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EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
BETWEEN
WIRELESS BROADCASTING SYSTEMS OF YAKIMA, INC.
"PURCHASER"
AND
MICROLINK TELEVISION OF WASHINGTON, INC.
"SELLER"
DATED AS OF AUGUST ____, 1996
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of this ____ day of August, 1996, between WIRELESS BROADCASTING SYSTEMS OF
YAKIMA, INC., a Delaware corporation ("Purchaser") and MICROLINK TELEVISION OF
WASHINGTON, INC., a Nevada corporation ("Seller").
A. Seller owns or leases certain wireless cable channel rights in the
Kennewick-Pasco-Richland area (Tri-Cities), Washington (the "Business").
B. Purchaser desires to purchase from Seller certain of Seller's assets
on and subject to the terms and conditions contained in this Agreement.
C. Seller desires to sell to Purchaser certain of the Seller's assets on
and subject to the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale of Assets. At the Closing (as hereinafter
defined), on and subject to the terms and conditions of this Agreement, Seller
shall sell, assign, transfer, convey, and deliver to Purchaser, and Purchaser
shall purchase, acquire, and accept from Seller, all of the right, title, and
interest of Seller in and to the following assets, properties, and rights of
Seller, free and clear of all liens, claims, charges, security interests, and
encumbrances of any kind or nature, other than Permitted Encumbrances (as
hereinafter defined), as the same shall exist at the Closing Date (as
hereinafter defined):
(a) To the extent permitted under applicable law or regulation, the
wireless cable channel rights for the Tri-Cities relating to or to be used in
the Business including: authorizations issued by the Federal Communications
Commission (the "FCC"), applications therefor, and all contracts or leases
giving the Business the right to use wireless cable rights and authorizations
owned by other entities, including the channel rights listed in SCHEDULE 1.1(A)
attached hereto (collectively, the "Channel Rights");
(b) The leases identified on SCHEDULE 1.1(A) attached hereto
that include Seller's transmitter sites and other head-end space, together with
all of Seller's right, title, and interest in the buildings, fixtures and
improvements, including construction-in-progress, and appurtenances thereto,
located on the real property subject to such real estate leases, and any
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and all assignable warranties of third parties with respect thereto (the "Site
Leases");
(c) The equipment listed in SCHEDULE 1.1(B) and any and all
assignable warranties of third parties with respect thereto (the "Equipment");
and
(d) All existing data, data bases, books, records, correspondence,
business plans and projections, records of sales, customer and vendor lists,
files, and papers in the possession of Seller and related to the Business;
including without limitation, all manuals and printed instructions of Seller
relating to the Acquired Assets (as hereinafter defined) and to the operation
of the Business (the "Books and Records");
All of the items described in this Section 1.1 to be purchased by
Purchaser are hereinafter collectively referred to as the "Acquired Assets."
For purposes of this Agreement, "Permitted Encumbrances" shall mean liens
for taxes not yet due and payable (other than taxes arising out of the
transactions contemplated by this Agreement).
ARTICLE 2
ASSUMPTION OF LIABILITIES
2.1 Assumption of Liabilities of Seller. Subject to Section 2.2 hereof,
as of the Closing Date, Purchaser shall assume responsibility for the
performance and satisfaction of the obligations and liabilities of Seller
arising from and after the Closing Date, pursuant to the Channel Rights and
Site Leases but excluding any obligations or liabilities arising from or
relating to any breach or violation of the Channel Rights or the Site Leases by
Seller or default under same by Seller. The obligations and liabilities of
Seller specifically assumed pursuant to this Section 2.1 are hereinafter
referred to as the "Assumed Liabilities."
2.2 Excluded Liabilities of Seller. Purchaser shall not assume or become
liable for any obligations, commitments, or liabilities of Seller, whether
known or unknown, accrued or unaccrued, absolute, contingent, or otherwise, and
whether or not related to the Acquired Assets, except for the liabilities
specifically described in Section 2.1 above.
ARTICLE 3
PURCHASE PRICE
3.1 Purchase Price. The aggregate consideration to be paid to Seller for
the sale, transfer, and conveyance of the Acquired Assets and the covenant not
to compete set forth in Section 12.2 hereof (the "Purchase Price") shall be ONE
MILLION SEVENTY-TWO THOUSAND DOLLARS ($1,072,000).
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3.2 Payment of Purchase Price. On the Closing Date, subject to the
fulfillment of the conditions set forth herein, Purchaser shall pay the
Purchase Price to Seller as follows:
(a) Purchaser shall deposit Fifty Thousand Dollars ($50,000) in an
Escrow Account (the "Escrow Account") to be held by the Escrow Agent as
described in the Escrow Agreement in the form of that attached as EXHIBIT
3.2 hereto (the "Escrow Agreement");
(b) If Seller has not obtained the court order referenced in Section
8.16, then Purchaser shall deposit an additional $250,000 in the Escrow
Account; and
(c) Purchaser shall pay the balance of the Purchase Price, less the
funds placed in the Escrow Account and as increased or decreased by the
net proration amount pursuant to Section 11.2(c), by wire transfer in
immediately available funds to an account designated in writing by Seller.
3.3 Transfer Expenses. Seller shall pay any sales and use, transfer or
recording, documentary, or other taxes or charges levied on the transfer of the
Acquired Assets.
3.4 Allocation of Purchase Price. The consideration paid for the
covenant not to compete set forth in Section 12.2 hereof and for the Acquired
Assets (which shall equal the Purchase Price) shall be allocated among the
Acquired Assets in accordance with the provisions contained in Treasury
Regulation Section 1.1060-1T(d). The parties agree to be bound by such
allocation and to report the transaction contemplated herein for federal income
tax purposes in accordance with such allocation. In furtherance of the
foregoing, the parties hereto agree to execute and deliver Internal Revenue
Service Form 8594 reflecting such allocation.
ARTICLE 4
PROCEDURE FOR CLOSING
4.1 Time and Place of Closing. The closing for the purchase and sale
contemplated by this Agreement (the "Closing") shall be held at Suite 325, 0000
Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, commencing at 10:00 a.m.,
local time, on the fifth business day following the date on which the FCC's
unconditional grant of the Assignment Applications has become a Final Order
(or, if later, the satisfaction or waiver of the last of the conditions
precedent to closing set forth in Articles 8 and 9 hereof), but in no event
(except as contemplated by clause (c) of Section 8.15 below) later than nine
months from the date hereof, unless the parties shall otherwise agree in
writing. The date on which the Closing actually occurs is hereinafter referred
to as the "Closing Date."
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4.2 Transactions at the Closing. At the Closing, each of the following
items shall be delivered:
(a) Seller shall deliver to Purchaser the following:
(i) such bills of sale, assignments, endorsements, and
other good and sufficient instruments and documents of conveyance and
transfer, in form reasonably satisfactory to Purchaser and its
counsel, as shall be necessary and effective to transfer and assign
to, vest in, and purchase all of Seller's right, title, and interests
in and to the Acquired Assets, including without limitation, good and
valid title in and to all of the Acquired Assets owned by Seller
(subject only to Permitted Encumbrances), good and valid leasehold
interests in and to all of the Acquired Assets leased by Seller as
lessee, and all of Seller's rights under all Site Leases and Channel
Rights; including the assignment to Purchaser of the BTA
Authorization for Kennewick/Tri-Cities.
