ASSET PURCHASE AGREEMENT dated as of February 20, 1996 by and between
WKWK RADIO, INC.
(Seller)
and
MOUNTAIN RADIO CORPORATION
(Buyer)
TABLE OF CONTENTS
Page
ARTICLE I - ASSIGNMENT AND PURCHASE OF ASSETS
1.1 Assignment of Assets 1
1.2 Excluded Assets 4
1.3 Liabilities to be Assumed 4
1.4 Purchase Price 5
1.5 Proration of Income and Expenses 5
1.6 Allocation of Purchase Price 6
1.7 Submission of Schedules; Due Diligence by Buyer 6
ARTICLE II - CLOSING, TERMINATION, AND RISK OF LOSS
2.1 Closing 7
2.2 Transactions at the Closing 7
2.3 Termination 10
2.4 Risk of Loss 12
2.5 Interruption of Broadcast Transmissions 12
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Due Incorporation 13
3.2 Authority; No Conflict 13
3.3 Government Authorizations 13
3.4 Compliance with Regulations 14
3.5 Taxes and Regulatory Fees 14
3.6 Personal Property 15
3.7 Real Property 15
3.8 Consents 17
3.9 Contracts 17
3.10 Environmental 18
3.11 Intangibles 18
3.12 Financial Statements 18
3.13 Personnel Information; Labor Contracts 19
3.14 Employee Benefit Plans 19
3.15 Litigation 20
3.16 Compliance with Laws 20
3.17 Insurance 21
3.18 Undisclosed Liabilities 21
3.19 Instruments of Conveyance; Good Title 21
3.20 Absence of Certain Changes 21
3.21 Insolvency Proceedings 23
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Due Incorporation 23
4.2 Authority; No Conflict 23
4.3 Consents 23
4.4 Litigation 24
4.5 Compliance with Laws 24
4.6 Qualification 24
ARTICLE V - COVENANTS OF SELLER
5.1 Continued Operation of Stations 25
5.2 Financial Obligations 25
5.3 Reasonable Access 25
5.4 Maintenance of Assets 25
5.5 Notification of Developments 25
5.6 Payment of Taxes 25
5.7 Third Party Consents 26
5.8 Encumbrances 26
5.9 Assignment of Assets 26
5.10 Commission Licenses and Authorizations 26
5.11 Technical Equipment 26
5.12 Compensation Increases 26
5.13 Sale of Broadcast Time 26
5.14 Insurance 27
5.15 Negotiations with Third Parties 27
ARTICLE VI - JOINT COVENANTS OF BUYER AND SELLER
6.1 Assignment Application; Local Marketing Agreement 27
6.2 Performance 28
6.3 Conditions 28
6.4 Confidentiality 28
6.5 Cooperation 28
6.6 Environmental Reports 28
6.7 Consents to Assignment 29
6.8 Employee Matters 30
6.9 Survey 30
6.10 Escrow Agreement 31
ARTICLE VII - CONDITIONS TO OBLIGATIONS OF BUYER
7.1 Commission Approvals 31
7.2 Performance 31
7.3 Failure of Transfer 32
7.4 Representations and Warranties 32
7.5 Consents 32
7.6 No Litigation 32
7.7 No Adverse Change 32
7.8 Documents 32
7.9 Opinions of Counsel 32
7.10 Survey 33
ARTICLE VIII - CONDITIONS TO OBLIGATIONS OF SELLER
8.1 Performance 33
8.2 Representations and Warranties 33
8.3 Government Approvals 33
8.4 Documents 33
8.5 Opinion of Counsel 33
ARTICLE IX - INDEMNIFICATION
9.1 Indemnification by Seller 34
9.2 Indemnification by Buyer 34
9.3 Notification of Claims 35
9.4 Limitation with Respecdt to Indemnification 36
ARTICLE X - MISCELLANEOUS
10.1 Assignment 36
10.2 Survival of Indemnification 37
10.3 Brokerage 37
10.4 Expenses of the Parties 37
10.5 Entire Agreement 38
10.6 Headings 38
10.7 Governing Law 38
10.8 Counterparts 38
10.9 Notices 38
10.10 Specific Performance 40
10.11 Consent to Jurisdiction 40
10.12 Further Assurances 41
10.13 Public Announcements 41
10.14 Accounts Receivable 41
DISCLOSURE SCHEDULE
1.1(a) Licenses and Authorizations
1.1(b) Tangible Personal Property
1.1(d) Real Estate Assets
1.1(e) Intangibles
1.1(f) Leases and Contracts
1.1(g) Contracts for Sale of Broadcast Time
1.1(i) Future Contracts
1.2(h) Excluded Assets
3.7 Title Defects
3.8 Consents Required by Seller
3.12 Financial Statements
3.13 Personnel
3.14 Employee Benefit Plans
3.15 Litigation
3.17 Insurance
3.20 Certain Changes
4.3 Consents Required by Buyer
THIS ASSET PURCHASE AGREEMENT is entered into this 20th day of February,
1996 by and between WKWK Radio, Inc., a corporation formed under the laws of the
State of West Virginia ("Seller"), and MOUNTAIN RADIO CORPORATION, a corporation
formed under the laws of the State of Delaware ("Buyer") (Seller and Buyer
sometimes being referred to herein individually as a "Party" and jointly as
"Parties").
R E C I T A L S
WHEREAS, Seller owns and operates and has been duly licensed by the
Federal Communications Commission (the "FCC" or the "Commission") to operate
radio stations WKWK-AM/FM, Wheeling, West Virginia (the "Stations"); and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase,
the assets utilized in connection with the operation of the Stations, and Seller
and Buyer further desire that Seller assign to Buyer the licenses and other
authorizations issued to Seller by the Commission for the purpose of operating
the Stations; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
ARTICLE I
ASSIGNMENT AND PURCHASE OF ASSETS
1.1 Assignment of Assets. Seller agrees to assign, transfer, convey and
deliver to Buyer and Buyer agrees to acquire, accept and receive from Seller, on
the Closing Date (as defined herein), all of Seller's right, title and interest
in and to the following assets relating to the Stations (the "Station Assets")
free and clear of all liens and encumbrances:
(a) Licenses and Authorizations. All licenses, permits and other
authorizations issued by the FCC or any other state or federal regulatory agency
pertaining to the Stations, including, without limitation, those licenses,
permits or authorizations listed in Section 1.1(a) of the Disclosure Schedule
delivered by Seller to Buyer and dated of even date herewith (the "Disclosure
Schedule"), together with any renewals, extensions or modifications thereof and
additions thereto made between the date of this Agreement and the Closing Date
(the "Licenses"). The Licenses include the right to use the call letters of the
Stations, including but not limited to the call letters WKWK.
(b) Tangible Personal Property. All of the tangible personal property
owned by Seller and used or useable in the operation of the Stations, including
but not limited to the items of personal property listed in Section 1.1(b) of
the Disclosure Schedule, together with all additions, modifications or
replacements thereto made in the ordinary course of business between the date
of this Agreement and the Closing Date, as hereafter defined (the "Personal
Property").
(c) Intentionally Left Blank.
(d) Real Estate Assets. All of Seller's interest in the real property
owned by Seller and listed in Section 1.1(d) of the Disclosure Schedule and all
of the buildings, structures and other improvements located thereon
(collectively, the "Owned Real Property" or "Real Property").
(e) Intangibles. The good will of the Stations and other intangible
assets used or useful in the operation of the Stations, including all of
Seller's rights in the trade names, copyrights, trademarks, service marks,
patents, patent applications, slogans, jingles, logos or other similar rights
relating to the operation of the Stations including, but not limited to, those
listed in Section 1.1(e) of the Disclosure Schedule, together with any necessary
additions or modifications thereto between the date hereof and the Closing Date
(the "Intangibles").
(f) Leases and Contracts. All leases, contracts, agreements and
franchises relating to the operation of the Stations (other than contracts for
the sale of broadcast time and leases for real property) listed and identified
in Section 1.1(f) of the Disclosure Schedule and those leases, contracts,
agreements and franchises described in Section 1.1(i) of this Agreement (the
"Contracts"). Buyer shall assume, pay and perform all obligations under such
Contracts accruing after the Closing Date.
(g) Contracts for Sale of Broadcast Time. All contracts for sale of
broadcast time on the Stations that provide for payment by the customer solely
on a cash basis and that are to be in effect on the Closing Date listed and
identified in Section 1.1(g) of the Disclosure Schedule (the "Broadcast
Agreements"). Buyer shall assume, pay and perform all obligations under the
Broadcast Agreements arising after the Closing Date, provided, however, Buyer
will not assume any contract for the sale of time pursuant to which payment is
to be received in whole or in part in services, merchandise or other non-cash
considerations ("Trade Agreements") entered into prior to the date of this
Agreement, except as agreed to by Buyer and set forth in Section 1.1(g) of the
Disclosure Schedule, and Buyer will not assume any contract for the sale of time
pursuant to such a Trade Agreement entered into subsequent to the date of this
Agreement unless Buyer has consented in writing to the execution of such
contract.
(h) Operating and Business Records. All files, records, logs and program
materials pertaining to the operation of the Stations required to be maintained
and kept under the rules of the Commission and such other files and
records as Buyer shall reasonably require for the continuing business and
operation of the Stations. Seller shall have the right to reasonable access to
such business records that Seller delivers to Buyer under this Section 1.1(h)
upon Seller's request for five years after the Closing Date.
(i) Future Contracts. All leases, contracts, agreements and franchises
(other than Broadcast Agreements, which are governed by Section 5.13 hereof)
entered into between the date hereof and the Closing Date in the usual and
ordinary course of business, except that those exceeding two months in duration
or $5,000.00 in amount will not be assumed by Buyer unless consented to by Buyer
in advance in writing and set forth in Section 1.1(i) of the Disclosure
Schedule.
(j) Inventory and Computer Software. All of Seller's items of inventory
related to the business of the Stations, including, without limitation,
broadcast programs, as well as all computer software used or useable by the
Stations.
(k) Other Rights and Privileges. Any and all other franchises,
materials, supplies, easements, rights-of-way, licenses, and other rights and
privileges of Seller relating to and used, useable or necessary in the operation
of the Stations.
