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EXHIBIT 2.5.14
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement") is made as of December 23,
1996, by and among GOLDEN WEST BROADCASTERS, a California corporation (the
"Company"), XXXXX XXXX XXXXX and XXXXXXX X. XXXXXXXXX, AS CO-TRUSTEES OF THE
XXXXX SURVIVOR'S TRUST (collectively, the "Trustees") and CLEAR CHANNEL RADIO,
INC., a Nevada corporation ("Optionee"), with reference to the following facts:
Recitals
A. The Company is authorized to operate radio station KSCA(FM),
Glendale, California (the "Station") pursuant to a license issued to the
Company by the Federal Communications Commission (the "FCC"); and
B. Optionee desires to have, and the Company desires to grant to
Optionee, an option to buy certain of the assets relating to the Station,
including all FCC licenses, on the terms and conditions hereof.
Agreement
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements contained herein, and intending to be legally bound, the
parties hereby agree as follows:
1. Option. The Company hereby grants to Optionee, and Optionee
hereby accepts for the consideration set forth in Section 2 of this Agreement,
the exclusive right (the "Option") to purchase from the Company the assets of
the Company described in the Purchase Agreement (the "Assets") on the terms and
conditions set forth in the Purchase Agreement. The parties acknowledge
included with the Purchase Agreement attached hereto are schedules which
provide the information required under the Purchase Agreement and exceptions to
the representations and warranties in the Purchase Agreement, assuming the
Purchase Agreement was executed on the date hereof.
2. Option Period.
(a) Subject to Section 14, the initial term of this
Agreement shall commence on the date hereof and shall remain in full force and
effect until 5:00 p.m., Pacific Time on December 30, 1997, provided Optionee
delivers to the Company within 5 business days after the Initial Payment Date
$10 million by bank cashier's check or wire-transfer of immediately available
funds.
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(b) Subject to Section 14, this Agreement shall be
automatically renewed for a period of one year (with each period expiring at
5:00 p.m., Pacific Time, on December 30), provided that for each one year
extension period Optionee shall have delivered to the Company an additional $3
million by bank cashier's check or wire-transfer of immediately available funds
before the expiration time for the one year option period then in effect. For
example, assuming the Initial Payment Date is January 1, 1997 for this
Agreement to be extended until December 30, 1998, Optionee must have delivered
$10 million on or before January 8, 1997 and another $3 million by December 30,
1997, for a total payment of $13 million. Notwithstanding the foregoing, if
Optionee exercises the Option during the Exercise Period, this Agreement shall
remain in effect (without the need to make any further additional $3 million
payments) until the earlier of termination hereof pursuant to Section 14 or the
closing of the transactions contemplated by the Purchase Agreement.
(c) All amounts due under this Section 2 shall be payable
in lawful money of the United States of America.
3. Application and Refund of Option Payments.
(a) If Optionee exercises the Option prior to the time
this Agreement expires under Section 2 or is terminated under Section 14 (the
"Expiration Time") and the transactions contemplated by the Purchase Agreement
are consummated, then all amounts paid pursuant to Section 2 (the "Option
Payments") shall be applied to the purchase price for the Assets.
(b) If (1) the Purchase Agreement is terminated pursuant
to Section 13.1(c) thereof, (2) this Agreement is terminated pursuant to
Section 14(b)(iv), or (3) the Company terminates this Agreement or the Purchase
Agreement other than pursuant to the terms hereof or thereof, the Company shall
refund to Optionee the Breaching Refund Amount.
(c) If either (1) the Purchase Agreement is terminated
pursuant to Section 13.1(b), (e), or (f) thereof, (2) this Agreement is
terminated pursuant to Section 14(b)(iii) or Section 14(b)(vi), or (3) Seller
terminates the Purchase Agreement pursuant to Section 13.1(g) thereof, the
Company shall refund to Optionee the Non-Breaching Refund Amount.
(d) If this Agreement is terminated pursuant to Section
14(b)(i) and the schedules referred to in Section 14(b)(i) are different as a
result of
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(1) the Assumed Liabilities (as defined in the
Purchase Agreement) at the time the Company delivers the
Purchase Agreement for execution pursuant to Section 4 being
greater than the Assumed Liabilities on the date hereof
(assuming the Purchase Agreement was executed on the date
hereof), as a result of a breach by the Company of its
covenant contained in Section 8(c)(vi) hereof,
(2) if the FCC licenses for the Station have
expired, been terminated or been modified in a manner which is
materially adverse to the holder thereof due more to the
actions or omissions of the Company than the actions or
omissions of Optionee (the parties agree the FCC licenses
shall not be deemed to have expired or been terminated due
solely to the passage of the expiration date for such licenses
if the Company has timely filed a renewal application which is
pending), or
(3) a material reduction in the Assets due to the
actions or omissions of the Company (normal wear and tear on
any Assets will not be deemed a material reduction in the
Assets),
then the Company shall refund to Optionee the Breaching Refund Amount.
(e) If this Agreement is terminated pursuant to Section
14(b)(i) and the schedules referred to in Section 14(b)(i) are different as a
result of
(1) the Assumed Liabilities (as defined in the
Purchase Agreement) at the time the Company delivers the
Purchase Agreement for execution pursuant to Section 4 being
greater than the Assumed Liabilities on the date hereof
(assuming the Purchase Agreement was executed on the date
hereof) for any reason other than as described in Section
(d)(1) hereof, or
(2) if the FCC licenses for the Station have
expired, been terminated or been modified in a manner which is
materially adverse to the holder thereof for any reason other
than described in Section (d)(2) hereof (the parties agree the
FCC licenses shall not be deemed to have expired or been
terminated due solely to the passage of the expiration date
for such licenses if the Company has timely filed a renewal
application which is pending)
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then the Company shall refund to Optionee the Non-Breaching Refund Amount.
(f) Any refund of a portion of the Option Payments due
under this Section 3 shall be paid promptly to Optionee, but in no event later
than five business days after this Agreement is terminated.
(g) Except as set forth in Sections 3(b),(c),(d) and (e),
the Company shall be entitled to retain all of the Option Payments.
(h) Any refund of any portion of the Option Payments, or
retention of all or part of the Option Payments, shall be in addition to all
other rights or remedies of Optionee or the Company, as the case may be,
including, without limitation, the right to recover damages incurred as a
result of a breach by the other party of its obligations, representations,
warranties or duties hereunder, under the TBA or under the Purchase Agreement,
including, without limitation, any capital expenditures of the Company
reimbursed by Optionee under the TBA and any amounts reimbursed by Optionee to
the Company under Section 3(b)(iii) of the TBA.
4. Exercise. If Optionee is not in material breach of this
Agreement, Optionee may exercise the Option at any time during the period
commencing on the date of death of Gene Xxxxx and ending one month after the
date of delivery by the Company of written notice of the death of Gene Xxxxx
(the "Exercise Period") by delivering to the Company written notice (the
"Exercise Notice"). The Company shall have 30 days from the date of delivery
of the Exercise Notice to the Company to execute and deliver to Optionee the
Purchase Agreement, together with any schedules thereunder, for execution by
Optionee (the date of such delivery by the Company is referred to herein as the
"Delivery Date").
5. Xxxx-Xxxxx-Xxxxxx Filing. As promptly as practical after the
date hereof (which in no event shall be later than January 3, 1997), Optionee
and the Company shall prepare and file with the Federal Trade Commission and
the United States Department of Justice all documents which are required to
comply with the HSR Act, and shall promptly furnish all materials thereafter
requested by any of the regulatory agencies having jurisdiction over such
filings.
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6. Representations and Warranties of the Company and the
Trustees.
(a) The Company represents and warrants to Optionee as
follows:
(i) The Company has the corporate power and authority
to enter into this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(ii) The representations and warranties of the
Company in the Purchase Agreement are true and correct on the date hereof.
(b) The Trustees represent and warrant to Optionee they have
the power and authority to enter into this Agreement, to perform their
obligations hereunder and to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Trustees and
constitutes a valid and binding obligation of the Trustees, enforceable against
the Trustees in accordance with its terms.
7. Representations and Warranties of Optionee. Optionee hereby
represents and warrants to the Company as follows:
(a) Optionee has all requisite corporate power and
authority to enter into this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Optionee and the consummation by Optionee of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Optionee. This Agreement has been duly
executed and delivered by Optionee and constitutes a valid and binding
obligation of Optionee, enforceable against Optionee in accordance with its
terms.
(b) The representations and warranties of Optionee
contained in the Purchase Agreement are true and correct on the date hereof.
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8. Covenants of the Company. From the date hereof until the
Execution Date, the Company agrees:
(a) it shall not by its acts or omissions cause the
representations and warranties of the Company in the Purchase Agreement to be
untrue in any material respect on the Execution Date;
(b) to maintain the insurance set forth on Schedule 6.9
attached hereto as part of Exhibit A, to submit a claim to the insurance
carriers for each event of loss or damage to any of the Assets and in
consultation with Optionee apply any insurance proceeds received by the Company
to the repair or replacement of the lost or damaged Asset;
(c) Except as caused by non-compliance by Optionee with
the TBA, the Company:
(i) shall not sell or otherwise dispose of any of
the Assets or xxxxx x Xxxx on the Assets or permit a Lien to remain on the
Assets if such Lien was placed thereon as a result of the actions or omissions
of the Company;
(ii) shall not commit any act or omit to do any act
which will cause a breach of any Contract;
(iii) shall not amend or renew any Contract or
terminate its lease for the Station's main transmitter site;
(iv) will operate in the ordinary course of
business, consistent with past practice, and will take no actions to diminish
materially the goodwill of the business of the Station;
(v) will operate the Station in material compliance
with the Communications Act and the FCC rules and regulations;
(vi) will not increase the liabilities which Optionee
will assume under the Purchase Agreement above the amount of the liabilities
which Optionee would assume if the Purchase Agreement was executed on the date
hereof, other than an increase resulting from any amendment or renewal of a
Contract approved in writing by Optionee or any new agreement which Optionee
requests in writing for the Company to execute and assign to Optionee under the
Purchase Agreement; and
(vii) will take all action necessary to maintain the
FCC licenses relating to the Station in full force and effect without material
modification, including, without limitation, the timely filing of a renewal
application and responding to requests thereunder from the FCC, and will keep
Optionee informed with
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respect to any renewal application and requests thereunder from the FCC.
9. Access to Information. From the date hereof until the
Execution Date, the Company shall afford, and shall cause its respective
officers, directors, employees and agents to afford, to Optionee and the
officers, employees and agents of Optionee complete access at all reasonable
times to the Company's officers, employees, independent contractors, agents,
properties and to the Company's books, records and contracts relating to the
Station.