(ii) a certificate of Seller with respect to the matters
described in Sections 8.1, 8.2, 8.5, 8.10, and 8.14 hereof;
(iii) a certificate of the Secretary of Seller with respect
to the matters described in Sections 8.6 and 8.7 hereof;
(iv) copies of the consents and waivers described in
Section 8.5 hereof;
(v) satisfactory evidence of the approvals described in
Section 8.5 hereof;
(vi) certificates of existence or certificates of good
standing of Seller, as of a date within twenty (20) days prior to the
Closing Date, from the States of Nevada and Washington;
(vii) the Escrow Agreement;
(viii) unless the order referred to in Section 8.16 has been
delivered, a surety bond or letter of credit in the amount of One
Million Dollars ($1,000,000) issued by an insurance company, bonding
company or financial institution reasonably satisfactory to
Purchaser, securing Seller's indemnity obligations under Section
14.1(b) in accordance with procedures and upon such terms and
conditions as are acceptable to Purchaser in its sole discretion.
(ix) the written opinions of Seller's legal counsel for
general matters, FCC matters and litigation matters, in form and
substance reasonably
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satisfactory to Purchaser; and
(x) such other evidence of the performance by Seller of all
covenants and the satisfaction by Seller of all conditions required
by this Agreement to be performed or satisfied by Seller at or prior
to the Closing Date as Purchaser or its counsel may reasonably
require.
The documents and certificates to be delivered hereunder by or on behalf
of Seller on the Closing Date shall be in form and substance reasonably
satisfactory to Purchaser and its counsel.
(b) Purchaser shall deliver to Seller the following:
(i) a wire transfer in the amount equal to the Purchase Price,
less any amounts placed in the Escrow Account at Closing, and as
increased or decreased by the net proration amount pursuant to
Section 11.2(c) in immediately available funds to an account
designated in writing by Seller;
(ii) an instrument or instruments of assumption of the
Assumed Liabilities, duly executed by Purchaser, and reasonably
satisfactory in form and substance to Seller and its counsel;
(iii) a certificate of Purchaser with respect to the
matters described in Sections 9.1, 9.2 and 9.5 hereof;
(iv) a certificate of the Secretary of Purchaser with
respect to the matters described in Sections 9.3 and 9.5 hereof;
(v) certificates of existence or certificates of good standing
of Purchaser, as of a date within twenty (20) days prior to the
Closing Date, from the State of Delaware; and
(vi) such other evidence of the performance by Purchaser of
all covenants and satisfaction by Purchaser of all of the conditions
required by this Agreement to be performed or satisfied by Purchaser
at or before the Closing Date, as Seller or its counsel may
reasonably require.
The documents and certificates to be delivered to Seller hereunder by or
on behalf of the Purchaser on the Closing Date shall be in form and substance
reasonably satisfactory to Seller and its counsel.
4.3 Further Assurances. Seller from time to time after the Closing Date,
at Purchaser's request, shall execute, acknowledge, and deliver to Purchaser
such other
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instruments of conveyance and transfer and will take such other actions and
execute and deliver such other documents, certifications, and further
assurances as Purchaser may reasonably require in order to vest more
effectively in Purchaser, or to put Purchaser more fully in possession of, any
of the Acquired Assets, or to better enable Purchaser to complete, perform or
discharge any of the Assumed Liabilities. Each of the Parties hereto will
cooperate with the other and execute and deliver to the other parties hereto
such other instruments and documents and take such other actions as may be
reasonably requested from time to time by any other party hereto as necessary
to carry out, evidence, and confirm the intended purposes of this Agreement.
ARTICLE 5
REPRESENTATION AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that:
5.1 Organization and Qualification. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Nevada and duly licensed or authorized to transact business in Washington as
a foreign corporation.
5.2 Authority. Seller has full power and authority to enter into this
Agreement and the agreements contemplated hereby, or respectively executed by
it in connection herewith (collectively, this Agreement and such other
agreements shall be referred to hereinafter as the "Acquisition Documents"),
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Seller of each of the Acquisition
Documents to which Seller is a party is the legal, valid, and binding
obligation of Seller, enforceable against Seller, in accordance with its terms,
except as enforceability may be limited by the Xxxxx Litigation as defined in
Section 5.6. Neither the execution and delivery by Seller of any of the
Acquisition Documents to which it is a party nor the consummation by Seller of
the transactions contemplated thereby will (i) violate the Articles of
Incorporation or Bylaws of Seller (ii) violate any provisions of law or any
order of any court or any governmental entity to which Seller is subject, or by
which the Acquired Assets may be bound, (iii) conflict with, result in a breach
of, or constitute a default under any indenture mortgage, lease, agreement, or
other instrument to which Seller is a party or by which it or any of the
Acquired Assets may be bound, or (iv) result in the creation of any lien,
charge, or encumbrance upon any of the Acquired Assets.
5.3 Channel Rights and Site Leases.
(a) SCHEDULE 1.1(A) contains a true and correct list of all current
licenses, permits, applications, rights, certificates, authorizations, and
leases used or held for use in the Business. True and correct copies of each
lease listed on SCHEDULE 1.1(A) and any amendments, extensions, and renewals
thereof have been delivered to the Purchaser. Each Channel Right and Site
Lease is in full force and effect and there is no existing default or event
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of default, real or claimed, or event which with notice or lapse of time or
both would constitute or ripen into a default thereunder by Seller or its
lessors. The assignment of any of the Channel Rights or Site Leases to
Purchaser shall not cause a breach, default, or event of default thereunder
except for those leases requiring consents.
5.4 Equipment.
(a) SCHEDULE 1.1(B) contains a true and correct list of all equipment
used or held for use in the Business.
5.5 Insurance. The Acquired Assets are insured under various policies of
general liability and other forms of insurance, which policies are in adequate
amounts. The type of insurance, carriers, coverage amounts and expiration
dates are set forth in SCHEDULE 5.5. Seller has not been refused any insurance
with respect to the Business by any insurance carrier to which it has applied
for insurance or with which it has carried insurance during the past five (5)
years. Except as set forth in SCHEDULE 5.5, there are no outstanding
requirements or recommendations by any current insurer or underwriter with
respect to the Business or the Acquired Assets which require or recommend
changes in the conduct of Business or the Acquired Assets which require or
recommend changes in the conduct of Business, or require any repairs or other
work to be done with respect to any of the Acquired Assets.
5.6 Litigation. Except as listed and described on SCHEDULE 5.6, there
are no arbitrations, grievances, actions, suits, or other proceedings pending
or to the knowledge of Seller threatened against the Seller or Seller's parent
or any of Seller's affiliates, or adversely affecting the Business or any of
the Acquired Assets purported to be owned or used by Seller, at law or in
equity or admiralty, nor is there any investigation pending or threatened,
before or by any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign
related to the Business; provided, however, that Purchaser and Seller mutually
acknowledge the existence of two civil actions against Cardiff Broadcasting
(which may be consolidated for discovery or other purposes) captioned Xxxxx
Xxxxx, et al.,; Plaintiffs v. Xxxxx X. "Xxxxx" Xxxxx, et al.,Defendants, and
Xxxxxx X'Xxxxx, et al., Plaintiffs v. Xxxxx X. "Xxxxx" Xxxxx, et al.,
Defendants, pending in the United States District Court for the District of New
Jersey, as cases nos. 94-5999 and 95- 6788 respectively, relative to assets
that could include part of the Acquired Assets (collectively, the "Xxxxx
Litigation"). Neither Seller, nor its parent, nor any of its affiliates is in
default under or in violation of any order, writ, injunction, or decree of any
federal, state, municipal court, or other governmental department, commission,
board, bureau, agency, or instrumentality, domestic or foreign, affecting the
Business or the Acquired Assets purported to be owned or used by Seller.
5.7 Brokers and Finders. Neither the Seller nor any affiliate of Seller
has incurred any obligation or liability to any party for any brokerage fees,
agent's commissions, or finder's fees in connection with the transactions
contemplated by this Agreement.