1.2 Excluded Assets. There shall be excluded from the sale transaction
described herein the following assets relating to the Stations:
(a) Cash and Deposits. Cash-on-hand or in banks (or their equivalents),
pre-paid deposits, and other investments belonging to Seller and relating to the
operation of the Stations as of the Closing Date.
(b) Accounts Receivable. All accounts receivable of the Seller with
regard to the operation of the Stations prior to the Closing Date (as that term
is defined therein), although Buyer agrees to collect such accounts pursuant to
the terms of Section 10.14 of this Agreement.
(c) Property Consumed. All property of the Stations disposed of or
consumed (including ordinary wear and tear) in the ordinary course of business
between the date hereof and the Closing Date.
(d) Expired Leases, Contracts and Agreements. All contracts described in
Sections 1.1(f), (g) and (i) to the Disclosure Schedule that are terminated or
will have expired prior to the Closing Date in the ordinary course of business.
(e) Pension and Profit-Sharing Plans. All pension and
profit-sharing plans, trusts established thereunder and assets thereof, if any,
of Seller.
(f) Other Employee Benefit Plans. All other employee benefit plans
(including health insurance) of Seller and the assets thereof.
(g) Employment and Collective Bargaining Agreements. All employment
agreements and collective bargaining agreements of Seller.
(h) Other Assets. Those assets, if any, listed in Section 1.2(h) of the
Disclosure Schedule.
1.3 Liabilities to be Assumed. Except as otherwise provided herein,
Buyer assumes no liabilities or obligations of Seller of any nature whatsoever,
contingent or otherwise, except for post-closing obligations related to Real
Estate Contracts, Contracts, Broadcast Agreements and Trade Agreements (the
"Assumed Contracts") assigned to and specifically assumed by Buyer. Without
limiting the generality of the foregoing, the Parties particularly agree that
Buyer should have no responsibility or liability regarding (i) federal, state or
local tax liability of any kind whatsoever incurred by Seller or (ii) any
employee benefit plan maintained by Seller, and Seller expressly agrees to
defend and indemnify Buyer against same. On or prior to the Closing Date Seller
shall pay or else have made arrangements, satisfactory to Buyer, to assume all
liabilities, debts and other obligations of the Stations arising prior to the
Closing Date and not assigned to and specifically assumed by Buyer.
1.4 Purchase Price. In consideration of Seller's performance of this
Agreement, Buyer shall pay to Seller the sum of Two Million, Six Hundred Fifty
Thousand Dollars($2,650,000) (the "Purchase Price") as follows:
(a) Escrow Deposit. As security for Buyer's failure to close, and as an
inducement for Seller to perform its obligations under this Agreement, Buyer,
upon execution of this Agreement, shall deposit, in accordance with Paragraph
1.7 of this Agreement, the sum of One Hundred Thirty-Thousand Dollars
($130,000.00) (the "Escrow Deposit") in the One Valley Bank to be invested in
accordance with the terms of the Escrow Agreement into which the Parties are
entering concurrently herewith. ▇▇▇▇ ▇▇▇▇▇, Esq., and ▇▇▇▇▇ ▇▇▇▇, Esq., shall
act as escrow agents (the "Escrow Agents") with respect to such Escrow Deposit
and any interest accrued thereon. At the Closing, the Escrow Deposit, and any
interest that has accrued thereon, shall be delivered to Seller and credited
against the Purchase Price. If the Closing fails to occur because Buyer is in
material breach of this Agreement, the Escrow Deposit shall be paid to Seller as
liquidated damages and as Seller's exclusive remedy for such breach and any
interest on the Escrow Deposit shall be paid to Buyer. If the Closing fails to
occur for any other reason, the Escrow Deposit and any interest
that has accrued thereon shall be paid to Buyer.
(b) On the Closing Date at the Closing, Buyer shall pay the Purchase
Price, minus any sums that have been credited against the Purchase Price
pursuant to Subparagraph 1.4(a), above, by wire transfer of federal funds.
1.5 Proration of Income and Expenses. Except as otherwise provided
herein and in the Local Marketing Agreement ("LMA") to be entered into by Buyer
and Seller pursuant to Section 6.1 of this Agreement, all income and expenses
arising from the conduct of the business and operations of the Stations shall be
prorated between Buyer and Seller in accordance with generally accepted
accounting principles as of 11:59 p.m., Eastern time, on the date immediately
preceding the Closing Date. Such prorations shall include, without limitation,
all ad valorem and other property taxes (but excluding taxes arising by reason
of the transfer of Station Assets as contemplated hereby, which shall be paid as
set forth in Section 10.4 of this Agreement), business and license fees, music
and other license fees (including any retroactive adjustments thereof, which
retroactive adjustments shall not be subject to the ninety day limitation set
forth in Section 1.5(a)), wages and salaries of employees hired by Buyer,
including accruals up to the Closing Date for bonuses, commissions, vacation and
sick pay, and related payroll taxes, utility expenses, time sales agreements,
Trade Agreements to the extent provided in Section 1.1(g) hereof, rents and
similar prepaid deferred items attributable to the ownership and operation of
the Stations.
(a) Time for Payment. The prorations and adjustments contemplated by
this Section 1.5, 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 90 days of the
Closing Date.
(b) Dispute Resolution. In the event of any disputes between the Parties
as to such adjustments, the amounts not in dispute shall nonetheless be paid at
the time provided in Section 1.5(a) and such disputes shall be determined by an
independent certified public accountant mutually acceptable to the Parties whose
determination shall be final, and the fees and expenses of such accountant shall
be paid one-half by Seller and one-half by Buyer.
1.6 Allocation of Purchase Price. Buyer and Seller agree that the
Purchase Price shall be allocated among the Station Assets in a manner to be
determined by Buyer. Buyer and Seller agree to use such allocation in completing
and filing Internal Revenue Service Form 8594 for federal income tax purposes.
Buyer and Seller further agree that they shall not take any position
inconsistent with such allocation upon examination of any return, in any refund
claim, in any litigation, or otherwise.
1.7 Submission of Schedules; Due Diligence by Buyer. Seller agrees that,
no later than February 23, 1996, it shall provide Buyer with all sections of the
Disclosure Schedule called for in this Agreement other than Section 4.3. Buyer
shall then have a period of fourteen (14) days, i.e., until March 8, 1996, to
complete its due diligence inspection of the Stations and the Station Assets and
to designate those Assumed Contracts that Buyer deems to be material ("Material
Contracts"). If that due diligence inspection reveals that the representations
and warranties of Seller are not true, complete and correct in all material
respects including, without limitation, if that due diligence inspection reveals
a material adverse change in the working capital, financial condition, business,
results of operations, assets or liabilities of Seller in comparison to the
Financial Statements provided to Buyer up to the date of execution of this
Agreement (but taking into account the seasonal differences in the financial
condition of the Stations as experienced by the Station in the past), Buyer may
terminate this Agreement by providing written notice of such termination to
Seller no later than March 13, 1996. In the event of such termination, the
Escrow Deposit and any interest accrued thereon shall be immediately returned to
Buyer.
ARTICLE II
CLOSING, TERMINATION, AND RISK OF LOSS
2.1 Closing. Unless otherwise agreed upon by the Parties, the purchase
and sale of the Station Assets contemplated by this Agreement (the "Closing")
shall take place at 10:00 a.m. on the fifth business day after the Commission's
approval of the Assignment Application, as defined in Section 6.1 below, becomes
a Final Order (the "Closing Date"). For purposes of this Agreement, a "Final
Order" shall mean any action of the Commission which has not been reversed,
stayed, enjoined, set aside, annulled or suspended and with respect to which no
requests are pending for administrative or judicial review, reconsideration,
appeal or stay, and the time for filing any such requests and the time for the
Commission to set aside the action on its own motion shall have expired. Buyer
may, at its sole election, waive the requirement that the Commission's approval
of the Assignment Application shall have become a Final Order.
2.2 Transactions at the Closing.
(a) At the Closing, Seller shall deliver to Buyer the following:
(i) assignments of the Licenses and other pertinent authorizations transferring
the same to the Buyer in customary form and substance;
(ii) the certificates contemplated by Sections 7.2 and 7.4;
(iii) a copy of the resolutions of the board of directors of Seller authorizing
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby and the unanimous consent of the
Seller's stockholders to the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, together
with a certificate of the Secretary of Seller, dated as of the Closing Date,
that such resolutions were duly adopted, that the consent was duly given and
that the resolutions and consent are in full force and effect;
(iv) a special warranty deed (or its equivalent in the State of West Virginia),
in proper statutory form for recording, conveying each parcel of Owned Real
Property;
(v) an owner's extended coverage policy of title insurance with respect to each
parcel of Real Property, in each case issued on the date of Closing by a title
insurance company acceptable to counsel for Buyer (the "Title Company"). Each
such title insurance policy shall be in an amount designated by Buyer, but which
shall not exceed the sum allocated to the Owned Real Property pursuant to this
Agreement, and shall insure Buyer's ownership of fee title with respect to the
Owned Real Property without any of the Scheduled B standard pre-printed
exceptions (other than taxes not yet due and payable) and free and clear of
title defects and other exceptions to or exclusions from coverage other than
Permitted Owned Real Property Exceptions (as hereinafter defined in Section
3.7(a));
(vi) all real property transfer tax returns and other similar filings required
by law in connection with the transactions contemplated hereby, all duly
executed and acknowledged by Seller. Seller shall also have executed such
affidavits in connection with such filings as shall have been required by law or
reasonably requested by Buyer;
(vii) affidavit of an officer of Seller, sworn to under penalty of perjury,
setting forth Seller's name, address and Federal tax identification number and
stating that Seller is not a "foreign person" within the meaning of Section 1445
of the Internal Revenue Code of 1986 (the "Code"). If, on or before the Closing
Date, Buyer shall not have received such affidavit, Buyer may withhold from the
Purchase Price payable at Closing to Seller pursuant hereto such sums as are
required to be withheld therefrom unde
(viii) a ▇▇▇▇ of sale and all other appropriate documents and instruments
assigning to Buyer good and marketable title to the Station Assets free and
clear of any security
interests, mortgages, liens, pledges, attachments, conditional sales contracts,
claims, charges or encumbrances of any kind whatsoever;
(ix) written consents of the respective lessors, landowners, and any other
persons or entities whose consents may be required to permit Buyer to assume the
liabilities, contracts, leases, licenses, understandings and agreements
constituting the Real Estate Contracts and the Contracts;
(x) evidence satisfactory to Buyer's counsel that no financing statements are
outstanding on the Station Assets except for financing statements related to
obligations that Buyer expressly assumes;
(xi) all files, records, logs, and program materials relating to the Stations;
and all other records required to be maintained by the FCC with respect to the
Stations, including the Stations' public file, which shall be left at the
Stations and thereby delivered to Buyer.