10. Confidentiality.
(a) Optionee shall hold, and shall cause its officers,
employees and agents and representatives, including, without limitation,
attorneys, accountants, consultants and financial advisors who obtain such
information to hold, in confidence, and not use for any purpose other than
evaluating the transactions contemplated by this Agreement or performing its
obligations hereunder or under the TBA, any confidential information of the
Company or the Trustees, which for the purposes hereof shall not include any
information which (i) is or becomes generally available to the public other
than as a result of disclosure by Optionee or one of its affiliates in
violation of its obligations under this subsection, (ii) becomes available to
Optionee on a nonconfidential basis from a source, other than the Company, the
Trustees or affiliates of the Company, which has represented that such source
is entitled to disclose it, or (iii) was known to Optionee on a nonconfidential
basis prior to its disclosure to Optionee hereunder. If this Agreement is
terminated without a closing of the acquisition of the Assets by Optionee,
Optionee shall deliver, and cause its officers, employees, agents, and
representatives, including, without limitation, attorneys, accountants,
consultants and financial advisors who obtain confidential information of the
Company or the Trustees to deliver, to the Company all such confidential
information that is written (including copies or extracts thereof), whether
such confidential information was obtained before or after the execution
hereof.
(b) The Company shall hold, and shall cause its officers,
employees and agents and representatives, including, without limitation,
attorneys, accountants, consultants and financial advisors who obtain such
information to hold, in confidence, and not use for any purpose other than
evaluating the transactions contemplated by this Agreement, any confidential
information of Optionee, which for the purposes hereof shall not include any
information which (i) is or becomes generally available to the public other
than as a result of disclosure by the Company or one of its affiliates in
violation of its obligations under this subsection, (ii) becomes available to
the Company on a nonconfidential basis from a source, other than
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Optionee or its affiliates, which has represented that such source is entitled
to disclose it, or (iii) was known to the Company on a nonconfidential basis
prior to its disclosure to the Company hereunder. If this Agreement is
terminated without a closing of the acquisition of the Assets by Optionee, the
Company shall deliver, and cause its officers, employees, agents, and
representatives, including, without limitation, attorneys, accountants,
consultants and financial advisors who obtain confidential information of
Optionee to deliver, to Optionee all such confidential information that is
written (including copies or extracts thereof), whether such confidential
information was obtained before or after the execution hereof.
(c) If a person who receives confidential information is
requested or becomes legally compelled (by oral questions, interrogatories,
requests for information or documents, subpoena, criminal or civil
investigative demand or similar process) to disclose any of such confidential
information, such person will provide the other party with prompt written
notice so that such other party may seek a protective order or other
appropriate remedy or waive compliance with Section 10(a) or (b), as the case
may be. If such protective order or other remedy is not obtained, or if the
applicable party waives compliance with Section 10(a) or (b), as the case may
be, the person subject to the request will furnish only that portion of such
confidential information which is legally required and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded such confidential information.
11. Notification of Certain Matters. The Company shall give
prompt notice to Optionee, of the discovery of (i) any material inaccuracy in
any representation or warranty made by it, (ii) any material failure of the
Company to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement or (iii) any legal
proceedings related to the Station or the transactions contemplated hereby.
Optionee shall give prompt notice to the Company of the discovery of (1) any
material inaccuracy in any representation or warranty made by it,(2) any
material failure of Optionee to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement or (3)
any legal proceedings related to the Station or the transactions contemplated
hereby. Notwithstanding the foregoing, no notification made under this Section
shall affect the representations or warranties or covenants or agreements of
the parties or the conditions to the obligations of the parties hereunder.
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12. News Releases. Except for announcements required by
applicable law, prior to the Execution Date, any news releases pertaining to
the transactions contemplated hereby shall be reviewed and approved by Optionee
and the Company, or their respective representatives, and shall be acceptable
to them prior to the dissemination thereof.
13. Covenants of Optionee. From the date hereof until the
Execution Date, Optionee agrees it shall not by its actions or omissions cause
(a) the representations and warranties of Optionee in the Purchase Agreement to
be untrue in any material respect on the Execution Date or (b) the schedules
delivered by the Company pursuant to Section 4 to be different than the
Schedules attached hereto as part of Exhibit A in a manner which is materially
adverse to Optionee or the Company.
14. Termination and Modification of Purchase Price. This
Agreement shall be terminated only as follows:
(a) This Agreement shall terminate as follows:
(i) At the expiration of the Exercise Period if
the Option has not been exercised during the Exercise Period;
(ii) Upon a termination of the Purchase Agreement in
accordance with its terms; or
(iii) If Optionee fails to deliver the $10 million to
the Company in accordance with Section 2(a).
(b) This Agreement may be terminated as follows,
provided, in the case of a termination pursuant to clause (i), (iii), (iv),
(v), (vi) or (vii), the terminating party is not in material breach of any of
its obligations, representations, warranties or duties hereunder:
(i) By written notice from the Optionee, if Optionee
exercises the Option during the Exercise Period but the schedules delivered by
the Company pursuant to Section 4 are different than the schedules attached
hereto as part of Exhibit A in a manner which is materially adverse to
Optionee;
(ii) By mutual written consent of the parties;
(iii) Subject to Section 15, written notice from
either the Company or Optionee, if a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action, in each case
permanently restraining, enjoining or otherwise prohibiting the acquisition of
the Assets pursuant to the terms of the Purchase Agreement and such order,
decree, ruling or other action is not subject to appeal or further
administrative or judicial review;
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(iv) By written notice from Optionee, if the Company
fails to perform or breaches any of its material obligations or duties under
this Agreement and the Company has not cured such failure to perform or breach
within 30 days after delivery of written notice from Optionee or upon a
material breach of any representation and warranty of the Company contained
herein;
(v) By written notice from the Company, if Optionee
fails to perform or breaches any of its material obligations or duties under
this Agreement and Optionee has not cured such failure to perform or breach
within 30 days after delivery of written notice from the Company or upon a
material breach of any representation and warranty of Optionee contained
herein;
(vi) Subject to Section 15, by written notice from
the Company or Optionee, if the Federal Trade Commission or the United States
Department of Justice prohibits the acquisition of the Assets pursuant to the
Purchase Agreement under a decision, order or decree which is not subject to
appeal or further administrative or judicial review; or
(vii) By written notice from the Company, if
neither of the following occurs: (A) within 30 days of the Delivery Date,
Optionee shall have executed, and delivered to the Company, the Purchase
Agreement, together with the schedules delivered by the Company pursuant to
Section 4, or (B) within 30 days of the Delivery Date, Optionee shall have
delivered to the Company a written notice (the "Execution Notice") that
Optionee intends to execute the Purchase Agreement, together with the schedules
delivered by the Company pursuant to Section 4, but Optionee has determined the
parties are required to file Notification and Report Forms under the HSR Act
prior to executing such Purchase Agreement and Optionee executes such Purchase
Agreement within five business days after the waiting period under the HSR Act
has expired or been terminated.
(c) Upon a termination of this Agreement in accordance
with its terms no party shall have any liability hereunder, except (i) as
provided in Sections 3 and 10, (ii) for liability for a breach of such party's
representations and warranties contained herein and (iii) for liability for
nonperformance of any of such party's obligations, covenants or agreements
contained herein.
(d) Notwithstanding anything to the contrary contained
herein, the provisions of Sections 3, 10 and 18 shall survive the termination
hereof and Section 19 (only with respect to Sections 3, 10 and 18) shall
survive the termination hereof.
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(e) If Optionee would be entitled to terminate this
Agreement under Section 14(b)(i) but Optionee desires to proceed with the
acquisition of the Assets, in lieu of termination of this Agreement the parties
agree the Purchase Agreement shall be executed and, if Optionee would have been
entitled to receive a refund under Section 3(d) or 3(e) if it had terminated
this Agreement, the purchase price for the Assets shall be reduced by the
amount of the increase in liabilities or the amount of the reduction in the
Assets, as the case may be, described in Section 3(d) or 3(e), as the case may
be.
15. Assignment. Optionee shall have no right, without the consent
of the Company (which consent may not be unreasonably withheld), to assign,
sell, transfer, pledge, hypothecate, delegate or otherwise transfer, whether
voluntarily, involuntarily or by operation of law, any of Optionee's rights or
obligations hereunder, nor shall Optionee's rights be subject to encumbrance or
the claim of creditors. Any such purported assignment, transfer or delegation
shall be null and void. Notwithstanding the foregoing, (a) Optionee may
assign its rights hereunder, without the consent of the Company or the
Trustees, to any of its wholly-owned subsidiaries, as well as to Heftel
Broadcasting Corporation, a Delaware corporation, or any of its wholly-owned
subsidiaries, and (b) if Optionee is not in material breach of any of its
obligations, representations, warranties or duties hereunder and the
acquisition of the Assets by Optionee is prohibited by law, Optionee may assign
it rights hereunder, without the consent of the Company or the Trustees, to an
entity which is financially capable of performing the obligations of Optionee
hereunder and under the Purchase Agreement. No assignment by Optionee
hereunder shall relieve Optionee of its obligations hereunder. Notwithstanding
anything to the contrary contained herein no assignment of any rights hereunder
may be made unless the rights of the assigning party under the Purchase
Agreement are also assigned to the same person.
16. Recordation and UCC-1. The Company agrees to execute a
memorandum of this Agreement in a form reasonably acceptable to the parties
which Optionee shall be entitled to record in the applicable county recorders'
offices. In addition, the Company shall execute and deliver to Optionee a
Financing Statement on Form UCC-1 which shall indicate the existence of this
Agreement and which Optionee may file with the California Secretary of State
and applicable county recorders' offices for purposes of informing the general
public of the existence of this Agreement.
17. Definitions.
(a) The following terms shall have the following meaning:
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"Breaching Refund Amount" shall mean an amount equal to the Option
Payments less the lesser of (i) the product of the Daily Amount (the parties
acknowledge the Daily Amount may be different for each day) multiplied by the
number of days elapsed from the TBA Effective Date until the date of
termination of this Agreement or (ii) Optionee's broadcast cash flow from the
Station for such period (for purposes hereof "broadcast cash flow" shall mean
broadcasting revenues less Station operating expenses).
"Communications Act" shall mean the Communications Act of 1934, as
amended.
"Contracts" shall mean the contracts set forth on Schedule 1.1(b) to
the Purchase Agreement attached hereto.
"Daily Amount" shall mean $13,698.63; provided, however, (i) for any
day on which Optionee is unable to broadcast its programming on the Station
under the TBA because of preemption thereof by Licensee or because the Station
is unable to broadcast (except if the reason for the inability to broadcast is
a capital expenditure was not made under the TBA due to Optionee not consenting
to such expenditure), the "Daily Amount" shall be reduced by an amount equal to
(1) $570.78, multiplied by (2) the number of hours (rounded to the nearest
whole number) for which Optionee is unable to broadcast its programming on the
Station under the TBA and (ii) for each day on which the TBA is not in effect
due to a termination thereof, the "Daily Amount" shall be zero.
"Execution Date" shall mean the date the Purchase Agreement is
executed by both parties.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Initial Payment Date" shall mean the earlier of the date on which the
waiting period under the HSR Act for the filing described in Section 5 expires
or the date of written notice of termination of such waiting period.