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5.8 Governmental Approval and Consents. Except as described on SCHEDULE
5.8, Seller has obtained Permits required for the lawful operation of the
Business as presently conducted. SCHEDULE 5.8 contains a true and correct copy
of each such Permit, including the Channel Rights. All such Permits and
Channel Rights are in full force and effect, and all fees and charges therefor
have been fully paid to date.
5.9 Taxes.
(a) Seller has timely filed, and as of the Closing Date will have
timely filed, all federal and foreign income tax returns, and all state,
county, and local income, franchise, property, sales, use, unemployment, and
other tax returns in each state and jurisdiction where such returns are
required to be filed on or prior to the Closing Date, taking into account any
extensions of the filing deadlines which have been validly granted to Seller,
and such returns are and will be true and correct in all respects. Seller has
paid, or by the Closing Date will have paid, all federal, state, county, and
local income, franchise, property, sales, use and all other taxes and
assessments (including penalties and interest in respect thereof, if any) that
have become or are due with respect to any period ended on or prior to the
Closing Date whether shown as due on such returns or not, or is contesting in
good faith such taxes and assessments, in which event Seller has disclosed the
details of such contests on SCHEDULE 5.9(A).
(b) SCHEDULE 5.9(B) provides a brief description of all pending
federal and state tax disputes in which Seller is alleged to be liable or in
which Seller is claiming a refund, including the nature and amount of the
controversy, the respective positions of the parties as to any amounts claimed
to be due thereunder, and the current status thereof.
(c) No claim or investigations are pending or threatened by any
state, local, or other jurisdiction alleging that Seller has a duty to file tax
returns and pay taxes or is otherwise subject to the taxing authority of any
jurisdiction not included in SCHEDULES 5.9(A) or 5.9(B) with respect to any
taxes covered by Section 11.2 (a) nor has Seller received any notice or
questionnaire form any such jurisdiction which suggests or asserts that Seller
may have a duty to file such returns and pay such taxes, or otherwise is
subject to the taxing authority of such jurisdiction.
5.10 Compliance with Laws. Seller is not engaging in any activity or
omitting to take any action with respect to the Business, or the Acquired
Assets that is or creates a violation of any law, statute, ordinance, or
regulation applicable to the Business, or the Acquired Assets, including
without limitation laws applicable to zoning, environmental matters and
employee benefit plans. Neither Seller nor any of the Acquired Assets is
subject to any judgment, order, writ, injunction, or decree issued by any court
or any governmental or administrative body or agency. Seller possesses all
Permits required for the operation of the Business as presently conducted and
is in compliance with all applicable laws, regulations, and orders issued by
any court or governmental or administrative body or agency. Seller has not
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at any time during the last five (5) years (i) made any unlawful contribution
to any political candidate, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal, state or local
governmental, regulatory or administrative officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof.
5.11 Governmental Approval and Consents. Except for consents
contemplated by this Agreement in Section 8.5, no consent, approval, or
authorization of or declaration, filing, or registration with any governmental
or regulatory authority is required in connection with the execution, delivery,
and performance of this Agreement by Seller or the consummation by Seller of
the transactions contemplated hereby.
5.12 Title to Acquired Assets. Seller has, and will have on the
Closing date, good and marketable title to the Acquired Assets free and clear
of all liens, claims, charges, encumbrances and security interests of any kind
or nature other than Permitted Encumbrances. Without limiting the foregoing,
the Acquired Assets are and will at all times thereafter be free and clear of
any liens or encumbrances related to the Xxxxx Litigation and any judgment or
motion or order that may be entered therein.
5.13 Correctness of Representations. No representation or warranty of
Seller in this Agreement or in any Exhibit, certificate, or Schedule attached
hereto or furnished pursuant hereto, contains, or on the Closing Date will
contain, any untrue statement of fact or omits, or on the Closing Date will
omit, to state any fact necessary in order to make the statements contained
therein not misleading in any respect, and all such statements,
representations, warranties, Exhibits, certificates, and Schedules shall be
true and complete in all respects on and as of the Closing Date as though made
on that date. True copies of all mortgages, indentures, notes, leases,
agreements, plans, contracts, and other instruments listed on the Schedules
delivered or furnished to Purchaser pursuant to this Agreement have been
delivered to Purchaser.
5.14 No Employees or Contractual Arrangements. Seller has no
employees and has never had any. Seller is not party to any contracts that
relate to the Business or the Acquired Assets except the Site Leases.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
6.1 Organization and Qualification. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware and has all corporate power and authority to conduct its business,
to own, lease, or operate its properties in the places where such business is
conducted and such properties are owned, leased, or
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operated.
6.2 Authority. Purchaser has full power and authority to enter into this
Agreement and each of the other Acquisition Documents to which it is a party
and consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Purchaser of this Agreement and each of
the other Acquisition Documents to which Purchaser is a party have been duly
and validly authorized and approved by all necessary action on the part of
Purchaser. This Agreement and each of the other Acquisition Documents to which
Purchaser is a party are the legal, valid, and binding obligations of Purchaser
enforceable against Purchaser in accordance with their terms. Neither the
execution and delivery by Purchaser of this Agreement or any of the other
Acquisition Documents to which Purchaser is a party nor the consummation by
Purchaser of the transactions contemplated hereby or thereby will (i) violate
Purchaser's Certificate of Incorporation or Bylaws, (ii) violate any provisions
of law or any order of any court or any governmental unit to which Purchaser is
subject, or by which its assets are bound, or (iii) conflict with, result in a
breach of, or constitute a default under any indenture, mortgage, lease,
agreement, or other instrument to which Purchaser is a party or by which its
assets or properties are bound.
6.3 Litigation. There is no suit, action, proceeding, claim or
investigation pending, or, to Purchaser's knowledge, threatened, against
Purchaser which would affect the consummation of the transactions contemplated
hereby.
6.4 Correctness of Representations. No representation or warranty of
Purchaser in this Agreement or in any Exhibit, certificate, or Schedule
attached hereto or furnished pursuant hereto contains, or on the Closing Date
will contain, any untrue statement of material fact or omits or, on the Closing
Date, will omit, to state any fact necessary in order to make the statements
contained therein not misleading in any material respect, and all such
statements, representations, Exhibits, and certificates shall be true and
complete on and as of the Closing date as though made on that date.
6.5 Brokers and Finders. Neither Purchaser nor any affiliate of
Purchaser has incurred any obligation or liability to any party for any
brokerage fees, agent's commissions, or finder's fees in connection with the
transactions contemplated by the Acquisition Documents.
6.6 Governmental Approval and Consents. No consent, approval, or
authorization of or declaration, filing, or registration with any governmental
or regulatory authority is required in connection with the execution, delivery,
and performance by Purchaser of this Agreement or the consummation of the
transactions contemplated hereby.
ARTICLE 7
COVENANTS OF SELLER
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Seller covenants and agrees with Purchaser as follows:
7.1 Conduct of Business Prior to Closing. From the date hereof to the
Closing Date, and except to the extent that Purchaser shall have otherwise
consented in advance in writing, Seller shall:
(a) operate the Business substantially as previously operated;
(b) except for the purchase of WNTJ-460 (H group) not purchase or
acquire any assets or properties, whether real or personal, tangible or
intangible, that if acquired would be an Acquired Asset hereunder, and not sell
or otherwise dispose of any real or personal property or asset that would have
been an Acquired Asset hereunder.