(xii) the opinion of counsel for Seller, dated the Closing Date, as described in
Section 7.9;
(xiii) assignments to Buyer of all the Material Contracts in form satisfactory
to Buyer; and
(xiv) such other documents and instruments as Buyer may reasonably request to
consummate the transactions contemplated hereby.
(b) At the Closing, Buyer shall deliver or cause to be delivered to
Seller the following:
(i) the Purchase Price less any sums that have been credited against the
Purchase Price pursuant to Section 1.4(a) of this Agreement;
(ii) a copy of the resolutions of the board of directors of Buyer authorizing
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby, together with a certificate of the
Secretary of Buyer dated as of Closing Date, that such resolutions were duly
adopted and are in full force and effect;
(iii) the certificates contemplated by Sections 8.1 and 8.2;
(iv) the opinion of counsel for Buyer, dated the Closing Date, as described in
Section 8.5; and
(v) such other documents and instruments as Seller may reasonably request to
consummate the transactions contemplated hereby.
2.3 Termination.
(a) Notwithstanding anything to the contrary contained in this
Agreement, this Agreement may be terminated at any time by:
(i) the mutual written consent of the Parties hereto;
(ii) either Buyer or Seller if the Closing does not occur before December 31,
1997, provided, however, that the Party seeking termination under this Section
2.3(a)(ii) shall not have prevented the Closing from occurring;
(iii) either Buyer or Seller if the Assignment Application is not granted within
nine (9) months from the date the Form 314 is placed on the Commission's public
notice (through no fault of the terminating Party) or is denied by the
Commission by a Final Order;
(iv) Buyer, if any of the conditions set forth in Article VII shall have become
incapable of fulfillment, and shall not have been waived by Buyer, or if Seller
shall have breached in any material respect any of its representations,
warranties or obligations hereunder and such breach shall not have been cured in
all material respects or waived prior to the Closing; or
(v) Seller, if any of the conditions set forth in Article VIII shall
have become incapable of fulfillment, and shall not have been waived by Seller,
or if Buyer shall have breached in any material respect any of its
representations, warranties or obligations hereunder and such breach shall not
have been cured in all material respects or waived prior to the Closing.
(b) In the event that the Local Marketing Agreement ("LMA") into which
the Parties are entering pursuant to Paragraph 6.1 of this Agreement is
terminated upon the occurrence of an event of default under the LMA, the
non-defaulting party may, by providing written notice to the defaulting party
within five (5) business days of the termination of the LMA, terminate this
Agreement.
(c) In the event of the termination of this Agreement by Buyer or Seller
pursuant to this Section 2.3, written notice thereof shall promptly be given to
the other Party and, except as otherwise provided herein, the transactions
contemplated by this Agreement shall be terminated, without further action by
any Party. Nothing in this Section 2.3 shall be deemed to release any Party from
any liability for any breach by such Party of the terms and provisions of this
Agreement or to impair the right of Buyer to compel
specific performance of Seller of its obligations under this Agreement.
(d) The time for Commission approval provided in Section 2.3(a)(iii)
notwithstanding, either Party may terminate this Agreement upon written notice
to the other, if, for any reason, the Assignment Application is designated for
hearing by the Commission, provided, however, that written notice of termination
must be given within twenty (20) days after release of the Hearing Designation
Order and that the Party giving such notice is not in default and has otherwise
complied with its obligations under this Agreement. Upon termination pursuant to
this Section, the Parties shall be released and discharged from any further
obligation hereunder and the Escrow Deposit shall be returned to the Buyer.
(e) It is further provided, however, that no Party may terminate this
Agreement if such Party is in default hereunder, or if a delay in any decision
or determination by the Commission respecting the Assignment Application has
been caused or materially contributed to (i) by any failure of such Party to
furnish, file or make available to the Commission information within its
control; (ii) by the willful furnishing by such Party of incorrect, inaccurate
or incomplete information to the Commission; and (iii) by any other action taken
by such Party for the purpose of delaying the Commission's decision or
determination respecting the Assignment Application. Upon such termination for
failure of the Commission to act, the Parties shall be released and discharged
from any further obligation hereunder.
(f) A Party shall be deemed to be in default under this Agreement only
if such Party has materially breached or failed to perform its obligations
hereunder, and non-material breaches or failures shall not be grounds for
declaring a Party to be in default, postponing the Closing, or terminating this
Agreement.
2.4 Risk of Loss. The risk of any loss, damage or destruction to any of
the Station Assets from fire or other casualty or cause shall be borne by Seller
at all times prior to the Closing Date hereunder. Upon the occurrence of any
loss or damage to any of the Station Assets as a result of fire, casualty,
accident or other causes prior to the Closing Date, Seller shall notify Buyer of
same in writing immediately stating with particularity the extent of loss or
damage incurred, the cause thereof if known and the extent to which restoration,
replacement and repair of the Station Assets lost or destroyed will be
reimbursed under any insurance policy with respect thereto. In the event the
loss exceeds $50,000 and the Station Assets cannot be substantially repaired or
restored within forty-five (45) days after such loss, Buyer shall have the
option, exercisable within ten (10) days after receipt of written notice from
Seller, to: (i) terminate this Agreement; (ii) postpone the Closing until such
time as the property has been completely repaired, replaced or restored to the
satisfaction of
Buyer, unless the same cannot be reasonably effected within thirty (30) days of
notification; or (iii) elect to consummate the Closing and accept the property
in its damaged condition, in which event Seller shall assign to Buyer all rights
under any insurance claim covering the loss and pay over to Buyer any proceeds
under any such insurance policy thereto received by Seller with respect thereto.
2.5 Interruption of Broadcast Transmissions. Notwithstanding any other
provision hereof, if prior to the Closing any event occurs which prevents the
broadcast transmission by either of the Stations with substantially full
licensed power and antenna height as described in the applicable FCC Licenses
and in the manner it has heretofore been operating for periods of time in excess
of six (6) hours, the Seller will give prompt written notice thereof to Buyer.
If such facilities are not restored so that operation is resumed with
substantially full licensed power within three (3) days of such event, or, in
the case of more than one event, the aggregate number of days preceding such
restorations from all such events is more than five (5) days, or if either of
the Stations is off the air more than three (3) times for a period in each case
exceeding six (6) hours other than for planned routine maintenance which the
Parties agree shall be scheduled between the hours of midnight and 6 AM to the
extent feasible, Buyer shall have the right, by giving written notice to Seller
of its election to do so, within five (5) business days of Buyer's becoming
entitled to terminate this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Due Incorporation. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of West Virginia.
Seller has the corporate power and authority to own and to operate the Stations
and the Station Assets.
3.2 Authority; No Conflict. The execution and delivery of this Agreement
have been duly and validly authorized and approved by the board of directors of
Seller, and Seller has the corporate power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
Neither such execution, delivery or performance nor compliance by Seller with
the terms and provisions hereof will (assuming receipt of all necessary
approvals from the Commission) conflict with or result in a breach of any of the
terms, conditions or provisions of (a) the Certificate of Incorporation or
Bylaws of Seller,(b) any judgment, order, injunction, decree, regulation or
ruling of any court or other governmental
authority to which Seller is subject, or (c) any material agreement, lease or
contract, written or oral, to which Seller is subject. This Agreement shall
constitute the valid and binding obligation of Seller with respect to the terms
hereof, subject to Commission approval of the transactions contemplated hereby.
3.3 Government Authorizations. Section 1.1(a) of the Disclosure Schedule
contains a true and complete list of all the Licenses, which Licenses are
sufficient for the lawful conduct of the business and operation of the Stations
in the manner and to the full extent they are currently conducted. Seller is the
authorized legal holder of the Licenses, none of which is subject to any
restriction or condition which would limit in any material respect the full
operation of the Stations as now operated. Except for the application seeking
the renewal of the licenses for the Stations, there are no applications,
complaints or proceedings pending or, to the best of Seller's knowledge,
threatened as of the date hereof before the Commission or any other governmental
authority relating to the business or operations of the Stations, other than
applications, complaints or proceedings which generally affect the broadcasting
industry as a whole, and other than reports and forms filed in the ordinary
course of the Stations' business. Seller has delivered to Buyer true and
complete copies of the Licenses, including any and all additions, amendments and
other modifications thereto. The Licenses are in good standing, are in full
force and effect and are unimpaired by any act or omission of Seller or its
officers, directors or employees; and the operation of the Stations is in
accordance with the Licenses and the underlying construction permits. No
proceedings are pending or, to the knowledge of Seller, are threatened which may
result in the revocation, modification, non-renewal or suspension of any of the
Licenses, the denial of any pending applications, the issuance of any cease and
desist order, the imposition of any administrative actions by the Commission
with respect to the Licenses or which may affect Buyer's ability to continue to
operate the Stations as they are currently operated. Seller has taken no action
which, to its knowledge, could lead to revocation or non-renewal of the
Licenses, nor omitted to take any action which, by reason of its omission, could
lead to revocation of the Licenses. All material reports, forms and statements
required to be filed with the Commission with respect to the Stations since the
grant of the last renewal of the Licenses have been filed and are complete and
accurate. To the knowledge of Seller, there are no facts which, under the
Communications Act of 1934, as amended, or the existing rules and regulations of
the Commission, would disqualify Seller as assignor, and Buyer as assignee, in
connection with the Assignment Application.