"Liens" shall mean all claims, liens, encumbrances, security
interests, mortgages, or pledges of any kind except for (i) rights of the
lessor of the transmitter site and the studio premises, and (ii) rights of any
parties to any Contract set forth in such Contract.
"Non-Breaching Refund Amount" shall mean an amount equal to the Option
Payments less the product of the Daily Amount (the parties acknowledge the
Daily Amount may be different for each day) multiplied by the number of days
elapsed from the TBA Effective Date until the date of termination of this
Agreement.
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"Purchase Agreement" shall mean the Asset Purchase Agreement attached
hereto as Exhibit A and incorporated herein by reference.
"TBA" shall mean the Time Brokerage Agreement, of even date herewith,
between the Company and Optionee.
"TBA Effective Date" shall mean the Effective Date as defined in the
TBA.
Each of the following terms shall have the meanings set forth in the
Section opposite such term:
Term Section
---- -------
Agreement Preamble
Applicable Period 21
Assets 1
Company Preamble
Delivery Date 4
Execution Notice 14(b)(vii)
Exercise Notice 4
Exercise Period 4
Expiration Time 3(a)
FCC Recital A
Option 1
Optionee Preamble
Option Payments 3(a)
Station Recital A
Trustees Preamble
18. Miscellaneous
(a) Benefit. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, permitted assigns, heirs, administrators, executors and
representatives.
(b) Headings. The headings set forth in this Agreement
are for convenience only and will not control or affect the meaning or
construction of the provisions of this Agreement.
(c) Governing Law. This Agreement and the rights of the
parties hereto shall be governed by, and construed in accordance with, the laws
of the State of California, without giving effect to the choice of law
principles thereof.
(d) Amendment. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.
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(e) Severability. In the event that any one or more of
the provisions contained in this Agreement or in any other instrument referred
to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other such instrument.
(f) Attorneys' Fees. Should any party hereto institute
any action or proceeding at law or in equity to enforce any provision of this
Agreement, including an action for declaratory relief, or for damages by reason
of an alleged breach of any provision of this Agreement, or otherwise in
connection with this Agreement, or any provision hereof, the prevailing party
shall be entitled to recover from the losing party or parties reasonable
attorneys' fees and costs for services rendered to the prevailing party in such
action or proceeding.
(g) Multiple Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
(h) Notices. Unless applicable law requires a different
method of giving notice, any and all notices, demands or other communications
required or desired to be given hereunder by any party shall be in writing.
Assuming that the contents of a notice meet the requirements of the specific
Section of this Agreement which mandates the giving of that notice, a notice
shall be validly given or made to another party if served either personally or
if deposited in the United States mail, certified or registered, postage
prepaid, or if transmitted by telegraph, telecopy or other electronic written
transmission device or if sent by overnight courier service, and if addressed
to the applicable party as set forth below. If such notice, demand or other
communication is served personally, service shall be conclusively deemed given
at the time of such personal service. If such notice, demand or other
communication is given by mail, service shall be conclusively deemed given
seventy-two (72) hours after the deposit thereof in the United States mail. If
such notice, demand or other communication is given by overnight courier, or
electronic transmission, service shall be conclusively deemed given at the time
of confirmation of delivery. The addresses for the parties are as follows:
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If to Optionee:
Clear Channel Radio, Inc.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx X. Xxxx
Telecopier No.: (000) 000-0000
If to the Company:
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxx. Xxxxxx Xxxxx
Telecopier: (000) 000-0000
with a copy to:
Jeffer, Mangels, Xxxxxx & Xxxxxxx LLP
2121 Avenue of the Stars, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
If to the Trustees:
Gursey, Xxxxxxxxx & Co., LLP
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Co-Trustee
Telecopier No.: (000) 000-0000
with a copy to:
Jeffer, Mangels, Xxxxxx & Marmaro LLP
2121 Avenue of the Stars, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
Any party hereto may change its or his address for the purpose of receiving
notices, demands and other communications as herein provided, by a written
notice given in the aforesaid manner to the other parties hereto.
(i) Waivers. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
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(j) No Third Party Beneficiaries. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
to any person or entity, other than the parties hereto and their respective
successors, permitted assigns, heirs, administrators, executors and
representatives, any rights or remedies under or by reason of this Agreement.
(k) Entire Agreement. This Agreement constitutes the
entire agreement and understanding of the parties hereto relating to the
matters provided for herein and supersede any and all prior agreements,
arrangements, negotiations, discussions and understandings relating to the
matters provided for herein.
(l) Rule of Construction. Each party and counsel for
each party have reviewed this Agreement. The parties hereto hereby agree that
the normal rule of construction, which requires a court to resolve any
ambiguities against the drafting party, shall not apply in interpreting this
Agreement.
(m) Exhibits. Each Exhibit referred to in this Agreement
is hereby incorporated herein by reference.
(n) HSR Filing Fee. Optionee shall be responsible for
paying any governmental filing fee for all filings made under the HSR Act.
Each party shall be responsible for its own attorneys fees and costs related to
the filings under the HSR Act and responding to any requests for additional
information made by the Federal Trade Commission or the United States
Department of Justice in response to such filings.
(o) References to Optionee. In the context of references
herein to representations, warranties, covenants, obligations or duties of
Optionee under the Purchase Agreement or the TBA, Optionee shall be deemed to
include its assigns under the Purchase Agreement and the TBA.
19. Guaranty. The Trustees, as co-trustees of the Xxxxx
Survivor's Trust, hereby guarantee the obligations of the Company hereunder;
provided, however, Optionee agrees the monetary liability of Xxxxxxx X.
Xxxxxxxxx under this guarantee shall be limited to the assets of the Xxxxx
Survivor's Trust.
20. Specific Performance. The Company recognizes that, in the
event the Company defaults in the performance of its obligations hereunder,
monetary damages will not be an adequate remedy. Therefore, unless Optionee is
in material breach of this Agreement, Optionee shall be entitled to obtain
specific performance of the terms of this Agreement. In any action to enforce
specifically the performance of this Agreement, the Company waives the defense
that there is another adequate remedy at law or equity and agrees that Optionee
shall have the right to obtain specific performance of the Company's
obligations under
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the terms of this Agreement without being required to prove actual damages,
post bond or furnish other security. As a condition to seeking specific
performance, Optionee shall not be required to have tendered the purchase price
for the Assets, but shall be required to demonstrate that it is ready, willing
and able to do so at the closing of the transactions contemplated by the
Purchase Agreement and to perform its other obligations hereunder and under the
Purchase Agreement in accordance with the terms hereof and thereof.
21. Extension of Time Periods. If either the Company or
Optionee is required or permitted to perform an action hereunder within a
certain time period (the "Applicable Period") but on or before the end of the
Applicable Period such party has delivered a notice of breach by the other
hereunder, the balance of the Applicable Period shall be suspended until the
day after the date on which the breaching party has cured the Subject Breach.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
GOLDEN WEST BROADCASTERS
By:/s/ Xxxxxxxxxx Xxxxx
-----------------------------
Xxxxxxxxxx Xxxxx
Executive Vice President
CLEAR CHANNEL RADIO, INC.
By:/s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President,
Legal Affairs
/s/ Xxxxx Xxxx Xxxxx
-------------------------------
XXXXX XXXX XXXXX, as co-trustee
of the Xxxxx Survivor's Trust
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------
XXXXXXX X. XXXXXXXXX, as
co-trustee of the Xxxxx
Survivor's Trust
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EXHIBIT A
Asset Purchase Agreement and Schedules
1. See the attached document consisting of 50 pages.
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and
entered into on _______ by and among GOLDEN WEST BROADCASTERS, a California
corporation ("Seller"), ________________ and XXXXXXX X. XXXXXXXXX, AS CO-
TRUSTEES OF THE XXXXX SURVIVOR'S TRUST (collectively, the "Trustees") and CLEAR
CHANNEL RADIO, INC., a Nevada corporation ("Buyer"), with reference to the
following facts:
Recitals
A. Seller operates radio station KSCA(FM), Glendale,
California (the "Station") pursuant to licenses issued by the Federal
Communications Commission (the "FCC");
B. Seller, Buyer and Xxxxxxx X. Xxxxxxxxx and Xxxxx Xxxx
Xxxxx, as co-trustees of the Xxxxx Survivor's Trust, entered into an Option
Agreement, dated as of December 23, 1996, (the "Option Agreement") and this
Agreement is being entered into pursuant to the exercise of the option granted
to Buyer under the Option Agreement.
C. Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller, substantially all of the assets used or held for use in
connection with the operation of the Station, all on the terms and subject to
the conditions set forth herein.
Agreement
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE 22
PURCHASE OF ASSETS
22.1 Transfer of Assets by Seller. On the Closing Date,
subject to the conditions contained herein, Seller shall sell, assign, transfer
and convey to Buyer, and Buyer shall purchase from Seller, all of the assets,
properties, interests and rights of Seller which are used or held for use in
connection with the operation of the Station (collectively, the "Purchased
Assets"), including, without limitation, the following:
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(a) All furniture, equipment and other tangible
personal property relating to the operation of the Station, including, without
limitation, the property listed on Schedule 1.1(a) attached hereto, together
with any additions thereto made between the date hereof and the Closing Date,
and less any dispositions thereof made in the ordinary course of business
between the date hereof and the Closing Date which are replaced with items of
equal or greater value (collectively, the "Tangible Personal Property");
(b) All of Seller's right, title and interest
in and to each permit, contract, agreement, license and lease, written or oral,
relating to the operation of the Station listed in Schedule 1.1(b) hereto,
together with all contracts, agreements and leases entered into by Seller
between the date hereof and the Closing Date if Buyer agrees to assume such
agreement in writing at the Closing (collectively, the "Contracts"); at Buyer's
option, exercisable by delivery of written notice before the Closing, the
Auxiliary Site Lease shall be included in the Contracts;
(c) All licenses, permits and other
authorizations relating to the Station issued to Seller by the FCC on or prior
to the Closing Date, together with renewals or modifications thereof,
including, without limitation, the licenses, permits and authorizations listed
on Schedule 1.1(c) attached hereto (collectively, the "FCC Licenses");
(d) All of Seller's right, title and interest
in and to all of its intellectual property associated with the Station,
including, but not limited to, the call letters "KSCA(FM)," together with any
associated goodwill (collectively, the "Intellectual Property");
(e) All files, records, and reports which
Seller must retain under FCC rules and regulations;
(f) All rights of way and other interests of
every kind in and to any real property and buildings thereon leased by Seller
and used or held for use in connection with the business and operations of the
Station; and
(g) All goodwill in, and going concern value
of, the Station;
(h) All claims and rights against third parties
relating to the Purchased Assets, including, without limitation, all rights
under manufacturers' and vendors' warranties; and
(i) Any books and records relating to any of
the foregoing, except to the extent that Seller wishes to make, at its expense,
a duplicate copy of such materials.