(c) maintain the Acquired Assets in their present order and
condition, reasonable wear and use excepted, and deliver the Acquired Assets to
Purchaser on the closing Date in such condition without encumbrances, waste or
need of repair, and maintain all policies of insurance covering such Acquired
Assets in amounts and on terms substantially equivalent to those in effect on
the date hereof;
(d) take all steps reasonably necessary to maintain the intangible
assets of the Business;
(e) pay all accounts payable of the Business in accordance with past
practice and collect all accounts receivable in accordance with past practice;
(f) comply with all laws applicable to the Acquired Assets and the
conduct of the Business;
(g) maintain the Books and Records of the Business in the usual,
regular, and ordinary manner, on a basis consistent with past practices and
prepare and file all foreign, federal, state, and local tax returns and
amendments thereto required to be filed by Seller after taking into account any
extensions of time granted by such taxing authorities; and
(h) diligently and continuously defend the Xxxxx Litigations and keep
Seller fully informed of events therein and provide Seller with copies of all
pleadings and correspondence.
7.2 Access and Information. From the date hereof to the Closing Date and
during normal business hours, Seller shall afford to Purchaser, its lenders,
counsel, accountants, and other representatives, reasonable access to the
offices, properties, books, contracts, commitments, records, vendors and
customers of Seller, and shall furnish such persons with all information
(including financial and operating data) concerning the Business and the
Acquired Assets as they reasonably may request. Seller shall use its best
efforts to assist
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Purchaser, its lenders, counsel, accountants, and other representative in their
examination. Purchaser shall, and shall use its best efforts to cause its
lenders counsel, accountants, and representatives to, hold in strict confidence
all information so obtained from Seller.
7.3 Notification of Changes. Between the date hereof and the Closing
Date, Seller shall promptly notify Purchaser in writing of any adverse change
in the financial condition of the Business, any damage to or loss of any of the
Acquired Assets or the threat of institution of legal, administrative, or other
proceedings against Seller or the occurrence or existence of any unassented
proceedings known to Seller.
7.4 Other Transactions. Seller shall deal exclusively and in good faith
with Purchaser with regard to the sale of the Acquired Assets to Purchaser and
will not, and will direct its officers, directors, financial advisors,
accountants, agents, and counsel not to (i) solicit submission of, or receive
or entertain proposals or offers from any person other than Purchaser relating
to any acquisition of the Acquired Assets, (an "Acquisition Proposal"), (ii)
participate in any discussions or negotiations regarding, or furnish any
non-public information to any other person regarding the Business other than
Purchaser and its representatives or otherwise cooperate in any way or assist,
facilitate, or encourage any Acquisition Proposal by any person other than the
Purchaser or, (iii) enter into any agreement or understanding, whether in
writing or, if legally binding, oral, that would have the effect of preventing
or delaying the consummation of the transactions contemplated by this
Agreement. If, notwithstanding the foregoing, Seller or its respective
representatives or agents should receive any Acquisition Proposal or any
inquiry regarding such proposal from a third party, such persons shall promptly
inform Purchaser and its counsel thereof.
7.5 Consents. Seller shall obtain, at its sole cost and expense, prior
to the Closing all consents, approvals and estoppels which are necessary or
appropriate for the transfer or assignment of the Acquired Assets to Purchaser
and the consummation of the transactions contemplated hereby. All such
consents, approvals and estoppels shall be in writing and in form and substance
reasonably satisfactory to Purchaser, and executed counterparts thereof will be
delivered to Purchaser promptly after receipt thereof but in no event later
than the Closing. Seller shall keep Purchaser informed of the status of
obtaining such consents, approvals and estoppels on a regular basis. All
Consents necessary to consummate the transactions contemplated hereby are
listed on SCHEDULE 8.5.
7.6 Supplemental Disclosure. Seller shall have the continuing obligation
up to and including the Closing Date to supplement promptly or amend the
schedules with respect to any matter hereafter arising or discovered which, if
existing or known at the date of this Agreement, would have been required to be
set forth or listed in the Schedules.
7.7 Conditions Precedent. Seller shall use its best efforts to satisfy
the conditions enumerated in Article 8 hereof in a timely manner.
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7.8 Discharge of Liens and Encumbrances. All liens, claims, charges,
security interests, pledges, assignments, or encumbrances relating to the
Acquired Assets that are not Permitted Encumbrances shall be satisfied,
terminated, and discharged by Seller on or prior to the Closing Date and
evidence reasonably satisfactory to Purchaser and its counsel of such
satisfaction, termination, and discharge shall be delivered to Purchaser at or
prior to the Closing
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each of the following conditions all or any of which may be waived in
writing, in whole or in part by Purchaser:
8.1 Certificate Regarding Schedules and Representations and Warranties.
All information required to be furnished or delivered by Seller pursuant to
this Agreement shall have been furnished or delivered as of the date hereof and
as of the Closing Date, as required hereunder; the representations and
warranties made by Seller in Article 5 shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made on and as of the
Closing Date (except that such representations and warranties may be untrue or
incorrect as a result of actions or transactions expressly permitted by this
Agreement or actions or transactions of Seller made with the prior written
consent of Purchaser), and Purchaser shall have received a certificate dated as
of the Closing Date executed by an officer of Seller to such effect.
8.2 Compliance by Seller. Seller shall have duly performed in all
material respects all of the covenants, agreements, and conditions contained in
this Agreement respectively to be performed by it on or prior to the Closing
Date, including the delivery of all items required by Section 4.2(a), and
Purchaser shall have received a certificate, date as of the Closing Date,
executed by an authorized officer of Seller to such effect.
8.3 No Injunction; Etc. No action, proceeding, investigation,
regulation, or legislation shall be pending which seeks to enjoin, restrain, or
prohibit Purchaser or Seller, or to obtain substantial damages from Purchaser,
in respect of the consummation of the transactions contemplated hereby, or
which seeks to enjoin the operation of all or a material portion of the
Acquired Assets.
8.4 Operation in the Ordinary Course. Since the date hereof, Seller
shall have operated the Business in the ordinary course (except as otherwise
permitted by this Agreement or as agreed to by Purchaser as evidenced by
Purchaser's prior written consent).
8.5 Consents; Authorizations; Approval of Legal Matters. Purchaser shall
have
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received a true and correct copy of each consent and waiver that is required
for the assignment of the Channel Rights, Site Leases, and other agreements and
assets or otherwise required for the execution, delivery, and performance of
this Agreement by Seller, including, without limitation, approval of the
assignment by Seller to Purchaser of all licenses issued to Seller by the
Federal Communications Commission with respect to the Business. All Consents
necessary to consummate the transactions contemplated hereby are listed on
SCHEDULE 8.5. All Authorizations, orders, or approvals of any governmental
commission, board, or other regulatory body, shall have been obtained.
Purchaser shall have received a certificate dated as of the Closing Date,
executed by an authorized officer of Seller to the foregoing effect, and
Purchaser shall be satisfied with the terms, conditions, and restrictions of
and obligations under each such authorization, order, or approval.
8.6 Incumbency. Purchaser shall have received a certificate of
incumbency of the Seller executed by a Secretary or Assistant Secretary thereof
listing the officers authorized to execute this Agreement and certifying the
authority of each such officer to execute the agreements, documents, and
instruments on behalf of Seller in connection with the consummation of the
transactions contemplated herein.
8.7 Certified Resolutions. Purchaser shall have received a certificate
of the Secretary of Seller containing a true and correct copy of the
resolutions duly adopted by the board of directors approving and authorizing
each Acquisition Document and the transactions contemplated hereby and thereby
and certifying that such resolutions have not been rescinded, revoked,
modified, or otherwise affected and remain in full force and effect.