3.4 Compliance with Regulations. The operation of the Stations is in
compliance in all material respects with (i) all applicable engineering
standards required to be met under Commission rules, and (ii) all other
applicable rules, regulations, requirements and policies of the Commission and
all other applicable governmental authorities, including, but not limited to,
ANSI Radiation Standards, to the extent required to be met under applicable
Commission rules and regulations; and there are no existing claims known to
Seller to the contrary.
3.5 Taxes and Regulatory Fees. Seller has timely filed all federal,
state, local and foreign income, franchise, sales, use, property, excise,
payroll and other tax returns required by law and has paid in full all taxes,
estimated taxes, interest, assessments, and penalties due and payable as shown
thereon. All returns and forms which have been filed have been true and correct
in all material respects and no tax or other payment in a material amount other
than as shown on such returns and forms are required to be paid or have been
paid by Seller. There are no present disputes as to taxes of any nature payable
by Seller which in any event could materially adversely affect the Station
Assets or operation of the Stations. Each of the parcels included in the Owned
Real Property is assessed for real estate purposes as a wholly independent tax
lot, separate from any adjoining lot or improvements not constituting a part of
such parcel. Seller has paid all FCC Regulatory Fees required to be paid by
Seller with respect to the Stations.
3.6 Personal Property. Section 1.1(b) of the Disclosure Schedule
contains a true and complete list of all the Personal Property. Except for those
assets designated on Section 1.1(b) of the Disclosure Schedule as being subject
to lease agreements, Seller owns and has, and will have on the Closing Date,
good and marketable title to such Personal Property, and none of such Personal
Property on the Closing Date will be subject to any security interest, mortgage,
pledge, conditional sales agreement or other lien or encumbrance. All items of
Personal Property are in all material respects in good operating condition,
ordinary wear and tear excepted, and are available for immediate use in the
conduct of the business and operation of the Stations. The technical equipment,
including, without limitation, all transmitters and studio equipment,
constituting part of the Personal Property, has been maintained in accordance
with industry practice and is in good operating condition, ordinary wear and
tear excepted, (except as noted in Section 1.1(b) of the Disclosure Schedule)
and complies in all material respects with all applicable rules and regulations
of the Commission and the terms of the Licenses. The Personal Property includes
all such items and equipment necessary to conduct in all material respects the
business and operations of the Stations as now conducted and in material
compliance with the terms and conditions of the Licenses.
3.7 Real Property.
(a) Seller is the owner of good, marketable and insurable fee title to
the Owned Real Property free and clear of all Title Defects (as hereinafter
defined) except for encumbrances of a minor nature that do not, in the
reasonable opinion of Buyer's counsel, individually or in the aggregate (i)
interfere in any material respect with the use, occupancy or operation of the
Owned Real Property or (ii) materially reduce the fair market value of the Owned
Real Property below the fair market value the Owned Real Property would have had
but for such encumbrances (collectively, the "Permitted Owned Real Property
Exceptions"). The Owned Real Property constitutes all of the real property owned
by Seller on the date hereof in connection with the operation of the Stations.
There are no leases/subleases or other agreements granting to any person other
than Seller any right to the possession, use or occupancy of the Owned Real
Property. As used in this Agreement, "Title Defects" shall mean and include any
mortgage, deed of trust, lien, pledge, security interest, claim, lease, charge,
option, right of first refusal, easement, restrictive covenant, encroachment or
other survey defect, encumbrance or other restriction or limitation whatsoever.
Notwithstanding the foregoing, Buyer recognizes that certain radials
constituting a portion of the antenna system used by WKWK(AM) extend slightly
beyond the surveyed boundaries of the real property owned by Seller, but are
permitted by virtue of an easement granted by the landowner of the property into
which the radials extend. This encroachment shall be deemed a Permitted Owned
Real Property Exception.
(b) Entire Premises. All of the land, buildings, structures and other
improvements used by Seller in the conduct of the business of the Stations or
involved in the Real Property are listed in the Disclosure Schedule.
(c) No Options. Seller does not own or hold, and is not obligated under
or a party to, any option, right of first refusal or other contractual right to
purchase, acquire, sell or dispose of the Real Property or any portion thereof
or interest therein.
(d) Condition and Operation of Improvements. All components of all
buildings, structures and other improvements included within the Real Property
(the "Improvements") are in good working order and repair. All water, gas,
electrical, steam, compressed air, telecommunication, sanitary and storm sewage
lines and systems and other similar systems serving the Real Property are
installed and operating and are sufficient to enable the Real Property to
continue to be used and operated in the manner currently being used and
operated, and any so-called hook-up fees or other associated charges have been
fully paid.
(e) Real Property Permits and Insurance. All certificates of occupancy,
permits, licenses, franchises, approvals and authorizations (collectively, "Real
Property Permits") of all governmental authorities having jurisdiction over the
Real Property, required or appropriate to have been issued to Seller to enable
the Real Property to be lawfully occupied and used for all of the purposes for
which it is currently occupied and used have been lawfully
issued and are, as of the date hereof, in full force and effect.
(f) Condemnation. Seller has not received notice and has no knowledge of
any pending, threatened or contemplated condemnation proceeding affecting the
Real Property or any part thereof or of any sale or other disposition of the
Owned Real Property or any part thereof in lieu of condemnation.
(g) Casualty. No portion of the Real Property has suffered any material
damage by fire or other casualty which has not heretofore been completely
repaired and restored to its original condition. No portion of the Real Property
is located in a special flood hazard area as designated by Federal governmental
authorities.
3.8 Consents. No consent, approval, authorization or order of, or
registration, qualification or filing with, any court, regulatory authority or
other governmental body is required for the execution, delivery and performance
by Seller of this Agreement, other than approval by the Commission of the
Assignment Application as contemplated hereby. Except as set forth in Section
3.8 of the Disclosure Schedule, no consent of any other party (including,
without limitation, any party to any Real Estate Contract or Contract) is
required for the execution, delivery and performance by Seller of this
Agreement.
3.9 Contracts. Section 1.1(f) of the Disclosure Schedule contains a true
and complete list of all Contracts, including all such Contracts necessary to
permit continued operation of the Stations in the manner in which they are being
operated as of the date of this Agreement, and Section 1.1(g) contains a true
and complete list of all Broadcast Agreements and Trade Agreements. Seller has
delivered to Buyer true and complete copies of all written Contracts, Broadcast
Agreements and Trade agreements in the possession of Seller, including any and
all amendments and other modifications to same. All such Contracts, Broadcast
Agreements and Trade Agreements are valid, binding and enforceable by Seller in
accordance with their respective terms, except as limited by laws affecting
creditors' rights or equitable principles generally. Seller has complied in all
material respects with all such Contracts, Broadcast Agreements and Trade
Agreements, and Seller is not in default beyond any applicable grace periods
under any of same, and no other contracting party is in material default under
any of same. Seller has full legal power and authority to assign its respective
rights under such Contracts, Broadcast Agreements and Trade Agreements to Buyer
in accordance with this Agreement on terms and conditions no less favorable than
those in effect on the date hereof, and such assignment will not materially
affect the validity, enforceability and continuity of any such Contracts,
Broadcast Agreements and Trade Agreements.
3.10 Environmental. Seller has not unlawfully disposed of any Hazardous
Waste in a manner which has caused, or could cause, Buyer to incur a material
liability under applicable law in connection therewith; and Seller warrants that
the technical equipment included in the Personal Property does not contain any
Hazardous Waste, including any Polychlorinated Biphenyls ("PCBs") that are
required by law to be removed, and if any equipment does contain Hazardous Waste
that is not required by law to be removed, including any PCBs, that such
equipment is stored and maintained in compliance with applicable law. Seller has
complied in all material respects with all federal, state and local
environmental laws, rules and regulations applicable to the Stations and its
operations, including but not limited to the Commission's guidelines regarding
RF radiation. No Hazardous Waste has been disposed of by Seller, and to the best
of Seller's knowledge, no Hazardous Waste has been disposed of by any other
person on the property subject to Real Estate Contracts. As used herein, the
term "Hazardous Waste" shall mean all materials regulated by any federal, state,
local or foreign laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata). If Seller learns between the date of
this Agreement and the Closing Date that Seller is in breach of the
representation and warranty set forth in this Section 3.10, Seller shall begin
remedial action promptly and shall use reasonable best efforts to complete such
remedial action to the satisfaction of Buyer before the Closing Date.
3.11 Intangibles. Section 1.1(e) of the Disclosure Schedule is a true
and complete list of all trade names, copyrights, trademarks, service marks,
patents or applications therefor (the "Intellectual Property") that have been
duly registered by, filed by, or issued to the Seller. Seller has not granted
any license or other rights with respect to the Intangibles (including the
Intellectual Property). Seller has not received any written notice of any
infringement or unlawful use of the Intangibles and Seller has not violated or
infringed any patent, trademark, trade secret or copyright held by others or any
license, authorization or permit held by it.
3.12 Financial Statements. Seller previously has provided Buyer with
complete copies of the audited statements of income, and the related balance
sheets, for the years ended December 31, 1993 and December 31, 1994 and
unaudited statements of income and related balance sheets through November 30,
1995. These financial statements are included in Section 3.12 of the Disclosure
Schedule. Pursuant to Paragraph 1.7 of this Agreement, Seller will supplement
Section 3.12 of the Disclosure Schedule with complete unaudited copies (or
audited copies, if available) of the statements of income, and the related
balance sheets for Seller, for the period after November, 1995. The schedules
supplied, and to be supplied, in Section 3.12 of the Disclosure Schedule have
been prepared in accordance with generally accepted accounting principles and in
accordance with the policies and procedures of the Seller
applicable thereto, consistently applied, and present fairly the financial
condition and results of operations of the Stations for the periods indicated.
3.13 Personnel Information; Labor Contracts.
(a) Section 3.13 of the Disclosure Schedule contains a true and complete
list of all persons employed at the Stations, including the date of hire and a
description of material compensation arrangements (other than employee benefit
plans set forth in Section 3.14 of the Disclosure Schedule). Seller has not
entered into any employment agreements with any of its employees.