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22.2 Excluded Assets. Notwithstanding anything to the
contrary contained herein, it is expressly understood and agreed that the
Purchased Assets shall not include the following assets along with all right,
title and interest therein (collectively, the "Excluded Assets"):
(a) All cash, cash equivalents or similar type
investments of Seller, such as certificates of deposit, Treasury bills and
other marketable securities on hand and/or in banks;
(b) All of Seller's accounts receivable
existing prior to the TBA Effective Date;
(c) All contracts or agreements to which Seller
is a party that Buyer has not assumed pursuant to the terms of Section 2.1
hereof;
(d) Seller's corporate seal, minute books,
charter documents, corporate stock record books and such other books and
records as pertain to the organization, existence or share capitalization of
Seller and duplicate copies of such records as are necessary to enable Seller
to file its tax returns and reports as well as any other records or materials
relating to Seller generally and not involving the Station's operations;
(e) All pension, profit sharing or cash or
deferred (Section 401(k)) plans and trusts and the assets thereof and any other
employee benefit plan or arrangement and the assets thereof, if any maintained
by Seller;
(f) Contracts of insurance and all insurance
proceeds or claims made by Seller relating to property or equipment repaired,
replaced or restored by Seller prior to the Closing Date;
(g) Any and all claims (except as set forth in
Section 1.1(h)) made by Seller with respect to transactions prior to the
Closing Date and the proceeds thereof, except claims with respect to
obligations to be assumed by Buyer pursuant to Section 2.1 hereof; and
(h) All other assets of Seller which are not
used or held for use in the operation of the Station.
22.3 No Liens. The Purchased Assets shall be transferred to
Buyer free and clear of all Liens.
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ARTICLE 23
ASSUMPTION OF OBLIGATIONS
23.1 Assumption of Obligations. In addition to the
provisions of Section 3.4, on the Closing Date, Buyer shall assume and
undertake to pay, satisfy or discharge the obligations and commitments of
Seller arising or to be performed on or after the Closing Date under the
Contracts. All of the foregoing assumed obligations and commitments shall be
referred to herein collectively as the "Assumed Liabilities." If any required
approval of or consent to the assignment of any Contract is not obtained and
the Closing occurs, such Contract shall not be assigned until such consent is
obtained, but on the Closing Date Buyer and Seller shall enter into an
equitable arrangement pursuant to which Buyer shall pay, satisfy, perform, and
discharge Seller's obligations which arise or are to be performed under such
Contract on or after the Closing Date and Seller shall provide to Buyer the
rights and benefits under such Contract arising on or after the Closing Date.
23.2 Retained Liabilities. Except as set forth in Sections
2.1 and 3.4, Buyer expressly does not, and shall not, assume or be deemed to
assume, under this Agreement or otherwise by reason of the transactions
contemplated hereby, any liability, obligation, commitment, undertaking,
expense or agreement of Seller of any nature whatsoever, whether known or
unknown or absolute or contingent. All of such liabilities and obligations
shall be referred to herein collectively as the "Retained Liabilities." Without
limiting the generality of the foregoing, (a) Buyer shall have no obligation or
liability to employees of Seller due to or because of any past service
liability, vested benefits, retirement plan insolvencies or other retirement
plan or past employment obligation under local, state or federal law (including
the Employee Retirement Income Security Act of 1974, as amended) as a result of
the purchase of the Purchased Assets or former employees of Seller becoming
employees of Buyer and (b) Buyer shall have no liability to any employees of
Seller under any employment agreement between Seller and such employee, whether
or not listed on any Schedule attached hereto. Nothing contained herein shall
limit the obligations of Buyer under the TBA to reimburse Seller for certain
expenses or pay certain severance obligations.
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ARTICLE 24
CONSIDERATION
24.1 Purchase Price. In consideration for the transfer of
the Purchased Assets, Buyer shall pay to Seller an amount (the "Purchase
Price") equal to the greater of (a) $112.5 million or (b) the sum of (i) $105
million plus (ii) an amount equal to the product of the Daily Amount (the
parties acknowledge the Daily Amount may be different for each day) multiplied
by the number of days elapsed from the TBA Effective Date until (but not
including) the Closing Date. The Purchase Price shall be subject to any
adjustment to be made pursuant to Section 3.4 hereof and shall be subject to
adjustment for any damages incurred by a party as a result of termination of
the TBA due to a breach thereof or a termination of the TBA not made in
accordance with the terms thereof. In addition, as consideration for the
transfer of the Purchased Assets to Buyer, Buyer shall assume the Assumed
Liabilities.
24.2 Payment of Purchase Price. On the Closing Date, Buyer
shall pay the Purchase Price, plus or minus any adjustment to be made pursuant
to Sections 3.1 and 3.4 hereof and minus all payments made under the Option
Agreement, in lawful money of the United States of America by bank cashier's
check or wire-transfer of immediately available funds.
24.3 Allocation of Purchase Price. Within 90 days after the
Closing, Buyer and Seller shall mutually determine the allocation of the
Purchase Price in accordance with Treasury Regulation Section 1.1060-1T based
upon the approximate replacement values of the Purchased Assets determined by a
nationally recognized appraisal firm chosen by Buyer and reasonably acceptable
to Seller (it being anticipated that the Purchase Price will be allocated first
to such of the Purchased Assets as are tangible to the extent of the
approximate replacement values thereof on the Closing Date, with the balance to
intangible assets). Buyer shall pay all fees and expenses of such appraisal
firm. Seller and Buyer will report the federal income tax consequences of the
sale and acquisition of the Purchased Assets under this Agreement in a manner
consistent with the foregoing, and will file Forms 8594 in the manner and at
the times required by Treasury Regulation Section 1.1060-1T. Buyer shall
prepare drafts of Form 8594 reflecting the respective Purchase Price
allocations determined as provided above in accordance with Treasury Regulation
Section 1.1060-1T for Seller and Buyer, such draft Form 8594 to be provided to
Seller within 180 days following the Closing Date, but in no event later than
the due date for Seller's federal income tax return for the period including
the Closing Date; and Seller's consent to such drafts shall not be unreasonably
withheld or delayed.
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24.4 Proration of Income and Expenses.
(a) Except as otherwise provided herein or in
the TBA, all income and expenses arising from the conduct of the business and
operation of the Station, including, without limitation, all ad valorem, real
estate and other property taxes (but excluding taxes arising by reason of the
transfer of the Purchased Assets as contemplated hereby, which shall be paid as
set forth in Article 11 of this Agreement), business and license fees, music
and other license fees, utility expenses, rents and similar prepaid and
deferred items attributable to the ownership and operation of the Station,
shall be prorated between Buyer and Seller in accordance with generally
accepted accounting principles as of 11:59 p.m., California time, on the date
immediately preceding the Closing Date (the "Effective Time") in accordance
with the principle that Seller shall receive all revenues and be responsible
for all expenses, costs, and liabilities allocable to the period prior to the
Effective Time, and Buyer shall receive all revenues, and be responsible for
all expenses, costs, and obligations, allocable to the period after the
Effective Time, subject to the following:
(i) There shall be no adjustment
with respect to any contracts not included in the Contracts;
(ii) There shall be no adjustment
for any expenses or payments to terminated employees which are the
responsibility of Buyer, or for which Buyer is obligated to reimburse Seller,
pursuant to Section 3(b) of the TBA or for any revenue to which Buyer is
entitled under the TBA; and
(iii) Revenues, expenses, taxes,
costs and liabilities earned or incurred in connection with particular programs
and announcements shall be allocated to the time of performance of such
programs and announcements without regard to the date of payment therefor.
(b) The prorations and adjustments contemplated
by this Section, to the extent practicable, shall be made on the Closing Date.
As to those prorations and adjustments not capable of being ascertained on the
Closing Date, an adjustment and proration shall be made within sixty (60) days
of the Closing Date. In the event of any disputes between the parties as to
such adjustments, the amounts not in dispute shall nonetheless be paid at such
time and such disputes shall be resolved by an independent certified public
accountant mutually acceptable to the parties, and the fees and expenses of
such accountant shall be paid one-half by Seller and one-half by Buyer. The
decision of such accountant shall be conclusive and binding on the parties.
All prorations and
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adjustments made on the Closing Date shall be paid in the form of an increase
or decrease of the amount payable by Buyer at the Closing. All prorations and
adjustments made after the Closing shall be paid within five (5) business days
of the determination thereof.
ARTICLE 25
GOVERNMENTAL CONSENTS
25.1 FCC Consent. It is specifically understood and agreed
by the parties hereto that consummation of the transactions contemplated hereby
is expressly conditioned on and is subject to the prior consent and approval of
the FCC ("FCC Consent").
25.2 FCC Application. Within five business days after
execution of this Agreement, the parties shall file with the FCC an application
for assignment of the FCC Licenses ("FCC Application") from Seller to Buyer.
The parties shall thereafter prosecute the FCC Application with all reasonable
diligence and otherwise use commercially reasonable efforts to obtain the grant
of the FCC Application as expeditiously as practicable. If the FCC Consent
imposes any condition on a party hereto, such party shall use commercially
reasonable efforts to comply with such condition. If reconsideration or
judicial review is sought with respect to the FCC Consent, the parties shall
oppose such efforts for reconsideration or judicial review.
25.3 Xxxx-Xxxxx-Xxxxxx Filings. If the HSR Act and the
rules and regulations of the Federal Trade Commission require the parties to
file Notification and Report Forms after the execution hereof, as soon as
possible after the date hereof, but in no event later than 30 days after the
date hereof, Buyer and Seller shall prepare and file all documents with the
Federal Trade Commission and the United States Department of Justice as are
required to comply with the HSR Act and shall promptly furnish all materials
thereafter requested by any of the regulatory agencies having jurisdiction over
such filings.
ARTICLE 26
CLOSING
26.1 Closing Date. Except as otherwise agreed upon by the
parties hereto, the consummation of the transactions contemplated herein (the
"Closing") shall occur within five (5) business days after the FCC Consent
shall have become a Final Order, subject to extension to allow Seller to comply
with Section 15.1 (the "Closing Date"). As used herein, the term "Final Order"
means a written action or order issued by the FCC setting forth the FCC Consent
and (a) which has not been reversed, stayed, enjoined, set aside, annulled or
suspended, and (b) with respect to which (i) no requests have been filed for
administrative or judicial review, reconsideration, appeal or stay, and the
time for filing any such requests and for the FCC to set aside the action on
its own motion (whether upon reconsideration or otherwise) has expired, or (ii)
in the event of
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review, reconsideration, appeal or stay, the time for further review,
reconsideration or appeal has expired or such requests have been withdrawn or
denied. Notwithstanding the foregoing, at Buyer's election the Closing shall
occur within five (5) business days after the date on which public notice of
the grant of FCC Consent is given (even though the FCC Consent shall not have
become a Final Order), subject to extension to allow Seller to comply with
Section 15.1. In addition, notwithstanding anything to the contrary contained
herein, if a party has a condition to its obligations which has not been
satisfied by the 5th business day after the date on which public notice of the
grant of the FCC Consent is given or the date on which the FCC Consent becomes
a Final Order, as the case may be, such party may extend the Closing Date for
such time as is necessary to cause such condition to be satisfied. All actions
taken at the Closing will be considered as having been taken simultaneously and
no such actions will be considered to be completed until all such actions have
been completed.