8.8 Release of Liens. Purchaser shall have received Uniform Commercial
Code searches (which searches shall be made or caused to be made by and at the
expense of Purchaser) of filings made pursuant to Article 9 thereof in all
jurisdictions where any of the Acquired Assets are located, in form, scope, and
substance reasonably satisfactory to Purchaser and its counsel, which searches
shall reflect the release or termination of liens, claims, security interest,
or encumbrances against any of the Acquired Assets disclosed thereby that are
not Permitted Encumbrances, and to the extent any such release or termination
is not reflected of record, Purchaser shall have received evidence satisfactory
to it, that all such liens and encumbrances against the Acquired Assets other
than Permitted Encumbrances have been released or terminated prior to or at
Closing.
8.9 Accuracy of Schedules. Examination by Purchaser shall not have
disclosed any material inaccuracy in the representations and warranties of
Seller set forth in this Agreement or in the Schedules delivered to Purchaser
pursuant hereto.
8.10 No Adverse Change. There shall not have been any material
adverse change in the Acquired Assets or the Business since the date hereof and
Purchaser shall have received a certificate dated as of the Closing Date,
executed by an authorized officer of Seller to such effect.
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8.11 Instrument of Transfer. Seller shall have delivered to Purchaser
such warranty deeds, bills of sale, motor vehicle titles, endorsements,
assignments, licenses, and other good and sufficient instruments of conveyance
and transfer and any of the instruments reasonably deemed appropriate by
counsel to Purchaser, all in form and substance reasonably satisfactory to
counsel to Purchaser, to vest in Purchaser all of Seller's rights, title, and
interest with respect to the Acquired Assets, free and clear of all liens,
charges, encumbrances, pledges, or claims of any nature except for Permitted
Encumbrances.
8.12 Site Lease Certificates. Purchaser shall have received prior to
Closing in form and substance reasonably satisfactory to Purchaser, Agreements
of Estoppel, Consent and Waiver and Landlord's Consent to Lease Assignments for
all the Site Leases.
8.13 Proceedings. The form and substance of all opinions,
certificates, assignments, orders, and other documents and instruments,
hereunder shall be satisfactory in all reasonable respects to Purchaser and its
counsel.
8.14 Condition of Acquired Assets. On the Closing Date, all of the
Acquired Assets shall be in substantially the same condition as at the close of
business on the date hereof, except for ordinary use and wear thereof between
the date hereof and the Closing Date or as expressly permitted by this
Agreement, and Purchaser shall have received a certificate dated as of the
Closing Date, executed by an authorized officer of Seller to such effect,
provided, however, if on or prior to the Closing Date any of the Acquired
Assets shall have suffered loss or damage on account of fire, flood, accident,
act of war, civil commotion, or any other cause or event, including the Bloch
Litigation (whether or not similar to the foregoing) to an extent which, in the
reasonable opinion of Purchaser, materially affects the value of the Acquired
Assets, taken as a whole, Purchaser shall have the right (a) to terminate this
Agreement and all of Purchaser's obligations hereunder without incurring any
liability to Seller as a result of such termination; (b) to consummate the
transactions provided for herein and be paid the full amount of all insurance
proceeds, if any, paid or payable to Seller, in respect of such loss plus an
amount equal to any deductible or co-insurance reserve applicable to such loss;
or (c) to require Seller to replace such lost or damaged assets or to restore
them to their original condition and to extend the Closing Date accordingly.
If under the circumstances described in the foregoing sentence, Purchaser shall
elect to consummate the transactions provided for herein, Seller shall, on
demand, pay to Purchaser the full amount of any insurance proceeds received by
Seller in respect of any such loss, together with any deductible or
co-insurance reserve applicable to such loss.
8.15 Satisfactory Due Diligence. Purchaser shall in all respects be
satisfied in its reasonable discretion with the results of its due diligence
investigation of Seller and the Business.
8.16 Bloch Litigation Order. A court order from the appropriate
United States District Court identical in substance (and in form, to the extent
practical) to the model attached
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hereto as EXHIBIT 8.16; provided, however, that if such an order has not been
entered and delivered to Purchaser prior to the Closing, then (a) Seller shall
comply with Sections 3.2(b) and 4.2(a)(viii), and (b) Seller shall furnish
Purchaser with a letter from litigation counsel reasonably satisfactory to
Purchaser, stating that such counsel has been paid an appropriate retainer and
has been engaged by Seller to zealously represent Seller, Purchaser and the
Acquired Assets, at Seller's sole cost and expense, with regard to the Bloch
Litigation and any other litigation that may implicate Seller, Purchaser and/or
the Acquired Assets.
8.17 Jump-Off Xxx Butte Leases. Seller shall have executed all
agreements necessary or desirable (in Purchaser's reasonable judgment) for the
operation of the wireless cable system at Jump-off Xxx Butte, that are
acceptable in form and substance to Purchaser and fully transferable to
Purchaser, including lease agreements with the Department of Natural Resources
and Palouse Paging, Inc. for the head-end site.
8.18 B, D, and G Group ITFS Applications and MDS 2A Application.
Seller shall have resolved to Purchaser's reasonable satisfaction the mutual
exclusivity between ITFS applications that were filed for the Tri-Cities, on
the B-group, D-group and G-group and resolve the Petition to Deny that was
filed against the MDS Channel 0X Xxxxxxxxxxx (XXX Xxxx Xx. XXXX 000000XX).
8.19 Channel Modifications. Seller shall have filed uncontested
modification and/or amendment applications for all Channel Rights, as described
on SCHEDULE 1.1(A), to be used in the Business that are consistent in all
material respects, including coordinates, tower heights, antenna heights,
centerline heights, polarization, and power.
8.20 FCC Approval. The FCC shall have unconditionally granted the
Assignment Applications, and such grants shall have become Final Orders.
8.21 Financial Statements. Prior to Closing, Seller shall furnish
Purchaser with audited financial statements of Seller, Seller's principals, and
Seller's parent.
8.22 Exercise and Consummation of Purchase Option. Prior to Closing
Seller shall have exercised its option to purchase WNTJ-460 (Group H), paid the
necessary purchase price and consummated the transaction. Seller shall also
cause the licenses of WNTJ-460 (Group H) to assign the license for such station
directly to WBSY Licensing Corporation.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date hereunder, of each of the following conditions, all or any of which may be
waived, in whole or in part, by Seller.
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9.1 Certificate Regarding Representations and Warranties. All
information required to be furnished or delivered by Purchaser pursuant to this
Agreement shall have been furnished or delivered as of the date hereof and the
Closing Date as required hereunder; the representations and warranties made by
Purchaser in Article 6 hereof shall be true and correct in all material
respects on and as of the Closing date with the same force and effect as though
such representations and warranties had been made on and as of the Closing
Date; and Seller shall have received a certificate dated the Closing Date,
executed by an authorized officer of Purchaser to such effect.
9.2 Compliance by Purchaser. Purchaser shall have duly performed in all
material respects all of the covenants, agreements, and conditions contained in
this Agreement to be performed by Purchaser on or before the Closing Date,
including the delivery of all items required by Section 4.2(b), and Seller
shall have received a certificate dated the Closing Date, executed by an
authorized officer of Purchaser, to such effect.
9.3 Certified Resolutions. Seller shall have received from Purchaser a
certificate executed by the Secretary of Purchaser containing a true and
correct copy of resolutions duly adopted by Purchaser's Board of Directors
approving and authorizing this Agreement and each of the other Acquisition
Documents to which Purchaser is a party and each of the transactions
contemplated thereby. The Secretary or Assistant Secretary of Purchaser shall
also certify that such resolutions have not been rescinded, revoked, modified,
or otherwise affected and remain in full force and effect.
9.4 No Injunction; Etc. No action, proceeding, investigation,
regulation, or legislation shall be pending which seeks to enjoin, restrain, or
prohibit Seller, or to obtain substantial damages from Seller, in respect of
the consummation of the transactions contemplated hereby, which, in the
reasonable judgment of Seller, would make it inadvisable to consummate such
transactions.
