agreement by Buyer ("Buyer's
Event of Default"):
(i) The material breach of any representation or
warranty by Buyer hereunder unless such breach is cured prior to the Closing
Date;
(ii) The failure by Buyer to timely consummate the
transactions contemplated by this Agreement in violation of the provisions of
this Agreement;
(iii) The failure by Buyer to perform any other of its
material obligations under this Agreement, where such failure shall continue for
a period of ten (10) days after delivery of written notice of demand therefor
from Seller to Buyer; provided, however, that if more than ten (10) days are
reasonably required to cure such failure, then Buyer shall not be deemed to be
in default thereof if Buyer, in good faith, has commenced such cure within said
ten (10) day period and thereafter diligently prosecutes such cure to completion
and completes such cure prior to Closing.
14.2(b) The occurrence of any one or more of the following
events shall constitute a material default of this Agreement by Seller
("Seller's Event of Default"):
(i) The material breach of any representation or
warranty by Seller hereunder unless such breach is cured prior to the Closing
Date;
(ii) The failure by Seller to timely consummate the
transactions contemplated by this Agreement in violation of the terms of this
Agreement;
25
(iii) The failure by Seller to perform any other of its
material obligations under this Agreement, where such failure shall continue for
a period of ten (10) days after delivery of written notice of demand therefor
from Buyer to Seller; provided, however, that if more than ten (10) days are
reasonably required to cure such failure, then Seller shall not be deemed to be
in default thereof if Seller, in good faith, has commenced such cure within said
ten (10) day period and thereafter diligently prosecutes such cure to completion
and completes such cure prior to Closing.
14.2(c) 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, upon the occurrence
of a Seller's Event of Default, Buyer shall be entitled, provided that a Buyer's
event of default has not occurred, in addition to any other remedies that it may
have, to enforcement of this Agreement (subject to obtaining any required
approval of the FCC) by a decree of specific performance or injunctive relief
requiring Seller to fulfill its obligations under this Agreement. In any action
to specifically enforce Seller's obligation to close the transaction
contemplated by this Agreement, Seller shall waive the defense that there is an
adequate remedy at law or in equity and agrees that Buyer shall be entitled to
obtain specific performance of Seller's obligation to close hereunder without
being required to prove actual damages. As a condition to seeking specific
performance, Buyer shall not be required to tender the Purchase Price, but shall
be required to demonstrate that Buyer is ready, willing and able to tender the
Purchase Price and consummate the purchase of the Station as contemplated
hereunder.
15. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement
or any of its Exhibits, or the breach thereof shall be settled by arbitration by
one (1) arbitrator (unless the parties mutually agree to accept multiple
arbitrators) in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the
Arbitrator(s) may be entered in any court having jurisdiction thereof. The cost
of any such arbitration shall be borne equally by the parties involved unless
the arbitrator(s) deem such division of costs to be inequitable, in which event
the arbitrator(s) may allocate the costs of arbitration among the parties
thereto as they deem just and equitable under the circumstances.
16. ACCESS TO BOOKS AND RECORDS.
After the Closing Date, Buyer and Seller shall each allow the other
reasonable access during normal business hours upon reasonable prior notice to
their respective books and records pertaining to the operation of the Station
prior to the Closing Date and shall retain such records for a period of not less
than three (3) years after the Closing Date.
26
17. NOTICES.
All notices and other communications hereunder shall be in writing and
be deemed to have been duly given if delivered personally or by overnight
courier or sent by telecopy (and confirmed by regular mail) or mailed by
registered mail, postage prepaid, addressed as follows:
(a) If to Seller, to:
Multicultural Radio Broadcasting, Inc.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxx, President
with a copy to:
Xxxx X. Xxxx, Esq.
Shook, Hardy & Bacon, LLP
000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
(b) If to Buyer, to:
Nassau Broadcasting Partners, L.P.
000 Xxxxxxxxx Xxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Xx.
with a copy to:
Xxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxxx
A Professional Corporation
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
X.X. Xxx 0000
Xxxxxxx, Xxx Xxxxxx 00000-0000
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
mailed, as of the close of the third business day following the date so mailed,
and (ii) if personally delivered or
27
otherwise sent as provided above, on the date delivered or sent if sent by
telecopy and on the next business day after the date sent in all other cases.