(b) Seller is not a party to any contract with any labor organization,
nor has Seller agreed to recognize any union or other collective bargaining
unit, nor has any union or other collective bargaining unit been certified as
representing any of Seller's employees. Seller has no knowledge of any
organizational effort currently being made or threatened by or on behalf of any
labor union with respect to employees of the Stations. During the past two
years, Seller has not experienced any strikes, work stoppages, grievance
proceedings, claims of unfair labor practices filed, or other significant labor
difficulties of any nature.
(c) Seller has complied in all material respects with all laws relating
to the employment of labor, including, without limitation, the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and those laws
relating to wages, hours, collective bargaining, unemployment insurance,
workers' compensation, equal employment opportunity and the payment and
withholding of taxes.
3.14 Employee Benefit Plans. The only employee benefit plan (as that
term is defined in Section 3(3) of ERISA) is the 401(k) plan summarized in
Section 3.14 of the Disclosure Schedule. Seller maintains no other employee
benefit plan. Seller's employee benefit plan has been operated and administered
in all material respects in accordance with its terms and applicable law,
including, without limitation, ERISA and the Internal Revenue Code.
3.15 Litigation. Seller is not subject to any judgment, award, order,
writ, injunction, arbitration decision or decree, and there is no litigation,
proceeding or investigation pending or, to the best of Seller's knowledge,
threatened against Seller or the Stations in any federal, state or local court,
or before any administrative agency or arbitrator (including, without
limitation, any proceeding which seeks the forfeiture of, or opposes the renewal
of, any of the Licenses), or before any other tribunal duly authorized to
resolve disputes, which would reasonably be expected to have any material
adverse effect upon the business, property, assets or condition (financial or
otherwise) of the Stations
or which seeks to enjoin or prohibit, or otherwise questions the validity of,
any action taken or to be taken pursuant to or in connection with this
Agreement. In particular, but without limiting the generality of the foregoing,
there are no applications, complaints or proceedings pending or, to the best of
Seller's knowledge, threatened before the Commission or any other governmental
organization with respect to the business or operation of the Stations, other
than applications, complaints or proceedings which affect the broadcast industry
generally.
3.16 Compliance with Laws. Seller has not received any notice asserting
any non-compliance with any applicable statute, rule or regulation (federal,
state or local) whether or not related to the business or operation of the
Stations or the Real Property. Seller is not in default with respect to any
judgment, order, injunction or decree of any court, administrative agency or
other governmental authority or to any other tribunal duly authorized to resolve
disputes in any respect material to the transactions contemplated hereby. Seller
is in compliance in all material respects with all laws, regulations and
governmental orders whether or not applicable to the conduct of the business and
operation of the Stations and any other business or operations conducted by
Seller. The Owned Real Property is in full compliance with all applicable
building, zoning, subdivision, environmental and other land use and similar
laws, codes, ordinances, rules, regulations and orders of governmental
authorities (collectively, "Real Property Laws"), and Seller has not received
any notice of violation or claimed violation of any Real Property Law. Seller
has no knowledge of any pending change in any Real Property Law which would have
a material adverse effect upon the ownership or use of the Owned Real Property.
3.17 Insurance. Seller has in full force and effect insurance on all of
the Real Property, Personal Property, and all other Station Assets pursuant to
insurance policies, true and complete copies of which are contained in Section
3.17 of the Disclosure Schedule. Seller shall continue to maintain such
insurance in full force and effect up to the Closing Date or shall have obtained
prior to the Closing Date other insurance policies with limits and coverage
comparable to the current policies after prior notice to, and upon written
consent of the Buyer, which consent shall not be unreasonably withheld.
3.18 Undisclosed Liabilities. Except as to, and to the extent of, the
amounts specifically reflected or reserved against in Seller's balance sheets
for the period ending November 30, 1995 (the "Balance Sheet Date"), and except
for liabilities and obligations incurred since the Balance Sheet Date in the
ordinary and usual course of business, Seller has no material liabilities or
obligations of any nature whether accrued, absolute, contingent or otherwise and
whether due or to become due, and, to the best of Seller's knowledge, there is
no basis for the assertion against Seller of any such liability or obligations.
No
representation or warranty made by Seller in this Agreement, and no statement
made in any exhibit or schedule hereto or any certificate or document delivered
by Seller pursuant to the terms of this Agreement, contain or will contain any
untrue statement of a material fact or omit or will omit to state any material
fact necessary to make such representation or warranty or any such statement not
misleading.
3.19 Instruments of Conveyance; Good Title. The instruments to be
executed by Seller and delivered to Buyer at Closing, conveying the Station
Assets, including without limitation the Owned Real Property, to Buyer, will be
in a form sufficient to transfer good and marketable title to the Station
Assets, including without limitation the Owned Real Property, free and clear of
all liabilities, obligations and encumbrances, except as provided herein.
3.20 Absence of Certain Changes. Between the Balance Sheet Date and the
date of this Agreement there has not been:
(a) Any material adverse change in the working capital, financial
condition, business, results of operations, assets or liabilities of Seller;
(b) Any change in the manner in which Seller conducts its business and
operations other than changes in the ordinary and usual course of business
consistent with past practice;
(c) Any amendment to the Certificate of Incorporation or Bylaws of
Seller;
(d) Any contract or commitment, to which Seller is a party, entered
into, modified or terminated, except in the ordinary and usual course of
business;
(e) Any creation or assumption of any mortgage, pledge or other lien or
encumbrance upon any of the Station Assets except in the ordinary and usual
course of business;
(f) Any sale, assignment, lease, transfer, or other disposition of any
of the Station Assets, except in the ordinary and usual course of business;
(g) The incurring of any liabilities or obligations, except items
incurred in the ordinary and usual course of business;
(h) The write-off or determination to write off as uncollectible any
accounts receivable or portion thereof, except for write-offs in the ordinary
course of business consistent with past practice at a rate not
materially greater than during the twelve months prior to the Balance Sheet
Date;
(i) The disposition, lapse or termination of any Intellectual Property;
(j) The increase or promise to increase the rate of commissions, fixed
salary or wages, draw, bonus or other compensation payable to any employee of
Seller, except in the ordinary and usual course of business consistent with past
practice;
(k) Any default under any contract or lease to which Seller is a party;
(l) Any change in any method of accounting or accounting practice used
by Seller; or
(m) Any other event or condition of any character materially and
adversely affecting the business or properties of Seller or the Stations.
3.21 Insolvency Proceedings. No insolvency proceedings of any character
including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary, affecting
Seller or the Station Assets are pending or, to Seller's knowledge, threatened,
and Seller has made no assignment for the benefit of creditors, nor taken any
action with a view to, or which would constitute the basis for, the institution
of any such insolvency proceedings.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Due Incorporation. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and as of
the Closing Date shall be duly qualified to do business in and be in good
standing in the State of West Virginia.
4.2 Authority; No Conflict. The execution and delivery of this Agreement
has been duly and validly authorized and approved by the board of directors of
Buyer, and Buyer has the corporate power and authority to execute, deliver and
perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery, performance hereof, and compliance
by Buyer with the terms and provisions hereof will not (assuming receipt of all
necessary approvals from the Commission) conflict with or result in a breach of
any of the terms, conditions or provisions of (a) the Certificate of
Incorporation or Bylaws of Buyer, (b) any judgment, order, injunction, decree,
regulation or ruling of any court or other governmental authority to which Buyer
is subject, or (c) any material agreement, lease or contract, written or oral,
to which Buyer is subject. This Agreement will constitute the valid and binding
obligation of Buyer with respect to the terms hereof, subject to Commission
approval of the transactions contemplated hereby.
4.3 Consents. No consent, approval, authorization or order of, or
registration, qualification or filing with, any court, regulatory authority or
other governmental body is required for the execution, delivery and performance
by Buyer of this Agreement, other than the approval by the Commission of the
Assignment Application as contemplated hereby. Except as set forth in Section
4.3 of the Disclosure Schedule, no consent of any other party is required for
the execution, delivery and performance by Buyer of this Agreement.
4.4 Litigation. There is no litigation, proceeding or investigation
pending or, to the best of Buyer's knowledge, threatened against Buyer in any
federal, state or local court, or before any administrative agency or
arbitrator, or before any other tribunal duly authorized to resolve disputes,
that would reasonably be expected to have any material adverse effect upon the
ability of Buyer to perform its obligations hereunder, or that seeks to enjoin
or prohibit, or otherwise questions the validity of, any action taken or to be
taken pursuant to or in connection with this Agreement.
4.5 Compliance with Laws. Buyer is not in default with respect to any
judgment, order, injunction or decree of any court, administrative agency or
other governmental authority or of any other tribunal duly authorized to resolve
disputes in any respect material to the transactions contemplated hereby. Buyer
is not in violation of any law, regulation or governmental order, the violation
of which would have a material adverse effect on Buyer or its ability to perform
its obligations pursuant to this Agreement.
4.6 Qualification. To the best of Buyer's knowledge, other than with
respect to the ownership limitations set forth in current FCC regulations which
must be revised by the Telecommunications Act of 1966 in such a way as to remove
the ownership limitation currently imposed on the Buyer by the FCC, Buyer is
legally, technically and financially qualified to be the assignee of the
Licenses and the other Station Assets, and, prior to the Closing Date, Buyer
will exercise its best efforts to refrain from doing any act which would
disqualify Buyer from being the assignee of the Licenses and the other Station
Assets.
ARTICLE V
COVENANTS OF SELLER
Between the date of this Agreement and the Closing Date, Seller shall
have complete control of the Stations and its operations, and Seller covenants
as follows with respect to such period:
5.1 Continued Operation of Stations. Seller shall continue to operate
the Stations under the terms of the Licenses in the manner in which the Stations
have been operated heretofore, in the usual and ordinary course of business, in
conformity with all material applicable laws, ordinances, regulations, rules and
orders, and in a manner so as to preserve and ▇▇▇▇▇▇ the goodwill and business
relationships of the Stations and Seller, including, without limitation,
relationships with advertisers, suppliers, customers, and employees. Seller
shall file with the Commission and any other applicable governmental authority
all applications and other documents required to be filed in connection with the
continued operation of the Stations.