9.5 Incumbency. Seller shall have received a certificate of incumbency
of Purchaser executed by the President and attested by the Secretary or
Assistant Secretary of Purchaser listing the officers of Purchaser authorized
to execute this Agreement and the other Acquisition Documents to which
Purchaser is a party and the instruments of assumption on behalf of Purchaser
and certifying the authority of each such officer to execute the agreements,
documents, and instruments on behalf of Purchaser in connection with the
consummation of the transactions contemplated herein.
9.6 FCC Approval. The FCC shall have granted the Assignment
Applications.
9.7 Proceedings. The form and substance of all opinions, certificates,
assignments, orders and other documents and instruments hereunder shall be
satisfactory in all reasonable respects to Seller and its counsel.
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ARTICLE 10
FCC APPLICATIONS
10.1 FCC Applications.
(a) Within fourteen (14) days after the date hereof, Seller and
Purchaser will join in and file with the FCC applications for FCC approval of
the assignments of the Channel Rights to Purchaser or Purchaser's affiliate
(the "Assignment Applications"). Both parties will use their best efforts to
prosecute the Assignment Applications to a swift and favorable conclusion and
to obtain any extensions that may be necessary or desirable to permit the
consummation of the transactions hereby contemplated.
(b) "Final Orders" means unconditional FCC Orders consenting to the
assignments of the Channel Rights to Purchaser as to which the time for the
filing of any request for administrative or judicial review, protest, request
for stay, reconsideration by the FCC on its own motion, petition for rehearing
or appeal of such order, shall have expired without any such filings having
been made, or in the event of such filing, shall have been reaffirmed or upheld
and the time for seeking further administrative or judicial review with respect
thereto shall have expired.
(c) If the FCC's unconditional grant of the Assignment Applications
have not become Final Orders within nine months after the date hereof, either
party may terminate this Agreement upon five days' written notice to the other;
provided, however, that if the party desiring to terminate this Agreement is or
has been in default hereunder or has been default in any manner which has
delayed FCC action on the Assignment Applications, then such defaulting party
may not terminate this Agreement under this Section 10.1. In the event of a
termination of this Agreement pursuant to this Section 10.1, each party will be
released from all liability under this Agreement.
ARTICLE 11
MUTUAL COVENANTS
11.1 Further Mutual Covenants. Purchaser, on the one hand, and
Seller, on the other hand, shall each take all actions contemplated by this
Agreement, and , subject to the right of a party to terminate this Agreement
pursuant to Article 13 hereof, do all things reasonably necessary to effect the
consummation of the transactions contemplated by this Agreement. Except as
otherwise provided in this Agreement, Purchaser and Seller shall each refrain
from knowingly taking or failing to take any action which would render any of
the representations or warranties contained in Articles 5 or 6 of this
Agreement in any material respect inaccurate as of the Closing Date. Each
party shall promptly notify the other party of any action, suit, or proceeding
that shall be instituted or threatened against such party to restrain,
prohibit, or otherwise challenge the legality of any transaction contemplated
by this Agreement.
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11.2 Prorations.
(a) Utility Charges, Rental Charges, Equipment Charges, Personal
Property Taxes and Lease Payments (collectively, the "Proration Items") shall
be prorated directly between Seller and Purchaser as provided in this Section
11.2.
(b) For the purposes of this Section 11.2, the capitalized terms set
forth below shall have the following meanings:
(i) "Utility Charges" shall mean water, sewer, electricity, gas,
and other utility charges, if any, applicable to the Site Leases;
(ii) "Rental Charges" shall mean common area maintenance
charges, merchant association dues, insurance reimbursement and rent
charges payable or receivable and other payments or receipts
applicable to the Site Leases;
(iii) "Equipment Charges" shall mean rental charges payable
or receivable and other payments or receipts applicable to the
equipment of the Business;
(iv) "Personal Property Taxes" shall mean ad valorem taxes
imposed upon the Acquired Assets or the Equipment; and
(vi) "Lease Payments" shall mean payments of rent or
additional rent under the Site Leases and any other lease of real or
personal property to be assigned to Purchaser hereunder.
(c) On the Closing Date, all Proration Items (including amounts owed
pursuant to transferable state licenses applicable to the Assets and
transferred to Purchaser hereunder) which are not included in the Assumed
Liabilities and which can be ascertained or reasonably prorated shall be
apportioned according to generally accepted accounting principles to the
Closing Date. All Proration Items which could not be ascertained or reasonably
prorated on the Closing Date will be so apportioned (as of the Closing Date)
within 45 days thereafter. Representatives of Seller and Purchaser will
examine all relevant books and records as of the Closing Date in order to make
the determination of the apportionments, which determinations shall be
calculated in accordance with past practices. Payments in respect thereof
shall be made to the appropriate party by check within (30) days after such
determination, except that payments for Real Property Taxes and Personal
Property Taxes shall initially be determined based on the previous year's taxes
and shall later be adjusted to reflect the current year's taxes when the tax
bills are finally rendered. The parties shall fully cooperate to avoid, to the
extent legally possible, the payment of duplicate Personal Property Taxes, and
each party shall furnish, at the request of the other, proof of payment of any
Personal Property Taxes or other documentation which is a prerequisite to
avoiding payment
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of a duplicate tax.
(d) In the event that either party (the "Payor") pays a Proration
Item (other than if and to the extent included in the Assumed Liabilities) for
which the other party (the "Payee") is obligated in whole or in part under this
Section 11.2, the Payor shall present to the Payee evidence of payment and a
statement setting forth Payee's proportionate share of such Proration Item, and
the Payee shall promptly pay such share to the Payor. In the event either
party (the "Recipient") receives payments of a Proration Item to which the
other party (the "Beneficiary") is entitled in whole or in part under this
Agreement, the Recipient shall promptly pay such share to the Beneficiary.
(e) In the event there exists as of the Closing Date any pending
appeals of ad valorem tax assessments with regard to any Acquired Assets, the
continued prosecution and/or settlement of such appeals shall be subject to the
direction and control of Purchaser with respect to assessments for the year
within which the Closing occurs.
11.3 Confidentiality.
Neither Purchaser nor Seller shall make any public release of information
regarding the matters contemplated herein except (i) that a joint press release
in agreed form may be issued by Purchaser and Seller as promptly as is
practicable after the execution of this Agreement, (ii) that Purchaser and
Seller may continue such communications with their attorneys, employees,
customers, suppliers, franchisees, lenders, lessors, shareholders, and other
particular groups as may be legally required or necessary or appropriate and
not inconsistent with the best interests of the other party or the prompt
consummation of the transactions contemplated by this Agreement, and (iii) as
required by Law.
ARTICLE 12
POST CLOSING MATTERS
12.1 Maintenance of Books and Records.
(a) Seller and Purchaser shall preserve until the third anniversary
of the Closing Date all books and records related to the Acquired Assets or the
Business possessed or to be possessed by such party relating to any of the
assets, liabilities or business of Seller prior to the Closing Date. Seller
shall give Purchaser written notice of any such books and records discovered by
Seller that were not transferred to Purchaser. After the Closing Date, where
there is a legitimate purpose, such party shall provide the other parties with
access, upon prior reasonable written request specifying the need therefor,
during regular business hours, to (i) the officers and employees of such party
and (ii) the books of account and records of such party, but, in each case,
only to the extent relating to the Business prior to the Closing Date, and the
other parties and their representatives shall have the right to make copies of
such books and records; provided, however, the foregoing right of access shall
not be exercisable in
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such a manner as to interfere unreasonably with the normal operations and
business of such party; and further, provided, as to so much of such
information as constitutes trade secrets or confidential business information
of such party, the requesting party, its affiliates, officers, directors and
representatives will use due care to not disclose such information except (i)
as required by law, (ii) with the prior written consent of such party, which
consent shall not be unreasonably withheld, or (iii) where such information
becomes available to the public generally, or becomes generally known to
competitors of such party, through sources other than the requesting party, its
affiliates or its officers, directors or representatives. Such records may
nevertheless be destroyed by a party if such party sends to the other party
written notice of its intent to destroy records, specifying with particularity
the contents of the records to be destroyed. Such records may then be
destroyed after the 30th day after such notice is given unless another party
objects to the destruction in which case the party seeking to destroy the
records shall deliver such records to the objecting party.