26.2 Closing Place. The Closing shall be held at such place
as the parties hereto may agree.
ARTICLE 27
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
27.1 Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of California
and has the requisite corporate power to carry on its business as it is now
being conducted.
27.2 Authority.
(a) Seller has the corporate power and
authority to enter into this Agreement, to perform its obligations hereunder,
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Seller. This Agreement has been duly executed
and delivered by Seller and constitutes a valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms.
(b) Except as set forth in Schedule 6.2(b)
attached hereto, the execution and delivery by Seller of this Agreement do not,
and the consummation of the transactions contemplated hereby will not, (i)
conflict with, or result in a violation of, any provision of the Articles of
Incorporation or Bylaws of Seller, (ii) constitute or result in a material
breach of or material default (or an event which with notice or lapse of time,
or both, would constitute a material default) under, or
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result in the termination or suspension of, or accelerate the performance
required by, or result in a right of termination, cancellation or acceleration
of any contract or agreement of Seller, (iii) create any Lien upon any of the
Purchased Assets, or (iv) constitute, or result in, a violation of any
judgment, ruling, order, writ, injunction, decree, statute, law, rule or
regulation applicable to Seller or any of its properties or assets, other than
in the cases of clauses (ii) and (iv) a breach, default, termination or
suspension, acceleration of performance, cancellation or violation which would
not adversely affect the Purchased Assets, Buyer's use or enjoyment of the
Purchased Assets or the ability of Seller to complete the sale of the Purchased
Assets to Buyer pursuant to this Agreement.
(c) No consent, approval, order or
authorization of, notice to, or registration, declaration of filing with, any
governmental entity is necessary in connection with the execution and delivery
of this Agreement by Seller or the consummation of the transactions
contemplated hereby by Seller, except for the FCC Consent and the filings
required under the HSR Act.
27.3 Station Licenses. Schedule 1.1(c) attached hereto
contains a true and complete list of the FCC Licenses. Seller is the
authorized legal holder of the FCC Licenses. The FCC Licenses are in full
force and effect [if the Purchase Agreement is executed after August 1, 1997,
this sentence will need to be modified to reflect the filing of the renewal
application for the FCC Licenses]. The FCC Licenses are all of the licenses,
permits or other authorizations required under the Communications Act and the
rules and regulations of the FCC to operate the Station as currently operated.
No proceedings are pending or, to the best knowledge of Seller, threatened
which may result in the revocation, modification, non-renewal or suspension of
any of the FCC Licenses. Except as caused by non-compliance by Buyer with the
TBA, the Station is operating in compliance in all material respects with the
Communications Act and all FCC rules and regulations, including, but not
limited to, the timely filing of all accurate reports required by the FCC. The
representations and warranties contained in this Section 6.3 are subject to
Schedule 6.3 attached hereto.
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27.4 Equipment. Schedule 1.1(a) attached hereto contains a
true and complete list of the Tangible Personal Property. Seller (a) is the
lawful owner of all of the Tangible Personal Property it purports to own, and
(b) has valid leasehold interests in the Tangible Personal Property it purports
to lease, in all cases free and clear of any Liens. Seller will not be a party
to any equipment financing leases as of the Closing Date.
27.5 Contracts. Seller is not in violation or breach of,
nor has Seller received in writing any claim or threat that it has breached any
of the terms and conditions of, any Contract, including any real property
leases. To the best knowledge of Seller, no other party to any Contract is in
default thereunder or breach thereof. Seller has delivered to Buyer a true,
accurate and complete copy of each Contract. Except as set forth in Schedule
6.5 attached hereto, neither the execution and delivery by Seller of this
Agreement nor the consummation by Seller of the transactions contemplated under
this Agreement requires the consent of any party to a Contract. With respect
to the Transmitter Site Lease, (a) such lease is in full force and effect and
is valid, binding and enforceable in accordance with its terms, (b) to the best
knowledge of Seller, no event has occurred or condition exists that, with
notice or lapse of time or both, would become a breach or default by either
party to such lease, (c) Seller's interest in such lease is not subject to any
Liens, and (d) the term thereof has been extended to September 30, 1999 and the
term "Master Sublease" as used therein means the KCET Sublease. The rights
under the Transmitter Site Lease provide sufficient access to the tower and
other facilities for the Station which are located on the premises described in
such lease without the need to obtain any other access rights. Seller has not
received any notice that any of the Senior Leases are being terminated.
27.6 Intellectual Property. None of the Intellectual
Property was granted to Seller pursuant to any licensing or sublicensing
agreement under which Seller is the licensee or the sublicensee. No person has
a right to receive a royalty or similar payment in respect of any Intellectual
Property pursuant to any contractual arrangements entered into by Seller.
Seller has not granted to any other person any right to use the Intellectual
Property pursuant to any licensing or sublicensing agreement. No notices have
been received by Seller that Seller's use of the Intellectual Property
infringes upon or otherwise violates any proprietary rights of others. To the
best knowledge of Seller, no third-party is infringing on the Intellectual
Property. The Intellectual Property, including any registered marks or
applications, is owned by Seller free and clear of any Liens. The
representations and warranties contained in this Section 6.6 are subject to
Schedule 6.6 attached hereto.
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27.7 Brokers. Seller has not entered into any contract,
agreement, arrangement or understanding with any person or entity which will
result in the obligation to pay any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement.
27.8 Litigation. There are no claims, actions, suits,
litigation, labor disputes, arbitrations, proceedings or investigations pending
or, to the best knowledge of Seller, threatened against Seller which would have
an adverse effect on Buyer's ability to purchase the Purchased Assets, Buyer's
ability to full use and enjoyment of the Purchased Assets or the ability of
Seller to sell the Purchased Assets to Buyer pursuant to this Agreement.
Seller is not subject to any order, judgment, writ, injunction or decree of any
court or governmental agency or entity.
27.9 Insurance. Seller maintains the insurance policies
relating to the Station and the Purchased Assets bearing the policy numbers,
for the terms, with the companies, in the amounts, and providing the general
coverage set forth on Schedule 6.9 attached hereto. All of such policies are
in full force and effect and Seller is not in default of any material provision
thereof. Seller has not received notice from any issuer of any such policies
of its intention to cancel, terminate or refuse to renew any policy issued by
it.
27.10 Labor, Employment Contracts and Benefit Programs.
(a) There are no collective bargaining
agreements, or written or oral agreements, relating to the terms and conditions
of employment or termination of employment, covering any employees, consultants
or agents of Seller relating to the Station, except as listed and described in
Schedule 6.10(a) attached hereto [if the Purchase Agreement is signed before
the TBA Effective Date, the following language will be included: and except for
agreements which will be terminated at the beginning of the term of the TBA].
Buyer has provided to Seller a copy of all of the agreements listed on Schedule
6.10(a) together with any amendments or modifications thereof. Except as
listed and described in Schedule 6.10(a), none of the employees of Seller
relating to the Station [if the Purchase Agreement is signed before the TBA
Effective Date, the following language will be included: who will remain as
employees after the beginning of the term of the TBA] have written employment
contracts. There is no strike, picketing, slowdown or work stoppage by or
concerning the employees of Seller relating to the Station pending against or
involving Seller. Other than with respect to the existing AFTRA agreement,
Seller has no knowledge of any organizational effort currently being made or
threatened respecting any of the employees of Seller relating to the Station.
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(b) All handbooks, policies and procedures of
Seller relating to all aspects of employment of employees of Seller relating to
the Station, including but not limited to compensation, benefits, equal
employment opportunity and safety, are listed and described in Schedule 6.10(b)
attached hereto.
(c) Seller has provided to Buyer the names of
all present employees of Seller and the positions, total annual compensation
and accrued vacation and sick time of each.
27.11 Absence of Material Change. Except as caused by non-
compliance by Buyer with the TBA, since the date of the Option Agreement:
(a) Seller has not taken any action with
respect to the Station outside of the ordinary and usual course of business,
except as related to the transactions contemplated hereby;
(b) Seller has not granted a security interest
in the Purchased Assets to secure any borrowings of Seller or any obligation or
liability of others;
(c) Seller has with respect to the Station paid
all of its debts and obligations under the Contracts as they became due;
(d) Seller has not waived any right of
substantial value under the Contracts; and
(e) Seller has maintained its books, accounts
and records with respect to the Contracts in the usual, customary and ordinary
manner.
27.12 Shareholders. The Trustees, as co-trustees of the
Xxxxx Survivor's Trust, are the sole shareholders of Seller.
27.13 Real Property. Seller has no interest in any real
property other than its interest in the K-LITE Studio/Office Lease, dated
February 4, 1994, between Seller and Toluca Plaza Company, together with the
Addendum dated February 4, 1994, and the Antenna Leases. Neither Seller, nor
to the best knowledge of Seller, any of Seller's lenders possess a title
insurance policy with respect to such interests. To the best knowledge of
Seller, the real property on which the tower for the Station is located is
owned by Katella, Katella leases such property to BALP pursuant to the Ground
Lease, BALP leases such property to RMBC pursuant to the RMBC Lease, RMBC
leases such property to Metromedia pursuant to the Metromedia Sublease,
Metromedia leases such property to Fox pursuant to the Fox Sublease, Fox leases
such property to KCET pursuant to the KCET Sublease and KCET leases a portion
of such property to Seller pursuant to the Transmitter Site Lease.
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27.14 Sales Tax. Seller has not made any sales which would
cause the sale of the Purchased Assets to Buyer hereunder to fail to be exempt
from sales tax under California law.
27.15 Schedules. The Schedules attached hereto are the same
as the Schedules attached to the Option Agreement, except for changes which are
not materially adverse to Buyer and changes which are not due to the actions or
omissions of Seller, and are accurate and complete as of the date hereof.
27.16 Disclosure. No provision of this Agreement relating to
Seller, the Station or the Purchased Assets or any other document, Schedule or
other written information furnished by Seller to Buyer in connection with the
execution, delivery and performance of this Agreement, or the consummation of
the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
required to be stated in order to make the statement, in light of the
circumstances in which it is made, not misleading. Except for facts affecting
the radio industry generally and except for facts or circumstances caused by
non- compliance by Buyer with the TBA, there is no fact now known to Seller
relating to the Station which in Seller's reasonable opinion adversely affects
the condition of the Purchased Assets, the status of the FCC licenses for the
Station or the ownership, operation, financial condition or business of the
Station which has not been disclosed to Buyer or set forth in the Schedules
attached hereto.
ARTICLE 28
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
28.1 Organization, Standing and Power. Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada and has the requisite corporate power to carry on
its business as it is now being conducted.