18. 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 the conduct of
the Station's business, all of which shall remain the sole responsibility and
under the control of Seller, provided that this Section 19 shall not be deemed
to be consent by Buyer to Seller's noncompliance (if any) with this Agreement.
19. EXPENSES.
Unless otherwise agreed to in writing by the parties hereto, each party
shall pay its own costs and expenses, including any and all legal and accounting
fees, of its performance and compliance with all conditions and agreements
contained herein on its or their part to be performed or complied with.
20. BROKERS.
Buyer and Seller each represent to the other that there is no finder,
consultant or broker involved in this transaction and that they have not agreed
to pay any other finder, consultant or broker fee in connection with this
transaction. If any other finder, consultant or broker claims a fee, the party
whose actions led to that claim will bear sole responsibility for paying or
settling that claim and shall indemnify the other party against the same.
21. SECTION HEADINGS.
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
22. ENTIRE AGREEMENT; FILINGS.
(a) This Agreement and all Schedules and Exhibits attached hereto
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede all prior understandings and agreements among the
parties, whether oral or written, contain the entire understanding of the
parties and shall not be changed, modified, amended, extended, terminated,
waived or discharged except by subsequent instrument in writing signed by the
parties hereto. To the extent permitted by the FCC, the Schedules shall not be
filed with the FCC or otherwise disclosed or made public.
(b) Buyer and Seller acknowledge that this Agreement was executed
before the preparation of the required schedules and Exhibits could be
completed. Buyer and
28
Seller agree that Buyer's obligation to perform under this Agreement is subject
to Buyer's review and approval of each Schedule and Exhibit which Seller is
required to provide under the terms of the Agreement.
23. COUNTERPARTS.
This Agreement may be signed upon any number of counterparts with the
same effect as if the signature to each counterpart were on the same instrument.
24. SURVIVAL.
The provisions hereof, which by their terms are to be performed or
observed after the Closing Date, shall survive the Closing hereunder in
accordance with the terms of this Agreement and shall be binding upon and inure
to the benefit of all of the parties hereto, their heirs, legal representatives,
successors and assigns.
25. CONFIDENTIALITY.
Neither party shall make any announcement or disclose to the press or
others without the other party's consent as to timing and content (which shall
not be unreasonable withheld or delayed), as to the purchase/sale of the Station
prior to the Closing. It is understood that the foregoing non-disclosure
requirement is not intended to preclude Seller from complying with the FCC's
public notice requirements or Buyer from having discussions with financial
entities, consultants and attorneys outside the Station who will also be advised
of the need and agreement for deferred disclosure and shall agree to such
confidentiality and deferred disclosure.
26. ASSIGNABILITY.
Neither the Agreement nor any rights or obligations hereunder may be
assigned by Buyer or Seller without the express prior written consent of the
other party, except that Buyer shall be permitted to assign this Agreement ot an
entity controlled by Xxxxx X. Xxxxxxxxxx, Xx.. Except as provided otherwise
herein, this Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the parties.
27. GOVERNING LAW.
This Agreement shall be governed by, construed (both as to validity and
performance) and enforced in accordance with the laws of the State of New Jersey
applicable to agreements made and to be performed wholly within such
jurisdiction.
28. ATTORNEYS' FEES.
29
In the event of commencement of either arbitration or suit by either
party to enforce the provisions of this Agreement, the prevailing party shall be
entitled to receive such attorneys' fees and costs as may be adjudged reasonable
in addition to any other relief granted.
29. 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 unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions 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.
30. FURTHER ACTIONS.
From time to time before, at and after the Closing, each party, at the
requesting party's 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.
IN WITNESS WHEREOF, this Asset Purchase Agreement has been duly executed by the
parties hereto as of the date first above written.
MULTICULTURAL RADIO BROADCASTING, INC.
By:
------------------------------------------
Xxxxxx Xxx, President
NASSAU BROADCASTING PARTNERS, L.P.
BY: NASSAU BROADCASTING PARTNERS, INC.
ITS GENERAL PARTNER
By:
------------------------------------------
Xxxxx X. Xxxxxxxxxx, Xx., President
30