(b) Purchaser shall fully cooperate with Seller, at no out-of-pocket
cost to Purchaser, in the preparation and filing of all tax filings relating to
the period ending prior to the Closing Date. Purchaser also shall make
available to Seller such information as may be reasonably required by Seller in
connection with audits or otherwise for the proper payment of taxes for which
Seller is responsible.
12.2 Covenants Not to Compete. Seller and Xxxxxx X. Xxxxxxx covenant
and agree that, as consideration for the consummation of the transactions
contemplated herein and for the payment to be made pursuant to Section 3
hereof, for a period of three (3) years commencing on the Closing Date within
the Territory (as hereinafter defined), neither will (a) directly or
indirectly, own, manage, operate, join, control, or participate in the
ownership, management, operation or control of, any business, whether in
corporate, proprietorship or partnership form or otherwise, which is engaged at
any place in the Territory in a business substantially the same as the Business
(a "Competing Business"), or (b) solicit or attempt to solicit to or for the
benefit of any Competing Business the business or patronage of a customer of
Purchaser that has been at any time during the three (3) year period prior to
the Closing Date a customer of Seller. As used herein, the term "Territory"
means a 100 mile radius from the transmitter site located at Latitude 460612,
Longitude 1190745. The parties hereto specifically acknowledge and agree that
the remedy at law for any breach of the foregoing will be inadequate and that
the Purchaser, in addition to any other relief available to it, shall be
entitled to temporary and permanent injunctive relief without the necessity of
proving actual damage. In the event that the provisions of this Section 12.2
should ever be deemed to exceed the limitation provided by applicable law, then
the parties hereto agree that such provisions shall be reformed to set forth
the maximum limitations permitted.
ARTICLE 13
TERMINATION
13.1 Termination. This Agreement may be terminated:
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(a) by the mutual consent of all parties hereto;
(b) by Purchaser if any condition in Article 8 becomes impossible of
performance or has not been satisfied in full or waived by Purchaser in writing
at or prior to the Closing Date;
(c) by Seller if any condition in Article 9 becomes impossible of
performance or has not been satisfied in full or waived by Seller in writing at
or prior to the Closing Date.
13.2 Effect of Termination. In the event of the termination and
abandonment hereof pursuant to the provisions of Section 13.1 hereof, this
Agreement shall become void and have no effect without any liability on the
part of any of the parties hereto or their directors, or officers or
stockholders in respect of this Agreement, except that the parties shall each
have available to them all remedies at law and at equity that they would
otherwise have.
ARTICLE 14
INDEMNIFICATION
14.1 Indemnity by Seller.
(a) All Matters Except Bloch Litigation. Seller, together with its
parent, its affiliates, and its principals (including Xxxxxx X. Xxxxxxx
personally) will indemnify and hold Purchaser and its directors, officers,
employees, agents and affiliates harmless with respect to any and all claims,
losses, obligations, liabilities, costs and expenses, including reasonable
attorneys' fees, arising out of or resulting from (i) any breach of any of the
covenants, representations and warranties of Seller under this Agreement, (ii)
claims by third parties arising out of the ownership of the Acquired Assets
prior to the Closing, or (iii) any liability or obligation not assumed by
Purchaser pursuant hereto including but not limited to any environmental
remediation.
(b) Bloch Litigation.
(i) In the event that the Bloch Litigation results after Closing
in a final judgment binding against Purchaser which requires the sale
or transfer of all or any of the Acquired Assets to any party other
than Purchaser (an "Adverse Bloch Litigation Decision"), then Seller
will within ten business days of the Adverse Bloch Litigation
Decision pay to Purchaser the greater of the following:
a. $1,500 per subscriber as of the date of the final judgment, or
b. The Purchase Price plus reimbursement of any and all capital
expenditures and ordinary business expenses made by
Purchaser or
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its designee from the Closing through the final judgment.
(ii) If an Adverse Bloch Litigation Decision, whether or not
binding on Purchaser, occurs prior to Closing, then all money paid by
Purchaser to Seller hereunder, including without limitation all
deposits made into an escrow account or otherwise, shall be returned
to Purchaser by Seller in full as Purchaser's sole and exclusive
remedy and this Agreement shall be null and void.
(iii) Seller agrees to assume full responsibility (financial
and otherwise) for defending itself, its parent, Purchaser, and the
Acquired Assets from and against any claim asserted in the Bloch
Litigation and any claims arising therefrom. Further, Seller will
indemnify and hold Purchaser and its directors, officers, employees,
agent and affiliates harmless with respect to any and all claims,
losses, obligations, liabilities, costs and expenses, including but
not limited to reasonable attorneys' fees and fees to accountants,
expert witnesses, court reporters and consultants, costs to produce
documents or for time for any testimony of Purchaser or its
employees, arising as a result out of or because of the Bloch
Litigation, including any costs associated with dealing with any
impairment to or encumbrances upon Purchaser's good and marketable
title to the Acquired Assets. This indemnity (14.1(b)(iii)) shall be
funded out of the escrowed funds which shall be replenished if need
be pursuant to the Escrow Agreement.
14.2 Indemnity by Purchaser.
14.3 Third Party Claims. In the event of third party claims, the
party seeking indemnification (the "Indemnified Party") will notify the other
party (the "Indemnifying Party") in writing as soon as practicable but in no
event later than fifteen (15) days after receipt of such claims. The
Indemnified Party's failure to do so will not preclude it from seeking
indemnification hereunder unless such failure has materially prejudiced the
Indemnifying Party's ability to defend such claim. The Indemnifying Party will
promptly defend such claim by counsel to be mutually agreed upon by Seller and
Purchaser and the Indemnified Party will cooperate with the Indemnifying Party
in the defense of such claim including the settlement of the matter on the
basis stipulated by the Indemnifying Party (with the Indemnifying Party being
responsible for all costs and expenses of such settlement). If the
Indemnifying Party fails to defend the Indemnified Party, within five (5)
business days of receiving notice, then the Indemnified Party will be entitled
to undertake the defense, compromise or settlement of such claim at the expense
of and for the account and risk of the Indemnifying Party. Upon the assumption
of the defense of such claim, the Indemnifying Party may settle, compromise or
defend as it sees fit, provided, however, that anything in this Section 14.1 to
the contrary notwithstanding:
(a) if there is a reasonable probability that a claim may materially
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and adversely affect the Indemnified Party, the Indemnified Party
will have the right, at its own cost and expense, to defend,
compromise or settle such claim against it.
(b) if the facts giving rise to indemnification hereunder shall
involve a possible claim by the Indemnified Party against a third
party, the Indemnified Party will have the right, at its own cost and
expense, to undertake the prosecution, compromise and settlement of
such claim.
(c) the Indemnifying Party will not, without the Indemnified
Party's written consent, settle or compromise any claim or consent to
any entry of judgment 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 liability in respect to such
claim.