28.2 Authority.
(a) Buyer has all requisite corporate power and
authority to enter into this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Buyer and the consummation by Buyer of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement has been duly executed
and delivered by Buyer and constitutes a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.
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(b) No consent, approval, order or
authorization of, notice to, or registration, declaration or filing with, any
governmental entity is necessary in connection with the execution and delivery
of any of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby, except the FCC Consent and the filings
required under the HSR Act.
28.3 Brokers. Buyer has not entered into any contract,
agreement, arrangement or understanding with any person or entity which will
result in the obligation to pay any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement.
28.4 Litigation. There are no claims, actions, suits,
litigation, labor disputes, arbitrations, proceedings or investigations pending
or, to the best knowledge of Buyer, threatened against Buyer relating to the
transactions contemplated by this Agreement.
28.5 Qualification. There are no facts which, under the
Communications Act or the existing rules and regulations of the FCC, would
disqualify Buyer as an assignee of the FCC Licenses.
ARTICLE 29
COVENANTS
29.1 Operation of Business. Except as caused by
non-compliance by Buyer with the TBA, notwithstanding anything to the contrary
contained herein, between the date of this Agreement and the Closing Date,
Seller:
(a) except in accordance with Section 1.1,
shall not sell or otherwise dispose of any of the Purchased Assets or xxxxx x
Xxxx thereon or permit a Lien to remain on the Purchased Assets if such Lien
was placed thereon as a result of the actions or omissions of Seller;
(b) shall not commit any act or omit to do any
act which will cause a breach of any Contract;
(c) shall not amend or renew any Contract or
terminate the lease for the Station's main transmitter site;
(d) will operate in the ordinary course of
business, consistent with past practice, and will take no actions to diminish
materially the goodwill of the business of the Station;
(e) will operate the Station in material
compliance with the Communications Act and the FCC's rules and regulations;
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(f) will maintain the insurance coverage listed
on Schedule 6.9 in full force and effect through the Closing Date; and
(g) will take all action necessary to maintain
the FCC Licenses in full force and effect without material modification,
including, without limitation, the timely filing of a renewal application and
responding to requests thereunder from the FCC, and will keep Buyer informed
with respect to any renewal application for the FCC Licenses and requests
thereunder from the FCC.
29.2 Access to Information. From the date hereof to the
Closing Date, Seller shall afford, and shall cause its respective officers,
directors, employees and agents to afford, to Buyer and the officers, employees
and agents of Buyer complete access at all reasonable times to Seller's
officers, employees, independent contractors, agents, properties and to
Seller's books, records and contracts relating to the Station.
29.3 Confidentiality.
(a) Buyer shall hold, and shall cause its
officers, employees and agents and representatives, including, without
limitation, attorneys, accountants, consultants and financial advisors who
obtain such information to hold, in confidence, and not use for any purpose
other than evaluating the transactions contemplated by this Agreement or
performing its obligations hereunder or under the TBA, any confidential
information of Seller or the Trustees, which for the purposes hereof shall not
include any information which (i) is or becomes generally available to the
public other than as a result of disclosure by Buyer or one of its affiliates
in violation of its obligations under this subsection, (ii) becomes available
to Buyer on a nonconfidential basis from a source, other than Seller, the
Trustees or affiliates of Seller, which has represented that such source is
entitled to disclose it, or (iii) was known to Buyer on a nonconfidential basis
prior to its disclosure to Buyer hereunder. If this Agreement is terminated,
Buyer shall deliver, and cause its officers, employees, agents, and
representatives, including, without limitation, attorneys, accountants,
consultants and financial advisors who obtain confidential information of
Seller or the Trustees to deliver, to Seller all such confidential information
that is written (including copies or extracts thereof), whether such
confidential information was obtained before or after the execution hereof.
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(b) Seller shall hold, and shall cause its
officers, employees and agents and representatives, including, without
limitation, attorneys, accountants, consultants and financial advisors who
obtain such information to hold, in confidence, and not use for any purpose
other than evaluating the transactions contemplated by this Agreement, any
confidential information of Buyer, which for the purposes hereof shall not
include any information which (i) is or becomes generally available to the
public other than as a result of disclosure by Seller or one of its affiliates
in violation of its obligations under this subsection, (ii) becomes available
to Seller on a nonconfidential basis from a source, other than Buyer or its
affiliates, which has represented that such source is entitled to disclose it,
or (iii) was known to Seller on a nonconfidential basis prior to its disclosure
to Seller hereunder. If this Agreement is terminated, Seller shall deliver,
and cause its officers, employees, agents, and representatives, including,
without limitation, attorneys, accountants, consultants and financial advisors
who obtain confidential information of Buyer to deliver, to Buyer all such
confidential information that is written (including copies or extracts
thereof), whether such confidential information was obtained before or after
the execution hereof.
(c) If a person who receives confidential
information is requested or becomes legally compelled (by oral questions,
interrogatories, requests for information or documents, subpoena, criminal or
civil investigative demand or similar process) to disclose any of such
confidential information, such person will provide the other party with prompt
written notice so that such other party may seek a protective order or other
appropriate remedy or waive compliance with Section 8.3(a) or (b), as the case
may be. If such protective order or other remedy is not obtained, or if the
applicable party waives compliance with Section 8.3(a) or (b), as the case may
be, the person subject to the request will furnish only that portion of such
confidential information which is legally required and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded such confidential information.
29.4 Notification of Certain Matters. Seller shall give
prompt notice to Buyer, of the discovery of (i) any material inaccuracy in any
representation or warranty made by it, (ii) any material failure of Seller to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement or (iii) any legal proceedings related
to the Station or the transactions contemplated hereby. Buyer shall give
prompt notice to Seller of the discovery of (1) any material inaccuracy in any
representation or warranty made by it,(2) any material failure of Buyer to
comply with or satisfy any covenant, condition or agreement to be complied with
or
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satisfied by it under this Agreement or (3) any legal proceedings related to
the Station or the transactions contemplated hereby. Notwithstanding the
foregoing, no notification made under this Section shall affect the
representations or warranties or covenants or agreements of the parties or the
conditions to the obligations of the parties hereunder.
29.5 Consents and Approvals. Seller and Buyer shall use
commercially reasonable efforts to obtain any and all consents, transfers,
authorizations, or approvals required for the consummation of the transactions
contemplated by this Agreement. Buyer and Seller will cooperate with each
other in obtaining, and will provide all information necessary to obtain, such
consents.
29.6 Control of Station. From the date hereof to the
Closing Date, Buyer shall not, directly or indirectly, control, supervise or
direct the operation of the Station. Such operation, including complete
control and supervision of all Station programs, employees and policies, shall
be the sole responsibility of Seller. Notwithstanding the foregoing, the
parties have entered into the TBA, pursuant to which Seller has granted to
Buyer (or its permitted assignee) the right to program the Station in
accordance with the Communications Act and the rules and regulations of the
FCC.
29.7 News Releases. Except for announcements required by
applicable law, prior to the Closing Date, any news releases pertaining to the
transactions contemplated hereby shall be reviewed and approved by Buyer and
Seller, or their respective representatives, and shall be acceptable to them
prior to the dissemination thereof.
29.8 Buyer's Covenant. Buyer agrees it shall not take any
action which would cause it to be disqualified under the Communications Act or
the FCC's rules or regulations as an assignee of the FCC Licenses.
ARTICLE 30
CONDITIONS
30.1 Conditions Precedent to Obligations of Buyer. The
obligations of Buyer to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or at the Closing, of each
of the following conditions, except to the extent Buyer shall have waived in
writing satisfaction of such condition:
(a) The representations and warranties made by
Seller in this Agreement shall be true and correct in all material respects as
of the date of this Agreement and on the Closing Date as though such
representations and warranties were made on such date.
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(b) Seller shall have performed and complied in
all material respects with all covenants, agreements, representations,
warranties and undertakings required by this Agreement to be performed or
complied with by it prior to or at the Closing.
(c) No action, suit or proceeding before any
court or any governmental or regulatory authority shall have been completed
which restrains, enjoins, rescinds, prevents or changes the transactions
contemplated hereby in a material manner.
(d) Seller shall have delivered to Buyer all of
the documents required by Section 10.1 hereof.
(e) The conditions set forth in Section 5.1
regarding the FCC Consent shall have been satisfied.
(f) Any applicable waiting period under the HSR
Act shall have expired or been terminated.
30.2 Conditions Precedent to Obligations of Seller. The
obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or at the Closing, of each
of the following conditions, except to the extent Seller shall have waived in
writing satisfaction of such condition:
(a) The representations and warranties made by
Buyer in this Agreement shall be true and correct in all material respects as
of the date of this Agreement and on the Closing Date as though such
representations and warranties were made on such date.
(b) Buyer shall have performed and complied in
all material respects with all covenants, agreements, representations,
warranties and undertakings required by this Agreement to be performed or
complied with by it prior to or at the Closing.
(c) No action, suit or proceeding before any
court or any governmental or regulatory authority shall have been completed
which restrains, enjoins, rescinds, prevents or changes the transactions
contemplated hereby in a material manner.
(d) Buyer shall have delivered to Seller all of
the documents required by Section 10.2 hereof.
(e) The conditions set forth in Section 5.1
regarding the FCC Consent shall have been satisfied.
(f) Any applicable waiting period under the HSR
Act shall have expired or been terminated.
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ARTICLE 31
CLOSING DELIVERIES
31.1 Deliveries by Seller. At the Closing, Seller shall
deliver or cause to be delivered to Buyer the following:
(a) Xxxx of Sale, assignment and other good and
sufficient instruments of conveyance, transfer and assignment, all in form and
substance reasonably satisfactory to counsel for Buyer, as shall be effective
to vest in Buyer title in and to the Purchased Assets.
(b) A certificate, executed by an officer of
Seller, in such detail as Buyer shall reasonably request, certifying to the
fulfillment or satisfaction of the conditions set forth in Sections 9.1(a), (b)
and (c). The delivery of such certificate shall constitute a representation
and warranty of Seller as to the statements set forth therein.
(c) Resolutions of the Board of Directors of
Seller authorizing the execution, delivery and performance of this Agreement by
Seller, certified by the corporate secretary of Seller.
(d) Updated Schedules to this Agreement
reflecting any changes necessary to render the information contained therein
true and accurate on the Closing Date.
(e) Originals or copies of all program,
operations, transmissions, or maintenance logs and all other records required
to be maintained by the FCC with respect to the Station, including the
Station's public file, shall be left at the Station and thereby delivered to
Buyer.
(f) An opinion of Jeffer, Mangels, Xxxxxx &
Xxxxxxx LLP covering the following matters:
(i) Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and has the requisite corporate power to carry on its business as it
is being conducted on the Closing Date;
(ii) Seller has the corporate power and
authority to enter into this Agreement, to perform its obligations hereunder,
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Seller; and
(iii) This Agreement constitutes a
valid and binding obligation of Seller and the Trustees.