5.2 Financial Obligations. Seller shall continue to conduct the
financial operations of the Stations, including their credit and collection
policies, in the ordinary course of business with the same effort, to the same
extent, and in the same manner, as in the prior conduct of the business of the
Stations; and shall continue to pay and satisfy all expenses, liabilities and
obligations arising in the ordinary course of business in accordance with past
accounting practices. Seller shall not enter into or amend any contracts or
commitments involving expenditures by Seller in an aggregate amount in excess of
$5,000 without the prior written consent of Buyer.
5.3 Reasonable Access. Seller shall provide Buyer, and representatives
of Buyer, with reasonable access during normal business hours to the Stations
and shall furnish such additional information concerning the Stations as Buyer
from time to time may reasonably request.
5.4 Maintenance of Assets. Seller shall maintain the Real Property, the
Personal Property and all other tangible assets in their present good operating
condition, repair and order, reasonable wear and tear in ordinary usage
excepted. Seller shall not waive or cancel any claims or rights of substantial
value, transfer or otherwise dispose of the Real Property, any Personal
Property, or permit to lapse or dispose of any right to the use of any
Intangibles.
5.5 Notification of Developments. Seller shall provide Buyer
with prompt written notice of any material change in any of the information
contained in the representations and warranties made herein or in the Disclosure
Schedule or any other documents delivered in connection with this Agreement.
5.6 Payment of Taxes. Seller shall pay or cause to be paid all property
and all other taxes relating to the Stations, the Real Property and the assets
and employees of the Stations required to be paid to city, county, state,
federal and other governmental units through the Closing Date.
5.7 Third Party Consents. Seller shall use commercially reasonable
efforts to obtain from any third party waivers, permits, licenses, approvals,
authorizations, qualifications, orders and consents necessary for the
consummation of the transactions contemplated by this Agreement, including,
without limitation, approval from the Commission of the Assignment Application
contemplated hereby.
5.8 Encumbrances. Seller shall not suffer or permit the creation of any
mortgage, conditional sales agreement, security interest, lease, lien,
hypothecation, deed of trust or pledge, encumbrance, restriction, liability,
charge, or imperfection of title with respect to the Station Assets.
5.9 Assignment of Assets. Seller shall not sell, assign, lease or
otherwise transfer or dispose of any Station Assets, whether now owned or
hereafter acquired, except for retirements in the normal and usual course of
business or in connection with the acquisition of similar property or assets, as
provided for herein.
5.10 Commission Licenses and Authorizations. Seller shall not by any act
or omission surrender, modify adversely, forfeit or fail to renew under regular
terms the Licenses, cause the Commission or any other governmental authority to
institute any proceeding for the revocation, suspension or modification of any
such License, or fail to prosecute with due diligence any pending applications
with respect to the Licenses at the Commission or any other applicable
governmental authority.
5.11 Technical Equipment. Seller shall not fail to repair, maintain or
replace the technical equipment transferred hereunder in accordance with the
normal standards of maintenance applicable in the broadcast industry.
5.12 Compensation Increases. Seller shall not permit any increase in the
rate of commissions, fixed salary or wages, draw or other compensation payable
to any employees of Seller, except in the ordinary course of business consistent
with Seller's past business practice.
5.13 Sale of Broadcast Time. Seller shall not enter into, extend or
renew any Broadcast Agreement not consistent with the usual and ordinary course
of business. In addition Seller shall not enter into, extend or renew any
Broadcast Agreement exceeding $10,000 in amount unless such Broadcast Agreement
is terminable on 30 days' notice, and Seller shall not enter into any Trade
Agreement without the prior written consent of Buyer.
5.14 Insurance. Seller shall maintain at all times between the date
hereof and the Closing Date, those insurance policies listed in Section 3.17 of
the Disclosure Schedule.
5.15 Negotiations with Third Parties. Seller shall not, before Closing
or the termination of this Agreement, enter into discussions with respect to any
sale or offer of the Stations, any Station Assets or any controlling stock
interest in Seller to any third party, nor shall Seller offer the Stations, any
Station Assets or any controlling stock interest in Seller to any third party.
ARTICLE VI
JOINT COVENANTS OF BUYER AND SELLER
Buyer and Seller covenant and agree that between the date hereof and the
Closing Date, they shall act in accordance with the following:
6.1 Assignment Application; Local Marketing Agreement. No later than ten
(10) days after the date of this Agreement, Buyer and Seller shall join in and
file with the FCC an application on FCC Form 314 requesting the Commission's
consent to the assignment of the Licenses from Seller to Buyer (the "Assignment
Application"). Seller and Buyer agree to prosecute the Assignment Application
with all reasonable diligence and to use their best efforts to obtain prompt
Commission grant of the Assignment Application. Buyer and Seller acknowledge
that the revisions to the FCC's broadcast ownership rule mandated by the
Telecommunications Act of 1996, PL 104-104, have, as of the date of this
Agreement, not yet been implemented. Buyer and Seller agree to promptly amend or
refile the Assignment Application as necessary in light of the revisions to the
FCC's regulations and policies that are adopted by the FCC in implementation of
the Telecommunications Act of 1996.
Contemporaneously with the execution of this Agreement, Buyer and Seller
shall execute an LMA in substantially the form of the agreement attached hereto
as Exhibit E.
6.2 Performance. Buyer and Seller shall perform all acts required of
them under this Agreement and shall refrain from taking or omitting
to take any action that would violate their representations and warranties
hereunder or render those representations and warranties inaccurate as of the
Closing Date.
6.3 Conditions. If any event should occur, either within or without the
control of any Party hereto, which would prevent fulfillment of the conditions
placed upon the obligations of any Party hereto to consummate the transactions
contemplated by this Agreement, the Parties hereto shall use their best efforts
to cure the event as expeditiously as possible.
6.4 Confidentiality. Buyer and Seller shall each keep confidential all
information they obtain with respect to any other Party hereto in connection
with this Agreement and the negotiations preceding this Agreement, and will use
such information solely in connection with the transactions con- templated by
this Agreement. If the transactions contemplated hereby are not consummated for
any reason, each Party hereto shall return to the Party so providing, without
retaining a copy thereof, any schedules, documents or other written information
obtained from the Party so providing such information in connection with this
Agreement and the transactions contemplated hereby. Notwithstanding the
foregoing, no Party shall be required to keep confidential or return any
information which (i) is known or available through other lawful sources, (ii)
is or becomes publicly known through no fault of the receiving Party or its
agents, (iii) is required to be disclosed pursuant to an order or request of a
judicial or governmental authority (provided the disclosing Party is given
reasonable prior notice), or (iv) is developed by the receiving Party
independently of the disclosure by the disclosing Party.
6.5 Cooperation. Buyer and Seller shall cooperate fully and with each
other in taking any actions to obtain the required consent of any governmental
instrumentality or any third party necessary or helpful to accomplish the
transactions contemplated by this Agreement provided, however, that no Party
shall be required to take any action which would have a material adverse effect
upon it or any entity affiliated with it.
6.6 Environmental Reports. If desired by Buyer, Seller and Buyer agree
to arrange for the preparation of, at the expense of Buyer, appropriate
environmental reports for the real property subject to Real Estate Contracts.
Such environmental reports shall conclude that: (i) the real property subject to
Real Estate Contracts is not in any way contaminated with any Hazardous Waste
requiring remediation, clean-up or removal under applicable laws relating to
Hazardous Waste; (ii) the real property subject to Real Estate Contracts is not
subject to any federal, state or local "superfund" or "Act 307" lien,
proceeding, claim, liability or action, or the threat or likelihood thereof, for
the clean-up, removal or remediation of any Hazardous Waste from same; (iii)
there is no asbestos located in the buildings situated on the real property
subject to Real Estate Contracts requiring remediation, encapsulation or removal
under applicable laws relating to asbestos clean-up; and (iv) there are no
underground storage tanks located at the real property subject to Real Estate
Contracts requiring remediation, clean-up or removal under applicable laws
relating to Hazardous Waste, and if any have previously been removed, such
removal was done in accordance with all applicable laws, rules and regulations.
The environmental review to be conducted shall initially be a Phase I review.
Any further investigations recommended in the environmental reports obtained
pursuant to this Section 6.6 shall be conducted with the cost to be shared
equally by Seller and Buyer.
6.7 Consents to Assignment. To the extent that any Contract, Broadcast
Agreement, Trade Agreement, Real Estate Contract or other contract identified in
the Disclosure Schedule that is to be assigned under this Agreement is not
capable of being sold, assigned, transferred, delivered or subleased without the
waiver or consent of any third person withholding same (including a government
or governmental unit), or if such sale, assignment, transfer, delivery or
sublease or attempted sale, transfer, delivery or sublease would constitute a
breach thereof or a violation of any law or regulation, this Agreement and any
assignment executed pursuant hereto shall not constitute a sale, assignment,
transfer, delivery or sublease or an attempted sale, assignment, transfer,
delivery or sublease thereof. In those cases where consents, assignments,
releases and/or waivers have not been obtained at or prior to the Closing Date
to the transfer and assignment to Buyer of such contracts, Buyer may in its sole
discretion elect to have this Agreement and any assignments executed pursuant
hereto, to the extent permitted by law, constitute an equitable assignment by
Seller to Buyer of all of Seller's rights, benefits, title and interest in and
to such contracts, and where necessary or appropriate, Buyer shall be deemed to
be Seller's agent for the purpose of completing, fulfilling and discharging all
of Seller's rights and liabilities arising after the Closing Date under such
contracts. Seller shall use its reasonable best efforts to provide Buyer with
the benefits of such contracts (including, without limitation, permitting Buyer
to enforce any rights of Seller arising under such contracts), and Buyer shall,
to the extent Buyer is provided with the benefits of such contracts, assume,
perform and in due course pay and discharge all debts, obligations and
liabilities of Seller under such contracts. The Parties recognize, however, that
the FCC licenses to be assigned under this Agreement may not be assigned without
the prior approval of the FCC and will not attempt to effectuate such an
assignment without the FCC's prior approval.