14.4 Survival of Representations. Unless otherwise set forth
herein, all representations and warranties, covenants and agreements of Seller
and Purchaser contained in or made pursuant to this Agreement or in any
certificate furnished pursuant hereto shall survive the Closing Date
indefinitely.
ARTICLE 15
GENERAL PROVISIONS
15.1 Fees and Expenses. Except as otherwise specifically provided in
this Agreement, Seller, on the one hand, and Purchaser, on the other hand,
shall pay their respective fees and expenses in connection with the negotiation
and Closing of this Agreement and the contemplated transactions.
15.2 Notices. All notices, request, demands, and other communications
hereunder shall be in writing and shall be delivered (a) in person or by
courier, (b) mailed by first class registered or certified mail, or (c)
delivered by facsimile transmission, as follows:
(a) If to Seller:
Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxx, Xxxxxxxxxx 00000
Telecopier: 000-000-0000
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with a copy (which shall not constitute notice) to:
Xxxxx X.X. Xxxxxxxxx
Attorney at Law
0000 Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopier: 000-000-0000
(b) If to Purchaser:
Wireless Broadcasting Systems of Yakima, Inc.
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telecopier: 000-000-0000
with a copy (which shall not constitute notice) to:
Xxxxx X. Xxxxxx XX
Xxxxxxxx & Xxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier: 000-000-0000
or to such other address as the parties hereto may designate in writing to the
other in accordance with this Section 15.2. Any party may change the address
to which notices are to be sent by giving written notice of such change of
address to the other parties in the manner above provided for giving notice.
If delivered personally or by courier, the date on which the notice, request,
instruction, or document is delivered shall be the date on which such delivery
is made and if delivered by facsimile transmission or mail as aforesaid, the
date on which such notice, request, instruction or document is receive d shall
be the date of delivery.
15.3 Assignment; Binding Effect. Except as provided in this Section
15.3, prior to the Closing, this Agreement shall not be assignable by any of
the parties hereto without the written consent of the other; provided, however
that Purchaser may assign any or all of its rights hereunder to any affiliate
of Purchaser, but such assignment shall not relieve Purchaser of its
obligations hereunder in the event such assignee shall fail timely to perform
any of such obligations. From and after any such assignment, the word
"Purchaser shall include assignee. This Agreement shall bind, and inure to the
benefit of, the parties hereto and their permitted assignees.
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15.4 No Benefit to Others. The representations, warranties,
covenants, and agreements contained in this Agreement are for the sole benefit
of the parties hereto and, in the case of Article 14 hereof, Indemnitee and its
heirs, executors, administrators, legal representatives, successors and
assigns, and they shall not be construed as conferring any rights on any other
persons.
15.5 Headings, Gender, "Person" and "Affiliate". All section headings
contained in this Agreement are for convenience of reference only, do not form
a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine, or
neuter, as the context requires. Any reference to a "person" herein shall
include an individual, firm, corporation, partnership, trust, governmental
authority or body, association, unincorporated organization or any other
entity, and any reference to an "affiliate," whether or not such term is
capitalized, with respect to a person shall mean a person or entity that is
controlled by, under common control with or controls such person.
15.6 Counterparts. This Agreement may be executed in two (2) or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one counterpart has been signed by each party and
delivered to the other party hereto.
15.7 Integration of Agreement. This Agreement supersedes all prior
agreements, oral and written, between the parties hereto with respect to the
subject matter hereof. Neither this Agreement, nor any provision hereof, may
be changed, waived, discharged, supplemented, or terminated orally, but only by
an agreement in writing signed by the party against which the enforcement of
such change, waiver, discharge, or termination is sought.
15.8 Time of Essence. Time is of the essence in this Agreement.
15.9 Governing Law. This Agreement shall be construed under the laws
of the State of Washington.
15.10 Partial Invalidity. Whenever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or enforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal, or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions had never
been contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.
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15.11 Public Announcements. Seller and Purchaser will consult with
each other before issuing any press releases or otherwise making any public
statements or filings with governmental entities with respect to this Agreement
or the transactions contemplated hereby and shall not issue any press releases
or make any public statements or filings with governmental entities prior to
such consultation and shall modify any portion thereof if the other party
reasonably objects thereto, unless the same may be required by applicable law.
15.12 Default by Purchaser. If Purchaser shall default in the
performance of its obligations under this Agreement or if, as a result of
Purchaser's action or failure to act, the conditions precedent to Seller's
obligation to close specified in Article 9 are not satisfied, and for such
reason or reasons this Agreement is not consummated, and provided that Seller
shall not then be in default in the performance of Seller's obligations
hereunder, Seller shall be entitled, by written notice to Purchaser, to
terminate this Agreement and as Seller's sole remedy under this Agreement to
receive as liquidated damages the sum of Fifty Thousand Dollars ($50,000).
Upon such payment Purchaser shall be discharged from all further liability
under this Agreement.
Seller and Purchaser have provided for liquidated damages as a remedy for
Seller after having considered carefully the anticipated and actual xxxxx and
losses that would be incurred if Purchaser defaults and thus fails to perform
its obligations to consummate the transactions contemplated hereunder, the
difficulty of ascertaining at this time the actual amount of damages, special
and general, that Seller will suffer in such event, and the inconvenience or
nonfeasibility of otherwise obtaining an adequate remedy in such event.
15.13 Default by Seller. If Seller shall default in the performance of
Seller's obligations under this Agreement, of if, as a result of Seller's
action or failure to act, the conditions precedent to Purchaser's obligation to
close specified in Article 8 are not satisfied and for such reason or reasons
this Agreement is not consummated, and provided that Purchaser shall not then
be in default in the performance of Purchaser's obligations hereunder,
Purchaser shall be entitled, at Purchaser's sole option (i) to require Seller
to consummate and specifically perform the sale in accordance with the terms of
this Agreement, if necessary through injunction or other court order or
process; or (ii) by written notice to Seller, to terminate this Agreement, to
receive the immediate return of the Deposit, and to pursue any other remedies
Purchaser has at law or in equity or otherwise.
Seller acknowledges that the Acquired Assets are unique and that
Purchaser has no adequate remedy at law if Seller shall fail to perform any of
their obligations hereunder, and Sellers therefore confirm and agree that
Purchaser's right to specific performance is essential to protect the rights
and interests of Purchaser. Accordingly, in addition to any other remedies
which Purchaser may have hereunder or a law or in equity or otherwise, Seller
hereby agrees that Purchaser shall have the right to have all obligations,
undertakings, agreements and other provisions of this Agreement specifically
performed by Seller and that Purchaser shall have the right to obtain an order
or decree of such specific performance in any of the courts of the United
States or of any state or other political subdivision thereof.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed on its behalf by its duly authorized officer, all as of the day and
year first above written.
PURCHASER:
WIRELESS BROADCASTING SYSTEMS OF
YAKIMA, INC.
By:
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Xxxxxxxx X. Xxxxxxx,
Vice President and General Counsel
SELLER:
MICROLINK TELEVISION OF WASHINGTON, INC.
By:
---------------------------------------------
Xxxxxx X. Xxxxxxx, [Title]
UNDERTAKING AND GUARANTY BY XXXXXX X. XXXXXXX
For good and valuable consideration and to induce Purchaser to enter into
this Agreement, Xxxxxx X. Xxxxxxx, being the chairman, president and principal
shareholder of Seller hereby:
(a) promises to be personally bound to the obligations set forth in
Section 12.2 above; and
(b) personally guaranties the full and timely performance of all of
Seller's obligations under this Agreement, both monetary and non- monetary.
Xx. Xxxxxxx acknowledges that as a major shareholder of Seller he will
receive a substantial benefit from Purchaser's performance of its obligations
hereunder.
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Xxxxxx X. Xxxxxxx
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