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(g) An estoppel certificate executed by each of KCET
and Fox containing the following information:
(i) The lease or leases to which it is a
party are in full force and effect;
(ii) To its knowledge, no party to such
lease(s) or any other agreement related to the property is in default thereof;
(iii) Stating the expiration date of the
lease(s);
(iv) No consent to the assignment of the
KCET Sublease to Buyer is necessary; and
(v) To its knowledge, no proceedings are
pending which would effect the use of the property as a site for a broadcasting
tower.
(h) An estoppel certificate executed by Metromedia
containing the following information:
(i) The lease or leases to which it is a
party are in full force and effect;
(ii) To its knowledge, no party to such
lease(s) or any other agreement related to the property is in default thereof;
(iii) Stating the expiration date of the
lease(s);
(iv) No consent to the assignment of the
KCET Sublease to Buyer is necessary;
(v) To its knowledge, no proceedings are
pending which would effect the use of the property as a site for a broadcasting
tower; and
(vi) To its knowledge, attached to the
certificate are the Ground Lease and the RMBC Lease.
(i) A Certification of Trust pursuant to California
Probate Code Section 18100.5 executed by the Trustees.
31.2 Buyer's Deliveries. At the Closing, Buyer shall
deliver or cause to be delivered to Seller the following:
(a) The payment required under Section 3.2
hereof.
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(b) An Assignment and Assumption Agreement
reasonably satisfactory in form and substance to counsel to Seller effecting
the assumption of the Assumed Liabilities on the terms and conditions hereof.
(c) A certificate, executed by an officer of
Buyer, in such detail as Seller shall reasonably request, certifying to the
fulfillment or satisfaction by Buyer of the conditions set forth in Sections
9.2(a), (b) and (c). The delivery of such certificate shall constitute a
representation and warranty of Buyer as to the statements set forth therein.
ARTICLE 32
TRANSFER TAXES, FEES AND EXPENSES
32.1 Expenses. Except as set forth in Section 11.2 hereof,
each party hereto shall be solely responsible for all costs and expense
incurred by it in connection with the negotiation and preparation of this
Agreement and the documents contemplated hereby and completion of the
transactions contemplated thereby, including, without limitation, attorneys'
fees and costs related to any governmental filings or any response to requests
made by a governmental agency in connection with such filings.
32.2 Governmental Filing or Grant Fees. Any filing or grant
fees imposed by any governmental authority the consent of which is required to
complete the transactions contemplated hereby shall be borne by Buyer.
ARTICLE 33
INDEMNIFICATION AND SPECIFIC PERFORMANCE
33.1 Survival of Representations and Warranties. All
representations and warranties made in this Agreement shall survive the Closing
for a period of six months from the Closing Date; provided, however, the
representation and warranty regarding title to any of the Purchased Assets
shall survive until the expiration of all applicable statutes of limitation.
The right of any party to recover Damages on any claim shall not be affected by
the termination of any representations and warranties as set forth above
provided that notice of the existence of such claim has been given by the
Indemnified Party to the Indemnifying Party prior to such termination.
33.2 Indemnification of Buyer by Seller. Subject to Section
12.4, from and after the Closing Date, Seller shall indemnify and hold Buyer
and its attorneys, affiliates, representatives, agents, officers, directors,
successors or assigns harmless from and against any Damages resulting from,
arising out of or incurred with respect to:
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(a) A breach of any representation, warranty,
covenant or agreement of Seller contained herein, subject to notice of a claim
being given before the expiration of the applicable period specified in Section
12.1 hereof with respect to the representations or warranties by Seller
contained herein;
(b) The Retained Liabilities; or
(c) Except as provided by the TBA, any and all
claims, liabilities or obligations of any nature, absolute or contingent,
relating to the business and operation of the Station as conducted by Seller
before the Closing Date.
Notwithstanding the foregoing, Seller shall not have any indemnity obligations
for expenses or liabilities for which Buyer is responsible under the TBA.
33.3 Indemnification of Seller. Subject to Section 12.4,
from and after the Closing Date Buyer shall indemnify and hold Seller and its
attorneys, affiliates, representatives, agents, officers, directors, successors
or assigns, harmless from and against any Damages resulting from, arising out
of, or incurred with respect to:
(a) A breach of any representation, warranty,
covenant or agreement by Buyer contained herein, subject to notice of a claim
being given before the expiration of the applicable period specified in Section
12.1 hereof with respect to the representations and warranties made by Buyer
herein;
(b) The Assumed Liabilities; or
(c) Any and all claims, liabilities or
obligations of any nature, absolute or contingent, relating to the business and
operation of the Station as conducted by Buyer on or after the Closing Date.
33.4 Limitations on Indemnification Liabilities.
(a) The indemnification obligations of Seller
under Section 12.2(a) shall not be effective until the aggregate dollar amount
of all Damages indemnified against under such Section exceeds $100,000, at
which time, all Damages in excess of $100,000 shall be subject to such
indemnification obligations. The maximum amount payable by Seller for
indemnity under Section 12.2(a) shall be $20 million.
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(b) The indemnification obligations of Buyer
under Section 12.3(a) shall not be effective until the aggregate dollar amount
of all Damages indemnified against under such Section exceeds $100,000, at
which time, all Damages in excess of $100,000 shall be subject to such
indemnification obligations. The maximum amount payable by Buyer for indemnity
under Section 12.3(a) shall be $20 million.
33.5 Procedures.
(a) Promptly after the receipt by a party (the
"Indemnified Party") of notice of (i) any claim or (ii) the commencement of any
action or proceeding which may entitle such party to indemnification under this
Section, such party shall give the other party (the "Indemnifying Party")
written notice of such claim or the commencement of such action or proceeding
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting from such claim. The failure to give the
Indemnifying Party timely notice under this subsection shall not preclude the
Indemnified Party from seeking indemnification from the Indemnifying Party
unless, and then only to the extent, such failure has materially prejudiced the
Indemnifying Party's ability to defend the claim or litigation. If such claim
does not arise from the claim of a third party, the Indemnifying Party shall
have 30 days after such notice to cure the conditions giving rise to such claim
to the Indemnified Party's satisfaction. Failure by the Indemnifying Party to
notify an Indemnified Party of its election to defend any such claim or action
by a third party within 30 days after notice thereof shall have been given to
the Indemnifying Party shall be deemed a waiver by the Indemnifying Party of
its rights to defend such claim or action.
(b) If the Indemnifying Party assumes the
defense of any such claim or litigation resulting therefrom with counsel
reasonably acceptable to the Indemnified Party, the Indemnified Party may
participate, at its expense, in the defense of such claim or litigation
provided that the Indemnifying Party shall direct and control the defense of
such claim or litigation. The Indemnified Party shall cooperate and make
available all books and records reasonably necessary and useful in connection
with the defense. Except with the prior written consent of the Indemnified
Party, the Indemnifying Party shall not, in the defense of such claim or any
litigation resulting therefrom, consent to the entry of any judgment (other
than a judgment of dismissal on the merits without cost) or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or the plaintiff to the Indemnified Party of a release from all
Damages in respect of such claim or litigation.
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(c) If the Indemnifying Party shall not assume
the defense of any such claim or litigation resulting therefrom, the
Indemnified Party may, but shall have no obligation to, defend against such
claim or litigation in such manner as it may deem appropriate; provided,
however, the Indemnified Party may not compromise or settle such claim or
litigation without the Indemnifying Party's prior written consent.
33.6 Indemnity Payments. The parties agree that any
payments made pursuant to this Article 12 will be treated by the parties on all
applicable tax returns as an adjustment to the Purchase Price.
33.7 Sole Remedy.. After the Closing, indemnity hereunder
shall be the sole remedy for a breach of a representation, warranty, covenant
or agreement of a party.
12.8 Specific Performance. Seller recognizes that, in the
event Seller defaults in the performance of its obligations to close under this
Agreement, monetary damages will not be an adequate remedy. Therefore, unless
Buyer is in material breach of this Agreement, Buyer shall be entitled to
obtain specific performance of the terms of this Agreement. In any action to
enforce specifically the performance of this Agreement, Seller waives the
defense that there is another adequate remedy at law or equity and agrees that
Buyer shall have the right to obtain specific performance of Seller's
obligations to close under the terms of this Agreement without being required
to prove actual damages, post bond or furnish other security. As a condition
to seeking specific performance, Buyer shall not be required to have tendered
the Purchase Price, but shall be required to demonstrate that it is ready,
willing and able to do so and to perform its other obligations hereunder in
accordance with the terms hereof. If the parties close under this Agreement as
a result of an order for specific performance or otherwise, Buyer shall still
be entitled to bring an action for indemnification of Damages under Section
12.2.
ARTICLE 34
TERMINATION RIGHTS
34.1 Termination. This Agreement may be terminated at any
time prior to the Closing Date only as follows (provided the terminating party
is not in material breach of any of its obligations, representations,
warranties or duties hereunder):
(a) By mutual written consent of the parties;
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(b) Subject to Section 15.2, by written notice
from either Buyer or Seller, if a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action, in each case
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
is not subject to appeal or further administrative or judicial review;
(c) By written notice from Buyer, if Seller
fails to perform or breaches any of its material obligations or duties under
this Agreement and Seller has not cured such failure to perform or breach
within 30 days after delivery of written notice from Buyer or upon a material
breach of any representation and warranty of Seller contained herein, in either
case such that the conditions set forth in Sections 9.1(a) and (b) would not be
satisfied;
(d) By written notice from Seller, if Buyer
fails to perform or breaches any of its material obligations or duties under
this Agreement and Buyer has not cured such failure to perform or breach within
30 days after delivery of written notice from Seller or upon a material breach
of any representation and warranty of Buyer contained herein, in either case
such that the conditions set forth in Sections 9.2(a) and (b) would not be
satisfied;
(e) By written notice from Buyer or Seller, if
the FCC denies the FCC Application in a decision which is not subject to appeal
or further administrative or judicial review;
(f) Subject to Section 15.2, by written notice
from Seller or Buyer, if the Federal Trade Commission or the United States
Department of Justice prohibits the acquisition of the Purchased Assets
pursuant to this Agreement under a decision, order or decree which is not
subject to appeal or further administrative or judicial review; or
(g) By any party which was not in material
breach of the TBA at the time of the termination thereof if the Closing has not
occurred on or before the later of (i) one year from the date hereof, or (ii)
one year from the date of the termination of the TBA; the parties agree the
termination right under this subparagraph (g) only applies if the TBA is
terminated.
34.2 Liability of Parties. Upon a termination of this
Agreement in accordance with its terms no party shall have any liability
hereunder, except (a) as provided in Section 8.3, (b) for liability for an
breach of such party's representations and warranties contained herein and (c)
for liability for nonperformance of any of such party's obligations, covenants
or agreements contained herein. Nothing contained herein shall
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limit the obligations of Seller under the Option Agreement to refund payments
made under the Option Agreement.
34.3 Survival. Notwithstanding anything to the contrary
contained herein, the provisions of Section 8.3 and Article 15 shall survive
the termination hereof.