6.8 Employee Matters. While under no obligation to hire any employees of
the Stations, Buyer shall make reasonable efforts to offer employment at will to
certain employees of the Stations. Upon review of a full list of employees and
salaries, Buyer shall notify Seller of (i) those employees to whom it will so
offer employment as soon as practicable and (ii) those
employees that Buyer intends to discharge not less than thirty (30) days prior
to the Closing Date. Seller shall be responsible for all salary and benefits of
the employees of the Stations who do not accept, or are not offered, employment
with Buyer. Seller shall be responsible for all salary and other compensation
due to be paid for work for Seller for employees of the Stations who become
employees of Buyer and Buyer shall be responsible for the salary and other
compensation due to be paid for work for Buyer on or after the date of hire by
Buyer for such employees. Seller shall be responsible for severance payments
which may be applicable under its employee benefit plans to any employees not so
offered employment and hired by Buyer.
6.9 Survey. Buyer and Seller shall obtain, at Seller's expense, a survey
of each parcel of Real Property certified to Buyer or its permitted assigns and
the Title Company. The certification shall be by a Registered Land Surveyor and
shall be made on the ground in accordance with the minimum technical standards
of land surveying in West Virginia. The survey shall be delivered to Buyer at
least fifteen (15) days prior to the Closing Date. If the survey shows: (i) the
Real Property does not have access to an abutting public road, (ii) easements
exist that are not approved by Buyer, (iii) violations of restrictions or
governmental zoning or building regulations, (iv) buildings, structures or other
improvements are constructed over any easement; provided that unless the
construction of a building, structure or other improvement over an easement
constitutes a violation of an easement it shall not constitute a defect or
encroachment, (v) any building, structure or other improvement is not entirely
within the boundaries of the applicable parcel of Real Property, (vi) any
drainage facilities are not entirely within the applicable parcel of Real
Property or appropriate public or private easements, or (vii) there are other
material encroachments, gaps or overlaps rendering title to the Real Property
unmarketable; then Buyer shall within seven (7) days of receipt of the survey
notify Seller in writing specifying the defects and encroachments reflected by
the survey, and Seller shall have ten (10) days within which to remove such
defects and encroachments except that Seller shall have no obligation to remove
a defect that is a Permitted Owned Real Property Exception.
6.10 Escrow Agreement. Seller and Buyer shall enter into an Escrow
Agreement substantially in the form attached hereto as Exhibit A.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYER
The performance of the obligations of the Buyer hereunder is subject, at
the election of the Buyer, to the following conditions precedent:
7.1 Commission Approvals. Notwithstanding anything herein to the
contrary, the consummation of this Agreement is conditioned upon (a) a grant by
the Commission of the Assignment Application, (b) compliance by the Parties with
the conditions, if any, imposed by the Commission in connection with the grant
of the Assignment Application (provided that neither Party shall be required to
accept or comply with any condition which would be unreasonably burdensome or
which would have a materially adverse effect upon it, it being agreed, however,
that any condition requiring Buyer to divest itself of an interest in WHLX(FM)
shall not be deemed to be unreasonably burdensome or to have a materially
adverse effect on Buyer) and (c) grant by the Commission of the renewal
applications pending for the Stations without condition and for a minimum
license term of seven years. All required governmental filings shall have been
made, and all requisite governmental approvals for the consummation of the
transactions contemplated hereby shall have been granted and become Final
Orders. The Licenses shall be in unconditional full force and effect and shall
be unimpaired by any acts or omissions of Seller or Seller's employees or
agents.
7.2 Performance. The Station Assets shall have been transferred to Buyer
by Seller, and all of the terms, conditions and covenants to be complied with or
performed by Seller on or before the Closing Date shall have been duly complied
with and performed in all material respects, and Buyer shall have received from
Seller a certificate or certificates to such effect, in form and substance
reasonably satisfactory to Buyer.
7.3 Failure of Transfer. Notwithstanding anything to the contrary
contained in this Agreement, in the event that any law, regulation or official
policy prevents the transfer or assignment of the Station Assets from Seller to
Buyer or any Buyer affiliate, the Parties shall have amended this Agreement
and/or executed such supplemental agreements, as necessary, to achieve for both
Buyer and Seller, to the maximum extent possible, the benefits of the
transactions contemplated by this Agreement in a manner consistent with
applicable law.
7.4 Representations and Warranties. The representations and warranties
of Seller to Buyer shall be true, complete and correct in all material respects
as of the Closing Date with the same force and effect as if then made, and Buyer
shall have received from Seller a certificate or certificates to such effect, in
form and substance reasonably satisfactory to Buyer.
7.5 Consents. Seller shall have received all consents (including
landlords' consents for the studio and tower sites) specified in Section 3.8 of
the Disclosure Schedule. With respect to consents for Assumed Contracts,
however, only the obtaining of consents for Material Contracts is a condition
precedent to the Buyer's obligation to purchase the Stations.
7.6 No Litigation. No litigation, proceeding, or investigation of any
kind shall have been instituted or, to Seller's knowledge, threatened which
would materially adversely affect the ability of Seller to comply with the
provisions of this Agreement or would materially adversely affect the operation
of the Stations.
7.7 No Adverse Change. Buyer shall have completed its due diligence
which shall, in its sole judgment, be satisfactory and no material adverse
change shall have occurred with respect to the operation of the Stations since
the conclusion of such due diligence.
7.8 Documents. Seller shall have obtained, executed, where necessary,
and delivered, to Buyer where applicable, all of the documents, reports, orders
and statements required of it herein, as well as any other documents (including
collateral assignments) required by any entity providing financing for the
transactions contemplated by this Agreement.
7.9 Opinions of Counsel. Seller shall have delivered to Buyer an opinion
of Bachman, Hess, ▇▇▇▇▇▇▇ and Garden, counsel to Seller, addressed to Buyer and
in the form attached hereto as Exhibit B. In addition, Seller shall have
delivered to Buyer a written opinion of Seller's FCC counsel, dated as of the
Closing Date, addressed to Buyer and in the form attached hereto as Exhibit C.
7.10 Survey. Buyer shall have received the survey of the Real Property
in accordance with Section 6.9 herein.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SELLER
The performance of the obligations of Seller hereunder is subject, at
the election of Seller, to the following conditions precedent:
8.1 Performance. All of the terms, conditions and covenants to be
complied with or performed by Buyer on or before the Closing Date shall have
been duly complied with and performed in all material respects, and Seller shall
have received from Buyer a certificate or certificates to such effect, in form
and substance reasonably satisfactory to Seller.
8.2 Representations and Warranties. The representations and warranties
of Buyer to Seller shall be true, complete and correct in all material respects
as of the Closing Date with the same force and effect as if then made,
and Seller shall have received from Buyer a certificate or certificates to such
effect, in form and substance reasonably satisfactory to Seller.
8.3 Government Approvals. All required governmental filings shall have
been made and all requisite governmental approvals for the consummation of the
transactions contemplated hereby shall have been granted.
8.4 Documents. Buyer shall have obtained, executed, where necessary, and
delivered to Seller where applicable, all of the documents, reports, orders and
statements required of it herein.
8.5 Opinion of Counsel. Buyer shall have delivered to Seller an opinion
of counsel to Buyer, addressed to Seller and in the form attached hereto as
Exhibit D.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by Seller. From and after the Closing Date, Seller
agrees to, and shall, indemnify, defend and hold Buyer harmless, and shall
reimburse Buyer for and against any and all actions, losses, expenses, damages,
liabilities, taxes, penalties or assessments, judgments and costs (including
reasonable legal expenses related thereto) resulting from or arising out of:
(a) Any breach by Seller of any representation, or warranty contained in
this Agreement or in any certificate, exhibit, schedule, or other document
furnished to or to be furnished pursuant hereto or in connection with the
transactions contemplated hereby;
(b) Any non-fulfillment or breach by Seller of any covenant, agreement,
term or condition contained in this Agreement or in any certificate, exhibit,
schedule, or other document furnished or to be furnished pursuant hereto or in
connection with the transactions contemplated hereby;
(c) Any material inaccuracy in any covenant, representation, agreement
or warranty by Seller including all material statements or figures contained in
the Financial Statements heretofore furnished to Buyer; and
(d) Any liabilities of any kind or nature, absolute or contingent not
assumed by Buyer including, without limitation, any liabilities relating to or
arising from the business and operation of the Stations by Seller prior to the
Closing Date.
Notwithstanding any other provision contained herein, Seller shall be
solely responsible for any fine or forfeiture imposed by the Commission relating
to the operation of the Stations prior to the Closing Date.
9.2 Indemnification by Buyer. From and after the Closing Date, Buyer
agrees to and shall indemnify, defend and hold Seller harmless, and shall
reimburse Seller for and against any and all actions, losses, expenses, damages,
liabilities, taxes, penalties or assessments, judgments and costs (including
reasonable legal expenses related thereto), resulting from or arising out of:
(a) Any breach by Buyer of any covenant, agreement, term, condition,
representation, or warranty contained in this Agreement or in any certificate,
exhibit, schedule, or any other document furnished or to be furnished pursuant
hereto or in connection with the transactions contemplated hereby;
(b) Any non-fulfillment by Buyer of any covenant contained in this
Agreement or in any certificate, exhibit, schedule, or other document furnished
or to be furnished pursuant hereto or in connection with the transactions
contemplated hereby; and
(c) Any liabilities of any kind or nature, absolute or contingent,
relating to or arising from the business and operation of the Stations
subsequent to the Closing Date.
9.3 Notification of Claims.
(a) A Party entitled to be indemnified pursuant to Sections 9.1 or 9.2
(the "Indemnified Party") shall notify the Party liable for such indemnification
(the "Indemnifying Party") in writing of any claim or demand which the
Indemnified Party has determined has given or could give rise to a right of
indemnification under this Agreement. Subject to the Indemnifying Party's right
to defend in good faith third party claims as hereinafter provided, the
Indemnifying Party shall satisfy its obligations under this Article IX within
thirty (30) days after the receipt of a written notice thereof from the
Indemnified Party.
(b) If the Indemnified Party shall notify the Indemnifying Party of any
claim or demand pursuant to Section 9.3(a), and if such claim or demand relates
to a claim or demand asserted by a third party against the Indemnified Party
which the Indemnifying Party acknowledges is a claim or demand for which it must
indemnify or hold harmless the Indemnified Party under Sections 9.1 or 9.2, the
Indemnifying Party shall have the right to
employ counsel acceptable to the Indemnified Party to defend any such claim or
demand asserted against the Indemnified Party. The Indemnified Party shall have
the right to participate in the defense of any such claim or demand. The
Indemnifying Party shall notify the Indemnified Party in writing, as promptly as
possible (but in any case before the due date for the answer or response to a
claim) after the date of the notice of claim given by the Indemnified Party to
the Indemnifying Party under Section 9.3(a) of its election to defend in good
faith any such third party claim or demand. So long as the Indemnifying Party is
defending in good faith any such claim or demand asserted by a third party
against the Indemnified Party, the Indemnified Party shall not settle or
compromise such claim or demand. The Indemnified Party shall make available to
the Indemnifying Party or its agents all records and other materials in the
Indemnified Party's possession reasonably required by it for its use in
contesting any third party claim or demand. Whether or not the Indemnifying
Party elects to defend any such claim or demand, the Indemnified Party shall
have no obligations to do so. Upon payment of any claim or demand pursuant to
this Article IX, the Indemnifying Party shall, to the extent of payment, be
subrogated to all rights of the Indemnified Party.
9.4 Limitation with Respect to Indemnification. Notwithstanding the
foregoing, an Indemnifying Party shall not be under any obligation to indemnify,
defend and hold the Indemnified Party harmless or to reimburse the Indemnified
Party until and unless the amount that otherwise would be due to the Indemnified
Party pursuant to this Article IX equals or exceeds Twenty-Five Thousand Dollars
($25,000.00), in which event the Indemnifying Party shall indemnify, defend and
hold the Indemnified Party harmless and reimburse the Indemnified Party for all
amounts (including such amounts up to Twenty-Five Thousand Dollars ($25,000.00))
without regard to the indemnification floor established by this Paragraph 9.4.
ARTICLE X
MISCELLANEOUS
10.1 Assignment.
(a) This Agreement shall not be assigned or conveyed by either Party
hereto to any other person or entity without the prior written consent of the
other Party hereto; provided, however, that Buyer may assign this Agreement
without Seller's prior consent to one or more corporations or other entities
controlled by Buyer; or as needed to ensure that the transactions contemplated
by this Agreement comply with applicable law, regulations or policy provided,
further, that Seller shall have recourse to Buyer in the event Buyer's assignee
defaults hereunder. Subject to the foregoing, this Agreement
shall be binding and shall inure to the benefit of the Parties hereto, their
successors and assigns.
(b) Notwithstanding anything to the contrary set forth herein, Buyer may
assign and transfer to any entity providing financing for the transactions
contemplated by this Agreement (or any refinancing of such financing) as
security for such financing all of the interest, rights and remedies of Buyer
with respect to this Agreement and Seller shall expressly consent to such
assignment. Any such assignment will be made for collateral security purposes
only and will not release or discharge Buyer from any obligations it may have
pursuant to this Agreement. Notwithstanding anything to the contrary set forth
herein, Buyer may (i) authorize and empower such financing sources to assert,
either directly or on behalf of Buyer, any claims Buyer may have against Seller
under this Agreement and (ii) make, constitute and appoint one agent bank in
respect of such financing (and all officers, employees and agents designated by
such agent) as the true and lawful attorney and agent-in- fact of Buyer for the
purpose of enabling the financing sources to assert and collect any such claims.
10.2 Survival of Indemnification. The indemnification obligations of
Seller contained in this Agreement including, without limitation, Section 1.3
shall survive indefinitely, except that any indemnification arising under
Section 9.1(a) hereof (other than any indemnification required as a result of
Seller's breach of Sections 3.1, 3.2 or 3.3 hereof, which indemnification shall
survive indefinitely) shall be binding for a period of three (3) years following
the date hereof.
10.3 Brokerage. Seller and Buyer warrant and represent to one another
that there has been no broker in any way involved in the transactions
contemplated hereby and that no one is or will be entitled to any fee or other
compensation in the nature of a brokerage fee or finder's fee as a result of the
Closing hereunder.
10.4 Expenses of the Parties. It is expressly understood and agreed that
all expenses of preparing this Agreement and of preparing and prosecuting the
Assignment Application with the Commission, and all other expenses, whether or
not the transactions contemplated hereby are consummated, shall be borne solely
by the Party who shall have incurred the same and the other Party shall have no
liability in respect thereto, except as otherwise provided herein. All costs of
transferring the Station Assets in accordance with this Agreement, including
recordation, transfer and documentary taxes and fees, and any excise, sales or
use taxes, shall be borne equally by Seller and Buyer. Any filing or grant fees
imposed by any governmental authority the consent of which is required for the
transactions contemplated hereby shall be borne equally by Seller and Buyer.
10.5 Entire Agreement. This Agreement, together with any related
Schedules or Exhibits, contains all the terms agreed upon by the Parties with
respect to the subject matter herein, and supersedes all prior agreements and
understandings among the Parties and may not be changed or terminated orally. No
attempted change, termination or waiver of any of the provisions hereof shall be
binding unless in writing and signed by the Party against whom the same is
sought to be enforced.
10.6 Headings. The headings set forth in this Agreement have been
inserted for reference only and shall not be deemed to limit or otherwise
affect, in any manner, or be deemed to interpret in whole or in part, any of the
terms or provisions of this Agreement. Unless otherwise specified herein, the
section references contained herein refer to sections of this Agreement.
10.7 Governing Law. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of West Virginia.
10.8 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all of
such shall constitute one and the same instrument.
10.9 Notices. Any notices or other communications shall be in writing
and shall be considered to have been duly given when deposited into first class,
certified mail, postage prepaid, return receipt requested, delivered personally
(which shall include delivery by Federal Express or other recognized overnight
courier service that issues a receipt or other confirmation of delivery) or
delivered via facsimile machine;
If to Seller:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President
WKWK Radio, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Hawthorne Group
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇. ▇. ▇▇▇▇▇▇ III
Howard, Leggans, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
42nd Floor
USX Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ & 5952
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇. ▇▇▇▇▇
Wiley, Rein & Fielding
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ Communications Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ P.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may at any time change the place of receiving notice by giving
notice of such change to the other as provided herein.
10.10 Specific Performance. Seller acknowledges that the Stations are of
a special, unique and extraordinary character and that damages are inadequate to
compensate Buyer for Seller's breach of this Agreement. Accordingly, in the
event of a material breach by Seller of its representations, warranties,
covenants and agreements under this Agreement, Buyer may ▇▇▇ at law for damages
or, at Buyer's sole election in addition to any other remedy available to it,
Buyer may also seek a decree of specific performance requiring Seller to fulfill
its obligations under this Agreement, and Seller agrees to waive its defense
that an adequate remedy at law exists.
10.11 Consent to Jurisdiction. Seller and Buyer hereby submit to the
nonexclusive jurisdiction of the courts of the State of West Virginia and the
federal courts of the United States of America located in such state solely in
respect of the interpretation and enforcement of the provisions hereof and of
the documents referred to herein, and hereby waive, and agree not to assert, as
a defense in any action, suit or proceeding for the interpretation or
enforcement hereof or of any such document, that they are not subject thereto or
that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that this Agreement or any of such documents may not be
enforced in or by said courts or that the Station property is exempt or immune
from execution, that the suit, action or proceeding is brought in an
inconvenient forum, or that the venue of the suit, action or proceeding is
improper.
10.12 Further Assurances. Seller and Buyer agree to execute all such
documents and take all such actions after the Closing Date as the other Party
shall reasonably request in connection with carrying out and effectuating the
intent and purpose hereof and all transactions and things contemplated by this
Agreement, including, without limitation, the execution and delivery of any and
all confirmatory and other documents in addition to those to be delivered on the
Closing Date and all actions which may reasonably be necessary or desirable to
complete the transactions contemplated hereby.
10.13 Public Announcements. No public announcement (including an
announcement to employees) or press release concerning the transactions provided
for herein shall be made by either Party without the prior
approval of the other Party, except as required by law.
10.14 Accounts Receivable. Subject to the terms of the LMA, Buyer,
commencing on the Closing Date and continuing for a period of six (6) months
following the Closing Date, shall collect all of Seller's accounts receivable
arising from the operation of the Stations in the same manner and with the same
diligence that Buyer uses to collect its own accounts receivable. This
obligation, however, shall not extend to the institution of litigation,
employment of any collection agency, legal counsel, or other third party, or any
other extraordinary means of collection. During the sixth-month period following
the Closing Date, neither Seller nor its agents shall make any solicitation of
these accounts for collection purposes and shall not institute litigation for
the collection of any amounts due. Every thirty (30) days after the Closing
Date, Buyer shall account to Seller in writing for and pay over to Seller the
amount of the collections made on Seller's behalf.
Except as is set forth in the last sentence of this paragraph, all
payments received by Buyer during the sixth-month period following the Closing
Date from any person obligated with respect to any of such accounts receivable
shall be allocated so that the oldest such account receivable shall be paid
first and the most recent last. Notwithstanding the foregoing, no payments shall
be applied to obligations disputed by any account debtor. Upon the provision of
notice to Seller, in the manner specified in Section 10.9, above, that an
account debtor disputes an account receivable of Seller, Buyer may cease efforts
to collect such account receivable and thereafter any amounts received by Buyer
from the disputed account debtor may be applied to Buyer's account with such
debtor and Seller may take whatever steps it deems necessary to attempt to
collect its account(s) receivable from such account debtor. Buyer shall not have
the right to compromise, settle, or adjust the amounts of any of Seller's
accounts receivable without Seller's written consent. Any amounts received by
Buyer in payment of any account receivable (without time limitation) which can
be identified as a payment on a specific account, whether by accompanying
invoice or otherwise, shall be promptly paid over to the owner of that account,
regardless of whether the account debtor has an outstanding balance on older
accounts.
IN WITNESS WHEREOF, the Parties hereto have executed or have caused this
Agreement to be executed by a duly authorized officer on the day and year first
above written.
SELLER
WKWK RADIO, INC.
BY:
TITLE:
BUYER
MOUNTAIN RADIO CORPORATION
BY:
TITLE: President