ARTICLE 35
DEFINITIONS
The following terms shall have the following meaning:
"Antenna Leases" shall mean the Transmitter Site Lease and the
Auxiliary Site Lease.
"Auxiliary Site Lease" shall mean the Radio Transmission Site and
Joint Occupancy Agreement, dated April 12, 1983, between Golden West
Television, Inc., a California corporation, and Seller.
"BALP" shall mean Branford Associates Limited Partnership.
"Communications Act" shall mean the Communications Act of 1934, as
amended.
"Daily Amount" shall mean $13,698.63; provided, however, (i) for
any day on which Buyer is unable to broadcast its programming on the Station
under the TBA because of preemption thereof by Licensee or because the Station
is unable to broadcast (except if the reason for the inability to broadcast is
a capital expenditure was not made under the TBA due to Buyer not consenting to
such expenditure), the "Daily Amount" shall be reduced by an amount equal to
(1) $570.78, multiplied by (2) the number of hours (rounded to the nearest
whole number) for which Buyer is unable to broadcast its programming on the
Station under the TBA and (ii) for each day on which the TBA is not in effect
due to a termination thereof, the "Daily Amount" shall be zero.
"Damages" shall mean any liability, loss, cost, expense, judgment,
order, settlement, obligation, deficiency, claim, suit, proceeding (whether
formal or informal), investigation, Lien or other damage, including, without
limitation, attorney's fees and expenses. Notwithstanding the foregoing,
"Damages" shall not include any consequential damages, including, but not
limited to, loss of future revenue or income, cost of capital or loss of
business reputation or opportunity.
"Fox" shall mean Fox Television Stations, Inc.
"Fox Sublease" shall mean the Sublease, dated March 3, 1986,
between Fox and Metromedia, as amended.
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"Ground Lease" shall mean the Ground Lease Agreement, dated
November 1, 1983, between Katella and XXXX.
"XXX Xxx" shall mean Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Katella" shall mean Katella Realty Corporation.
"KCET" shall mean Community Television of Southern California, a
California non-profit corporation.
"KCET Sublease" shall mean the Master Sublease, dated October 1,
1994, between Fox and KCET.
"Liens" shall mean all claims, liens, encumbrances, security
interests, mortgages, or pledges of any kind except for (i) rights of the
lessor of the Station's main transmitter site [and the studio premises], and
(ii) rights of any parties to any Contract set forth in such Contract.
"Metromedia" shall mean Metromedia Company, successor-in-interest
to Metromedia, Inc.
"Metromedia Sublease" shall mean the Sublease and Agreement dated
November 1, 1983, between Metromedia and RMBC.
"RMBC" shall mean X.X. Xxxxxxxx Corporation.
"RMBC Lease" shall mean the Lease and Agreement, dated November 1,
1983, between RMBC and BALP.
"Senior Leases" shall mean the Ground Lease, the RMBC Lease, the
Metromedia Sublease, the Fox Sublease and the KCET Sublease collectively.
"TBA" shall mean the Time Brokerage Agreement, dated as of December
23, 1996, between Seller and Buyer.
"TBA Effective Date" shall mean the Effective Date, as defined in
the TBA.
"Transmitter Site Lease" shall mean the Sublease, dated February 1,
1992, between KCET and Seller, as amended by a First Amendment dated December
4, 1996.
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Each of the following terms shall have the meanings set forth in
the Section opposite such term:
Term Section
---- -------
Agreement Preamble
Assumed Liabilities 2.1
Buyer Preamble
Closing 5.1
Closing Date 5.1
Contracts 1.1(b)
Effective Time 3.4(a)
Excluded Assets 1.2
FCC Recital A
FCC Application 4.2
FCC Consent 4.1
FCC Licenses 1.1(c)
Final Order 5.1
Indemnified Party 12.5(a)
Indemnifying Party 12.5(a)
Intellectual Property 1.1(d)
Option Agreement Recital B
Purchased Assets 1.1
Purchase Price 3.1
Retained Liabilities 2.2
Seller Preamble
Station Recital A
Tangible Personal Property 1.1(a)
Trustees Preamble
ARTICLE 36
MISCELLANEOUS PROVISIONS
36.1 Risk of Loss. The risk of loss or damage to any of the
Purchased Assets prior to the Closing Date shall be upon the Seller. In
consultation with Buyer, Seller shall repair, replace and restore any such
damaged or lost Purchased Asset to the condition necessary to cause Buyer to be
able to broadcast under the FCC Licenses. If the provisions of this Section
conflict with the TBA, the TBA shall control.
36.2 Benefit and Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. No party may voluntarily or
involuntarily assign its interest under this Agreement without the prior
written consent of the other parties, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, (a) Buyer may assign its rights
hereunder, without the consent of Seller or the Trustees, to any of its
wholly-owned subsidiaries, as well as to Heftel Broadcasting Corporation, a
Delaware corporation, or any of its wholly-owned subsidiaries and (b) if Buyer
is not in material
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breach of any of its obligations, representations, warranties or duties
hereunder and the acquisition of the Purchased Assets by Buyer is prohibited by
law, Buyer may assign its rights hereunder, without the consent of Seller or
the Trustees, to an entity which is financially capable of performing the
obligations of Buyer hereunder. No assignment by Buyer hereunder shall relieve
Buyer of its obligations hereunder. Notwithstanding anything to the contrary
contained herein no assignment of any rights hereunder may be made unless the
rights of the assigning party under the Option Agreement are also assigned to
the same person.
36.3 Headings. The headings set forth in this Agreement are
for convenience only and will not control or affect the meaning or construction
of the provisions of this Agreement.
36.4 Governing Law. This Agreement and the rights of the
parties hereto shall be governed by, and construed in accordance with, the laws
of the State of California without giving effect to the choice of law
principles thereof.
36.5 Amendment. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
36.6 Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
36.7 Attorneys' Fees. Should any party hereto institute any
action or proceeding at law or in equity to enforce any provision of this
Agreement, including an action for declaratory relief, or for damages by reason
of an alleged breach of any provision of this Agreement, or otherwise in
connection with this Agreement, or any provision hereof, the prevailing party
shall be entitled to recover from the losing party or parties reasonable
attorneys' fees and costs for services rendered to the prevailing party in such
action or proceeding.
36.8 Multiple Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
36.9 Notices. Unless applicable law requires a different
method of giving notice, any and all notices, demands or other communications
required or desired to be given hereunder by any party shall be in writing.
Assuming that the contents of a notice meet the requirements of the specific
Section of this
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Agreement which mandates the giving of that notice, a notice shall be validly
given or made to another party if served either personally or if deposited in
the United States mail, certified or registered, postage prepaid, or if
transmitted by telegraph, telecopy or other electronic written transmission
device or if sent by overnight courier service, and if addressed to the
applicable party as set forth below. If such notice, demand or other
communication is served personally, service shall be conclusively deemed given
at the time of such personal service. If such notice, demand or other
communication is given by mail, service shall be conclusively deemed given
seventy-two (72) hours after the deposit thereof in the United States mail. If
such notice, demand or other communication is given by overnight courier, or
electronic transmission, service shall be conclusively deemed given at the time
of confirmation of delivery. The addresses for the parties are as follows:
If to Buyer:
Clear Channel Radio, Inc.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx X. Xxxx
Telecopier No.: (000) 000-0000
If to Seller:
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxx. Xxxxxx Xxxxx
Telecopier: (000) 000-0000
with a copy to:
Jeffer, Mangels, Xxxxxx & Xxxxxxx LLP
2121 Avenue of the Stars, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
If to the Trustees:
Gursey, Xxxxxxxxx & Co., LLP
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Co-Trustee
Telecopier No.: (000) 000-0000
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with a copy to:
Jeffer, Mangels, Xxxxxx & Marmaro LLP
2121 Avenue of the Stars, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
Any party hereto may change its or his address for the purpose of receiving
notices, demands and other communications as herein provided, by a written
notice given in the aforesaid manner to the other party hereto.
36.10 Incorporation by Reference. All Schedules attached
hereto or to be delivered in connection herewith are incorporated herein by
this reference.
36.11 Waivers. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
36.12 No Third Party Beneficiaries. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give to any
person or entity other than the parties hereto and their successors or
permitted assigns, any rights or remedies under or by reason of this Agreement.
36.13 Entire Agreement. This Agreement, the Schedules
attached hereto, the TBA, the Option Agreement and the other ancillary
documents provided for herein, constitute the entire agreement and
understanding of the parties hereto relating to the matters provided for herein
and supersede any and all prior agreements, arrangements, negotiations,
discussions and understandings relating to the matters provided for herein. To
the extent this Agreement conflicts with the TBA or the Option Agreement, this
Agreement shall control.
36.14 Rule of Construction. Each party and counsel for each
party have reviewed this Agreement. The parties hereto hereby agree that the
normal rule of construction, which requires a court to resolve any ambiguities
against the drafting party, shall not apply in interpreting this Agreement.
36.15 Neuter and Gender. In this Agreement, the masculine,
feminine or neuter gender shall each be deemed to include the others when the
context so requires.
36.16 Reference to Buyer. In the context of references herein
to representations, warranties, covenants, obligations or
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duties of Buyer under, or Buyer's non-compliance with, the Option Agreement or
the TBA, Optionee shall be deemed to include its assigns under the Option
Agreement or the TBA.
ARTICLE 37
GUARANTEE
37.1 Guarantee. The Trustees, as co-trustees of the Xxxxx
Survivor's Trust, hereby guarantee the obligations of Seller hereunder;
provided, however, Buyer hereby agrees the monetary liability of the co-
trustees under this guarantee shall be limited to the assets of the Xxxxx
Survivor's Trust.
37.2 Representations and Warranties. The Trustees represent
and warrant to Buyer that (a) they have the power and authority to enter into
this Agreement, to perform their obligations hereunder and to consummate the
transactions contemplated hereby and (b) this Agreement has been duly executed
and delivered by the Trustees and constitutes a valid and binding obligation of
the Trustees, enforceable against the Trustees in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first above written.
GOLDEN WEST BROADCASTERS
By:_____________________________
Xxxxxxxxxx Xxxxx,
Executive Vice President
CLEAR CHANNEL RADIO, INC.
By:_____________________________
Name:___________________________
Title:__________________________
________________________________
______________, as co-trustee
of the Xxxxx Survivor's Trust
_______________________________
XXXXXXX X. XXXXXXXXX, as
co-trustee of the Xxxxx
Survivor's Trust
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LIST OF SCHEDULES
1.1(a) Equipment
1.1(b) Contracts
1.1(c) FCC Licenses
6.2(b) Exceptions to Section 6.2(b)
6.3 Exceptions to Section 6.3
6.5 Consents to Assignment of Contracts
6.6 Exceptions to Section 6.6
6.9 List of Insurance
6.10(a) Collective Bargaining Agreements and Employment Agreements
6.10(b) Employee Handbooks, Benefits and Policies
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